AMR & AA MOR July 2013


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: August 26, 2013
_____________

AMR CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
1-8400
 
75-1825172
(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.)

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))


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Item 7.01.    Regulation FD Disclosure
 As previously reported, on November 29, 2011, AMR Corporation (the “Company”), its principal subsidiary, American Airlines, Inc. (“American”) and certain of the Company’s other direct and indirect domestic subsidiaries (collectively, the “Debtors”), filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"), in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”).
On August 26, 2013, the Debtors filed their monthly operating report for the month ended July 31, 2013 (the “Monthly Operating Report”) with the Bankruptcy Court. The Monthly Operating Report is attached hereto as Exhibit 99.1 and is incorporated herein by reference. This current report (including the exhibit hereto or any information included therein) shall not be deemed an admission as to the materiality of any information required to be disclosed solely by reason of Regulation FD.
Limitation on Incorporation by Reference
In accordance with General Instruction B.2 of Form 8-K, the information with respect to the Debtors in this Item 7.01 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding Financial and Operating Data
The Company cautions investors and potential investors not to place undue reliance upon the information contained in the Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of the Company. No assurance can be given as to the value that ultimately may be ascribed to the Debtors' various prepetition liabilities and other securities. The Company cannot predict what the ultimate value of any of its or the other Debtors' securities may be. Accordingly, the Company urges that caution be exercised with respect to existing and future investments in any of these securities (including the Company's common stock) or other Debtor claims. The Monthly Operating Report is limited in scope, covers a limited time period and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Office of the United States Trustee of the Southern District of New York and the Bankruptcy Court. The Monthly Operating Report was not audited or reviewed by independent accountants, is in a format prescribed by applicable bankruptcy laws and regulations and is subject to future adjustment and reconciliation. Therefore, the Monthly Operating Report does not necessarily contain all information required in filings pursuant to the Exchange Act, or may present such information differently from such requirements. There can be no assurance that, from the perspective of an investor or potential investor in the Debtors' securities, the Monthly Operating Report is complete. The Monthly Operating Report also contains information for periods which are shorter or otherwise different from those required in the Company's reports pursuant to the Exchange Act, and such information might not be indicative of the Company's financial condition or operating results for the period that would be reflected in the Company's financial statements or in its reports pursuant to the Exchange Act. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results.
Cautionary Statement Regarding Forward-Looking Statements
This current report on Form 8-K and the exhibits hereto contain forward-looking statements or information. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “forecast,” “if current trends continue,” and other similar words. Actual results may differ materially from the results suggested by the statements and information contained herein, for a number of reasons, including, but not limited to, risks related to the Agreement and Plan of Merger executed as of February 13, 2013, among the Company, AMR Merger Sub, Inc. and US Airways Group, Inc., including fulfillment of conditions and receipt of consents and approvals required thereby, the lawsuit brought by the U.S. Department of Justice seeking to enjoin the merger of the Company and US Airways Group, Inc., the Company's ability to secure financing for all of its scheduled aircraft deliveries, the impact of the restructuring of the Company and certain of its U.S. subsidiaries, the Company's ability to refinance, extend or repay its near and intermediate term debt, the Company's substantial level of indebtedness and related interest rates, the potential impact of volatile fuel prices, impairments and restructuring charges, and the potential impact of labor unrest. Because of the Company's restructuring, there can be no assurance as to the future value of the

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Company's or any of its subsidiaries' securities, including the Company's common stock. Accordingly, the Company urges that caution be exercised with respect to existing and future investments in any of these securities (including the Company's common stock) or other claims. Readers are referred to the documents filed by the Company and American Airlines, Inc. with the Securities and Exchange Commission, including the Company's Form 10-K for the period ended December 31, 2012, as amended by its Form 10-K/A filed April 16, 2013, which further identify the important risk factors that could cause actual results to differ materially from the forward-looking statements in this current report on Form 8-K and the exhibit hereto. The Company disclaims any obligation to update any forward-looking statement or information.
Item 9.01.      Financial Statements and Exhibits
Exhibit Number                Description
99.1
Monthly Operating Report for the month ended July 31, 2013, filed with the United States Bankruptcy Court for the Southern District of New York.


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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.


    AMR CORPORATION

                            
/s/ Kenneth W. Wimberly
Kenneth W. Wimberly
Corporate Secretary


Dated: August 26, 2013

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: August 26, 2013

 
 

4




 
 
EXHIBIT INDEX
 
Exhibit
Description
99.1
Monthly Operating Report for the month ended July 31, 2013, filed with the United States Bankruptcy Court for the Southern District of New York.


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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK

Chapter 11

In re:                                    Case No. 11-15463-SHL          
AMR Corporation, et al.                         (jointly administered)
Debtors

MONTHLY OPERATING REPORT
FOR THE MONTH ENDED JULY 31, 2013



DEBTORS' ADDRESS:
AMR Corporation
4333 Amon Carter Blvd.
Fort Worth, Texas 76155

DEBTORS' ATTORNEYS:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153



DISBURSEMENTS (IN THOUSANDS):                            $ 3,169,589
FOR THE MONTH ENDED JULY 31, 2013

CONSOLIDATED NET INCOME (IN MILLIONS):                        $ 292
FOR THE MONTH ENDED JULY 31, 2013






REPORT PREPARER:    AMR CORPORATION

The undersigned, having reviewed the attached report and being familiar with the Debtors' financial affairs, verifies under penalty of perjury, that the information contained therein is complete, accurate, and truthful to the best of my knowledge.

 


/s/ Isabella D. Goren
Isabella D. Goren
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)





1




AMR CORPORATION

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 


SCHEDULES
 




AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED BALANCE SHEET
JULY 31, 2013
(Unaudited) (In millions)

    


                        
Assets
 
Current Assets
 
  Cash
$
615

  Short-term investments
5,213

  Restricted cash and short-term investments
933

  Receivables, net
1,344

  Inventories, net
627

  Fuel derivative contracts
76

  Other current assets
617

    Total current assets
9,425

 
 
Equipment and Property
 
  Flight equipment, net
10,575

  Other equipment and property, net
2,077

  Purchase deposits for flight equipment
670

 
13,322

 
 
Equipment and Property Under Capital Leases
 
  Flight equipment, net
197

  Other equipment and property, net
58

 
255

 
 
International slots and route authorities
709

Domestic slots and airport operating and gate lease rights, less accumulated amortization, net
148

Other assets
2,203

 
$
26,062

The accompanying notes are an integral part of these financial statements.

















