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AMR
CORPORATION
2006 Annual Report

Table of contents

  • Page 1
    AMR CORPORATION 2006 Annual Report

  • Page 2
    THE FOLLOWING IS THE AMR CORPORATION (THE "CORPORATION") ANNUAL REPORT ON FORM 10-K/A FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006 (THE "10-K/A"). THE 10-K/A WAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 27, 2007. ADDITIONAL INFORMATION REGARDING, AMONG OTHER THINGS: (A) THE ...

  • Page 3
    ... telephone number, including area code) _____ 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 2039 Name of Exchange on Which Registered New York Stock Exchange New York Stock...

  • Page 4
    ... (Amendment No. 1) is being filed by AMR Corporation (the Company) to revise the presentation of the adjustment resulting from the Company's adoption in 2006 of SFAS 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans", in the Consolidated Statement of Stockholders...

  • Page 5
    ...of assets of 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 Beacon Funds, a family of mutual funds with both institutional and retail shareholders, and provides customized fixed income portfolio management services...

  • Page 6
    ... potential of their service. American operates five hubs: Dallas/Fort Worth (DFW), Chicago O'Hare, Miami, St. Louis and San Juan, Puerto Rico. United Air Lines (United) also has a hub operation at Chicago O'Hare. The American Eagle® carriers increase the number of markets the Company serves by...

  • 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
    ... foreign countries which the Company serves. While air carriers are required to file and adhere to international fare and rate tariffs, substantial commissions, fare overrides and discounts to travel agents, brokers and wholesalers characterize many international markets. Airport Access The FAA has...

  • Page 9
    ... are subject to changes in government policies. On October 13, 2006, the Wright Amendment Reform Act of 2006 (the Act) was signed into law by the President. The Act is based on an agreement by the cities of Dallas and Fort Worth, Texas, DFW International Airport, Southwest, and the Company to modify...

  • Page 10
    ... by the U.S. or foreign governments in the future may adversely affect our business and financial results. American is a named potentially responsible party (PRP) at the former Operating Industries, Inc. Landfill in Monterrey Park, CA (OII). American is participating with a number of other PRPs in...

  • Page 11
    ... the Company. See Note 4 to the consolidated financial statements for additional information on accruals related to environmental issues. Labor The airline business is labor intensive. Wages, salaries and benefits represented approximately 32 percent of the Company's consolidated operating expenses...

  • Page 12
    ...moderated the labor costs associated with the employees represented by the unions. In conjunction with the Labor Agreements, American also implemented various changes in the pay plans and benefits for non-unionized personnel, including officers and other management (the Management Reductions). While...

  • Page 13
    ... 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. See Critical Accounting Policies and Estimates under Item 7 for more information on AAdvantage. Other Matters Seasonality...

  • Page 14
    ... page on its website, www.aa.com, as soon as reasonably practicable after such reports are electronically 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...

  • Page 15
    ...obligations to make future payments on aircraft equipment and property leases, and a high proportion of debt to equity capital. We may incur substantial additional debt, including secured debt, and lease obligations in the future. We also have substantial pension funding obligations. Our substantial...

  • Page 16
    ... fuel prices have moderated somewhat from the record high prices reached in July and August 2006, they are volatile and remain high by historical standards. Due to the competitive nature of the airline industry, we may not be able to pass on increased fuel prices to customers by increasing fares...

  • Page 17
    ... all of our routes is highly competitive and fares remain at low levels by historical standards. We face vigorous, and in some cases, increasing competition from major domestic airlines, national, regional, allcargo and charter carriers, foreign air carriers, low-cost carriers and, particularly on...

  • Page 18
    .... Our corporate and business strategies are, therefore, subject to change. Our business is subject to extensive government regulation, which can result in increases in our costs, limits on our operating flexibility, reductions in the demand for air travel, and competitive disadvantages. Airlines are...

  • Page 19
    ... airport rates and charges have been enacted from time to time that have significantly increased the costs of airline operations, reduced the demand for air travel or restricted the way we can conduct our business. For example, the Aviation and Transportation Security Act, which became law in 2001...

  • Page 20
    ... or other employee work group, our ability to execute our strategic plans could be adversely affected. Our insurance costs have increased substantially and further increases in insurance costs or reductions in coverage could have an adverse impact on us. We carry insurance for public liability...

