ar12168k.htm
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: December 16, 2010
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AMR CORPORATION
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(Exact name of registrant as specified in its charter)
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Delaware
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1-8400
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75-1825172
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(State of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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4333 Amon Carter Blvd.
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Fort Worth, Texas
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76155
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(Address of principal executive offices)
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(Zip code)
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(817) 963-1234
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(Registrant's telephone number)
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(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))
AMR Corporation is filing herewith its Eagle Eye communication to investors. This document includes (a) actual unit cost, fuel price, capacity and traffic information for October and November and (b) forecasts of unit cost, revenue performance, fuel prices and fuel hedging, capacity and traffic estimates, liquidity expectations, other income/expense estimates and share count.
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.
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AMR CORPORATION
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/s/ Kenneth W. Wimberly
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Kenneth W. Wimberly
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Corporate Secretary
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Dated: December 16, 2010
December 16, 2010
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, the words “expects”, “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; regulatory approvals and actions, including the Company’s application for antitrust immunity with other oneworld alliance members; 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 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. This document 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; very 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 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 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; interruption or disruptions in service at one or more of the Company’s primary market airports; the heavy taxation of the airline industry; changes in the price of the Company’s common stock; and the ability of the Company to reach acceptable agreements with third parties. 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 December 31, 2009 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010.
This Eagle Eye provides updated guidance for the fourth quarter and the full year 2010.
Performance Update
Costs: Unit cost forecasts are attached.
Revenue: Fourth quarter mainline unit revenue is expected to increase between 6.5% and 7.5% year over year, and fourth quarter consolidated unit revenue is expected to increase between 6.5% and 7.5% year over year. In total, Cargo and Other Revenue is expected to increase between 3.6% and 4.6% relative to fourth quarter 2009.
Liquidity: AMR expects to end the fourth quarter with a cash and short-term investment balance of approximately $4.8 billion, including approximately $450 million in restricted cash and short-term investments.
Christopher Ducey
Managing Director, Investor Relations
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AMR EAGLE EYE
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Fuel Forecast (based on December 8, 2010 market prices)
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Fuel Hedge Position:
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4Q10: 39% hedged with an average cap of $2.34 ($85 crude equivalent) with 39% subject to a floor of $1.78 ($61 crude equivalent)
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2010: 38% hedged with an average cap of $2.42 ($91 crude equivalent) with 37% subject to a floor of $1.82 ($65 crude equivalent)
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AMR Fuel Price (Including Effective Hedges and Taxes) and Consumption
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Actual
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Forecast
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Oct
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Nov
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Dec
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4Q10 |
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2010 |
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Fuel Price (dollars/gal)
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2.36 |
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2.42 |
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2.46 |
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2.41 |
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2.31 |
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Fuel Consumption (MM gals)
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232.5 |
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221.9 |
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234.1 |
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688.5 |
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2,768.5 |
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Unit Cost Forecast (cents)
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AMR Consolidated Cost per ASM
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Actual
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Forecast
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Oct
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Nov
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Dec
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4Q10 |
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2010 |
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AMR Cost per ASM
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12.97 |
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13.65 |
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13.41 |
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13.34 |
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13.21 |
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AMR Cost per ASM (ex-special items)1/2/
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12.97 |
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13.65 |
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13.22 |
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13.27 |
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13.16 |
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AMR Cost per ASM (ex-fuel and special items)1/2/
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9.05 |
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9.63 |
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9.11 |
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9.26 |
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9.29 |
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American Mainline Cost per ASM
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Actual
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Forecast
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Oct
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Nov
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Dec
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4Q10 |
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2010 |
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AA Cost per ASM
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12.39 |
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13.08 |
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12.78 |
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12.74 |
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12.61 |
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AA Cost per ASM (ex-special items)1/ 2/
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12.39 |
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13.08 |
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12.56 |
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12.67 |
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12.56 |
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AA Cost per ASM (ex-fuel and special items)1/2
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8.61 |
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9.21 |
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8.64 |
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8.81 |
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8.82 |
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Notes:
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1/ The Company believes that unit costs excluding fuel and/or special items is a useful measurement to investors in monitoring the Company's ongoing cost performance.
