<PAGE> 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: October 21, 1998
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 October 21, 1998 by the Company as Exhibit 99.1
which is included herein. This press release was issued to
report third quarter 1998 earnings and to announce that the
Company's board of directors has authorized management to
repurchase additional shares of its outstanding common stock.
Item 7. Financial Statements and Exhibits
The following exhibit is included herein:
99.1 Press Release
<PAGE> 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: October 21, 1998
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EXHIBIT INDEX
Exhibit Description
99.1 Press Release
<PAGE> 5
Exhibit 99.1
Contact: Tim Kincaid
Fort Worth,
Texas
817-967-1577
FOR RELEASE: Wednesday, Oct. 21, 1998
AMR REPORTS RECORD THIRD QUARTER EARNINGS OF $433 MILLION;
COMPANY TO INITIATE ANOTHER $500 MILLION STOCK REPURCHASE
FORT WORTH, Texas -- AMR Corp., parent company of American
Airlines Inc., today reported record third quarter net earnings
of $433 million, or $2.49 per common share diluted, a 34 percent
improvement over net earnings of $323 million, or $1.78 per
common share diluted, during the same period in 1997. These are
the highest quarterly earnings in the company's history, and the
sixth consecutive quarter of record earnings for AMR.
"Solid demand, stable yields and lower fuel prices all
contributed to our outstanding third quarter performance," said
Donald J. Carty, AMR's chairman and CEO. 'The third quarter was
especially challenging for our employees. In addition to serving
the usual heavy summer flow of customers, our people also
admirably contended with the effects of Hurricane Georges in the
Caribbean and Florida, plus they accommodated thousands of
additional passengers stranded by the strikes at Northwest and
Air Canada. The employees of American and American Eagle can be
very proud of our performance in this quarter."
Additionally, AMR completed in September a $500 million
stock repurchase program that began in July. This follows the
completion last quarter of a $500 million stock repurchase
program that began in 1997. Today, AMR announced that the
company's board of directors has authorized management to
repurchase up to an additional $500 million of its outstanding
common stock. This represents approximately 8.6 million shares
of common stock at yesterday's closing price of $57.94.
"We have strengthened our balance sheet during the past few
years by using our substantial free cash flow," Carty said.
"Free cash flow generated that is in excess of our needs is being
returned to our shareholders."
-- more --
<PAGE> 6
AMR Reports Third Quarter Earnings of $433 million
October 21, 1998
Page 2
Repurchases, including block repurchases, are expected to be
made in the open market or in private transactions, from time to
time, depending on market conditions, and may be discontinued at
any time.
Among AMR's third quarter highlights:
o American joined with British Airways, Canadian Airlines
International, Cathay Pacific and Qantas to introduce the new
oneworld global airline alliance.
o AMR announced it would sell the three AMR Global Services
companies -- AMR Services, AMR Combs and TeleService Resources --
to focus on its core airline and related technology businesses.
o AMR announced and completed a $500 million stock repurchase
program, after completing another $500 million buy-back in the
second quarter.
o AMR received Department of Justice clearance for investment
in Aerolineas Argentinas.
o American introduced new nonstop service between Houston
Hobby Airport and New York LaGuardia, plus began flights between
Dallas Love Field and Austin.
o American and US Airways introduced new reciprocal frequent
flyer and airport membership club programs.
o American began new service between DFW and Manchester, U.K.
o American's network of codeshare partners grew with a new
agreement with Finnair; expansion of existing codeshares with
Grupo TACA and Iberia; and the beginning of codesharing with
Asiana and China Eastern.
o American announced orders for an additional 15 Boeing 777s,
for 2000-2001 delivery.
o American Eagle ordered 75 new 37-seat Embraer ERJ-135s, with
options for 75.
o American Eagle regional jet service expanded to serve 12
cities.
o American began contract negotiations with the Association of
Professional Flight Attendants.
