1 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: January 15, 1997 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) 2 Item 5. Other Events AMR Corporation (the "Company") is filing herewith a press release issued today by the Company as Exhibit 99.1 which is incorporated herein by reference. Item 7. Financial Statements and Exhibits The following exhibit is included herein: 99.1 Press Release 3 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/ Charles D. MarLett Charles D. MarLett Corporate Secretary Dated: January 15, 1997 4 EXHIBIT INDEX Exhibit Description 99.1 Press Release 5 Exhibit 99.1 AMR Reports Fourth Quarter Earnings of $122 Million Before Special Items FOR RELEASE: Wednesday, Jan. 15, 1997 FORT WORTH, Texas -- AMR Corporation, parent company of American Airlines, Inc., today reported that fourth quarter net earnings, excluding certain special items, were $122 million ($1.33 per common share). In the fourth quarter of 1995, the company reported earnings, before special charges, of $90 million ($1.15 per common share). "We had quite a successful fourth quarter," said Robert L. Crandall, AMR's Chairman and Chief Executive, "which rounded out a very satisfactory year." After accounting for the special items, AMR reported net earnings of $284 million ($3.08 per common share) for the quarter, as compared to a $282 million net loss ($3.69 per common share) in 1995. 1996 Fourth Quarter Results In the fourth quarter, the company recorded a $497 million gain on the initial public offering of The SABRE Group. Partially offsetting that gain was a $251 million charge ($230 million after tax) associated with the write down of AMR's investment in, and start-up costs associated with, the company's relationship with Canadian Airlines. The company also incurred an $89 million extraordinary loss, after tax, on the repurchase of $624 million of unsecured debt. AMR also recorded a $26 million charge ($16 million after tax) to write down the value of aircraft interiors the company plans to refurbish.
(in millions, except per share amounts) Amount Earnings per (net of tax) share Net earnings before special items $122 $1.33 Gain on initial public offering of The SABRE Group 497 5.40 Canadian Airlines charges (230) (2.50) Extraordinary loss from early debt retirement (89) (0.97) Writedown of aircraft interiors (16) (0.18) Net earnings as reported $284 $3.08 6 AMR's fourth quarter results brought the company's full year 1996 net earnings, excluding the special items, to $854 million, or $9.77 per common share ($9.43 fully diluted), which compares favorably to the company's 1995 net earnings before special charges of $551 million, or $7.12 per common share ($6.56 fully diluted). Including the special items, the company reported 1996 net earnings of $1.0 billion, or $11.63 per common share ($11.19 fully diluted). This compares with 1995 net earnings after special charges of $162 million, or $2.11 per common share. Crandall described 1996 as "a year in which we reaped the benefits of a favorable business environment as well as the many changes we have made over the last several years throughout the American Airlines system. Moreover, with the initial public offering of The SABRE Group and the announcement of our alliance with British Airways, we laid the foundation for further progress in the years to come." 7 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In millions, except per share amounts) * Greater Than 100% Note: Certain amounts from 1995 have been reclassified to conform with 1996 presentation.
Three Months Ended December 31, Percent 1996 1995 Change Revenues Airline Group Passenger - American Airlines $3,315 $3,232 2.6 - AMR Eagle 249 252 (1.2) Cargo 181 174 4.0 Other 222 191 16.2 3,967 3,849 3.1 The SABRE Group 376 368 2.2 Management Services Group 154 145 6.2 Less: Intergroup revenues (164) (174) (5.7) Total operating revenues 4,333 4,188 3.5 Expenses Wages, salaries and benefits 1,513 1,445 4.7 Aircraft fuel 531 430 23.5 Commissions to agents 293 312 (6.1) Depreciation and amortization 305 312 (2.2) Other rentals and landing fees 227 217 4.6 Aircraft rentals 144 167 (13.8) Food service 166 175 (5.1) Maintenance materials and repairs 181 163 11.0 Other operating expenses 683 674 1.3 Writedown of aircraft interiors 26 - * Restructuring costs - 533 (100.0) Total operating expenses 4,069 4,428 (8.1) Operating Income (Loss) 264 (240) * Other Income (Expense) Interest income 32 21 52.4 Interest expense (113) (157) (28.0) Gain on sale of stock by subsidiary 497 - * Canadian Airlines charges (251) - * Minority interest (2) - * Miscellaneous - net (3) (46) (93.5) 160 (182) * Earnings (Loss) Before Income Taxes and Extraordinary Loss 424 (422) * Income tax provision (benefit) 51 (152) * Net Earnings (Loss) Before 373 (270) * Extraordinary Loss Extraordinary Loss, Net of Tax Benefit (89) (12) * Net Earnings (Loss) $ 284 $ (282) * Earnings (Loss) Per Common Share Primary and Fully Diluted: Before Extraordinary Loss $ 4.05 $(3.54) Extraordinary Loss (0.97) (0.15) Net Earnings (Loss) $ 3.08 $(3.69) Number of Shares Used in Computation 92 76 8 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (In millions, except per share amounts) * Greater Than 100% Note: Certain amounts from 1995 have been reclassified to conform with 1996 presentation.
