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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X]Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2002.
[ ]Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Transition Period From to .
Commission file number 1-8400.
AMR Corporation
(Exact name of registrant as specified in its charter)
Delaware 75-1825172
(State or other (I.R.S. Employer
jurisdiction Identification No.)
of incorporation or
organization)
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (817) 963-1234
Not Applicable
(Former name, former address and former fiscal year , if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, $1 par value - 155,688,619 as of July 15, 2002.
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INDEX
AMR CORPORATION
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations -- Three and six months ended
June 30, 2002 and 2001
Condensed Consolidated Balance Sheets - June 30, 2002 and December
31, 2001
Condensed Consolidated Statements of Cash Flows -- Six months ended
June 30, 2002 and 2001
Notes to Condensed Consolidated Financial Statements - June 30,
2002
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
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PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In millions, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenues
Passenger - American Airlines $3,747 $4,645 $7,231 $8,580
- AMR Eagle 344 409 649 763
Cargo 142 190 276 366
Other revenues 246 339 459 634
Total operating revenues 4,479 5,583 8,615 10,343
Expenses
Wages, salaries and benefits 2,126 2,126 4,206 3,872
Aircraft fuel 656 842 1,183 1,549
Depreciation and amortization 338 352 679 665
Other rentals and landing fees 306 320 595 577
Maintenance, materials and
repairs 285 298 551 578
Aircraft rentals 214 226 440 374
Food service 180 218 350 402
Commissions to agents 155 260 316 484
Special charges - 685 - 685
Other operating expenses 820 1,016 1,625 1,921
Total operating expenses 5,080 6,343 9,945 11,107
Operating Loss (601) (760) (1,330) (764)
Other Income (Expense)
Interest income 18 24 36 64
Interest expense (164) (132) (330) (251)
Interest capitalized 22 38 44 79
Miscellaneous - net 5 37 (3) 22
(119) (33) (253) (86)
Loss Before Income Taxes (720) (793) (1,583) (850)
Income tax benefit (225) (286) (513) (300)
Net Loss $ (495) $ (507) $ (1,070) $ (550)
Loss Per Share
Basic and Diluted $(3.19) $(3.29) $ (6.90) $(3.58)
The accompanying notes are an integral part of these financial statements.
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AMR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited) (In millions)
June 30,2002 December 31,2001
Assets
Current Assets
Cash $ 195 $ 120
Short-term investments 2,368 2,872
Receivables, net 1,556 1,414
Inventories, net 743 822
Deferred income taxes 792 790
Other current assets 194 522
Total current assets 5,848 6,540
Equipment and Property
Flight equipment, net 15,556 14,980
Other equipment and property, net 2,317 2,079
Purchase deposits for flight equipment 686 929
18,559 17,988
Equipment and Property Under Capital Leases
Flight equipment, net 1,433 1,572
Other equipment and property, net 92 95
1,525 1,667
Goodwill 1,351 1,392
Route acquisition costs 829 829
Airport operating and gate lease rights, net 481 496
Other assets 4,296 3,929
$ 32,889 $ 32,841
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 1,559 $ 1,785
Accrued liabilities 2,344 2,192
Air traffic liability 3,059 2,763
Current maturities of long-term debt 350 556
Current obligations under capital leases 147 216
Total current liabilities 7,459 7,512
Long-term debt, less current maturities 9,172 8,310
Obligations under capital leases, less
current obligations 1,444 1,524
Deferred income taxes 1,940 1,627
Postretirement benefits 2,611 2,538
Other liabilities, deferred gains and
deferred credits 5,868 5,957
Stockholders' Equity
Preferred stock - -
Common stock 182 182
Additional paid-in capital 2,812 2,865
Treasury stock (1,645) (1,716)
Accumulated other comprehensive loss (72) (146)
Retained earnings 3,118 4,188
4,395 5,373
$ 32,889 $ 32,841
The accompanying notes are an integral part of these financial statements.
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AMR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In millions)
Six Months Ended June 30,
2002 2001
Net Cash Provided by Operating Activities $ 86 $ 885
Cash Flow from Investing Activities:
Capital expenditures, including purchase
deposits for flight equipment (1,113) (2,124)
Acquisition of Trans World Airlines, Inc. - (742)
Net decrease in short-term investments 504 922
Proceeds from sale of equipment and property 162 206
Other 35 (6)
Net cash used for investing activities (412) (1,744)
Cash Flow from Financing Activities:
Payments on long-term debt and capital lease
obligations (468) (586)
Proceeds from:
Issuance of long-term debt 866 1,587
Exercise of stock options 3 34
Net cash provided by financing activities 401 1,035
Net increase in cash 75 176
Cash at beginning of period 120 89
Cash at end of period $ 195 $ 265
The accompanying notes are an integral part of these financial statements.
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AMR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the
instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, these financial
statements contain all adjustments, consisting of normal recurring
accruals and the asset impairment charge as discussed in footnote 8,
necessary to present fairly the financial position, results of
operations and cash flows for the periods indicated. The Company's
2002 results continue to be adversely impacted by the September 11,
2001 terrorist attacks and the resulting effect on the economy and the
air transportation industry. In addition, on April 9, 2001, Trans
World Airlines LLC (TWA LLC, a wholly owned subsidiary of AMR
Corporation) purchased substantially all of the assets and assumed
certain liabilities of Trans World Airlines, Inc. (TWA). Accordingly,
the operating results of TWA LLC are included in the accompanying
condensed consolidated financial statements for the three and six
month periods ended June 30, 2002 whereas for 2001 the results of TWA
LLC were included only for the period April 10, 2001 through June 30,
2001. When utilized in this report, all references to American
Airlines, Inc. include the operations of TWA LLC since April 10, 2001
(collectively, American). Results of operations for the periods
presented herein are not necessarily indicative of results of
operations for the entire year. For further information, refer to the
consolidated financial statements and footnotes thereto included in
the AMR Corporation (AMR or the Company) Annual Report on Form 10-K
for the year ended December 31, 2001 ("2001 Form 10-K").
2.Accumulated depreciation of owned equipment and property at June
30, 2002 and December 31, 2001 was $9 billion and $8.9 billion,
respectively. Accumulated amortization of equipment and property
under capital leases at June 30, 2002 and December 31, 2001 was
approximately $1.1 billion and $1.2 billion, respectively.
