American Airlines 2009 Annual Report Download

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AMR
CORPORATION
2009 Annual Report

Table of contents

  • Page 1
    AMR CORPORATION 2009 Annual Report

  • Page 2
    ... was filed with the Securities and Exchange Commission on February 17, 2010. Additional information regarding, among other things: (a) AMR Corporation's Board of Directors; (b) the officers of AMR Corporation and certain of its subsidiaries; (c) a graph of AMR Corporation's stock performance; and...

  • Page 3
    ... (Address of principal executive offices, including zip code) (817) 963-1234 (Registrant's telephone number, including area code) _____ Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on Which Registered Common Stock, $1 par value per share New York...

  • Page 4
    ...end of 2009, American provided scheduled jet service to approximately 160 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American, AMR Eagle Holding Corporation (AMR Eagle) and the AmericanConnection® airline serve approximately 250 cities in 40 countries with...

  • Page 5
    ... U.S. and its possessions. Most major air carriers have developed hub-and-spoke systems and schedule patterns in an effort to maximize the revenue potential of their service. American operates in five primary markets: Dallas/Fort Worth (DFW), Chicago O'Hare, Miami, New York City and Los Angeles. 2

  • Page 6
    ...14 to the consolidated financial statements. In providing international air transportation, the Company competes with foreign investor-owned carriers, foreign state-owned carriers and U.S. airlines that have been granted authority to provide scheduled passenger and cargo service between the U.S. and...

  • Page 7
    ... a joint business agreement and related marketing arrangements with British Airways and Iberia, providing for commercial cooperation on flights between North America and most countries in Europe, pooling and sharing of certain revenues and costs, expanded codesharing, enhanced frequent flyer program...

  • Page 8
    ...the EU approved an open skies air services agreement that provides airlines from the U.S. and EU member states open access to each other's markets, with freedom of pricing and unlimited rights to fly beyond the U.S. and any airport in the EU including London's Heathrow Airport. The provisions of the...

  • Page 9
    ... significant impact on the Company's flights to or from JFK. In late 2008, the FAA issued new rules for carriers operating at LGA, JFK and Newark that would have fundamentally changed the manner in which operating authorizations are held and distributed at those airports. Every departure and landing...

  • Page 10
    ... flight attendants. The Labor Agreements substantially 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...

  • Page 11
    ... successfully negotiated limited changes. The pilot agreement is amendable January 1, 2013; however, the parties have agreed that contract openers may be exchanged 120 days prior to that date. The Association of Flight Attendants (AFA) represents the flight attendants of the American Eagle carriers...

  • Page 12
    ... every 18 months. American sells mileage credits and related services to other participants in the AAdvantage program. There are over 1,000 program participants, including a leading credit card issuer, hotels, car rental companies and other products and services companies in the AAdvantage program...

  • Page 13
    ... available to the Company, or significantly increase its cost, the Company would be adversely affected. The U.S. government has agreed to provide commercial war-risk insurance for U.S. based airlines through August 31, 2010, covering losses to employees, passengers, third parties and aircraft...

  • Page 14
    ... to our capacity plan. In connection with these capacity reductions, the Company incurred special charges related to aircraft, employee reductions and certain other charges. If the global economic downturn persists or worsens, demand for air travel may continue to weaken. No assurance can be...

  • Page 15
    ... with a number of credit card companies and processors to accept credit cards for the sale of air travel and other services. Under certain of these agreements, the related credit card processor may hold back a reserve from American's credit card receivables following the occurrence of certain events...

  • Page 16
    ... affected by the cost, volatile price and the availability of jet fuel, which are in turn affected by a number of factors beyond our control. 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. Although we had...

  • Page 17
    ... Service over almost 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, all-cargo and charter carriers, foreign air carriers, low-cost carriers...

  • Page 18
    ... a joint business agreement and related marketing arrangements with British Airways and Iberia, providing for commercial cooperation on flights between North America and most countries in Europe, pooling and sharing of certain revenues and costs, expanded codesharing, enhanced frequent flyer program...

  • Page 19
    ... or orders, that would curtail an airline's ability to respond to a competitor); • the adoption of regulations that impact customer service standards (for example new passenger security standards, passenger bill of rights); • restrictions on airport operations, such as restrictions on the use of...

  • Page 20
    ...skies air services agreement between the U.S. and the EU which took effect in March 2008 provides airlines from the U.S. and EU member states open access to each other's markets, with freedom of pricing and unlimited rights to fly beyond the U.S. and any airport in the EU including London's Heathrow...

