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AMR
CORPORATION
2003 Annual Report

Table of contents

  • Page 1
    AMR CORPORATION 2003 Annual Report

  • Page 2
    ...Common stock, $1 par value per share 9.00% Debentures due 2016 7.875% Public Income Notes due 2039 Securities registered pursuant to Section 12(g) of the Act: NONE (Title of Class) Name of exchange on which registered New York Stock Exchange New York Stock Exchange New York Stock Exchange Indicate...

  • Page 3
    ... of assets of AMR's employee benefit plans, as well as its short-term investments. It also serves as the investment 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
    ...Chicago and Dallas/Fort Worth hub schedules (with its Miami hub to be de-peaked in 2004), closed a reservations center, reduced the size of its St. Louis hub, accelerated the retirement of certain aircraft, and improved aircraft utilization across its fleet. Fly Smart, Give Customers What They Value...

  • Page 5
    ... their service. American operates five hubs: 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...

  • Page 6
    ...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. The majority of the tickets for travel on American and American Eagle are sold by travel agents. On...

  • Page 7
    ...fleet types. The Company is progressing toward the completion of over 100 airworthiness directives including McDonnell Douglas MD-80 metal-mylar insulation replacement, enhanced ground proximity warning systems, McDonnell Douglas MD-80 main landing gear piston improvements, Boeing 757 and Boeing 767...

  • Page 8
    ... Access The FAA has designated New York John F. Kennedy, New York LaGuardia, and Washington Reagan airports as high-density traffic airports. The high-density rule limits the number of Instrument Flight Rule operations - take-offs and landings - permitted per hour and requires that a slot support...

  • Page 9
    ... the related costs. No further action has been taken against American or Executive. American Eagle Airlines, Inc. has been notified of its potential liability under New York law at an inactive hazardous waste site in Poughkeepsie, New York. Pursuant to an Administrative Order on Consent entered into...

  • Page 10
    ...respect to flight attendant integration). American and the TWU participated in arbitration and resolved certain unionized ground employee integration issues in late February and early March 2002. In early April 2002, the NMB declared American and TWA LLC a single carrier for labor relations purposes...

  • Page 11
    ... for an award, the member may book award travel on American. Most travel awards are subject to capacity controlled seating. Mileage credit does not expire, provided a customer has any type of qualifying activity at least once every 36 months. American uses the incremental cost method to account for...

  • Page 12
    ... filed with the Securities and Exchange Commission. In addition, the Company's code of ethics, which applies to all employees of the Company including the Company's Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Controller, is posted under the Investor Relations page on its website...

  • Page 13
    ... 31, 2003 included: Average Age (Years) Equipment Type American Airlines Aircraft* Airbus A300-600R Boeing 737-800 Boeing 757-200 Boeing 767-200 Extended Range Boeing 767-300 Extended Range Boeing 777-200 Extended Range Fokker 100 McDonnell Douglas MD-80 Total AMR Eagle Aircraft ATR 42 Bombardier...

  • Page 14
    Flight Equipment - Non-Operating Owned and leased aircraft not operated by the Company at December 31, 2003 included: Capital Leased Operating Leased Equipment Type American Airlines Aircraft Boeing 757-200 Boeing 767-200 Boeing 767-200 Extended Range Fokker 100 McDonnell Douglas MD-80 Total AMR ...

  • Page 15
    ... reservation offices; and local ticket and administration offices throughout the system. 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...

  • Page 16
    ... lawsuit alleged 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...

  • Page 17
    ..., 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...

  • Page 18
    ... and were unjustly enriched when these carriers at various times reduced their base commissions to zero. The as yet uncertified class includes all travel agencies accredited by the Airlines Reporting Corporation "whose base commissions on airline tickets were unilaterally reduced to zero by" the...

  • Page 19
    ... of its fiscal year ended December 31, 2003. Executive Officers of the Registrant The following information relates to the executive officers of AMR as of December 31, 2003 unless otherwise noted. Gerard J. Arpey Mr. Arpey was elected Chief Executive Officer of AMR and American in April 2003...

  • Page 20
    ... Company's common stock is traded on the New York Stock Exchange (symbol AMR). The approximate number of record holders of the Company's common stock at February 20, 2004 was 16,739. The range of closing market prices for AMR's common stock on the New York Stock Exchange was: 2003 High Quarter Ended...