3.The following table provides unaudited pro forma consolidated
results of operations, assuming the acquisition of TWA had occurred
as of January 1, 2001 (in millions, except per share amounts):
Six Months Ended
June 30, 2001
Operating revenues $ 11,210
Net loss (557)
Loss per share $ (3.62)
The unaudited pro forma consolidated results of operations have
been prepared for comparative purposes only. These amounts are not
indicative of the combined results that would have occurred had the
transaction actually been consummated on the date indicated above
and are not indicative of the consolidated results of operations
which may occur in the future.
4.As discussed in the notes to the consolidated financial
statements included in the Company's 2001 Form 10-K, Miami-Dade County
(the County) is currently investigating and remediating various
environmental conditions at the Miami International Airport (MIA) and
funding the remediation costs through landing fees and various cost
recovery methods. American and AMR Eagle have been named as
potentially responsible parties (PRPs) for the contamination at MIA.
During the second quarter of 2001, the County filed a lawsuit against
17 defendants, including American, in an attempt to recover its past
and future cleanup costs (Miami-Dade County, Florida v. Advance Cargo
Services, Inc., et al. in the Florida Circuit Court). In addition to
the 17 defendants named in the lawsuit, 243 other agencies and
companies were also named as PRPs and contributors to the
contamination. American's and AMR Eagle's portion of the cleanup
costs cannot be reasonably estimated due to various factors, including
the unknown extent of the remedial actions that may be required, the
proportion of the cost that will ultimately be recovered from the
responsible parties, and uncertainties regarding the environmental
agencies that will ultimately supervise the remedial activities and
the nature of that supervision.
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AMR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
In addition, the Company is subject to environmental issues at
various other airport and non-airport locations. Management
believes, after considering a number of factors, that the ultimate
disposition of these environmental issues is not expected to
materially affect the Company's consolidated financial position,
results of operations or cash flows. Amounts recorded for
environmental issues are based on the Company's current assessments
of the ultimate outcome and, accordingly, could increase or
decrease as these assessments change.
5.As of June 30, 2002, the Company had commitments to acquire the
following aircraft: 47 Boeing 737-800s, 11 Boeing 777-200ERs, nine
Boeing 767-300ERs, 109 Embraer regional jets and 20 Bombardier CRJ-
700s. Deliveries of these aircraft are scheduled to continue through
2008. Payments for these aircraft are expected to be approximately
$505 million during the remainder of 2002, $1.5 billion in 2003, $1.1
billion in 2004 and an aggregate of approximately $2.1 billion in 2005
through 2008.
6.During the six month period ended June 30, 2002, American and AMR
Eagle borrowed approximately $626 million under various debt
agreements which are secured by aircraft. Effective interest rates on
these agreements are based on London Interbank Offered Rate plus a
spread and mature over various periods of time through 2018.
In March 2002, the Regional Airports Improvement Corporation issued
facilities sublease revenue bonds at the Los Angeles International
Airport to provide reimbursement to American for certain facility
construction costs. The proceeds of approximately $225 million
provided to American have been recorded as long-term debt on the
condensed consolidated balance sheets. These obligations bear
interest at fixed rates, with an average rate of 7.88 percent, and
mature over various periods of time, with a final maturity in 2024.
7.Effective January 1, 2001, the Company adopted Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended (SFAS 133). SFAS
133 required the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges are
adjusted to fair value through income. If the derivative is a
hedge, depending on the nature of the hedge, changes in the fair
value of derivatives are either offset against the change in fair
value of the hedged assets, liabilities, or firm commitments
through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings. The ineffective portion
of a derivative's change in fair value is immediately recognized in
earnings. The adoption of SFAS 133 did not result in a cumulative
effect adjustment being recorded to net income for the change in
accounting. However, the Company recorded a transition adjustment
of approximately $64 million in Accumulated other comprehensive
loss in the first quarter of 2001.
In addition, effective January 1, 2002, the Company adopted
Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets" (SFAS 142). SFAS 142 requires the Company
to test goodwill and indefinite-lived intangible assets (for AMR,
route acquisition costs) for impairment rather than amortize them.
During the first quarter of 2002, the Company completed its
impairment analysis for route acquisition costs in accordance with
SFAS 142. The analysis did not result in an impairment charge.
During the second quarter of 2002, the Company completed the first
step of its impairment analysis related to its $1.4 billion of
goodwill and determined the Company's net book value to be in
excess of the Company's fair market value at January 1, 2002, using
AMR as the reporting unit for purposes of the fair value
determination. As a result, the Company is in the process of
completing the second step of the impairment analysis which will
allocate the newly determined fair value of AMR to each of its
assets and liabilities. This allocation is expected to be
completed during the third or fourth quarter of 2002 and will
likely result in the Company recording a one-time, non-cash pre-tax
charge of up to $1.4 billion to write-down AMR's goodwill. Such
charge would be nonoperational in nature and would be reflected as
a cumulative effect of an accounting change in the consolidated
statements of operations.
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8
AMR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
The following table provides information relating to the Company's
amortized intangible assets as of June 30, 2002 (in millions):
Accumulated Net Book
Cost Amortization Value
Amortized intangible assets:
Airport operating rights $ 516 $ 168 $ 348
Gate lease rights 209 76 133
Total $ 725 $ 244 $ 481
Airport operating and gate lease rights are being amortized on a
straight-line basis over 25 years to a zero residual value. For
the three and six month period ended June 30, 2002, the Company
recorded amortization expense of approximately $6 million and $15
million, respectively, related to these intangible assets. The
Company expects to record annual amortization expense of
approximately $29 million in each of the next five years related to
these intangible assets.
The pro forma effect of discontinuing amortization of goodwill and
route acquisition costs under SFAS 142 - assuming the Company had
adopted this standard as of January 1, 2001 - results in an adjusted
net loss of approximately $494 million, or $3.21 per share, and
approximately $530 million, or $3.45 per share, respectively, for the
three and six month periods ended June 30, 2001.
