1
                                
                                
                         UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                        FORM 10-Q/A No. 1



[]Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Period Ended March 31, 1996.


[  ]Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period From                      to
 .


Commission file number 1-8400.



                        AMR Corporation
     (Exact name of registrant as specified in its charter)

        Delaware                            75-1825172
    (State or other                      (I.R.S. Employer
      jurisdiction                      Identification No.)
   of incorporation or
     organization)
                                   
 4333 Amon Carter Blvd.                          
   Fort Worth, Texas                           76155
 (Address of principal                      (Zip Code)
   executive offices)
                                   
Registrant's telephone number,   (817) 963-1234
including area code             
                                   
                                   
                         Not Applicable
(Former name, former address and former fiscal year , if changed
                       since last report)


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter periods that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes x      No        .
                                
                                
              Applicable Only to Corporate Issuers

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date.


Common Stock, $1 par value - 76,911,973 as of April 24, 1996




 2
                                 INDEX

                            AMR CORPORATION
                                   
                                   


PART I:   FINANCIAL INFORMATION


Item 1.  Financial Information

  Consolidated  Statement of Operations -- Three months  ended  March
  31, 1996 and 1995 (as amended June 4, 1996)
  
  Condensed Consolidated Balance Sheet -- March 31, 1996 and December
  31, 1995
  
  Condensed  Consolidated Statement of Cash  Flows  --  Three  months
  ended March 31, 1996 and 1995
  
  Notes  to Condensed Consolidated Financial Statements -- March  31,
  1996
  

Item  2.  Management's Discussion and Analysis of Financial Condition
      and Results of Operations (as amended June 4,  1996,  to  reflect
      certain reclassifications  between  reporting segments)


