-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KrwDxIcAq6sq7/nEPBkqdBxiRYSokx7k2UjV+1VvesrnoCG66uNavtwZ/Z4uGgjK Zjsd4qUok092QLBsciI8zA== 0000006201-96-000008.txt : 19960606 0000006201-96-000008.hdr.sgml : 19960606 ACCESSION NUMBER: 0000006201-96-000008 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960605 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN AIRLINES INC CENTRAL INDEX KEY: 0000004515 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 131502798 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-02691 FILM NUMBER: 96576798 BUSINESS ADDRESS: STREET 1: 4333 AMON CARTER BLVD CITY: FT WORTH STATE: TX ZIP: 76155 BUSINESS PHONE: 8179631234 MAIL ADDRESS: STREET 1: P O BOX 619616 MD5661 CITY: DALLAS FORT WORTH AI STATE: TX ZIP: 75261-9616 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN AIRWAYS INC DATE OF NAME CHANGE: 19670629 10-Q/A 1 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A No. 1 [x]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Period Ended March 31, 1996. [ ]Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to . Commission file number 1-2691. American Airlines, Inc. (Exact name of registrant as specified in its charter) Delaware 13-1502798 (State or other (I.R.S. Employer jurisdiction Identification No.) of incorporation or organization) 4333 Amon Carter Blvd. Fort Worth, Texas 76155 (Address of principal (Zip Code) executive offices) Registrant's telephone number, (817) 963-1234 including area code Not Applicable (Former name, former address and former fiscal year , if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . Applicable Only to Corporate Issuers Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common Stock, $1 par value - 1,000 as of April 30, 1996 2 INDEX AMERICAN AIRLINES, INC. PART I: FINANCIAL INFORMATION Item 1. Financial Information Consolidated Statement of Operations -- Three months ended March 31, 1996 and 1995 (as amended June 4, 1996) Condensed Consolidated Balance Sheet -- March 31, 1996 and December 31, 1995 Condensed Consolidated Statement of Cash Flows -- Three months ended March 31, 1996 and 1995 Notes to Condensed Consolidated Financial Statements -- March 31, 1996 (as amended June 4, 1996) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (as amended June 4, 1996, to reflect certain reclassifications between reporting segments) SIGNATURE 3 PART 1. FINANCIAL INFORMATION AMERICAN AIRLINES, INC. CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In millions)
Three Months Ended March 31, 1996 1995 Revenues Airline Group: Passenger $3,287 $3,090 Cargo 160 156 Other 192 158 3,639 3,404 Information Services Group 386 350 Less: Intergroup revenues (123) (128) Total operating revenues 3,902 3,626 Expenses Wages, salaries and benefits 1,332 1,263 Aircraft fuel 424 365 Commissions to agents 296 307 Depreciation and amortization 271 287 Other rentals and landing fees 197 195 Food service 154 158 Aircraft rentals 148 153 Maintenance materials and repairs 134 118 Other operating expenses 588 529 Total operating expenses 3,544 3,375 Operating Income 358 251 Other Income (Expense) Interest income 5 5 Interest expense (111) (145) Miscellaneous - net (1) (11) (107) (151) Earnings Before Income Taxes 251 100 Income tax provision 101 44 Net Earnings $ 150 $ 56
The accompanying notes are an integral part of these financial statements. 1 4 AMERICAN AIRLINES, INC. CONDENSED CONSOLIDATED BALANCE SHEET (In millions)
March December 31, 31, 1996 1995 Assets (Unaudited) (Note 1) Current Assets Cash $ 31 $ 70 Short-term investments 791 816 Receivables, net 1,222 1,013 Inventories, net 532 516 Other current assets 469 438 Total current assets 3,045 2,853 Equipment and Property Flight equipment, net 8,902 9,096 Other equipment and property, net 1,811 1,820 10,713 10,916 Equipment and Property Under Capital Leases Flight equipment, net 1,251 1,274 Other equipment and property, net 160 160 1,411 1,434 Route acquisition costs, net 996 1,003 Other assets, net 1,402 1,423 $ 17,567 $ 17,629 Liabilities and Stockholder's Equity Current Liabilities Accounts payable $ 803 $ 742 Payables to affiliates 968 907 Accrued liabilities 1,558 1,789 Air traffic liability 1,707 1,467 Current maturities of long-term debt 33 49 Current maturities of long-term debt due - 193 to Parent Current obligations under capital leases 125 101 Total current liabilities 5,194 5,248 Long-term debt, less current maturities 1,170 1,318 Long-term debt due to Parent 1,676 1,676 Obligations under capital leases, less 1,702 1,777 current obligations Deferred income taxes 479 480 Other liabilities, deferred gains, deferred credits and postretirement benefits 3,552 3,484 Stockholder's Equity Common stock - - Additional paid-in capital 1,699 1,699 Retained earnings 2,095 1,947 3,794 3,646 $ 17,567 $ 17,629