8.In conjunction with the acquisition of certain assets from TWA,
coupled with revisions to the Company's fleet plan to accelerate
the retirement dates of its Fokker 100, Saab 340 and ATR 42
aircraft, during the second quarter of 2001 the Company determined
these aircraft were impaired under Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of"
(SFAS 121). As a result, during the second quarter of 2001, the
Company recorded an asset impairment charge of approximately $685
million relating to the write-down of the carrying value of 71
Fokker 100 aircraft, 74 Saab 340 aircraft and 20 ATR 42 aircraft
and related rotables to their estimated fair market values which is
included in Special charges on the accompanying consolidated
statements of operations. Management estimated the undiscounted
future cash flows utilizing models used by the Company in making
fleet and scheduling decisions. In determining the fair market
value of these aircraft, the Company considered outside third party
appraisals and recent transactions involving sales of similar
aircraft. As a result of the writedown of these aircraft to fair
market value, as well as the acceleration of the retirement dates
and changes in salvage values, depreciation and amortization will
decrease by approximately $18 million on an annualized basis.
9.The Company includes unrealized gains and losses on available-for-
sale securities, changes in minimum pension liabilities and changes in
the fair value of certain derivative financial instruments that
qualify for hedge accounting in comprehensive loss. For the three
months ended June 30, 2002 and 2001, comprehensive loss was $496
million and $511 million, respectively. In addition, for the six
months ended June 30, 2002 and 2001, comprehensive loss was $996
million and $480 million, respectively. The difference between net
loss and comprehensive loss is due primarily to the accounting for the
Company's derivative financial instruments under SFAS 133. In
addition, the six month period ended June 30, 2001 includes the
cumulative effect of the adoption of SFAS 133.
During the second quarter of 2002, the Company discontinued
entering into new foreign exchange currency put option agreements.
The fair value of the Company's remaining foreign currency put
option agreements was not material as of June 30, 2002, and all of
these agreements will expire by September 30, 2002.
6
9
AMR CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
10.The following table sets forth the computations of basic and
diluted loss per share (in millions, except per share data):
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Numerator:
Net loss - numerator for basic
and diluted loss per share $ (495) $(507) $(1,070) $(550)
Denominator:
Denominator for basic and
diluted loss per share -
weighted-average shares 155 154 155 154
Basic and diluted loss per share $(3.19) $(3.29) $(6.90) $(3.58)
For the three and six months ended June 30, 2002, approximately
five million and seven million potential dilutive shares,
respectively, were not added to the denominator because inclusion
of such shares would be antidilutive as compared to approximately
14 million shares for the three and six months ended June 30, 2001.
7
10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
For the Three Months Ended June 30, 2002 and 2001
Summary AMR Corporation's (AMR or the Company) net loss during the
second quarter of 2002 was $495 million, or $3.19 per share, as
compared to a net loss of $507 million, or $3.29 per share for the
same period in 2001. AMR's operating loss of $601 million decreased
by $159 million compared to the same period in 2001. The Company's
2002 results continue to be adversely impacted by the September 11,
2001 terrorist attacks and the resulting effect on the economy and the
air transportation industry. On April 9, 2001, Trans World Airlines
LLC (TWA LLC, a wholly owned subsidiary of AMR) purchased
substantially all of the assets and assumed certain liabilities of
Trans World Airlines, Inc. (TWA). Accordingly, the operating results
of TWA LLC are included in the accompanying condensed consolidated
financial statements for the three month period ended June 30, 2002
whereas for 2001 the results of TWA LLC were included only for the period
April 10, 2001 through June 30, 2001. All references to American
Airlines, Inc. include the operations of TWA LLC since April 10, 2001
(collectively, American). AMR's second quarter 2001 results include:
(i) a $685 million charge ($430 million after-tax, or $2.79 per
share) related to the writedown of the carrying value of its Fokker
100, Saab 340 and ATR-42 aircraft and related rotables in accordance
with SFAS 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of" (see footnote 8 to the
condensed consolidated financial statements), and (ii) a $45 million
gain ($29 million after-tax, or $0.19 per share) from the settlement
of a legal matter related to the Company's 1999 labor disruption.
Although traffic has continued to increase on significantly reduced
capacity since the events of September 11, 2001, the Company's second
quarter 2002 revenues were down significantly quarter-over-quarter.
In addition to the residual effects of September 11, the Company's
revenues continue to be negatively impacted by the economic slowdown,
seen largely in business travel declines, the geographic distribution
of the Company's network and reduced fares. In total, the Company's
revenues decreased $1,104 million, or 19.8 percent, in the second
quarter of 2002 as compared to the same period last year. American's
passenger revenues decreased by 19.3 percent, or $898 million in the
second quarter of 2002 from the same period in 2001. American's
domestic revenue per available seat mile (RASM) decreased 11.9
percent, to 8.47 cents, on a capacity decrease of 8 percent, to 32
billion available seat miles (ASMs). International RASM decreased to
8.67 cents, or 5 percent, on a capacity decrease of 16.2 percent. The
decrease in international RASM was due to an 8.6 percent and 3.1
percent decrease in Latin American and European RASM, respectively,
slightly offset by a 3.2 percent increase in Pacific RASM. The
decrease in international capacity was driven by a 33.9 percent, 16.2
percent and 12.3 percent reduction in Pacific, European and Latin
American ASMs, respectively.
AMR Eagle's passenger revenues decreased 15.9 percent, or $65 million.
AMR Eagle's traffic increased 2.8 percent while capacity decreased 5
percent, to approximately 1.6 billion ASMs. As with American, the
decrease in AMR Eagle's revenues was due primarily to the continued
impact of the September 11, 2001 terrorist attacks and the economic
slowdown.
Cargo revenues decreased $48 million, or 25.3 percent, primarily due
to the same reasons as noted above.
Other revenues decreased 27.4 percent, or $93 million, due primarily
to decreases in contract maintenance work that American performs for
other airlines, and decreases in codeshare revenue and employee travel
service charges.
