American Airlines 2010 Annual Report Download - page 40

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37
Contractual Obligations
The following table summarizes the Company’s obligations and commitments as of December 31, 2010 (in
millions):
Payments Due by Year(s) Ended December 31,
Contractual Obligations
Total
2011
2012
and
2013
2014
and
2015
201
6
and
Beyond
Operating lease payments for
aircraft and facility obligations
1
$10,804
$1,254
$2,041
$1,503
$6,006
Firm aircraft commitments 2
2,865
884
1,442
460
79
Capacity purchase agreement 3
71
56
15
-
-
Long-term debt 4
14,558
2,997
3,654
2,778
5,129
Capital lease obligations
976
186
256
185
349
Other purchase obligations 5
1,030
238
247
169
376
Other long-term liabilities 6
7,624
700
1,330
1,259
4,335
Total obligations and commitments7
$37,928
$6,315
$8,985
$6,354
$16,274
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, 2010, the Company had firm commitments to acquire 15 Boeing 737-800s in 2011 and 28 Boeing 737-
800 aircraft in 2012, and in addition to those commitments, the Company had 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 8
Bombardier CRJ-700 aircraft scheduled to be delivered in 2011. Future payments for all aircraft, including the estimated
amounts for price escalation, are currently estimated to be approximately $2.9 billion, with the majority occurring in 2011
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, 2010.
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 2020. 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, the Pension Protection Act of 2006, and the Pension Relief Act of 2010. The
Company estimates its 2011 required contribution to its defined benefit pension plans to be approximately $520
million under the provisions of these acts.
The Company’s obligation for pension and retiree medical and other benefits increased from $7.4 billion at
December 31, 2009 to $7.9 billion at December 31, 2010, largely the result of a lower discount rate associated
with declining interest rates in the bond markets in 2010. A significant portion of this increase is recorded in
Accumulated other comprehensive loss, a component of stockholders’ equity.