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: July 15, 1998 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 (July 15, 1998) by the Company as Exhibit 99.1 which is included herein. This press release was issued to report second quarter 1998 earnings and to announce that the Company's board of directors has authorized management to repurchase additional shares of its outstanding common stock. 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: July 15, 1998 4 EXHIBIT INDEX Exhibit Description 99.1 Press Release 5 Exhibit 99.1 Contact: Tim Kincaid Fort Worth, Texas 817-967-1577 FOR RELEASE: Wednesday, July 15, 1998 AMR REPORTS RECORD SECOND QUARTER EARNINGS OF $409 MILLION; COMPANY TO INITIATE ANOTHER $500 MILLION STOCK REPURCHASE FORT WORTH, Texas -- AMR Corp., parent company of American Airlines Inc., today reported record second quarter net earnings of $409 million, or $2.30 per common share diluted, a 35 percent improvement over net earnings of $302 million, or $1.63 per common share diluted, during the same period in 1997. These are the highest quarterly earnings in the company's history. "Our strong second quarter performance reflects continued solid demand, stable yields, lower fuel prices and industry- leading operating performance," said Donald J. Carty, AMR's chairman and CEO. "Obviously, much credit for our improved operating performance goes to our employees. We had a very busy and productive second quarter, with new planes, new cities, modest growth and exciting marketing developments." During the second quarter, AMR completed a $500 million stock repurchase program that began in 1997. Today, AMR announced that the company's board of directors has authorized management to repurchase up to an additional $500 million of its outstanding common stock. This represents approximately 5.6 million shares of common stock at yesterday's closing price of $89.25. "We have used our substantial free cash flow over the past few years to strengthen our balance sheet," Carty said. "As we generate free cash flow in excess of what we need to fund our expansion plans, we believe it makes sense to return additional cash to our shareholders." -- more -- 6 AMR Reports Second Quarter Earnings of $409 million July 15, 1998 Page 2 Repurchases, including block repurchases, are expected to be made in the open market or in private transactions, from time to time, depending on market conditions, and may be discontinued at any time. Among AMR's second quarter highlights: o Donald J. Carty succeeded Robert L. Crandall as AMR's chairman and CEO o AMR completed a $500 million stock repurchase program o AMR completed a 2-for-1 stock split in the form of a stock dividend o AA announced an innovative marketing alliance with US Airways that includes linking the airlines' frequent flyer programs and reciprocal access to airport clubs o AA took delivery of the first new jetliner of a total firm order of 139 Boeing aircraft -- the first new aircraft delivered to AA in nearly two years o American Eagle inaugurated Embraer ERJ-145 regional jet service from Chicago O'Hare to six cities o AA introduced several new international routes, including Chicago-Tokyo; Chicago-Monterrey, Mexico; Dallas/Fort Worth- Panama City, Panama; London Gatwick to both Miami and Boston; Miami-Cozumel, Mexico; and New York Kennedy to Lima and Cuzco, Peru o AA alliances with Iberia Airlines, the TACA Group, Air Liberte, Asiana Airlines and China Eastern Airlines were approved by the U.S. Department of Transportation o AA led the six largest U.S. hub carriers for on-time dependability for April and May o AA launched its redesigned, highly interactive "AA.com" Internet web site. AMR's third quarter is off to a strong start with the U.S. Department of Justice's approval of its investment in Aerolineas Argentinas, plus the issuance of the European Commission's tentative opinion on conditions for approval of the American Airlines-British Airways alliance. ### 7 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In millions, except per share amounts) * Greater Than 100% ** The 1997 earnings per share amounts have been restated as required to comply with Statement of Financial Accounting Standards No. 128, "Earnings Per Share." Note 1: All share and earnings per share amounts have been restated to give effect to the stock split on June 9, 1998. Note 2: Certain amounts from 1997 have been reclassified to conform with 1998 presentation.