SIGNATURE

 3
PART 1. FINANCIAL INFORMATION

AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) (In millions, except per share amounts)
Three Months Ended March 31, 1996 1995 Revenues Airline Group: Passenger - American Airlines, Inc. $3,287 $3,090 - AMR Eagle, Inc. 267 208 Cargo 163 158 Other 197 155 3,914 3,611 The SABRE Group 428 385 Management Services Group 157 143 Less: Intergroup revenues (191) (169) Total operating revenues 4,308 3,970 Expenses Wages, salaries and benefits 1,487 1,405 Aircraft fuel 441 378 Commissions to agents 315 320 Depreciation and amortization 300 315 Other rentals and landing fees 216 214 Aircraft rentals 164 170 Food service 156 160 Maintenance materials and repairs 168 152 Other operating expenses 660 604 Total operating expenses 3,907 3,718 Operating Income 401 252 Other Income (Expense) Interest income 16 13 Interest expense (146) (177) Miscellaneous - net (6) (16) (136) (180) Earnings Before Income Taxes 265 72 Income tax provision 108 35 Net Earnings $ 157 $ 37 Earnings Per Common Share Primary $ 2.02 $ 0.48 Fully Diluted $ 1.84 $ 0.48 Number of shares used in computations Primary 78 77 Fully Diluted 92 77
The accompanying notes are an integral part of these financial statements. 1 4 AMR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (In millions)
March December 31, 31, 1996 1995 (Unaudited) (Note 1) Assets Current Assets Cash $ 38 $ 82 Short-term investments 796 819 Receivables, net 1,378 1,153 Inventories, net 606 589 Deferred income taxes 358 357 Other current assets 166 137 Total current assets 3,342 3,137 Equipment and Property Flight equipment, net 9,649 9,852 Other equipment and property, net 1,959 1,964 11,608 11,816 Equipment and Property Under Capital Leases Flight equipment, net 1,559 1,588 Other equipment and property, net 160 161 1,719 1,749 Route acquisition costs, net 996 1,003 Other assets, net 1,816 1,851 $ 19,481 $ 19,556 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 880 $ 817 Accrued liabilities 1,775 1,999 Air traffic liability 1,707 1,466 Current maturities of long-term debt 148 228 Current obligations under capital leases 146 122 Total current liabilities 4,656 4,632 Long-term debt, less current maturities 4,730 4,983 Obligations under capital leases, less 1,990 2,069 current obligations Deferred income taxes 443 446 Other liabilities, deferred gains, deferred credits and postretirement benefits 3,766 3,706 Stockholders' Equity Convertible preferred stock 78 78 Common stock 77 76 Additional paid-in capital 2,263 2,239 Retained earnings 1,478 1,327 3,896 3,720 $ 19,481 $ 19,556
The accompanying notes are an integral part of these financial statements. 2 5 AMR CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In millions)
Three Months Ended March 31, 1996 1995 Net Cash Provided by Operating Activities $ 325 $ 253 Cash Flow from Investing Activities: Capital expenditures (107) (458) Net decrease in short-term investments 23 270 Proceeds from sale of equipment and property 73 60 Net cash used for investing activities (11) (128) Cash Flow from Financing Activities: Payments on long-term debt and capital lease obligations (379) (86) Other 21 (1) Net cash used for financing activities (358) (87) Net increase (decrease) in cash (44) 38 Cash at beginning of period 82 23 Cash at end of period $ 38 $ 61 Cash Payments (Refunds) For: Interest $ 138 $ 155 Income taxes 133 (9)
The accompanying notes are an integral part of these financial statements. 3 6 AMR CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1.The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date. For further information, refer to the consolidated financial statements and footnotes thereto included in the AMR Corporation Annual Report on Form 10-K for the year ended December 31, 1995. 2.Certain amounts from 1995 have been reclassified to conform with the 1996 presentation. 3.Accumulated depreciation of owned equipment and property at March 31, 1996 and December 31, 1995, was $6.0 billion and $5.8 billion, respectively. Accumulated amortization of equipment and property under capital leases at March 31, 1996 and December 31, 1995, was $890 million and $875 million, respectively. 