-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ACcRhxw0GxzVrNzDnRzlMFSiXpGsdVSuuYAXSmK5LT3mbMyej1m/VWWy9XeFcwam 8XpeGa1Og6Eb7GL+kbgsPw== 0000006201-99-000004.txt : 19990122 0000006201-99-000004.hdr.sgml : 19990122 ACCESSION NUMBER: 0000006201-99-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981119 ITEM INFORMATION: FILED AS OF DATE: 19990121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMR CORP CENTRAL INDEX KEY: 0000006201 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 751825172 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08400 FILM NUMBER: 99508888 BUSINESS ADDRESS: STREET 1: 4333 AMON CARTER BLVD CITY: FORT WORTH STATE: TX ZIP: 76155 BUSINESS PHONE: 8179631234 MAIL ADDRESS: STREET 1: 4333 AMON CARTER BLVD CITY: FORT WORTH STATE: TX ZIP: 75261-9616 8-K 1 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: January 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 today (January 20, 1999) by the Company as Exhibit 99.1 which is included herein. This press release was issued to report fourth quarter and full year 1998 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: January 20, 1999 4 EXHIBIT INDEX Exhibit Description 99.1 Press Release 5 Exhibit 99.1 Contact: Corporate Communications Fort Worth, Texas 817-967-1577 AMR REPORTS FOURTH QUARTER EARNINGS OF $182 MILLION 1998 EARNINGS OF $1.3 BILLION AN ALL-TIME RECORD FOR RELEASE: Wednesday, Jan. 20, 1999 FORT WORTH, Texas -- AMR Corporation, parent company of American Airlines Inc., today reported fourth quarter net earnings of $182 million ($1.09 per common share diluted) after a special item for the fourth quarter, as compared to $208 million ($1.16 per common share diluted, adjusted for last year's 2-for-1 stock split) after special items in the same period in 1997. Excluding a special item totaling $15 million after taxes, AMR reported fourth quarter earnings of $167 million ($1.00 per common share diluted). This compares with net earnings of $195 million ($1.09 per common share diluted and adjusted for the stock split), excluding certain special items, during the same period in 1997. AMR's fourth quarter results brought the company's full-year 1998 net earnings to a record $1.3 billion ($7.52 per common share diluted), including the special item. This compares with net earnings including special items of $985 million ($5.39 per common share diluted and adjusted for the stock split) in 1997. "As the numbers clearly demonstrate, we had an outstanding year in 1998, thanks in large part to the hard work of our employees, management's dedicated focus on the airline and related technology businesses, and very favorable external factors such as the strong domestic economy and lower fuel prices," said Donald J. Carty, AMR's Chairman and CEO. "We've worked hard to build shareholder value for our investors, and our great performance last year will mean another record pay-out this March for American's employee profit sharing plans." Carty added that although 1998 was an excellent year, AMR's fourth quarter earnings were down year-over-year, largely due to decreased yields, especially in international markets. - more - 6 AMR Fourth Quarter Earnings January 20, 1999 Page 2 "We are cautiously optimistic about 1999, as we carefully monitor the balance of supply and demand in the marketplace and continue our cost-containment initiatives," Carty said. "However, there's no question that 1999 will be a very good year for American's customers as we take delivery of 45 new Boeing aircraft and 31 regional jets, upgrade airport facilities, refurbish aircraft interiors, continue network expansion, and enhance passenger service." Among AMR's fourth quarter highlights: o AA announced and completed the tender offer for Reno Air and American Eagle announced it would buy Business Express to strengthen the overall network and boost presence in the western U.S. and New England. o AA welcomed Finnair to the oneworld alliance. o AA announced a frequent flyer plan partnership with Alaska Airlines and Horizon Air. o AA reduced slightly its 1999 growth plan to reflect changing global economic conditions, through increased aircraft retirements and deferred international service. The additional aircraft retirements should save an estimated $40 million in associated maintenance costs during the next three years. Sixteen 727-200, DC-10-10 