American Airlines 2004 Annual Report Download

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AMR
CORPORATION
2004 Annual Report

Table of contents

  • Page 1
    AMR CORPORATION 2004 Annual Report

  • Page 2
    ... FILED WITH THE SECURITIES AND EXCHANGE THE 10-K WAS ON COMMISSION FEBRUARY 25, 2005. ADDITIONAL INFORMATION REGARDING, AMONG OTHER THINGS: (A) THE CORPORATION'S BOARD OF DIRECTORS; (B) THE OFFICERS OF THE CORPORATION AND CERTAIN OF ITS SUBSIDIARIES; AND (C) A MEANS OF CONTACTING THE CORPORATION...

  • Page 3
    ... Act: NONE (Title of Class) Name of exchange on which registered New York Stock Exchange New York Stock Exchange New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during...

  • Page 4
    ... AMR's U.S. employee benefit plans, as well as AMR's 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. As of...

  • Page 5
    ... revenue generating opportunities currently exist, (vii) the implementation of an on-board food purchase program and new fees for ticketing services and (viii) numerous other initiatives. As part of its effort to build greater employee involvement, the Company has worked to make its labor unions and...

  • Page 6
    ..., St. Louis and San Juan, Puerto Rico. United Air Lines (United) also has a hub operation at Chicago O'Hare. Delta Air Lines (Delta) previously operated a hub at DFW. In January 2005, however, Delta ceased hub operations at DFW. The American Eagle carriers increase the number of markets the Company...

  • Page 7
    ... 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 8
    ...carriers also no longer pay base commissions on tickets issued by travel agents in the U.S., Puerto Rico and Canada, but pay certain commissions in connection with their own special revenue programs. Accordingly, airlines compete, not only with respect to the price of the tickets sold, but also with...

  • Page 9
    ...-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 each operation. In April st 2000, the Wendell H. Ford Aviation Investment and Reform Act for the 21 Century (Air 21...

  • Page 10
    ... air transportation system. Authorities in several cities have promulgated aircraft noise reduction programs, including the imposition of nighttime curfews. The ANCA generally requires FAA approval of local noise restrictions on aircraft. While the Company has had sufficient scheduling flexibility...

  • Page 11
    ... reduced the labor costs associated with the employees represented by the unions. In conjunction with the Labor Agreements, American implemented various changes in the pay plans and benefits for non-unionized personnel, including officers and other management (the Management Reductions). While...

  • Page 12
    ... millions) 3,345 3,161 3,264 $ Total Cost (in millions) 2,562 2,772 3,969 The impact of fuel price changes on the Company and its competitors depends on various factors, including hedging strategies. The Company has a fuel hedging program in which it enters into jet fuel, heating oil and crude oil...

  • Page 13
    ... bank credit card issuers, hotels, car rental companies 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 at any time without notice and may end the...

  • Page 14
    ...In time of war or during a national emergency or defense oriented situation, American and other air carriers can be required to provide airlift services to the Air Mobility Command under the Civil Reserve Air Fleet program. In the event the Company has to provide a substantial number of aircraft and...

  • Page 15
    ... 31, 2004. Flight Equipment - Non-Operating Owned and leased aircraft not operated by the Company at December 31, 2004 included: Capital Leased Operating Leased Equipment Type American Airlines Aircraft Boeing 767-200 Boeing 767-200 Extended Range Fokker 100 McDonnell Douglas MD-80 Total AMR...

  • Page 16
    ... 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 17
    ... Company. On May 13, 2002, the named plaintiffs in Always Travel, et. al. v. Air Canada, et. al., pending in the Federal Court of Canada, Trial Division, Montreal, filed a statement of claim alleging that between 1995 and the present, American, the other defendant airlines, and the International Air...

  • Page 18
    ... lawsuits, filed as class actions but not certified as such, arising from allegedly improper failure to refund certain governmental taxes and fees collected by the Company upon the sale of nonrefundable tickets when such tickets are not used for travel. The suits are: Coleman v. American Airlines...