Twelve Months Ended December 31, Percent 1996 1995 Change Revenues Airline Group Passenger - American Airlines $13,645 $13,134 3.9 - AMR Eagle 1,047 976 7.3 Cargo 682 677 0.7 Other 837 714 17.2 16,211 15,501 4.6 The SABRE Group 1,622 1,529 6.1 Management Services Group 620 572 8.4 Less: Intergroup revenues (700) (692) 1.2 Total operating revenues 17,753 16,910 5.0 Expenses Wages, salaries and benefits 5,961 5,779 3.1 Aircraft fuel 1,936 1,623 19.3 Commissions to agents 1,252 1,293 (3.2) Depreciation and amortization 1,204 1,259 (4.4) Other rentals and landing fees 895 878 1.9 Aircraft rentals 616 671 (8.2) Food service 672 682 (1.5) Maintenance materials and repairs 697 641 8.7 Other operating expenses 2,655 2,536 4.7 Writedown of aircraft interiors 26 - * Restructuring costs - 533 (100.0) Total operating expenses 15,914 15,895 0.1 Operating Income 1,839 1,015 81.2 Other Income (Expense) Interest income 80 63 27.0 Interest expense (499) (670) (25.5) Gain on sale of stock by subsidiary 497 - * Canadian Airlines charges (251) - * Minority interest (2) - * Miscellaneous - net (31) (55) (43.6) (206) (662) (68.9) Earnings Before Income Taxes and Extraordinary Loss 1,633 353 * Income tax provision 528 162 * Earnings Before Extraordinary Loss 1,105 191 * Extraordinary Loss, Net of Tax Benefit (89) (29) * Net Earnings $1,016 $ 162 * Earnings (Loss) Per Common Share Primary: Before Extraordinary Loss $ 12.64 $ 2.48 Extraordinary Loss (1.01) (0.37) Net Earnings $ 11.63 $ 2.11 Fully Diluted: Before Extraordinary Loss $ 12.15 $ 2.48 Extraordinary Loss (0.96) (0.37) Net Earnings $ 11.19 $ 2.11 Number of Shares Used in Computation Primary 87 76 Fully Diluted 92 76 9 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions) * Greater Than 100% Note: Certain amounts from 1995 have been reclassified to conform with 1996 presentation.
Three Months Ended December 31, Percent 1996 1995 Change Airline Group Revenues Passenger - American Airlines $3,315 $3,232 2.6 - AMR Eagle 249 252 (1.2) Cargo 181 174 4.0 Other 222 191 16.2 3,967 3,849 3.1 Expenses Wages, salaries and benefits 1,313 1,259 4.3 Aircraft fuel 531 430 23.5 Commissions to agents 293 312 (6.1) Depreciation and amortization 261 266 (1.9) Other rentals and landing fees 209 197 6.1 Aircraft rentals 144 167 (13.8) Food service 166 175 (5.1) Maintenance materials and repairs 177 161 9.9 Other operating expenses 631 660 (4.4) Writedown of aircraft interiors 26 - * Restructuring costs - 533 (100.0) Total operating expenses 3,751 4,160 (9.8) Operating Income (Loss) 216 (311) * Other Income (Expense) Interest income 34 23 47.8 Interest expense (114) (159) (28.3) Miscellaneous - net - (45) (100.0) (80) (181) (55.8) Earnings (Loss) Before Income Taxes and Extraordinary Loss $ 136 $(492) * Pre-tax Margin 3.4% (12.8)% 16.2 pts. The SABRE Group Revenues $ 376 $ 368 2.2 Operating Expenses 335 315 6.3 Operating Income 41 53 (22.6) Other Income (Expense) (4) (1) * Earnings Before Income Taxes 37 52 (28.8) Pre-tax Margin 9.8% 14.1% (4.3) pts. Management Services Group Revenues $ 154 $ 145 6.2 Operating Expenses 147 127 15.7 Operating Income 7 18 (61.1) Other Income (Expense) Canadian Airlines charges (251) - * Earnings (Loss) Before Income Taxes (244) 18 * Pre-tax Margin (158.4)% 12.4% (170.8) pts. 10 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (In millions) * Greater Than 100% Note: Certain amounts from 1995 have been reclassified to conform with 1996 presentation.