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AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED BALANCE SHEET
JULY 31, 2013
(Unaudited) (In millions)

    

Liabilities and Stockholders' Equity (Deficit)
 
Current Liabilities
 
  Accounts payable
$
1,427

  Accrued liabilities
2,177

  Air traffic liability
5,371

  Current maturities of long-term debt
1,287

  Current obligations under capital leases
26

    Total current liabilities
10,288

 
 
Long-term debt, less current maturities
7,913

Obligations under capital leases, less current obligations
348

Pension and postretirement benefits
6,686

Other liabilities, deferred gains and deferred credits
1,860

 
 
Liabilities Subject to Compromise (Note 2)
6,851

 
 
Stockholders' Equity (Deficit)
 
  Preferred stock

  Common stock
341

  Additional paid-in capital
4,488

  Treasury stock
(367
)
  Accumulated other comprehensive income (loss)
(3,054
)
  Accumulated deficit
(9,292
)
 
(7,884
)
 
$
26,062

The accompanying notes are an integral part of these financial statements.


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AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
CONSOLIDATED STATEMENT OF OPERATIONS
MONTH ENDED JULY 31, 2013
(Unaudited) (In millions, except per share amounts)    



Revenues
 
    Passenger - American Airlines
$
1,939

                      - Regional Affiliates
270

    Cargo
55

    Other revenues
219

      Total operating revenues
2,483

 
 
Expenses
 
  Aircraft fuel
737

  Wages, salaries and benefits
523

  Other rentals and landing fees
117

  Maintenance, materials and repairs
118

  Depreciation and amortization
83

  Commissions, booking fees and credit card expense
101

  Aircraft rentals
62

  Food service
54

  Special charges and merger related
2

  Other operating expenses
274

    Total operating expenses
2,071

 
 
Operating Income
412

 
 
Other Income (Expense)
 
  Interest income
2

  Interest expense
(62
)
  Interest capitalized
3

  Miscellaneous - net
(6
)
 
(63
)
 
 
Income Before Reorganization Items
349

 
 
Reorganization Items, Net (Note 2)
(57
)
 
 
Income Before Income Taxes
292

Income tax (benefit)

Net Income
$
292

 
 
Earnings Per Share
 
Basic
$
0.87

 
 
Diluted
$
0.76

 
 
Weighted Average Shares Used in Computation
 
Basic
335,560,889

 
 
Diluted
388,071,098


The accompanying notes are an integral part of these financial statements.

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AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
MONTH ENDED JULY 31, 2013
(Unaudited) (In millions)    



Net Cash Provided by (Used for) Operating Activities
$
(81
)
 
 
Cash Flow from Investing Activities:
 
  Capital expenditures, including aircraft lease deposits
(261
)
  Disposal of equipment and property

  Net (increase) decrease in short-term investments
325

        Net cash used for investing activities
64

 
 
Cash Flow from Financing Activities:
 
  Payments on long-term debt and capital lease obligations
(93
)
  Proceeds from:
 
    Issuance of debt

    Sale leaseback transactions
122

    Other
(1
)
        Net cash provided by financing activities
28

 
 
Net increase (decrease) in cash
11

Cash at beginning of period
604

 
 
Cash at end of period
$
615

The accompanying notes are an integral part of these financial statements.


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AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)






1.Summary of Accounting Policies

Basis of Presentation
On November 29, 2011 (the “Petition Date”), AMR Corporation ("AMR" or the “Company”), its principal subsidiary, American Airlines, Inc. ("American") and certain of the Company's other direct and indirect domestic subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (the “Chapter 11 Cases”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”), in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Chapter 11 Cases are being jointly administered under the caption “In re AMR Corporation, et al., Case No. 11-15463-SHL.”
The Company and the other Debtors are operating as “debtors in possession” under the jurisdiction of the Bankruptcy Court and the applicable provisions of the Bankruptcy Code. In general, as debtors in possession under the Bankruptcy Code, we are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Bankruptcy Code enables the Company to continue to operate its business without interruption, and the Bankruptcy Court has granted additional relief covering, among other things, obligations to (i) employees, (ii) taxing authorities, (iii) insurance providers, (iv) independent contractors for improvement projects, (v) foreign vendors, (vi) other airlines pursuant to certain interline agreements, and (vii) certain vendors deemed critical to the Debtors' operations.
While operating as debtors in possession under Chapter 11 of the Bankruptcy Code, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or otherwise as permitted in the ordinary course of business. On June 5, 2013, the Debtors filed their Second Amended Joint Chapter 11 Plan (as may be amended or supplemented, the “Plan”) and Disclosure Statement for the Plan (as may be amended or supplemented, the “Disclosure Statement”). On August 14, 2013, the Debtors filed technical amendments to the Plan. The Plan contains provisions for the treatment of equity interests in and prepetition claims against the Company and the other Debtors. See Note 2 to the Condensed Consolidated Financial Statements for further information on the Plan.
A hearing was held on August 15, 2013, to consider confirmation of the Plan. The Bankruptcy Court deferred ruling on Plan confirmation and requested briefs from the Debtors and other interested parties regarding the impact of the Department of Justice ("DOJ") lawsuit (see Merger Agreement under Note 2) on confirmation standards and the appropriateness of ruling on confirmation before the DOJ lawsuit is resolved. On August 23, 2013, the Debtors and the Official Committee of Unsecured Creditors, among others, submitted briefs in support of entry of an order confirming the Plan.
This Monthly Operating Report (“MOR”) was prepared on a consolidated basis for the Company and its direct and indirect subsidiaries, including the subsidiary Debtors and other subsidiaries that did not file voluntary petitions for relief under Chapter 11. This MOR is unaudited, is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements for Chapter 11 debtors as required by the Office of the United States Trustee for the Southern District of New York (the “U.S. Trustee”) and the Bankruptcy Court. This MOR does not include all the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. Therefore, there can be no assurance that the consolidated financial information presented herein is complete and readers are strongly cautioned not to place undue reliance on this MOR. This MOR should be read in conjunction with the Debtors' previously filed MORs and the financial statements and accompanying notes in the Company's and American's annual and quarterly reports, as amended, that are filed with the United States Securities and Exchange Commission (the “SEC”).
In accordance with GAAP, the Debtors have applied ASC 852 “Reorganizations” (“ASC 852”) in preparing the Condensed Consolidated Financial Statements. ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 Cases, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses (including professional fees), realized gains and losses and provisions for losses that are realized or incurred in the Chapter 11 Cases are recorded in reorganization items, net on the accompanying Consolidated Statement of Operations. In addition, prepetition obligations that may be impacted by the Chapter 11 reorganization process have been classified on the Condensed Consolidated Balance Sheet in liabilities subject to compromise. These liabilities are reported at the amounts expected

