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    AMR Corporation Reports Second Quarter 2012 Results

    $6.5 Billion in Quarterly Revenue, Highest in Company History

    Net Profit of $95 Million, Excluding Reorganization and Special Items, a $381 Million Improvement Over a Year Ago

    Net Loss of $241 Million; Operating Income of $142 Million

    FORT WORTH, Texas, July 18, 2012 /PRNewswire/ -- AMR Corporation, the parent company of American Airlines, Inc., today reported second quarter revenue of $6.5 billion, an increase of 5.5 percent year-over-year and the highest quarterly revenue in company history.

    In the second quarter of 2012, the company reported a net profit of $95 million, excluding reorganization and special items – a $381 million improvement over the second quarter of 2011. AMR incurred a net loss of $241 million compared to a net loss of $286 million in the same period of 2011.

    "Thanks to the great work of the entire American team, this was a time of exceptional improvement. Our revenue performance has topped the industry for several months, leading to our first second quarter profit in five years excluding reorganization and special items," said Tom Horton, AMR's Chairman and Chief Executive Officer. "And this improvement reflects only a fraction of our ongoing restructuring progress. While there is still much to be done, we expect this momentum to build quickly as the new American re-emerges as an industry leader."

    Financial and Operational Performance
    Consolidated passenger revenue per available seat mile (unit revenue) grew 9.1 percent compared to the second quarter of 2011, and mainline passenger unit revenue increased 8.7 percent.

    • Consolidated passenger yield, representing average fares paid, increased 7.1 percent year-over-year in the second quarter of 2012, and mainline passenger yield increased 6.8 percent.
    • Mainline capacity, or total available seat miles, in the second quarter of 2012 decreased 2.4 percent compared to the same period in 2011.
    • American's second quarter 2012 mainline load factor, or the percentage of total seats filled, was 85.1 percent – a record for any quarter.

    The company's revenue performance was driven by year-over-year yield improvement and a higher consolidated load factor of 84.5 percent – a record for any quarter as well. Domestic unit revenue improved 8.6 percent in the second quarter versus the same period last year and, for the second consecutive quarter, the company experienced unit revenue increases across all five of its hubs. These results were supported by strong corporate revenue growth.

    International unit revenue increased 9.0 percent in the second quarter, driven by increased load factors across all entities, and strong yield performance. Premium cabin demand improved significantly in both the Atlantic and Pacific entities, generating unit revenue increases of 8.5 percent and 18.1 percent, respectively.  American and its joint-business partners, British Airways and Iberia over the Atlantic, and Japan Airlines over the Pacific, have gained momentum in attracting high-value customers to the airlines' enhanced networks. The Latin American entity posted a 6.7 percent unit revenue increase in the second quarter of 2012, including yield improvements in Mexico and Central and South America.

    "Our improved financial results were driven by strong unit revenue performance, with growth outpacing the industry in each of the three months of the second quarter," said Bella Goren, AMR's Chief Financial Officer. "Our consolidated unit revenue rose 9.1 percent, with increases across all five of our hubs and across all international entities. These industry-leading year-over-year revenue increases reflect the strength of our network and alliances, our focus on the customer, and the effectiveness of our overall strategy."

    AMR's consolidated operating expenses, excluding special items, were $6.2 billion, essentially flat with the same period last year. Excluding fuel costs, consolidated unit costs increased 2.3 percent year-over-year.

    Reorganization Items and Special Charges
    The second quarter 2012 results include $336 million in special charges and reorganization items.

    • Of that amount, $106 million is related to a special charge, primarily associated with employee severance-related costs.
    • The company recognized $230 million in reorganization items resulting from its and certain of its direct and indirect U.S. subsidiaries' voluntary petitions for reorganization under Chapter 11 on Nov. 29, 2011. These items are primarily from estimated claims associated with restructuring the financing arrangements for certain aircraft and rejecting certain special facility revenue bonds, as well as professional fees.