Twelve Months Ended December 31, Percent 1996 1995 Change Airline Group Revenues Passenger - American Airlines $13,645 $13,134 3.9 - AMR Eagle 1,047 976 7.3 Cargo 682 677 0.7 Other 837 714 17.2 16,211 15,501 4.6 Expenses Wages, salaries and benefits 5,191 5,082 2.1 Aircraft fuel 1,936 1,623 19.3 Commissions to agents 1,252 1,293 (3.2) Depreciation and amortization 1,018 1,070 (4.9) Other rentals and landing fees 815 801 1.7 Aircraft rentals 616 671 (8.2) Food service 672 682 (1.5) Maintenance materials and repairs 686 632 8.5 Other operating expenses 2,557 2,550 0.3 Writedown of aircraft interiors 26 - * Restructuring costs - 533 (100.0) Total operating expenses 14,769 14,937 (1.1) Operating Income 1,442 564 * Other Income (Expense) Interest income 103 74 39.2 Interest expense (508) (679) (25.2) Miscellaneous - net (23) (45) (48.9) (428) (650) (34.2) Earnings (Loss) Before Income Taxes and Extraordinary Loss $1,014 $ (86) * Pre-tax Margin 6.3% (0.6)% 6.9 pts. The SABRE Group Revenues $1,622 $1,529 6.1 Operating Expenses 1,295 1,149 12.7 Operating Income 327 380 (13.9) Other Income (Expense) (21) (10) * Earnings Before Income Taxes $ 306 $ 370 (17.3) Pre-tax Margin 18.9% 24.2% (5.3) pts. Management Services Group Revenues $ 620 $ 572 8.4 Operating Expenses 550 501 9.8 Operating Income 70 71 (1.4) Other Income (Expense) Canadian Airlines charges (251) - * Miscellaneous - net (1) (2) (50.0) (252) (2) * Earnings (Loss) Before Income Taxes $(182) $ 69 * Pre-tax Margin (29.4)% 12.1% (41.5) pts. 11 AMR CORPORATION NOTES TO CONSOLIDATED STATEMENT OF OPERATIONS 1.Certain amounts from 1995 have been reclassified to conform with 1996 presentation. 2.On October 17, 1996, The SABRE Group Holdings, Inc. (TSG) completed an initial public offering of 23,230,000 shares of its Class A Common Stock, representing 17.8 percent of the economic interest in TSG, for net proceeds of approximately $589 million. AMR (the Company) recorded a $497 million gain in the fourth quarter of 1996 related to the initial public offering. 3.During the fourth quarter of 1996, AMR recorded a $251 million charge ($230 million net of tax benefit) related to the Company's relationship with Canadian Airlines. This charge includes $192 million related to the writedown of AMR's investment in the cumulative mandatorily redeemable convertible preferred stock of Canadian Airlines International Limited (Canadian) and $59 million ($38 million net of tax benefit) related to the writedown of certain start-up costs relating to the Company's agreement to provide a variety of management, technical and administrative services to Canadian. 4.During 1996, AMR repurchased and/or retired prior to maturity approximately $1.1 billion in face value of long-term debt and capital lease obligations. These transactions resulted in an extraordinary loss of $137 million ($89 million net of tax benefit) and $136 million ($89 million net of tax benefit) for the three months and twelve months ended December 31, 1996, respectively. During 1995, AMR repurchased and retired prior to maturity $378 million in face value of long-term debt, net of sinking funding balances. In addition, $616 million in outstanding principal of certain debt and lease obligations was refinanced during 1995. These debt transactions resulted in an extraordinary loss of $18 million ($12 million net of tax benefit) and $45 million ($29 million net of tax benefit) for the three months and twelve months ended December 31, 1995, respectively. 