UNITED STATES

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 20, 2011

 

 

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 (Address of principal executive offices)				76155 (Zip code)

(817) 963-1234

(Registrant’s telephone number)

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02

Results of Operations

AMR Corporation (the Company) is furnishing herewith a press release issued on July 20, 2011 by the Company as Exhibit 99.1, which is included herein. This press release was issued to report the Company’s second quarter 2011 results and other items.

 

Item 8.01

Other Events

The Company is furnishing herewith a press release issued on July 20, 2011 by the Company as Exhibit 99.2, which is included herein, and a related presentation, which is attached as Exhibit 99.3 to this Form 8-K, announcing an aircraft order by American Airlines, Inc.

The Company is also furnishing herewith a press release issued on July 20, 2011 by the Company as Exhibit 99.4, which is included herein, announcing the Company’s intent to move forward with the divestiture of American Eagle Holding Corporation (AMR Eagle).

Information in these Items 2.02 and 8.01, including Exhibits 99.1 through 99.4, are being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01

Financial Statements and Exhibits

 

	(c) Exhibits
	Exhibit 99.1			Press Release of AMR dated July 20, 2011 – Second Quarter 2011 Earnings
	Exhibit 99.2			Press Release of AMR dated July 20, 2011 – Aircraft Order
	Exhibit 99.3			Slide Presentation – Aircraft Order
	Exhibit 99.4			Press Release of AMR dated July 20, 2011 – AMR Eagle Divestiture Intent

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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.

 

Dated: July 20, 2011

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EXHIBIT INDEX

 

Exhibit		Description
99.1		Press Release of AMR dated July 20, 2011 – Second Quarter 2011 Earnings
99.2		Press Release of AMR dated July 20, 2011 – Aircraft Order
99.3		Slide Presentation – Aircraft Order
99.4		Press Release of AMR dated 20, 2011 – AMR Eagle Divestiture Intent

Exhibit 99.1

 

FOR RELEASE: Wednesday, July 20, 2011

Editor’s Note: A live webcast reporting second quarter results will be broadcast on the Internet on July 20 at 2 p.m. EDT (Windows Media Player required for viewing)

AMR CORPORATION REPORTS SECOND QUARTER 2011

NET LOSS OF $286 MILLION

Fuel Price Increase of 31 Percent Year-Over-Year Drove $524 Million

of Additional Expense

AMR Second Quarter 2011 Revenue Rose 8 Percent Compared to Same

Period a Year Ago

AMR TAKES STEPS TO POSITION THE COMPANY FOR LONG-TERM SUCCESS, including landmark agreements to transform its narrowbody fleet; intention to move forward with a divestiture of American Eagle regional affiliate; and implementation of additional initiatives

FORT WORTH, Texas – AMR Corporation, the parent company of American Airlines, Inc., today reported a net loss of $286 million for the second quarter of 2011, or $0.85 per share, compared to a net loss of $11 million, or $0.03 per share, in the second quarter of 2010.

The Company’s second quarter performance was negatively impacted by fuel prices that increased 31 percent compared to the second quarter 2010. Including the impact of fuel hedging, AMR paid on average $3.12 per gallon for jet fuel in the second quarter of this year versus $2.37 per gallon in the second quarter 2010. As a result, the Company paid $524 million more for fuel in the second quarter 2011 than it would have paid at prevailing prices from the corresponding prior-year period.

“This past quarter was challenging in many respects,” said AMR Chairman and CEO Gerard Arpey. “We remain acutely focused on taking the necessary steps to manage through our near-term challenges while continuing to lay the foundation for long-

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term success. We believe we have the right framework under our Flight Plan 2020 strategy to achieve our long-term objectives for the benefit of all our stakeholders, and today we took several major steps forward. I would also like to thank all of our employees for their efforts to serve our customers, particularly during the extreme weather conditions and tornadoes in April and May, and for their hard work and dedication during a very busy summer.”

Arpey outlined several immediate actions the company is taking to be more competitive and efficient, including the following:

 

•

American has adjusted its network for the fall, with the cancellation of its San Francisco to Honolulu and Los Angeles to San Salvador flights, as well as a number of other adjustments to reduce costs and improve revenue performance.

 

•

In conjunction with American’s trans-Atlantic joint business partners, the company is evaluating its winter flying, and anticipates making seasonal route and day-of -week flying adjustments in early 2012 to improve its results.

 

•

American announced today it intends to discontinue operating its reservations office in Dublin, Ireland, to reduce its operating costs.

 

•

American also applied for a waiver from the U.S. Department of Transportation to temporarily suspend service from New York’s JFK to Tokyo’s Haneda Airport through mid-2012. American plans to suspend its service to Haneda beginning in early September in an effort to help it offer service more in line with market demand, as Japan continues to recover from March’s earthquake and tsunami.

AMR Corporation Announces Landmark Fleet Agreements with Boeing and Airbus to Transform American’s Narrowbody Fleet

AMR today announced landmark agreements with Boeing and Airbus that will enable it to transform American’s narrowbody fleet. These new aircraft will allow American to reduce its operating and fuel costs and deliver a broad range of state-of-the-art amenities to customers, while maximizing the Company’s financial flexibility.

