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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 16, 2002
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)
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Item 5. Other Events
AMR Corporation (the Company) is filing herewith a press release
issued on October 16, 2002 by the Company as Exhibit 99.1 which is
included herein. This press release was issued to report the
Company's third quarter 2002 earnings.
Item 7. Financial Statements and Exhibits
The following exhibits are included herein:
99.1 Press Release
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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.
AMR CORPORATION
/s/ Charles D. MarLett
Charles D. MarLett
Corporate Secretary
Dated: October 16, 2002
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EXHIBIT INDEX
Exhibit Description
99.1 Press Release
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Exhibit 99.1
Contact: Corporate Communications
Fort Worth, Texas
817-967-1577
FOR RELEASE: Wednesday, Oct. 16, 2002
Editor's Note: A live Webcast reporting second quarter results will be
broadcast on the Internet on Oct. 16 at 2 p.m. EDT. (Windows Media Player
required for viewing.)
AMR REPORTS THIRD QUARTER LOSS OF $475 MILLION
BEFORE SPECIAL CHARGES
FORT WORTH, Texas - Consistent with financial community
expectations, AMR Corporation, the parent company of American
Airlines, Inc., today reported a third quarter net loss of $475
million before special items, or $3.05 per share. This compares
with a net loss of $525 million before special items, or $3.40 per
share, in the third quarter of 2001, the first period affected by
the attacks of Sept. 11.
"Any way you look at them, these are terrible financial
results that reflect a sluggish economy, continued weakness in the
revenue environment, high fuel prices, the cost of enhanced
security and the uncertainty of events in the Middle East," said
Don Carty, AMR's chairman and chief executive officer. "Although
we operated an excellent airline in the third quarter, we could not
overcome the cumulative weight of the economic challenges, and the
environment shows little sign of improving."
In the face of these challenges, Carty said, AMR during the
third quarter intensified its efforts at examining every aspect of
its business for added ways to reduce costs and capital spending,
increase efficiency and put the company in a position to succeed
long term and eventually return to profitability. "At every
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level of this organization, people are working extremely hard to
make sure that AMR is a vital competitor in this industry for many
years to come," he said, "and we will not rest until this is
achieved."
Adding further impetus to its efforts to reduce capital
spending, American announced today that it has reached an agreement
with Boeing for the deferral of a total of 34 airplanes during
2003, 2004 and 2005. Under the agreement, American will take
delivery of only 11 airplanes in 2003 - nine 767-300s and two 777s
- compared to the original plan of 19. No airplanes will now be
delivered to American in 2004 and 2005. The airline had planned on
taking 13 aircraft each year in 2004 and 2005.
With these and other adjustments to AMR's capital spending
plans, the company has further reduced its capital spending plan by
more than $1.5 billion from 2003 - 2005.
American also announced today that it would supplement its
near-term cost-saving efforts by temporarily storing approximately
42 aircraft starting in early 2003. By putting 28 MD-80s and 14
767-200s into short-term storage, American will save in excess of
$100 million in expenses over the next two years, largely due to
reduced maintenance expenditures. Based on current projections,
American anticipates that these aircraft would remain in storage
until at least 2005.
"We are managing this business for the short- and long-term
and are sharply focused on its success," Carty said. "The scope,
variety and magnitude of our various actions and initiatives are an
insight into the seriousness with which we approach our task and
the determination with which we are seeking solutions."
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The company's wide-ranging, long-term cost-reduction program
was given a major boost on Aug. 13 when American unveiled an
additional series of cost-saving and efficiency producing
initiatives. Among the key steps announced on Aug. 13 were the de-
peaking of the Dallas/Fort Worth hub and many spoke cities, the
retirement of the 74-plane Fokker 100 fleet by 2005, a reduction of
an estimated 7,000 jobs by March 2003, and steps to enhance the
efficiency of several fleet types, including 777s and 767-300s.
Since the Aug. 13 announcement, American has refined and
increased its estimated savings from these initiatives. In
addition, even more cost-saving and revenue-enhancing initiatives
have been identified. These include the EveryFare
program announced last month, a consolidation of AMR's headquarters
operation, and a series of other operational changes. When taken
in combination with previously announced initiatives, these efforts
should contribute more than $2 billion in steady state, structural
cost savings over the coming years, independent of capacity-related
changes. In addition, efficiencies in the use of airplanes from de-
peaking and fleet actions will allow American to forgo the
equivalent of 17 "new" aircraft in the future, ultimately saving
more than $1.3 billion in capital spending.