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2/ The Company expects a non-cash special item of approximately $28 million in the fourth quarter related to the
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impairment of certain route and slot authorities in South America. Consequently, the company expects special items to total
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approximately $81 million for the full year 2010.
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Capacity and Traffic Forecast (millions)
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AA Mainline Operations
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Actual
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Forecast
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Oct
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Nov
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Dec
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4Q10 |
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2010 |
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ASMs
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12,895 |
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12,323 |
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12,970 |
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38,187 |
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153,387 |
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Domestic
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7,746 |
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7,535 |
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7,798 |
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23,078 |
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93,153 |
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International
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5,149 |
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4,788 |
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5,172 |
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15,109 |
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60,234 |
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Traffic
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10,774 |
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9,914 |
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10,442 |
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31,131 |
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125,593 |
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Regional Affiliate Operations
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Actual
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Forecast
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Oct
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Nov
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Dec
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4Q10 |
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2010 |
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ASMs
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1,097 |
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1,057 |
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1,093 |
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3,247 |
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12,211 |
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Traffic
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828 |
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771 |
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783 |
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2,382 |
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8,828 |
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Below the Line Income/Expenses & Taxes
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Total Other Income(Expense) is estimated at ($202) million in the fourth quarter of 2010.
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AMR EAGLE EYE
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Share Count (millions)
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4Q10 |
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Earnings
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Basic
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Diluted
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$54 million and over
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333 |
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390 |
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$0-$53 million
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333 |
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344 |
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Loss
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333 |
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333 |
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FY2010
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Earnings
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Basic
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Diluted
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$214 million and over
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333 |
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390 |
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$0-$213 million
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333 |
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344 |
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Loss
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333 |
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333 |
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Reconciliation to GAAP
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Actual
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Forecast
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Oct
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Nov
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Dec
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4Q10 |
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2010 |
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Cents
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AMR CASM
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12.97 |
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13.65 |
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13.41 |
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13.34 |
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13.21 |
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Special Items CASM
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|
|
|
|
|
- |
|
|
|
- |
|
|
|
0.19 |
|
|
|
0.07 |
|
|
|
0.05 |
|
|
AMR CASM Excluding Special Items
|
|
|
|
|
|
|
|
12.97 |
|
|
|
13.65 |
|
|
|
13.22 |
|
|
|
13.27 |
|
|
|
13.16 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel CASM
|
|
|
|
|
|
|
|
3.92 |
|
|
|
4.02 |
|
|
|
4.11 |
|
|
|
4.01 |
|
|
|
3.87 |
|
|
AMR CASM Excluding Fuel and Special Items
|
|
|
|
|
|
|
|
9.05 |
|
|
|
9.63 |
|
|
|
9.11 |
|
|
|
9.26 |
|
|
|
9.29 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Actual
|
|
|
|
|
|
|
Forecast
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Oct
|
|
|
Nov
|
|
|
Dec
|
|
|
|
4Q10 |
|
|
|
2010 |
|
|
Cents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AA CASM
|
|
|
|
|
|
|
|
12.39 |
|
|
|
13.08 |
|
|
|
12.78 |
|
|
|
12.74 |
|
|
|
12.61 |
|
|
Special Items CASM
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
0.22 |
|
|
|
0.07 |
|
|
|
0.05 |
|
|
AA CASM Excluding Special Items
|
|
|
|
|
|
|
|
12.39 |
|
|
|
13.08 |
|
|
|
12.56 |
|
|
|
12.67 |
|
|
|
12.56 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel CASM
|
|
|
|
|
|
|
|
3.78 |
|
|
|
3.87 |
|
|
|
3.92 |
|
|
|
3.86 |
|
|
|
3.74 |
|
|
AA CASM Excluding Fuel and Special Items
|
|
|
|
|
|
|
|
8.61 |
|
|
|
9.21 |
|
|
|
8.64 |
|
|
|
8.81 |
|
|
|
8.82 |
|