4.As discussed in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995, the Miami International Airport Authority is currently remediating various environmental conditions at Miami International Airport (Airport) and funding the remediation costs through landing fee revenues. Some of the costs of the remediation effort may be borne by carriers currently operating at the Airport, including American Airlines, Inc. (American), through increased landing fees. The ultimate resolution of this matter is not expected to have a significant impact on the financial position or liquidity of AMR. 5.On April 17, 1996, the Company announced that its Board of Directors had approved a reorganization of The SABRE Group as a separate, wholly-owned subsidiary of AMR Corporation subject to the receipt of a favorable tax ruling and certain other conditions. This reorganization will involve the dividend of American's SABRE Travel Information Network, SABRE Computer Services, SABRE Development Services and SABRE Interactive divisions to the Company. The reorganization should be completed sometime during the third quarter. The Company also continues to study, as it has in the past, other transactions which may involve The SABRE Group, such as strategic partnerships or an initial public offering of a portion of The SABRE Group's stock. No decisions, however, have been made at this time as to what, if any, transactions involving The SABRE Group may occur after the reorganization is complete. 6.On April 19, 1996, the Company announced the call for redemption on May 20, 1996 of all its outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital Securities due 2024. At March 31, 1996, debentures in an aggregate principal amount of $1,020,356,000 were outstanding. The redemption price of the debentures is $1,042 per $1,000 principal amount of debentures, plus accrued and unpaid interest to the redemption date. As an alternative to redemption, holders of debentures have the option, until May 17, 1996, to convert their debentures into AMR Common Stock at a conversion price of $79 per share of Common Stock (equivalent to 12.658 shares of Common Stock for each $1,000 principal amount of debentures). The Company has entered into a standby arrangement with certain parties in which the parties have agreed to purchase from the Company, at the Company's option, up to the number of shares of Common Stock that would have been issuable upon conversion of any debentures that are not surrendered for conversion by May 17, 1996. Debentures that are redeemed rather than converted will result in the Company recording an extraordinary loss on early retirement of debt during the second quarter arising from the excess of the redemption price for such debentures over their carrying value. This differential as of March 31, 1996 equaled approximately $231 for each $1,000 principal amount of debentures. 4 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 7.On April 19, 1996, the Company announced the call for redemption on May 20, 1996 of all its outstanding $500 Series A Cumulative Convertible Preferred Stock. The redemption price for the Preferred Stock is $521 per share of Preferred Stock, plus accrued and unpaid dividends to the redemption date. As an alternative to redemption, holders of the Preferred Stock have the option, until May 17, 1996, of converting their Preferred Stock into AMR Common Stock at a conversion price of $78.75 per share of Common Stock (equivalent to 6.3492 shares of Common Stock for each share of Preferred Stock). 5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Summary AMR recorded net earnings for the three months ended March 31, 1996, of $157 million, or $2.02 per common share ($1.84 fully diluted). This compares to net earnings of $37 million, or $0.48 per common share (both primary and fully diluted) for the first quarter of 1995. AMR's operating income improved 59.1 percent or $149 million. AMR's improved net earnings for the first quarter reflect better performance by each of the Company's three business units - the Airline Group, which includes American Airlines, Inc.'s Passenger and Cargo Divisions and AMR Eagle, Inc.; The SABRE Group, which includes AMR's information technology and consulting businesses; and the Management Services Group, which includes AMR's airline management, aviation services, and investment service activities. In April of 1996, American and The SABRE Group completed negotiations on the economics of a new market rate services agreement between the two business units, pursuant to which The SABRE Group performs data processing and solutions services for American. The new agreement -- which will reflect the recent downward trend in market prices for such data processing services -- is expected to increase the Airline Group's operating income and decrease The SABRE Group's operating income by approximately $36 million in 1996. Additionally, the two business units completed negotiations on the economics of new agreements covering the provision of air travel and certain marketing services by American to The SABRE Group. These agreements are expected to increase the Airline Group's operating income and decrease The SABRE Group's operating income by approximately $35 million in 1996. As these agreements will be effective retroactive to January 1, 1996, their estimated impact has been reflected in the reporting segments' financial highlights noted below. On April 17, 1996, the Company announced the planned reorganization of The SABRE Group as a separate, wholly-owned subsidiary of AMR. It is anticipated that upon completion of the reorganization approximately $850 million of American's debt owed to AMR will be replaced by an equivalent amount of debt owed to AMR by The SABRE Group, thereby reducing the Airline Group's annual interest costs -- and increasing The SABRE Group's annual interest costs -- by approximately $50-60 million. 6 8 Results of Operations (continued) The following sections provide a discussion of AMR's results by reporting segment, which are described in AMR's Annual Report on Form 10-K for the year ended December 31, 1995. AIRLINE GROUP FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in millions)
