American Airlines 2002 Annual Report Download

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AMR CORPORATION ANNUAL REPORT
ON
FORM 10-K

Table of contents

  • Page 1
    AMR CORPORATION ANNUAL REPORT ON FORM 10-K

  • Page 2
    ... (Address of principal executive offices) 76155 (Zip Code) Registrant's telephone number, including area code (817) 963-1234 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common stock, $1 par value per share 9.00% Debentures due 2016 7.875% Public Income Notes due...

  • Page 3
    ... assets of AMR's defined benefit and defined contribution plans, as well as its short-term investments. It serves as manager of the American AAdvantage Funds, a family of mutual funds with both institutional and retail shareholders, and provides customized fixed income portfolio management services...

  • Page 4
    ... of the Company's Dallas/Fort Worth International Airport hub (following the de-peaking of its Chicago hub), gradually phasing out operation of its Fokker aircraft fleet, and reducing capacity in the fourth quarter of 2002. In addition, the Company eliminated an additional 7,000 jobs to better...

  • Page 5
    ... in the airline revenue environment, the Company continues to review its business model, particularly with a view towards identifying significant cost reductions. The Company believes that it must quickly reduce its annual operating costs by at least $4 billion in order to become competitive and...

  • Page 6
    ... all other employees. Reductions related to benefits and work rule changes will be phased in over time. In connection with the changes in wages, benefits and work rules, the Labor Agreements provide for the issuance of approximately 38 million shares of AMR stock in the form of stock options which...

  • Page 7
    ...: Dallas/Fort Worth (DFW), Chicago O'Hare, Miami, St. Louis and San Juan, Puerto Rico. Delta Air Lines (Delta) and United Air Lines (United) also have hub operations at DFW and Chicago O'Hare, respectively. The American Eagle carriers increase the number of markets the Company serves by providing...

  • Page 8
    .... In addition, the Company, along with United, Continental, Delta and Northwest, owns an interest in Orbitz, a travel planning website. Orbitz provides online access to airline, hotel, car rental and other travel services. The Company also has marketing agreements with other internet travel services...

  • Page 9
    ... to enhance customer service and smooth connections to the destinations served by the alliance, including linking the carriers' frequent flyer programs and access to the carriers' airport lounge facilities. Several of American's major competitors are members of marketing/operational alliances that...

  • Page 10
    ...) essential customer needs during extraordinary delays, (viii) flight oversales, (ix) Frequent Flyer Program - AAdvantage, (x) other travel policies, (xi) service with domestic codeshare partners, and (xii) handling of customer issues. In February 2001, the DOT Inspector General issued a report on...

  • Page 11
    ... local governments have adopted environmental and employee safety and health laws and regulations, some of which are similar to federal requirements. The ANCA recognizes the rights of airport operators with noise problems to implement local noise abatement programs so long as they do not interfere...

  • Page 12
    ... 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...

  • Page 13
    ... all other employees. Reductions related to benefits and work rule changes will be phased in over time. In connection with the changes in wages, benefits and work rules, the Labor Agreements provide for the issuance of approximately 38 million shares of AMR stock in the form of stock options which...

  • Page 14
    ... in Part A of Item 1 are ratified, the new APFA, TWU and APA agreements will not become amendable until 2009. A provision in the scope clause of American's current contract with the APA limits the number of available seat miles (ASMs) and block hours that may be flown under American's marketing code...

  • Page 15
    ... the competitive nature of the airline industry, in the event of continuing increases in the price of jet fuel, there can be no assurance that the Company will be able to pass on increased fuel prices to its customers by increasing its fares. Likewise, any potential benefit of lower fuel prices may...

  • Page 16
    ... issuers, hotels and car rental and phone service companies. American sells mileage credits and related services to the other companies participating in the program. American reserves the right to change the AAdvantage program rules, regulations, travel awards and special offers at any time without...

  • Page 17
    .... In the event the Company has to provide a substantial amount of additional services, its operations could be adversely impacted. Available Information The Company makes its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or...

