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: October 20, 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 October 20, 1999 by the Company as Exhibit 99.1 which is included herein. This press release was issued to report third 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: October 20, 1999
4 EXHIBIT INDEX Exhibit Description 99.1 Press Release
5 Exhibit 99.1 Contact: John Hotard Fort Worth, Texas 817-967-1577 FOR RELEASE: Wednesday, Oct. 20,1999 AMR REPORTS THIRD QUARTER EARNINGS OF $279 MILLION FORT WORTH, Texas - AMR Corp., parent of American Airlines Inc., today reported third quarter earnings of $279 million, or $1.76 per common share diluted, a 36 percent decrease compared to net earnings of $433 million, or $2.49 per common share diluted, for the same period in 1998. "It's difficult to compare this quarter with the record third quarter earnings of last year because American benefited from strikes at two carriers in 1998," said Donald J. Carty, American's chairman and CEO. "And despite the disruption in many parts of our operation caused by Hurricane Floyd, our earnings per share were our third highest ever for a third quarter period. "During the third quarter, we were pleased to welcome 1,700 new employees to the American Airlines team as Reno Air was integrated into American on Aug. 31," Carty said. "This added 180-plus flights to the western part of our route structure. Also, in the Northeast, the network added 300 daily flights as American Eagle's Business Express Airlines unit transitioned into our reservation system." Carty also pointed out that the airline group's gross sales from Internet commerce continue to grow each month. In the third quarter, on American's AA.com Web site alone, gross sales were $133 million, an increase of 303 percent from the same period in 1998. Weekly gross revenue from AA.com was as much as $14.3 million in the third quarter. Among AMR's other third-quarter highlights: - The AADVANTAGE program made major changes, making it much easier for members to keep miles from expiring. - more -
6 AMR REPORTS THIRD QUARTER EARNINGS Oct. 20, 1999 Page 2 - American Airlines changed its on-board cell phone policy to allow calls while still at the gate. - The National Mediation Board upheld the decision of American's passenger service and reservation agents to reject union representation. - American Eagle put its first 37-seat ERJ-135 regional jet into service. - American Airlines was the only airline in the Fortune 100 to receive the top rating for its Y2K preparedness by Weiss Ratings. - American Airlines Cargo experienced its best quarter for freight traffic and implemented new customer friendly automation systems. - American Airlines said it would install fully flat sleeper seats in First Class on its Boeing 767-300 aircraft. - American Eagle opened a spacious new terminal at Los Angeles International Airport, offering covered boarding. - American Airlines began DFW-Osaka service with Boeing 777 aircraft. - American's Anne McNamara received the first National Diversity Leadership Award given by the Coalition of Bar Associations of Color. - Hispanic magazine honored American as having one of the top 25 minority supplier programs. - American Airlines welcomed Finnair and Iberia to the oneworld alliance. - American Airlines and EVA Airways of Taiwan announced a new marketing agreement. - American Airlines moved its Paris operation from Orly Airport to Roissy-Charles de Gaulle airport. - AMR was named by FORTUNE Magazine as one of the 50 best companies for black, Hispanic and Asian employment - the only passenger airline to make the list. - Total worldwide travel bookings processed through the Sabre computer reservations system were 113 million for the quarter, an increase of 6.2 percent over the same period last year. EDITORS: AMR's Chief Financial Officer, Gerard J. Arpey, will be available to answer media inquiries 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 (in millions, except per share amounts) (Unaudited) Three Months Ended September 30, Percent 1999 1998 Change Revenues Airline Group Passenger - American Airlines $3,900 $3,871 0.7 - AMR Eagle 352 304 15.8 Cargo 160 158 1.3 Other 267 257 3.9 4,679 4,590 1.9 Sabre 617 604 2.2 Other 20 17 17.6 Less: Intersegment revenues (166) (165) 0.6 Total operating revenues 5,150 5,046 2.1 Expenses Wages, salaries and benefits 1,734 1,632 6.3 Aircraft fuel 456 400 14.0 Depreciation and amortization 317 328 (3.4) Commissions to agents 314 311 1.0 Maintenance, materials and repairs 263 251 4.8 Other rentals and landing fees 261 231 13.0 Food service 196 184 6.5 Aircraft rentals 161 142 13.4 Other operating expenses 901 835 7.9 Total operating expenses 4,603 4,314 6.7 Operating Income 547 732 (25.3) Other Income (Expense) Interest income 26 37 (29.7) Interest expense (107) (93) 15.1 Interest capitalized 27 28 (3.6) Minority interest (13) (12) 8.3 Miscellaneous - net (9) 16 * (76) (24) * Income From Continuing Operations Before Income Taxes 471 708 (33.5) Income tax provision 192 277 (30.7) Income From Continuing Operations 279 431 (35.3) Discontinued Operations (net of applicable income taxes) - 2 - Net Earnings $ 279 $ 433 (35.6) Continued on next page.