and MD-11 aircraft will leave the fleet in 1999. o AMR announced sales agreements for three non-airline businesses -- AMR Services, AMR Combs and TeleService Resources (TSR) -- to better focus on core airline and related technology businesses. o AA announced the launch of Nexos, a new Latin inflight magazine as part of the airline's overall $11.5-million initiative to improve service for Latin customers. The airline also observed the 10th anniversary of its Latin Desk, celebrating a decade of reservations services to Spanish-speaking customers. o AA introduced voice recognition technology to its automated flight information system. o AA launched new DFW-Osaka service and announced new Los Angles-Paris (Orly) service, starting June 1. o AMR completed Aerolineas Argentinas and Austral equity transactions. o American Eagle began new regional jet service to Abilene, Texas; Houston (Hobby); Montgomery, Ala.; the new Northwest Arkansas Regional Airport; and between Columbus, Ohio and Miami. The regional airline also announced new jet service to Long Island-Islip (MacArthur), N.Y.; Jackson, Miss.; Memphis, Tenn.; and Peoria, Ill. 7 AMR Fourth Quarter Earnings January 20, 1999 Page 3 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 release, the word "expects" and similar expressions are intended to identify forward-looking statements. 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 statements, 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, included but not limited to the Form 10-K/A No. 1 for the year ended Dec. 31, 1997. ### 8 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In millions, except per share amounts)
Three Months Ended December 31, Percent 1998 1997 Change Revenues Airline Group Passenger- American Airlines $3,457 $3,566 (3.1) - AMR Eagle 272 251 8.4 Cargo 166 180 (7.8) Other 257 231 11.3 4,152 4,228 (1.8) The SABRE Group 571 443 28.9 Management Services Group 33 22 50.0 Less: Intergroup revenues (155) (152) 2.0 Total operating revenues 4,601 4,541 1.3 Expenses Wages, salaries and benefits 1,690 1,576 7.2 Aircraft fuel 385 466 (17.4) Depreciation and amortization 321 306 4.9 Commissions to agents 292 303 (3.6) Maintenance, materials and repairs 233 230 1.3 Other rentals and landing fees 208 218 (4.6) Food service 152 167 (9.0) Aircraft rentals 142 144 (1.4) Other operating expenses 844 751 12.4 Total operating expenses 4,267 4,161 2.5 Operating Income 334 380 (12.1) Other Income (Expense) Interest income 37 40 (7.5) Interest expense (92) (110) (16.4) Interest capitalized 33 10 * Minority interest (3) (4) (25.0) Miscellaneous - net (3) 24 * (28) (40) (30.0) Income From Continuing Operations Before Income Taxes 306 340 (10.0) Income tax provision 124 132 (6.1) Income From Continuing Operations 182 208 (12.5) Income From Discontinued Operations (net of applicable income taxes) - - - Net Earnings $ 182 $ 208 (12.5) Continued on next page * Greater Than 100%
9 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED) (Unaudited) (In millions, except per share amounts)
Three Months Ended December 31, 1998 1997 Earnings Per Common Share Basic Before Discontinued Operations $ 1.12 $ 1.20 Discontinued Operations - - Net Earnings $ 1.12 $ 1.20 Diluted Before Discontinued Operations $ 1.09 $ 1.16 Discontinued Operations - - Net Earnings $ 1.09 $ 1.16 Number of Shares Used in Computation Basic 162 173 Diluted 167 179
10 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In millions, except per share amounts)
Twelve Months Ended December 31, Percent 1998 1997 Change Revenues Airline Group Passenger- American Airlines $14,695 $14,310 2.7 - AMR Eagle 1,121 1,017 10.2 Cargo 656 687 (4.5) Other 977 889 9.9 17,449 16,903 3.2 The SABRE Group 2,306 1,789 28.9 Management Services Group 119 95 25.3 Less: Intergroup revenues (669) (603) 10.9 Total operating revenues 19,205 18,184 5.6 Expenses Wages, salaries and benefits 6,507 6,056 7.4 Aircraft fuel 1,604 1,923 (16.6) Depreciation and amortization 1,287 1,225 5.1 Commissions to agents 1,226 1,278 (4.1) Maintenance, materials and repairs 937 863 8.6 Other rentals and landing fees 875 876 (0.1) Food service 675 677 (0.3) Aircraft rentals 569 574 (0.9) Other operating expenses 3,187 2,805 13.6 Total operating expenses 16,867 16,277 3.6 Operating Income 2,338 1,907 22.6 Other Income (Expense) Interest income 140 140 - Interest expense (372) (420) (11.4) Interest capitalized 104 20 * Minority interest (40) (36) 11.1 Miscellaneous - net (6) 13 * (174) (283) (38.5) Income From Continuing Operations Before Income Taxes 2,164 1,624 33.3 Income tax provision 858 651 31.8 Income From Continuing Operations 1,306 973 34.2 Income From Discontinued Operations (net of applicable income taxes) 8 12 (33.3) Net Earnings $1,314 $ 985 33.4 Continued on next page * Greater Than 100%
