American Airlines 2012 Annual Report Download - page 51

(in millions)
Operating Expenses
Year Ended
December 31,
2011
Change from
2010
Percentage
Change
Aircraft fuel
$7,434
$1,703
29.7 %
(a)
Wages, salaries and benefits
6,385
158
2.5 %
Regional payments to AMR Eagle
2,418
191
8.6 %
Other rentals and landing fees
1,305
21
1.6 %
Maintenance, materials and repairs
1,020
(36)
(3.4)%
Depreciation and amortization
950
15
1.6 %
Commissions, booking fees and credit card expense
1,062
86
8.8 %
(b)
Aircraft rentals
673
81
13.7 %
(c)
Food service
518
28
5.7 %
(d)
Special charges
725
725
— %
(e)
Other operating expenses
2,637
156
6.3 %
(f)
Total operating expenses
$25,127
$ 3,128
14.5 %
(a) Aircraft fuel expense increased primarily due to a 30.3 percent increase in the Company’s price per gallon of fuel (net of the impact of hedging gains
of $297 million).
(b) Commissions, booking fees and credit card expenses increased due to an 8.2 percent increase in operating revenues.
(c) Aircraft rental expense increased primarily due to new aircraft deliveries in 2011 and 2010.
(d) Food service expense increased primarily due to increased international flying.
(e) Special charges in 2011 consist of $725 million related to the impairment of certain aircraft and gates.
(f) Other operating expenses increased primarily due to increases in professional and technical fees and sale-leaseback losses.
Other Income (Expense)
Other income (expense) consists of Interest income and expense, Interest capitalized and Miscellaneous—net.
2012 Compared to 2011 A decrease in short-term investment balances caused a decrease in interest income of 0.5 percent to $25 million in 2012. Interest
expense decreased $27 million or 3.9 percent, to $662 million primarily as a result of the Company's Chapter 11 Cases as described in Note 1 to the
consolidated financial statements. Miscellaneous - net increased to $243 million primarily as a result of a settlement of a commercial dispute.
2011 Compared to 2010 Interest income for 2011 to 2010 was $25 million. Interest expense increased $35 million, or 5.3 percent, to $689 million primarily
as a result of increases in the Company’s long-term debt balance.
Reorganization Items, Net
Reorganization items refer to revenues, expenses (including professional fees), realized gains and losses and provisions for losses that are realized or incurred
as a direct result of the Chapter 11 Cases. The following table summarizes the components included in reorganization items, net on the Consolidated
Statements of Operations for the years ended December 31, 2012 and 2011:
(in millions)
2012
2011
Pension and postretirement benefits $(66)
$ —
Aircraft and facility financing renegotiations and rejections (1) (2) 1,951
102
Professional fees 227
14
Other 67
—
Total reorganization items, net $2,179
$116
(1) Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to the rejection or modification of
financings related to aircraft. The Debtors record an estimated claim associated with the rejection or modification of a financing when the applicable
motion is filed with the Bankruptcy Court to reject or modify such financing and the Debtors believe that it is probable the motion will be approved,
and there is sufficient information to estimate the claim. Modifications of the financings related to aircraft remain subject to conditions, including
reaching agreement on definitive documentation. See above, “Special Protection Applicable to Leases and Secured Financing of Aircraft and Aircraft
Equipment,” for further information.
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