Under the new agreements, American will acquire 460 narrowbody aircraft from the Boeing 737 and Airbus A320 families beginning in 2013 — the largest aircraft order in aviation history. As part of these agreements, starting in 2017 American will become the first U.S. network airline to begin taking delivery of “next generation” narrowbody aircraft that will further accelerate fuel-efficiency gains.

These new deliveries are expected to pave the way for American to have the youngest and most fuel-efficient fleet among its U.S. airline peers in approximately five years. American also will benefit from approximately $13 billion of committed financing

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from the manufacturers through lease transactions that will help maximize balance sheet flexibility and reduce risk. The financing fully covers the first 230 deliveries. (AMR provided additional details in a separate news release issued this morning. Please refer to that release for more details).

In addition, American now has eight Boeing 777-300ERs that are scheduled for delivery in 2012 and 2013, including three additional aircraft for which options were recently exercised. These 777-300ERs will complement American’s fleet, offering additional network flexibility, and providing increased efficiency due to better seat mile economics and performance characteristics.

AMR Corporation Announces Intent to Move Forward with the Divestiture of American Eagle

AMR announced today its intent to move forward with the divestiture of AMR Eagle Holding Corporation (“Eagle”). AMR currently expects the divestiture to take the form of a spin-off of Eagle stock to the shareholders of AMR. Strategically, AMR believes a divestiture would be beneficial, as it would help ensure American maintains competitive rates and services for its regional feed into the future. A divestiture would also provide Eagle an opportunity to vie for the business of other mainline carriers and allow the carrier to expand its operations.

(AMR provided additional details regarding American Eagle in a separate news release issued this morning. Please refer to that release for more details).

Financial and Operational Performance

AMR reported second quarter consolidated revenues of approximately $6.1 billion, an increase of 7.8 percent year-over-year. American, its regional affiliates, AA Cargo, as well as the ‘other revenue’ category, experienced year-over-year increases, as total operating revenue was approximately $440 million higher in second quarter 2011 than in the second quarter 2010.

Consolidated passenger revenue per available seat mile (unit revenue) grew 4.9 percent, while mainline unit revenue at American grew 4.3 percent, in each case compared to the second quarter 2010. The Company’s second quarter unit revenue performance reflects a modestly improved revenue environment year-over-year. AMR faced a number of revenue headwinds in the quarter, including extreme weather events in Dallas/Fort Worth and the continued impact of the earthquake and tsunami that struck Japan in March.

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American’s passenger yield, which represents the average of fares paid, increased by 4.6 percent year-over-year in the second quarter.

Mainline unit costs, excluding fuel, in the second quarter increased 1.4 percent year-over-year. Non-fuel unit cost performance reflects the impact of American’s cost reduction efforts, offset by weather-related operational disruptions and the previously announced capacity reductions.

Mainline capacity, or total available seat miles, in the second quarter increased by 2.1 percent compared to the second quarter 2010, as the Company selectively added capacity to key markets, such as Asia.

American’s mainline load factor – or percentage of total seats filled – was 83.6 percent during the second quarter 2011, which compares to a load factor of 83.9 percent in the year ago period.

Balance Sheet Update

AMR ended the second quarter with approximately $5.6 billion in cash and short-term investments, including a restricted balance of approximately $457 million. This compares to a balance of $5.5 billion in cash and short-term investments, including a restricted balance of $461 million, at the end of the second quarter 2010.

AMR’s Total Debt, which it defines as the aggregate of its long-term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $17.1 billion at the end of the second quarter 2011, compared to $16.1 billion a year earlier.

AMR’s Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $11.9 billion at the end of the second quarter, compared to $11.0 billion in the second quarter 2010.

Other Second Quarter and Recent Highlights

 

•

Malaysia Airlines announced it is joining oneworld®, adding one of aviation’s most frequent award winners to the world’s leading quality airline alliance. Malaysia Airlines and its subsidiaries serve almost 100 destinations globally in more than 30 countries across Asia, Australasia, Europe, Africa and North and South America. Malaysia Airlines is expected to start flying as a member of oneworld late next year.

 

•

American Airlines and Qantas announced they are seeking regulatory approval for a joint business agreement (JBA) on their services between Australia/New Zealand and the United States, within these regions, and to countries beyond. If

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approved, the JBA will create a new strategic partnership between Qantas and American involving close commercial cooperation and resulting in significant benefits for consumers.

 

•

In July, American entered into a sale-leaseback arrangement with AerCap, a leading independent aircraft leasing company, to finance up to 35 Boeing 737-800 Next Generation aircraft, including 29 firm deliveries, scheduled to be delivered to American. The arrangement also covers six Boeing 737-800 Next Generation aircraft subject to purchase rights that, if exercised by American, would be scheduled for delivery in 2013 - 2014.

 

•

On July 7, Priceline said that its online airline ticketing service is now booking more than 1,000 tickets a day through American Airlines AA Direct Connect. Priceline.com has been booking tickets through AA Direct Connect for approximately six months.

 

•

American Airlines and Citi Cards have launched the Citi ExecutiveSM / AAdvantage® World EliteTM MasterCard® (Citi Executive / AAdvantage card), which will deliver premium travel services and experiences to American Airlines customers. The new Citi Executive / AAdvantage card offers unprecedented airline benefits that allow cardmembers to travel in comfort and style.