  • Page 21
    ... work stoppages or other job actions. In addition, the union that represents American's pilots has filed a number of grievances, lawsuits and complaints, most of which American believes are part of a corporate campaign related to the union's labor agreement negotiations with American. While American...

  • Page 22
    ... market airports in Dallas/Ft. Worth, Chicago, Miami, New York City and Los Angeles. Each of these operations includes flights that gather and distribute traffic from markets in the geographic region around the primary market to other major cities. A significant interruption or disruption in service...

  • Page 23
    ... one McDonnell Douglas MD-80 aircraft. Flight Equipment - Non-Operating Owned and leased aircraft not operated by the Company at December 31, 2009 included: Capital Leased Operating Leased Equipment Type American Airlines Aircraft Airbus A300-600R Fokker 100 McDonnell Douglas MD-80 Total AMR Eagle...

  • Page 24
    ... and Alliance Airport (Fort Worth, Texas); its regional reservation offices; and local ticket and administration offices throughout the system. In October 2009, AMR announced the planned closure of its Kansas City overhaul and maintenance base to create a more flexible, cost-efficient operation that...

  • Page 25
    ...RPA was one of three labor agreements American successfully reached with its unions in order to avoid filing for bankruptcy in 2003. In a related case (Sherry Cooper, et al. v. TWA Airlines, LLC, et al., also in the United States District Court for the Eastern District of New York), the court denied...

  • Page 26
    ... set prices and surcharges on cargo shipments. These cases, along with other purported class action lawsuits in which the Company was not named, were consolidated in the United States District Court for the Eastern District of New York as In re Air Cargo Shipping Services Antitrust Litigation, 06-MD...

  • Page 27
    ...Civ. No. 08-1444 (N.D. Cal.), and LaFlamme v. American Airlines, et al., Civ. No. 08-1079 (E.D.N.Y.), were filed against the Company, alleging that the Company violated U.S. antitrust laws by illegally conspiring to set prices and surcharges for passenger transportation in Japan and certain European...

  • Page 28
    ... has been with the Company in various management positions since 1984. Age 52. Mr. Horton was elected Executive Vice President of Finance and Planning and Chief Financial Officer of AMR and American in March 2006 upon returning to American from AT&T Corp., a telecommunications company, where he had...

  • Page 29
    ... 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 10, 2010 was 15,202. The range of closing market prices for AMR's common stock on the New York...

  • Page 30
    ...1,6,7 Total operating revenues Operating income (loss) Net income (loss) Net income (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 31
    ... no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Guidance given in this report regarding capacity, fuel consumption, fuel prices, fuel hedging, and unit costs, and statements regarding expectations of...

  • Page 32
    ... global alliance. In 2008, American entered into a joint business agreement and related marketing arrangements with British Airways and Iberia, providing for commercial cooperation on flights between North America and most countries in Europe, pooling and sharing of certain revenues and costs...

  • Page 33
    ... Company's unit costs excluding fuel and special charges were greater for the year ended December 31, 2009 than for the same period in 2008. Factors driving the increase include increased defined benefit pension expenses (due to the stock market decline in 2008), higher airport rent and landing fees...

  • Page 34
    ...capital markets, in the twelve months ended December 31, 2009, the Company raised approximately $4.3 billion in cash from the advance sale of AAdvantage miles, debt issuances, equity issuances and sale leasebacks. In addition, the Company secured financing commitments covering all aircraft scheduled...

  • Page 35
    ... with a number of credit card companies and processors to accept credit cards for the sale of air travel and other services. Under certain of these agreements, the related credit card processor may hold back a reserve from American's credit card receivables following the occurrence of certain events...

  • Page 36
    ... AIP is American's annual bonus plan and provides for the payment of awards in the event certain financial and/or customer service metrics are satisfied. Working Capital AMR (principally American) historically operates with a working capital deficit, as do most other airline companies. In addition...

  • Page 37
    ... Ended December 31, 2011 2013 and and 2015 and Contractual Obligations Total 2010 2012 2014 Beyond Operating lease payments for aircraft and facility obligations 1 Firm aircraft commitments 2 Capacity purchase agreement 3 Long-term debt 4 Capital lease obligations Other purchase obligations 5 Other...

  • Page 38
    ... write the McDonnell Douglas MD -80 and Embraer RJ-135 fleets and certain related long-lived assets down to their estimated fair values, a $71 million accrual for employee severance cost and a $33 million expense related to the grounding of leased Airbus A300 aircraft prior to lease expiration, all...

