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: January 19, 2005
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)
(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))
Item 2.02 Results of Operations and Financial Condition and
Item 8.01 Other Events
AMR Corporation (the Company) is filing herewith a press release
issued on January 19, 2005 by the Company as Exhibit 99.1 which
is included herein. This press release was issued to report the
Company's fourth quarter and full year 2004 results.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Press Release of AMR dated January 19, 2005
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: January 19, 2005
EXHIBIT INDEX
Exhibit Description
99.1 Press Release
Exhibit 99.1
CONTACT: Al Becker
Corporate Communications
Fort Worth, Texas
817-967-1577
corp.comm@aa.com
FOR RELEASE: Wednesday, Jan. 19, 2005
Editor's Note: A live Webcast reporting fourth quarter results
will be broadcast on the Internet on Jan. 19 at 2 p.m. EST.
(Windows Media Player required for viewing.)
AMR CORPORATION REPORTS A FOURTH QUARTER LOSS
OF $387 MILLION -- ENDS QUARTER WITH $3.4 BILLION
IN CASH AND SHORT-TERM INVESTMENTS, INCLUDING
A RESTRICTED BALANCE OF $478 MILLION
Results Reflect Low-Fare And High Fuel-Price Environment That
Plagued Entire Industry In 2004
American Continues Intense Focus On Cutting Costs, Increasing Revenues
FORT WORTH, Texas -- AMR Corporation, the parent company of
American Airlines, Inc., today reported a net loss of $387
million in the fourth quarter, or $2.40 per share. This compares
to last year's fourth quarter loss of $111 million, or $0.70 per
share. For the year, AMR posted a net loss of $761 million,
compared to 2003's loss of $1.2 billion.
AMR's fourth quarter 2004 and 2003 results include a handful
of special items, both gains and losses. Fourth quarter 2004
special items totaled a net gain of $86 million, or $0.54 per
share, and primarily included a $146 million gain on the sale of
American's interest in Orbitz, $42 million in severance charges,
and $21 million in aircraft charges. Fourth quarter 2003 special
items totaled a net charge of $16 million, or $0.11 per share.
For the full year, special items totaled a net gain of $135
million in 2004, and a net gain of $265 million in 2003.
"As expected, the fourth quarter proved to be a
disappointing end to a very difficult year," said AMR Chairman
and CEO Gerard Arpey. "AMR's results for the fourth quarter of
2004 reflect the economic woes that plagued the airline industry
throughout 2004 - in particular, high fuel prices and a tough
revenue environment."
During the quarter, Arpey said, the company paid 59 cents,
or 67 percent, more per gallon of fuel than it did during the
same period in 2003. That translated into $477 million in
-- more --
incremental fuel costs, which added about one cent to AMR's cost
per available seat mile of 10.69 cents. For the entire year,
higher fuel prices cost AMR $1.1 billion. "Unfortunately, low
fares and the continuing high price of fuel are masking a lot of
the progress we have made in reducing costs," he said.
Meanwhile, American's revenue per available seat mile
declined 3.1 percent, driven by a 6.7 percent drop in passenger
yield (passenger revenue per passenger mile). "As in the third
quarter, low fares were driven by an excess of industry capacity,
the continued growth of low cost carriers, and the pricing
behavior of distressed competitors," Arpey said. He added that
external factors such as these are not an excuse, but rather a
reminder that American must sustain its intense focus on reducing
costs and increasing revenue wherever and however possible.
"The issues we are grappling with are not new to us, and in
fact, in 2004 we made a lot of headway in addressing them," Arpey
said. "The productivity of our people, and of our fleet, is
higher than it has ever been. We are running a smarter, more
efficient airline than we were a year ago. We have improved our
performance relative to the rest of the industry on both the
revenue and cost sides of the ledger."
While these accomplishments were not enough to overcome a
difficult environment, they did enable American to finish 2004
with more than $3.4 billion in total cash and short-term
investments (including $478 million in restricted cash and short-
term investments), Arpey said. American continued to make
payments to all of its pension programs in 2004, contributing
$461 million to its defined benefit plans. These payments, on
top of those made in recent years, have helped improved the
funded level of the defined benefit plans from a low of 72
percent in 2002 to about 80 percent at the end of 2004. Since
the beginning of 2005, American has contributed a further $42
million to its defined benefit pension programs.
Arpey said he expects 2005 to be another very difficult
year. However, the company does anticipate positive impacts from
many initiatives announced or launched in 2004. These include
reductions in domestic capacity, additional seats on the
airline's MD80, 737, 767 and 777 fleets, several new
international routes, a simplified domestic operation and various
revenue-producing initiatives.