  • Page 19
    ... represents the Company's flight attendants (Ann M. Marcoux, et al., v. American Airlines Inc., et al. in the United States District Court for the Eastern District of New York). While a class has not yet been certified, the lawsuit seeks on behalf of all of American's flight attendants or various...

  • Page 20
    ... two years service as Senior Vice President and Chief Financial Officer of Continental Airlines between 1993 and 1995, he has been with the Company in various management positions since 1984. Age 47. Mr. Beer became the Senior Vice President and Chief Financial Officer of AMR and American in January...

  • Page 21
    ... STOCK AND RELATED STOCKHOLDER MATTERS The 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 18, 2005 was 17,041. The range of closing market prices for AMR's common stock on the New York...

  • Page 22
    ...operations before cumulative effect of 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...

  • Page 23
    ... discounted fare sales initiated by competitors, including competitors currently operating under the protection of Chapter 11 of the Bankruptcy Code. The Company's 2004 operating and financial results were also adversely affected by the significant increases in the price of jet fuel. Fuel price...

  • Page 24
    ... revenue generating opportunities currently exist, (vii) the implementation of an on-board food purchase program and new fees for ticketing services and (viii) numerous other initiatives. As part of its effort to build greater employee involvement, the Company has worked to make its labor unions and...

  • Page 25
    ... sale or monetization of certain assets, (vi) unsecured debt and (vii) equity and/or equity-like securities. However, the availability and level of these financing sources cannot be assured, particularly in light of the Company's and American's reduced credit ratings, high fuel prices, historically...

  • Page 26
    ... The Company, or its subsidiaries, issued the following debt during the year ended December 31, 2004 (in millions): 7.25% secured notes due 2009 4.50% senior convertible notes due 2024 (net of discount) Credit facility * Various debt agreements related to the purchase of regional jet aircraft...

  • Page 27
    ... 31, 2004, future lease payments required under these leases totaled $2.9 billion. 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. Approximately...

  • Page 28
    ... 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...

  • Page 29
    ... defined benefit pension plans, such as interest rate levels, the amount and timing of asset returns, and the impact of proposed legislation, the Company is not able to reasonably estimate its future required contributions beyond 2005. However, based on the current regulatory environment and market...

  • Page 30
    ...agreements for flights connecting to American flights, increased $357 million, or 23.5 percent, to $1.9 billion as a result of increased capacity and load factors. Regional Affiliates' traffic increased 32.0 percent to 7.3 billion revenue passenger miles (RPMs), while capacity increased 26.0 percent...

  • Page 31
    ... 2003. (in millions) Operating 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 Aircraft rentals Food service Other operating expenses Special charges...

  • Page 32
    ... Company's cost savings initiatives coupled with security cost reimbursements from the U.S. government and a decrease in special charges. (in millions) Operating Expenses Wages, salaries and benefits Aircraft fuel Depreciation and amortization Other rentals and landing fees Commissions, booking fees...

  • Page 33
    ... sale of the Company's investment in Hotwire and a $70 million gain related to an initial public offering by Orbitz, offset by the write-down of certain investments held by the Company during the first quarter of 2003. INCOME TAX BENEFIT 2004 The Company did not record a net tax benefit associated...

  • Page 34
    ... However, the size of the loss is uncertain due to external factors beyond the Company's control such as fuel prices and the revenue environment. The Company currently expects first quarter mainline unit costs to be approximately 9.9 cents. Capacity for American's mainline jet operations is expected...

  • Page 35
    .... American's frequent flyer liability is accrued each time a member accumulates sufficient mileage in his or her account to claim the lowest level of free travel award (25,000 miles) and the award is expected to be used for free travel. American includes fuel, food, and reservations/ticketing costs...

