aa12218k.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 21, 2007


American Airlines, Inc.
(Exact name of registrant as specified in its charter)


Delaware
1-2691
13-1502798
(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 8.01
 
Other Events
 

American Airlines, Inc. 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.



 
American Airlines, Inc.
   
   
   
 
/s/ Kenneth W. Wimberly
 
Kenneth W. Wimberly
 
Corporate Secretary



Dated:  December 21, 2007
 
 

 
AMR EAGLE EYE

 
December 21, 2007

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” and similar expressions are intended to identify forward-looking statements.  Similarly, statements that describe our objectives, plans or goals 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; 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 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; the ability of the Company to generate additional revenues and reduce its costs; changes in economic and other conditions beyond the Company’s control, and the volatile results of the Company’s operations; the Company’s substantial indebtedness and other obligations; the ability of the Company to satisfy existing financial or other covenants in certain of its credit agreements; continued high and volatile fuel prices and further increases in the price of fuel, and the availability of fuel; the fiercely and increasingly competitive business environment faced by the Company; industry consolidation; competition with reorganized and reorganizing carriers; low fare levels by historical standards and the Company’s reduced pricing power; the Company’s potential need to raise additional funds and its ability to do so on acceptable terms; changes in the Company’s corporate or business strategy; 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 or avian flu) 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; 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/A for the year ended December 31, 2006.


This Eagle Eye provides updated guidance for the fourth quarter and the full year 2007.

Performance Update

Costs:  Unit cost forecasts are attached.

Revenue:  Fourth quarter mainline passenger unit revenue is expected to increase between 3.4% and 4.4% year over year.  Fourth quarter consolidated passenger unit revenue is expected to increase between 3.6% and 4.6% year over year.  These estimates exclude the positive impact of the previously announced change to an 18 month expiration of AAdvantage miles, which is now effective.  In total, Cargo and Other Revenue is anticipated to be about flat relative to fourth quarter 2006.    

Liquidity:  We expect 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.  As previously announced, AMR will pay down approximately $900 million in debt in the fourth quarter, which consists of both scheduled payments and pre-payments.




 
Kenji Hashimoto
 
Managing Director, Investor Relations


 
 

 


AMR EAGLE EYE
                               
                                 
Fuel Forecast
                             
                                 
Fuel Hedge Position:
                 
 
4Q07: Hedged on approximately 40% of consumption at an average cap of $68/bbl WTI Crude
 
 
1H08: Hedged on approximately 31% of consumption at an average cap of $76/bbl WTI Crude
 
                                 
AMR Fuel Price (Including Effective Hedges and Taxes) and Consumption
 
     
Actual
   
Forecast
 
     
Oct
   
Nov
   
Dec
   
4Q07
   
2007
 
 
Fuel Price (dollars/gal)
   
2.31
     
2.43
     
2.56
     
2.43
     
2.14
 
 
Fuel Consumption (MM gals)
   
264.3
     
251.6
     
264.0
     
779.9
     
3,132.2
 
                                           
Unit Cost Forecast (cents)
                                       
                                           
AMR Consolidated Cost per ASM
                       
     
Actual
   
Forecast
 
     
Oct
   
Nov
   
Dec
   
4Q07
   
2007
 
 
AMR Cost per ASM 1/
   
12.31
     
12.55
     
13.06
     
12.64
     
11.99
 
 
AMR Cost per ASM (ex-special items) 2/
   
12.31
     
12.55
     
12.64
     
12.50
     
11.94
 
 
AMR Cost per ASM (ex-fuel and special items) 2/
   
8.35
     
8.43
     
8.23
     
8.34
     
8.29
 
                                           
                                           
American Mainline Cost per ASM
                       
     
Actual
   
Forecast
 
     
Oct
   
Nov
   
Dec
   
4Q07
   
2007
 
 
AA Cost per ASM 1/
   
11.70
     
11.96
     
12.45
     
12.03
     
11.39
 
 
AA Cost per ASM (ex-special items) 2/
   
11.70
     
11.96
     
12.00
     
11.88
     
11.33
 
 
AA Cost per ASM (ex-fuel and special items) 2/
   
7.85
     
7.96
     
7.72
     
7.84
     
7.78
 
                                           
Note:
The increase in ex-fuel CASM versus prior guidance is due to lower capacity driven by weather, salary costs for dependability initiatives, materials and repairs and an accrual for broad-based variable compensation. 3/ There can be no assurance that the Company’s CASM forecasts will approximate actual results.
 