    Fuel Impact
    Taking into account the impact of fuel hedging, AMR paid approximately $3.24 per gallon for jet fuel in the second quarter of 2012 versus approximately $3.12 per gallon in the second quarter of 2011, a 3.8 percent increase. As a result, the company paid $81 million more for fuel in the second quarter of 2012 than it would have paid at prevailing prices from the prior-year period.

    Cash Position
    AMR ended the second quarter with approximately $5.8 billion in cash and short-term investments, including a restricted cash balance of $772 million, compared to a balance of approximately $5.6 billion in cash and short-term investments, including a restricted balance of approximately $457 million, at the end of the second quarter of 2011.

    At Nov. 30, 2011, the company had approximately $4.8 billion in cash and short-term investments, including a restricted cash balance of $693 million.

    Fleet Renewal Progress
    Later this year, the company will start placing into service the newest addition to its fleet, the Boeing 777-300ER, which will showcase a number of special features, including fully lie-flat First and Business Class seating, with direct aisle access from every seat; specially designed Main Cabin Extra seating with more legroom and comfort; international Wi-Fi and in-seat entertainment throughout all cabins.

    In addition, the company recently unveiled plans for upgrading its international widebody fleet of Boeing 777-200ERs and Boeing 767-300ERs, which will also offer industry-leading interiors and amenities as well as fully lie-flat Business Class seats with aisle access for every seat.

     

    About American Airlines
    American Airlines, American Eagle® and the AmericanConnection® carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,500 daily flights. The combined network fleet numbers more than 900 aircraft. American's award-winning website, AA.com®, provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld® alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members and members-elect serve more than 900 destinations with more than 9,000 daily flights to 150 countries and territories. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiaries of AMR Corporation. AmericanAirlines, American Eagle, AmericanConnection, AA.com, and AAdvantage are trademarks of American Airlines, Inc. AMR Corporation common stock trades under the symbol "AAMRQ" on the OTCQB marketplace, operated by OTC Markets Group.

    Cautionary Statement Regarding Forward-Looking Statements and Information
    This news release could be viewed as containing forward-looking statements or information. Actual results may differ materially from the results suggested by the statements and information contained herein for a number of reasons, including, but not limited to, the impact of the restructuring of the company and certain of its U.S. subsidiaries, the company's ability to refinance, extend or repay its near and intermediate term debt, the company's substantial level of indebtedness and related interest rates, the potential impact of volatile and rising fuel prices, impairments and restructuring charges. Because of the company's restructuring, there can be no assurance as to the future value of the company's securities, including its common stock, which could have little or no value at the end of the restructuring process. Accordingly, the company urges that caution be exercised with respect to existing and future investments in any of these securities (including the company's common stock) or other claims. Readers are referred to the documents filed by the company with the Securities and Exchange Commission, including the company's Form 10-K for the period ended December 31, 2011, which further identify the important risk factors that could cause actual results to differ materially from the forward-looking statements in this news release. The company disclaims any obligation to update any forward-looking statement or information.

    Detailed financial information follows:


     

    AMR CORPORATION

      

    CONSOLIDATED STATEMENT OF OPERATIONS

      

    (in millions, except per share amounts)

      

    (Unaudited)

      
        
     

    Three Months Ended
    June 30,

     

    Percent

    Change

     

    2012

     

    2011

     

    Revenues

         

        Passenger - American Airlines

    $    4,837

     

    $    4,557

     

    6.1

                          - Regional Affiliates

    790

     

    711

     

    11.1

        Cargo

    175

     

    187

     

    (6.6)

        Other revenues

    650

     

    659

     

    (1.4)

          Total operating revenues

    6,452

     

    6,114

     

    5.5

          

    Expenses

         

      Aircraft fuel

    2,209

     

    2,202

     

    0.3

      Wages, salaries and benefits

    1,778

     

    1,764

     