8 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (in millions, except per share amounts) (Unaudited) Three Months Ended September 30, 1999 1998 Earnings Per Common Share Basic Income from Continuing Operations $ 1.86 $ 2.56 Discontinued Operations - 0.01 Net Earnings $ 1.86 $ 2.57 Diluted Income from Continuing Operations $ 1.76 $ 2.48 Discontinued Operations - 0.01 Net Earnings $ 1.76 $ 2.49 Number of Shares Used in Computation Basic 150 169 Diluted 155 174 * Greater than 100% Note: Certain amounts from 1998 have been reclassified to conform with 1999 presentation.
9 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (Unaudited) Nine Months Ended September 30, Percent 1999 1998 Change Revenues Airline Group Passenger - American Airlines $10,971 $11,238 (2.4) - AMR Eagle 963 849 13.4 Cargo 469 490 (4.3) Other 795 739 7.6 13,198 13,316 (0.9) Sabre 1,894 1,735 9.2 Other 60 51 17.6 Less: Intersegment revenues (508) (498) 2.0 Total operating revenues 14,644 14,604 0.3 Expenses Wages, salaries and benefits 5,164 4,817 7.2 Aircraft fuel 1,219 1,219 - Depreciation and amortization 984 966 1.9 Commissions to agents 900 934 (3.6) Maintenance, materials and repairs 743 704 5.5 Other rentals and landing fees 754 667 13.0 Food service 548 523 4.8 Aircraft rentals 483 427 13.1 Other operating expenses 2,634 2,343 12.4 Total operating expenses 13,429 12,600 6.6 Operating Income 1,215 2,004 (39.4) Other Income (Expense) Interest income 72 103 (30.1) Interest expense (294) (280) 5.0 Interest capitalized 89 71 25.4 Minority interest (40) (37) 8.1 Miscellaneous - net 50 (3) * (123) (146) (15.8) Income From Continuing Operations Before Income Taxes 1,092 1,858 (41.2) Income tax provision 451 734 (38.6) Income From Continuing Operations 641 1,124 (43.0) Discontinued Operations (net of applicable income taxes) 64 8 * Net Earnings $ 705 $ 1,132 (37.7) Continued on next page.
10 AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (in millions, except per share amounts) (Unaudited) Nine Months Ended September 30, 1999 1998 Earnings Per Common Share Basic Income from Continuing Operations $ 4.17 $ 6.57 Discontinued Operations 0.41 0.05 Net Earnings $ 4.58 $ 6.62 Diluted Income from Continuing Operations $ 4.04 $ 6.34 Discontinued Operations 0.40 0.05 Net Earnings $ 4.44 $ 6.39 Number of Shares Used in Computation Basic 154 171 Diluted 159 177 * Greater than 100% Note: Certain amounts from 1998 have been reclassified to conform with 1999 presentation.
11 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (in millions) (Unaudited) Three Months Ended September 30, Percent 1999 1998 Change Airline Group Revenues Passenger - American Airlines $3,900 $ 3,871 0.7 - AMR Eagle 352 304 15.8 Cargo 160 158 1.3 Other 267 257 3.9 4,679 4,590 1.9 Expenses Wages, salaries and benefits 1,528 1,449 5.5 Aircraft fuel 456 400 14.0 Commissions to agents 314 311 1.0 Depreciation and amortization 276 265 4.2 Maintenance, materials and repairs 263 250 5.2 Other rentals and landing fees 248 222 11.7 Food service 196 184 6.5 Aircraft rentals 161 142 13.4 Other operating expenses 815 741 10.0 Total operating expenses 4,257 3,964 7.4 Operating Income 422 626 (32.6) Other Expense (69) (27) * Earnings Before Income Taxes $ 353 $ 599 (41.1) Pre-tax Margin 7.5% 13.1% (5.6) pts. Sabre Revenues $ 617 $ 604 2.2 Operating Expenses 496 506 (2.0) Operating Income 121 98 23.5 Other Income 4 15 (73.3) Earnings Before Income Taxes $ 125 $ 113 10.6 Pre-tax Margin 20.3% 18.7% 1.6 pts. * Greater than 100% Note: Certain amounts from 1998 have been reclassified to conform with 1999 presentation.
