American Airlines 2006 Annual Report Download - page 36

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32
Certain 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
$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. Approximately $495 million of these special facility revenue bonds
contain mandatory tender provisions that require American to make operating lease payments sufficient to
repurchase the bonds at various times: $100 million in 2007, $218 million in 2008, $112 million in 2014 and $65
million in 2015. Although American has the right to remarket the bonds, there can be no assurance that these
bonds will be successfully remarketed. Any payments to redeem or purchase bonds that are not remarketed
would generally reduce existing rent leveling accruals or be considered prepaid facility rentals and would reduce
future operating lease commitments.
In addition, the Company had other operating leases, primarily for aircraft and airport facilities, with total future
lease payments of $4.6 billion as of December 31, 2006. Entering into aircraft leases allows the Company to
obtain aircraft without immediate cash outflows.