    0.8

      Other rentals and landing fees

    333

     

    355

     

    (6.2)

      Maintenance, materials and repairs

    357

     

    334

     

    6.8

      Depreciation and amortization

    261

     

    266

     

    (2.0)

      Commissions, booking fees and credit card expense

    263

     

    268

     

    (2.1)

      Aircraft rentals

    130

     

    158

     

    (18.0)

      Food service

    130

     

    133

     

    (1.6)

      Special charges

    106

     

    -

     

    *

      Other operating expenses

    743

     

    712

     

    4.4

        Total operating expenses

    6,310

     

    6,192

     

    1.9

          

    Operating Income (Loss)

    142

     

    (78)

     

    *

          

    Other Income (Expense)

         

      Interest income

    7

     

    7

     

    (3.9)

      Interest expense

    (164)

     

    (215)

     

    (23.8)

      Interest capitalized

    12

     

    10

     

    18.4

      Miscellaneous – net

    (8)

     

    (10)

     

    (20.0)

        Total other income

    (153)

     

    (208)

     

    (26.4)

          

    Income (Loss) Before Reorganization Items, Net

    (11)

     

    (286)

     

    (96.1)

    Reorganization Items, Net

    (230)

     

    -

     

    *

    Income Before Income Taxes

    (241)

     

    (286)

     

    (15.7)

    Income tax

    -

     

    -

     

    -

    Net Income

    $     (241)

     

    $     (286)

     

    (15.7)

          

    Earnings Per Share

         

    Basic

    $    (0.72)

     

    $    (0.85)

      

    Diluted

    $    (0.72)

     

    $    (0.85)

      
          

    Number of Shares Used in Computation

         

      Basic

    335

     

    335

      

      Diluted

    335

     

    335

      
          

    * Greater than 100%

         

     

    AMR CORPORATION

    OPERATING STATISTICS

    (Unaudited)

     

    OPERATING STATISTICS BY REGIONAL ENTITY

      

    American Airlines, Inc.

    Three Months Ended June 30, 2012

    Entity Results

    RASM1

    (cents)

     

    Y-O-Y

    Change

     

    ASMs2

    (billions)

     

    Y-O-Y

    Change

     
             

    DOT Domestic

    12.75

     

    8.6%

     

    22.7

     

    (1.9)%

     

    International

    12.46

     

    9.0

     

    15.6

     

    (3.0)

     

       DOT Latin America

    13.61

     

    6.7

     

    7.3

     

    1.3

     

       DOT Atlantic

    11.76

     

    8.5

     

    6.0

     

    (9.2)

     

       DOT Pacific

    10.67

     

    18.1

     

    2.3

     

    1.3

     

    American Airlines, Inc.

    Three Months Ended June 30, 2012

    Entity Results

     

    Load Factor

    (pts)

     

    Y-O-Y

    Change

    (pts)

     

     

    Yield

    (cents)

     

     

    Y-O-Y

    Change

     
             

    DOT Domestic

    86.3

     

    0.7

     

    14.78

     

    7.7%

     

    International

    83.4

     

    2.7

     

    14.94

     

    5.5

     

       DOT Latin America

    80.6

     

    0.7

     

    16.88

     

    5.9

     

       DOT Atlantic

    85.8

     

    2.9

     

    13.70

     

    4.9

     

       DOT Pacific

    86.1

     

    9.1

     

    12.39

     

    5.7

     
             

    1 Revenue per Available Seat Mile

          

    2 Available Seat Miles

          

     

    AMR CORPORATION

      

    NON-GAAP AND OTHER RECONCILIATIONS

      

    (in millions)

      

    (Unaudited)

      
        
     

    Three Months Ended
    June 30,

     

    Percent

     

    2012

     

    2011

     

    Change

          

    Net Income

    $        (241)

     

    $      (286)

     

    (15.7)

    Special Charges

    106

     

    -

     

    *

    Reorganization Items

    230

     

