American Airlines 2003 Annual Report Download - page 27

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Contractual Obligations
The following table summarizes the Company’s obligations and commitments as of December 31, 2003 (in
millions):
Payments Due by Year(s) Ended December 31,
Contractual Obligations Total 2004
2005
Through
2006
2007
Through
2008
2009 and
Beyond
Operating lease payments for
aircraft and facility obligations 1$ 13,431 $ 1,114 $ 2,046 $ 1,884 $ 8,387
Firm aircraft commitments 24,058 755 1,380 1,314 609
Capacity purchase agreements 3325 95 139 91 -
Long-term debt 412,504 603 2,552 1,679 7,670
Capital lease obligations 2,359 325 512 411 1,111
Other purchase obligations 52,281 480 616 395 790
Other long-term liabilities6,7 2,039 197 399 401 1,042
Total obligations and commitments $ 36,997 $ 3,569 $ 7,644 $ 6,175 $ 19,609
1 Certain special facility revenue bonds issued by municipalities - which are supported by
operating leases executed by American - are guaranteed by AMR and/or American. The
special facility revenue bonds with mandatory tender provisions discussed above are
included in this table under their ultimate maturity date rather than their mandatory
tender provision date. See Note 5 to the consolidated financial statements for additional
information.
2 As of December 31, 2003, the Company had commitments to acquire: 36 Embraer
regional jets and six Bombardier CRJ-700s in 2004; an aggregate of 38 Embraer
regional jets in 2005 and 2006; and an aggregate of 47 Boeing 737-800s and nine
Boeing 777-200ERs in 2006 through 2010. The Company has pre-arranged financing
or backstop financing for all of its aircraft deliveries through June 2005 (42 aircraft in
2004 and 20 aircraft in 2005).
3 The table reflects minimum required payments under capacity purchase contracts
between American and two regional airlines, Chautauqua Airlines, Inc. (Chautauqua)
and Trans States Airlines Inc. However, based on expected utilization, the Company
expects to make payments of $162 million in 2004, $164 million in 2005, $166 million in
2006, $168 million in 2007, $170 million in 2008 and $854 million in 2009 and beyond.
In addition, if the Company terminates its contract with Chautauqua without cause,
Chautauqua has the right to put its Embraer aircraft to the Company. If this were to
happen, the Company would take possession of the aircraft and become liable for lease
obligations totaling approximately $21 million per year with lease expirations in 2018
and 2019. These lease obligations are not included in the table above. See Note 4 to
the consolidated financial statements for additional information.
4 Excludes related interest amounts.
5 Includes noncancelable commitments to purchase goods or services, primarily
construction related costs at the John F. Kennedy International Airport and information
technology related support. The Company has made estimates as to the timing of
certain payments primarily for construction related costs. The actual timing of payments
may vary from these estimates. Substantially all of the Company’s purchase orders
issued for other purchases in the ordinary course of business contain a 30-day
cancellation clause that allows the Company to cancel an order with 30 days notice.
6 Includes expected other postretirement benefit payments through 2013.
7 Excludes a $2.9 billion accident liability, related to the events of September 11, 2001
and flight 587, recorded in Other liabilities and deferred credits, as discussed in Note 2
to the consolidated financial statements. This liability is offset in its entirety by a
receivable, recorded in Other assets, which the Company expects to receive from
insurance carriers as claims are resolved.