5.Restructuring costs of $533 million ($334 million net of tax benefit), included in operating expenses for the three months and twelve months ended December 31, 1995, primarily represent the cost of early retirement programs for Airline Group employees and provisions for the writedown of certain DC-10 aircraft and the planned retirement of certain turboprop aircraft. 6.Other Income (Expense) for the twelve months ended December 31, 1996 includes a $21 million provision ($13 million net of tax benefit) for a cash payment recorded in the third quarter of 1996 representing American's share of a multi-carrier travel agency class action litigation settlement. Other Income (Expense) for the three months and twelve months ended December 31, 1995, includes a $41 million charge ($26 million net of tax benefit) related to the loss of an aircraft operated by American Airlines, Inc. 12 Airline Group Operating Statistics (Unaudited)
Three Months Ended December 31, Percent 1996 1995 Change American Airlines Jet Airline Operations: Revenue passenger miles (millions) 25,591 25,258 1.3 Available seat miles (millions) 37,758 38,821 (2.7) Cargo ton miles (millions) 524 527 (0.6) Passenger load factor 67.8% 65.1% 2.7 pts. Breakeven load factor 62.3% 59.8% 2.5 pts. (excluding special charges) Passenger revenue yield per passenger mile (cents) 12.95 12.80 1.2 Passenger revenue per available seat mile (cents) 8.78 8.33 5.4 Cargo revenue yield per ton mile (cents) 34.03 32.45 4.9 Operating expenses excluding special charges per available seat mile (cents) 9.12 8.60 6.0 Fuel consumption (gallons, in millions) 677 684 (1.0) Fuel price per gallon (cents) 75.6 60.4 25.2 Fuel price per gallon, excluding fuel tax (cents) 70.4 55.3 27.3 Operating aircraft at period-end 642 635 1.1 AMR Eagle, Inc.: Revenue passenger miles (millions) 628 658 (4.6) Available seat miles (millions) 1,081 1,172 (7.8) Passenger load factor 58.1% 56.1% 2.0 pts. Operating aircraft at period-end 205 261 (21.5) AMR Corporation Average Equivalent Number of Employees Airline Group: Jet Airline Operations 78,300 78,500 Other 10,100 10,600 Total Airline Group 88,400 89,100 The SABRE Group 8,000 7,400 Management Services Group 14,800 13,900 Total 111,200 110,400 13 Airline Group Operating Statistics (Unaudited)
Twelve Months Ended December 31, Percent 1996 1995 Change American Airlines Jet Airline Operations: Revenue passenger miles(millions) 104,710 102,918 1.7 Available seat miles (millions) 152,886 155,337 (1.6) Cargo ton miles (millions) 2,028 2,046 (0.9) Passenger load factor 68.5% 66.3% 2.2 pts. Breakeven load factor 60.2% 59.6% 0.6 pts. (excluding special charges) Passenger revenue yield per passenger mile (cents) 13.03 12.76 2.1 Passenger revenue per available seat mile (cents) 8.92 8.46 5.4 Cargo revenue yield per ton mile (cents) 33.14 32.64 1.5 Operating expenses excluding special charges per available seat mile (cents) 8.91 8.57 4.0 Fuel consumption (gallons, in millions) 2,734 2,749 (0.5) Fuel price per gallon (cents) 68.2 56.9 19.9 Fuel price per gallon, excluding fuel tax (cents) 63.3 53.8 17.7 Operating aircraft at period-end 642 635 1.1 AMR Eagle, Inc.: Revenue passenger miles (millions) 2,590 2,492 3.9 Available seat miles (millions) 4,431 4,488 (1.3) Passenger load factor 58.5% 55.5% 3.0 pts. Operating aircraft at period-end 205 261 (21.5) AMR Corporation Average Equivalent Number of Employees Airline Group: Jet Airline Operations 78,400 79,000 Other 10,500 10,400 Total Airline Group 88,900 89,400 The SABRE Group 7,900 7,300 Management Services Group 14,500 13,300 Total 111,300 110,000