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 21, 1999 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 on July 21, 1999 by the Company as Exhibit 99.1 which is included herein. This press release was issued to report second quarter earnings. 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 21, 1999
4 EXHIBIT INDEX Exhibit Description 99.1 Press Release
5 Exhibit 99.1 Contact: Corporate Communications Fort Worth, Texas 817-967-1577 FOR RELEASE: Wednesday, July 21, 1999 AMR REPORTS SECOND-QUARTER EARNINGS OF $268 MILLION FORT WORTH, Texas - AMR Corp., parent of American Airlines Inc., today reported second-quarter net earnings of $268 million, or $1.70 per common share diluted, a 34.5 percent decrease compared to net earnings of $409 million, or $2.30 per common share diluted, during the same period of 1998. "We made very real progress in recovering from our difficult first quarter," said Donald J. Carty, AMR's Chairman and CEO. "We posted our second strongest earnings per share for any second quarter in the company's history, in spite of operations that were hampered by air traffic control and weather disruptions. "We're also encouraged by our cost control efforts during the quarter, holding our year-over-year unit cost increase to only 0.6 percent," Carty added. Among AMR's second-quarter highlights: - -USA TODAY named AADVANTAGE the top frequent flyer program. - -FORTUNE magazine named AMR as one of "The 50 Best Companies for Asians, Blacks and Hispanics." No other airline made the list. - -Hispanic Magazine recognized American Airlines for having one of the top 25 minority supplier programs. No other airline made the list. - -AA and Canadian became the first in the industry to implement electronic ticket interline capability. - -AMR has repurchased 39.4 million shares of stock since 1997. - -Sabre's travel distribution revenues rose 15 percent, driven by travel growth, market share gains, and the rapid growth of Travelocity.com, the company's leading travel web site. -- more --
6 AMR Reports Second Quarter Earnings July 21, 1999 Page 2 - -AA reached agreement with the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU) on the Reno Air integration process. - -Aug. 31 was set as the date when Reno Air will be fully integrated into American. - -AA added Los Angeles-Paris service and announced a $245 million renovation of LAX Terminal 4. - -Alaska Airlines, Horizon Air and Air Pacific joined the AADVANTAGE program. - -AA and LanChile received U.S. DOT tentative approval for codesharing. LanChile is admitted to the oneworld alliance. - -AA and El Al announced a reciprocal frequent flyer agreement. - -AA launched new Buffalo-DFW, Hartford-Los Angeles, Boston- Seattle, Anchorage-DFW, and Houston Hobby-Washington D.C. Reagan service. - -AA ordered three more new Boeing 737-800s, for a total of 103 of the jets ordered. The new aircraft were ordered to replace three Reno Air jets being returned to lessors. - -AA Cargo set new records throughout the network, thanks to the introduction of Boeing 777s to London and Tokyo. - -AA applied for China routes, including Chicago-Beijing and Chicago-Shanghai. - -AA and American Eagle announced additional service at the San Juan hub. - -American Eagle began new ERJ-145 Regional Jet (RJ) service between Dallas/Fort Worth and Baton Rouge, La., and added one flight between DFW and Montgomery, Ala. New RJ service began between Chicago O'Hare and both Baltimore/Washington and Pittsburgh. Turboprops were replaced with RJs between Chicago and both Madison, Wis., and Grand Rapids, Mich. EDITORS: AMR's Chief Financial Officer, Gerard J. Arpey, will be available to answer questions during a telephone news conference today, from 2 p.m. to 2:45 p.m., CDT. Those interested in joining the conference should call 817- 967-1577 for details. Detailed Financial Information Follows