Three Months Ended March 31, 1996 1995 Revenues Passenger - American Airlines, Inc. $3,287 $3,090 - AMR Eagle, Inc. 267 208 Cargo 163 158 Other 197 155 3,914 3,611 Expenses Wages, salaries and benefits 1,301 1,240 Aircraft fuel 441 378 Commissions to agents 315 320 Depreciation and amortization 252 266 Other operating expenses 1,343 1,291 Total operating expenses 3,652 3,495 Operating Income 262 116 Other Income (Expense) (134) (171) Earnings (Loss) Before Income Taxes $ 128 $ (55) Average number of equivalent employees 89,900 89,300
7 9 Results of Operations (continued)
OPERATING STATISTICS Three Months Ended March 31, 1996 1995 American Airlines, Inc. Jet Airline Operations Revenue passenger miles (millions) 24,632 23,834 Available seat miles (millions) 37,554 37,398 Cargo ton miles (millions) 498 489 Passenger revenue yield per passenger mile 13.34 12.96 (cents) Passenger revenue per available seat mile 8.75 8.26 (cents) Cargo revenue yield per ton mile (cents) 32.26 31.99 Operating expenses per available seat mile 8.97 8.67 (cents) Passenger load factor 65.6% 63.7% Breakeven load factor 59.8% 60.3% Fuel consumption (gallons, in millions) 663 666 Fuel price per gallon (cents) 63.9 54.8 Operating aircraft at period-end 632 648 AMR Eagle, Inc. Revenue passenger miles (millions) 636 496 Available seat miles (millions) 1,137 960 Passenger load factor 56.0% 51.7% Operating aircraft at period-end 255 267
Operating aircraft at March 31, 1996, included:
Jet Aircraft: Regional Aircraft: Airbus A300-600R 35 ATR 42 46 Boeing 727-200 68 Super ATR 33 Boeing 757-200 86 Jetstream 32 38 Boeing 767-200 8 Saab 340A 9 Boeing 767-200 Extended 22 Saab 340B 95 Range Boeing 767-300 Extended 41 Saab 340B Plus 14 Range Fokker 100 75 Shorts 360 20 McDonnell Douglas DC-10-10 15 Total 255 McDonnell Douglas DC-10-30 4 McDonnell Douglas MD-11 18 McDonnell Douglas MD-80 260 Total 632
89.2% of the jet aircraft fleet is Stage III, a classification of aircraft meeting noise standards as promulgated by the Federal Aviation Administration. Average aircraft age is 8 years for jet aircraft and 4 years for regional aircraft. 8 10 Results of Operations (continued) The Airline Group's revenues increased $303 million or 8.4 percent. American's passenger revenues increased by 6.4 percent, $197 million. American's yield (the average amount one passenger pays to fly one mile) of 13.34 cents increased by 2.9 percent compared to the same period in 1995. Domestic yields increased 4.0 percent from first quarter 1995, while international yields were up 0.6 percent. American's traffic or revenue passenger miles (RPMs) increased 3.3 percent to 24.6 billion miles for the quarter ended March 31, 1996. American's capacity or available seat miles (ASMs) increased 0.4 percent to 37.6 billion miles in the first quarter of 1996, primarily as a result of increases in jet stage length and aircraft productivity. Jet stage length increased 8.7 percent and aircraft productivity, as measured by miles flown per aircraft per day, increased 2.1 percent compared with first quarter 1995. American's domestic traffic increased 0.9 percent on capacity decreases of 1.9 percent and international traffic grew 9.4 percent on capacity increases of 6.3 percent. The increase in international traffic was led by a 13.4 percent increase in traffic to Europe on capacity growth of 5.1 percent, and a 5.6 percent increase in traffic to Latin America on capacity growth of 7.2 percent. Although not quantifiable, some portion of the passenger revenue increase is attributable to the January 1, 1996 expiration of the ten percent federal excise tax on airline travel. AMR Eagle passenger revenues increased 28.4 percent, $59 million, due principally to an increase in traffic of 28.2 percent to 636 million RPMs. The increase in traffic was due in large part to the Federal Aviation Administration's temporary restrictions on the operation of ATR aircraft during first quarter 1995, which contributed to a decrease in capacity at that time. Other revenues increased 27.1 percent, $42 million, primarily due to contract maintenance work performed by American for other airlines. The new agreement covering air travel to be signed by American and The SABRE Group discussed previously, increased other revenues $4 million. The Airline Group's operating expenses increased 4.5 percent, $157 