12 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (in millions) (Unaudited) Nine Months Ended September 30, Percent 1999 1998 Change Airline Group Revenues Passenger - American Airlines $10,971 $11,238 (2.4) - AMR Eagle 963 849 13.4 Cargo 469 490 (4.3) Other 795 739 7.6 13,198 13,316 (0.9) Expenses Wages, salaries and benefits 4,547 4,285 6.1 Aircraft fuel 1,219 1,219 - Commissions to agents 900 934 (3.6) Depreciation and amortization 797 781 2.0 Maintenance, materials and repairs 742 702 5.7 Other rentals and landing fees 717 641 11.9 Food service 548 523 4.8 Aircraft rentals 483 427 13.1 Other operating expenses 2,378 2,143 11.0 Total operating expenses 12,331 11,655 5.8 Operating Income 867 1,661 (47.8) Other Expense (131) (130) 0.8 Earnings Before Income Taxes $ 736 $ 1,531 (51.9) Pre-tax Margin 5.6% 11.5% (5.9) pts. Sabre Revenues $1,894 $ 1,735 9.2 Operating Expenses 1,565 1,413 10.8 Operating Income 329 322 2.2 Other Income 45 18 * Earnings Before Income Taxes $ 374 $ 340 10.0 Pre-tax Margin 19.7% 19.6% 0.1 pts. * Greater than 100% Note: Certain amounts from 1998 have been reclassified to conform with 1999 presentation.
13 AIRLINE GROUP OPERATING STATISTICS (Unaudited) Three Months Ended September 30, Percent 1999 1998 Change American Airlines Jet Operations: Revenue passenger miles (millions) 30,325 29,132 4.1 Available seat miles (millions) 42,245 39,806 6.1 Cargo ton miles (millions) 541 480 12.7 Passenger load factor 71.8% 73.2% (1.4) pts. Breakeven load factor 63.3% 60.2% 3.1 pts. Passenger revenue yield per passenger mile (cents) 12.86 13.29 (3.2) Passenger revenue per available seat mile (cents) 9.23 9.73 (5.1) Cargo revenue yield per ton mile (cents) 29.22 32.61 (10.4) Operating expenses per available seat mile (cents) 9.21 9.22 (0.1) Fuel consumption (gallons, in millions) 780 728 7.1 Fuel price per gallon (cents) 55.9 53.1 5.3 Fuel price per gallon, excluding fuel taxes (cents) 51.0 48.4 5.4 Operating aircraft at period-end 703 645 9.0 AMR Eagle: Revenue passenger miles (millions) 905 753 20.2 Available seat miles (millions) 1,502 1,156 29.9 Passenger load factor 60.2% 65.1% (4.9) pts. Operating aircraft at period-end 268 207 29.5 AMR Corporation Average Equivalent Number of Employees Airline Group: AA Jet Operations 87,700 82,300 Other 13,100 10,800 Total Airline Group 100,800 93,100 Sabre 11,700 11,700 Other 1,300 13,100 Total 113,800 117,900
14 AIRLINE GROUP OPERATING STATISTICS (Unaudited) Nine Months Ended September 30, Percent 1999 1998 Change American Airlines Jet Operations: Revenue passenger miles (millions) 84,522 82,443 2.5 Available seat miles (millions) 120,354 116,476 3.3 Cargo ton miles (millions) 1,483 1,485 (0.1) Passenger load factor 70.2% 70.8% (0.6) pts. Breakeven load factor 64.3% 59.2% 5.1 pts. Passenger revenue yield per passenger mile (cents) 12.98 13.63 (4.8) Passenger revenue per available seat mile (cents) 9.12 9.65 (5.5) Cargo revenue yield per ton mile (cents) 31.21 32.64 (4.4) Operating expenses per available seat mile (cents) 9.38 9.27 1.2 Fuel consumption (gallons, in millions) 2,212 2,120 4.3 Fuel price per gallon (cents) 52.7 55.6 (5.2) Fuel price per gallon, excluding fuel taxes (cents) 48.1 50.8 (5.3) Operating aircraft at period-end 703 645 9.0 AMR Eagle: Revenue passenger miles (millions) 2,496 2,076 20.2 Available seat miles (millions) 4,135 3,326 24.3 Passenger load factor 60.4% 62.4% (2.0) pts. Operating aircraft at period-end 268 207 29.5