7

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts (see Note 2).These Condensed Consolidated Financial Statements have also been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business. Accordingly, the Condensed Consolidated Financial Statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Debtors be unable to continue as a going concern.
The accompanying Condensed Consolidated Financial Statements do not purport to reflect or provide for the consequences of the Chapter 11 Cases, other than as set forth under “liabilities subject to compromise” on the accompanying Condensed Consolidated Balance Sheet and “income (loss) before reorganization items” and “reorganization items, net” on the accompanying Consolidated Statement of Operations (see Note 2). In particular, the financial statements do not purport to show (1) as to assets, their realizable value on a liquidation basis or their availability to satisfy liabilities; (2) as to prepetition liabilities, the amounts that may be allowed for claims or contingencies, or the status and priority thereof; (3) as to shareowners' equity accounts, the effect of any changes that may be made to the Debtors' capitalization; or (4) as to operations, the effect of any changes that may be made to the Debtors' business, including, without limitation, as a result of the Merger (as defined in the section entitled “Merger Agreement” below).
Results of operations for the periods presented herein are not necessarily indicative of results of operations for the entire year. The Condensed Consolidated Financial Statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries (both Debtor and non-Debtor), including (i) its principal subsidiary American and (ii) its regional airline subsidiary, AMR Eagle Holding Corporation and its primary subsidiaries, American Eagle Airlines, Inc. and Executive Airlines, Inc. (collectively, “AMR Eagle”). The Condensed Consolidated Financial Statements also include the accounts of variable interest entities for which the Company is the primary beneficiary. For further information, refer to the consolidated financial statements and footnotes included in the Company's Annual Report on Form 10-K filed with the SEC on February 20, 2013, as amended by the Form 10-K/A filed on April 16, 2013 (“2012 Form 10-K”), including the Summary of Significant Accounting Policies which appears as Note 2 in the 2012 Form 10-K.Notwithstanding any indications of value that may be contained in the Plan, no assurance can be given as to the ultimate value that may be ascribed to the Debtors' various prepetition liabilities and other securities. The Company cannot predict what the ultimate value of any of its or the other Debtors' securities may be. Trading in the Company's common stock and certain debt securities on the New York Stock Exchange ("NYSE") was suspended on January 5, 2012, and the Company's common stock and such debt securities were delisted by the SEC from the NYSE on January 30, 2012. On January 5, 2012, the Company's common stock began trading under the symbol “AAMRQ” on the OTCQB marketplace, operated by OTC Markets Group (www.otcmarkets.com).Additional information about the Chapter 11 Cases is available on the Internet at aa.com/restructuring. Court filings and claims information are available at amrcaseinfo.com.

2.Chapter 11 Proceedings and Reorganization Update for the Reporting Period
General Information
Notices to Creditors; Effect of Automatic Stay. The Debtors have notified all known current or potential creditors that the Chapter 11 Cases were filed. Subject to certain exceptions under the Bankruptcy Code, the filing of the Debtors’ Chapter 11 Cases automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date. Thus, for example, most creditor actions to obtain possession of property from the Debtors, or to create, perfect or enforce any lien against the property of the Debtors, or to collect on monies owed or otherwise exercise rights or remedies with respect to a prepetition claim, are enjoined unless and until the Bankruptcy Court lifts the automatic stay as to any such claim. Vendors are being paid for goods furnished and services provided after the Petition Date in the ordinary course of business.
Appointment of Creditors’ Committee. On December 5, 2011, the U.S. Trustee appointed the Creditors’ Committee ("Creditors’ Committee") for the Chapter 11 Cases.
Rejection of Executory Contracts. Under section 365 and other relevant sections of the Bankruptcy Code, the Debtors may assume, assume and assign, or reject certain executory contracts and unexpired leases, including, without limitation, agreements relating to aircraft and aircraft engines (collectively, "Aircraft Property") and leases of real property, subject to the approval of the Bankruptcy Court and certain other conditions. As of July 31, 2013, the Bankruptcy Court had

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AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





entered orders granting the Debtors' motions to assume 554, assume and assign one, terminate one, and reject 12 unexpired leases of non-residential real property and had entered various orders extending, by the Debtors' agreement with certain landlords, the date by which the Debtors must assume or reject an additional 3 unexpired leases of non-residential real property. With respect to certain agreements between American and the City of Chicago, American and the City of Chicago entered into a stipulated order, which provided for the assumption of such agreements as of the effective date of the Plan. The stipulated order also provides that if the effective date of the Plan has not occurred by October 31,2013, the parties are free to extend such deadline with the approval of the Bankruptcy Court or to renegotiate the terms of the order assuming such agreements.
In general, rejection of an executory contract or unexpired lease is treated as a prepetition breach of the executory contract or unexpired lease in question and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases have the right to file claims against the Debtors’ estate for such damages. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing defaults under such executory contract or unexpired lease.
Any description of an executory contract or unexpired lease elsewhere in these Notes or in the report to which these Notes are attached, including where applicable the Debtors’ express termination rights or a quantification of their obligations, must be read in conjunction with, and is qualified by, any rights the Debtors or counterparties have under section 365 of the Bankruptcy Code.
The Debtors expect that liabilities subject to compromise and resolution in the Chapter 11 Cases will arise in the future as a result of damage claims created by the Debtors’ rejection of various executory contracts and unexpired leases. Due to the uncertain nature of many of the potential rejection claims, the magnitude of such claims is not reasonably estimable at this time. Such claims may be material (see “Liabilities Subject to Compromise” in Note 2 to the Condensed Consolidated Financial Statements).
Special Protection Applicable to Leases and Secured Financing of Aircraft and Aircraft Equipment. Notwithstanding the general discussion above of the impact of the automatic stay, under section 1110 of the Bankruptcy Code, beginning 60 days after filing a petition under Chapter 11, certain secured parties, lessors and conditional sales vendors may have a right to take possession of certain qualifying Aircraft Property that is leased or subject to a security interest or conditional sale contract, unless the Debtors, subject to approval by the Bankruptcy Court, agree to perform under the applicable agreement, and cure any defaults as provided in section 1110 (other than defaults of a kind specified in section 365(b)(2) of the Bankruptcy Code). Taking such action does not preclude the Debtors from later rejecting the applicable lease or abandoning the Aircraft Property subject to the related security agreement, or from later seeking to renegotiate the terms of the related financing.
The Debtors may extend the 60-day period by agreement of the relevant financing party, with Bankruptcy Court approval. In the absence of an agreement or cure as described above or such an extension, the financing party may take possession of the Aircraft Property and enforce its contractual rights or remedies to sell, lease or otherwise retain or dispose of such equipment.
The 60-day period under section 1110 in the Chapter 11 Cases expired on January 27, 2012. In accordance with the Bankruptcy Court’s Order Authorizing the Debtors to (i) Enter into Agreements Under Section 1110(a) of the Bankruptcy Code, (ii) Enter into Stipulations to Extend the Time to Comply with Section 1110 of the Bankruptcy Code and (iii) File Redacted Section 1110(b) Stipulations, dated December 23, 2011, the Debtors have entered into agreements to extend the automatic stay or agreed to perform and cure defaults under financing agreements with respect to certain aircraft in their fleet and other Aircraft Property. The Debtors have reached agreement on revised terms with respect to substantially all of the aircraft for which the Debtors expect to negotiate revised terms, subject in a number of instances to certain conditions, including reaching agreement on definitive documentation. The ultimate outcome of these negotiations cannot be predicted with certainty. To the extent the Debtors are unable to reach definitive agreements with Aircraft Property financing parties, those parties may seek to repossess the subject Aircraft Property.