  • Page 39
    ... Change (8.7)% (4.7) (6.5) (3.7) 0.1 Regional Affiliates' passenger revenues, which are based on industry standard proration agreements for flights connecting to American flights, decreased by $474 million, or 19.1 percent, to $2.0 billion as a result of a reduction in capacity, decreased passenger...

  • Page 40
    ... standard proration agreements for flights connecting to American flights, remained flat at $2.5 billion. Regional Affiliates' traffic decreased 10.2 percent to 8.8 billion revenue passenger miles (RPMs), while capacity decreased 6.0 percent to 12.6 billion ASMs, resulting in a 3.2 point decrease in...

  • Page 41
    ... down the Company's McDonnell Douglas MD-80 and Embraer RJ-135 fleets and certain related long-lived assets to their estimated fair values. Special charges in 2009 relate to announced capacity reductions, the grounding of the Airbus A300 fleet and the write down of certain Embraer RJ-135 aircraft to...

  • Page 42
    ... McDonnell Douglas MD-80 and Embraer RJ-135 fleets and certain related long-lived assets down to their estimated fair values and certain other special charges and employee charges. (in millions) Operating Expenses Wages, salaries and benefits Aircraft fuel Other rentals and landing fees Depreciation...

  • Page 43
    ... of American Beacon in 2008 and $138 million for the sale of ARINC in 2007. Income Tax Benefit The Company did not record a net tax provision (benefit) associated with 2008 net loss due to the Company providing a valuation allowance, as discussed in Note 8 to the consolidated financial statements...

  • Page 44
    ... table provides statistical information for American and Regional Affiliates for the years ended December 31, 2009, 2008 and 2007. Year Ended December 31, 2008 2009 American Airlines, Inc. Mainline Jet Operations Revenue passenger miles (millions) Available seat miles (millions) Cargo ton miles...

  • Page 45
    ... estimates used by management in the preparation of the Company's financial statements: long-lived assets, routes, passenger revenue, frequent flyer program, stock compensation, pensions and retiree medical and other benefits, income taxes and derivatives accounting. Long-lived assets - The Company...

  • Page 46
    ... upon the Company's 12 -month historical average of such costs. American also accrues a frequent flyer liability for the mileage credits expected to be used for travel on participating airlines based on historical usage patterns and contractual rates. Revenue earned from selling AAdvantage miles to...

  • Page 47
    ... expected long-term rate of return on plan assets by 50 basis points as of December 31, 2009 would increase estimated 2010 pension expense by approximately $35 million. The health care cost trend rate is based upon an evaluation of the Company's historical trends and experience taking into account...

  • Page 48
    ... the correlation of the change in prices of the commodities used to hedge jet fuel (e.g., NYMEX Heating oil) to the change in the price of jet fuel. The Company also monitors the actual dollar offset of the hedges' market values as compared to hypothetical jet fuel hedges. The fuel hedge co ntracts...

  • Page 49
    ... fuel. In order to provide a measure of control over price and supply, 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 and heating oil hedging contracts. Market...

  • Page 50
    ...$316 million and $297 million as of December 31, 2009 and 2008, 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. 47

  • Page 51
    ... 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 49 50 51-52 53 54 55-82...

  • Page 52
    ... in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), AMR Corporation's internal control...

  • Page 53
    AMR CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) Year Ended December 31, 2008 2009 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, 2009 Assets Current Assets Cash Short-term investments Restricted cash and short-term investments Receivables, less allowance for uncollectible accounts (2009 - $58; 2008 - $49) Inventories, less ...

  • Page 55
    ... shares and par value) December 31, 2009 Liabilities and Stockholders' Equity (Deficit) Current Liabilities Accounts payable Accrued salaries and wages Fuel derivative liability Accrued liabilities Air traffic liability Current maturities of long-term debt Current obligations under capital leases...

  • Page 56
    ... Net cash provided by (used in) investing activities Cash Flow from Financing Activities: Payments on long-term debt and capital lease obligations Proceeds from: Issuance of common stock, net of issuance costs Reimbursement from construction reserve account Exercise of stock options Issuance of long...

  • Page 57
    ... Net changes in fair value of derivative financial instruments Non-cash tax provision Unrealized gain on investments Total comprehensive loss Reclassification and amortization of stock compensation plans Issuance of 52,269,849 shares Issuance of 1,399,833 shares to employees pursuant to stock option...

