UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of earliest event
reported: March 30, 2007
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-2691 13-1502798
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
4333 Amon Carter Blvd. Fort Worth, Texas 76155
(Address of principal executive offices) (Zip Code)
(817) 963-1234
(Registrant's telephone number)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01. Other Events.
American Airlines, Inc. is filing herewith a press release issued
by its parent corporation, AMR Corporation, on March 30, 2007 as
Exhibit 99.1, which is included herein. This press release was
issued to provide an update on actions taken in the first quarter
of 2007 as part of AMR Corporation's efforts to strengthen its
balance sheet.
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 hereunto duly authorized.
American Airlines, Inc.
/s/ Kenneth W. Wimberly
Kenneth W. Wimberly
Corporate Secretary
Dated: March 30, 2007
Exhibit 99.1
CONTACT: Andy Backover
Corporate Communications
Fort Worth, Texas
817-967-1577
corp.comm@aa.com
FOR RELEASE: Friday, March 30, 2007
AMR CORPORATION CONTINUES EFFORTS
TO STRENGTHEN ITS BALANCE SHEET
COMPANY PAYS DOWN $285 MILLION REVOLVING CREDIT FACILITY AND
PREPAYS $79 MILLION OF AIRCRAFT DEBT; PROVIDES UPDATE ON
$350 MILLION BOND REFINANCING
ACTIONS TO RESULT IN APPROXIMATELY $15 MILLION OF ANNUAL NET INTEREST
SAVINGS
FORT WORTH, Texas - AMR Corp., the parent company of
American Airlines, Inc., today provided an update on actions
taken in the first quarter of 2007 as part of its ongoing efforts
to strengthen its balance sheet and build a stronger financial
foundation.
AMR said that American Airlines has paid in full the $285
million principal balance of its senior secured revolving credit
facility, which had been fully drawn since its establishment in
December 2004. AMR's $444 million term loan facility remains
outstanding.
The Company said that the revolving credit facility may be
redrawn, subject to certain conditions, and repaid from time to
time depending on various factors, such as economic and industry
conditions and the Company's financial condition.
AMR also said that its wholly-owned subsidiary, American
Eagle Airlines, Inc., has prepaid $79 million in principal amount
of aircraft debt. The prepayment, which occurred in February, is
incremental to AMR's $1.3 billion in scheduled principal payments
in 2007.
AMR anticipates ending the first quarter of 2007 with
approximately $5.8 billion in cash and short-term investments,
including a restricted balance of nearly $500 million,
compared to a cash and short-term investment balance of $4.8
billion, including a restricted balance of $510 million, in the
first quarter of 2006.
AMR also said that it expects to complete by mid-April the
refinancing of $350 million in municipal bonds that originally
were issued in 1990 to help fund the development of American's
Alliance Maintenance and Engineering Base in Fort Worth, Texas.
The closing of the transaction is subject to certain government
approvals. The refinanced bonds, to be issued by AllianceAirport
Authority, Inc., will have a blended interest rate of 5.46
percent, down from a rate of 7.5 percent in the current bonds,
and a final maturity of Dec. 1, 2029.
AMR estimates that by paying down the revolving credit
facility balance, prepaying the aircraft debt and refinancing the
maintenance facility bonds, as described above, it will eliminate
approximately $15 million of its annual net interest expense.
"We believe that these actions illustrate our continued
progress in strengthening our balance sheet, which is an
important component of our Turnaround Plan that has helped to
position our company for long-term success," said Thomas W.
Horton, Executive Vice President of Finance and Planning and
Chief Financial Officer of AMR. "While there is more work to do,
we are building a stronger company by reducing debt and
increasing liquidity while continuing to find ways to grow
revenue and reduce costs."
Other examples of AMR's balance sheet improvement include:
- AMR has raised more than $1.1 billion through three equity
issuances in the past 17 months, including the sale of 13 million
new shares in January that raised approximately $500 million.
