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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: July 2, 1996
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-2691 13-1502798
(State or other (Commiss (I.R.S. Employer
jurisdiction ion File Identification No.)
of incorporation) Number)
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
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Item 2. Disposition of Assets.
AMR Corporation ("AMR"), parent company of American
Airlines, Inc. ("American" or the "Company"), announced that
as of July 2, 1996 it had completed the reorganization of
its information technology businesses known as The SABRE
Group into separate, wholly-owned subsidiaries of AMR
(the "Reorganization").
Prior to the Reorganization, most of The SABRE Group's
business units were divisions of American. As part of the
Reorganization, all of the businesses of The SABRE Group,
including American's SABRE Travel Information Network, SABRE
Computer Services, SABRE Development Services, and SABRE
Interactive divisions, and certain buildings, equipment, and
American's leasehold interest in certain other buildings
used by The SABRE Group were combined in subsidiaries of
American (the "SABRE Group subsidiaries"), and the SABRE
Group subsidiaries were dividended by American to AMR. Also
as part of the Reorganization, $850 million of American's
long-term debt owed to AMR was repaid through the transfer
by American to AMR of an $850 million debenture issued by
one of the SABRE Group subsidiaries to American.
AMR is continuing to study, as it has in the past,
additional SABRE Group transactions. No decisions have been
made, however, as to what, if any, transactions involving
The SABRE Group may occur.
The accompanying unaudited pro forma consolidated statements
of operations are presented to reflect the Company's results
of operations as if the Reorganization had been completed
on January 1,1995. The accompanying unaudited pro forma
condensed consolidated balance sheet is presented to reflect
the Company's financial position on March 31,1996, as if the
Reorganiztion had occurred on that date.
The pro forma information is presented for illustrative
purposes only and is not necessarily indicative of the
operating results or financial position that would have
occurred if the transactions had been consummated as
presented in the accompanying pro forma condensed
consolidated financial statements, nor is it necessarily
indicative of future results of operations.
The pro forma condensed consolidated financial statements
should be read in conjunction with the historical
consolidated financial statements and related notes thereto
of the Company.
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American Airlines, Inc.
Pro Forma Consolidated Statement of Operations
Year ended December 31,1995
(Unaudited) (In millions)
Pro Pro
Forma Forma
Historical Adjustments As Adjusted
Revenues
Airline Group:
Passenger $ 13,134 $ - $ 13,134
Cargo 668 - 668
Other 699 - 699
14,501 - 14,501
Information Services Group 1,391 (1,391) (a) -
Less: Intergroup revenues (483) 483 (d) -
Total operating revenues 15,409 (908) 14,501
Expenses
Wages, salaries and benefits 5,183 (367) (a) 4,816
Aircraft fuel 1,565 - 1,565
Commissions to agents 1,236 - 1,236
Depreciation and amortization 1,138 (164) (a) 964
(10) (b)
Other rentals and landing fees 802 (31) (a) 771
Food service 675 - 675
Aircraft rentals 604 - 604
Maintenance materials and
repairs 494 - 494
Other operating expenses 2,259 (445) (a) 2,297
483 (d)
Restructuring costs 485 - 485
Total operating expenses 14,441 (534) 13,907
Operating Income 968 (374) 594
Other Income (Expense)
Interest income 23 - 23
Interest expense (543) (6) (a) (467)
9 (b)
73 (c)
Miscellaneous - net (55) (1) (a) (56)
(575) 75 (500)
Earnings Before Income
Taxes and Extraordinary Loss 393 (299) 94
Income tax provision 172 (114) (e) 58
Earnings Before
Extraordinary Loss 221 (185) 36
Extraordinary Loss,
Net of Tax Benefit (13) - (13)
Net Earnings $ 208 $ (185) $ 23
See accompanying notes.
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American Airlines, Inc.
Pro Forma Consolidated Statement of Operations
Three months ended March 31, 1996
(Unaudited) (In millions)
Pro Pro
Forma Forma
Historical Adjustments As Adjusted
Revenues
Airline Group:
Passenger $ 3,287 $ - $ 3,287
Cargo 160 - 160
Other 192 - 192
3,639 - 3,639
Information Services Group 386 (386) (a) -
Less: Intergroup revenues (123) 123 (d) -
Total operating revenues 3,902 (263) 3,639
Expenses
Wages, salaries and benefits 1,332 (98) (a) 1,234
Aircraft fuel 424 - 424
Commissions to agents 296 - 296
Depreciation and amortization 271 (41) (a) 227
(3) (b)
Other rentals and landing fees 197 (9) (a) 188
Food service 154 - 154
Aircraft rentals 148 - 148
Maintenance materials and
repairs 134 - 134
Other operating expenses 588 (116) (a) 595
123 (d)
Total operating expenses 3,544 (144) 3,400
Operating Income 358 (119) 239
Other Income (Expense)
Interest income 5 - 5
Interest expense (111) (2) (a) (93)
2 (b)
18 (c)
Miscellaneous - net (1) (1) (a) (2)
(107) 17 (90)
Earnings Before Income Taxes 251 (102) 149
Income tax provision 101 (39) (e) 62
Net Earnings $ 150 $ (63) $ 87
See accompanying notes.