Guidance

Mainline and Consolidated Capacity

In light of incremental 2011 capacity reductions, AMR now expects its full-year mainline capacity to be up 1.9 percent versus 2010, with domestic capacity down 0.1 percent and international capacity up 5.0 percent compared to 2010 levels. On a consolidated basis, AMR now expects full-year capacity will be up 2.6 percent.

AMR expects mainline capacity in the third quarter 2011 to be 1.0 percent higher than third quarter 2010, with domestic capacity expected to be down 0.8 percent and international capacity expected to be up 3.6 percent. AMR expects consolidated capacity in the third quarter of 2011 to be up 1.6 percent year-over-year.

Fuel Expense and Hedging

The cost of jet fuel has been increasing and remains very volatile. Based on the July 12 forward curve, AMR is planning for an average system price of $3.15 per gallon in the third quarter 2011 and $3.06 per gallon for all of 2011. This compares to an average system price of $2.32 per gallon in 2010. Consolidated consumption for the third quarter is expected to be 723 million gallons of jet fuel.

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AMR has 50 percent of its anticipated third quarter 2011 fuel consumption hedged at an average cap of $2.89 per gallon of jet fuel equivalent ($87 per barrel crude equivalent), with 39 percent subject to an average floor of $2.15 per gallon of jet fuel equivalent ($56 per barrel crude equivalent). AMR has 48 percent of its anticipated full-year consumption hedged at an average cap of $2.73 per gallon of jet fuel equivalent ($84 per barrel crude equivalent), with 37 percent subject to an average floor of $2.05 per gallon of jet fuel equivalent ($56 per barrel crude equivalent).

Mainline and Consolidated Cost per Available Seat Mile (CASM), Excluding Special Items

Fuel prices are expected to continue to be a significant cost headwind in 2011. AMR remains intensely focused on containing costs, despite significant fuel price and other headwinds in a number of areas, including facilities and healthcare costs. As a result, cost per available seat mile for 2011, excluding fuel and the potential impact of any new labor agreements, is now expected to increase 0.5 percent to 1.5 percent compared to 2010.

Cost/ASM – Percent Change

 

		3Q2011 (est.) vs. 3Q2010 H/(L)		year 2011 (est.) vs. 2010 H/(L)
Mainline CASM		12.9% – 13.3%		8.9% – 9.9%
Excluding Fuel		2.4 – 2.8		0.5 – 1.5
Consolidated CASM		13.1 – 13.5		9.0 – 10.0
Excluding Fuel		2.6 – 3.0		0.5 – 1.5

Editor’s Note: Senior management of AMR will make a presentation to analysts during a teleconference on Wednesday, July 20, at 2 p.m. EDT. Following the analyst call, they will hold a question-and-answer conference call for media. Reporters interested in listening to the presentation or participating in the media Q&A should call 817-967-1577.

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words “expects,” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals, or actions we may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, the Company’s expectations concerning operations and financial conditions, including changes in capacity, revenues, and costs; future financing plans and needs; the amounts of the Company’s unencumbered assets and other sources of liquidity; fleet plans; overall economic and industry conditions; plans and objectives for future operations; a potential spin-off or other divestiture of Eagle; regulatory approvals and actions; and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact.

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Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. This release includes forecasts of unit cost and revenue performance, fuel prices and fuel hedging, capacity and traffic estimates, other income/expense estimates, share count, and statements regarding the Company’s liquidity, each of which is a forward-looking statement. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. The following factors, in addition to other possible factors not listed, could cause the Company’s actual results to differ materially from those expressed in forward-looking statements: the materially weakened financial condition of the Company, resulting from its significant losses in recent years; weak demand for air travel and lower investment asset returns resulting from the severe global economic downturn; the Company’s need to raise substantial additional funds and its ability to do so on acceptable terms; the potential requirement for the Company to maintain reserves under its credit cart processing agreements, which could materially adversely impact the Company’s liquidity; the ability of the Company to generate additional revenues and reduce its costs; continued high and volatile fuel prices and further increases in the price of fuel, and the availability of fuel; the resolution of pending litigation with certain global distribution systems and business discussions with certain on-line travel agents; the Company’s substantial indebtedness and other obligations; the ability of the Company to satisfy certain covenants and conditions in certain of its financing and other agreements; changes in economic and other conditions beyond the Company’s control, and the volatile results of the Company’s operations; the fiercely and increasingly competitive business environment faced by the Company; potential industry consolidation and alliance changes; competition with reorganized carriers; low fare levels by historical standards and the Company’s reduced pricing power; changes in the Company’s corporate or business strategy; extensive government regulation of the Company’s business; conflicts overseas or terrorist attacks; uncertainties with respect to the Company’s international operations; outbreaks of a disease (such as SARS, avian flu or the H1N1 virus) that affects travel behavior; labor costs that are higher than those of the Company’s competitors; uncertainties with respect to the Company’s relationships with unionized and other employee work groups; increased insurance costs and potential reductions of available insurance coverage; the Company’s ability to retain key management personnel; potential failures or disruptions of the Company’s computer, communications or other technology systems; losses and adverse publicity resulting from any accident involving the Company’s aircraft; interruptions or disruptions in service at one or more of the Company’s primary market airports; the heavy taxation of the airline industry; and changes in the price of the Company’s common stock. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010.