###
<PAGE> 7
AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) (In millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30, Percent
1998 1997 Change
<S> <C> <C> <C>
Revenues
Airline Group
Passenger-American Airlines $3,871 $3,713 4.3
-AMR Eagle 304 262 16.0
Cargo 158 169 (6.5)
Other 250 233 7.3
4,583 4,377 4.7
The SABRE Group 604 457 32.2
Management Services Group 31 26 19.2
Less: Intergroup revenues (172) (154) 11.7
Total operating revenues 5,046 4,706 7.2
Expenses
Wages, salaries and benefits 1,632 1,521 7.3
Aircraft fuel 400 466 (14.2)
Depreciation and amortization 328 306 7.2
Commissions to agents 311 332 (6.3)
Maintenance, materials and
repairs 251 224 12.1
Other rentals and landing fees 231 223 3.6
Food service 184 176 4.5
Aircraft rentals 142 143 (0.7)
Other operating expenses 835 708 17.9
Total operating expenses 4,314 4,099 5.2
Operating Income 732 607 20.6
Other Income (Expense)
Interest income 37 40 (7.5)
Interest expense (93) (101) (7.9)
Interest capitalized 28 5 *
Minority interest (12) (10) 20.0
Miscellaneous - net 16 - -
(24) (66) (63.6)
Income From Continuing
Operations
Before Income Taxes 708 541 30.9
Income tax provision 277 219 26.5
Income From Continuing
Operations 431 322 33.9
Income From Discontinued
Operations(less applicable
income taxes) 2 1 *
Net Earnings $ 433 $ 323 34.1
Continued on next page
* Greater Than 100%
</TABLE>
<PAGE> 8
AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)
(Unaudited) (In millions, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1998 1997
<S> <C> <C>
Earnings Per Common Share
Basic
Before Discontinued
Operations $ 2.56 $ 1.83
Discontinued Operations 0.01 -
Net Earnings $ 2.57 $ 1.83
Diluted
Before Discontinued
Operations $ 2.48 $ 1.78
Discontinued Operations 0.01 -
Net Earnings $ 2.49 $ 1.78
Number of Shares Used in
Computation
Basic 169 176
Diluted 174 181
</TABLE>
<PAGE> 9
AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) (In millions, except per share amounts)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Percent
1998 1997 Change
<S> <C> <C> <C>
Revenues
Airline Group
Passenger - American Airlines $11,238 $10,744 4.6
- AMR Eagle 849 766 10.8
Cargo 490 507 (3.4)
Other 720 658 9.4
13,297 12,675 4.9
The SABRE Group 1,735 1,346 28.9
Management Services Group 86 73 17.8
Less: Intergroup revenues (514) (451) 14.0
Total operating revenues 14,604 13,643 7.0
Expenses
Wages, salaries and benefits 4,817 4,480 7.5
Aircraft fuel 1,219 1,457 (16.3)
Depreciation and amortization 966 919 5.1
Commissions to agents 934 975 (4.2)
Maintenance, materials and repairs 704 633 11.2
Other rentals and landing fees 667 658 1.4
Food service 523 510 2.5
Aircraft rentals 427 430 (0.7)
Other operating expenses 2,343 2,054 14.1
Total operating expenses 12,600 12,116 4.0
Operating Income 2,004 1,527 31.2
Other Income (Expense)
Interest income 103 100 3.0
Interest expense (280) (310) (9.7)
Interest capitalized 71 10 *
Minority interest (37) (32) 15.6
Miscellaneous - net (3) (11) (72.7)
(146) (243) (39.9)
Income From Continuing Operations
Before Income Taxes 1,858 1,284 44.7
Income tax provision 734 519 41.4
Income From Continuing Operations 1,124 765 46.9
Income From Discontinued
Operations (less applicable
income taxes) 8 12 (33.3)
Net Earnings $1,132 $ 777 45.7
Continued on next page
* Greater Than 100%
</TABLE>
<PAGE> 10
AMR CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)
(Unaudited) (In millions, except per share amounts)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
1998 1997
<S> <C> <C>
Earnings Per Common Share
Basic
Before Discontinued Operations $ 6.57 $ 4.25
Discontinued Operations 0.05 0.06
Net Earnings $ 6.62 $ 4.31
Diluted
Before Discontinued Operations $ 6.34 $ 4.16
Discontinued Operations 0.05 0.06
Net Earnings $ 6.39 $ 4.22
Number of Shares Used in
Computation
Basic 171 180
Diluted 177 184
</TABLE>
<PAGE> 11
AMR CORPORATION
NOTES TO CONSOLIDATED STATEMENT OF OPERATIONS
1.All share and earnings per share amounts 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.