11 AMR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED) (Unaudited) (In millions, except per share amounts)
Twelve Months Ended December 31, 1998 1997 Earnings Per Common Share Basic Before Discontinued Operations $ 7.73 $ 5.45 Discontinued Operations 0.05 0.07 Net Earnings $ 7.78 $ 5.52 Diluted Before Discontinued Operations $ 7.48 $ 5.32 Discontinued Operations 0.04 0.07 Net Earnings $ 7.52 $ 5.39 Number of Shares Used in Computation Basic 169 178 Diluted 175 183
12 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions)
Three Months Ended December 31, Percent 1998 1997 Change Airline Group Revenues Passenger - American Airlines $3,457 $3,566 (3.1) - AMR Eagle 272 251 8.4 Cargo 166 180 (7.8) Other 257 231 11.3 4,152 4,228 (1.8) Expenses Wages, salaries and benefits 1,486 1,421 4.6 Aircraft fuel 385 466 (17.4) Commissions to agents 292 303 (3.6) Depreciation and amortization 257 257 - Maintenance, materials and repairs 232 229 1.3 Other rentals and landing fees 195 207 (5.8) Food service 152 167 (9.0) Aircraft rentals 142 144 (1.4) Other operating expenses 716 678 5.6 Total operating expenses 3,857 3,872 (0.4) Operating Income 295 356 (17.1) Other Income (Expense) Interest income 34 37 (8.1) Interest expense (93) (110) (15.5) Interest capitalized 33 10 * Miscellaneous - net (3) 20 * (29) (43) (32.6) Earnings Before Income Taxes $ 266 $ 313 (15.0) Pre-tax Margin 6.4% 7.4% (1.0) pts. The SABRE Group Revenues $ 571 $ 443 28.9 Operating Expenses 543 422 28.7 Operating Income 28 21 33.3 Other Income 3 6 (50.0) Earnings Before Income Taxes $ 31 $ 27 14.8 Pre-tax Margin 5.4% 6.1% (0.7) pts. Management Services Group Revenues $ 172 $ 147 17.0 Less: Revenues From Discontinued Operations (139) (125) 11.2 Revenues From Continuing Operations 33 22 50.0 Operating Expenses 158 143 10.5 Less: Expenses From Discontinued Operations (136) (124) 9.7 Operating Expenses From Continuing Operations 22 19 15.8 Operating Income From Continuing Operations 11 3 * Other Income From Continuing Operations 1 1 - Earnings From Continuing Operations Before Income Taxes $ 12 $ 4 * Pre-tax Margin From Continuing Operations 36.4% 18.2% 18.2 pts.
* Greater Than 100% 13 AMR CORPORATION BUSINESS SEGMENT FINANCIAL HIGHLIGHTS (Unaudited) (In millions)
Twelve Months Ended December 31, Percent 1998 1997 Change Airline Group Revenues Passenger- American Airlines $14,695 $14,310 2.7 - AMR Eagle 1,121 1,017 10.2 Cargo 656 687 (4.5) Other 977 889 9.9 17,449 16,903 3.2 Expenses Wages, salaries and benefits 5,763 5,480 5.2 Aircraft fuel 1,604 1,923 (16.6) Commissions to agents 1,226 1,278 (4.1) Depreciation and amortization 1,038 1,038 - Maintenance, materials and repairs 934 861 8.5 Other rentals and landing fees 833 836 (0.4) Food service 675 677 (0.3) Aircraft rentals 569 574 (0.9) Other operating expenses 2,856 2,667 7.1 Total operating expenses 15,498 15,334 1.1 Operating Income 1,951 1,569 24.3 Other Income (Expense) Interest income 131 133 (1.5) Interest expense (375) (423) (11.3) Interest capitalized 104 20 * Miscellaneous - net (20) 4 * (160) (266) (39.8) Earnings Before Income Taxes $1,791 $1,303 37.5 Pre-tax Margin 10.3% 7.7% 2.6 pts. The SABRE Group Revenues $2,306 $1,789 28.9 Operating Expenses 1,956 1,476 32.5 Operating Income 350 313 11.8 Other Income 21 11 90.9 Earnings Before Income Taxes $ 371 $ 324 14.5 Pre-tax Margin 16.1% 18.1% (2.0) pts. Management Services Group Revenues $ 632 $ 610 3.6 Less: Revenues From Discontinued Operations (513) (515) (0.4) Revenues From Continuing Operations 119 95 25.3 Operating Expenses 577 561 2.9 Less: Expenses From Discontinued Operations (495) (491) 0.8 Operating Expenses From Continuing Operations 82 70 17.1 Operating Income From Continuing Operations 37 25 48.0 Other Income From Continuing Operations 5 8 (37.5) Earnings From Continuing Operations Before Income Taxes $ 42 $ 33 27.3 Pre-tax Margin From Continuing Operations 35.3% 34.7% 0.6 pts.