  • Page 18
    ...* American Airlines aircraft totals include 27 Boeing 757-200s and 103 McDonnell Douglas MD-80s that were formerly TWA aircraft In addition, the following owned and leased aircraft were not operated by the Company as of December 31, 2002: seven owned Boeing 727-200s, 14 operating leased Boeing 717...

  • Page 19
    .... American has entered into agreements with the Tulsa Municipal Airport Trust; the Alliance Airport Authority, Fort Worth, Texas; the New York City Industrial Development Agency; and the Dallas/Fort Worth, Chicago O'Hare, Newark, San Juan, and Los Angeles airport authorities to provide funds for...

  • Page 20
    ... 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...

  • Page 21
    ...14, 2002, a class action lawsuit was filed against American Airlines, Inc. in the United States District Court for the Central District of California, Western Division (All World Professional Travel Services, Inc. v. American Airlines, Inc.). The lawsuit alleges that requiring travel agencies to pay...

  • Page 22
    ... 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...

  • Page 23
    ...for two years service as President and CEO of Canadian Pacific Air between March 1985 and March 1987, he has been with the Company in various finance and planning positions since 1978. Age 56. Mr. Arpey was elected President and Chief Operating Officer of AMR and American in April 2002. He served as...

  • Page 24
    There are no family relationships among the executive officers of the Company named on the preceding page. There have been no events under any bankruptcy act, no criminal proceedings, and no judgments or injunctions material to the evaluation of the ability and integrity of any director or ...

  • Page 25
    ...AND RELATED STOCKHOLDER MATTERS The Company's common stock is traded on the New York Stock Exchange (symbol AMR). approximate number of record holders of the Company's common stock at March 31, 2003 was 13,000. The range of closing market prices for AMR's common stock on the New York Stock Exchange...

  • Page 26
    ... statements for more information) In March 2003, the Compensation Committee of the AMR Board of Directors adopted the 2003 Employee Stock Incentive Plan to provide equity awards to employees in return for wage, benefit and work rule concessions. Awards will be granted only after the Labor Agreements...

  • Page 27
    ..., 2002, the Company recorded an additional minimum pension liability adjustment resulting in an after tax charge to stockholders' equity of approximately $1.0 billion. Effective after the close of business on March 15, 2000, AMR distributed 0.722652 shares of Sabre Holdings Corporation (Sabre) Class...

  • Page 28
    Information on the comparability of results is included in Management's Discussion and Analysis and the notes to the consolidated financial statements. 26

  • Page 29
    ..., 2001. All references to American Airlines, Inc. include the operations of TWA LLC since April 10, 2001 (collectively, American) (see Note 17 to the consolidated financial statements). American is the largest scheduled passenger airline in the world. In addition, AMR Eagle Holding Corporation (AMR...

  • Page 30
    ..., while capacity increased to 6.5 billion ASMs, or 3.4 percent. Similar to American, the decrease in AMR Eagle's revenues was due primarily to the September 11, 2001 terrorist attacks and a worsening of the U.S. economy that had already been dampening the demand for air travel prior to the events of...

  • Page 31
    ... to the Company's reduced operating schedule and reductions in the level of food service. Special charges for 2002 included approximately $658 million related to aircraft charges, $57 million in employee charges and $3 million in facility charges. Special charges for 2001 included approximately...

  • Page 32
    ... card fees, and food service. American's cost per ASM increased 9.4 percent to 11.46 cents, excluding TWA LLC and including the impact of special charges and U.S. Government grant. The increase in American's cost per ASM was driven partially by a reduction in ASMs due to the Company's More Room...

  • Page 33
    ... Company, resulting in this charge. OPERATING STATISTICS The following table provides statistical information for American and AMR Eagle for the years ended December 31, 2002, 2001 and 2000. Year Ended December 31, 20011 2002 American Airlines Revenue passenger miles (millions) Available seat miles...