Detailed financial information follows:

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AMR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(Unaudited)

 

		Three Months Ended June 30,								Percent
		2011				2010				Change
Revenues
Passenger - American Airlines		$	4,557			$	4,279				6.5	%
- Regional Affiliates			711				600				18.5
Cargo			187				170				9.6
Other revenues			659				625				5.5
Total operating revenues			6,114				5,674				7.8
Expenses
Aircraft fuel			2,202				1,655				33.1
Wages, salaries and benefits			1,764				1,714				2.9
Other rentals and landing fees			355				352				0.9
Maintenance, materials and repairs			334				340				(1.8	)
Depreciation and amortization			266				267				(0.4	)
Commissions, booking fees and credit card expense			268				248				8.1
Aircraft rentals			158				145				9.0
Food service			133				121				9.9
Special charges			—				—				*
Other operating expenses			712				636				11.9
Total operating expenses			6,192				5,478				13.0
Operating Income (Loss)			(78	)			196				*
Other Income (Expense)
Interest income			7				6				16.7
Interest expense			(215	)			(209	)			2.8
Interest capitalized			10				8				24.0
Miscellaneous – net			(10	)			(12	)			(16.7	)
			(208	)			(207	)			0.5
Loss Before Income Taxes			(286	)			(11	)			*
Income tax			—				—				—
Net Loss		$	(286	)		$	(11	)			*
Loss Per Share
Basic		$	(0.85	)		$	(0.03	)
Diluted		$	(0.85	)		$	(0.03	)
Number of Shares Used in Computation
Basic			335				333
Diluted			335				333

 

*	Greater than 100%

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AMR CORPORATION

OPERATING STATISTICS

(Unaudited)

 

		Three Months Ended June  30,								Percent
		2011				2010				Change
American Airlines, Inc. Mainline Jet Operations
Revenue passenger miles (millions)			32,788				32,215				1.8
Available seat miles (millions)			39,228				38,413				2.1
Cargo ton miles (millions)			459				478				(4.1	)
Passenger load factor			83.6	%			83.9	%			(0.3	) pts
Passenger revenue yield per passenger mile (cents)			13.90				13.28				4.6
Passenger revenue per available seat mile (cents)			11.62				11.14				4.3
Cargo revenue yield per ton mile (cents)			40.76				35.67				14.2
Operating expenses per available seat mile, excluding Regional Affiliates (cents) (1)			13.85				12.62				9.7
Fuel consumption (gallons, in millions)			627				627				0.0
Fuel price per gallon (dollars)			3.11				2.37				31.2
Regional Affiliates
Revenue passenger miles (millions)			2,585				2,230				15.9
Available seat miles (millions)			3,412				2,994				14.0
Passenger load factor			75.8	%			74.5	%			1.3	pts
AMR Corporation
Average Equivalent Number of Employees
American Airlines			66,800				65,600
Other			13,700				12,700
Total			80,500				78,300

 

(1)	Excludes $793 million and $662 million of expense incurred related to Regional Affiliates in 2011 and 2010, respectively.

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AMR CORPORATION

OPERATING STATISTICS

(Unaudited)

OPERATING STATISTICS BY REGIONAL ENTITY

 

American Airlines, Inc.		Three Months Ended June 30, 2011
Entity Results		RASM1 (cents)				Y-O-Y Change				ASMs2 (billions)				Y-O-Y Change
DOT Domestic			11.74				4.9	%			23.2				(1.0	)%
International			11.44				3.5				16.0				7.0
DOT Latin America			12.75				17.0				7.2				0.2
DOT Atlantic			10.83				(4.7	)			6.6				9.0
DOT Pacific			9.02				(14.7	)			2.3				27.4
American Airlines, Inc.		Three Months Ended June 30, 2011
Entity Results		Load Factor (pts)				Y-O-Y Change (pts)				Yield (cents)				Y-O-Y Change
DOT Domestic			85.5				(0.2	)			13.73				5.1	%
International			80.8				(0.2	)			14.16				3.8
DOT Latin America			79.9				3.6				15.95				11.7
DOT Atlantic			82.9				(2.0	)			13.07				(2.3	)
DOT Pacific			77.0				(9.3	)			11.72				(4.3	)

 

1	Revenue per Available Seat Mile

2	Available Seat Miles

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AMR CORPORATION

NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)

 

