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: June 27, 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
AMR Corporation (AMR), parent company of American Airlines,
Inc., is filing herewith a press release issued on June 27,
2007 as Exhibit 99.1, which is included herein. This press
release was issued to provide an update on actions taken in
the second quarter of 2007 as part of AMR'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: June 27, 2007
EXHIBIT INDEX
Exhibit Description
99.1 Press Release
Exhibit 99.1
CONTACT: Andy Backover
Corporate Communications
Fort Worth, Texas
817-967-1577
corp.comm@aa.com
FOR RELEASE: Wednesday, June 27, 2007
AMR CORPORATION CONTINUES EFFORTS TO
STRENGTHEN ITS BALANCE SHEET
COMPANY REDUCES INTEREST RATE ON $442 MILLION TERM LOAN,
REFINANCES $236 MILLION IN AIRPORT FACILITY BONDS AND
PREPAYS $48 MILLION OF AIRCRAFT DEBT
ACTIONS TO YIELD APPROXIMATELY $12 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 second quarter of 2007 as part of its ongoing
efforts to strengthen its balance sheet and build a stronger
financial foundation. The Company said that these actions
are expected to eliminate approximately $12 million in
annual net interest expense.
"We continue to make progress in strengthening our
balance sheet, which gives us greater flexibility and builds
our foundation for the future," said Thomas W. Horton,
Executive Vice President of Finance and Planning and Chief
Financial Officer of AMR. "We have more work ahead of us to
reduce debt and improve our overall cost structure, but we
believe that we are on the right path to position the
Company for long-term success."
Actions in the second quarter include:
. American amended the $442 million floating rate term
loan portion of its credit facility, which has been
outstanding since December 2004, lowering the interest rate
from 3.25 percent over LIBOR to 2.00 percent over LIBOR.
. AMR's wholly-owned subsidiary, American Eagle Airlines,
Inc., prepaid $48.2 million in principal amount of aircraft
debt. The debt prepayment is in addition to AMR's $1.3
billion in scheduled principal payments in 2007.
. American refinanced $127.7 million of bonds that were
originally issued to fund facilities expansion and
renovation at Dallas/Fort Worth International Airport,
reducing the interest rate by 1.75 percentage points to 5.50
percent.
. American refinanced $108.7 million in bonds that were
originally issued to fund expansion and improvements at
O'Hare International Airport in Chicago, reducing the
interest rate by 2.70 percentage points to 5.50 percent.
These efforts by AMR to improve its balance sheet
follow similar actions taken by the Company earlier in 2007,
which resulted in the elimination of more than $15 million
in annual net interest expense.
AMR anticipates ending the second quarter of 2007 with
approximately $6.2 billion in cash and short-term
investments, including a restricted balance of approximately
$500 million, compared to a cash and short-term investment
balance of $5.7 billion, including a restricted balance of
$525 million, at the end of the second quarter of 2006.
The Company expects to end the second quarter of 2007
with Total Debt, which the Company defines as the aggregate
of its long-term debt, capital lease obligations, the
principal amount of airport facility tax-exempt bonds and
the present value of aircraft operating lease obligations,
of approximately $17.3 billion. AMR's Total Debt was
approximately $19.4 billion at the end of the second quarter
of 2006 and approximately $20.1 billion at the end of 2005.
The Company expects to end the second quarter of 2007
with Net Debt, which the Company defines as Total Debt less
unrestricted cash and short-term investments, of
approximately $11.6 billion, compared to Net Debt of
approximately $14.2 billion at the end of the second quarter
of 2006 and approximately $16.3 billion at end of 2005.
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 Estimate as of As of As of
Calculation of Net Debt June 30, 2007* June 30, 2006 Dec. 31, 2005
Current and long-term debt $11,700 $13,148 $13,607
Current and long-term
capital lease obligations 900 972 1,088
Principal amount of
certain airport facility
tax-exempt bonds and the
present value of aircraft
operating lease obligations 4,700 5,257 5,435
17,300 19,377 20,130
Less: Unrestricted cash
and short-term investments 5,700 5,154 3,814
Net Debt $11,600 $14,223 $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