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American Airlines,Inc.
Proforma Condensed Consolidated Balance Sheet
March 31,1996
(Unaudited) (In millions)
Pro Pro
Forma Forma
Historical Adjustments As Adjusted
Assets
Current Assets
Cash $ 31 $ (1) (f) $ 30
Short-term investments 791 (111) (g) 550
(130) (i)
Receivables, net 1,222 (53) (f) 1,169
Inventories, net 532 - 532
Other current assets 469 (28) (f) 441
Total current assets 3,045 (323) 2,722
Equipment and Property
Flight equipment, net 8,902 - 8,902
Other equipment and
property, net 1,811 (483) (f) 1,328
10,713 (483) 10,230
Equipment and Property Under Capital Leases
Flight equipment, net 1,251 - 1,251
Other equipment and property, net 160 (68) (f) 92
1,411 (68) 1,343
Route acquisition costs, net 996 - 996
Other assets, net 1,402 (67) (f) 1,322
(13) (g)
$ 17,567 $ (954) $ 16,613
See accompanying notes.
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American Airlines, Inc.
Pro Forma Condensed Consolidated Balance Sheet, Continued
March 31,1996
(Unaudited) (In millions)
Pro Pro
Forma Forma
Historical Adjustments As Adjusted
Liabilities and Stockholder's Equity
Current Liabilities
Accounts Payable $ 803 $ (43) (f) $ 760
Payable to affiliates 968 130 (f) 968
(130) (i)
Accrued liabilities 1,558 (64) (f) 1,494
Air traffic liability 1,707 - 1,707
Current maturities of
long-term debt 33 - 33
Current obligations under
capital leases 125 - 125
Total current liabilities 5,194 (107) 5,087
Long-term debt, less
current maturities 1,170 - 1,170
Long-term debt due to Parent 1,676 (850) (h) 826
Obligations under capital leases,
less current obligations 1,702 (124) (g) 1,578
Deferred income taxes 479 (56) (f) 423
Other liabilities, deferred gains,
deferred credits and
postretirement benefits 3,552 (67) (f) 3,485
Stockholder's Equity
Common stock - - -
Additional paid-in capital 1,699 - 1,699
Retained earnings 2,095 (600) (f) 2,345
850 (h)
3,794 250 4,044
$ 17,567 $ (954) $ 16,613
See accompanying notes.
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NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (Unaudited)
The accompanying pro forma consolidated statements of
operations for the year ended December 31, 1995 and the
three months ended March 31, 1996 reflect the following pro
forma adjustments assuming the Reorganization had been
consummated on January 1, 1995.
(a) To remove the historical results of operations of the
divisions of American dividended to AMR.
(b) To reflect the estimated decrease in depreciation and
amortization expense due to the removal of certain
buildings, equipment, and American's leasehold interest in
certain other buildings used by The SABRE Group, and to
record the estimated decrease in interest expense as a
result of the extinguishment of the capital lease obligation
associated with American's leasehold interest.
(c) To remove the interest expense associated with the
repayment of $850 million of American's long-term debt owed
to AMR.
(d) To reflect expenses of the Company which were
previously eliminated in consolidation.
(e) To reflect the estimated tax impact of the above
adjustments.
The accompanying pro forma condensed consolidated balance
sheet reflects the following pro forma adjustments for the
Reorganization as if it had been consummated on March 31,
1996.
(f) To remove the assets and liabilities of the divisions
of American dividended to AMR and to reflect the removal of
certain buildings, equipment, and the leasehold interest in
certain other buildings and the related deferred income
taxes.
(g) To reflect the extinguishment of the capital lease
obligation associated with American's leasehold interest in
certain buildings used by The SABRE Group.
(h) To reflect the repayment of $850 million of
American's long-term debt owed to AMR.
(i) To reflect the repayment of American's payable to
The SABRE Group.
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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/Charles D. MarLett
Charles D. MarLett
Corporate Secretary
Dated: July 17, 1996