Several fleet decisions will be particularly helpful to the
company going forward, Arpey said. These include decisions to
withdraw from American's fleet in 2005 the equivalent of 15
mainline jet aircraft; to forgo delivery of 18 regional jets for
the American Eagle affiliate, and to
-- more --
defer the delivery of 54 of 56 mainline jets from Boeing. The
arrangement with Boeing allows American to postpone $1.4 billion
in capital spending previously planned for 2005 through 2007 and
a total of $2.7 billion in capital spending through 2010.
The workforce reductions American instituted last year,
though difficult to make, also will help the company as it works
to meet continuing financial challenges in 2005, Arpey said.
The reductions resulted from a combination of factors, including
fleet decisions, capacity adjustments and steps to simplify
operations. Although the full extent of the reductions is still
being determined, Arpey said the total impact currently stands at
3,200 jobs.
Despite much progress, AMR anticipates a loss during the
first quarter of 2005. "This simply means our work is not done,"
Arpey said. "We must continue to focus on finding creative ways
to lower costs, increase revenue and provide our customers with
the kind of service they value."
Editor's Note: AMR's Chairman, President and Chief Executive
Officer, Gerard Arpey, and its Chief Financial Officer, James
Beer, will make a presentation to analysts during a
teleconference on Wednesday, Jan. 19, from 2 p.m. to 2:45 p.m.
EST. Following the analyst call, they will hold a question-and-
answer conference call for media from 3 p.m. to 3:45 p.m. EST.
Reporters interested in listening to the presentation or
participating in the media Q&A should call 817-967-1577 for
details.
Statements in this news 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 news release, the words "expects," "plans," "anticipates,"
"indicates," "believes," "forecast," "guidance," "outlook" and
similar expressions are intended to identify 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, overall economic
conditions, plans and objectives for future operations, 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. 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.
Forward-looking statements are subject to a number of risk
factors that could cause actual results to differ materially from
our 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: changes in economic, business and financial
conditions; the Company's substantial indebtedness; continued
high fuel prices and the availability of fuel; further increases
in the price of fuel; the impact of events in Iraq; conflicts in
the Middle East or elsewhere; the highly competitive business
environment faced by the Company, with increasing competition
from low cost carriers and financially distressed carriers;
historically low fare levels and fare simplification initiatives
(both of which could result in a further
-- more --
deterioration of the revenue environment); the ability of the
Company to reduce its costs further without adversely affecting
operational performance and service levels; uncertainties with
respect to the Company's international operations; changes in the
Company's business strategy; actions by U.S. or foreign
government agencies; the possible occurrence of additional
terrorist attacks; another outbreak of a disease (such as
SARS) that affects travel behavior; uncertainties with respect
to the Company's relationships with unionized and other
employee work groups; the ability of the Company to satisfy
existing financial or other covenants in certain of its credit
agreements; the availability and terms of future financing;
the ability of the Company to reach acceptable agreements with
third parties; and increased insurance costs and potential
reductions of available insurance coverage. 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
Dec. 31, 2003.
Detailed financial information follows:
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Three Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $3,610 $ 3,589 0.6
- Regional Affiliates 463 407 13.8
Cargo 173 149 16.1
Other revenues 295 246 19.9
Total operating revenues 4,541 4,391 3.4
Expenses
Wages, salaries and benefits 1,680 1,604 4.7
Aircraft fuel 1,188 695 70.9
Depreciation and amortization 329 350 (6.0)
Other rentals and landing fees 286 282 1.4
Commissions, booking fees and
credit card expense 244 267 (8.6)
Maintenance, materials and
repairs 230 219 5.0
Aircraft rentals 151 155 (2.6)
Food service 137 151 (9.3)
Other operating expenses 591 565 4.6
Special charges 60 330 (81.8)
Total operating expenses 4,896 4,618 6.0
Operating Loss (355) (227) 56.4
Other Income (Expense)
Interest income 19 14 35.7
Interest expense (223) (123) 81.3
Interest capitalized 20 17 17.6
Miscellaneous - net 152 128 18.8
(32) 36 *
Loss Before Income Taxes (387) (191) *
Income tax benefit ** - (80) *
Net Loss $ (387) $ (111) *
Continued on next page
* Greater than 100%
** The company did not record a net tax benefit associated
with its 2004 or 2003 losses due to the company providing
a valuation allowance. However, in 2003, the company
reached an agreement with the IRS covering tax years 1990
through 1995 and as a result recorded an $80 million tax
benefit to reduce previously accrued income tax liabilities.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(in millions, except per share amounts)
(Unaudited)
Three Months Ended December 31,
2004 2003
Basic and Diluted Loss Per Share $ (2.40) $ (0.70)
Number of Shares Used in Computation
Basic and Diluted 161 160
AMR Corporation
Impact of Fuel Price Variance
Average fuel price per gallon (cents)
Three months ended December 31, 2004 147.7
Three months ended December 31, 2003 88.4
Change in price (cents) 59.3
2004 consumption (gallons, in millions) x 805
Impact of fuel price variance (in millions) $ 477
AMR Corporation
Impact of Fuel Price Variance
Average fuel price per gallon (cents)
Twelve months ended December 31, 2004 121.6
Twelve months ended December 31, 2003 87.7
Change in price (cents) 33.9
2004 consumption (gallons, in millions) x 3,264
Impact of fuel price variance (in millions)$ 1,106
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Three Months Ended
December 31, Percent
2004 2003 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 31,893 29,592 7.8
Available seat miles (millions) 42,906 41,348 3.8
Cargo ton miles (millions) 586 532 10.2
Passenger load factor 74.3% 71.6% 2.7 pts.