  • Page 21
    ... systems. Any substantial or repeated failure of these systems could impact our operations and customer service, result in the loss of important data, loss of revenues, and increased costs, and generally harm our business. Moreover, a catastrophic failure of certain of our vital systems (which we...

  • Page 22
    ...aircraft operated by the Company at December 31, 2006 included: Average Average Seating 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 McDonnell Douglas MD-80 Total AMR...

  • Page 23
    ... capital and operating leased flight equipment operated by the Company as of December 31, 2006 are: 2012 and Equipment Type American Airlines Aircraft Airbus A300-600R Boeing 737-800 Boeing 757-200 Boeing 767-200 Extended Range Boeing 767-300 Extended Range McDonnell Douglas MD-80 AMR Eagle Aircraft...

  • Page 24
    ... 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 25
    ... an amended complaint was filed, against AMR, American, AMR Eagle, Airlines Reporting Corporation, and the Sabre Group Holdings, Inc. in the United States District Court for the Central District of California, Western Division (Westways World Travel, Inc. v. AMR Corp., et al.). The lawsuit alleges...

  • Page 26
    ... appeal of a lawsuit, filed as a class action but not certified as such, arising from allegedly improper failure to refund certain governmental taxes and fees collected by American upon the sale of nonrefundable tickets when such tickets are not used for travel. In Harrington v. Delta Air Lines, Inc...

  • Page 27
    ... the Company. American is defending a lawsuit (Love Terminal Partners, L.P. et al. v. The City of Dallas, Texas et al.) filed on July 17, 2006 in the United States District Court in Dallas. The suit was brought by two lessees of facilities at Dallas Love Field Airport against American, the cities of...

  • Page 28
    ... money damages or placing material restrictions on existing automated telephone call system operations would have a material adverse impact on the Company. American is defending a lawsuit (Kelley Kivilaan v. American Airlines, Inc.), filed on September 16, 2004 in the United States District...

  • Page 29
    ...has been with the Company in various management positions since 1984. Age 49. Mr. Horton was named Executive Vice President of Finance and Planning and Chief Financial Officer of AMR Corporation in March 2006 upon returning to American from AT&T Corp., a telecommunications company, where he had been...

  • Page 30
    ... 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 16, 2007 was 16,320. The range of closing market prices for AMR's common stock on the New York Stock Exchange was: 2006 High...

  • Page 31
    ... "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans". This adoption decreased Stockholders' equity by $1.0 billion and increased the obligation for pension and other postretirement benefits by $880 million. No cash dividends were declared on AMR's common shares during...

  • Page 32
    ... on the part of travelers (especially business travelers), increased competition from LCC's, the use of the internet, and other factors. The Company believes its reduced pricing power could persist indefinitely. Offsetting these fare increases, the Company's 2006 fuel expense increased $787 million...

  • Page 33
    ... labor unions and its employees its business partners in working for continuous improvement under the Turnaround Plan. Among other things, the senior management of the Company meets regularly with union officials to discuss the Company's financial results as well as the competitive landscape. These...

  • Page 34
    ... 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 recent financial results, substantial indebtedness, reduced credit ratings, high fuel prices, revenues that are weak by historical...

  • Page 35
    ... of 2006, the Company issued and sold 15 million shares of its common stock. The Company realized $400 million from the equity sale. During 2006, the Company repurchased approximately $190 million of its debt and lease obligations. Going forward, depending on market conditions, its cash position and...

  • Page 36
    ... primarily to purchase equipment and improve airport facilities that are leased by American and accounted for as operating leases. Approximately $1.8 billion of these bonds (with total future payments of approximately $4.6 billion as of December 31, 2006) are guaranteed by American, AMR, or both...

  • Page 37
    ...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...

  • Page 38
    ... in Other assets, which the Company expects to receive from insurance carriers as claims are resolved. Pension Obligations The Company is required to make contributions to its defined benefit pension plans under the minimum funding requirements of the Employee Retirement Income Security Act (ERISA...

  • Page 39
    ... increase in passenger revenue per available seat mile (RASM) of 8.8 percent to 10.26 cents. In 2006, American derived approximately 64 percent of its passenger revenues from domestic operations and approximately 36 percent from international operations. Following is additional information regarding...