  • Page 36
    ... current and expected market conditions. The expected return on plan assets component of the Company's net periodic benefit cost is calculated based on the fair value of plan assets and the Company's target asset allocation of 40 percent longer duration corporate bonds, 25 percent U.S. value stocks...

  • Page 37
    ... taking into account current and expected market conditions. Increasing the assumed health care cost trend rate by 1.0 percent would increase estimated 2005 postretirement benefits expense by $40 million. The Company has pension and postretirement benefit unrecognized net actuarial losses as...

  • Page 38
    ... increased fuel prices to its customers by increasing its fares. In fact, recent history would indicate that the Company has a very limited ability to pass along the increased costs of fuel. Likewise, increased fare competition and lower revenues may offset any potential benefit of lower fuel prices...

  • Page 39
    ...in or out of Chapter 11. Historically, air carriers involved in reorganizations have undertaken substantial fare discounting in order to maintain cash flows and enhance customer loyalty. Increased Pricing Transparency The increased use of the Internet as a travel distribution channel is resulting in...

  • Page 40
    ... by failure of the Company to reach agreement with any labor union representing the Company's employees. In addition, a dispute between the Company and an employee work group (outside the confines of a collective bargaining agreement) could adversely impact the Company's operations. Insurance Costs...

  • Page 41
    ... The Company is increasingly dependent on technology to operate its business. Any substantial or repeated failures of the Company's computer or communications systems could impact the Company's customer service, result in the loss of important data, loss of revenues, and increased costs, and...

  • Page 42
    ...the Company trades and ships fuel and maintains fuel storage facilities to support its flight operations. The Company also manages the price risk of fuel costs primarily by using jet fuel, heating oil, and crude oil hedging contracts. Market risk is estimated as a hypothetical 10 percent increase in...

  • Page 43
    ... 2003, respectively. 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. Other The Company holds investments in certain other entities...

  • Page 44
    ... Page Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations Consolidated Balance Sheets Consolidated Statements of Cash Flows Consolidated Statements of Stockholders' Equity (Deficit) Notes to Consolidated Financial Statements 42 43 44-45 46 47 48-77...

  • Page 45
    ... Registered Public Accounting Firm The Board of Directors and Stockholders AMR Corporation We have audited the accompanying consolidated balance sheets of AMR Corporation as of December 31, 2004 and 2003 and the related consolidated statements of operations, stockholders' equity (deficit) and cash...

  • Page 46
    ...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 and credit card expense Maintenance, materials and repairs Aircraft rentals Food service Other operating...

  • Page 47
    ... investments Restricted cash and short-term investments Receivables, less allowance for uncollectible accounts (2004 - $59; 2003 - $62) Inventories, less allowance for obsolescence (2004 - $379; 2003 - $428) Other current assets Total current assets Equipment and Property Flight equipment, at cost...

  • Page 48
    ...par value) December 31, 2004 Liabilities and Stockholders' Equity (Deficit) 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 Debt...

  • Page 49
    ...) in air traffic liability Increase in other liabilities and deferred credits Other, net Net cash provided (used) by operating activities Cash Flow from Investing Activities: Capital expenditures, including purchase deposits on flight equipment Net (increase) decrease in short-term investments Net...

  • Page 50
    ... loss on investments Income tax benefit Total comprehensive loss Issuance of 1,533,760 shares from Treasury pursuant to stock option, deferred stock and restricted stock incentive plans, net of tax of $2 Balance at December 31, 2002 Net loss Minimum pension liability Changes in fair value of...

  • Page 51
    ... except costs incurred for maintenance and repair under flight hour maintenance contract agreements, which are accrued based on contractual terms when an obligation exists. Intangible Assets Route acquisition costs and airport operating and gate lease rights represent the purchase price attributable...

  • Page 52
    .... Lease terms vary but are generally ten to 25 years for aircraft and seven to 40 years for other leased equipment and property. Regional Affiliates Revenue from ticket sales is generally recognized when service is provided. Regional Affiliates revenues for flights connecting to American flights are...