  • Page 21
    ...accounting change: Basic Diluted Net earnings (loss) per share: Basic Diluted Total assets Long-term debt, less current maturities Obligations under capital leases, less current obligations Obligation for pension and postretirement benefits Stockholders' equity 4 1 2 2002 1,2 $ 17,420 (3,330) 2001...

  • Page 22
    ... on the part of travelers, especially business travelers, increasing competition from low-cost carriers (LCCs) and the continuing increase in pricing transparency resulting from the use of the Internet and (iii) the aftermath of the terrorist attacks of September 11, 2001, which accelerated and...

  • Page 23
    ...Chicago and Dallas/Fort Worth hub schedules (with its Miami hub to be de-peaked in 2004), closed a reservations center, reduced the size of its St. Louis hub, accelerated the retirement of certain aircraft, and improved aircraft utilization across its fleet. Fly Smart, Give Customers What They Value...

  • Page 24
    ... deteriorates beyond normal seasonal trends, or the Company is unable to access the capital markets, it may be unable to fund its obligations and sustain its operations in the long-term. LIQUIDITY AND CAPITAL RESOURCES Cash, Short-Term Investments, Restricted Assets and Deposits At December 31, 2003...

  • Page 25
    ... American guaranteed, $324 million of 4.5 percent senior convertible notes due 2024. Other Operating and Investing Activities The improved revenue environment and the effects of the Company's cost savings initiatives resulted in improved cash flow from operating activities in 2003. Net cash provided...

  • Page 26
    ... of American, purchased substantially all of the assets of Trans World Airlines, Inc. (TWA) for approximately $742 million (which was funded from the Company's existing cash and short-term investments) and the assumption of certain liabilities. Working Capital AMR (principally American) historically...

  • Page 27
    ... Due by Year(s) Ended December 31, 2005 2007 Through Through 2009 and Contractual Obligations Total 2004 2006 2008 Beyond Operating lease payments for aircraft and facility obligations 1 Firm aircraft commitments 2 Capacity purchase agreements 3 Long-term debt 4 Capital lease obligations Other...

  • Page 28
    ... 100 aircraft (with a minimal net book value), issued a $23 million non-interest-bearing note, payable in installments and maturing in December 2010, entered into short-term leases on these aircraft and issued shares of AMR common stock as discussed in Note 9 to the consolidated financial statements...

  • Page 29
    ... Chautauqua for the full year and a capacity purchase agreement with Trans States beginning in November 2002. Regional Affiliates' passenger revenues, which are based on industry standard mileage proration agreements for flights connecting to American flights, increased $88 million, or 6.1 percent...

  • Page 30
    ... and changes in business traveler profiles; the geographic distribution of the Company's network; and reduced fares due in part to increased competition from low-cost carriers. TWA LLC purchased substantially all of the assets and assumed certain liabilities of TWA on April 9, 2001. The results of...

  • Page 31
    ... favorable terms with vendors; (ii) travel and incidental costs of $61 million due primarily to decreased overnight stays for pilots and flight attendants as a result of changes in the scheduling of flights, lower average hotel rates, work rule changes and lower per diems; (iii) insurance costs of...

  • Page 32
    ... higher salaries, largely offset by a decrease in the average number of equivalent employees and (ii) increases in the Company's pension and health insurance costs, the latter reflecting rapidly rising medical care and prescription drug costs. (b) Aircraft fuel expense decreased due to a 3.3 percent...

  • Page 33
    ... in the Company's long-term debt of approximately $2.7 billion. Interest capitalized decreased $58 million, or 40.3 percent, to $86 million due primarily to a decrease in purchase deposits for flight equipment. INCOME TAX BENEFIT 2003 The Company did not record a net tax benefit associated with...

  • Page 34
    ...the operating results of TWA LLC since the date of acquisition. Excludes $1,757 million, $129 million and $7 million of expense incurred related to Regional Affiliates in 2003, 2002 and 2001, respectively. In 2003, this expense related to capacity purchase agreements with AMR Eagle, Trans States and...

  • Page 35
    .... The Company has identified the following critical accounting policies and estimates used by management in the preparation of the Company's financial statements: accounting for long-lived assets, passenger revenue, frequent flyer program, pensions and other postretirement benefits, and income taxes...