    -

     

    *

    Net Income Excluding Reorganization and Special Items

    95

     

    (286)

     

    *

     

    AMR CORPORATION

      

    OPERATING STATISTICS

      

    (Unaudited)

      
        
     

    Three Months Ended
    June 30,

     

    Percent

    Change

     

    2012

     

    2011

     

    American Airlines, Inc. Mainline Jet Operations

         

    Revenue passenger miles (millions)

    32,586

     

    32,788

     

    (0.6)

    Available seat miles (millions)

    38,289

     

    39,228

     

    (2.4)

    Cargo ton miles (millions)

    456

     

    459

     

    (0.7)

    Passenger load factor

    85.1%

     

    83.6%

     

    1.5 pts

    Passenger revenue yield per passenger mile (cents)

    14.84

     

    13.90

     

    6.8

    Passenger revenue per available seat mile (cents)

    12.63

     

    11.62

     

    8.7

    Cargo revenue yield per ton mile (cents)

    38.34

     

    40.76

     

    (5.9)

    Operating expenses per available seat mile, excluding Regional

       Affiliates (cents) (1)

    14.55

     

    13.85

     

    5.0

    Fuel consumption (gallons, in millions)

    604

     

    627

     

    (3.7)

    Fuel price per gallon (dollars)

    3.24

     

    3.11

     

    4.1

          
          

    Regional Affiliates

         

    Revenue passenger miles (millions)

    2,683

     

    2,585

     

    3.8

    Available seat miles (millions)

    3,447

     

    3,412

     

    1.0

    Passenger load factor

    77.8%

     

    75.8%

     

    2.1 pts

          
          

    AMR Corporation

         

    Average Equivalent Number of Employees

         

    American Airlines

    65,300

     

    66,800

      

    Other

    12,800

     

    13,700

      

       Total

    78,100

     

    80,500

      
     

    (1) Excludes $756 million and $793 million of expense incurred related to Regional Affiliates in 2012 and 2011, respectively.

     

    AMR CORPORATION

     

    NON-GAAP AND OTHER RECONCILIATIONS

     

    (Unaudited)

     
      

    American Airlines, Inc. Mainline Jet Operations
    (in millions, except as noted)

    Three Months Ended
    June 30,

     

    2012

     

    2011

    Total operating expenses

    $   6,325

     

    $   6,225

    Less: Operating expenses incurred related to Regional Affiliates

    756

     

    793

    Operating expenses excluding expenses incurred related to Regional Affiliates

    $   5,569

     

    $   5,432

    American mainline jet operations available seat miles

    38,289

     

    39,228

    Operating expenses per available seat mile, excluding Regional Affiliates (cents)

    14.55

     

    13.85

        

    Percent change

    5.0%

      

     

    American Airlines, Inc. Mainline Jet Operations
    (in millions, except as noted)

    Three Months Ended
    June 30,

     

    2012

     

    2011

    Total operating expenses

    $   6,325

     

    $   6,225

    Less: Operating expenses incurred related to Regional Affiliates

    756

     

    793

    Operating expenses excluding expenses incurred related to Regional Affiliates

    $   5,570

     

    $   5,432

    American mainline jet operations available seat miles

    38,289

     

    39,228

    Operating expenses per available seat mile, excluding Regional Affiliates (cents)

    14.55

     

    13.85

        

    Less: Impact of reorganization and special Items (cents)

    0.28

     

    -

    Operating expenses per available seat mile, excluding impact of reorganization
    and special items (cents)

    14.27

     

    13.85

        

    Percent change

    3.1%

      
        

    Less: Fuel cost per available seat mile (cents)

    5.11

     

    4.97

    Operating expenses per available seat mile, excluding impact of reorganization
    and special items, and fuel expenses (cents)

    9.16

     

    8.88

        

    Percent change

    3.2%

      
        

    Note: The company believes that operating expenses per available seat mile, excluding the cost of fuel, reorganization items and special items, assists investors in understanding the impact of fuel prices and special items on the company's operations.