  • Page 34
    ... all other employees. Reductions related to benefits and work rule changes will be phased in over time. In connection with the changes in wages, benefits and work rules, the Labor Agreements provide for the issuance of approximately 38 million shares of AMR stock in the form of stock options which...

  • Page 35
    ..., the Company plans to deliver shares of AMR common stock to its vendors, lessors and other creditors. Even if the Labor Agreements are ratified and the Company obtains concessions from its vendors, lessors and suppliers, the Company may nonetheless need to initiate a Chapter 11 filing because its...

  • Page 36
    ...secured and unsecured debt ratings of AMR, and lowered the secured debt rating of American. Ratings on most of American's non-enhanced equipment trust certificates were also lowered. These reductions have increased the Company's borrowing costs. Additional significant reductions in AMR's or American...

  • Page 37
    .... In 2002, the Regional Airports Improvement Corporation and the New York City Industrial Development Agency issued facilities sublease revenue bonds at the Los Angeles International Airport and John F. Kennedy International Airport, respectively, to provide reimbursement to American for certain...

  • Page 38
    ... agreements and other LIBOR-based financing transactions (including certain leveraged aircraft leases) generally obligate the Company to reimburse the applicable lender for incremental increased costs due to a change in law that imposes (i) any reserve or special deposit requirement against assets...

  • Page 39
    ... to purchase goods or services, primarily information technology support. In addition to the commitments summarized above, the Company is required to make contributions to its defined benefit pension plans. These contributions are required under the minimum funding requirements of the Employee...

  • Page 40
    ... frequent flyer program. Additional information regarding the Company's AAdvantage frequent flyer program is included in Part G of Item 1 of this Report. Changes to the percentage of the amount of revenue deferred, deferred recognition period, cost per mile estimates or the minimum award level...

  • Page 41
    ...liability, an increase to other assets (to the extent that a plan has unrecognized prior service costs) and a charge to stockholders' equity as a component of other comprehensive loss. See Note 12 to the consolidated financial statements for additional information regarding the Company's pension and...

  • Page 42
    ... third quarter of 2003 for all variable interest entities acquired before February 1, 2003. The Company is currently evaluating the impact of Interpretation 46. In June 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards 145, "Rescission of FASB...

  • Page 43
    ... American employees (the Labor Agreements) and announced changes in pay plans and benefits for non-unionized employees (including officers and other management) which will significantly reduce its labor costs. Although these Labor Agreements enabled the Company to avoid an immediate filing...

  • Page 44
    ... fare reduction would be offset by increases in passenger traffic, a reduction in costs or changes in the mix of traffic that would improve yields. In addition, since September 11, 2001 several air carriers have sought to reorganize under Chapter 11 of the United States Bankruptcy Code, including...

  • Page 45
    ... to capital markets is extremely limited. As noted elsewhere in this Report, credit ratings for the Company's debt instruments have been downgraded significantly below investment grade and remain on review for a further downgrade. These reductions have increased the Company's borrowing costs. To the...

  • Page 46
    ... to support its flight operations. The Company also manages the price risk of fuel costs primarily by using jet fuel, heating oil, and crude swap and option contracts. Market risk is estimated as a hypothetical 10 percent increase in the December 31, 2002 and 2001 cost per gallon of fuel. Based on...

  • Page 47
    ... as of December 31, 2002 and 2001, respectively. The change in market risk is due primarily to the increase in the Company's fixed-rate long-term debt during 2002. The fair values of the Company's long-term debt were estimated using quoted market prices or discounted future cash flows based on the...

  • Page 48
    ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Auditors Consolidated Statements of Operations Consolidated Balance Sheets Consolidated Statements of Cash Flows Consolidated Statements of Stockholders' Equity Notes to Consolidated Financial Statements 47 48-49 50-51 52 53 54-...

  • Page 49
    REPORT OF INDEPENDENT AUDITORS The Board of Directors and Stockholders AMR Corporation We have audited the accompanying consolidated balance sheets of AMR Corporation as of December 31, 2002 and 2001, and the related consolidated statements of operations, stockholders' equity, and cash flows for ...