  • Page 36
    ... the Company's ticket refund policy and changes in the travel profile of customers, historical trends may not be representative of future results. Frequent flyer program - The Company uses a number of estimates in accounting for its AAdvantage frequent flyer program. Additional information regarding...

  • Page 37
    ... long-term rate of return on plan assets by 0.5 percent as of December 31, 2003 would increase estimated 2004 pension expense by approximately $32 million. The health care cost trend rate is based upon an evaluation of the Company's historical trends and experience taking into account current...

  • Page 38
    ... of American's other debt. Fuel Prices / Supply Due to 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...

  • Page 39
    ...the availability of jet fuel or significant increases in its cost, or if current high prices are sustained for a significant period of time, the Company's business, as well as that of the entire industry, would be adversely affected. Competition in the Airline Industry Service over almost all of the...

  • Page 40
    ...to access the capital markets, it may be unable to fund its obligations and sustain its operations in the long-term. Credit Ratings Since the September 11, 2001 terrorist attacks, AMR's and American's credit ratings have been lowered significantly. These reductions have increased borrowing costs and...

  • Page 41
    ... or issue derivative financial instruments for trading purposes. See Note 7 to the consolidated financial statements for accounting policies and additional information. Aircraft Fuel The Company's earnings are affected by changes in the price and availability of aircraft fuel. In order to provide...

  • Page 42
    ... primarily to the increase in the Company's fixed-rate long-term debt during 2003. The fair values of the Company's long-term debt were estimated using quoted market prices or discounted future cash flows based on the Company's incremental borrowing rates for similar types of borrowing arrangements...

  • Page 43
    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 42 43 44-45 46 47 48-78 ...

  • Page 44
    ... of Directors and Stockholders AMR Corporation We have audited the accompanying consolidated balance sheets of AMR Corporation as of December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended...

  • Page 45
    ... per share amounts) Year Ended December 31, 2002 2003 Revenues Passenger - American Airlines - Regional Affiliates Cargo Other revenues Total operating revenues Expenses Wages, salaries and benefits Aircraft fuel Depreciation and amortization Other rentals and landing fees Commissions, booking fees...

  • Page 46
    AMR CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except shares and par value) December 31, 2003 Assets Current Assets Cash Short-term investments Restricted cash and short-term investments Receivables, less allowance for uncollectible accounts (2003 - $62; 2002 - $66) Income tax receivable ...

  • Page 47
    ... shares and par value) December 31, 2003 Liabilities and Stockholders' Equity Current Liabilities Accounts payable Accrued salaries and wages Accrued liabilities Air traffic liability Current maturities of long-term debt Current obligations under capital leases Total current liabilities Long-Term...

  • Page 48
    ..., net Net cash provided (used) by operating activities Cash Flow from Investing Activities: Capital expenditures, including purchase deposits on flight equipment Acquisition of Trans World Airlines, Inc. Net (increase) decrease in short-term investments Net decrease (increase) in restricted cash and...

  • Page 49
    AMR CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in millions, except share amounts) Accumulated Other Comprehensive Loss $ (2) (161) (75) 5 87 Common Stock Balance at January 1, 2001 Net loss Adjustment for minimum pension liability Changes in fair value of derivative financial ...

  • Page 50
    ... Airlines, Inc. (TWA) and assumed certain liabilities. TWA was the eighth largest U.S. carrier, with a primary domestic hub in St. Louis. American funded the acquisition of TWA's assets with its existing cash and short-term investments. The acquisition of TWA was accounted for under the purchase...

  • Page 51
    ... the asset will be used in the Company's operations and estimated salvage values. Regional Affiliates Revenue from ticket sales is generally recognized when service is provided. Regional Affiliates revenues for flights connecting to American flights are allocated based on industry standard mileage...

  • Page 52
    1. Summary of Accounting Policies (Continued) Frequent Flyer Program The estimated incremental cost of providing free travel awards is accrued when such award levels are reached. American sells mileage credits and related services to companies participating in its frequent flyer program. The ...

  • Page 53
    ...vii) headquarters/administration efficiencies. As a result of the initiatives, the Company reduced an estimated 7,000 jobs by March 2003. In February 2003, American asked its employees for approximately $1.8 billion in annual savings through a combination of changes in wages, benefits and work rules...