9

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





Magnitude of Potential Claims. On February 27, 2012, the Debtors filed with the Bankruptcy Court schedules and statements of financial affairs setting forth, among other things, the assets and liabilities of the Debtors, subject to the assumptions filed in connection therewith. All of the schedules are subject to further amendment or modification.
Bankruptcy Rule 3003(c)(3) requires the Bankruptcy Court to fix the time within which proofs of claim must be filed in a Chapter 11 case pursuant to section 501 of the Bankruptcy Code. This Bankruptcy Rule also provides that any creditor who asserts a claim against the Debtors that arose prior to the Petition Date and whose claim (i) is not listed on the Debtors' schedules or (ii) is listed on the schedules as disputed, contingent, or unliquidated, must file a proof of claim. On May 4, 2012, the Bankruptcy Court entered an order that established July 16, 2012 at 5:00 p.m. (Eastern Time) as the deadline to file proofs of claim against any Debtor. More information regarding the filing of proofs of claim can be obtained at www.amrcaseinfo.com. Information on this website is not incorporated into or otherwise made a part of this report.
Differences between amounts scheduled by the Debtors and claims by creditors will be investigated and resolved in connection with the claims resolution process. In light of the expected number of creditors, the claims resolution process may take considerable time to complete. Accordingly, the ultimate number and amount of allowed claims is not presently known, nor can the ultimate recovery with respect to allowed claims be presently ascertained.
Collective Bargaining Agreements. Section 1113(c) of the Bankruptcy Code provides a process for the modification and/or rejection of collective bargaining agreements ("CBAs"). Through this process, American was able to achieve new CBAs with each of its unions (TWU, APFA and APA), covering nine unionized work groups.
In September 2012, the Bankruptcy Court authorized American to reject its pilot CBA, and thereafter American began implementing certain terms and conditions of employment for pilots. American and the APA continued to negotiate in good faith toward a new pilot agreement, and those negotiations resulted in a new pilot CBA that was approved by the Bankruptcy Court on December 19, 2012. A small group of American pilots is appealing the Bankruptcy Court's decisions granting American's request to reject the pilot CBA and approving the new pilot CBA, and those appeals are pending in the U.S. District Court for the Southern District of New York.
AMR Eagle also engaged in the Section 1113(c) process with its unions, and ultimately achieved new CBAs with its unions, including AFA, ALPA and all four TWU-represented work groups.
In addition, American's pilots, flight attendants, and ground employee unions and the US Airways, Inc. pilots union have agreed to new terms for CBAs, effective upon the closing of the Merger (see below for further information in the section entitled “Merger Agreement”). American's unions representing pilots and flight attendants are working with their counterparts at US Airways, Inc. to determine representation and single agreement protocols to be used to integrate the pilots and flight attendants workforces after the Merger. The TWU reached agreement with its counterpart at US Airways (the International Association of Machinists and Aerospace Workers (IAM)) to jointly represent three groups of ground employees (Mechanic and Related, Fleet Service and Stores) following the Merger (subject to certification by the National Mediation Board), and on a process for integrating these workgroups, and one other, following the Merger.
Filing of Plan of Reorganization, Disclosure Statement and Form S-4
On April 15, 2013, the Company and other Debtors initially filed with the Bankruptcy Court the Plan and related Disclosure Statement, which contemplate that the Debtors will emerge from Chapter 11 and AMR and AMR Merger Sub, Inc will engage in the Merger (see the section entitled “Merger Agreement” below). The Plan addresses various subjects with respect to the Debtors, including the resolution of pre-petition obligations as well as the capital structure and corporate governance after exit from the Chapter 11 Cases. The Plan further provides that, upon the effectiveness of the Plan and the Merger, which is anticipated to occur contemporaneously, all shares of existing AMR common stock and other equity interests in AMR will be cancelled and any rights with respect thereto will cease to exist, subject to the right to receive distributions pursuant to the Plan. The Bankruptcy Court entered an order approving the Disclosure Statement on June 7, 2013, as discussed more fully below.
Generally, for purposes of the Plan, all 20 Debtors will be “substantively consolidated” into three nodes, consisting of: (i) AMR Debtors, (ii) American Debtors, and (iii) Eagle Debtors. As among the AMR Debtors, the American Debtors, and the Eagle Debtors, the Plan will separately classify creditor claims. However, pursuant to the compromises

10

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





incorporated into the Plan relating to certain inter-creditor issues and the treatment of intercompany claims among the Debtors, general unsecured claims of similar rank and priority will be treated the same under the Plan regardless of the Debtor against which such claim was filed.
The Plan contains provisions related to the treatment of prepetition unsecured claims against the Debtors and equity interests in AMR as described below under “Support Agreement and Term Sheet.”
On June 7, 2013, the Bankruptcy Court entered the order approving the Disclosure Statement. The Court also authorized the Debtors to solicit votes on the Plan from eligible creditors and AMR equity interest holders. Solicitation packages were distributed by June 20, 2013. On July 19, 2013, the Company and the other Debtors filed the “Plan Supplement.” The period to solicit and obtain acceptances for the Plan ended on July 29, 2013. The Plan was accepted by each class of creditors and AMR equity interest holders entitled to vote on the Plan. The Bankruptcy Court deferred ruling on Plan confirmation and requested briefs from the Debtors and other interested parties regarding the impact of the DOJ lawsuit (see the section entitled “Merger Agreement” below) on confirmation standards and the appropriateness of ruling on confirmation before the DOJ lawsuit is resolved. On August 23, 2013, the Debtors and the Official Committee of Unsecured Creditors, among others, submitted briefs in support of entry of an order confirming the Plan.
On April 15, 2013, the Company filed a Form S-4 registration statement (the “Form S-4 Registration Statement”) with the Securities and Exchange Commission (the "SEC") to register the shares of common stock of AMR, which following the Merger will be renamed American Airlines Group Inc. (herein, the “AAG Common Stock”), to be issued to stockholders of US Airways Group, Inc. ("US Airways Group") as consideration in the Merger in exchange for their US Airways Group common stock. The SEC declared the Form S-4 Registration Statement, as amended, effective on June 10, 2013. The stockholders of US Airways Group voted to approve the Merger on July 12, 2013. The AAG Common Stock cannot be issued to US Airways Group stockholders until the Plan is confirmed and the Plan and Merger are consummated.
The Plan will become effective only if it receives the requisite approval and is confirmed by the Bankruptcy Court. There can be no assurance that the Bankruptcy Court will confirm the Plan or that the Plan will be implemented successfully.
Availability and Utilization of Net Operating Losses. A discussion of the potential impact of the Plan on the availability and utilization of net operating losses (and alternative minimum tax credits) after the Debtors' emergence from Chapter 11 is contained in the Disclosure Statement. As described therein, the Debtors reasonably anticipate taking advantage of the special bankruptcy rule in section 382(l)(5) of the U.S. Internal Revenue Code, which generally applies to an ownership change in bankruptcy that involves the retention or receipt of at least half of the stock of the reorganized debtor by its shareholders and/or qualified creditors.
On April 11, 2013, the Bankruptcy Court issued a Revised Final Order Establishing Notification Procedures for Substantial Claimholders and Equity Security Holders and Approving Restrictions on Certain Transfers of Interests in the Debtors' Estates (the "Revised Order"), which restricts trading in the Company's common stock and establishes certain procedures and potential restrictions with respect to the transfer of claims (the “Revised Procedures”). The order is intended to prevent, or otherwise institute procedures and notification requirements with respect to, certain transfers of AMR common stock and unsecured claims against the Debtors that could impair the ability of the Debtors to use their net operating loss carryovers and certain other tax attributes on a reorganized basis.
In accordance with the Revised Procedures, the Debtors established an initial date by which holders of unsecured claims (or in certain cases, group of holders) that beneficially owned in excess of a threshold amount as of May 24, 2013 were required to file a Notice of Substantial Claim Ownership. The reporting deadline was May 31, 2013, and the threshold amount was $190 million of unsecured claims or such lesser amount as set forth in the proposed Disclosure Statement. The Disclosure Statement established in accordance with the Revised Procedures a second (final) date by which holders of unsecured claims (or in certain cases, group of holders) that beneficially own in excess of a threshold amount as of July 1, 2013 must file a Notice of Substantial Claim Ownership (regardless of whether such holder(s) filed a Notice as of the first reporting deadline). The final reporting deadline was July 8, 2013. The threshold amount is $190 million of unsecured claims or such lesser amount as set forth in the approved Disclosure Statement, namely such lesser amount which, when added to certain specified interests, including stock, in AMR or US Airways Group, would result in such holder holding the “Applicable Percentage,” generally 4.5