million. American's Jet Airline cost per ASM increased by 3.5 percent to 8.97 cents. Wages, salaries and benefits rose 4.9 percent, $61 million, due primarily to contractual wage rate and seniority increases that are built into the Company's labor contracts and an increase in the provision for profit sharing, partially offset by a decrease due to the outsourcing of certain services. Aircraft fuel expense increased 16.7 percent, $63 million, due to a 9.1 cent increase in American's average price per gallon, which includes the impact of the October 1995 expiration of the fuel tax exemption for the airline industry. Other operating expenses, consisting of maintenance costs, aircraft rentals, other rentals and landing fees, food service costs, data processing charges, and miscellaneous operating expenses increased 4.0 percent, $52 million, primarily due to an increase in outsourced services, costs associated with increased contract maintenance work performed for other airlines, and adverse winter weather. Absent the new agreements covering marketing and technology services to be signed by American and The SABRE Group discussed previously, other operating expenses would have increased an additional $11 million. Other Income (Expense) decreased 21.6 percent or $37 million. Interest expense decreased $31 million primarily due to scheduled debt repayments and the retirement of debt prior to scheduled maturity. 9 11 Results of Operations (continued) THE SABRE GROUP FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in millions)
Three Months Ended March 31, 1996 1995 Revenues $ 428 $ 385 Expenses Wages, salaries and benefits 119 103 Depreciation and amortization 43 45 Other operating expenses 150 118 Total operating expenses 312 266 Operating Income 116 119 Other Income (Expense) (1) (9) Earnings Before Income Taxes $ 115 $ 110 Average number of equivalent employees 7,900 7,300
Revenues Revenues for The SABRE Group increased 11.2 percent, $43 million, primarily due to higher booking fee prices and increased volumes. Absent the new technology services agreement to be signed by American and The SABRE Group discussed previously, revenues would have increased an additional $7 million. Expenses Wages, salaries and benefits increased 15.5 percent, $16 million, due primarily to an increase in the average number of equivalent employees. Other operating expenses increased 27.1 percent, $32 million, due primarily to increased product development costs. The new agreements covering air travel and certain marketing services to be signed by American and The SABRE Group discussed previously, increased other operating expenses $8 million. 10 12 Results of Operations (continued) MANAGEMENT SERVICES GROUP FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in millions)
Three Months Ended March 31, 1996 1995 Revenues $ 157 $ 143 Expenses Wages, salaries and benefits 67 62 Other operating expenses 67 64 Total operating expenses 134 126 Operating Income 23 17 Other Income (Expense) (1) - Earnings Before Income Taxes $ 22 $ 17 Average number of equivalent employees 13,500 12,700
Revenues Revenues for the Management Services Group increased 9.8 percent, or $14 million. AMR Services Corporation contributed $12.8 million to the increase, principally due to increased airline passenger, ramp and cargo handling services provided by its Airline Services division. Expenses Wages, salaries and benefits increased 8.1 percent, $5 million, due primarily to an increase in the average number of equivalent employees. LIQUIDITY AND CAPITAL RESOURCES Net cash provided by operating activities in the three month period ended March 31, 1996, was $325 million, compared to $253 million in 1995. Capital expenditures for the first quarter of 1996 were $107 million. These capital expenditures were financed with internally generated cash. On April 19, 1996, the Company announced the call for redemption on May 20, 1996 of all its outstanding 6 1/8% Convertible Subordinated Quarterly Income Capital Securities due 2024. This will reduce the Company's annual cash interest expense by approximately $62 million. On April 19, 1996, the Company announced the call for redemption on May 20, 1996 of all its outstanding $500 Series A Cumulative Convertible Preferred Stock. The redemption price for the Preferred Stock is $521 per share of Preferred Stock, plus accrued and unpaid dividends to the redemption date (approximately $83 million if all the outstanding Preferred Stock is redeemed). Payments made for shares redeemed will be made with internally generated cash. 11 13 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 Date: June 4, 1996 BY: /s/ Gerard J. Arpey Gerard J. Arpey Senior Vice President and Chief Financial Officer 12
 

5 1,000,000 3-MOS DEC-31-1996 MAR-31-1996 38 796 1,389 11 606 3,342 20,207 6,880 19,481 4,656 0 77 78 0 3,741 19,481 0 4,308 0 3,907 0 0 146 265 108 157 0 0 0 157 2.02 1.84