American Airlines, Inc. Mainline Jet Operations		Three Months Ended June 30,
(in millions, except as noted)		2011				2010
Total operating expenses		$	6,225			$	5,510
Less: Operating expenses incurred related to Regional Affiliates			793				662
Operating expenses excluding expenses incurred related to Regional Affiliates		$	5,432			$	4,848
American mainline jet operations available seat miles			39,228				38,413
Operating expenses per available seat mile, excluding Regional Affiliates (cents)			13.85				12.62
Percent change			9.7	%
American Airlines, Inc. Mainline Jet Operations		Three Months Ended June 30,
(in millions, except as noted)		2011				2010
Total operating expenses		$	6,225			$	5,510
Less: Operating expenses incurred related to Regional Affiliates			793				662
Operating expenses excluding expenses incurred related to Regional Affiliates		$	5,432			$	4,848
American mainline jet operations available seat miles			39,228				38,413
Operating expenses per available seat mile, excluding Regional Affiliates (cents)			13.85				12.62
Less: Impact of special items (cents)			—				—
Operating expenses per available seat mile, excluding impact of special items (cents)			13.85				12.62
Percent change			9.7	%
Less: Fuel cost per available seat mile (cents)			4.97				3.87
Operating expenses per available seat mile, excluding impact of special items and the cost of fuel (cents)			8.88				8.75
Percent change			1.4	%

Note: The Company believes that operating expenses per available seat mile, excluding the cost of fuel and special items assists investors in understanding the impact of fuel prices and special items on the Company’s operations.

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AMR CORPORATION

NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)

 

AMR Corporation		Three Months Ended June 30,
		2011				2010
Operating expenses per available seat mile (cents)		$	14.52			$	13.23
Less: Impact of special items (cents)			—				—
Operating expenses per available seat mile (cents)			14.52				13.23
Percent change			9.8	%
Less: Fuel cost per available seat mile (cents)			5.16				4.00
Operating expenses per available seat mile, excluding impact of special items and the cost of fuel (cents)			9.36				9.23
Percent change			1.4	%
Note: The Company believes that operating expenses per available seat mile, excluding the cost of fuel and special items assists investors in understanding the impact of fuel prices and special items on the Company’s operations.
AMR Corporation Calculation of Net Debt		As of June 30
(in millions)		2011				2010
Current and long-term debt		$	11,169			$	10,869
Current and long-term capital lease obligations			713				628
Principal amount of certain airport facility tax-exempt bonds and the present value of aircraft operating lease obligations			5,218				4,588
			17,100				16,085
Less: Unrestricted cash and short-term investments			5,176				5,084
Net Debt		$	11,924			$	11,001

Note: The Company believes the net debt metric assists investors in understanding changes in the Company’s liquidity and the results of its efforts to build a financial foundation under the Company’s Turnaround Plan.

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AMR CORPORATION

NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)

 

American Airlines, Inc. Mainline Jet Operations		Three Months Ended September 30,
		2011 (Estimate)1				2010 (Actual)
Operating expenses per available seat mile, excluding Regional Affiliates (cents)			13.80				12.20
Less: Impact of special items (cents)			—				—
Operating expenses per available seat mile, excluding Regional Affiliates and impact of special items (cents)			13.80				12.20
Percent change			13.1	%
Less: Fuel expense per available seat mile (cents)			4.99				3.61
Operating expenses per available seat mile, excluding Regional Affiliates, impact of special items and fuel expense (cents)			8.81				8.59
Percent change			2.6	%
American Airlines, Inc. Mainline Jet Operations		Year Ended December 31,
		2011 (Estimate)1				2010 (Actual)
Operating expenses per available seat mile, excluding Regional Affiliates (cents)			13.77				12.62
Less: Impact of special items (cents)			0.02				0.05
Operating expenses per available seat mile, excluding Regional Affiliates and impact of special items (cents)			13.75				12.57
Percent change			9.4	%
Less: Fuel expense per available seat mile (cents)			4.83				3.74
Operating expenses per available seat mile, excluding Regional Affiliates, impact of special items and fuel expense (cents)			8.92				8.83
Percent change			1.0	%

 

1	CASM and ex-fuel CASM guidance reconciliations represent the mid-point of the guidance provided in the earnings release

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AMR CORPORATION

NON-GAAP AND OTHER RECONCILIATIONS

(Unaudited)

 

AMR Corporation		Three Months Ended September 30,
		2011 (Estimate)1				2010 (Actual)
Operating expenses per available seat mile (cents)			14.45				12.75
Less: Impact of special items (cents)			—				—
Operating expenses per available seat mile, excluding impact of special items (cents)			14.45				12.75
Percent change			13.3	%
Less: Fuel expense per available seat mile (cents)			5.19				3.74
Operating expenses per available seat mile, excluding impact of special items and fuel expense (cents)			9.26				9.01
Percent change			2.8	%
AMR Corporation		Year Ended December 31,
		2011 (Estimate)1				2010 (Actual)
Operating expenses per available seat mile (cents)			14.44				13.22
Less: Impact of special items (cents)			0.02				0.05
Operating expenses per available seat mile, excluding impact of special items (cents)			14.42				13.17
Percent change			9.5	%
Less: Fuel expense per available seat mile (cents)			5.03				3.87
Operating expenses per available seat mile, excluding impact of special items and fuel expense (cents)			9.39				9.30
Percent change			1.0	%
AMR Corporation		Three Months Ended June 30,
(in millions, except as noted)		2011				2010
Net Loss			(286	)			(11	)
Less: Impact of special items			—				—
Net Loss, excluding impact of special items			(286	)			(11	)
Loss Per Share
Basic			(0.85	)			(0.03	)
Diluted			(0.85	)			(0.03	)

 