The accompanying notes are an integral part of these financial statements. 2 5 AMERICAN AIRLINES, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In millions)
Three Months Ended March 31, 1996 1995 Net Cash Provided by Operating Activities $ 296 $ 228 Cash Flow from Investing Activities: Capital expenditures (94) (440) Net decrease in short-term investments 25 270 Proceeds from sale of equipment and property 73 57 Net cash provided by (used for) investing activities 4 (113) Cash Flow from Financing Activities: Payments on long-term debt and capital lease obligations (207) (52) Funds transferred to affiliates, net (132) (21) Net cash used for financing activities (339) (73) Net increase (decrease) in cash (39) 42 Cash at beginning of period 70 13 Cash at end of period $ 31 $ 55 Cash Payments For: Interest $ 114 $ 135 Income taxes 133 17
The accompanying notes are an integral part of these financial statements. 3 6 AMERICAN AIRLINES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1.The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. The balance sheet at December 31, 1995 has been derived from the audited financial statements at that date. For further information, refer to the consolidated financial statements and footnotes thereto included in the American Airlines, Inc. (American or the Company) Annual Report on Form 10-K for the year ended December 31, 1995. 2.Certain amounts from 1995 have been reclassified to conform with the 1996 presentation. 3.Accumulated depreciation of owned equipment and property at March 31, 1996 and December 31, 1995, was $5.6 billion and $5.4 billion, respectively. Accumulated amortization of equipment and property under capital leases at March 31, 1996 and December 31, 1995, was $788 million and $778 million, respectively. 4.As discussed in the notes to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995, the Miami International Airport Authority is currently remediating various environmental conditions at Miami International Airport (Airport) and funding the remediation costs through landing fee revenues. Some of the costs of the remediation effort may be borne by carriers currently operating at the Airport, including American, through increased landing fees. The ultimate resolution of this matter is not expected to have a significant impact on the financial position or liquidity of American. 5.On April 17, 1996, the Company announced that the Board of Directors of AMR Corporation (AMR) and American had approved a reorganization of The SABRE Group as a separate, wholly-owned subsidiary of AMR subject to the receipt of a favorable tax ruling and certain other conditions. This reorganization will involve the dividend of American's SABRE Travel Information Network, SABRE Computer Services, SABRE Development Services and SABRE Interactive divisions (collectively, the Information Services Group) to AMR. Subject to meeting the conditions noted above, the reorganization should be completed sometime during the third quarter. The business units comprising the Information Services Group along with certain other units of AMR form The SABRE Group, one of AMR's three major lines of business. Operating income for the Information Services Group was $118 million and $115 million for the three months ended March 31, 1996 and 1995, respectively. Selected financial data for the Information Services Group for the years ended December 31, 1995, 1994 and 1993 is included in Note 12 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. It is anticipated that upon completion of the reorganization approximately $850 million of American's debt owed to AMR will be replaced by an equivalent amount of debt owed to AMR by The SABRE Group, thereby reducing American's annual interest costs -- and increasing The SABRE Group's annual interest costs -- by approximately $50-60 million. AMR also continues to study, as it has in the past, other transactions which may involve The SABRE Group, such as strategic partnerships or an initial public offering of a portion of The SABRE Group's stock. No decisions, however, have been made at this time as to what, if any, transactions involving The SABRE Group may occur after the reorganization is complete. 