  • Page 58
    ... 2008, the Financial Accounting Standards Board (FASB) issued new guidance requiring additional disclosures about assets held in an employer's defined benefit pension or other postretirement plan, primarily related to categories and fair value measurements of plan assets. The Company has adopted the...

  • Page 59
    ... Company's network or capacity, or the implementation of open skies agreements in countries where the Company operates flights. Airport operating and gate lease rights are being amortized on a straight-line basis over 25 years to a zero residual value. Statements of Cash Flows Short-term investments...

  • Page 60
    ... revenues, as the related services have been provided. The Company's total liability for future AAdvantage award redemptions for free, discounted or upgraded travel on American, American Eagle or participating airlines as well as unrecognized revenue from selling AAdvantage miles was approximately...

  • Page 61
    ... weakness in the regional jet aircraft market, the Company's plan to sell certain of its Embraer RJ -135 aircraft was no longer feasible at the amount for which these aircraft had been valued. Consequently, the Company reclassified these aircraft from held for sale to held for use, tested them for...

  • Page 62
    ...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). The Company utilizes the market approach to measure fair value for its financial assets and liabilities...

  • Page 63
    ... addition, the Company has an information technology support related contract that requires minimum annual payments of $150 million through 2013. American has a capacity purchase agreement with Chautauqua Airlines, Inc. to provide Embraer -140 regional jet services to certain markets under the brand...

  • Page 64
    ...on the Company's consolidated financial position, results of operations, or cash flows, after consideration of available insurance. 5. Leases AMR's subsidiaries lease various types of equipment and property, primarily aircraft and airport facilities. The future minimum lease payments required under...

  • Page 65
    .... However, American does not guarantee the residual value of the aircraft. As of December 31, 2009, future lease payments required under these leases totaled $1.4 billion. 6. Indebtedness Long-term debt consisted of (in millions): December 31, 2009 Secured variable and fixed rate indebtedness due...

  • Page 66
    ...and the cash collateral was released to the Company. The other three aircraft were pledged to secure the 2009 Loan Facility referred to below. On September 16, 2009, American entered into an arrangement under which Citibank paid to American $1.0 billion in order to pre-purchase AAdvantage Miles (the...

  • Page 67
    ... a LIBOR-based variable rate with a fixed margin which resets quarterly and are due in installments through 2019. Almost all of the Company's aircraft assets (including aircraft eligible for the benefits of Section 1110 of the U.S. Bankruptcy Code) are encumbered. Cash payments for interest, net of...

  • Page 68
    ..., 2008 and 2007, the Company recognized net gains (losses) of approximately ($651) million, $380 million and $239 million, respectively, as a component of Aircraft fuel expense on the accompanying consolidated statements of operations related to its fuel hedging agreements, including the ineffective...

  • Page 69
    ... with a net zero impact to the Company's financial statements. Fair Values of Financial Instruments 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...

  • Page 70
    7. Financial Instruments and Risk Management (Continued) The carrying value and estimated fair values of the Company's long-term debt, including current maturities, were (in millions): December 31, 2009 2008 Carrying Fair Carrying Fair Value Value Value Value Secured variable and fixed rate ...

  • Page 71
    ... benefit will not significantly change within the next twelve months. The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company's 2004 through 2008 tax years are still subject to examination by the Internal Revenue Service. Various state...

  • Page 72
    ...in 2022. These net operating losses include an unrealized benefit of approximately $649 million related to the implementation of share-based compensation accounting guidance that will be recorded in equity when realized. The Company had available for state income tax purposes net operating losses of...

  • Page 73
    ... to make available enough shares to permit the Company to settle all outstanding performance and deferred share awards in stock under the 1998 Plan 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...

  • Page 74
    ... of performance awards is calculated by multiplying the stock price on the date of grant by the expected payout percentage and the number of shares granted. Activity during 2009 for performance awards accounted for as equity awards was: Weighted Average Remaining Contractual Term Awards Outstanding...

  • Page 75
    ... 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 2009 for deferred awards accounted for as equity awards was: Shares Outstanding...

  • Page 76
    ...retiree health care benefits during their working lives. The Company funds benefits as incurred and makes contributions to match employee prefunding. The following table provides a reconciliation of the changes in the pension and retiree medical and other benefit obligations and fair value of assets...