As previously disclosed, the Aug. 13 initiatives drove several
special charges, notably aircraft impairments and lease accruals
and employee severance. These special charges, mostly non-cash in
nature, totaled $449 million after tax. Including these items,
AMR's third quarter net loss was $924 million ($5.93 per share),
compared to last year's third quarter net loss of $414 million
after special items ($2.68 per share).
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Looking forward, if the revenue environment remains depressed,
the company expects to post a sizeable operating loss in the fourth
quarter, most likely exceeding the third quarter loss before
special items.
Editor's Note: AMR's Chief Financial Officer, Jeff Campbell, will
make a presentation to analysts during a teleconference on
Wednesday, Oct. 16, from 2 p.m. to 2:45 p.m. EDT. Following the
analyst call, he will hold a question and answer conference call
for media from 3 p.m. to 3:45 p.m. EDT. Reporters interested in
listening to Mr. Campbell's presentation or participating in the
media Q&A conference call should call 817-967-1577 for details.
Statements in this report 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 document and
in documents incorporated herein by reference, the words "expects,"
"plans," "anticipates," "believes," and similar expressions are
intended to identify forward-looking statements. 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 report are based upon information available to
the Company on the date of this report. 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 actual results to differ materially from
our 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 Form 10-K for
the year ended December 31, 2001.
Detailed financial information follows:
###
Current AMR Corp. news releases can be accessed via the Internet:
The address is http://amrcorp.com
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AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended
September 30, Percent
2002 2001 Change
Revenues
Passenger - American Airlines $3,754 $ 4,031 (6.9)
- AMR Eagle 342 338 1.2
Cargo 139 158 (12.0)
Other revenues 259 289 (10.4)
Total operating revenues 4,494 4,816 (6.7)
Expenses
Wages, salaries and benefits 2,121 2,133 (0.6)
Aircraft fuel 697 776 (10.2)
Depreciation and amortization 340 368 (7.6)
Other rentals and landing fees 313 323 (3.1)
Maintenance, materials
and repairs 289 332 (13.0)
Aircraft rentals 210 230 (8.7)
Food service 189 209 (9.6)
Commissions to agents 107 207 (48.3)
Special charges - net of
U.S. Government grant 708 (177) *
Other operating expenses 841 973 (13.6)
Total operating expenses 5,815 5,374 8.2
Operating Loss (1,321) (558) *
Other Income (Expense)
Interest income 18 16 12.5
Interest expense (171) (122) 40.2
Interest capitalized 23 37 (37.8)
Miscellaneous - net 2 (9) *
(128) (78) 64.1
Loss Before Income Taxes (1,449) (636) *
Income tax benefit (525) (222) *
Net Loss $ (924) $ (414) *
Loss Per Share
Basic and Diluted $ (5.93) $ (2.68)
Number of Shares Used in
Computation
Basic and Diluted 156 154
* Greater than 100%
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AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
September 30, Percent
2002 2001 Change
American Airlines
Revenue passenger miles (millions) 33,080 33,543 (1.4)
Available seat miles (millions) 45,920 46,908 (2.1)
Cargo ton miles (millions) 498 526 (5.3)
Passenger load factor 72.0% 71.5% 0.5 pts.
Breakeven load factor (*) 87.3% 87.5% (0.2)pts.
Passenger revenue yield per
passenger mile (cents) 11.35 12.02 (5.6)
Passenger revenue per available
seat mile (cents) 8.18 8.60 (4.9)
Cargo revenue yield per ton
mile (cents) 27.58 29.69 (7.1)
Operating expenses per available
seat mile (cents) (*) 10.38 11.04 (6.0)
Fuel consumption (gallons, in
millions) 839 895 (6.3)
Fuel price per gallon (cents) 78.0 81.3 (4.1)
Fuel price per gallon, excluding
fuel taxes (cents) 72.3 76.0 (4.9)
Operating aircraft at period-end 826 893 (7.5)
AMR Eagle
Revenue passenger miles (millions) 1,070 962 11.2
Available seat miles (millions) 1,662 1,664 (0.1)
Passenger load factor 64.4% 57.8% 6.6 pts.
