I'll try to explain

I'll take the first one, because it's more complicated.

This is the first action block:

Code:

{ 
  /^PY/ && y = $2
  r = r ? r RS $0 : $0 
  }

While reading every[1] input record (most awk code outside of the BEGIN/END/BEGINFILE/ENDFILE special patterns is wrapped in an implicit loop):

Code:

/^PY/ && y = $2

When the current record matches the regular expression above (i.e. begins with the string PY), set the content of the variable y to the value of the second field (the year).

Code:

r = r ? r RS $0 : $0

Store all the records in the variable r. This statement uses the ternary operator,
in pseudo-code:

Code:

expression ? if_true_return_this : otherwise_return_this

It simply appends all the records to the variable r. This approach is rather fragile, in some situation you will loose data (when the first line is empty(NULL or only white space characters or it contains only the digit 0 (zero), let me know if you need a more robust solution).

The next pattern/action pair:

Code:

/^ER/ {
  print r >> y
  r = x; close(y)
  }

If the current input record matches ^ER append ( >>) the content of the r variable to the file named y (the current year of the logical record, the previously saved value).
Reset r (x is an uninitialized variable, in awk those are NULL (when used as strings) or 0 (when used as numbers)).
Close the current input file (needed with some awk implementations on certain systems).

[1] I say every record because in that rule the pattern part is missing, so the action is executed for every record.

Hope this helps.