  • Page 40
    ... are based on industry standard proration agreements for flights connecting to American flights, increased $272 million, or 14.5 percent, to $2.1 billion as a result of increased capacity and load factors. Regional Affiliates' traffic increased 22.8 percent to 8.9 billion revenue passenger miles...

  • Page 41
    ...due primarily to a 16.5 percent increase in American's price per gallon of fuel (net of the impact of a fuel tax credit and fuel hedging) in 2006 relative to 2005. (in millions) Operating Expenses Wages, salaries and benefits Aircraft fuel Other rentals and landing fees Depreciation and amortization...

  • Page 42
    ...due primarily to a 42.1 percent increase in American's price per gallon of fuel (net of the impact of a fuel tax credit and fuel hedging) in 2005 relative to 2004. (in millions) Operating Expenses Wages, salaries and benefits Aircraft fuel Other rentals and landing fees Depreciation and amortization...

  • Page 43
    ... the Company's remaining interest in Orbitz. INCOME TAX BENEFIT The Company did not record a net tax provision or benefit associated with its 2006 earnings or 2005 and 2004 losses due to the Company providing a valuation allowance, as discussed in Note 8 to the consolidated financial statements. 39

  • Page 44
    ... following table provides statistical information for American and Regional Affiliates for the years ended December 31, 2006, 2005 and 2004. Year Ended December 31, 2005 2006 American Airlines, Inc. Mainline Jet Operations Revenue passenger miles (millions) Available seat miles (millions) Cargo ton...

  • Page 45
    ...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, stock compensation, pensions and other postretirement benefits...

  • Page 46
    ... been applied consistently from year to year. However, due to changes in 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 - American uses the incremental cost method to account for...

  • Page 47
    .... Stock Compensation - Effective January 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards No. 123(R) "Share-Based Payment". The Company grants awards under its various share based payment plans and utilizes option pricing models or...

  • Page 48
    ... corporate bonds, 25 percent U.S. value stocks, 20 percent developed international stocks, five percent emerging markets stocks and bonds and ten percent alternative (private) investments. The expected return on plan assets component of the Company's net periodic benefit cost is calculated based...

  • Page 49
    ... 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 a measure of control over price and supply, the Company trades and...

  • Page 50
    ... 31, 2006 and 2005, 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...

  • Page 51
    ...CONSOLIDATED FINANCIAL STATEMENTS 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...

  • Page 52
    ... sheets of AMR Corporation as of December 31, 2006 and 2005 and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the...

  • Page 53
    AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) Year Ended December 31, 2005 2006 Revenues Passenger - American Airlines - Regional Affiliates Cargo Other revenues Total operating revenues Expenses Wages, salaries and benefits Aircraft fuel Other ...

  • Page 54
    AMR CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except shares and par value) December 31, 2006 Assets Current Assets Cash Short-term investments Restricted cash and short-term investments Receivables, less allowance for uncollectible accounts (2006 - $45; 2005- $60) Inventories, less ...

  • Page 55
    AMR CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except shares and par value) December 31, 2006 Liabilities and Stockholders' Equity (Deficit) Current Liabilities Accounts payable Accrued salaries and wages Accrued liabilities Air traffic liability Current maturities of long-term debt ...

  • Page 56
    ...Equity based stock compensation Provisions for asset impairments and restructuring charges Gain on sale of investments Redemption payments under operating leases for special facility revenue bonds Change in assets and liabilities: Decrease (increase) in receivables Decrease (increase) in inventories...

  • Page 57
    AMR CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (in millions, except share amounts) Accumulated Additional Common Stock Balance at January 1, 2004 Net loss Minimum pension liability Changes in fair value of derivative financial instruments Unrealized loss on investments ...

  • Page 58
    ... for Defined Benefit Pension and Other Postretirement Plans", and FASB Staff Position AUG AIR-1, "Accounting for Planned Major Maintenance Activities". SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements...

  • Page 59
    ... are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company's operations and estimated salvage values. Equipment and Property The provision for depreciation of operating equipment and property is computed on the straight-line method applied...

  • Page 60
    ... airlines based on historical usage patterns and contractual rates. American sells mileage credits and related services to companies participating in its frequent flyer program. The portion of the revenue related to the sale of mileage credits, representing the revenue for air transportation sold...

