1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A No. 1
[]Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Period Ended March 31, 1995.
[ ]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 May 8, 1995
The registrant meets the conditions set forth in, and is filing
this form with the reduced disclosure format prescribed by,
general Instructions H(1)(a) and H(1)(b) of Form 10-Q.
2
INDEX
AMERICAN AIRLINES , INC.
PART I: FINANCIAL INFORMATION
Item 1. Financial Information
Consolidated Statement of Operations -- the three months ended
March 31, 1995 and 1994
Condensed Consolidated Balance Sheet -- March 31, 1995 and
December 31, 1994
Condensed Consolidated Statement of Cash Flows -- three months
ended March 31, 1995 and 1994 (as amended August 30, 1995)
Notes to Condensed Consolidated Financial Statements -- March
31, 1995 (as amended August 30, 1995, to revise Note 2)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (as amended August 30, 1995,
to revise Liquidity and Capital Resources)
SIGNATURE
3
PART 1. FINANCIAL INFORMATION
AMERICAN AIRLINES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited) (In millions)
Three Months Ended
March 31,
1995 1994
Revenues
Airline Group:
Passenger $3,143 $3,028
Cargo 156 154
Other 158 142
3,457 3,324
Information Services Group 364 333
Less: Intergroup revenues (142) (149)
Total operating revenues 3,679 3,508
Expenses
Wages, salaries and benefits 1,263 1,241
Aircraft fuel 365 382
Commissions to agents 307 311
Depreciation and amortization 287 289
Other rentals and landing fees 195 193
Food service 158 161
Aircraft rentals 153 157
Maintenance materials and repairs 118 114
Other operating expenses 582 556
Total operating expenses 3,428 3,404
Operating Income 251 104
Other Income (Expense)
Interest income 5 1
Interest expense (149) (97)
Interest capitalized 4 6
Miscellaneous - net (11) (9)
(151) (99)
Earnings Before Income Taxes 100 5
Income tax provision 44 8
Net Earnings (Loss) $ 56 $ (3)
The accompanying notes are an integral part of these financial statements.
4
AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
March December
31, 31,
1995 1994
(Unaudited) (Note)
Assets
Current Assets
Cash $ 55 $ 13
Short-term investments of affiliates 474 744
Receivables, net 1,136 877
Receivables from affiliates 304 493
Inventories, net 532 590
Other current assets 425 385
Total current assets 2,926 3,102
Equipment and Property
Flight equipment, net 9,380 9,132
Purchase deposits for flight equipment 46 105
9,426 9,237
Other equipment and property, net 1,865 1,866
11,291 11,103
Equipment and Property Under Capital Leases
Flight equipment, net 1,353 1,370
Other equipment and property, net 169 172
1,522 1,542
Route acquisition costs, net 1,025 1,032
Other assets, net 1,086 1,037
$ 17,850 $ 17,816
Note: The balance sheet at December 31, 1994 has been derived
from the audited financial statements at that date but does not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
The accompanying notes are an integral part of these financial
statements.
5
AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions)
March December
31, 31,
1995 1994
(Unaudited) (Note)
Liabilities and Stockholder's Equity
Current Liabilities
Accounts payable $ 840 $ 831
Payables to affiliates 722 759
Accrued liabilities 1,432 1,434
Air traffic liability 1,577 1,473
Current maturities of long-term debt 51 49
Current obligations under capital leases 142 110
Total current liabilities 4,764 4,656
Long-term debt, less current maturities 1,495 1,518
Long-term debt due to Parent 3,023 3,196
Obligations under capital leases,
less current obligations 1,942 1,964
Deferred income taxes 313 268
Other liabilities, deferred gains, deferred
credits and postretirement benefits 3,023 2,981
Stockholder's Equity
Common stock - -
Additional paid-in capital 1,699 1,699
Minimum pension liability adjustment (199) (199)
Retained earnings 1,790 1,733
3,290 3,233
$ 17,850 $ 17,816
Note: The balance sheet at December 31, 1994 has been derived
from the audited financial statements at that date but does not
include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements.
The accompanying notes are an integral part of these financial
statements.
6
AMERICAN AIRLINES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
Three Months Ended
March 31,
1995 1994
Net Cash Provided by Operating Activities $ 228 $ 369
Cash Flow from Investing Activities:
Capital expenditures (440) (283)
Net decrease (increase) in short-term
investments 270 (146)
Other 57 3
Net cash used for investing activities (113) (426)
Cash Flow from Financing Activities:
Proceeds from issuance of long-term debt - 72
Net short-term borrowings with maturities of
90 days or less - 200
Other short-term borrowings - 200
Payments on long-term debt and capital lease
obligations (52) (43)
Funds transferred to affiliates, net (21) (359)
Net cash (used for) provided by
financing activities (73) 70
Net increase in cash 42 13
Cash at beginning of period 13 55
Cash at end of period $ 55 $ 68
Cash Payments (Refunds) For:
Interest (net of amounts capitalized) $ 135 $ 99
Income taxes 17 1
Financing Activities not Affecting Cash:
Capital lease obligations incurred $ - $ 72
The accompanying notes are an integral part of these
financial statements.