     

    AMR CORPORATION

    NON-GAAP AND OTHER RECONCILIATIONS

    (Unaudited)

      

    AMR Corporation Consolidated
    (in millions, except as noted)

    Three Months Ended
    June 30,

     

     

    2012

     

    2011

    Operating expenses per available seat mile (cents)

    15.12

     

    14.52

    Less: Impact of reorganization and special items (cents)

    0.25

     

    -

        

    Operating expenses per available seat mile, excluding impact of reorganization
    and special items (cents)

    14.87

     

    14.52

        

    Percent change

    2.4%

      
        

    Less: Fuel expense per available seat mile (cents)

    5.30

     

    5.16

    Operating expenses per available seat mile, excluding impact of reorganization
    and special items and fuel expense (cents)

    9.57

     

    9.36

        

    Percent change

    2.3%

      

     

    AMR CORPORATION

    CONSOLIDATED STATEMENT OF OPERATIONS

    (in millions, except per share amounts)

    (Unaudited)

        
     

    Six Months Ended
    June 30,

     

    Percent

    Change

     

    2012

     

    2011

     

    Revenues

         

        Passenger - American Airlines

    $   9,394

     

    $    8,691

     

    8.1

                          - Regional Affiliates

    1,460

     

    1,288

     

    13.3

        Cargo

    343

     

    356

     

    (3.7)

        Other revenues

    1,293

     

    1,312

     

    (1.4)

          Total operating revenues

    12,490

     

    11,647

     

    7.2

          

    Expenses

         

      Aircraft fuel

    4,375

     

    4,044

     

    8.2

      Wages, salaries and benefits

    3,560

     

    3,486

     

    2.1

      Other rentals and landing fees

    661

     

    707

     

    (6.5)

      Maintenance, materials and repairs

    700

     

    639

     

    9.5

      Depreciation and amortization

    521

     

    542

     

    (3.9)

      Commissions, booking fees and credit card expense

    529

     

    524

     

    0.9

      Aircraft rentals

    272

     

    318

     

    (14.4)

      Food service

    255

     

    253

     

    0.6

      Special charges

    117

     

    -

     

    *

      Other operating expenses

    1,447

     

    1,443

     

    0.3

        Total operating expenses

    12,437

     

    11,956

     

    4.0

          

    Operating Income (Loss)

    53

     

    (309)

     

    *

          

    Other Income (Expense)

         

      Interest income

    13

     

    14

     

    (6.8)

      Interest expense

    (342)

     

    (415)

     

    (17.6)

      Interest capitalized

    24

     

    17

     

    41.9

      Miscellaneous – net

    (18)

     

    (29)

     

    (37.9)

        Total other income

    (323)

     

    (413)

     

    (21.8)

          

    Income (Loss) Before Reorganization Items, Net

    (270)

     

    (722)

     

    (62.6)

    Reorganization Items, Net

    (1,630)

     

    -

     

    *

    Income Before Income Taxes

    (1,900)

     

    (722)

     

    *

    Income tax

    -

     

    -

     

    -

    Net Income

    $  (1,900)

     

    $     (722)

     

    *

          

    Earnings Per Share

         

    Basic

    $    (5.67)

     

    $    (2.16)

      

    Diluted

    $    (5.67)

     

    $    (2.16)

      
          

    Number of Shares Used in Computation

         

      Basic

    335

     

    334

      

      Diluted

    335

     

    334

      

    * Greater than 100%

         

     

    AMR CORPORATION

    OPERATING STATISTICS

    (Unaudited)

     

    OPERATING STATISTICS BY REGIONAL ENTITY

      
     

    American Airlines, Inc.