  • Page 53
    ... statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues, release of administrative guidance, or rendering of a court decision affecting a particular tax issue. Advertising Costs The Company expenses the costs of advertising...

  • Page 54
    ... accruals for lease return and other costs Permanently retired seven McDonnell Douglas MD80 aircraft $ $ (20) 21 1 2003 Accelerated the planned retirement of Airbus A300 aircraft and permanently retired Boeing 767-200 aircraft and four Boeing 767-200 ER aircraft. Aircraft and related Airbus A300...

  • Page 55
    ... severance costs related to the 2003 Management Reductions and Labor Agreements** due to fewer furloughs than anticipated resulting from the Company's operational requirements and the volume of pilot retirements Accrued primarily severance costs for approximately 3,200 job reductions across all work...

  • Page 56
    ...achieve these savings and also implemented various reductions in the pay plans and benefits for non-unionized personnel, including officers and other management (the Management Reductions). ** Other In 2003, American sold 33 Fokker 100 aircraft (with a minimal net book value), issued a $23 million...

  • Page 57
    ... Fee Reimbursement). The Company's Security Fee Reimbursement was $358 million (net of payments to independent regional affiliates) and is included in U.S. government grant in the accompanying consolidated statements of operations. On September 22, 2001, President Bush signed into law the Air...

  • Page 58
    ...reserves, from the insurance carrier as of December 31, 2004. The Company expects to recover the net receivable via the liquidation process or other means available. 3. Investments Short-term investments consisted of (in millions): December 31, 2004 Overnight investments and time deposits Corporate...

  • Page 59
    ...the Company pays the American Connection carriers a fee per block hour to operate the aircraft. The block hour fees are designed to cover the American Connection carriers' fully allocated costs plus a margin. Assumptions for certain costs such as fuel, landing fees, insurance, and aircraft ownership...

  • Page 60
    ... 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 of, deposits with, or credit extended by such lender related to the loan, (ii) any tax...

  • Page 61
    ... if they become payable. Special facility revenue bonds have been issued by certain municipalities primarily to improve airport facilities (and purchase equipment) that are leased by American and accounted for as operating leases. Approximately $1.7 billion of these bonds (with total future payments...

  • Page 62
    .... However, American does not guarantee the residual value of the aircraft. As of December 31, 2004, future lease payments required under these leases totaled $2.9 billion. 6. Indebtedness Long-term debt consisted of (in millions): December 31, 2004 Secured variable and fixed rate indebtedness due...

  • Page 63
    ... 72 aircraft (consisting of McDonnell Douglas MD-80, Boeing 757-200 and Boeing 767-300 model aircraft). The Credit Facility includes a covenant that requires periodic appraisal of the aircraft at current market value and requires American to pledge more aircraft or cash collateral if the loan amount...

  • Page 64
    ... 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 facility construction and other related costs...

  • Page 65
    ... 31, 2004 is included in restricted cash and short-term investments and is not material. A deterioration of the Company's liquidity position may negatively affect the Company's ability to hedge fuel in the future. Fuel Price Risk Management American enters into jet fuel, heating oil and crude oil...

  • 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
    ... tax assets not benefited Other, net Income tax benefit $ (266) (14) 9 255 16 $ - 2002 (1,351) (103) 16 39 50 12 (1,337) The change in valuation allowance in 2004 and 2003 related primarily to net operating loss carryforwards. The change in valuation allowance in 2002 related to the Company...

  • Page 68
    ... Additional paid-in capital of $142 million. Also in 2003, the Company established the 2003 Employee Stock Incentive Plan (the 2003 Plan) to provide equity awards to employees (from the above shares authorized for issuance) in connection with the Labor Agreements and Management Reductions discussed...