11

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





percent, of the reorganized Debtors. In connection with the filing of a Notice of Substantial Claim Ownership, a holder was required to indicate if it will agree to refrain from acquiring additional AMR and US Airways Group common stock and such other specified interests until after the effective date of the Plan, and to dispose of any such interests acquired since February 22, 2013 if directed to do so pursuant to the Revised Order.
After July 1, 2013, any acquisition of unsecured claims by a Substantial Claimholder or a person (or in certain cases, group of persons) that would become a Substantial Claimholder as a result of the contemplated transaction is not permitted unless the potential transferee files a Claims Acquisition Request at least 10 business days prior to the proposed transfer date and receives written approval from the Debtors.
The Revised Procedures did not alter the procedures applicable with respect to “Substantial Equityholders,” namely persons who are, or as a result of a transaction would become, the beneficial owner of approximately 4.5 percent of the outstanding shares of the Company's common stock.
Any acquisition, disposition, or other transfer of equity or claims in violation of the restrictions set forth in the Revised Order will be null and void ab initio and/or subject to sanctions as an act in violation of the automatic stay under sections 105(a) and 362 of the Bankruptcy Code. A further explanation of the Revised Procedures is contained in the Disclosure Statement.
Liabilities Subject to Compromise
The following table summarizes the components of liabilities subject to compromise included on the Consolidated Balance Sheet as of July 31, 2013:
(in millions)
 
Long-term debt
$
1,153

Estimated allowed claims on aircraft lease and debt obligations and facility lease and bond obligations
4,110

Pension and postretirement benefits
1,211

Accounts payable and other accrued liabilities
389

Other
(12
)
Total liabilities subject to compromise
$
6,851

Liabilities subject to compromise refers to prepetition obligations which may be impacted by the Chapter 11 reorganization process. These amounts represent the Debtors’ current estimate of known or potential prepetition obligations to be resolved in connection with the Chapter 11 Cases.
In accordance with ASC 852, substantially all of the Company’s unsecured debt has been classified as liabilities subject to compromise. Additionally, certain of the Company’s undersecured debt instruments have also been classified as liabilities subject to compromise.
As a result of the modifications to the retirement benefits as discussed below, a portion of the pension and postretirement benefits liability, primarily relating to retiree medical and other benefits, was classified as liabilities subject to compromise.
Differences between liabilities the Debtors have estimated and the claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust amounts as necessary. Such adjustments may be material. In light of the expected number of creditors, the claims resolution process may take considerable time to complete. Accordingly, the ultimate number and amount of allowed claims is not presently known.

12

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





Reorganization Items, net
Reorganization items refer to revenues, expenses (including professional fees), realized gains and losses and provisions for losses that are realized or incurred in the Chapter 11 Cases. The following table summarizes the components included in reorganization items, net on the Consolidated Statement of Operations for the month ended July 31, 2013:
(in millions)
 
Aircraft and facility financing renegotiations and rejections (1) (2)
$
28

Professional fees
27

Other
2

Total reorganization items, net
$
57

(1)
Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to the rejection or modification of financings related to aircraft. The Debtors record an estimated claim associated with the rejection or modification of a financing when the applicable motion is filed with the Bankruptcy Court to reject or modify such financing and the Debtors believe that it is probable the motion will be approved, and there is sufficient information to estimate the claim. Modifications of the financings related to certain aircraft remain subject to conditions, including reaching agreement on definitive documentation. See above, “Special Protection Applicable to Leases and Secured Financing of Aircraft and Aircraft Equipment,” for further information.
(2)
Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to entry of orders treating as unsecured claims with respect to facility agreements supporting certain issuances of special facility revenue bonds. The Debtors record an estimated claim associated with the treatment of claims with respect to facility agreements when the applicable motion is filed with the Bankruptcy Court and the Debtors believe that it is probable that the motion will be approved, and there is sufficient information to estimate the claim. See above, “Rejection of Executory Contracts,” for further information.
Claims related to reorganization items are reflected in liabilities subject to compromise on the Condensed Consolidated Balance Sheet as of July 31, 2013.
Interest Expense
In accordance with ASC 852, the Debtors record interest expense only to the extent (1) interest will be paid during the Chapter 11 Cases or (2) it is probable that the Bankruptcy Court will allow a claim in respect of such interest. Interest expense recorded on the Consolidated Statements of Operations totaled $62 million for the month ended July 31, 2013. Contractual interest expense (including interest expense that is associated with obligations in liabilities subject to compromise) during this period totaled $64 million.
Insurance
Premiums to date for all insurance policies, including workers' compensation and disability insurance, have been paid in accordance with each respective policy's payment terms. No payments are past due.
Restricted Cash and Short-term Investments
The Company has restricted cash and short-term investments related primarily to collateral held to support projected workers' compensation obligations and funds held for certain tax obligations.
Recent Modifications to Pension and Other Post-Employment Benefits
The Company's defined benefit pension plans were frozen effective November 1, 2012. Eligible employees began to receive a replacement benefit under the $uper $aver 401(k) Plan on November 1, 2012.