7 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In millions, except per share amounts) Three Months Ended June 30, Percent 1999 1998 Change Revenues Airline Group Passenger - American Airlines $3,751 $ 3,789 (1.0) - AMR Eagle 340 289 17.6 Cargo 164 169 (3.0) Other 273 250 9.2 4,528 4,497 0.7 Sabre 639 577 10.7 Other 20 17 17.6 Less: Intersegment revenues (176) (167) 5.4 Total operating revenues 5,011 4,924 1.8 Expenses Wages, salaries and benefits 1,765 1,627 8.5 Aircraft fuel 414 404 2.5 Depreciation and amortization 351 320 9.7 Commissions to agents 298 322 (7.5) Other rentals and landing fees 253 223 13.5 Maintenance, materials and repairs 223 223 - Food service 185 175 5.7 Aircraft rentals 162 143 13.3 Other operating expenses 850 763 11.4 Total operating expenses 4,501 4,200 7.2 Operating Income 510 724 (29.6) Other Income (Expense) Interest income 21 33 (36.4) Interest expense (95) (92) 3.3 Interest capitalized 29 25 16.0 Minority interest (11) (12) (8.3) Miscellaneous - net (6) (5) 20.0 (62) (51) 21.6 Income From Continuing Operations Before Income Taxes 448 673 (33.4) Income tax provision 180 265 (32.1) Income From Continuing Operations 268 408 (34.3) Income From Discontinued Operations (net of applicable income taxes) - 1 - Gain on Sale of Discontinued Operations (net of applicable income taxes) - - - Net Earnings $ 268 $ 409 (34.5) Continued on next page
8 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (Unaudited) (In millions, except per share amounts) Three Months Ended June 30, 1999 1998 Earnings Per Common Share Basic Income from Continuing Operations $ 1.76 $ 2.37 Discontinued Operations - 0.01 Net Earnings $ 1.76 $ 2.38 Diluted Income from Continuing Operations $ 1.70 $ 2.29 Discontinued Operations - 0.01 Net Earnings $ 1.70 $ 2.30 Number of Shares Used in Computation Basic 153 172 Diluted 158 178
9 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In millions, except per share amounts) Six Months Ended June 30, Percent 1999 1998 Change Revenues Airline Group Passenger - American Airlines $7,071 $7,367 (4.0) - AMR Eagle 611 545 12.1 Cargo 309 332 (6.9) Other 528 482 9.5 8,519 8,726 (2.4) Sabre 1,277 1,131 12.9 Other 40 34 17.6 Less: Intersegment revenues (342) (333) 2.7 Total operating revenues 9,494 9,558 (0.7) Expenses Wages, salaries and benefits 3,430 3,186 7.7 Aircraft fuel 763 819 (6.8) Depreciation and amortization 667 638 4.5 Commissions to agents 586 623 (5.9) Other rentals and landing fees 493 436 13.1 Maintenance, materials and repairs 480 453 6.0 Food service 352 339 3.8 Aircraft rentals 322 285 13.0 Other operating expenses 1,733 1,507 15.0 Total operating expenses 8,826 8,286 6.5 Operating Income 668 1,272 (47.5) Other Income (Expense) Interest income 46 67 (31.3) Interest expense (187) (189) (1.1) Interest capitalized 62 43 44.2 Minority interest (27) (25) 8.0 Miscellaneous - net 59 (18) * (47) (122) (61.5) Income From Continuing Operations Before Income Taxes 621 1,150 (46.0) Income tax provision 259 457 (43.3) Income From Continuing Operations 362 693 (47.8) Income From Discontinued Operations (net of applicable income taxes) - 6 - Gain on Sale of Discontinued Operations (net of applicable income taxes) 64 - * Net Earnings $ 426 $ 699 (39.1) Continued on next page * Greater Than 100%
10 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (Unaudited) (In millions, except per share amounts) Six Months Ended June 30, 1999 1998 Earnings Per Common Share Basic Income from Continuing Operations $ 2.32 $ 4.02 Discontinued Operations 0.41 0.04 Net Earnings $ 2.73 $ 4.06 Diluted Income from Continuing Operations $ 2.25 $ 3.88 Discontinued Operations 0.40 0.03 Net Earnings $ 2.65 $ 3.91 Number of Shares Used in Computation Basic 156 172 Diluted 161 179