  • 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
    ... in 1993 under the terms of which shares of deferred stock are awarded at no cost to officers and key employees under the LTIP Plans and, beginning in 2003, under the 2003 Plan. The fair value of the performance shares granted is equal to the market price of the Company's stock at the date of...

  • Page 71
    ...plan for non-contract employees in which the Company will match the employees' before-tax contribution on a dollar-for-dollar basis, up to 5.5 percent of their pensionable pay. During 2000, American provided a one-time election for current non-contract employees to remain in the defined benefit plan...

  • Page 72
    ... defined benefit plans' benefit obligations and fair value of assets for the years ended December 31, 2004 and 2003, and a statement of funded status as of December 31, 2004 and 2003 (in millions): Pension Benefits 2004 2003 Reconciliation of benefit obligation Obligation at January 1 Service cost...

  • Page 73
    ...): Pension Benefits 2003 2004 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 loss Curtailment loss Settlement loss Net periodic benefit cost for defined benefit...

  • Page 74
    ... the public markets over the long-term. Additionally, the Company engages currency overlay managers in an attempt to increase returns by protecting non-U.S. dollar denominated assets from a rise in the relative value of the U.S. dollar. The Company also participates in securities lending programs in...

  • Page 75
    ... point change in the assumed health care cost trend rates would have the following effects (in millions): One Percent Increase Impact on 2004 service and interest cost Impact on postretirement benefit obligation as of December 31, 2004 $ $ 27 244 One Percent Decrease $ $ (25) (233) The Company...

  • Page 76
    ... following tables provide information relating to the Company's amortized intangible assets as of December 31 (in millions): 2004 Accumulated Amortization $ $ 220 89 309 $ $ Cost Amortized intangible assets: Airport operating rights Gate lease rights Total $ $ 517 186 703 Net Book Value 297 97 394...

  • Page 77
    ...) - Minimum Pension Liability 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 benefit Balance at December 31, 2002 Current year net change Reclassification of...

  • Page 78
    ...is the largest scheduled passenger airline in the world. At the end of 2004, American provided scheduled jet service to approximately 150 destinations throughout North America, the Caribbean, Latin America, Europe and the Pacific. American is also one of the largest scheduled air freight carriers in...

  • Page 79
    ...921 413 17,420 $ $ $ The Company attributes operating revenues by geographic region based upon the origin and destination of each flight segment. The Company's tangible assets consist primarily of flight equipment, which is mobile across geographic markets and, therefore, has not been allocated...

  • 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. 77

  • 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
    ... with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of AMR Corporation as of December 31, 2004 and 2003 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the three...

  • Page 83
    ...granted under the 2003 Employee Stock Incentive Plan (the ESIP). The Pilot Stock Option Plan and the ESIP were implemented in accordance with the rules of the New York Stock Exchange. Includes 4,324,933 shares available for future grant under the 1998 Long Term Incentive Plan, as amended, and shares...

  • Page 84
    ...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 85
    ... 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. AMR Corporation 2004 Directors Unit Incentive Plan, incorporated by reference to Exhibit 10.4 to AMR...

  • Page 86
    ... Agreement, dated as of December 18, 2001 between AMR and Armando M. Codina, incorporated by reference to Exhibit 10.6 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2002, as filed on July 19, 2002. Deferred Compensation Agreement, dated as of December 13, 2002 between AMR...

  • Page 87
    ... 30, 2003 between AMR and Michael A. Miles, incorporated by reference to Exhibit 10.4 to AMR's report on Form 10-Q for the quarterly period ended March ... Purcell, incorporated by reference to Exhibit 10.7 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2002, as filed on July 19, ...

  • Page 88
    ...AMR and Roger T. Staubach. American Airlines, Inc. 2004 Employee Profit Sharing Plan, incorporated by reference to Exhibit 10.1 to AMR's report on Form 10-Q for the quarterly period ended March 31, 2004. American Airlines, Inc. 2004 Annual Incentive Plan, incorporated by reference to Exhibit 10.2 to...