13

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





In December 2012, the Pilot A Plan, a defined benefit plan, was amended to remove the lump-sum option and the installment option forms of benefit effective December 31, 2012. A small group of American pilots is appealing the Bankruptcy Court's decision authorizing American to eliminate the lump sum option and installment option forms of benefit. This is the same group of pilots that is appealing the Bankruptcy Court's decisions authorizing American to reject the pilot CBA and approving the new pilot CBA. All of these appeals have been consolidated, and are pending in the U.S. District Court for the Southern District of New York.
The Pilot B Plan, a defined contribution plan, was terminated on November 30, 2012. Approximately 90% of Plan B assets have been distributed and, with the exception a small residual balance to cover final plan expenses, we expect the remaining funds to be distributed by end of third quarter 2013.
On July 6, 2012, the Company commenced an adversary proceeding against the Section 1114 Committee of Retired Employees (the “Retiree Committee”) in the Bankruptcy Court seeking a determination on the issue of vesting for former employees who retired before November 1, 2012 and were eligible for certain retiree medical coverage. The Court held a hearing on January 23, 2013 and has not ruled on this matter as of the date of this report. The Company has been negotiating with the Retiree Committee since July 2012, seeking a consensual agreement to terminate subsidized retiree medical coverage and life insurance coverage.
Merger Agreement
Description of Agreement and Plan of Merger
On February 13, 2013, AMR, US Airways Group, and AMR Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of AMR (“Merger Sub”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”), providing for a business combination of AMR and US Airways Group. The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into US Airways Group (the "Merger"), with US Airways Group surviving as a wholly owned subsidiary of AMR. AMR and US Airways Group anticipate that immediately following the Merger closing, AMR will change its name to American Airlines Group Inc. ("AAG"). Following the Merger, AAG will own, directly or indirectly, all of the equity interests of American, US Airways Group and their direct and indirect subsidiaries. The Merger Agreement and the transactions contemplated thereby, including the Merger, are subject to the approval of the Bankruptcy Court, and are to be effected pursuant to the Plan of the Debtors in connection with the Chapter 11 Cases. The Bankruptcy Court entered an order approving the Disclosure Statement on June 7, 2013. The Plan is subject to confirmation and consummation in accordance with the requirements of the Bankruptcy Code.
Subject to the terms and conditions of the Merger Agreement, which has been approved by the boards of directors of the respective parties, upon completion of the Merger, US Airways Group stockholders will receive one share of common stock of AAG ("AAG Common Stock") for each share of US Airways Group common stock. The aggregate number of shares of AAG Common Stock issuable to holders of US Airways Group equity instruments (including stockholders and holders of convertible notes, options, stock appreciation rights and restricted stock units) will represent 28% of the diluted equity of AAG after giving effect to the Plan. The remaining 72% diluted equity ownership of AAG will be distributable, pursuant to the Plan, to the Debtors' stakeholders, labor unions and certain employees. At the meeting of stockholders of US Airways Group held on July 12, 2013, US Airways Group's stockholders approved the adoption of the Merger Agreement.
All of the equity interests in AAG will be issued initially solely pursuant to the Merger Agreement or the Plan. Pursuant to the Plan, holders of AMR equity interests are expected to receive a recovery on such interests in the form of a distribution of AAG common stock. On June 7, 2013, the Bankruptcy Court authorized American to begin soliciting votes on the Plan from creditors and stockholders. All of the creditor classes voted to accept the Plan. A hearing was held on August 15, 2013, to consider confirmation of the Plan. The Bankruptcy Court deferred ruling on Plan confirmation and requested briefs from the Debtors and other interested parties regarding the impact of the DOJ lawsuit (see Merger Agreement under Note 2) on confirmation standards and the appropriateness of ruling on confirmation before the DOJ lawsuit is resolved. Implementation of the Plan and the making of any distributions thereunder are subject to confirmation thereof in accordance with the provisions of the Bankruptcy Code, the occurrence of the effective date under the Plan and the consummation of the Merger.

14

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





At the meeting of stockholders of US Airways Group held on July 12, 2013, US Airways Group's stockholders approved the adoption of the Merger Agreement.
On August 13, 2013, the Antitrust division of the DOJ filed a lawsuit in federal district court to enjoin the Company's pending merger with US Airways Group. The Company and US Airways Group have indicated that they intend to defend the proposed Merger. However, the ultimate resolution of the DOJ's action, and its impact on the Company and the Merger, is uncertain.
The Merger Agreement includes a termination clause that gives parties the right to terminate the Merger Agreement as of December 13, 2013 (subject to further extension by agreement) in the event all necessary regulatory approvals have not been received by that date.
Support Agreement and Term Sheet
On February 13, 2013, AMR and the other Debtors entered into a Support and Settlement Agreement (the "Support Agreement") with certain significant holders of certain prepetition claims against one or more of the Debtors (such holders of claims, the "Consenting Creditors"), aggregating approximately $1.2 billion of prepetition unsecured claims. Pursuant to the terms of the Support Agreement, each Consenting Creditor has agreed, among other things, and subject to certain conditions, to (a) vote in favor of a plan of reorganization, which must include certain terms specified in a Term Sheet attached to the Support Agreement (the "Term Sheet"), (b) generally support confirmation and consummation of such plan and (c) not to support or solicit any plan in opposition to such plan. The Plan contains the terms specified in the Term Sheet.
The Support Agreement may be terminated upon the occurrence of certain events, including: (a) certain breaches by the Debtors or Consenting Creditors under the Support Agreement; (b) termination of the Merger Agreement or the announcement by AMR or US Airways Group of their intent to terminate the Merger Agreement (in which case the Support Agreement would terminate automatically); (c) the failure to meet certain milestones with respect to achieving confirmation and consummation of the Plan; (d) the filing, amendment or modification of certain documents, including the Plan, in a manner materially inconsistent with the Support Agreement and materially adverse to a Consenting Creditor (in which case the Support Agreement can be terminated by such Consenting Creditor solely with respect to itself); (e) the amendment or modification of the Merger Agreement in a manner that is materially adverse to a Consenting Creditor (in which case the Support Agreement can be terminated by such Consenting Creditor solely with respect to itself); and (f) if the volume weighted average price of US Airways Group common stock for the thirty trading days ending on the last trading day immediately prior to the date of termination is less than $10.40. Termination of the Support Agreement would give the Consenting Creditors the right to withdraw their support of the Plan.
As described in the Term Sheet, the Plan implements the Merger, incorporates a compromise and settlement of certain intercreditor and intercompany claim issues, and contains the following provisions relating to the treatment of prepetition unsecured claims against the Debtors and equity interests in AMR:
Unless they elect to receive alternative treatment, holders of prepetition unsecured claims against AMR or American that also are guaranteed by either such company ("Double-Dip Unsecured Claims") will receive shares of preferred stock of AAG (the "AAG Preferred Stock") that will be mandatorily convertible into shares of AAG Common Stock on each of the 30th, 60th, 90th and 120th day after the effective date of the Plan.Upon the conversion of the remaining AAG Preferred Stock on the 120th day after the effective date of the Plan, all AAG Preferred Stock will have been converted to AAG Common Stock and no AAG Preferred Stock will remain outstanding. The conversion price of the AAG Preferred Stock will vary on each conversion date, based on the volume weighted average price of the shares of the AAG Common Stock on the five trading days immediately preceding each conversion date, at a 3.5% discount, subject to a cap and a floor price. The AAG Preferred Stock allocable to the Double-Dip Unsecured Claims will have a face amount equal to the allowed amount of their claims, including post-petition interest at the non-default rate;
Holders of prepetition unsecured claims (other than claims of the Debtors' unions) that are not Double-Dip Unsecured Claims (and holders of Double-Dip Unsecured Claims that elect to receive such treatment) will receive shares of AAG Preferred Stock, as well as shares of AAG Common Stock;