1	CASM and ex-fuel CASM guidance reconciliations represent the mid-point of the guidance provided in the earnings release

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AMR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

(Unaudited)

 

		Six Months Ended June 30,								Percent Change
		2011				2010
Revenues
Passenger - American Airlines		$	8,691			$	8,110				7.2	%
- Regional Affiliates			1,288				1,098				17.4
Cargo			356				324				9.8
Other revenues			1,312				1,210				8.4
Total operating revenues			11,647				10,742				8.4
Expenses
Aircraft fuel			4,044				3,131				29.2
Wages, salaries and benefits			3,486				3,417				2.0
Other rentals and landing fees			707				704				0.4
Maintenance, materials and repairs			639				691				(7.5	)
Depreciation and amortization			542				534				1.5
Commissions, booking fees and credit card expense			524				482				8.7
Aircraft rentals			318				274				16.1
Food service			253				236				7.2
Special charges			—				—				*
Other operating expenses			1,443				1,375				4.9
Total operating expenses			11,956				10,844				10.3
Operating Loss			(309	)			(102	)			*
Other Income (Expense)
Interest income			14				11				25.6
Interest expense			(415	)			(418	)			(0.6	)
Interest capitalized			17				18				(6.4	)
Miscellaneous – net			(29	)			(25	)			16.0
			(413	)			(414	)			(0.2	)
Loss Before Income Taxes			(722	)			(516	)			39.9
Income tax			—				—				—
Net Loss		$	(722	)		$	(516	)			39.9
Loss Per Share
Basic		$	(2.16	)		$	(1.55	)
Diluted		$	(2.16	)		$	(1.55	)
Number of Shares Used in Computation
Basic			334				333
Diluted			334				333

 

*	Greater than 100%

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AMR CORPORATION

OPERATING STATISTICS

(Unaudited)

 

		Six Months Ended June 30,								Percent Change
		2011				2010
American Airlines, Inc. Mainline Jet Operations
Revenue passenger miles (millions)			61,953				60,916				1.7
Available seat miles (millions)			77,078				75,259				2.4
Cargo ton miles (millions)			898				925				(3.0	)
Passenger load factor			80.4	%			80.9	%			(0.6	) pts
Passenger revenue yield per passenger mile (cents)			14.03				13.31				5.4
Passenger revenue per available seat mile (cents)			11.28				10.78				4.6
Cargo revenue yield per ton mile (cents)			39.66				35.04				13.2
Operating expenses per available seat mile, excluding Regional Affiliates (cents) (1)			13.63				12.76				6.8
Fuel consumption (gallons, in millions)			1,224				1,225				(0.1	)
Fuel price per gallon (dollars)			2.93				2.30				27.6
Regional Affiliates
Revenue passenger miles (millions)			4,720				4,093				15.3
Available seat miles (millions)			6,567				5,767				13.9
Passenger load factor			71.9	%			71.0	%			0.9	pts
AMR Corporation
Average Equivalent Number of Employees
American Airlines			66,250				65,500
Other			13,500				12,550
Total			79,750				78,050

 

(1)	Excludes $1.5 billion and $1.3 billion of expense incurred related to Regional Affiliates in 2011 and 2010, respectively

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AMR CORPORATION

OPERATING STATISTICS

(Unaudited)

OPERATING STATISTICS BY REGIONAL ENTITY

 

American Airlines, Inc.		Six Months Ended June 30, 2011
Entity Results		RASM1 (cents)				Y-O-Y Change				ASMs2 (billions)				Y-O-Y Change
DOT Domestic			11.32				5.5	%			46.0				(0.6	)%
International			11.21				3.3				31.1				7.3
DOT Latin America			12.70				11.3				15.3				5.0
DOT Atlantic			10.07				(3.5	)			11.6				4.6
DOT Pacific			8.98				(9.3	)			4.3				25.4

 

1	Revenue per Available Seat Mile

2	Available Seat Miles

 

American Airlines, Inc.		Six Months Ended June 30, 2011
Entity Results		Load Factor (pts)				Y-O-Y Change (pts)				Yield (cents)				Y-O-Y Change
DOT Domestic			82.0				(0.3	)			13.81				6.0	%
International			78.0				(0.7	)			14.37				4.3
DOT Latin America			79.9				2.4				15.88				8.0
DOT Atlantic			76.2				(2.5	)			13.22				(0.1	)
DOT Pacific			76.2				(8.0	)			11.79				0.2

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Current AMR Corp. releases can be accessed on the Internet.

The address is http://www.aa.com

Exhibit 99.2

 

CONTACT:		Andrew Backover
		Corporate Communications
		Fort Worth, Texas
		817-967-1577
		mediarelations@aa.com

FOR RELEASE: Wednesday, July 20, 2011

AMR CORPORATION ANNOUNCES LARGEST AIRCRAFT ORDER IN HISTORY WITH

BOEING AND AIRBUS

American Airlines to Order 460 Narrowbody Jets to Replace and Transform its Fleet

American expects to create youngest, most fuel-efficient fleet among

U.S. industry peers in approximately five years

Agreement includes options and purchase rights for 465 additional

aircraft through 2025

American to be first network carrier to take delivery of Airbus A320neo Family aircraft and

first airline to commit to Boeing’s expected new 737 family offering

FORT WORTH, Texas — AMR Corporation, the parent company of American Airlines and American Eagle, today announced landmark agreements with Airbus and Boeing that will allow it to replace and transform American’s narrowbody fleet over five years and solidify its fleet plan into the next decade. These new aircraft will allow American to reduce its operating and fuel costs and deliver state-of-the-art amenities to customers, while maximizing financial flexibility for the Company.