  • Page 54
    ... McDonnell Douglas MD-80 aircraft and accrued future lease commitments and lease return costs $ Employee charges 2003 Reduced approximately 9,300 jobs across all work groups** (by June 2004) in conjunction with the Management Reductions and the Labor Agreements and the reduction of the St. Louis hub...

  • Page 55
    ... fair value of these aircraft, and with respect to the Fokker 100 aircraft, incorporated the fact that with this grounding, no major airline will operate this fleet type. ** Work groups include pilots, flight attendants, mechanics, fleet service clerks, agents, management and support staff personnel...

  • Page 56
    ... a minimal net book value), issued a $23 million non-interest-bearing note, payable in installments and maturing in December 2010, entered into short-term leases on these aircraft and issued shares of AMR common stock as discussed in Note 9. In exchange, approximately $130 million of debt related to...

  • Page 57
    ...may be revised as additional information becomes available concerning the expected claims. One of the Company's insurance carriers has entered liquidation. The carrier provides approximately five percent of the Company's coverage related to the events of September 11, 2001 and flight 587, as well as...

  • Page 58
    ...investments and time deposits Corporate and bank notes U. S. government agency notes U. S. government agency mortgages Other $ 718 1,245 496 17 10 2,486 $ 2002 572 832 285 142 15 1,846 $ $ Short-term investments at December 31, 2003, by contractual maturity included (in millions): Due in one year...

  • Page 59
    ... support related contract that requires minimum annual payments of $158 million through 2013. The Company has capacity purchase agreements with two regional airlines, Chautauqua Airlines, Inc. (Chautauqua) and Trans States Airlines, Inc. (collectively the American Connection carriers) to provide...

  • Page 60
    ... occur and the credit ratings of such obligations are downgraded below certain levels within a certain period of time. No designated event, as defined, has occurred as of December 31, 2003. The Company is subject to environmental issues at various other airport and non-airport locations for which it...

  • Page 61
    ...a stated percentage of the defined lessor's cost of the aircraft or a predetermined fixed amount. Special facility revenue bonds have been issued by certain municipalities primarily to purchase equipment and improve airport facilities that are leased by American and accounted for as operating leases...

  • Page 62
    .... However, American does not guarantee the residual value of the aircraft. As of December 31, 2003, future lease payments required under these leases totaled $3.2 billion. 6. Indebtedness Long-term debt consisted of (in millions): December 31, 2003 Secured variable and fixed rate indebtedness due...

  • Page 63
    ...year ended December 31, 2003, American borrowed approximately $554 million, under seller financed debt agreements, related to the purchase of aircraft. These debt agreements are secured by the related aircraft and have effective interest rates, which are fixed and mature over various periods of time...

  • Page 64
    ...debt service reserve fund. Certain debt is secured by aircraft, engines, equipment and other assets having a net book value of approximately $12.6 billion. As of December 31, 2003, AMR has issued guarantees covering approximately $932 million of American's taxexempt bond debt and American has issued...

  • Page 65
    ... Rate Risk Management American uses interest rate swap contracts to effectively convert a portion of its fixed-rate capital lease obligations to floating-rate obligations. The Company accounts for its interest rate swap contracts as fair value hedges whereby the fair value of the related interest...

  • Page 66
    ...The fair values of the Company's long-term debt were estimated using quoted market prices where available. For long-term debt not actively traded, fair values were estimated using discounted cash flow analyses, based on the Company's current incremental borrowing rates for similar types of borrowing...

  • Page 67
    ... assets not benefited Other, net Income tax benefit $ (458) (31) (80) 11 9 465 4 (80) 2001 (965) (58) 18 (7) 7 11 (994) $ $ $ The deferred tax assets not benefited in 2003 relate primarily to net operating loss carryforwards. The deferred tax assets not benefited in 2002 related to the Company...

  • Page 68
    ...2003 Employee Stock Incentive Plan (the 2003 Plan) to provide equity awards to employees in connection with the Labor Agreements and Management Reductions discussed in Note 2. Under the 2003 Plan, employees may be granted stock options, restricted stock and deferred stock. The total number of shares...

  • Page 69
    ... Long Term Incentive Plan, as amended, officers and key employees of AMR and its subsidiaries may be 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...

