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: March 19, 2007
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 8.01 Other Events
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 January and February
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.
AMR CORPORATION
/s/ Kenneth W. Wimberly
Kenneth W. Wimberly
Corporate Secretary
Dated: March 19, 2007
AMR EAGLE EYE
March 19, 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. 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 and industry 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 on
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 significantly 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 fuel prices and
further increases in the price of fuel, and the availability of fuel;
the fiercely competitive business environment faced by the Company,
and historically low fare levels; competition with reorganized and
reorganizing carriers; the Company's reduced pricing power; the
Company's likely need to raise additional funds and its ability to do
so on acceptable terms; changes in the Company's 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; 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 for the year ended December 31, 2006.
This Eagle Eye provides updated guidance for the first quarter and
the full year 2007.
Performance Update
Costs: Unit cost forecasts are attached.
Revenue: First quarter mainline passenger unit revenue is expected
to increase between 3.5% and 4.5% year over year. First quarter
consolidated passenger unit revenue is expected to increase between
2.7% and 3.7% year over year. In the Other Revenue category, year
over year improvements are expected to continue to moderate as prior
year comparables become more difficult.
Liquidity: We expect to end the first quarter with a cash and short-
term investment balance of approximately $6 billion, including nearly
$500 million in restricted cash and short-term investments.
Kenji Hashimoto
Managing Director, Investor Relations
AMR EAGLE EYE
Fuel Forecast
Fuel Hedge Position:
1Q07: Hedged on 29% of consumption at an average cap of $66/bbl
WTI Crude
AMR Fuel Price (Including Effective Hedges and Taxes) and Consumption
Actual Forecast
Jan Feb Mar 1Q07 2007
Fuel Price (dollars/gal) 1.84 1.79 1.87 1.84 1.98
Fuel Consumption (MM gals) 263.7 233.8 264.8 762.3 3,107.8
Unit Cost Forecast (cents)
AMR Consolidated Cost per ASM
Actual Forecast
Jan Feb Mar 1Q07 2007
AMR Cost per ASM 1/ 11.46 11.84 11.31 11.52 11.51
AMR Cost per ASM (ex-fuel) 2/ 8.35 8.79 8.16 8.42 8.19
American Mainline Cost per ASM
Actual Forecast
Jan Feb Mar 1Q07 2007
AA Cost per ASM 1/ 10.87 11.20 10.70 10.91 10.90
AA Cost per ASM (ex-fuel) 2/ 7.85 8.23 7.63 7.89 7.67
Note: The increase in ex-fuel CASM versus prior guidance is mostly
attributable to reduced capacity associated with weather related
cancellations January 1 through March 18. During this period,
American Airlines cancelled 2.5 percent of 1Q07's expected
departures due to weather.
American Airlines has an Annual Incentive Plan (AIP) and Profit
Sharing Program that provide variable compensation that rewards
frontline employees when American Airlines achieves certain
financial and customer service targets.
AIP has two components:
1. Customer Service pays out to eligible employees on a
quarterly basis up to $1,200 per employee per year when
American Airlines performs well in the monthly customer
service measures in Survey America and in the A + 14
Dependability statistics tracked by the Department of
Transportation. Since 2004, the Company has paid out more
than $46 million in AIP Customer Service payments to
employees.
2. Financial payments are based on the Company's financial
results. This pays out 2.5 percent of wages when American
Airlines records a 5 percent annual pre-tax margin. If the
pre-tax margin reaches 10 percent, these annual awards rise
to 5 percent of wages. And, if the pre-tax margin reaches
15 percent, these annual awards pay out 10 percent of wages.
Profit Sharing pays cash awards to all eligible employees when
American Airlines exceeds $500 million in pre-tax earnings.
Generally, the profit sharing plan provides for a profit sharing
pool for eligible employees equal to 15 percent of pre-tax
income of American Airlines in excess of $500 million.
Based on current conditions, the Company's most recently
prepared internal forecast for the full year 2007 contains an
accrual for profit sharing. There can be no assurance that the
Company's forecast will approximate actual results.
Additionally, reductions in forecasted pre-tax earnings from a
previous quarter could result in the reversal of a portion or
all of the previously recorded profit sharing expense.
For more information regarding these plans, please see the
Company's 2006 Form 10-K.
AMR EAGLE EYE
Capacity and Traffic Forecast (millions)
AA Mainline Operations
Actual Forecast
Jan Feb Mar 1Q07 2007
ASMs 14,486 12,726 14,595 41,807 171,307
Domestic 9,280 8,191 9,430 26,901 109,205
International 5,206 4,535 5,165 14,906 62,103
Traffic 10,902 9,737 11,990 32,630 138,272
Regional Affiliate Operations
Actual Forecast
Jan Feb Mar 1Q07 2007
ASMs 1,140 998 1,147 3,285 13,865
Traffic 730 690 840 2,260 10,177
Below the Line Income/Expense
Total Other Income (Expense) is estimated at $(164) million in the
first quarter of 2007.
Share Count (millions)
1Q 2007
Earnings Basic Diluted
Over $66 million 236 297
$49 - $65 million 236 282
$0 - $48 million 236 265
Loss 236 236
FY 2007
Earnings Basic Diluted
Over $267 million 246 302
$200 - $266 million 246 287
$0 - $199 million 246 270
Loss 246 246
1/ Data is as reported
2/ The Company believes that unit costs excluding fuel is a useful
measurement to investors in monitoring the performance of the
Company's costs excluding the volatility of fuel. Reconciliation
to GAAP follows:
Actual Forecast
Jan Feb Mar 1Q07 2007
Cents
AMR CASM 11.46 11.84 11.31 11.52 11.51
Less Fuel CASM 3.11 3.05 3.15 3.10 3.32
AMR CASM Excluding Fuel 8.35 8.79 8.16 8.42 8.19
Actual Forecast
Jan Feb Mar 1Q07 2007
Cents
AA CASM 10.87 11.20 10.70 10.91 10.90
Less Fuel CASM 3.02 2.97 3.07 3.02 3.23
AA CASM Excluding Fuel 7.85 8.23 7.63 7.89 7.67