<PAGE> 12
AMR CORPORATION
BUSINESS SEGMENT FINANCIAL HIGHLIGHTS
(Unaudited) (In millions)
<TABLE>
<CAPTION>
Three Months Ended
September 30, Percent
1998 1997 Change
Airline Group
<S> <C> <C> <C>
Revenues
Passenger - American Airlines $3,871 $3,713 4.3
- AMR Eagle 304 262 16.0
Cargo 158 169 (6.5)
Other 250 233 7.3
4,583 4,377 4.7
Expenses
Wages, salaries and benefits 1,446 1,380 4.8
Aircraft fuel 400 466 (14.2)
Commissions to agents 311 332 (6.3)
Depreciation and amortization 265 259 2.3
Maintenance, materials and repairs 250 224 11.6
Other operating expenses 1,286 1,207 6.5
Total operating expenses 3,958 3,868 2.3
Operating Income 625 509 22.8
Other Expense (29) (66) (56.1)
Earnings Before Income Taxes $ 596 $ 443 34.5
Pre-tax Margin 13.0% 10.1% 2.9 pts.
The SABRE Group
Revenues $ 604 $ 457 32.2
Operating Expenses 506 368 37.5
Operating Income 98 89 10.1
Other Income 15 3 *
Earnings Before Income Taxes $ 113 $ 92 22.8
Pre-tax Margin 18.7% 20.1% (1.4) pts.
Management Services Group
Revenues $ 152 $ 151 0.7
Less:Revenues From
Discontinued Operations (121) (125) (3.2)
Revenues From Continuing Operations 31 26 19.2
Operating Expenses 140 138 1.4
Less: Expenses From
Discontinued Operations (118) (121) (2.5)
Operating Expenses From Continuing
Operations 22 17 29.4
Operating Income From Continuing
Operations 9 9 -
Other Income From Continuing
Operations 2 7 (71.4)
Earnings From Continuing
Operations Before Income Taxes $ 11 $ 16 (31.3)
Pre-tax Margin From Continuing
Operations 35.5% 61.5% (26.0) pts.
</TABLE>
* Greater Than 100%
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AMR CORPORATION
BUSINESS SEGMENT FINANCIAL HIGHLIGHTS
(Unaudited) (In millions)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Percent
1998 1997 Change
Airline Group
<S> <C> <C> <C>
Revenues
Passenger - American Airlines $11,238 $10,744 4.6
- AMR Eagle 849 766 10.8
Cargo 490 507 (3.4)
Other 720 658 9.4
13,297 12,675 4.9
Expenses
Wages, salaries and benefits 4,277 4,059 5.4
Aircraft fuel 1,219 1,457 (16.3)
Commissions to agents 934 975 (4.2)
Depreciation and amortization 781 781 -
Maintenance, materials and repairs 702 632 11.1
Other operating expenses 3,728 3,558 4.8
Total operating expenses 11,641 11,462 1.6
Operating Income 1,656 1,213 36.5
Other Expense (131) (223) (41.3)
Earnings Before Income Taxes $1,525 $ 990 54.0
Pre-tax Margin 11.5% 7.8% 3.7 pts.