Under the new agreements, American plans to acquire 460 narrowbody, single-aisle aircraft from the Boeing 737 and Airbus A320 families beginning in 2013 through 2022 – the largest aircraft order in aviation history. As part of these agreements, starting in 2017 American will become the first network U.S. airline to begin taking delivery of “next generation” narrowbody aircraft that will further accelerate fuel-efficiency gains.

These new deliveries are expected to pave the way for American to have the youngest and most fuel-efficient fleet among its U.S. airline peers in approximately five years.

American also will benefit from approximately $13 billion of committed financing provided by the manufacturers through lease transactions that will help maximize balance sheet flexibility and reduce risk. The financing fully covers the first 230 deliveries.

Gerard Arpey, Chairman and CEO of AMR and American Airlines, noted that today’s order represents another important step in the Company’s strategy to build a strong foundation for the future.

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“We have a long track record of meeting our obligations to all of our stakeholders, including strategic partners, lenders, suppliers and investors. We believe this history continues to help us navigate today’s challenges while remaining focused on doing what’s necessary to position American Airlines for long-term success, and we look forward to working with Boeing and Airbus to achieve it,” Arpey said. “Today’s announcement paves the way for us to achieve important milestones in our company’s future, giving us the ability to replace our narrowbody fleet and finance it responsibly. This was an incredible opportunity for our company that presented itself from two great manufacturers. And, given our aggressive and ambitious fleet plans, we feel fortunate to have both Boeing and Airbus standing beside us to meet our needs. With today’s news, we expect to have the youngest and most fuel-efficient fleet among our peers in the U.S. industry within five years. This new fleet will dramatically improve our fuel and operating costs, while enhancing our financial flexibility. More than that, with the power of our network and partnerships and the dedication of our people, we will be an even stronger competitor.”

Said Tom Horton, President of AMR and American Airlines: “Our efforts in recent years have transformed nearly every corner of our business. We’ve strengthened our liquidity, focused our network and alliance relationships on serving the world’s most important markets with the best partners, enhanced our products and services with industry-leading technology, and worked to improve the customer experience. Today’s announcement will accelerate this transformation, delivering important benefits to our shareholders, customers and employees.”

Under the agreement with Boeing, American plans to acquire a total of 200 additional aircraft from the 737 family, with options for another 100 737 family aircraft. American has the flexibility to convert the new deliveries into variants within the 737 family, including the 737-700, 737-800 and 737-900ER.

As part of the Boeing agreement, American will take delivery of 100 aircraft from Boeing’s current 737NG family starting in 2013, including three 737-800 options that had been exercised as of July 1, 2011. American also intends to order 100 of Boeing’s expected new evolution of the 737NG, with a new engine that would offer even more significant fuel-efficiency gains over today’s models. American is pleased to be the first airline to commit to Boeing’s new 737 family offering, which is expected to provide a new level of economic efficiency and operational performance, pending final confirmation of the program by Boeing. This airplane would be powered by CFM International’s LEAP-X engine.

American’s most recent deliveries of the 737-800, with 160 seats, include the all-new Boeing Sky Interior, offering larger overhead bins that pivot down and out similar to those on the 787 Dreamliner, a contemporary feeling of spaciousness and variable LED lighting options for cabin ambience.

“We are pleased to continue our long and successful partnership with American Airlines,” said Jim Albaugh, President and CEO of Boeing Commercial Airplanes. “While the 737 family will continue to serve an important role in American’s narrowbody fleet — delivering customer and cost benefits in both its current form and future evolution — as American’s primary widebody partner, we are excited to deliver to its customers all of the benefits and cutting-edge technology of the Boeing 787 Dreamliner and the 777-300ER. We look forward to strengthening our partnership for the future.”

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American also will acquire a total of 260 Airbus aircraft from the A320 Family and will have 365 options and purchase rights for additional aircraft. American has the flexibility to convert its delivery positions into variants within the A320 Family, including the A319 and A321.

American will take delivery of 130 current-generation Airbus A320 Family aircraft beginning in 2013. Beginning in 2017 American will begin taking delivery of 130 aircraft from the A320neo (New Engine Option) Family featuring next-generation engine technology. The new aircraft are approximately 15 percent more fuel efficient than today’s models. American will be the first network airline in the U.S. to deploy this new-technology aircraft.

The A320 Family features cabin interiors with increased overhead storage, reduced noise and ambient lighting options.

“American’s order represents a strong vote of confidence in our product in the important North American market, and we feel certain our A320 Family aircraft will help the American team deliver a great experience for customers while helping the airline to achieve cost efficiencies that will benefit its shareholders,” said Airbus President and CEO Tom Enders. “We are proud to renew our partnership with a company that has a long history of airline industry leadership.”