4 7 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 6.In April of 1996, American and The SABRE Group completed negotiations on the economics of a new market rate services agreement between the two business units, pursuant to which The SABRE Group performs data processing and solutions services for American. The new agreement will reflect the recent downward trend in market prices for such data processing services. Additionally, the two business units completed negotiations on the economics of new agreements covering the provision of air travel and certain marketing services by American to The SABRE Group. As these agreements will be effective retroactive to January 1, 1996, their estimated impact has been reflected in the consolidated statement of operations. 5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations American recorded net earnings for the three months ended March 31, 1996, of $150 million. This compares to net earnings of $56 million for first quarter 1995. American's operating income was $358 million for first quarter 1996 compared with $251 million for first quarter 1995. American's passenger revenues increased by 6.4 percent, or $197 million. American's yield (the average amount one passenger pays to fly one mile) of 13.34 cents increased by 2.9 percent compared to the same period in 1995. Domestic yields increased 4.0 percent from first quarter 1995, while international yields were up 0.6 percent. American's traffic or revenue passenger miles (RPMs) increased 3.3 percent to 24.6 billion miles for the quarter ended March 31, 1996. American's capacity or available seat miles (ASMs) increased 0.4 percent to 37.6 billion miles in the first quarter of 1996, primarily as a result of increases in jet stage length and aircraft productivity. Jet stage length increased 8.7 percent and aircraft productivity, as measured by miles flown per aircraft per day, increased 2.1 percent compared with first quarter 1995. American's domestic traffic increased 0.9 percent on capacity decreases of 1.9 percent and international traffic grew 9.4 percent on capacity increases of 6.3 percent. The increase in international traffic was led by a 13.4 percent increase in traffic to Europe on capacity growth of 5.1 percent, and a 5.6 percent increase in traffic to Latin America on capacity growth of 7.2 percent. Although not quantifiable, some portion of the passenger revenue increase is attributable to the January 1, 1996 expiration of the ten percent federal excise tax on airline travel. Airline Group other revenues increased 21.5 percent, $34 million, primarily due to contract maintenance work performed by American for other airlines. The new agreement covering air travel to be signed by American and The SABRE Group discussed in Note 6, increased American's other revenues by $4 million. Information Services Group revenues increased 10.3 percent, $36 million, primarily due to higher booking fee prices and increased volumes. Absent the new technology services agreement to be signed by American and The SABRE Group as discussed in Note 6, revenues would have increased an additional $8 million. American's operating expenses increased 5.0 percent, or $169 million. Jet Airline cost per ASM increased by 3.5 percent to 8.97 cents. Wages, salaries and benefits rose 5.5 percent, $69 million, due primarily to contractual wage rate and seniority increases that are built into the Company's labor contracts and an increase in the provision for profit sharing, partially offset by a decrease due to the outsourcing of certain services. Aircraft fuel expense increased 16.2 percent, $59 million, due to a 9.1 cent increase in American's average price per gallon, which includes the impact of the October 1995 expiration of the fuel tax exemption for the airline industry. Maintenance materials and repairs expense increased 13.6 percent, $16 million, due to the maturing of the Boeing 757 and 767 fleets, the timing of scheduled maintenance occurring in first quarter 1996 compared to first quarter 1995, and maintenance work performed in first quarter 1996 on certain Boeing 727 aircraft purchased off lease in late 1995. Other operating expenses increased 11.2 percent, $59 million, primarily due to an increase in outsourced services, costs associated with increased contract maintenance work performed for other airlines, and adverse winter weather. Other Income (Expense) decreased 29.1 percent or $44 million. Interest expense decreased $34 million primarily due to scheduled debt repayments and the retirement of debt prior to scheduled maturity. 6 8 Signature Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN AIRLINES, INC. Date: June 4, 1996 BY: /s/ Gerard J. Arpey Gerard J. Arpey Senior Vice President - Finance and Planning and Chief Financial Officer 7 EX-27 2
5 1,000,000 3-MOS DEC-31-1996 MAR-31-1996 31 791 1,232 10 532 3,045 18,541 6,417 17,567 5,194 0 0 0 0 3,794 17,567 0 3,902 0 3,544 0 0 111 251 101 150 0 0 0 150 0 0
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