  • Page 70
    ... grant date fair value per share of all stock option awards granted during 2003, 2002 and 2001 was $2.32, $11.42 and $12.23, respectively. Shares of deferred stock are awarded at no cost to officers and key employees under the LTIP Plans' Career Equity Program and will be issued upon the individual...

  • Page 71
    ... in pension plans. The defined benefit plans provide benefits for participating employees based on years of service and average compensation for a specified period of time before retirement. The Company uses a December 31 measurement date for all of its defined benefit plans. Airline pilots also...

  • Page 72
    ... defined benefit plans' benefit obligations and fair value of assets for the years ended December 31, 2003 and 2002, and a statement of funded status as of December 31, 2003 and 2002 (in millions): Pension Benefits 2003 2002 Reconciliation of benefit obligation Obligation at January 1 Service cost...

  • Page 73
    ... benefit cost for the years ended December 31, 2003, 2002 and 2001 (in millions): Pension Benefits 2002 2003 Components of net periodic benefit cost Defined benefit plans: Service cost Interest cost Expected return on assets Amortization of: Transition asset Prior service cost Unrecognized net...

  • Page 74
    ...average assumptions used to determine net periodic benefit cost for the years ended December 31 Discount rate Salary scale (ultimate) Expected return on plan assets Other Benefits 2003 2002 6.57% 3.78 9.00 7.50% 3.93 9.25 6.57% 9.00 7.50% 9.25 The Company estimates the long-term rate of return...

  • Page 75
    ... benefit pension plans and $14 million to its postretirement benefit plan in 2004. The Company's estimate of its 2004 defined benefit pension plan contributions assumes Congress passes legislation providing certain technical corrections to current Employee Retirement Income Security Act pension plan...

  • Page 76
    ... 1, 2002 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 $363...

  • Page 77
    ... 102 $ Minimum Pension Liability Balance at December 31, 2000 Current year net change Cumulative effect of adoption of SFAS 133 as of January 1, 2001 Reclassification of derivative financial instruments into earnings Change in fair value of derivative financial instruments Income tax effect Balance...

  • Page 78
    ... are managed and the manner in which resource allocation decisions are made, the Company has only one operating segment consisting of the operations of American and AMR Eagle. Following the acquisition of TWA in April 2001, American is the largest scheduled passenger airline in the world. At the end...

  • Page 79
    ... result of the adoption of SFAS 142, 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, which is reflected as a cumulative effect of accounting change in the accompanying consolidated financial statements. 77

  • Page 80
    ... accrued interest related to the accrued income tax liabilities. Also in the fourth quarter of 2003, the Company recognized an $80 million gain on the sale of the Company's investment in Hotwire and a $70 million gain related to an Orbitz initial public offering and a related secondary offering...

  • Page 81
    ...is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, or the Exchange Act. This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act...

  • Page 82
    ...the ESIP). The Pilot Stock Option Plan and the ESIP were implemented in accordance with the rules of the New York Stock Exchange. Includes 4,003,118 shares available for future grant under the 1998 Long Term Incentive Plan, as amended, and shares granted but not vested and issued under the following...

  • Page 83
    ...required information is included in the consolidated financial statements or notes thereto. (3) Exhibits required to be filed by Item 601 of Regulation S-K. (Where the amount of securities authorized to be issued under any of AMR's long-term debt agreements does not exceed 10 percent of AMR's assets...

  • Page 84
    ...for the year ended December 31, 1998. Description of informal arrangement relating to deferral of payment of directors' fees, incorporated by reference to Exhibit 10(c)(11) to American's Registration Statement No. 276709. Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and...

  • Page 85
    ... as of January 12, 2004 between AMR and Michael A. Miles. Deferred Compensation Agreement, dated as of January 19, 2001, between AMR and Philip J. Purcell, incorporated by reference to Exhibit 10.26 to AMR's report on Form 10-K for the year ended December 31, 2000. Deferred Compensation Agreement...

  • Page 86
    ... on Form 10-K for the year ended December 31, 2000. Deferred Compensation Agreement, dated as of December 18, 2001 between AMR and Judith Rodin, incorporated by reference to Exhibit 10.4 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2002, as filed on July 19, 2002. Deferred...