Passenger revenue yield per
passenger mile (cents) 11.32 12.13 (6.7)
Passenger revenue per available
seat mile (cents) 8.41 8.68 (3.1)
Cargo revenue yield per ton
mile (cents) 29.56 27.91 5.9
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents)(1) 10.25 10.25 -
Special charges per available
seat mile (cents) 0.14 0.80 (82.5)
Fuel consumption (gallons, in
millions) 738 732 0.8
Fuel price per gallon (cents) 147.4 88.1 67.3
Regional Affiliates
Revenue passenger miles (millions) 1,928 1,499 28.6
Available seat miles (millions) 2,877 2,311 24.5
Passenger load factor 67.0% 64.9% 2.1 pts.
AMR Corporation
Average Equivalent Number of Employees
American Airlines 77,500 78,900
Other 13,200 11,700
Total 90,700 90,600
(1) Excludes $561 million and $451 million of expense incurred
related to Regional Affiliates in 2004 and 2003, respectively.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)
Twelve Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $15,021 $ 14,332 4.8
- Regional Affiliates 1,876 1,519 23.5
Cargo 625 558 12.0
Other revenues 1,123 1,031 8.9
Total operating revenues 18,645 17,440 6.9
Expenses
Wages, salaries and benefits 6,719 7,264 (7.5)
Aircraft fuel 3,969 2,772 43.2
Depreciation and amortization 1,292 1,377 (6.2)
Other rentals and landing fees 1,187 1,173 1.2
Commissions, booking fees
and credit card expense 1,107 1,063 4.1
Maintenance, materials and
repairs 971 860 12.9
Aircraft rentals 609 687 (11.4)
Food service 558 611 (8.7)
Other operating expenses 2,366 2,428 (2.6)
Special charges 11 407 (97.3)
U.S. government grant - (358) *
Total operating expenses 18,789 18,284 2.8
Operating Loss (144) (844) (82.9)
Other Income (Expense)
Interest income 66 55 20.0
Interest expense (871) (703) 23.9
Interest capitalized 80 71 12.7
Miscellaneous - net 108 113 (4.4)
(617) (464) 33.0
Loss Before Income Taxes (761) (1,308) (41.8)
Income tax benefit ** - (80) *
Net Loss $(761) $ (1,228) (38.0)
Continued on next page
* Greater than 100%
** The company did not record a net tax benefit associated
with its 2004 or 2003 losses due to the company providing
a valuation allowance. However, in 2003, the company
reached an agreement with the IRS covering tax years 1990
through 1995 and as a result recorded an $80 million tax
benefit to reduce previously accrued income tax
liabilities.
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(in millions, except per share amounts)
(Unaudited)
Twelve Months Ended December 31,
2004 2003
Basic and Diluted Loss Per Share $ (4.74) $ (7.76)
Number of Shares Used in Computation
Basic and Diluted 161 158
AMR CORPORATION
OPERATING STATISTICS
(Unaudited)
Twelve Months Ended
December 31, Percent
2004 2003 Change
American Airlines, Inc. Mainline Jet
Operations
Revenue passenger miles (millions) 130,164 120,328 8.2
Available seat miles (millions) 174,015 165,209 5.3
Cargo ton miles (millions) 2,203 2,000 10.2
Passenger load factor 74.8% 72.8% 2.0 pts.