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RESULTS OF OPERATIONS (Continued)
The Company's operating expenses decreased 19.9 percent, or $1,263
million. American's cost per ASM increased 0.5 percent to 10.78
cents, excluding the impact of the second quarter 2001 asset
impairment charge. Wages, salaries and benefits remained flat quarter-
over-quarter, reflecting (i) a decrease in the average number of equivalent
employees, somewhat offset by higher salaries, and (ii) increases in the
Company's pension and health insurance costs, the latter reflecting rapidly
rising medical care and prescription drug costs. Aircraft fuel expense
decreased 22.1 percent, or $186 million, due primarily to an 11.6 percent
decrease in the Company's fuel consumption and a 9.4 percent decrease in
the Company's average price per gallon of fuel. Food service decreased
17.4 percent, or $38 million, due primarily to the Company's reduced
operating schedule and change in level of food service. Commissions
to agents decreased 40.4 percent, or $105 million, due primarily to a
19.1 percent decrease in passenger revenues and commission structure
changes implemented in March 2002. Special charges of $685 million related
to the writedown of the carrying value of the Company's Fokker 100,
Saab 340 and ATR-42 aircraft and related rotables during the second
quarter of 2001 (see footnote 8 to the condensed consolidated
financial statements). Other operating expenses decreased 19.3
percent, or $196 million, due primarily to decreases in
contract maintenance work that American performs for other airlines,
and decreases in travel and incidental costs, credit card and booking
fees, advertising and promotion costs, and data processing expenses,
which were partially offset by higher insurance and security costs.
Other income (expense) increased $86 million due to the following:
Interest income decreased 25 percent, or $6 million, due primarily to
decreases in interest rates. Interest expense increased $32 million,
or 24.2 percent, resulting primarily from the increase in the
Company's long-term debt. Interest capitalized decreased $16 million,
or 42.1 percent, due primarily to a decrease in purchase deposits for
flight equipment. Miscellaneous-net decreased 86.5 percent, or $32
million, due primarily to a $45 million gain recorded during the
second quarter of 2001 from the settlement of a legal matter related
to the Company's 1999 labor disruption.
The effective tax rate for the three months ended June 30, 2002 was
impacted by a $30 million charge resulting from a provision in
Congress' economic stimulus package that changes the period for
carrybacks of net operating losses (NOLs). This change allows the
Company to carry back 2001 and 2002 NOLs for five years, rather than
two years under the existing law, allowing the Company to more quickly
recover its NOLs. The extended NOL carryback did however, result in
the displacement of foreign tax credits taken in prior years. These
credits are now expected to expire before being utilized by the
Company, resulting in this charge.
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RESULTS OF OPERATIONS (Continued)
OPERATING STATISTICS Three Months Ended June 30,
2002 2001
American Airlines
Revenue passenger miles (millions) 31,379 35,188
Available seat miles (millions) 43,958 49,044
Cargo ton miles (millions) 518 610
Passenger load factor 71.4% 71.7%
Breakeven load factor (*) 86.4% 74.0%
Passenger revenue yield per passenger mile (cents) 11.94 13.20
Passenger revenue per available seat mile (cents) 8.52 9.47
Cargo revenue yield per ton mile (cents) 27.21 30.89
Operating expenses per available seat mile (cents)(*) 10.78 10.73
Fuel consumption (gallons, in millions) 808 922
Fuel price per gallon (cents) 75.5 83.3
Fuel price per gallon, excluding fuel taxes (cents) 70.0 78.0
Operating aircraft at period-end 828 904
AMR Eagle
Revenue passenger miles (millions) 1,059 1,030
Available seat miles (millions) 1,596 1,680
Passenger load factor 66.4% 61.3%
Operating aircraft at period-end 281 271
(*) Excludes the impact of Special charges
Operating aircraft at June 30, 2002, included:
American Airlines Aircraft AMR Eagle Aircraft
Airbus A300-600R 34 ATR 42 28
Boeing 737-800 77 Bombardier CRJ-700 5
Boeing 757-200 151 Embraer 135 40
Boeing 767-200 8 Embraer 140 30
Boeing 767-200 Extended Range 21 Embraer 145 56
Boeing 767-300 Extended Range 58 Super ATR 42
Boeing 777-200 Extended Range 43 Saab 340B 55
Fokker 100 74 Saab 340B Plus 25
McDonnell Douglas MD-80 362 Total 281
Total 828
The average aircraft age for American's aircraft is 10 years and 6.6
years for AMR Eagle aircraft.
In addition, the following owned and leased aircraft were not operated
by the Company as of June 30, 2002: 29 owned Boeing 727-200s, 24
operating leased Boeing 717-200s, 13 operating leased McDonnell
Douglas DC-9s, eight owned McDonnell Douglas DC-10-10s, four operating
leased McDonnell Douglas MD-80s, and 15 capital leased and two owned
Saab 340Bs.
10
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RESULTS OF OPERATIONS (Continued)
For the Six Months Ended June 30, 2002 and 2001
Summary AMR's net loss for the six months ended June 30, 2002 was
$1,070 million, or $6.90 per share, as compared to a net loss of $550
million, or $3.58 per share, for the same period in 2001. AMR's
operating loss for the six months ended June 30, 2002 was $1,330
million, compared to an operating loss of $764 million for the same
period in 2001. The Company's 2002 results continue to be adversely
impacted by the September 11, 2001 terrorist attacks and the
resulting effect on the economy and the air transportation industry.
On April 9, 2001, TWA LLC purchased substantially all of the assets
and assumed certain liabilities of TWA. Accordingly, the operating
results of TWA LLC are included in the accompanying condensed
consolidated financial statements for the six month period ended June
30, 2002 whereas for 2001 the results of TWA LLC were included only
for the period April 10, 2001 through June 30, 2001. In addition, AMR's
2001 results include: (i) a $685 million charge ($430 million after-tax,
or $2.79 per share) related to the writedown of the carrying value
of its Fokker 100, Saab 340 and ATR-42 aircraft and related rotables,
and (ii) a $45 million gain ($29 million after-tax, or $0.19 per
share) from the settlement of a legal matter related to the
Company's 1999 labor disruption.
Although traffic has continued to increase on significantly reduced
capacity since the events of September 11, 2001, the Company's 2002
revenues were down significantly year-over-year. In addition to the
residual effects of September 11, the Company's revenues continue to
be negatively impacted by the economic slowdown, seen largely in
business travel declines, the geographic distribution of the Company's
network and reduced fares. In total, the Company's revenues decreased
$1,728 million, or 16.7 percent, in 2002 versus the same period in
2001. American's passenger revenues decreased by 15.7 percent, or
$1,349 million in 2002 as compared to the same period in 2001.