* Greater Than 100% 14 AMR CORPORATION NOTES TO CONSOLIDATED STATEMENT OF OPERATIONS AND BUSINESS SEGMENT FINANCIAL HIGHLIGHTS 1.All share and earnings per share amounts for 1997 have been restated to give effect to the stock split on June 9, 1998. The 1997 earnings per share amounts also have been restated as required to comply with Statement of Financial Accounting Standards No. 128, "Earnings Per Share." 2.On September 29, 1998, the Company announced its plan to sell most of the companies that comprise the largest unit of the Management Services Group - AMR Global Services. The companies to be disposed of include AMR Services, AMR Combs and TeleService Resources. Accordingly, the results of operations for these companies have been reflected in the consolidated statement of operations as income from discontinued operations for all periods presented. 3. The minority interest in the earnings of consolidated subsidiaries has not been allocated to a reporting segment. 4.Certain amounts from 1997 have been reclassified to conform with 1998 presentation. 15 Airline Group Operating Statistics (Unaudited)
Three Months Ended December 31, Percent 1998 1997 Change American Airlines Jet Operations: Revenue passenger miles (millions) 26,512 25,913 2.3 Available seat miles (millions) 38,821 38,281 1.4 Cargo ton miles (millions) 489 525 (6.9) Passenger load factor 68.3% 67.7% 0.6 pts. Breakeven load factor 62.1% 60.1% 2.0 pts. Passenger revenue yield per passenger mile (cents) 13.04 13.76 (5.2) Passenger revenue per available seat mile (cents) 8.91 9.32 (4.4) Cargo revenue yield per ton mile (cents) 33.50 34.13 (1.8) Operating expenses per available seat mile (cents)* 9.20 9.39 (2.0) Fuel consumption (gallons, in millions) 706 691 2.2 Fuel price per gallon (cents) 52.7 65.2 (19.2) Fuel price per gallon, excluding fuel taxes (cents) 47.9 60.1 (20.3) Operating aircraft at period-end 648 641 1.1 AMR Eagle: Revenue passenger miles (millions) 712 629 13.2 Available seat miles (millions) 1,145 1,058 8.2 Passenger load factor 62.1% 59.5% 2.6 pts. Operating aircraft at period-end 209 199 5.0 AMR Corporation Average Equivalent Number of Employees Airline Group: AA Jet Operations 81,700 80,000 Other 10,700 10,000 Total Airline Group 92,400 90,000 The SABRE Group 11,800 8,800 Management Services Group 12,700 12,700 Total 116,900 111,500
* 1998 amount not adjusted for the impact of the special item 16 Airline Group Operating Statistics (Unaudited)
Twelve Months Ended December 31, Percent 1998 1997 Change American Airlines Jet Operations: Revenue passenger miles (millions) 108,955 107,026 1.8 Available seat miles (millions) 155,297 153,917 0.9 Cargo ton miles (millions) 1,974 2,032 (2.9) Passenger load factor 70.2% 69.5% 0.7 pts. Breakeven load factor 59.9% 61.0% (1.1)pts. Passenger revenue yield per passenger mile (cents) 13.49 13.37 0.9 Passenger revenue per available seat mile (cents) 9.46 9.30 1.7 Cargo revenue yield per ton mile (cents) 32.85 33.78 (2.8) Operating expenses per available seat mile (cents)* 9.25 9.27 (0.2) Fuel consumption (gallons, in millions) 2,826 2,773 1.9 Fuel price per gallon (cents) 54.9 67.1 (18.2) Fuel price per gallon, excluding fuel taxes (cents) 50.1 62.1 (19.3) Operating aircraft at period-end 648 641 1.1 AMR Eagle: Revenue passenger miles (millions) 2,788 2,553 9.2 Available seat miles (millions) 4,471 4,218 6.0 Passenger load factor 62.4% 60.5% 1.9 pts. Operating aircraft at period-end 209 199 5.0 AMR Corporation Average Equivalent Number of Employees Airline Group: AA Jet Operations 81,600 80,500 Other 10,400 10,100 Total Airline Group 92,000 90,600 The SABRE Group 11,400 8,500 Management Services Group 12,900 14,800 Total 116,300 113,900
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