  • Page 89
    ... year ended December 31, 2003. Current form of Stock Option Agreement under the 2003 Employee Stock Incentive Plan. Current form of Career Equity Program Deferred Stock Award Agreement for Corporate Officers under the AMR 1998 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.41 to...

  • Page 90
    ... Officers and Key Employees under the 1998 Long-Term Incentive Plan, as amended, incorporated by reference to Exhibit 10.10 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2002, as filed on July 19, 2002. AMR Corporation 2002 - 2004 Performance Share Program Deferred Stock Award...

  • Page 91
    ... 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...

  • Page 92
    ... - Results of Operations and Financial Condition On October 20, 2004, AMR filed a report on Form 8-K to provide a press release issued on October 20, 2004 to report the Company's third quarter 2004 earnings. Form 8-Ks filed under Item 5.02 - Departure of Directors or Principal Officers; Election of...

  • Page 93
    ... a press release issued to report November traffic for American Airlines, Inc. On December 28, 2004, AMR filed a report on Form 8-K to provide actual fuel cost, unit cost and capacity and traffic information for October and November as well as certain forecasts of unit cost, revenue performance and...

  • Page 94
    ...By: /s/ Gerard J. Arpey Gerard J. Arpey Chairman, President and Chief Executive Officer (Principal Executive Officer) Date: February 25, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant...

  • Page 95
    .... In our opinion, the financial statement schedule referred to above, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. /s/ Ernst & Young LLP Dallas, Texas February 22, 2005 92

  • Page 96
    ... to statement Balance of at beginning operations accounts of year Year ended December 31, 2004 Allowance for obsolescence of inventories $ 428 Allowance for uncollectible accounts Reserves for environmental remediation costs Allowance for insurance receivable 62 72 22 Payments Write-offs (net of...

  • Page 97
    ...AMR CORPORATION Computation of Ratio of Earnings to Fixed Charges (in millions) 2004 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 charges...

  • Page 98
    ...%) AEROSAN Airport Services S.A. (50%) American Airlines de Mexico, S.A. American Airlines de Venezuela, S.A. American Airlines Realty (NYC) Holdings, Inc. American Aviation Supply LLC AMR Training Group, Inc. AMR Ventures III, Inc. oneworld Alliance, LLC (33.4%) oneworld Management Company Ltd. (33...

  • Page 99
    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 100
    ... S-8 No. 333-104611, Form S-3 No. 333-109978 and Form S-3 No. 333-110760) of AMR Corporation, and in the related Prospectuses, of our reports dated February 22, 2005, with respect to the consolidated financial statements and schedule of AMR Corporation, AMR Corporation management's assessment of the...

  • Page 101
    ... condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules...

  • Page 102
    ... condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules...

  • Page 103
    ... of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: February 25, 2005 /s/ Gerard J. Arpey Gerard J. Arpey Chairman, President and Chief Executive Officer...

  • Page 104
    ... Magazine New York, New York Elected in 1995 Ann M. Korologos Chairman, RAND Board of Trustees RAND Corporation (International Public Policy Research) Santa Monica, California Elected in 1990 Michael A. Miles Special Limited Partner Forstmann Little & Co. (Investment Banking) New York, New York...

  • Page 105
    ... Vice President - Alliance and Kansas City Base Maintenance John A. Carpenter Vice President - Corporate Affairs Robert C. Cordes Vice President - Operations Planning and Performance Lauri L. Curtis Vice President - Onboard Service C. David Cush Vice President and General Sales Manager Thomas R. Del...

  • Page 106
    ... DE 19890 Paying Agents JPMorgan Chase Bank, N.A. Institutional Trust Securities Window 4 New York Plaza - 1st Floor New York, NY 10004 Wilmington Trust Company c/o Computershare Trust Company of New York Wall Street Plaza New York, NY 10005 STOCK EXCHANGES The AMR Corporation Trading Symbol is AMR...