American's domestic RASM decreased 13.4 percent, to 8.58 cents, on a
capacity decrease of 0.4 percent, to 61.3 billion ASMs. International
RASM decreased to 8.67 cents, or 7.7 percent, on a capacity decrease
of 14 percent. The decrease in international RASM was due to a 10.2
percent and 7.9 percent decrease in Latin American and European RASM,
respectively, slightly offset by a 5.6 percent increase in Pacific
RASM. The decrease in international capacity was driven by a 36.4
percent, 15.2 percent and 8.2 percent reduction in Pacific, European
and Latin American ASMs, respectively.
AMR Eagle's passenger revenues decreased 14.9 percent, or $114
million. AMR Eagle's traffic increased 4.7 percent while capacity
decreased 3.2 percent, to approximately 3.2 billion ASMs. As with
American, the decrease in AMR Eagle's revenues was due primarily to
the continued impact of the September 11, 2001 terrorist attacks and
the economic slowdown.
Cargo revenues decreased $90 million, or 24.6 percent, primarily due
to the same reasons as noted above.
Other revenues decreased 27.6 percent, or $175 million, due primarily
to decreases in contract maintenance work that American performs for
other airlines, and decreases in codeshare revenue and employee travel
service charges.
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RESULTS OF OPERATIONS (Continued)
The Company's operating expenses decreased 10.5 percent, or
approximately $1,162 million. American's cost per ASM increased by
0.5 percent to 11.03 cents, excluding the impact of the second quarter
2001 asset impairment charge. Wages, salaries and benefits increased
8.6 percent, or $334 million, reflecting (i) a decrease in the average
number of equivalent employees, somewhat offset by higher average
salaries, and (ii) increases in the Company's pension and health insurance
costs, the latter reflecting rapidly rising medical care and
prescription drug costs. Aircraft fuel expense decreased 23.6 percent,
or $366 million, due primarily to a 16.1 percent decrease in the
Company's average price per gallon of fuel and a 6.1 percent decrease
in the Company's fuel consumption. Aircraft rentals increased $66 million,
or 17.6 percent, due primarily the addition of TWA aircraft. Food service
decreased 12.9 percent, or $52 million, due primarily to the Company's
reduced operating schedule and change in level of food service.
Commissions to agents decreased 34.7 percent, or $168 million, due primarily
to a 15.7 percent decrease in passenger revenues and commission structure
changes implemented in March 2002. Special charges of $685 million related
to the writedown of the carrying value of the Company's Fokker 100,
Saab 340 and ATR-42 aircraft and related rotables during the second
quarter of 2001. Other operating expenses decreased 15.4 percent, or
$296 million, due primarily to decreases in contract
maintenance work that American performs for other airlines, and
decreases in travel and incidental costs, credit card and booking
fees, advertising and promotion costs, and data processing expenses,
which were partially offset by higher insurance and security costs.
Other income (expense) increased $167 million due to the following:
Interest income decreased 43.8 percent, or $28 million, due primarily
to decreases in interest rates. Interest expense increased $79
million, or 31.5 percent, resulting primarily from the increase in the
Company's long-term debt. Interest capitalized decreased $35 million,
or 44.3 percent, due primarily to a decrease in purchase deposits for
flight equipment. Miscellaneous-net decreased $25 million due
primarily to a $45 million gain recorded during the second quarter of
2001 from the settlement of a legal matter related to the Company's
1999 labor disruption and the write-down of certain investments held
by the Company during the first quarter of 2001.
The effective tax rate for the six months ended June 30, 2002 was
impacted by a $57 million charge resulting from a provision in
Congress' economic stimulus package that changes the period for
carrybacks of NOLs. This change allows the Company to carry back 2001
and 2002 NOLs for five years, rather than two years under the existing
law, allowing the Company to more quickly recover its NOLs. The extended
NOL carryback did however, result in the displacement of foreign tax
credits taken in prior years. These credits are now expected to expire
before being utilized by the Company, resulting in this charge.
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RESULTS OF OPERATIONS (Continued)
OPERATING STATISTICS Six Months Ended June 30,
2002 2001
American Airlines
Revenue passenger miles (millions) 59,197 61,640
Available seat miles (millions) 84,047 88,021
Cargo ton miles (millions) 981 1,159
Passenger load factor 70.4% 70.0%
Breakeven load factor (*) 86.9% 71.3%
Passenger revenue yield per passenger mile (cents) 12.22 13.92
Passenger revenue per available seat mile (cents) 8.60 9.75
Cargo revenue yield per ton mile (cents) 27.93 31.27
Operating expenses per available seat mile (cents)(*) 11.03 10.97
Fuel consumption (gallons, in millions) 1,553 1,664
Fuel price per gallon (cents) 71.5 85.2
Fuel price per gallon, excluding fuel taxes (cents) 66.0 79.8
AMR Eagle
Revenue passenger miles (millions) 1,978 1,890
Available seat miles (millions) 3,163 3,268
Passenger load factor 62.5% 57.8%
(*) Excludes the impact of Special charges
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities in the six month period
ended June 30, 2002 was $86 million, a decrease of $799 million over
the same period in 2001, due primarily to an increase in the Company's
net loss. Included in net cash provided by operating activities during
the first six months of 2002 was approximately $658 million received
by the Company as a result of the utilization of its 2001 NOL's.
Capital expenditures for the first six months of 2002 were $1,113
million, and included the acquisition of seven Boeing 757-200s, three
Boeing 777-200ERs, 15 Embraer 140s and four Bombardier CRJ-700
aircraft. These capital expenditures were financed primarily through
secured mortgage and debt agreements. Proceeds from the sale of
equipment and property of $162 million include the proceeds received
upon delivery of three McDonnell Douglas MD-11 aircraft to FedEx.