    Six Months Ended June 30, 2012

     

    Entity Results

    RASM1

    (cents)

     

    Y-O-Y

    Change

     

    ASMs2

    (billions)

     

    Y-O-Y

    Change

     
             

    DOT Domestic

    12.35

     

    9.1%

     

    45.2

     

    (1.7)%

     

    International

    12.29

     

    9.6

     

    31.0

     

    (0.3)

     

       DOT Latin America

    13.83

     

    8.9

     

    15.8

     

    3.2

     

       DOT Atlantic

    10.96

     

    8.8

     

    10.7

     

    (7.4)

     

       DOT Pacific

    10.09

     

    12.3

     

    4.6

     

    6.3

     
             
     

    American Airlines, Inc.

    Six Months Ended June 30, 2012

     

    Entity Results

     

    Load Factor

    (pts)

     

    Y-O-Y

    Change

    (pts)

     

     

    Yield

    (cents)

     

     

    Y-O-Y

    Change

     
             

    DOT Domestic

    83.3

     

    1.3

     

    14.84

     

    7.4%

     

    International

    80.3

     

    2.3

     

    15.29

     

    6.4

     

       DOT Latin America

    79.9

     

    (0.1)

     

    17.31

     

    9.0

     

       DOT Atlantic

    80.4

     

    4.2

     

    13.63

     

    3.1

     

       DOT Pacific

    81.9

     

    5.7

     

    12.32

     

    4.5

     
             

    1 Revenue per Available Seat Mile

          

    2 Available Seat Miles

           

     

    AMR CORPORATION

    NON-GAAP AND OTHER RECONCILIATIONS

    (in millions)

    (Unaudited)

        
     

    Six Months Ended
    June 30,

     

    Percent

    Change

     

    2012

     

    2011

     

    Net Income

    $  (1,900)

     

    (722)

     

    *

    Special Charges

    117

     

    31

     

    *

    Reorganization Items

    1,630

     

    -

     

    *

    Net Income Excluding Reorganization and Special Items

    (153)

     

    (691)

     

    (77.9)

    * Greater than 100%

     

    AMR CORPORATION

    OPERATING STATISTICS

    (Unaudited)

     
     

    Six Months Ended
    June 30,

     

    Percent

    Change

     

    2012

     

    2011

     

    American Airlines, Inc. Mainline Jet Operations

         

    Revenue passenger miles (millions)

    62,546

     

    61,953

     

    1.0

    Available seat miles (millions)

    76,207

     

    77,078

     

    (1.1)

    Cargo ton miles (millions)

    901

     

    898

     

    0.3

    Passenger load factor

    82.1%

     

    80.4%

     

    1.7 pts

    Passenger revenue yield per passenger mile (cents)

    15.02

     

    14.03

     

    7.1

    Passenger revenue per available seat mile (cents)

    12.33

     

    11.28

     

    9.3

    Cargo revenue yield per ton mile (cents)

    38.07

     

    39.66

     

    (4.0)

    Operating expenses per available seat mile, excluding

       Regional Affiliates (cents) (1)

    14.38

     

    13.63

     

    5.5

    Fuel consumption (gallons, in millions)

    1,196

     

    1,224

     

    (2.2)

    Fuel price per gallon (dollars)

    3.24

     

    2.93

     

    10.3

          

    Regional Affiliates

         

    Revenue passenger miles (millions)

    5,054

     

    4,720

     

    7.1

    Available seat miles (millions)

    6,781

     

    6,567

     

    3.2

    Passenger load factor

    74.5%

     

    71.9%

     

    2.7 pts

          

    AMR Corporation

         

    Average Equivalent Number of Employees

         

    American Airlines

    65,500

     

    66,250

      

    Other

    13,000

     

    13,500

      

    Total

    78,500

     

    79,750

      
     

    (1) Excludes $1.5 billion and $1.5 billion of expense incurred related to Regional Affiliates in 2012 and 2011, respectively.

    Current AMR Corp. news releases can be accessed at http://www.aa.com

    SOURCE AMR Corporation

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