  • Page 61
    ... high fuel prices and the Company's restructuring activities, the Company has recorded a number of charges during the last few years. The following table summarizes the components of these charges and the remaining accruals for future lease payments, aircraft lease return and other costs, facilities...

  • Page 62
    ... 7 4,594 $ All short-term investments are classified as available-for-sale and stated at fair value. Unrealized gains and losses are reflected as a component of Accumulated other comprehensive loss. In 2004, the Company sold its remaining interest in Orbitz, a travel planning website, resulting in...

  • Page 63
    ...of JFK construction costs which are included in these amounts. In addition, the Company has an information technology support related contract that requires minimum annual payments of $152 million through 2013. American has capacity purchase agreements with two regional airlines, Chautauqua Airlines...

  • Page 64
    ... related to its operations. In the opinion of management, liabilities, if any, arising from these claims and litigation will not have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows, after consideration of available insurance. 60

  • Page 65
    ...at fair market value, but generally not to exceed a stated percentage of the defined lessor's cost of the aircraft or a predetermined fixed amount. Certain special facility revenue bonds have been issued by certain municipalities primarily to improve airport facilities and purchase equipment. To the...

  • Page 66
    ...31, 2006 Secured variable and fixed rate indebtedness due through 2021 (effective rates from 5.41% - 11.36% at December 31, 2006) Enhanced equipment trust certificates due through 2012 (rates from 3.86% - 12.00% at December 31, 2006) 6.0% - 8.5% special facility revenue bonds due through 2036 Credit...

  • Page 67
    ... Facility are guaranteed by AMR, and AMR's guaranty is secured by a pledge of all the outstanding shares of common stock of American. The Credit Facility contains a covenant (the Liquidity Covenant) requiring American to maintain, as defined, unrestricted cash, unencumbered short term investments...

  • Page 68
    ...In such case, holders may elect to convert the notes into shares of AMR common stock, in which cash settlement will occur as described above. Certain debt is secured by aircraft, engines, equipment and other assets having a net book value of approximately $13.1 billion as of December 31, 2006. As of...

  • Page 69
    ...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 70
    ... 2006 2005 Carrying Fair Carrying Fair Value Value Value Value Secured variable and fixed rate indebtedness Enhanced equipment trust certificates 6.0% - 8.5% special facility revenue bonds Credit facility agreement 4.25% - 4.50 % senior convertible notes 9.0% - 10.20% debentures 7.88% - 10.55% notes...

  • Page 71
    ...primarily to net operating loss carryforwards, an unrealized benefit related to the implementation of SFAS 123(R) and the resolution of certain tax contingencies. The recording of other comprehensive income items, primarily the pension liability, resulted in changes to the deferred tax asset and the...

  • Page 72
    ...Income Taxes (Continued) The components of AMR's deferred tax assets and liabilities were (in millions): December 31, 2006 Deferred tax assets: Postretirement benefits other than pensions Rent expense Alternative minimum tax credit carryforwards Operating loss carryforwards Pensions Frequent flyer...

  • Page 73
    ... negotiation. Under the 1998 Long Term Incentive Plan, as amended, officers and key employees of AMR and its subsidiaries may be granted certain types of stock or performance based awards. At December 31, 2006, the Company had stock option/SSAR awards, performance share awards, deferred share awards...

  • Page 74
    ... the Company to settle all outstanding performance and deferred share awards in stock rather than cash. Options/SSARs granted under the LTIP Plans and the 2003 Plan are awarded with an exercise price equal to the fair market value of the stock on date of grant, become exercisable in equal annual...

  • Page 75
    9. Share Based Compensation (Continued) A summary of stock option/SSARs activity under the LTIP Plans, the 2003 Plan and the Pilot Plan as of December 31, 2006, and changes during the year then ended is presented below: LTIP Plans Weighted Average Exercise Price $ 25.70 23.68 20.57 22.03 $ 27.03 ...

  • Page 76
    ...number of shares (6,696,719 shares at December 31, 2006) that will ultimately be distributed for outstanding awards computed using the market value of the Company's common stock at December 31, 2006. The weighted-average grant date fair value per share of performance share awards granted during 2006...