As of June 30, 2002, the Company had commitments to acquire the
following aircraft: 47 Boeing 737-800s, 11 Boeing 777-200ERs, nine
Boeing 767-300ERs, 109 Embraer regional jets and 20 Bombardier CRJ-
700s. Deliveries of these aircraft are scheduled to continue through
2008. Payments for these aircraft are expected to be approximately
$505 million during the remainder of 2002, $1.5 billion in 2003, $1.1
billion in 2004 and an aggregate of approximately $2.1 billion in 2005
through 2008.
In June 2002, Standard & Poor's downgraded the credit ratings of AMR
and American, and the credit ratings of a number of other major
airlines. The long-term credit ratings of AMR and American were
removed from Standand & Poor's Credit Watch with negative implications
and were given a negative outlook. Any additional reductions in AMR's
or American's credit ratings could result in increased borrowing costs
to the Company and might limit the availability of future financing
needs.
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In addition to the Company's approximately $2.6 billion in cash and
short-term investments as of June 30, 2002, the Company has available
a variety of future financing sources, including, but not limited to:
(i) the receipt of the remainder of the U.S. Government grant
authorized by the Air Transportation Safety and System Stabilization
Act (the Act), which is estimated to be in excess of $40 million, (ii)
additional secured aircraft debt, (iii) the availability of the
Company's $1 billion credit facility, (iv) sale-leaseback transactions
of owned property, including aircraft and real estate, (v) the
recovery of past federal income taxes paid as a result of a provision
in the recently passed economic stimulus package regarding NOL
carrybacks, (vi) tax-exempt borrowings for airport facilities, (vii)
securitization of future operating receipts, and (viii) unsecured
borrowings. No assurance can be given that any of these financing
sources will be available on terms acceptable to the Company.
However, the Company believes it will meet its current financing
needs.
Pursuant to the Act, the Government made available to air carriers,
subject to certain conditions, up to $10 billion in federal government
guarantees of certain loans. American did not seek such loan
guarantees.
OTHER INFORMATION
As a result of the September 11, 2001 events, aviation insurers have
significantly reduced the maximum amount of insurance coverage
available to commercial air carriers for liability to persons other
than employees or passengers for claims resulting from acts of
terrorism, war or similar events (war-risk coverage). At the same
time, they significantly increased the premiums for such coverage as
well as for aviation insurance in general. Pursuant to authority
granted in the Act, the Government has supplemented the commercial war-
risk insurance until August 17, 2002 with a third party liability
policy to cover losses to persons other than employees or passengers
for renewable 60-day periods. In the event the insurance carriers
reduce further the amount of insurance coverage available or the
Government fails to renew war-risk insurance, the Company's operations
and/or financial position, results of operations or cash flows would
be adversely impacted.
As discussed in the Company's 2001 Form 10-K, a provision in the
current Allied Pilots Association (APA) contract freezes the number of
ASMs and block hours flown on American's two letter marketing code by
American's regional carrier partners when American pilots are on
furlough (the ASM cap). As AMR Eagle continues to accept previously
ordered regional jets, this ASM cap would be reached sometime in 2002,
necessitating actions to insure compliance with the ASM cap. American
is working with its regional partners to accomplish this. Actions
currently being taken and considered by AMR Eagle to reduce its
capacity are discussed in the Company's 2001 Form 10-K. In addition,
American is removing its code from flights of the AmericanConnection
carriers, which are independent carriers that provide feed to
American's St. Louis hub. American believes that the combination of
these actions will enable it to comply with this ASM cap through 2002
and for sometime beyond.
In addition, another provision in the current APA contract limits the
total number of regional jets with more than 44 seats flown under the
American code by American's regional carrier partners to 67 aircraft.
Similar to the above, as AMR Eagle continues to accept previously
ordered Bombardier CRJ aircraft, this cap would be reached in early
2003. In order to ensure American remains in compliance with this
provision, AMR Eagle has reached an agreement in principle to dispose
of 14 Embraer 145 aircraft. Ultimately, these airplanes will be
acquired by Trans States Airlines, an AmericanConnection carrier.
Trans States Airlines will operate these aircraft under its two letter
airline code and expects to deploy these aircraft at its St. Louis hub
where it feeds American. The potential transaction still requires the
consent of certain third parties, including the companies financing these
aircraft, and is subject to the negotiation of final documentation.
Effective January 1, 2002, the Company adopted Statement
of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" (SFAS 142). SFAS 142 requires the Company to test
goodwill and indefinite-lived intangible assets (for AMR, route
acquisition costs) for impairment rather than amortize them. During
the first quarter of 2002, the Company completed its impairment
analysis for route acquisition costs in accordance with SFAS 142. The
analysis did not result in an impairment charge. During the second
quarter of 2002, the Company completed the first step of its
impairment analysis related to its $1.4 billion of goodwill and
determined the Company's net book value to be in excess of the
Company's fair market value at January 1, 2002, using AMR as the
reporting unit for purposes of the fair value determination. As a
result, the Company is in the process of completing the second step of
the impairment analysis which will allocate the newly determined fair
value of AMR to each of its assets and liabilities. This allocation
is expected to be completed during the third or fourth quarter of 2002
and will likely result in the Company recording a one-time, non-cash
pre-tax charge of up to $1.4 billion to write-down AMR's goodwill.
Such charge would be nonoperational in nature and would be reflected
as a cumulative effect of an accounting change in the consolidated
statements of operations.
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OUTLOOK
Capacity for American is expected to be down approximately two percent
in the third quarter of 2002 compared to last year's third quarter
levels. AMR Eagle's third quarter capacity will be down about one
percent from last year's levels. For the third quarter of 2002, the
Company expects traffic to be about flat as compared to last year's
third quarter levels. Pressure to reduce costs will continue,
although the Company will continue to see higher benefit and security
costs, increased insurance premiums, and greater interest expense.
However, the Company expects to see a slight decrease in fuel prices
as compared to the third quarter of 2001 and the continued decline in
commission expense due to the commission changes implemented earlier
in 2002. In total, American's unit costs, excluding special charges,
for the third quarter of 2002 are expected to be down approximately
3.5 percent from last year's third quarter level. Notwithstanding the
expected decrease in unit costs however, given the revenue pressures
seen in the first half of the year and expected to continue into the
third quarter, the Company expects to incur a sizable loss in the
third quarter and a significant loss for 2002.