Operating aircraft at period-end 285 279 2.2
AMR Corporation
Average Equivalent Number of Employees
American Airlines 99,700 114,100
Other 12,000 13,100
Total 111,700 127,200
(*) Excludes the impact of Special charges - net of U.S. Government grant
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AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Nine Months Ended
September 30, Percent
2002 2001 Change
Revenues
Passenger - American Airlines $10,985 $ 12,611 (12.9)
- AMR Eagle 991 1,101 (10.0)
Cargo 415 524 (20.8)
Other revenues 718 923 (22.2)
Total operating revenues 13,109 15,159 (13.5)
Expenses
Wages, salaries and benefits 6,327 6,005 5.4
Aircraft fuel 1,880 2,325 (19.1)
Depreciation and amortization 1,019 1,033 (1.4)
Other rentals and landing fees 908 900 0.9
Maintenance, materials and repairs 840 910 (7.7)
Aircraft rentals 650 604 7.6
Food service 539 611 (11.8)
Commissions to agents 423 691 (38.8)
Special charges - net of
U.S. Government grant 708 508 39.4
Other operating expenses 2,466 2,894 (14.8)
Total operating expenses 15,760 16,481 (4.4)
Operating Loss (2,651) (1,322) *
Other Income (Expense)
Interest income 54 80 (32.5)
Interest expense (501) (373) 34.3
Interest capitalized 67 116 (42.2)
Miscellaneous - net (1) 13 *
(381) (164) *
Loss Before Income Taxes and
Cumulative Effect of
Accounting Change (3,032) (1,486) *
Income tax benefit (1,038) (522) 98.9
Loss Before Cumulative
Effect of Accounting Change (1,994) (964) *
Cumulative Effect of Accounting
Change, Net of Tax Benefit (988) - *
Net Loss $(2,982) $ (964) *
Continued on next page
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AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(in millions, except per share amounts)
(Unaudited)
Nine Months Ended
September 30,
2002 2001
Basic and Diluted Loss Per Share
Before Cumulative Effect of
Accounting Change $(12.83) $ (6.26)
Cumulative Effect of Accounting Change (6.36) -
Net Loss $(19.19) $ (6.26)
Number of Shares Used in
Computation
Basic and Diluted 155 154
Note 1: 2002 results include TWA whereas the 2001 amounts include
TWA for the period April 10, 2001 through September 30, 2001
* Greater than 100%
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AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Nine Months Ended
September 30, Percent
2002 2001 Change
American Airlines (*)
Revenue passenger miles (millions) 92,276 95,182 (3.1)
Available seat miles (millions) 129,968 134,930 (3.7)
Cargo ton miles (millions) 1,478 1,685 (12.3)
Passenger load factor 71.0% 70.5% 0.5 pts.
Breakeven load factor (**) 87.1% 76.5% 10.6 pts.
Passenger revenue yield per
passenger mile (cents) 11.90 13.25 (10.2)
Passenger revenue per available
seat mile (cents) 8.45 9.34 (9.5)
Cargo revenue yield per
ton mile (cents) 27.82 30.77 (9.6)
Operating expenses per available
seat mile (cents) (**) 10.80 10.99 (1.7)
Fuel consumption (gallons,
in millions) 2,392 2,559 (6.5)
Fuel price per gallon (cents) 73.8 83.8 (11.9)
Fuel price per gallon, excluding
fuel taxes (cents) 68.2 78.3 (12.9)
Operating aircraft at period-end 826 893 (7.5)
AMR Eagle
Revenue passenger miles (millions) 3,048 2,851 6.9
Available seat miles (millions) 4,825 4,931 (2.1)
Passenger load factor 63.2% 57.8% 5.4 pts.
Operating aircraft at period-end 285 279 2.2
(*) 2002 results include TWA whereas the 2001 amounts
include TWA for the period April 10, 2001 through
September 30, 2001
(**) Excludes the impact of Special charges - net of U.S. Government grant