  • Page 50
    ...2002 Revenues Passenger - American Airlines - AMR Eagle Cargo Other revenues Total operating revenues Expenses Wages, salaries and benefits Aircraft fuel Depreciation and amortization Other rentals and landing fees Commissions, booking fees and credit card expense Maintenance, materials and repairs...

  • Page 51
    ... Ended December 31, 2001 $ (1,762) $ 2002 Earnings (Loss) Applicable to Common Shares Earnings (Loss) Per Share: Basic Income (loss) from continuing operations Discontinued operations Extraordinary loss Cumulative effect of accounting change Net earnings (loss) Diluted Income (loss) from continuing...

  • Page 52
    ... shares and par value) December 31, 2002 Assets Current Assets Cash Short-term investments Restricted cash and short-term investments Receivables, less allowance for uncollectible accounts (2002 - $66; 2001 - $52) Income tax receivable Inventories, less allowance for obsolescence (2002 - $450; 2001...

  • Page 53
    AMR CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except shares and par value) December 31, 2002 Liabilities and Stockholders' Equity Current Liabilities Accounts payable Accrued salaries and wages Accrued liabilities Air traffic liability Current maturities of long-term debt Current ...

  • Page 54
    ...Issuance of long-term debt Sale-leaseback transactions Exercise of stock options Net cash provided by financing activities Net increase in cash Cash at beginning of year Cash at end of year Activities Not Affecting Cash Distribution of Sabre Holdings Corporation shares to AMR shareholders Year Ended...

  • Page 55
    ... Total comprehensive income Distribution of Sabre Holdings Corporation shares to AMR shareholders Issuance of 3,817,892 shares from Treasury pursuant to stock option, deferred stock and restricted stock incentive plans, net of tax of $11 Balance at December 31, 2000 Net loss Adjustment for minimum...

  • Page 56
    ...estimated useful life of the related aircraft and engines - for spare parts expected to be on hand at the date aircraft are retired from service, plus allowances for spare parts currently identified as excess. These allowances are based on management estimates, which are subject to change. Equipment...

  • Page 57
    ... (AMR Eagle) and costs incurred for maintenance and repair under power by the hour maintenance contract agreements, which are accrued on the basis of hours flown. Intangible Assets Route acquisition costs and airport operating and gate lease rights represent the purchase price attributable to route...

  • Page 58
    ... the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable...

  • Page 59
    ... third quarter of 2003 for all variable interest entities acquired before February 1, 2003. The Company is currently evaluating the impact of Interpretation 46. In June 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards 145, "Rescission of FASB...

  • Page 60
    ... all other employees. Reductions related to benefits and work rule changes will be phased in over time. In connection with the changes in wages, benefits and work rules, the Labor Agreements provide for the issuance of approximately 38 million shares of AMR stock in the form of stock options which...

  • Page 61
    ..., and hub restructurings. As a result of these initiatives, the Company recorded special charges in the third quarter of 2002, as discussed below. On September 11, 2001, two American Airlines aircraft were hijacked and destroyed in terrorist attacks on The World Trade Center in New York City and the...

  • Page 62
    ...all McDonnell Douglas DC-9 aircraft and eight McDonnell Douglas MD-80 aircraft during the third and fourth quarters of 2001, and accelerated the retirement of its entire Boeing 717-200 fleet to June 2002 (these aircraft were acquired from TWA). In conjunction therewith, the Company recorded a charge...

  • Page 63
    ...,000 jobs across all work groups (pilots, flight attendants, mechanics, fleet service clerks, agents, management and support staff personnel). The reduction in workforce, which the Company accomplished through various measures, including leaves of absence, job sharing, elimination of open positions...

  • Page 64
    ..., ultimately using market capitalization as the primary indicator of fair value. As a result, the Company recorded a one-time, non-cash charge, effective January 1, 2002, of $988 million ($6.35 per share, net of a tax benefit of $363 million) to write-off all of AMR's goodwill. The tax benefit of...

