American Airlines 2004 Annual Report Download - page 68

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8. Income Taxes (Continued)
The components of AMR's deferred tax assets and liabilities were (in millions):
December 31,
2004 2003
Deferred tax assets:
Postretirement benefits other than pensions $ 1,082 $ 1,067
Rent expense 696 851
Alternative minimum tax credit carryforwards 423 427
Operating loss carryforwards 2,065 1,228
Pensions 536 525
Frequent flyer obligation 267 467
Gains from lease transactions 197 212
Other 598 693
Total deferred tax assets 5,864 5,470
Valuation allowance (833) (663)
Net deferred tax assets 5,031 4,807
Deferred tax liabilities:
Accelerated depreciation and amortization (4,620) (4,441)
Other (411) (366)
Total deferred tax liabilities (5,031) (4,807)
Net deferred tax liability $ - $ -
At December 31, 2004, the Company had available for federal income tax purposes an alternative minimum tax
credit carryforward of approximately $423 million, which is available for an indefinite period, and federal net
operating losses of approximately $5.4 billion for regular tax purposes, which will expire, if unused, beginning in
2022. The Company had available for state income tax purposes net operating losses of $3.8 billion, which expire,
if unused, in years 2005 through 2024. The amount that will expire in 2005 is $28 million.
Cash payments for income taxes were $3 million for 2004. Cash refunds for income taxes were $575 million and
$646 million for 2003 and 2002, respectively. The amounts received in 2003 and 2002 relate primarily to net
operating loss carryback claims, including a carryback claim filed as a result of a provision in Congress’ economic
stimulus package that changes the period for carrybacks of net operating losses (NOLs). This change allows the
Company to carry back 2001 and 2002 NOLs for five years, rather than two years under the previous law, allowing
the Company to more quickly recover its NOLs.
9. Stock Awards and Options
In March 2003, the Board of Directors of AMR approved the issuance of additional shares of AMR common stock
to employees and certain vendors, lessors, lenders and suppliers in connection with negotiations concerning
concessions. The maximum number of shares authorized for issuance was approximately 46.9 million shares.
From the foregoing authorization, the Company issued approximately 2.5 million shares to Vendors from treasury
stock in 2003, resulting in a re-allocation from Treasury stock to 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 in Note 2. Under the 2003 Plan, employees may be granted stock options,
restricted stock and deferred stock. The total number of shares authorized for distribution under the 2003 Plan is
42,680,000 shares.