  • Page 77
    ... service period (generally 36 months). Career equity awards granted to certain employees of the Company vest upon the retirement of those individuals. The fair value of each deferred award is based on AMR's stock price on the measurement date. Activity during 2006 for deferred awards accounted...

  • Page 78
    ...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. In addition to pension benefits, other postretirement benefits, including certain health care and life insurance benefits (which provide secondary coverage to...

  • Page 79
    ... value of assets for the years ended December 31, 2006 and 2005, and a statement of funded status as of December 31, 2006 and 2005 (in millions): Pension Benefits 2006 2005 Reconciliation of benefit obligation Obligation at January 1 Service cost Interest cost Actuarial (gain) loss Plan amendments...

  • Page 80
    ..., pension benefit plan assets of $149 million and $48 million, respectively, and other benefit plan assets of $200 million and $159 million, respectively, were invested in shares of mutual funds managed by a subsidiary of AMR. The following tables provide the components of net periodic benefit cost...

  • Page 81
    ..., and expected value to be generated through active management, currency overlay and securities lending programs. The Company's annualized ten-year rate of return on plan assets as of December 31, 2006, was approximately 11.8 percent. The Company's pension plan weighted-average asset allocations at...

  • Page 82
    ... payments under this plan. This estimate reflects the provisions of the Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006. The following benefit payments, which reflect expected future service as appropriate, are expected to be paid: Pension 2007 2008 2009 2010 2011 2012...

  • Page 83
    ... provide information relating to the Company's amortized intangible assets as of December 31 (in millions): 2006 Accumulated Amortization $ $ 261 100 361 $ $ Cost Amortized intangible assets: Airport operating rights Gate lease rights Total $ $ 517 182 699 Net Book Value 256 82 338 Cost Amortized...

  • Page 84
    ...year net change Reclassification of derivative financial instruments into earnings Change in fair value of derivative financial instruments Adjustment resulting from adoption of SFAS 158 Balance at December 31, 2006 $ (956) 129 Unrealized Gain/(Loss) on Investments $ 1 (4) Income Tax Benefit $ 145...

  • Page 85
    ...only one operating segment for financial reporting purposes consisting of the operations of American and AMR Eagle. American is the largest scheduled passenger airline in the world. At the end of 2006, American provided scheduled jet service to approximately 150 destinations throughout North America...

  • Page 86
    ... 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 are mobile across geographic markets and, therefore, have not been allocated. 15. Quarterly Financial...

  • Page 87
    16. Subsequent Event On January 26, 2007, AMR completed a public offering of 13 million shares of its common stock. The Company realized $497 million from the sale of equity. 83

  • Page 88
    ...based on those criteria. Management's assessment of the effectiveness of internal control over financial reporting as of December 31, 2006, has been audited by Ernst & Young LLP, the independent registered public accounting firm who also audited the Company's consolidated financial statements. Ernst...

  • Page 89
    ... statements of operations, stockholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2006 and related financial statement schedule and our report dated February 21, 2007 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Dallas, Texas...

  • Page 90
    ... with the rules of the New York Stock Exchange. ** Additional shares may become available for future use as certain employee stock options are settled as SSARs. See Note 9 to the consolidated financial statements for additional information regarding the equity compensation plans included above...

  • Page 91
    ...Consolidated Statements of Stockholders' Equity (Deficit) for the Years Ended December 31, 2006, 2005 and 2004 Notes to Consolidated Financial Statements (2) The following financial statement schedule is filed as part of this report: Page Schedule II Valuation and Qualifying Accounts and Reserves 99...

  • Page 92
    ...American's Registration Statement No. 2-76709. AMR Corporation 2004 Directors Unit Incentive Plan, as amended, incorporated by reference to Exhibit 10.5 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2005; the successor to the AMR Corporation 1994 Directors Stock Incentive Plan...

  • Page 93
    ...AMR's report on Form 10-K for the year ended December 31, 2005. Deferred Compensation Agreement, dated as of November 29, 2006 between AMR... dated as of January 22, 2001, between AMR and Armando M. Codina, incorporated by reference to Exhibit 10.20 to AMR's report on Form 10-K for the year ended ...

  • Page 94
    10.28 Deferred Compensation 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 ...

  • Page 95
    ... Compensation Agreement, dated as of November 29, 2006 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...