  • Page 65
    ...The following tables provide information relating to the Company's amortized intangible assets as of December 31 (in millions): 2002 Accumulated Amortization $ $ 178 79 257 $ $ Cost Amortized intangible assets: Airport operating rights Gate lease rights Total $ $ 516 204 720 Net Book Value 338 125...

  • Page 66
    ... classified as available-for-sale and stated at fair value. Unrealized gains and losses, net of deferred taxes, are reflected as an adjustment to stockholders' equity. The Company has restricted cash and short-term investments related primarily to collateral held to support standby letters of credit...

  • Page 67
    ... agreements and other LIBOR-based financing transactions (including certain leveraged aircraft leases) generally obligate the Company to reimburse the applicable lender for incremental increased costs due to a change in law that imposes (i) any reserve or special deposit requirement against assets...

  • Page 68
    ... 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...

  • Page 69
    ... aircraft leases have purchase options at or near the end of the lease term at fair market value, but generally not to exceed a stated percentage of the defined lessor's cost of the aircraft or at a predetermined fixed amount. Special facility revenue bonds have been issued by certain municipalities...

  • Page 70
    ... of long-term debt (including sinking fund requirements) for the next five years are: 2003 - $627 million; 2004 - $540 million; 2005 - $1.3 billion; 2006 - $1.1 billion; 2007 - $978 million. In addition, in the first quarter of 2003, the Company redeemed $86 million of tax-exempt special facility...

  • Page 71
    ...) In 2002, the Regional Airports Improvement Corporation and the New York City Industrial Development Agency issued facilities sublease revenue bonds at the Los Angeles International Airport and John F. Kennedy International Airport, respectively, to provide reimbursement to American for certain...

  • Page 72
    ...a positive fair value at the reporting date, reduced by the effects of master netting agreements. To manage credit risks, the Company selects counterparties based on credit ratings, limits its exposure to a single counterparty under defined guidelines, and monitors the market position of the program...

  • Page 73
    ...31, 2002 and 2001, was approximately $21 million and $11 million, respectively. Foreign Exchange Risk Management To hedge against the risk of future exchange rate fluctuations on a portion of American's foreign cash flows, the Company previously entered into various currency put option agreements on...

  • Page 74
    ... using discounted cash flow analyses, based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. The carrying amounts and estimated fair values of the Company's long-term debt, including current maturities, were (in millions): December 31, 2002 2001...

  • Page 75
    ... carryforwards and state net operating losses. The change in valuation allowance in 2001 related to the Company's uncertainty regarding the realization of the foreign tax credit carryforwards. Additionally, as of December 31, 2002, the recording of Other Comprehensive Income items, primarily the...

  • Page 76
    ... granted stock options, stock appreciation rights (SARs), restricted stock, deferred stock, stock purchase rights, other stock-based awards and/or performance-related awards, including cash bonuses. The total number of common shares authorized for distribution under the 1998 Long Term Incentive Plan...

  • Page 77
    ... by the New York Stock Exchange. Accordingly, all outstanding stock options and other stock-based awards, including the related exercise prices, were adjusted to preserve the intrinsic value of the stock options and awards. See Note 15 for information regarding the Sabre spin-off. In 2002, 2001 and...

  • Page 78
    ...value per share of all stock option awards granted during 2002, 2001 and 2000 was $11.42, $12.23 and $16.54, respectively. Shares of deferred stock are awarded at no cost to officers and key employees under the Plans' Career Equity Program and will be issued upon the individual's retirement from AMR...

  • Page 79
    ... American employees (the Labor Agreements). In connection with the changes in wages, benefits and work rules, the Labor Agreements provide for the issuance of up to 38 million shares of AMR stock in the form of stock options which will be granted under the 2003 Plan if the Labor Agreements...

  • Page 80
    ...the changes in the plans' benefit obligations and fair value of assets for the years ended December 31, 2002 and 2001, and a statement of funded status as of December 31, 2002 and 2001 (in millions): Pension Benefits 2002 2001 Reconciliation of benefit obligation Obligation at January 1 Service cost...