- AMR reduced its total debt, which includes the principal
amount of airport facility tax-exempt bonds and the present value
of aircraft operating lease obligations, to $18.4 billion at the
end of the fourth quarter of 2006, compared to $20.1 billion a
year earlier. The Company expects to end the first quarter of
2007 with total debt of approximately $17.6 billion.
- AMR reduced its net debt, which is defined as total debt
less unrestricted cash and short-term investments, from $16.3
billion at the end of 2005 to $13.6 billion at the end of 2006.
The Company expects to end the first quarter of 2007 with net
debt of approximately $12.3 billion.
Statements in this release contain various forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which represent the Company's
expectations or beliefs concerning future events. When used in
this release, the words "expects", "plans," "anticipates,"
"indicates," "believes," "forecast," "guidance," "outlook",
"may," "will," "should" and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
include, without limitation, the Company's expectations
concerning operations and financial conditions, including changes
in capacity, revenues and costs; future financing plans and
needs; overall economic and industry conditions; plans and
objectives for future operations; and the impact on the Company
of its results of operations in recent years and the sufficiency
of its financial resources to absorb that impact. Other forward-
looking statements include statements which do not relate solely
to historical facts, such as, without limitation, statements
which discuss the possible future effects of current known trends
or uncertainties, or which indicate that the future effects of
known trends or uncertainties cannot be predicted, guaranteed or
assured. All forward-looking statements in this release are
based on information available to the Company on the date of this
release. The Company undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of
new information, future events, or otherwise. This release
includes forecasts of total debt and net debt, and statements
regarding the Company's liquidity, each of which is a forward-
looking statement. Forward-looking statements are subject to a
number of factors that could cause the Company's actual results
to differ materially from the Company's expectations. The
following factors, in addition to other possible factors not
listed, could cause the Company's actual results to differ
materially from those expressed in forward-looking statements:
the materially weakened financial condition of the Company,
resulting from its significant losses in recent years; the
ability of the Company to generate additional revenues and
significantly reduce its costs; changes in economic and other
conditions beyond the Company's control, and the volatile results
of the Company's operations; the Company's substantial
indebtedness and other obligations; the ability of the Company to
satisfy existing financial or other covenants in certain of its
credit agreements; continued high fuel prices and further
increases in the price of fuel, and the availability of fuel; the
fiercely competitive business environment faced by the Company,
and historically low fare levels; competition with reorganized
and reorganizing carriers; the Company's reduced pricing power;
the Company's likely need to raise additional funds and its
ability to do so on acceptable terms; changes in the Company's
business strategy; government regulation of the Company's
business; conflicts overseas or terrorist attacks; uncertainties
with respect to the Company's international operations; outbreaks
of a disease (such as SARS or avian flu) that affects travel
behavior; uncertainties with respect to the Company's
relationships with unionized and other employee work groups;
increased insurance costs and potential reductions of available
insurance coverage; the Company's ability to retain key
management personnel; potential failures or disruptions of the
Company's computer, communications or other technology systems;
changes in the price of the Company's common stock; and the
ability of the Company to reach acceptable agreements with third
parties. Additional information concerning these and other
factors is contained in the Company's Securities and Exchange
Commission filings, including but not limited to the Company's
Annual Report on Form 10-K for the year ended December 31, 2006.
AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)
AMR Corporation Est. as of
Calculation of Net Debt March 31 As of December 31
(in millions, except as noted) 2007* 2006 2005
Current and long-term debt $11,900 $12,463 $13,607
Current and long-term capital
lease obligations 900 927 1,088
Principal amount of certain airport facility
tax-exempt bonds and the present value of 4,800 4,973 5,435
aircraft operating lease obligations
17,600 18,363 20,130
Less: Unrestricted cash and short-term 5,300 4,715 3,814
investments
Net Debt $12,300 $13,648 $16,316
Note: The Company believes the Net Debt metric assists investors
in understanding changes in the Company's liquidity and its
progress in building a financial foundation under the Company's
Turnaround Plan.
* The Company's estimates could differ from actual results.
Current AMR Corp. news releases can be accessed on the Internet.
The address is: http://www.aa.com