Three Months Ended Percent June 30, Change 1998 1997 Revenues Airline Group Passenger - American Airlines $3,789 $3,641 4.1 - AMR Eagle 289 256 12.9 Cargo 169 174 (2.9) Other 244 221 10.4 4,491 4,292 4.6 The SABRE Group 577 449 28.5 Management Services Group 148 151 (2.0) Less: Intergroup revenues (204) (180) 13.3 Total operating revenues 5,012 4,712 6.4 Expenses Wages, salaries and benefits 1,693 1,556 8.8 Aircraft fuel 404 471 (14.2) Commissions to agents 322 329 (2.1) Depreciation and amortization 324 310 4.5 Maintenance, materials and repairs 226 219 3.2 Other rentals and landing fees 228 227 0.4 Food service 175 173 1.2 Aircraft rentals 143 143 - Other operating expenses 770 694 11.0 Total operating expenses 4,285 4,122 4.0 Operating Income 727 590 23.2 Other Income (Expense) Interest income 32 31 3.2 Interest expense (92) (102) (9.8) Interest capitalized 25 3 * Minority interest (12) (10) 20.0 Miscellaneous - net (4) (8) (50.0) (51) (86) (40.7) Earnings Before Income Taxes 676 504 34.1 Income tax provision 267 202 32.2 Net Earnings $ 409 $ 302 35.4 Earnings Per Common Share (**) Basic $ 2.38 $ 1.66 Diluted $ 2.30 $ 1.63 Number of Shares Used in Computation Basic 172 182 Diluted 178 185 8 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In millions, except per share amounts) * Greater Than 100% ** The 1997 earnings per share amounts have been restated as required to comply with Statement of Financial Accounting Standards No. 128, "Earnings Per Share." Note 1: All share and earnings per share amounts have been restated to give effect to the stock split on June 9, 1998. Note 2: Certain amounts from 1997 have been reclassified to conform with 1998 presentation.
Six Months Ended Percent June 30, Change 1998 1997 Revenues Airline Group Passenger - American Airlines $7,367 $7,031 4.8 - AMR Eagle 545 504 8.1 Cargo 332 338 (1.8) Other 470 425 10.6 8,714 8,298 5.0 The SABRE Group 1,131 889 27.2 Management Services Group 308 312 (1.3) Less: Intergroup revenues (404) (361) 11.9 Total operating revenues 9,749 9,138 6.7 Expenses Wages, salaries and benefits 3,317 3,096 7.1 Aircraft fuel 819 991 (17.4) Commissions to agents 623 643 (3.1) Depreciation and amortization 647 622 4.0 Maintenance, materials and repairs 458 414 10.6 Other rentals and landing fees 446 445 0.2 Food service 339 334 1.5 Aircraft rentals 285 287 (0.7) Other operating expenses 1,531 1,367 12.0 Total operating expenses 8,465 8,199 3.2 Operating Income 1,284 939 36.7 Other Income (Expense) Interest income 66 58 13.8 Interest expense (188) (207) (9.2) Interest capitalized 43 5 * Minority interest (25) (22) 13.6 Miscellaneous - net (19) (12) (58.3) (123) (178) (30.9) Earnings Before Income Taxes 1,161 761 52.6 Income tax provision 462 307 50.5 Net Earnings $ 699 $ 454 54.0 Earnings Per Common Share (**) Basic $ 4.06 $ 2.50 Diluted $ 3.91 $ 2.45 Number of Shares Used in Computation Basic 172 182 Diluted 179 185 9 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions) * Greater Than 100% Note: Certain amounts from 1997 have been reclassified to conform with 1998 presentation.
Three Months Ended Percent June 30, Change 1998 1997 Airline Group Revenues Passenger - American Airlines $3,789 $3,641 4.1 - AMR Eagle 289 256 12.9 Cargo 169 174 (2.9) Other 244 221 10.4 4,491 4,292 4.6 Expenses Wages, salaries and benefits 1,449 1,345 7.7 Aircraft fuel 404 471 (14.2) Commissions to agents 322 329 (2.1) Depreciation and amortization 258 260 (0.8) Maintenance, materials and repairs 223 215 3.7 Other operating expenses 1,229 1,192 3.1 Total operating expenses 3,885 3,812 1.9 Operating Income 606 480 26.3 Other Expense (40) (77) (48.1) Earnings Before Income Taxes $ 566 $ 403 40.4 Pre-tax Margin 12.6% 9.4% 3.2 pts. The SABRE Group Revenues $ 577 $ 449 28.5 Operating Expenses 468 354 32.2 Operating Income 109 95 14.7 Other Income 1 1 - Earnings Before Income Taxes $ 110 $ 96 14.6 Pre-tax Margin 19.1% 21.4% (2.3) pts. Management Services Group Revenues $ 148 $ 151 (2.0) Operating Expenses 136 136 - Operating Income 12 15 (20.0) Other Income (Expense) - - - Earnings Before Income Taxes $ 12 $ 15 (20.0) Pre-tax Margin 8.1% 9.9% (1.8) pts. 10 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions) * Greater Than 100% Note: Certain amounts from 1997 have been reclassified to conform with 1998 presentation.