  • Page 81
    ... provide the components of net periodic benefit cost for the years ended December 31, 2002, 2001 and 2000 (in millions): Pension Benefits 2001 2002 Components of net periodic benefit cost Defined benefit plans: Service cost Interest cost Expected return on assets Amortization of: Transition asset...

  • Page 82
    ... assumed health care cost trend rate was six percent in 2002, decreasing gradually to an ultimate rate of 4.5 percent by 2004. A one percentage point change in the assumed health care cost trend rates would have the following effects (in millions): One percent increase Impact on 2002 service and...

  • Page 83
    ... Change in fair value of derivative financial instruments Income tax effect Balance at December 31, 2001 Current year net change Reclassification of derivative financial instruments into earnings Change in fair value of derivative financial instruments Income tax effect Balance at December 31, 2002...

  • Page 84
    ...accounting change Denominator: Denominator for basic earnings (loss) per share - weighted-average shares Effect of dilutive securities: Employee options and shares Assumed treasury shares purchased Dilutive potential common shares Denominator for diluted earnings (loss) per share - adjusted weighted...

  • Page 85
    ... American and AMR Eagle, which represent one reportable segment. Following the acquisition of TWA in April 2001 (see Note 17), American is the largest scheduled passenger airline in the world. At the end of 2002, American provided scheduled jet service to more than 152 destinations throughout North...

  • Page 86
    ...was based on estimated fair values of the assets acquired and liabilities assumed. American paid approximately $742 million in cash (subject to certain working capital adjustments) for the purchase of TWA, which included the $625 million purchase price paid to TWA and various other acquisition costs...

  • Page 87
    ... for the first quarter of 2001 related to the Company's fuel hedging program have been reclassified to conform with the 2001 presentation. The Company recorded a one-time, non-cash charge, effective January 1, 2002, of $988 million, net of tax, to write-off all of AMR's goodwill, as a result of the...

  • Page 88
    ... the Company during the second, third and fourth quarters of 2002 and 2001 (in millions): Second Quarter 2002 Aircraft charges Facility exit costs Employee charges Other Total special charges U.S. Government grant 2001 Aircraft charges Facility exit costs Employee charges Other Total special charges...

  • Page 89
    .... Information concerning the executive officers is included in Part I of this report on pages 21 and 22. ITEM 11. EXECUTIVE COMPENSATION Incorporated herein by reference from the Company's definitive proxy statement for the annual meeting of stockholders on May 21, 2003. ITEM 12. SECURITY OWNERSHIP...

  • Page 90
    ... with respect to such long-term debt.) Exhibit 3.1 Restated Certificate of Incorporation of AMR, incorporated by reference to AMR's Registration Statement on Form S-4, file number 33-55191. Bylaws of AMR Corporation, amended as of January 22, 2003. Compensation and Benefit Agreement relative to the...

  • Page 91
    ... ended December 31, 2000. Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Roger T. Staubach, incorporated by reference to Exhibit 10.1 to AMR's report on Form 10Q for the quarterly period ended June 30, 2002, as filed on July 19, 2002. 10.4 10.5 10.6 10.7 10.8 10...

  • Page 92
    ... by reference to Exhibit 10.34 to AMR's report on Form 10-K for the year ended December 31, 1998. AMR Corporation 2003 Employee Stock Incentive Plan. Current form of Stock Option Agreement under the 1998 Long-Term Incentive Plan, as amended. Current Form of Career Equity Program Deferred Stock Award...

  • Page 93
    ...31, 1998. Current form of Career Equity Program Deferred Stock Award Agreement for Employees under the AMR 1998 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.44 to AMR's report on Form 10-K for the year ended December 31, 1999. Performance Share Program for the years 2001 to 2003...

