American Airlines 2012 Annual Report Download - page 72

Table of Contents
as of December 31, 2012 and 2011:
(in millions)
2012
2011
Long-term debt $ 358
$1,642
Estimated allowed claims on aircraft lease and debt obligations and facility lease and bond
obligations 3,716
1,868
Pension and postretirement benefits 1,250
—
Accounts payable and other accrued liabilities 370
438
Other —
4
Total liabilities subject to compromise $5,694
$3,952
Long-term debt, including undersecured debt, classified as subject to compromise as of December 31, 2012 and 2011 consisted of (in millions):
2012
2011
Secured variable and fixed rate indebtedness due through 2023 (effective rates
from 1.00%-13.00% at December 31, 2012)
172
1,456
6.00%—8.50% special facility revenue bonds due through 2036 186
186
$ 358
$1,642
Liabilities subject to compromise refers to prepetition obligations which may be impacted by the Chapter 11 reorganization process. These amounts represent
the Debtors’ current estimate of known or potential prepetition obligations to be resolved in connection with the Chapter 11 Cases.
In accordance with ASC 852, substantially all of the Company’s unsecured debt has been classified as liabilities subject to compromise. Additionally, certain
of the Company’s undersecured debt instruments have also been classified as liabilities subject to compromise.
As a result of the modifications to the retirement benefits as discussed in Note 11 to the consolidated financial statements, a portion of the pension and
postretirement benefits liability, primarily relating to retiree medical and other benefits, was classified as liabilities subject to compromise as of December 31,
2012.
Differences between liabilities the Debtors have estimated and the claims filed, or to be filed, will be investigated and resolved in connection with the claims
resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust amounts as necessary. Such
adjustments may be material. In light of the expected number of creditors, the claims resolution process may take considerable time to complete. Accordingly,
the ultimate number and amount of allowed claims is not presently known.
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
in 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
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