Passenger revenue yield per
passenger mile (cents) 11.54 11.91 (3.1)
Passenger revenue per available
seat mile (cents) 8.63 8.67 (0.5)
Cargo revenue yield per
ton mile (cents) 28.36 27.87 1.8
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents)(1) 9.73 10.15 (4.1)
Special charges and U.S. government
grant per available seat mile (cents) 0.01 0.05 (80.0)
Fuel consumption (gallons, in
millions) 3,014 2,956 2.0
Fuel price per gallon (cents) 121.2 87.5 38.5
Regional Affiliates
Revenue passenger miles (millions) 7,283 5,516 32.0
Available seat miles (millions) 10,835 8,597 26.0
Passenger load factor 67.2% 64.2% 3.0 pts.
(1) Excludes $2,104 million and $1,757 million of expense incurred
related to Regional Affiliates in 2004 and 2003, respectively.
AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions) (Unaudited)
Three Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $3,610 $3,589 0.6
- Regional Affiliates 463 407 13.8
Cargo 173 149 16.1
Other revenues 285 238 19.7
Total operating revenues 4,531 4,383 3.4
Expenses
Wages, salaries and benefits 1,554 1,496 3.9
Aircraft fuel 1,088 645 68.7
Regional carrier payments 504 401 25.7
Depreciation and amortization 286 309 (7.4)
Other rentals and landing fees 255 262 (2.7)
Commissions, booking fees
and credit card expense 244 268 (9.0)
Maintenance, materials and
repairs 190 179 6.1
Aircraft rentals 145 151 (4.0)
Food service 135 150 (10.0)
Other operating expenses 497 498 (0.2)
Special charges 59 330 (82.1)
Total operating expenses 4,957 4,689 5.7
Operating Loss (426) (306) 39.2
Other Income (Expense)
Interest income 19 14 35.7
Interest expense (165) (74) *
Interest capitalized 21 16 31.3
Related party interest - net (1) - *
Miscellaneous - net 151 130 16.2
25 86 (70.9)
Loss Before Income Taxes (401) (220) 82.3
Income tax benefit ** - (91) *
Net Loss $(401) $(129) *
* Greater than 100%
** The company did not record a net tax benefit associated
with its 2004 or 2003 losses due to the company providing
a valuation allowance. However, in 2003, the company
reached an agreement with the IRS covering tax years 1990
through 1995 and as a result recorded a $91 million tax
benefit to reduce previously accrued income tax liabilities.
AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions) (Unaudited)
Twelve Months Ended December 31, Percent
2004 2003 Change
Revenues
Passenger - American Airlines $15,021 $14,332 4.8
- Regional Affiliates 1,876 1,519 23.5
Cargo 625 558 12.0
Other revenues 1,086 994 9.3
Total operating revenues 18,608 17,403 6.9
Expenses
Wages, salaries and benefits 6,224 6,831 (8.9)
Aircraft fuel 3,653 2,586 41.3
Regional payments 1,869 1,550 20.6
Depreciation and amortization 1,124 1,213 (7.3)
Other rentals and landing fees 1,066 1,084 (1.7)
Commissions, booking fees
and credit card expense 1,107 1,064 4.0
Maintenance, materials and
repairs 821 714 15.0
Aircraft rentals 588 666 (11.7)
Food service 552 606 (8.9)
Other operating expenses 2,015 2,126 (5.2)
Special charges 10 407 (97.5)
U.S. government grant - (315) *
Total operating expenses 19,029 18,532 2.7
Operating Loss (421) (1,129) (62.7)
Other Income (Expense)
Interest income 64 54 18.5
Interest expense (650) (524) 24.0
Interest capitalized 77 66 16.7
Related party interest - net (2) 7 *
Miscellaneous - net 111 117 (5.1)
(400) (280) 42.9
Loss Before Income Taxes (821) (1,409) (41.7)
Income tax benefit ** - (91) *
Net Loss $(821) $ (1,318) (37.7)
* Greater than 100%
** The company did not record a net tax benefit associated
with its 2004 or 2003 losses due to the company providing
a valuation allowance. However, in 2003, the company
reached an agreement with the IRS covering tax years 1990
through 1995 and as a result recorded a $91 million tax
benefit to reduce previously accrued income tax liabilities.
###
Current AMR Corp. news releases can be accessed via the Internet.
The address is http://www.aa.com