  • Page 94
    ..., 2002. Trust Agreement under Supplemental Retirement Program for Officers of American Airlines, Inc., dated October 14, 2002. Aircraft Purchase Agreement by and between American Airlines, Inc. and The Boeing Company, dated October 31, 1997, incorporated by reference to Exhibit 10.48 to AMR's report...

  • Page 95
    ...and CEO of AMR Corporation, would be speaking at the 17th Annual Salomon Smith Barney Transportation Conference. On November 22, 2002, AMR filed a report on Form 8-K to provide certain data regarding its unit costs, capacity, traffic and fuel, a monthly update, and an updated fleet plan. On December...

  • Page 96
    ... or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMR CORPORATION /s/ Donald J. Carty Donald J. Carty Chairman and Chief Executive Officer (Principal Executive Officer) /s/ Jeffrey...

  • Page 97
    ..., results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and...

  • Page 98
    ..., results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and...

  • Page 99
    ... Stockholders AMR Corporation We have audited the consolidated financial statements of AMR Corporation as of December 31, 2002 and 2001, and for each of the three years in the period ended December 31, 2002, and have issued our report thereon dated March 31, 2003. Our audits also included Schedule...

  • Page 100
    ...inventories $ 383 Allowance for uncollectible accounts Reserves for maintenance activities Reserves for environmental remediation costs Reserves for litigation Allowance for insurance receivable 52 42 84 6 - Increases charged to other accounts (Note) Payments Write-offs (net of recoveries) Sales...

  • Page 101
    Exhibit 12 AMR CORPORATION Computation of Ratio of Earnings to Fixed Charges (in millions) 1998 Earnings: Earnings (loss) from continuing operations before income taxes, extraordinary loss and cumulative effect of accounting change Add: Total fixed charges (per below) Less: Interest capitalized ...

  • Page 102
    ... American Airlines Realty (NYC) Holdings, Inc. AMR Training Group, Inc. AMR Ventures III, Inc. oneworld Alliance, LLC (33.4%) oneworld Management Company Ltd. (33.4%) Texas Aero Engine Services, L.L.C, dba TAESL (50/50 AA/RollsRoyce) TWA Airlines LLC TWA Stock Holding Company, Inc. Trans World PARS...

  • Page 103
    ... Leasing Corporation AMR Eagle Maintenance Services Group, Inc. Aero Perlas (20%) Eagle Aviation Leasing, Inc. Eagle Aviation Services, Inc. Executive Airlines, Inc. AMR Finance, Inc. AMR Foreign Sales Corporation, Ltd. AMR Holding Company, Inc. AMR Investment Services, Inc. American Private Equity...

  • Page 104
    ...01) of AMR Corporation, and in the related Prospectuses, of our reports dated March 31, 2003, with respect to the consolidated financial statements and schedule of AMR Corporation included in this Annual Report (Form 10-K) for the year ended December 31, 2002. ERNST & YOUNG LLP Dallas, Texas April...

  • Page 105
    ... the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of AMR Corporation, a Delaware corporation (the Company), does hereby certify, to such officer's knowledge, that: The Annual Report on Form 10-K for...

  • Page 106
    ... Officer AMR Corporation/ American Airlines, Inc. (Air Transportation) Fort Worth, Texas Elected in 1998 Armando M. Codina Chairman and Chief Executive Officer Codina Group, Inc. (Real Estate Investments, Development and Construction, Property Management and Brokerage Services) Coral Gables, Florida...

  • Page 107
    ... - Capacity Planning James A. Beer Vice President - Europe David R. Brooks President - American Airlines Cargo Division Jeffrey J. Brundage Vice President - Employee Policy and Relations David L. Campbell Vice President - Alliance Base Maintenance John A. Carpenter Vice President - Corporate Affairs...

  • Page 108
    ... on the New York Stock Exchange. The common stock is also traded unlisted on the Pacific Stock Exchange. FORM 10-K AMR Corporation's Annual Report to the Securities and Exchange Commission for 2002 (Form 10-K) is available online at: http://www.amrcorp.com/investorhome.htm ; additional copies of...