  • Page 87
    ...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. Current form of Deferred Stock Award Agreement. AMR Corporation 2001 - 2003...

  • Page 88
    ... Benefits Agreement between AMR, American Airlines and Gerard J. Arpey, dated May 21, 1998, incorporated by reference to Exhibit 10.61 to AMR's report on Form 10-K for the year ended December 31, 1998. Amended and Restated Executive Termination Benefits Agreement between AMR, American Airlines...

  • Page 89
    ... Retirement Program for Officers of American Airlines, Inc., dated October 14, 2002, incorporated by reference to Exhibit 10.61 to AMR's report on Form 10-K for the year ended December 31, 2002. Aircraft Purchase Agreement by and between American Airlines, Inc. and The Boeing Company, dated October...

  • Page 90
    ... on November 12, 2003. Form 8-Ks furnished under Item 7 - Financial Statements and Exhibits On October 22, 2003, AMR filed a report on Form 8-K to provide a press release issued on October 22, 2003 to report the Company's third quarter 2003 earnings. Form 8-Ks furnished under Item 12 - Disclosure...

  • Page 91
    ... and in the capacities and on the dates noted: /s/ Gerard J. Arpey Gerard J. Arpey Director, President and Chief Executive Officer (Principal Executive Officer) /s/ James A. Beer James A. Beer Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) /s/ John...

  • Page 92
    ...OF INDEPENDENT AUDITORS The Board of Directors and Stockholders AMR Corporation We have audited the consolidated financial statements of AMR Corporation as of December 31, 2003 and 2002, and for each of the three years in the period ended December 31, 2003, and have issued our report thereon dated...

  • Page 93
    ... for uncollectible accounts Reserves for environmental remediation costs Reserves for litigation Allowance for insurance receivable 66 92 4 12 Increases charged to other accounts (Note) Payments Write-offs (net of recoveries) Sales, retirements and transfers Balance at end of year $ 71 14...

  • Page 94
    ... 12 AMR CORPORATION Computation of Ratio of Earnings to Fixed Charges (in millions) 1999 Earnings: Earnings (loss) from continuing operations before income taxes and cumulative effect of accounting change $ Add: Total fixed charges (per below) Less: Interest capitalized Total earnings (loss) Fixed...

  • Page 95
    ... American Airlines de Venezuela, S.A. 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...

  • Page 96
    Name of Subsidiary AMR Eagle Holding Corporation . American Eagle Airlines, Inc. AMR Leasing Corporation Aero Perlas (20%) Eagle Aviation Services, Inc. Executive Airlines, Inc. AMR Foreign Sales Corporation, Ltd. AMR Investment Services, Inc. American Private Equity Management, LLC Avion Assurance ...

  • Page 97
    ...) of AMR Corporation, and in the related Prospectuses, of our reports dated February 16, 2004, 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, 2003. /s/ ERNST & YOUNG LLP Dallas, Texas...

  • Page 98
    Exhibit 31.1 I, Gerard J. Arpey, certify that: 1. I have reviewed this annual report on Form 10-K of AMR Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of ...

  • Page 99
    ... controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating...

  • Page 100
    ... 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 the year ended December 31, 2003 (the Form 10-K) of the...

  • Page 101
    BOARD OF DIRECTORS BOARD OF DIRECTORS Gerard J. Arpey President and Chief Executive Officer AMR Corporation / American Airlines, Inc. (Air Transportation) Fort Worth, Texas Elected in 2003 John W. Bachmann Senior Partner Edward Jones (Financial Services) St. Louis, Missouri Elected in 2001 David L. ...

  • Page 102
    ... Vice President - e-Business Carolyn E. Wright Vice President - Corporate Human Resources AMERICAN EAGLE AIRLINES, INC. Peter M. Bowler President R. Stan Henderson Senior Vice President - Chief Operations Officer Jonathan D. Snook Senior Vice President - Customer Service AMR INVESTMENT SERVICES, INC...

  • Page 103
    ... Dallas/Fort Worth Airport, TX 75261-9616 MEDIUM TERM NOTES Trustees The Bank of New York 101 Barclay Street New York, NY 10286 Wilmington Trust Company 1100 North Market Street Rodney Square North Wilmington, DE 19890 STOCK EXCHANGES The AMR Corporation Trading Symbol is AMR. The common stock...