American Airlines 2007 Annual Report Download - page 60

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57
3. Investments
Short-term investments consisted of (in millions):
December 31,
2007 2006
Overnight investments and time deposits $ 488 $ 29
Corporate and bank notes 3,781 4,475
U. S. government agency mortgages - 7
U. S. government agency notes 17 16
Other 101 67
$ 4,387 $ 4,594
Short-term investments at December 31, 2007, by contractual maturity included (in millions):
Due in one year or less $ 3,621
Due between one year and three years 766
Due after three years -
$ 4,387
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 income (loss).
In 2007, the Company sold its interests in ARINC, Incorporated (“ARINC”), a military and aviation
communications company, previously recorded as a component of other assets. The Company received
$192 million in proceeds for its interest in ARINC, $138 million of which was recognized as a gain. The gain on
the sale of the Company’s interest in ARINC is included in Miscellaneous-net in the accompanying consolidated
statement of operations.
4. Commitments, Contingencies and Guarantees
As of December 31, 2007, the Company had commitments to acquire 23 Boeing 737-800s in 2009 and an
aggregate of 29 Boeing 737 aircraft and seven Boeing 777 aircraft in 2013 through 2016 as a part of its fleet
renewal strategy. Future payments for all aircraft, including the estimated amounts for price escalation, are
currently estimated to be approximately $2.8 billion, with the majority occurring in 2008 through 2015. However, if
the Company commits to accelerating the delivery dates of a significant number of aircraft in the future, a
significant portion of the $2.8 billion commitment will be accelerated into earlier periods, including 2008 and
2009. Future payments for all aircraft, including price escalation, will approximate $269 million in 2008, $432
million in 2009, no payments in 2010, $106 million in 2011, $336 million in 2012, and $1.6 billion for 2013 and
beyond. This amount is net of purchase deposits currently held by the manufacturer.
American has granted Boeing a security interest in American’s purchase deposits with Boeing. These purchase
deposits totaled $239 million and $177 million at December 31, 2007 and 2006, respectively.