Cost Reduction, Simplification and Flexibility for the Future

The 737 and A320 families offer significant cost reduction opportunities in replacing American’s older fleet. For example, Boeing and Airbus aircraft in the 737 and A320 families offer a 35 percent reduction in fuel cost per seat versus the MD-80 and a 12 percent and 15 percent fuel cost reduction per seat, respectively, versus the 757 and 767-200.

The agreements with Boeing and Airbus will continue American’s fleet simplification efforts, allowing American to transition four fleet types (MD-80, 737-800, 757 and 767-200) to two (the 737 and the A320 families, which offer significant commonality benefits within each family).

With a total of 465 options and purchase rights for additional aircraft from both manufacturers through 2025, these agreements give American the flexibility for replacement as well as growth opportunities under the right economic and financial conditions, with the ability to acquire up to 925 aircraft in total over 12 years.

Beyond today’s announcement, American continues to execute on other elements of a comprehensive fleet renewal plan that will deliver customer benefits in a range of aircraft types and sizes.

In 2009 and 2010, American took delivery of 76 737-800s. Separate from today’s announcement, American has taken or is scheduled to take delivery of a total of 54 737-800s from 2011 into 2013. American also has firm orders for eight Boeing 777-300ER widebody aircraft to be delivered in 2012-2013. American is the first U.S. airline to order the 777-300ER, which will offer many operational and customer benefits while serving as the flagship of American’s modernized fleet.

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In addition, American has plans to acquire 42 state-of-the-art Boeing 787 Dreamliners, to be delivered starting in late 2014, with options for 58 additional 787s. American also has firm orders for seven 777-200 widebody aircraft scheduled for delivery in 2013 through 2016.

“While our network is our core product, designed to take our customers where they most want to go, our fleet is a critical element of our ability to deliver a superior travel experience, safely, reliably and comfortably,” said Virasb Vahidi, American’s Chief Commercial Officer, who leads American’s fleet and network planning and strategy. “With today’s announcement, I am confident that we will be able to meet our customers’ needs for decades to come with a modern fleet that will be second to none.”

American was advised in the transaction by SkyWorks Capital, LLC.

AMR and American Airlines President Tom Horton and Senior Vice President and Chief Financial Officer Bella Goren will make a presentation regarding American’s fleet transaction during a teleconference on Wednesday, July 20, at 8:30am EDT. To listen to the presentation, call 612-326-1011, and enter the passcode: AMR. The presentation and teleconference also can be accessed at the Investor Relations site of AA.com.

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words “expects,” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals, or actions we may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding acquisitions and financings of aircraft, and the benefits to the Company thereof. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 and Report on Form 10-Q for the quarter ending June 30, 2011.

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Current AMR Corp. releases can be accessed on the Internet.

The address is http://www.aa.com

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Exhibit 99.4

 

FOR RELEASE: Wednesday, July 20, 2011

AMR CORPORATION ANNOUNCES INTENT TO MOVE FORWARD

WITH THE DIVESTITURE OF AMERICAN EAGLE

FORT WORTH, Texas - AMR Corporation, the parent company of American Airlines, Inc., announced today its intent to move forward with the divestiture of AMR Eagle Holding Corporation (“Eagle”). AMR currently expects the divestiture to take the form of a spin-off of Eagle stock to the shareholders of AMR.

“We believe that a divestiture of Eagle would be in the best interests of AMR and Eagle, as well as our shareholders, customers and employees,” said AMR Chairman and CEO Gerard Arpey. “Strategically for AMR, it would be beneficial, as we could, over time, diversify our regional feed with additional regional airlines to ensure we have access to the most competitive rates and service. A divestiture could provide Eagle an opportunity to vie for business of other mainline carriers and allow the carrier to grow. I am proud of the accomplishments of American and Eagle as a combined group of companies under AMR for the past 26 years, and I look forward to their future, independent successes.”

“For everyone here at Eagle, our highest priority will be to continue operating safely and reliably for all of our customers – and earning American’s business every day,” said Dan Garton, President and CEO of AMR Eagle and American Eagle Airlines. “We are excited about today’s announcement and the opportunities for growth that would be available to us as an independent carrier. We’re eager to take on those new challenges.”

As part of the process of preparing for a potential spin-off of Eagle, in August AMR Eagle Holding Corporation expects to file a Registration Statement on Form 10 with the Securities and Exchange Commission related to the intended divestiture. The Registration Statement on Form 10 will describe the divestiture and will contain important information about Eagle, including its historical consolidated financial statements.

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A specific time frame for the divestiture has not been announced. The company currently envisions the divestiture as a spin-off, however, it remains open to other options, including a sale, as the transaction moves forward.

Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company’s expectations or beliefs concerning future events. When used in this release, the words “expects,” “estimates,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals, or actions we may take in the future, are forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding a potential divestiture of Eagle. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of factors that could cause the Company’s actual results to differ materially from the Company’s expectations. Additional information concerning these and other factors is contained in the Company’s Securities and Exchange Commission filings, including but not limited to the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2010 and Report on Form 10-Q for the quarter ending June 30, 2011.

###

Current AMR Corp. releases can be accessed on the Internet.

The address is http://www.aa.com