The SABRE Group
Revenues $1,735 $1,346 28.9
Operating Expenses 1,413 1,054 34.1
Operating Income 332 292 10.3
Other Income 18 5 *
Earnings Before Income Taxes $ 340 $ 297 14.5
Pre-tax Margin 19.6% 22.1% (2.5) pts.
Management Services Group
Revenues $ 460 $ 463 (0.6)
Less: Revenues From
Discontinued Operations (374) (390) (4.1)
Revenues From Continuing Operations 86 73 17.8
Operating Expenses $ 419 $ 418 0.2
Less: Expenses From
Discontinued Operations (359) (367) (2.2)
Operating Expenses From Continuing
Operations 60 51 17.6
Operating Income From Continuing
Operations 26 22 18.2
Other Income From Continuing
Operations 4 7 (42.9)
Earnings From Continuing
Operations Before Income Taxes $ 30 $ 29 3.4
Pre-tax Margin From Continuing
Operations 34.9% 39.7% (4.8) pts.
</TABLE>
* Greater Than 100%
<PAGE> 14
Airline Group
Operating Statistics
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30, Percen
t
1998 1997 Change
<S> <C> <C> <C>
American Airlines Jet Operations:
Revenue passenger miles (millions) 29,132 28,500 2.2
Available seat miles (millions) 39,806 39,378 1.1
Cargo ton miles (millions) 480 506 (5.1)
Passenger load factor 73.2% 72.4% 0.8 pts.
Breakeven load factor 60.2% 61.2% (1.0) pts.
Passenger revenue yield per
passengre mile (cents) 13.29 13.03 2.0
Passenger revenue per
available seat mile (cents) 9.73 9.43 3.2
Cargo revenue yield per ton
mile (cents) 32.61 33.05 (1.3)
Operating expenses per
available seat mile (cents) 9.22 9.14 0.9
Fuel consumption (gallons,
in millions) 728 712 2.2
Fuel price per gallon (cents) 53.1 63.5 (16.4)
Fuel price per gallon, excluding
fuel taxes (cents) 48.4 58.5 (17.3)
Operating aircraft at period-end 645 642 0.5
AMR Eagle:
Revenue passenger miles (millions) 753 670 12.4
Available seat miles(millions) 1,156 1,070 8.0
Passenger load factor 65.1% 62.6% 2.5 pts.
Operating aircraft at period-end 207 196 5.6
AMR Corporation
Average Equivalent Number of
Employees
Airline Group:
AA Jet Operations 82,300 81,800
Other 10,800 10,100
Total Airline Group 93,100 91,900
The SABRE Group 11,700 8,600
Management Services Group 13,100 15,600
Total 117,900 116,100
</TABLE>
<PAGE> 15
Airline Group
Operating Statistics
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Percent
1998 1997 Change
<S> <C> <C> <C>
American Airlines Jet Operations:
Revenue passenger miles (millions) 82,443 81,113 1.6
Available seat miles (millions) 116,476 115,636 0.7
Cargo ton miles (millions) 1,485 1,507 (1.5)
Passenger load factor 70.8% 70.1% 0.7 pts.
Breakeven load factor 59.2% 61.3% (2.1) pts.
Passenger revenue yield per
passenger mile (cents) 13.63 13.25 2.9
Passenger revenue per available
seat mile (cents) 9.65 9.29 3.9
Cargo revenue yield per ton
mile (cents) 32.64 33.22 (1.7)
Operating expenses per available
seat mile (cents) 9.27 9.23 0.4
Fuel consumption (gallons,
in millions) 2,120 2,082 1.8
Fuel price per gallon (cents) 55.6 67.7 (17.9)
Fuel price per gallon, excluding
fuel taxes (cents) 50.8 62.8 (19.1)
Operating aircraft at period-end 645 642 0.5
AMR Eagle:
Revenue passenger miles (millions) 2,076 1,924 7.9
Available seat miles (millions) 3,326 3,160 5.3
Passenger load factor 62.4% 60.9% 1.5 pts.
Operating aircraft at period-end 207 196 5.6
</TABLE>