7
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. For
further information, refer to the consolidated financial
statements and footnotes thereto included in the American
Airlines, Inc. annual report on Form 10-K for the year ended
December 31, 1994.
2.Certain amounts from 1994 have been reclassified to conform
with the 1995 presentation, including cash flows resulting
from certain transactions with affiliates.
3.In July 1991, American entered into a five-year agreement
whereby American transfers, on a continuing basis and with
recourse to the receivables, an undivided interest in a
designated pool of receivables. Undivided interests in new
receivables are transferred daily as collections reduce
previously transferred receivables. At December 31, 1994,
receivables are presented net of approximately $112 million of
such transferred receivables. At March 31, 1995, no
receivables were transferred under the terms of the agreement.
4.Accumulated depreciation of owned equipment and property at
March 31, 1995 and December 31, 1994, was $5.3 billion and
$5.2 billion, respectively. Accumulated amortization of
equipment and property under capital leases at March 31, 1995
and December 31, 1994, was $861 million and $823 million,
respectively.
5.In April 1995, American announced an agreement to sell 12 of
its McDonnell Douglas MD-11 aircraft to Federal Express
Corporation (FedEx), with delivery of the aircraft between
1996 and 1999. In addition, American has the option to sell
its remaining seven MD-11 aircraft to FedEx with deliveries
between 2000 and 2002. At the same time the two companies
signed a separate six-year maintenance contract under the
terms of which American will perform work on FedEx's aircraft
fleet.
8
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, 1995, of $56 million. This compares to a net loss of $3
million for first quarter 1994. American's operating income was
$251 million for first quarter 1995 compared with $104 million
for first quarter 1994.
The Airline Group's (formerly the Air Transportation Group)
revenues increased $133 million or 4.0 percent. American's
passenger revenues increased by 3.8 percent, $115 million.
American's yield (the average amount one passenger pays to fly
one mile) of 13.19 cents decreased by 2.5 percent compared to
the same period in 1994. Domestic yields decreased 4.7 percent
from first quarter 1994. International yields increased 3.2
percent over first quarter 1994, due principally to a 13.0
percent increase in Europe, partially offset by a 3.7 percent
decrease in Latin America.
American's traffic or revenue passenger miles (RPMs) increased
6.5 percent to 23.8 billion miles for the quarter ended March
31, 1995. American's capacity or available seat miles (ASMs)
increased 1.9 percent to 37.4 billion miles in the first quarter
of 1995 primarily as a result of increases in jet stage length
and aircraft productivity. Jet stage length increased 5.0
percent and aircraft productivity, as measured by miles flown
per aircraft per day, increased 8.2 percent compared with first
quarter 1994. Year over year for the first quarter 1995,
American's domestic traffic increased 5.8 percent on capacity
decreases of 0.4 percent and international traffic grew 8.2
percent on capacity increases of 8.0 percent. The change in
international traffic was driven by a 12.8 percent increase in
traffic to Latin America on capacity growth of 10.6 percent, and
a 4.3 percent increase in traffic to Europe on a capacity
increase of 5.8 percent.
Other Airline Group revenues increased 11.3 percent, $16
million, primarily due to contract maintenance work performed by
American for other airlines.
Information Services Group revenues increased 9.3 percent, $31
million, primarily due to increased booking fee volume, which
was positively impacted by international expansion in Europe,
Latin America and India, and increased sales of premium priced
products.
American's operating expenses increased 0.7 percent, $24
million. Passenger Division cost per ASM decreased by 1.6
percent to 8.52 cents. Wages, salaries and benefits rose 1.8
percent, $22 million, due primarily to salary adjustments for
existing employees, partially offset by a 3.0 percent reduction
in the average number of equivalent employees. Aircraft fuel
expense decreased 4.5 percent, $17 million, due to a 5.0 percent
decrease in American's average price per gallon, partially
offset by an 0.5 percent increase in gallons consumed by
American. Commissions to agents decreased 1.3 percent, $4
million, due principally to a lower percentage of revenue
subject to agent commissions combined with a reduction in
average rates paid to agents.
Other Income (Expense) increased 52.5 percent or $52 million.
Interest expense (net of amounts capitalized) increased $52
million due primarily to the effect of rising interest rates on
floating rate debt and interest rate swap transactions and a
change in the terms of the subordinated note agreement with AMR.
Effective September 30, 1994, the subordinated promissory note
bears interest based on the weighted average rate on AMR's long-
term debt and preferred stock. Prior to September 30, 1994,
interest on the subordinated note was based on the London
Interbank Offered Rate (LIBOR).
9
Signatures
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: August 30, 1995 By: /s/ Charles D. Marlett
Charles D. Marlett
Corporate Secretary