15

AMR CORPORATION, ET AL.
DEBTORS AND DEBTORS IN POSSESSION
Notes to Condensed Consolidated Financial Statements
(Unaudited)





Holders of existing AMR equity interests (including stock, warrants, restricted stock units and options) will receive a distribution of shares of AAG Common Stock representing 3.5% of the total number of shares of AAG Common Stock (on an as-converted basis) in addition to the potential to receive shares of AAG Common Stock above such amount; and
The satisfaction of certain labor-related claims through the allocation to such claims of shares of AAG Common Stock representing 23.6% of the total number of such shares of AAG Common Stock ultimately distributed to holders of prepetition general unsecured claims against the Debtors.
In each case, the distributions made to each of the foregoing stakeholders will be adjusted to take into account any reserves made for disputed claims under the Plan. The Bankruptcy Court entered an order approving the Support Agreement on June 4, 2013.
The Support Agreement includes a termination clause that gives parties the right to terminate the Support Agreement (subject to further extension by agreement) in the event the effective date of the Plan has not occurred on or prior to December 13, 2013.

16

AMR CORPORATION, ET AL.                                 Schedule 1
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATING BALANCE SHEET    
JULY 31, 2013                            
(Unaudited) (In millions)    




 
Debtors
Non-Debtors
Eliminations & Adjustments
Consolidated
Assets
 
 
 
 
Current Assets


 
 
 
  Cash
$
611

$
4

$

$
615

  Short-term investments
5,211

2


5,213

  Restricted cash and short-term investments
933



933

  Receivables, net
1,341

17

(14
)
1,344

  Inventories, net
627



627

  Fuel derivative contracts
76



76

  Other current assets
616

1


617

    Total current assets
9,415

24

(14
)
9,425

 
 
 
 
 
Equipment and Property
 
 
 
 
  Flight equipment, net
10,575



10,575

  Other equipment and property, net
2,076

1


2,077

  Purchase deposits for flight equipment
670



670

 
13,321

1


13,322

 
 
 
 
 
Equipment and Property Under Capital Leases
 
 
 
 
  Flight equipment, net
197



197

  Other equipment and property, net
58



58

 
255



255

 


 
 
 
International slots and route authorities
709



709

Domestic slots and airport operating and gate lease rights, less accumulated amortization, net
148



148

Other assets
2,479

106

(382
)
2,203

 
$
26,327

$
131

$
(396
)
$
26,062





17

AMR CORPORATION, ET AL.                             Schedule 1 (Continued)
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATING BALANCE SHEET
JULY 31, 2013
(Unaudited ) (In millions)




 
Debtors
Non-Debtors
Eliminations & Adjustments
Consolidated
Liabilities and Stockholders' Equity (Deficit)
 
 
 
 
Current Liability


 
 
 
  Accounts payable
$
1,586

$
(144
)
$
(15
)
$
1,427

  Accrued liabilities
2,177



2,177

  Air traffic liability
5,371



5,371

  Current maturities of long-term debt
1,287



1,287

  Current obligations under capital leases
26



26

    Total current liabilities
10,447

(144
)
(15
)
10,288

 


 
 
 
  Long-term debt, less current maturities
8,019


(106
)
7,913

 Obligations under capital leases, less current obligations
348



348

  Pensions and postretirement benefits
6,686



6,686

  Other liabilities, deferred gains and deferred credits
1,860



1,860

 
16,913


(106
)
16,807

 
 
 
 
 
  Liabilities Subject to Compromise
6,851



6,851

 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Deficit)
 
 
 
 
  Preferred stock




  Common stock
341

1

(1
)
341

  Additional paid-in-capital
4,488

259

(259
)
4,488

  Treasury stock
(367
)


(367
)
  Accumulated other comprehensive income
(3,054
)


(3,054
)
  Accumulated Deficit
(9,292
)
15

(15
)
(9,292
)
 
$
26,327

$
131

$
(396
)
$
26,062




18

AMR CORPORATION, ET AL.                         Schedule 2
DEBTORS AND DEBTORS IN POSSESSION
CONSOLIDATING STATEMENT OF OPERATIONS    
MONTH ENDED JULY 31, 2013                            
(Unaudited)




 
Debtors
Non-Debtors
Eliminations & Adjustments
Consolidated
Revenues
 
 
 
 
    Passenger - American Airlines
$
1,939

$

$

$
1,939

                      - Regional Affiliates
270



270

    Cargo
55



55

    Other revenues
219

1

(1
)
219

      Total operating revenues
2,483

1

(1
)
2,483

 
 
 
 
 
Expenses
 
 
 
 
  Aircraft fuel
737



737

  Wages, salaries and benefits
523



523

  Other rentals and landing fees
117



117

  Maintenance, materials and repairs
118



118

  Depreciation and amortization
83



83

  Commissions, booking fees and credit card expense
101



101

  Aircraft rentals
62



62

  Food service
54



54

  Special charges and merger related
2



2

  Other operating expenses
274

1

(1
)
274

    Total operating expenses
2,071

1

(1
)
2,071

 
 
 
 
 
Operating Income
412



412

 
 
 
 
 
Other Income (Expense)
 
 
 
 
  Interest income
2



2

  Interest expense
(62
)


(62
)
  Interest capitalized
3



3

  Miscellaneous - net
(6
)


(6
)
 
(63
)


(63
)
 
 
 
 
 
Income Before Reorganization Items
349



349

 
 
 
 
 
Reorganization Items, Net
(57
)


(57
)
 
 
 
 
 
Income Before Income Taxes
292



292

Income tax




Net Income
$
292

$

$

$
292


19

AMR CORPORATION, ET AL.                         Schedule 3
DEBTORS AND DEBTORS IN POSSESSION
TOTAL DISBURSEMENTS BY FILED LEGAL ENTITY
MONTH ENDED JULY 31, 2013                            
(Unaudited) (In thousands)




