American Airlines 2009 Annual Report Download - page 37

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34
Contractual Obligations
The following table summarizes the Company’s obligations and commitments as of December 31, 2009 (in
millions):
Payments Due by Year(s) Ended December 31,
Contractual Obligations
Total
2010
2011
and
2012
2013
and
2014
2015 and
Beyond
Operating lease payments for
aircraft and facility obligations 1
$9,327
$1,057
$1,880
$1,369
$5,021
Firm aircraft commitments 2
3,274
1,592
744
690
248
Capacity purchase agreement 3
128
55
73
-
-
Long-term debt 4
15,277
1,670
5,126
3,001
5,480
Capital lease obligations
1,152
181
318
217
436
Other purchase obligations 5
864
270
399
182
13
Other long-term liabilities 6
7,843
708
1,491
1,488
4,156
Total obligations and commitments7
$37,865
$5,533
$10,031
$6,947
$15,354
1. Certain 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 based on lease payment terms rather than their mandatory tender provision
date. See Note 5 to the consolidated financial statements for additional information.
2. As of December 31, 2009, the Company had firm commitments to acquire 45 Boeing 737-800s in 2010 and eight Boeing
737-800 aircraft in 2011. In addition to these aircraft, the Company has firm commitments for eleven Boeing 737-800
aircraft and seven Boeing 777 aircraft scheduled to be delivered in 2013 - 2016. AMR Eagle has firm commitments for 22
Bombardier CRJ-700 aircraft scheduled to be delivered in 2010 and 2011. Future payments for all aircraft, including the
estimated amounts for price escalation, are currently estimated to be approximately $3.3 billion, with the majority occurring
in 2010 through 2013. Additional information about the Company’s obligations is included in Note 4 to the consolidated
financial statements.
3. The table reflects minimum required payments under the capacity purchase agreement between American and a regional
airline, Chautauqua Airlines, Inc. (Chautauqua). If the Company terminates its contract with Chautauqua without cause,
Chautauqua has the right to put its 15 Embraer aircraft to the Company. If this were to happen, the Company would take
possession of the aircraft and become liable for lease obligations totaling approximately $21 million per year with lease
expirations in 2018 and 2019. These lease obligations are not included in the table above. See Note 4 to the consolidated
financial statements for additional information.
4. Amounts represent contractual amounts due, including interest. Interest on variable rate debt was estimated based on the
current rate at December 31, 2009.
5. Includes noncancelable commitments to purchase goods or services, primarily information technology related support. The
Company has made estimates as to the timing of certain payments primarily for construction related costs. The actual
timing of payments may vary from these estimates. Substantially all of the Company’s purchase orders issued for other
purchases in the ordinary course of business contain a 30-day cancellation clause that allows the Company to cancel an
order with 30 days notice.
6. Includes minimum pension contributions based on actuarially determined estimates and other postretirement benefit
payments based on estimated payments through 2019. See Note 10 to the consolidated financial statements.
7. Total contractual obligations do not include long-term contracts that represent a variable expense (based on levels of
operation) or where short-term cancellation provisions exist.
Pension Obligations The Company is required to make minimum contributions to its defined benefit pension
plans under the minimum funding requirements of the Employee Retirement Income Security Act (ERISA), the
Pension Funding Equity Act of 2004 and the Pension Protection Act of 2006. The Company estimates its 2010
required contribution to its defined benefit pension plans to be approximately $525 million under the provisions of
these acts.
The Company’s obligation for pension and retiree medical and other benefits increased from $6.6 billion at
December 31, 2008 to $7.4 billion at December 31, 2009, largely the result of a lower discount rate associated
with declining interest rates in the bond markets in 2009. A significant portion of this increase is recorded in
Accumulated other comprehensive loss, a component of stockholders’ equity. Consequently, the Company’s 2010
pension expense will be slightly higher than in 2009.