In response to these financial challenges, the Company has undertaken
a comprehensive review of its business to better align its cost
structure with the current revenue environment, aimed at improving
productivity, simplifying operations and reducing costs. The Company
has begun to implement certain of these changes, including a fleet
simplification program, adjustments to its operating schedule and
increased airport automation, and will continue to refine its business
throughout the coming months.
FORWARD-LOOKING INFORMATION
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 and in documents
incorporated herein by reference, the words "expects," "plans,"
"anticipates," "believes," and similar expressions are intended to
identify forward-looking statements. 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.
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, including
but not limited to the 2001 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in market risk from the
information provided in Item 7A. Quantitative and Qualitative
Disclosures About Market Risk of the 2001 Form 10-K.
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PART II: OTHER INFORMATION
Item 1. Legal Proceedings
On July 26, 1999, a class action lawsuit was filed, and in November
1999 an amended complaint was filed, against AMR Corporation, American
Airlines, Inc., AMR Eagle Holding Corporation, Airlines Reporting
Corporation, and the Sabre Group Holdings, Inc. in the United States
District Court for the Central District of California, Western
Division (Westways World Travel, Inc. v. AMR Corp., et al.). The
lawsuit alleges that requiring travel agencies to pay debit memos to
American for violations of American's fare rules (by customers of the
agencies) (1) breaches the Agent Reporting Agreement between American
and AMR Eagle and the plaintiffs, (2) constitutes unjust enrichment,
and (3) violates the Racketeer Influenced and Corrupt Organizations
Act of 1970 (RICO). The as yet uncertified class includes all travel
agencies who have been or will be required to pay monies to American
for debit memos for fare rules violations from July 26, 1995 to the
present. The plaintiffs seek to enjoin American from enforcing the
pricing rules in question and to recover the amounts paid for debit
memos, plus treble damages, attorneys' fees, and costs. The Company
intends to vigorously defend the lawsuit. Although the Company
believes that the litigation is without merit, an adverse court
decision could impose restrictions on the Company's relationships with
travel agencies which restrictions could have an adverse impact on the
Company.
On May 13, 1999, the United States (through the Antitrust Division of
the Department of Justice) sued AMR Corporation, American Airlines,
Inc., and AMR Eagle Holding Corporation in federal court in Wichita,
Kansas. The lawsuit alleges that American unlawfully monopolized or
attempted to monopolize airline passenger service to and from
Dallas/Fort Worth International Airport (DFW) by increasing service
when new competitors began flying to DFW, and by matching these new
competitors' fares. The Department of Justice seeks to enjoin
American from engaging in the alleged improper conduct and to impose
restraints on American to remedy the alleged effects of its past
conduct. On April 27, 2001, the U.S. District Court for the District
of Kansas granted American's motion for summary judgment. On June 26,
2001, the U.S. Department of Justice appealed the granting of
American's motion for summary judgment. The parties have submitted
briefs to the 10th Circuit Court of Appeals, which has scheduled the
case for oral argument on September 23, 2002. The Company intends to
defend the lawsuit vigorously. A final adverse court decision
imposing restrictions on the Company's ability to respond to
competitors would have an adverse impact on the Company.
Between May 14, 1999 and June 7, 1999, seven class action lawsuits
were filed against AMR Corporation, American Airlines, Inc., and AMR
Eagle Holding Corporation in the United States District Court in
Wichita, Kansas seeking treble damages under federal and state
antitrust laws, as well as injunctive relief and attorneys' fees (King
v. AMR Corp., et al.; Smith v. AMR Corp., et al.; Team Electric v. AMR
Corp., et al.; Warren v. AMR Corp., et al.; Whittier v. AMR Corp., et
al.; Wright v. AMR Corp., et al.; and Youngdahl v. AMR Corp., et al.).
Collectively, these lawsuits allege that American unlawfully
monopolized or attempted to monopolize airline passenger service to
and from DFW by increasing service when new competitors began flying
to DFW, and by matching these new competitors' fares. Two of the
suits (Smith and Wright) also allege that American unlawfully
monopolized or attempted to monopolize airline passenger service to
and from DFW by offering discounted fares to corporate purchasers, by
offering a frequent flyer program, by imposing certain conditions on
the use and availability of certain fares, and by offering override
commissions to travel agents. The suits propose to certify several
classes of consumers, the broadest of which is all persons who
purchased tickets for air travel on American into or out of DFW from
1995 to the present. On November 10, 1999, the District Court stayed
all of these actions pending developments in the case brought by the
Department of Justice. As a result, to date no class has been
certified. The Company intends to defend these lawsuits vigorously.
One or more final adverse court decisions imposing restrictions on the
Company's ability to respond to competitors or awarding substantial
money damages would have an adverse impact on the Company.
On May 17, 2002, the named plaintiffs in Hall, et al. v. United
Airlines, et al., No. 7:00 CV 123-BR(1), pending in the United States
District Court for the Eastern District of North Carolina, filed an
amended complaint alleging that between 1995 and the present, American
and the other defendant airlines conspired to reduce commissions paid
to U.S.-based travel agents in violation of Section 1 of the Sherman
Act. The named plaintiffs seek to certify a nationwide class of
travel agents, but no class has yet been certified. American is
vigorously defending the lawsuit. Trial is set for April 29, 2003. A
final adverse court decision awarding substantial money damages or
placing restrictions on the Company's commission policies or practices
would have an adverse impact on the Company.
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Item 1. Legal Proceedings (Continued)
On April 26, 2002, six travel agencies filed an action in the United
States District Court for the Central District of California against
American, United Air Lines, Delta Air Lines, and Orbitz, LLC, alleging
that American and the other defendants: (i) conspired to prevent
travel agents from acting as effective competitors in the distribution
of airline tickets to passengers in violation of Section 1 of the
Sherman Act; and (ii) conspired to monopolize the distribution of
common carrier air travel between airports in the United States in
violation of Section 2 of the Sherman Act. The named plaintiffs seek
to certify a nationwide class of travel agents, but no class has yet
been certified. American is vigorously defending the lawsuit, which
is styled Albany Travel Co., et al. v. Orbitz, LLC, et al., No. 02-
3459 (ER) (AJW)x. A final adverse court decision awarding substantial
money damages or placing restrictions on the Company's distribution
practices would have an adverse impact on the Company.