Legal Entity
Case Number
Disbursements
 
 
 
American Airlines Realty (NYC) Holdings, Inc.
11-15462
$
32

 
 
 
AMR Corporation
11-15463
268

 
 
 
American Airlines, Inc.
11-15464
3,064,634

 
 
 
AMR Eagle Holding Corporation
11-15465

 
 
 
Americas Ground Services, Inc.
11-15466
318

 
 
 
PMA Investment Subsidiary, Inc.
11-15467

 
 
 
SC Investment, Inc.
11-15468

 
 
 
American Eagle Airlines, Inc.
11-15469
98,721

 
 
 
Executive Airlines, Inc.
11-15470
2,635

 
 
 
Executive Ground Services, Inc.
11-15471

 
 
 
Eagle Aviation Services, Inc.
11-15472
1,534

 
 
 
Admirals Club, Inc.
11-15473

 
 
 
Business Express Airlines, Inc.
11-15474

 
 
 
Reno Air, Inc.
11-15475

 
 
 
AA Real Estate Holding GP LLC
11-15476

 
 
 
AA Real Estate Holding L.P.
11-15477

 
 
 
American Airlines Marketing Services LLC
11-15478
32

 
 
 
American Airlines Vacations LLC
11-15479
74

 
 
 
American Aviation Supply LLC
11-15480
1,341

 
 
 
American Airlines IP Licensing Holding, LLC
11-15481

 
 
 
 
 
$
3,169,589



20

AMR CORPORATION, ET AL.                             Schedule 4
DEBTORS AND DEBTORS IN POSSESSION
SCHEDULE OF FEDERAL, STATE AND LOCAL TAXES COLLECTED, RECEIVED, DUE OR WITHHELD
MONTH ENDED JULY 31, 2013                            
(Unaudited) (In millions)




Payroll Taxes
 
Gross wages and salaries paid or incurred(3)
$
373.0

  Payroll taxes withheld employee
80.9

  Payroll taxes withheld employer
26.9

  Total payroll taxes withheld
107.8

  Amount of payroll tax remitted to tax authorities
107.2

  Date(s) remitted to tax authorities
Various

 
 
Sales & Use Taxes
 
  Sales & use tax collected and incurred
6.0

Amount of sales & use tax remitted to tax authorities(1)
5.4

  Date(s) remitted to tax authorities
Various

 
 
Federal Transportation Tax
 
  Federal transportation tax collected
131.2

  Amount of federal transportation tax remitted to Internal Revenue Service(1)
167.4

  Date(s) remitted to tax authorities
7/10 & 7/25

 
 
Passenger Facility Charges
 
  Passenger facility charges collected
28.9

  Amount of passenger facility charges remitted to airport authorities(1)
27.6

  Date(s) remitted to airport authorities
7/31

 
 
U.S. Security Fees
 
  U.S. Security Fees collected
19.9

  Amount of U.S. Security Fees remitted to Transportation Security Administration(1)
19.0

  Date(s) remitted to Transportation Security Administration
7/28

 
 
Customs User Fees
 
  Customs user fees collected
5.7

  Amount of customs user fees remitted to Customs and Border Protection Agency(2)
18.0

  Date(s) remitted to Customs and Border Protection Agency
7/30

 
 
Immigration User Fees
 
  Immigration user fees collected
7.3

  Amount of immigration user fees remitted to Customs and Border Protection Agency(2)
23.1

  Date(s) remitted to Customs and Border Protection Agency
7/30

 
 
Animal and Plant Health Inspection Service (APHIS) Fees
 
  APHIS user fees collected
5.3

  Amount of user fees remitted to U.S. Department of Agriculture(2) 
16.8

  Date(s) remitted to U.S. Department of Agriculture
7/30

 
 
Property taxes paid
2.4

(1) Tax is remitted one month in arrears of collection month. Amounts noted reflect actual collections and remittances during the month ended July 31, 2013.
(2) Tax is remitted quarterly. Amounts noted reflect actual collections and remittances during the month ended July 31, 2013.
(3) Payroll tax remittance does not equal taxes withheld because of tax entity payment timing requirements.

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AMR CORPORATION, ET AL.                             Schedule 5
DEBTORS AND DEBTORS IN POSSESSION
TOTAL DISBURSEMENTS TO RETAINED PROFESSIONALS
MONTH ENDED JULY 31, 2013                            
(Unaudited) (In thousands)




Retained Professionals
Disbursements(1)
 
 
Debtors' Advisors and Notice and Claims Agent:
 
Airport & Aviation Professionals Inc.
$
14

Bernstein Shur Sawyer & Nelson
224

Brinks Hofer Gilson & Lione
180

Cooley LLP
5

Covington & Burling LLP
25

Debevoise & Plimpton
5,001

Deloitte Financial
1,605

Ernst & Young LLP
357

Ford & Harrison
150

Grant Thornton
30

Groom Law Group
469

Harris Finley & Bogle
42

Haynes and Boone LLP
179

Houlihan Lokey Capital Inc.
155

Husch Blackwell LLP
133

ICF SH&E
607

Jenner & Block LLP
110

K&L Gates LLP
246

Kelly Hart & Hallman LLP
182

KPMG LLP
794

McKinsey Recovery & Transformation
327

Milbank Tweed Hadley & McCloy
386

Morgan Lewis & Bockius
315

Paul Hastings LLP
1,997

Rothschild Inc.
228

Sheppard Mullin Richter & Hampton LLP
182

Skyworks Capital LLC
4,606

The Boston Consulting Group, Inc.
75

The Garden City Group Inc.
52

The Segal Company
1

Weil, Gotshal & Manges LLP
1,781

Winstead Sechrest & Minick PC
376

Yetter Coleman LLP
330

Zolfo Cooper LLC
30

 
$
21,194

Advisors to Unsecured Creditors' Committee:
 
Epiq Bankruptcy Solutions LLC
$
15

Hay Group
4

Mesirow Financial Consulting LLC
970

Moelis & Company Holding LP
286

Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates
777


22

AMR CORPORATION, ET AL.                             Schedule 5
DEBTORS AND DEBTORS IN POSSESSION
TOTAL DISBURSEMENTS TO RETAINED PROFESSIONALS
MONTH ENDED JULY 31, 2013                            
(Unaudited) (In thousands)




Togut Segal & Segal LLP
91

 
$
2,143

Total Disbursements to Retained Professionals
$
23,337


(1)
The Debtors have retained certain legal and financial professionals to advise them in the Chapter 11 Cases. The Creditors' Committee also retained certain legal and financial professionals in connection with the Chapter 11 Cases. For the month of July 2013, estimated based on the Debtors' books and records, the Debtors accrued $27 million of professional fees relating to such professionals, as indicated in Note 2 to the Condensed Consolidated Financial Statements. Any payments to such professionals will be made in accordance with applicable orders of the Bankruptcy Court.

23