11 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions) Three Months Ended June 30, Percent 1999 1998 Change Airline Group Revenues Passenger - American Airlines $3,751 $3,789 (1.0) - AMR Eagle 340 289 17.6 Cargo 164 169 (3.0) Other 273 250 9.2 4,528 4,497 0.7 Expenses Wages, salaries and benefits 1,557 1,452 7.2 Aircraft fuel 414 404 2.5 Commissions to agents 298 322 (7.5) Depreciation and amortization 268 258 3.9 Other rentals and landing fees 241 215 12.1 Maintenance, materials and 222 223 (0.4) repairs Food service 185 175 5.7 Aircraft rentals 162 143 13.3 Other operating expenses 773 697 10.9 Total operating expenses 4,120 3,889 5.9 Operating Income 408 608 (32.9) Other Expense (56) (41) 36.6 Earnings Before Income Taxes $ 352 $ 567 (37.9) Pre-tax Margin 7.8% 12.6% (4.8) pts. Sabre Revenues $ 639 $ 577 10.7 Operating Expenses 543 468 16.0 Operating Income 96 109 (11.9) Other Income 4 1 * Earnings Before Income Taxes $ 100 $ 110 (9.1) Pre-tax Margin 15.6% 19.1% (3.5) pts. * Greater Than 100%
12AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions) Six Months Ended June 30, Percent 1999 1998 Change Airline Group Revenues Passenger - American Airlines $7,071 $7,367 (4.0) - AMR Eagle 611 545 12.1 Cargo 309 332 (6.9) Other 528 482 9.5 8,519 8,726 (2.4) Expenses Wages, salaries and benefits 3,019 2,836 6.5 Aircraft fuel 763 819 (6.8) Commissions to agents 586 623 (5.9) Depreciation and amortization 521 516 1.0 Other rentals and landing fees 469 419 11.9 Maintenance, materials and repairs 479 452 6.0 Food service 352 339 3.8 Aircraft rentals 322 285 13.0 Other operating expenses 1,563 1,402 11.5 Total operating expenses 8,074 7,691 5.0 Operating Income 445 1,035 (57.0) Other Expense (62) (103) (39.8) Earnings Before Income Taxes $ 383 $ 932 (58.9) Pre-tax Margin 4.5% 10.7% (6.2) pts. Sabre Revenues $1,277 $1,131 12.9 Operating Expenses 1,069 907 17.9 Operating Income 208 224 (7.1) Other Income 41 3 * Earnings Before Income Taxes $ 249 $ 227 9.7 Pre-tax Margin 19.5% 20.1% (0.6) pts. * Greater Than 100%
13 Airline Group Operating Statistics (Unaudited) Three Months Ended June 30, Percent 1999 1998 Change American Airlines Jet Operations: Revenue passenger miles (millions) 28,908 27,923 3.5 Available seat miles (millions) 40,406 38,963 3.7 Cargo ton miles (millions) 511 509 0.4 Passenger load factor 71.5% 71.7% (0.2) pts. Breakeven load factor 63.2% 58.9% 4.3 pts. Passenger revenue yield per passenger mile (cents) 12.97 13.57 (4.4) Passenger revenue per available seat mile (cents) 9.28 9.72 (4.5) Cargo revenue yield per ton mile (cents) 31.67 32.75 (3.3) Operating expenses per available seat mile (cents) 9.31 9.25 0.6 Fuel consumption (gallons, in millions) 745 711 4.8 Fuel price per gallon (cents) 53.0 55.0 (3.6) Fuel price per gallon, excluding fuel taxes (cents) 48.4 50.3 (3.8) Operating aircraft at period-end 697 641 8.7 AMR Eagle: Revenue passenger miles (millions) 885 708 25.0 Available seat miles (millions) 1,422 1,099 29.4 Passenger load factor 62.2% 64.5% (2.3) pts. Operating aircraft at period-end 260 206 26.2 AMR Corporation Average Equivalent Number of Employees Airline Group: AA Jet Operations 85,600 81,400 Other 12,800 10,100 Total Airline Group 98,400 91,500 Sabre 12,000 11,300 Other 1,400 13,000 Total 111,800 115,800
14 Airline Group Operating Statistics (Unaudited) Six Months Ended June 30, Percent 1999 1998 Change American Airlines Jet Operations: Revenue passenger miles (millions) 54,198 53,311 1.7 Available seat miles (millions) 78,109 76,670 1.9 Cargo ton miles (millions) 942 1,005 (6.3) Passenger load factor 69.4% 69.5% (0.1) pts. Breakeven load factor 64.9% 58.6% 6.3 pts. Passenger revenue yield per passenger mile (cents) 13.05 13.82 (5.6) Passenger revenue per available seat mile (cents) 9.05 9.61 (5.8) Cargo revenue yield per ton mile (cents) 32.36 32.65 (0.9) Operating expenses per available seat mile (cents) 9.46 9.30 1.7 Fuel consumption (gallons, in millions) 1,432 1,392 2.9 Fuel price per gallon (cents) 51.0 56.9 (10.4) Fuel price per gallon, excluding fuel taxes (cents) 46.6 52.0 (10.4) Operating aircraft at period-end 697 641 8.7 AMR Eagle: Revenue passenger miles (millions) 1,591 1,323 20.3 Available seat miles (millions) 2,633 2,170 21.3 Passenger load factor 60.4% 61.0% (0.6) pts. Operating aircraft at period-end 260 206 26.2