  • Page 77
    ... provide the components of net periodic benefit cost for the years ended December 31, 2009, 2008 and 2007 (in millions): Pension Benefits 2008 2009 Components of net periodic benefit cost Defined benefit plans: Service cost Interest cost Expected return on assets Amortization of: Prior service cost...

  • Page 78
    ... used to determine net periodic benefit cost for the years ended December 31 Discount rate Salary scale (ultimate) Expected return on plan assets 6.50% 3.78 8.75 6.50% 3.78 8.75 6.50% 8.75 6.00% 8.75 As of December 31, 2009, the Company's estimate of the long-term rate of return on plan assets...

  • Page 79
    .... Securities traded in the over-the-counter market are valued at the last bid price. The money market fund is valued at fair value which represents the net asset value of the shares of such fund as of the close of business at the end of the period. Investments in limited partnerships are carried at...

  • Page 80
    ...(Level 3) Total Asset Category Money market fund $ 4 $ - $ - $ 4 Unitized mutual funds - 202 - 202 Total $ 4 $ 202 $ - $ 206 Investments in the unitized mutual funds are carried at the per share net asset value and include approximately 25 percent of investments in non-U.S. common stocks. Net asset...

  • Page 81
    ... 2012 2013 2014 2015 - 2019 550 572 603 678 738 4,633 During 2008, AMR recorded a settlement charge totaling $103 million related to lump sum distributions from the Company's defined benefit pension plans to pilots who retired. Pursuant to U.S. GAAP, the use of settlement accounting is required...

  • Page 82
    ...The following tables provide information relating to the Company's amortized intangible assets as of December 31 (in millions): 2009 Accumulated Amortization $ $ 323 122 445 $ $ Cost Amortized intangible assets: Airport operating rights Gate lease rights Total $ $ 515 182 697 Net Book Value 192 60...

  • Page 83
    ... fuel derivative hedges. The difference between Net earnings (loss) and other comprehensive income (loss) for the twelve month periods ended December 31, 2009 and 2008 is due primarily to the accounting for the Company's derivative financial instruments and the actuarial loss on the pension benefit...

  • Page 84
    ... network fleet numbers approximately 900 aircraft. American is also one of the largest scheduled air freight carriers in the world, providing a wide range of freight and mail services to shippers throughout its system onboard American's passenger fleet. AMR Eagle owns two regional airlines, which do...

  • Page 85
    ... to write the McDonnell Douglas MD80 and Embraer RJ-135 fleets and certain related long-lived assets down to their estimated fair values, and a $55 million accrual for employee severance costs. The Company's third quarter 2008 results include the sale of American Beacon for total proceeds of $442...

  • Page 86
    ... Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance...

  • Page 87
    ... with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of AMR Corporation as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders' equity (deficit) and cash flows for each of the three...

  • Page 88
    ... Equity compensation plans not approved by security holders Total * Weighted-average exercise price of outstanding options, warrants and rights 15,892,528 $ 19.02 -* 13,526,670 29,419,198 $ $ 5.66 12.88 734,298 734,298 Additional shares may become available for future use per the terms...

  • Page 89
    ... Consolidated Statements of Stockholders' Equity (Deficit) for the Years Ended December 31, 2009, 2008 and 2007 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...

  • Page 90
    ...ended September 30, 2003. 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. 2-76709. AMR Corporation 2004 Directors Unit Incentive Plan, as amended, incorporated by reference...

  • Page 91
    ...the year ended December 31, 2008. Deferred Compensation Agreement, dated as of December 4, 2009 between AMR and John W. Bachmann. Deferred Compensation Agreement, dated as of April 30, 2003 between AMR and David L. Boren, incorporated by reference to Exhibit 10.1 to AMR's report on Form 10-Q for the...

  • Page 92
    ...'s report on Form 10K for the year ended December 31, 2006. Deferred Compensation Agreement, dated as of December 4, 2007 between AMR and Ann M. Korologos, incorporated by reference to Exhibit 10.40 to AMR's report on Form 10-K for the year ended December 31, 2007. 89 10.26 10.27 10.28 10.29 10...

  • Page 93
    ...incorporated by reference to Exhibit 10.39 to AMR's report on Form 10-K for the year ended December 31, 2008. Deferred Compensation Agreement, dated as of April 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...

  • Page 94
    ...t on Form 10-Q for the quarterly period ended June 30, 2002, as filed on July 19, 2002. Deferred Compensation Agreement, dated as of November 20, 2002 between AMR and Judith Rodin, incorporated by reference to Exhibit 10.26 to AMR's report on Form 10 -K for the year ended December 31, 2002. Deferred...

