American Airlines 2012 Annual Report Download - page 82

Table of Contents
purchase the aircraft at a predetermined price on a specified date. However, American does not guarantee the residual value of the aircraft. As of December 31,
2012, future lease payments required under these leases totaled $98 million.
7. Indebtedness
Long-term debt classified as not subject to compromise consisted of (in millions):
December 31,
2012
December 31,
2011
Secured variable and fixed rate indebtedness due through 2023 (effective rates from 1.00%—13.00% at
December 31, 2012) $3,297
$2,952
Enhanced equipment trust certificates due through 2021 (rates from 5.10%—10.375% at December 31,
2012) 1,741
1,942
6.00%—8.50% special facility revenue bonds due through 2036
1,313
1,436
7.50% senior secured notes due 2016 1,000
1,000
AAdvantage Miles advance purchase (net of discount of $53 million) (effective rate 8.3%) 772
890
Other 27
27
8,150
8,247
Less current maturities 1,388
1,518
Long-term debt, less current maturities $6,762
$6,729
The financings listed in the table above are considered not subject to compromise. For information regarding the liabilities subject to compromise, see Note 1
and Note 8 to the consolidated financial statements.
The Company’s future long-term debt and operating lease payments have changed as its ordered aircraft are delivered and such deliveries have been financed.
As of December 31, 2012, maturities of long-term debt (including sinking fund requirements) for the next five years are:
Years Ending December 31
(in millions)
Principal Not Subject
to Compromise
Principal Subject
to Compromise
Total Principal
Amount
2013
$ 1,388
$ 93
$ 1,481
2014
857
152
1,009
2015
758
6
764
2016
1,751
5
1,756
2017
492
42
534
Principal Not Subject to Compromise and Subject to Compromise includes payments not made due to the Chapter 11 Cases of $ 1 million and $50 million
respectively.
As of December 31, 2012, AMR had issued guarantees covering approximately $ 1.5 billion of American’s tax-exempt bond debt (and interest thereon) and
$4.2 billion of American’s secured debt (and interest thereon). American had issued guarantees covering approximately $ 842 million of AMR’s unsecured debt
(and interest thereon). AMR also guarantees $6.3 million of American’s leases of certain Super ATR aircraft and certain Embraer RJ-135 aircraft, which are
subleased to AMR Eagle.
During 2012, the Company entered into a series of agreements with the lender with respect to its 216 Embraer RJ aircraft and certain other interested parties
pursuant to which the Company (i) surrendered 18 Embraer RJ 135 aircraft on June 21, 2012, (ii) subject to certain conditions (including reaching agreement
on definitive documentation), will restructure the mortgage debt encumbering 59 Embraer 140 aircraft and 68 Embraer 145 aircraft and (iii) transferred and
leased back its remaining 21 Embraer RJ 135 aircraft. The debt encumbering 50 Embraer 145 aircraft will not be reduced. The Company's entry into these
transactions was approved by the Bankruptcy Court on November 8, 2012. The modifications to the financing arrangement for the Embraer RJ-140, RJ-145,
and RJ-135 aircraft meet the definition of troubled debt restructurings per ASC 470-60 "Troubled Debt Restructurings by Debtors", and resulted in a gain of
approximately $380 million, or $1.13 gain per share, offset by estimated claims filed by the creditor of approximately $ 592 million and a loss on the asset
transfer of approximately $64 million. The estimated net loss of $276 million is included as a component of reorganization items, net.
On January 25, 2011, American closed on a $657 million offering of Class A and Class B Pass Through Trust Certificates, Series 2011-1 (the 2011-1
Certificates). Interest of 5.25% and 7.00% per annum on the issued and outstanding Series A equipment notes and Series B equipment notes, respectively,
will be payable semiannually on January 31 and July 31 of each year, commencing
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