On May 13, 2002, the named plaintiffs in Always Travel, et. al. v. Air
Canada, et. al., No. T757-027, pending in the Federal Court of Canada,
Trial Division, Montreal, filed a statement of claim alleging that
between 1995 and the present, American, the other defendant airlines,
and the International Air Transport Association conspired to reduce
commissions paid to Canada-based travel agents in violation of
Section 45 of the Competition Act of Canada. The named plaintiffs
seek to certify a nationwide class of travel agents, but no class has
yet been certified. American is vigorously defending the lawsuit. A
final adverse court decision awarding substantial money damages or
placing restrictions on the Company's commission policies would have
an adverse impact on the Company.
Miami-Dade County (the County) is currently investigating and
remediating various environmental conditions at the Miami
International Airport (MIA) and funding the remediation costs through
landing fees and various cost recovery methods. American Airlines,
Inc. and AMR Eagle have been named as potentially responsible parties
(PRPs) for the contamination at MIA. During the second quarter of
2001, the County filed a lawsuit against 17 defendants, including
American Airlines, Inc., in an attempt to recover its past and future
cleanup costs (Miami-Dade County, Florida v. Advance Cargo Services,
Inc., et al. in the Florida Circuit Court). In addition to the 17
defendants named in the lawsuit, 243 other agencies and companies were
also named as PRPs and contributors to the contamination. American's
and AMR Eagle's portion of the cleanup costs cannot be reasonably
estimated due to various factors, including the unknown extent of the
remedial actions that may be required, the proportion of the cost that
will ultimately be recovered from the responsible parties, and
uncertainties regarding the environmental agencies that will
ultimately supervise the remedial activities and the nature of that
supervision. The Company is vigorously defending the lawsuit.
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Item 4. Submission of Matters to a Vote of Security Holders
The owners of 138,215,811 shares of common stock, or 89 percent of
shares outstanding, were represented at the annual meeting of
stockholders on May 15, 2002 at the American Airlines Training &
Conference Center, Flagship Auditorium, 4501 Highway 360 South, Fort
Worth, Texas.
Elected as directors of the Corporation, each receiving a minimum of
135,637,573 votes were:
John W. Bachmann Ann McLaughlin Korologos
David L. Boren Michael A. Miles
Edward A. Brennan Philip J. Purcell
Donald J. Carty Joe M. Rodgers
Armando M. Codina Judith Rodin
Earl G. Graves Roger T. Staubach
Stockholders ratified the appointment of Ernst & Young LLP as
independent auditors for the Corporation for 2002. The vote was
132,769,970 in favor; 4,927,896 against; and 517,945 abstaining.
A stockholder proposal to recommend that the Company affirm its
political non-partisanship - submitted by Mrs. Evelyn Y. Davis - was
defeated. The vote was 18,069,575 in favor; 95,602,793 against;
2,449,216 abstaining; and 22,094,227 non-voting.
A stockholder proposal relating to increasing the Board of Directors
independence by nominating only independent directors to key board
committees - submitted by Mr. John Chevedden - was defeated. The
vote was 11,207,257 in favor; 102,829,057 against; 2,085,270
abstaining; and 22,094,227 non-voting.
Item 6. Exhibits and Reports on Form 8-K
The following exhibits are included herein:
3.1 Bylaws of AMR Corporation, amended as of April 2, 2002.
10.1 Deferred Compensation Agreement, dated as of December 18, 2001
between AMR and Roger T. Staubach.
10.2 Deferred Compensation Agreement, dated as of December 18, 2001
between AMR and Edward A. Brennan.
10.3 Deferred Compensation Agreement, dated as of January 14, 2002
between AMR and Joe M. Rodgers.
10.4 Deferred Compensation Agreement, dated as of December 18, 2001
between AMR and Judith Rodin.
10.5 Deferred Compensation Agreement, dated as of December 18, 2001
between AMR and John W. Bachmann.
10.6 Deferred Compensation Agreement, dated as of December 18, 2001
between AMR and Armando M. Codina.
10.7 Deferred Compensation Agreement, dated as of December 18, 2001
between AMR and Philip J. Purcell.
10.8 American Airlines, Inc. 2002 Employee Profit Sharing Plan.
10.9 American Airlines, Inc. 2002 Incentive Compensation Plan for
Officers and Key Employees.
10.10 AMR Corporation 2002-2004 Performance Share Plan for Officers and
Key Employees under the 1998 Long-Term Incentive Plan, as amended.
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Item 6. Exhibits and Reports on Form 8-K (continued)
10.11 AMR Corporation 2002-2004 Performance Share Program Deferred Stock
Award Agreement under the 1998 Long-Term Incentive Plan, as amended.
10.12 Current form of Stock Option Agreement under the 1998
Long-Term Incentive Plan, as amended.
12 Computation of ratio of earnings to fixed charges for the three
and six months ended June 30, 2002 and 2001.
Form 8-Ks filed under Item 5 - Other Events
On June 13, 2002, AMR filed a report on Form 8-K relating to a
press release issued by American to announce the appointment of
Jeffrey C. Campbell as Senior Vice President and Chief Financial
Officer of the Company.
On June 19, 2002, AMR filed a report on Form 8-K to provide updated
monthly guidance on unit cost, fuel, traffic and capacity for the
months of May through August 2002.
Form 8-Ks furnished under Item 9 - Regulation FD Disclosure
On April 4, 2002, AMR furnished a report on Form 8-K to announce
AMR's intent to host a conference call on April 17, 2002 with the
financial community relating to its first quarter 2002 earnings.
On May 31, 2002, AMR furnished a report on Form 8-K to provide
updated monthly guidance on unit cost, fuel, traffic and capacity for
the months of March through July 2002.
On June 5, 2002, AMR furnished a report on Form 8-K to provide
information regarding a presentation by Don Carty, Chairman and CEO of
AMR, at the Merrill Lynch Global Transportation Conference.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amended report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMR CORPORATION
Date: July 19, 2002 BY: /s/ Jeffrey C. Campbell
Jeffrey C. Campbell
Senior Vice President and Chief
Financial Officer
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