1/ Full year data includes a previously disclosed special item in 3Q07 related to an adjustment for expense from prior periods of $30M. In addition, December 2007 and 4Q07 include a $64M special item related to the writedown of 24 MD-80 aircraft currently in storage.
 
2/ 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.
 
3/ Whether any broad-based variable compensation will be paid, and the amount of any such payment, has not been determined.
 
                                     

 
 

 

AMR EAGLE EYE

Capacity and Traffic Forecast (millions)
                             
                               
AA Mainline Operations
                 
   
Actual
   
Forecast
 
   
Oct
   
Nov
   
Dec
   
4Q07
   
2007
 
ASMs
   
14,310
     
13,729
     
14,226
     
42,264
     
169,874
 
  Domestic
   
9,251
     
8,920
     
9,003
     
27,174
     
108,515
 
  International
   
5,059
     
4,809
     
5,223
     
15,090
     
61,358
 
                                         
Traffic
   
11,527
     
11,151
     
11,194
     
33,872
     
138,406
 
                                         
Regional Affiliate Operations
                       
   
Actual
   
Forecast
 
   
Oct
   
Nov
   
Dec
   
4Q07
   
2007
 
ASMs
   
1,143
     
1,105
     
1,094
     
3,342
     
13,437
 
                                         
Traffic
   
840
     
798
     
749
     
2,387
     
9,855
 
                                         
Below the Line Income/Expense

Total Other Income (Expense) is estimated at $(140) million in the fourth quarter of 2007.  This excludes the special item impact due to the gain on sale of ARINC, which was $140 million.

Share Count (millions)

 
     
4Q 2007
 
 
Earnings
 
Basic
 
Diluted
 
 
Over $67 million
 
249
 
299
 
 
$51 – $66 million
 
249
 
284
 
 
$0 – $50 million
 
249
 
267
 
 
Loss
 
249
 
249
 
             
             
 
  
 
FY 2007
 
 
Earnings                      
 
Basic
 
Diluted
 
 
Over $266 million
 
245
 
299
 
 
$199 - $265 million
 
245
 
284
 
 
$0 - $198 million
 
245
 
267
 
 
Loss
 
245
 
245
 

Reconciliation to GAAP:

   
Actual
   
Forecast
   
Oct
   
Nov
   
Dec
   
4Q07
   
2007
Cents
                           
AMR CASM
   
12.31
     
12.55
     
13.06
     
12.64
     
11.99
 
Less Special Items CASM
   
-
     
-
     
0.42
     
0.14
     
0.05
 
AMR CASM Excluding Special Items
   
12.31
     
12.55
     
12.64
     
12.50
     
11.94
 
                                     
Less Fuel CASM
   
3.96
     
4.12
     
4.41
     
4.16
     
3.65
 
AMR CASM Excluding Fuel and Special Items
   
8.35
     
8.43
     
8.23
     
8.34
     
8.29
 
                             
                             
   
Actual
   
Forecast
   
Oct
   
Nov
   
Dec
   
4Q07
   
2007
Cents
                                   
AA CASM
   
11.70
     
11.96
     
12.45
     
12.03
     
11.39
 
Less Special Items CASM
   
-
     
-
     
0.45
     
0.15
     
0.06
 
AA CASM Excluding Special Items
   
11.70
     
11.96
     
12.00
     
11.88
     
11.33
 
                                     
Less Fuel CASM
   
3.85
     
4.00
     
4.28
     
4.04
     
3.55
 
AA CASM Excluding Fuel and Special Items
   
7.85
     
7.96
     
7.72
     
7.84
     
7.78