  • Page 95
    ... Form 10-Q for the quarterly period ended June 30, 2002, as filed on July 19, 2002. Deferred Compensation Agreement, dated as of November 18, 2002 between AMR and Roger T. Staubach, incorporated by reference to Exhibit 10.23 to AMR's report on Form 10-K for the year ended December 31, 2002. Deferred...

  • Page 96
    ... Stock Option Agreement under the 1998 Long Term Incentive Plan, as amended, incorporated by reference to Exhibit 10.3 to AMR's report on Form 10 -Q for the quarterly period ended June 30, 2005. Current form of 2003 Stock Option Agreement under the 2003 Employee Stock Incentive Plan, incorporated...

  • Page 97
    ... Stock Option Agreements under the 1998 Long Term Incentive Plan to Add Stock Appreciation Rights, incorporated by reference to Exhibit 10.1 AMR's report on Form 10-Q for the quarterly period ended September 30, 2006. Career Performance Shares, Deferred Stock Award Agreement between AMR Corporation...

  • Page 98
    ... 1998 Long Term Incentive Plan, as Amended (with awards to executive officers noted), incorporated by reference to Exhibit 10.1 to AMR's report on Form 10-Q for the quarterly period ended June 30, 2009. Amended and Restated Executive Termination Benefits Agreement between AMR, American Airlines and...

  • Page 99
    ... in the $uper $aver Plus Plan, as amended and restated as of June 1, 2007, incorporated by referenc e to Exhibit 10.129 to AMR's report on Form 10-K for the year ended December 31, 2008. Aircraft Purchase Agreement by and between American Airlines, Inc. and The Boeing Company, dated October 31, 1997...

  • Page 100
    ...-2011 Performance Share Agreement (with awards to executive officers noted), and 2009-2011 Performance Share Plan for Officers and Key Employees, incorporated by reference to Exhibit 10.2 to AMR's current report Form 10 -Q for the quarterly period ended June 30, 2009. AMR Corporation 1998 Long Term...

  • Page 101
    ... have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request under Rule 24b-2 of the Securities and Exchange Act of 1934, as amended. AMR Corporation Amended and Restated Directors Pension Benefits Plan, effective as of January...

  • Page 102
    ... thereunto duly authorized. AMR CORPORATION By: /s/ Gerard J. Arpey Gerard J. Arpey Chairman, President and Chief Executive Officer (Principal Executive Officer) Date: February 17, 2010 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the...

  • Page 103
    ...) Changes charged to statement of operations accounts Balance at beginning of year Year ended December 31, 2009 Allowance for obsolescence of inventories $ 488 Allowance for uncollectible accounts Reserves for environmental remediation costs 49 18 Payments Write-offs (net of recoveries) Sales...

  • Page 104
    ... 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 expense representative of the interest factor Amortization of debt expense Total fixed charges...

  • Page 105
    ..., to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and...

  • Page 106
    ..., to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and...

  • Page 107
    ... 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 17, 2010 /s/ Gerard J. Arpey Gerard J. Arpey Chairman, President and Chief Executive Officer...

  • Page 108
    ... filing specifically incorporates such information. BOARD OF DIRECTORS (as of April 1, 2010) Gerard J. Arpey Chairman, President and Chief Executive Officer AMR Corporation / American Airlines, Inc. (Air Transportation) Elected in 2003 John W. Bachmann Senior Partner Edward Jones (Financial Services...

  • Page 109
    ... and Chief Information Officer Timothy J. Ahern Vice President - Airport Services Walter J. Aue Vice President - Capacity Planning David R. Brooks President - American Airlines Cargo Mark L. Burdette Vice President - Employee Relations David L. Campbell Vice President - Safety, Security and...

  • Page 110
    ... INFORMATION-(Continued) CORPORATE PERFORMANCE The following graph compares the cumulative total stockholder return on AMR Corporation's common stock with the cumulative total returns on the Standard & Poor's 500 Stock Index and the Amex Airline Index as if $100 were invested in AMR Corporation...

  • Page 111
    ... Trading Symbol is AMR. The common stock of AMR Corporation is listed for trading on the New York Stock Exchange. COMMON STOCK Transfer Agent & Registrar American Stock Transfer & Trust Company, LLC 59 Maiden Lane, Plaza Level New York, New York 10038 Shareholder Services Toll-free telephone number...