Six Months Ended Percent June 30, Change 1998 1997 Airline Group Revenues Passenger - American Airlines $7,367 $7,031 4.8 - AMR Eagle 545 504 8.1 Cargo 332 338 (1.8) Other 470 425 10.6 8,714 8,298 5.0 Expenses Wages, salaries and benefits 2,831 2,679 5.7 Aircraft fuel 819 991 (17.4) Commissions to agents 623 643 (3.1) Depreciation and amortization 516 522 (1.1) Maintenance, materials and repairs 452 408 10.8 Other operating expenses 2,442 2,351 3.9 Total operating expenses 7,683 7,594 1.2 Operating Income 1,031 704 46.4 Other Expense (102) (157) (35.0) Earnings Before Income Taxes $ 929 $ 547 69.8 Pre-tax Margin 10.7% 6.6% 4.1 pts. The SABRE Group Revenues $1,131 $ 889 27.2 Operating Expenses 907 686 32.2 Operating Income 224 203 10.3 Other Income 3 2 50.0 Earnings Before Income Taxes $ 227 $ 205 10.7 Pre-tax Margin 20.1% 23.1% (3.0) pts. Management Services Group Revenues $ 308 $ 312 (1.3) Operating Expenses 279 280 (0.4) Operating Income 29 32 (9.4) Other Income (Expense) 1 (1) * Earnings Before Income Taxes $ 30 $ 31 (3.2) Pre-tax Margin 9.7% 9.9% (0.2) pts. 11 Airline Group Operating Statistics (Unaudited)
Three Months Ended Percent June 30, Change 1998 1997 American Airlines Jet Operations: Revenue passenger miles (millions) 27,923 27,318 2.2 Available seat miles (millions) 38,963 38,738 0.6 Cargo ton miles (millions) 509 521 (2.3) Passenger load factor 71.7% 70.5% 1.2 pts. Breakeven load factor 58.9% 60.0% (1.1) pts. Passenger revenue yield per passenger mile (cents) 13.57 13.33 1.8 Passenger revenue per available seat mile (cents) 9.72 9.40 3.4 Cargo revenue yield per ton mile (cents) 32.75 32.88 (0.4) Operating expenses per available seat mile (cents) 9.25 9.15 1.1 Fuel consumption (gallons, in millions) 711 697 2.0 Fuel price per gallon (cents) 55.0 65.3 (15.7) Fuel price per gallon, excluding fuel tax (cents) 50.3 60.4 (16.8) Operating aircraft at period-end 641 644 (0.5) AMR Eagle: Revenue passenger miles (millions) 708 652 8.6 Available seat miles (millions) 1,099 1,047 5.0 Passenger load factor 64.5% 62.3% 2.2 pts. Operating aircraft at period-end 206 203 1.5 AMR Corporation Average Equivalent Number of Employees Airline Group: AA Jet Operations 81,400 80,300 Other 10,100 10,200 Total Airline Group 91,500 90,500 The SABRE Group 11,300 8,400 Management Services Group 13,000 15,500 Total 115,800 114,400 12 Airline Group Operating Statistics (Unaudited)
Six Months Ended Percent June 30, Change 1998 1997 American Airlines Jet Operations: Revenue passenger miles (millions) 53,311 52,613 1.3 Available seat miles (millions) 76,670 76,258 0.5 Cargo ton miles (millions) 1,005 1,001 0.4 Passenger load factor 69.5% 69.0% 0.5 pts. Breakeven load factor 58.6% 61.4% (2.8) pts. Passenger revenue yield per passencer mile (cents) 13.82 13.36 3.4 Passenger revenue per avalable seat mile (cents) 9.61 9.22 4.2 Cargo revenue yield per ton mile (cents) 32.65 33.31 (2.0) Operating expenses per available seat mile (cents) 9.30 9.27 0.3 Fuel consumption (gallons, in millions) 1,392 1,370 1.6 Fuel price per gallon (cents) 56.9 69.9 (18.6) Fuel price per gallon, excluding fuel tax (cents) 52.0 65.0 (20.0) Operating aircraft at period-end 641 644 (0.5) AMR Eagle: Revenue passenger miles (millions) 1,323 1,254 5.5 Available seat miles (millions) 2,170 2,090 3.8 Passenger load factor 61.0% 60.0% 1.0 pts. Operating aircraft at period-end 206 203 1.5