  • Page 96
    ...-K for the year ended December 31, 1999. Deferred Compensation Agreement, dated as of January 22, 2001, between AMR and Judith Rodin, incorporated by reference to Exhibit 10.25 to AMR's report on Form 10-K for the year ended December 31, 2000. Deferred Compensation Agreement, dated as of December 18...

  • Page 97
    ...of November 29, 2006 between 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. 2006 Annual Incentive Plan, incorporated by...

  • Page 98
    ... Program Deferred Stock Award Agreement for Senior Officers under the AMR 1998 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.42(a) to AMR's report on Form 10-K for the year ended December 31, 1998. Current form of Career Equity Program Deferred Stock Award Agreement for Employees...

  • Page 99
    ... 26, 2002, incorporated by reference to Exhibit 10.54 to AMR's report on Form 10-K for the year ended December 31, 2002. Amended and Restated Executive Termination Benefits Agreement between AMR, American Airlines and Gary F. Kennedy dated February 3, 2003, incorporated by reference to Exhibit 10.55...

  • Page 100
    ...2008 Performance Share Plan for Officers and Key Employees (with awards to executive officers noted), incorporated by reference to Exhibit 10.4 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2006. 2004 - 2006 Performance Share Plan for Officers and Key Employees, as Amended and...

  • Page 101
    ...on Form 8-K dated January 17, 2007. AMR Corporation 1998 Long-Term Incentive Plan, as Amended. Amendment of Stock Option Agreements Under the 1998 Long-Term Incentive Plan to Add Stock Appreciation Rights. American Airlines 2007 Employee Profit Sharing Plan. Computation of ratio of earnings to fixed...

  • Page 102
    ... 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 By: /s/ Gerard J. Arpey Gerard J. Arpey Chairman, President and Chief Executive Officer (Principal Executive Officer) Date...

  • Page 103
    AMR CORPORATION Schedule II - Valuation and Qualifying Accounts and Reserves (in millions) Changes charged to statement of operations accounts Balance at beginning of year Year ended December 31, 2006 Allowance for obsolescence of inventories $ 410 Allowance for uncollectible accounts Reserves for ...

  • Page 104
    ... AMR CORPORATION Computation of Ratio of Earnings to Fixed Charges (in millions) 2006 Earnings: Income (loss) before income taxes and cumulative effect of accounting change Add: Total fixed charges (per below) Less: Interest capitalized Total earnings (loss) Fixed charges: Interest Portion of rental...

  • Page 105
    ..., S.A. American Airlines Marketing Services LLC American Airlines Realty (NYC) Holdings, Inc. American Airlines Vacations LLC American Aviation Supply LLC Packcall Limited Reno Air, Inc. Texas Aero Engine Services, L.L.C, dba TAESL* American Beacon Advisors, Inc. American Private Equity Management...

  • Page 106
    ... management's assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of AMR Corporation, included in this Annual Report (Form 10-K/A) for the year ended December 31, 2006. /s/ ERNST & YOUNG LLP Dallas, Texas...

  • Page 107
    ... with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for...

  • Page 108
    ... with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for...

  • Page 109
    ... Corporation, a Delaware corporation (the Company), does hereby certify, to such officer's knowledge, that: The Annual Report on Form 10-K/A for the year ended December 31, 2006 (the Form 10-K/A) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange...

  • Page 110
    ... J. Arpey Chairman, 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. Boren President The University of...

  • Page 111
    ... - Global Sales Peter J. Dolara Senior Vice President - Miami, Caribbean and Latin America Monte E. Ford Senior Vice President - Information Technology and Chief Information Officer Isabella D. Goren Senior Vice President - Customer Relationship Marketing and Reservations Henry C. Joyner Senior Vice...

  • Page 112
    ... The following graph compares the yearly change in AMR Corporation's cumulative total return on its common stock with the cumulative total return on the published Standard & Poor's 500 Stock Index, and an airline index published by the American Stock Exchange, in each case over the preceding...

  • Page 113
    ... P.O. Box 619616 Dallas/Fort Worth Airport, TX 75261-9616 COMMON STOCK Transfer Agent & Registrar American Stock Transfer & Trust Company 59 Maiden Lane, Plaza Level New York, NY 10038 Shareholder Services: Toll-free telephone number: 1-877-390-3077 Website: www.amstock.com E-mail: [email protected]...