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AMERICAN AIRLINES INCTuesday, 29 November 2011
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAAnot
available
non return extremlypathological
pathological highdanger
weak sufficient adequate good very
strongextremely
strong
Company name AMERICAN AIRLINES INC
Identification number US131502798
Country United States of America
ZIP code and city 76155 - FORT WORTH
Address 4333, Amon Carter Boulevard
+1 817 963 1234
www.aa.com
Legal form
Account Consolidated
Incorporation date 1930
NACE 2 Sector 5110 - Passenger air transport
Listed
Status Active
MORE Credit limit Not eligible for credit on the base of the available informations
31/12/2010 31/12/2009 31/12/2008
Turnover (th e) 16,576,861 13,812,297 17,026,666
Rating CC CC C
Probability of default 42.00% 42.00% 57.00%
Confidence Level 100% 100% 100%
Solvency ratios
Leverage ratio -4.54 -4.91 -5.59
Total asset/Total liabilties 0.78 0.80 0.82
Liquidity ratios
Current Ratio 0.60 0.64 0.52
Quick Ratio 0.55 0.59 0.48
Profitability and economic equili-
brium ratios
Return on investement ROI (%) 0.54 -5.30 -8.86
Return on equity ROE (%) -7.40 -25.08 -51.60
Asset turnover 0.99 0.87 1.05
Interest paid weight 5.17 -0.44 -0.27
Gross Profit/Operating revenue 0.26 0.23 0.23
Interest Coverage ratios
EBIT interest coverage ratio 0.24 -2.15 -3.83
Analysis and trend of financial
strength
Page 2
AMERICAN AIRLINES INCTuesday, 29 November 2011
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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Sector Analysis
Company Healthy Balanced Vulnerable Risky
Solvency ratios
Leverage ratio -4.54 0.56 2.40 4.74 -1.92
Total asset/Total liabilties 0.78 2.77 1.42 1.17 0.92
Liquidity ratios
Current Ratio 0.60 2.35 1.28 0.88 0.67
Quick Ratio 0.55 2.02 1.17 0.79 0.59
Profitability and economic equilibrium ratios
Return on investement ROI (%) 0.54 20.00 6.39 1.05 -19.55
Return on equity ROE (%) -7.40 23.37 10.40 -7.60 -108.80
Asset turnover 0.99 2.08 1.48 1.36 1.39
Interest paid weight 5.17 0.00 0.17 0.13 -0.10
Gross Profit/Operating revenue 0.26 0.21 0.20 0.12 0.06
Interest Coverage ratios
EBIT interest coverage ratio 0.24 331.80 4.60 0.03 -8.53
Cash Conversion Cycle (days)
Days Sales Of Inventory (DIO) 9 14 8 11 7
Days Sales Outstanding (DSO) 12 34 33 33 33
Days Payable Outstanding (DPO) 66 12 27 37 48
Cash Conversion Cycle (DIO + DSO - DPO) -45 36 20 9 -6
Numer of analyzed companies - 70 279 227 145
(Average) Rating CC A BB B CC
The sector has been chosen according to:
international companies in the sector NACE 2 5110 with financial data of year 2009.
Page 3
AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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Sector Analysis - Graphs
Page 4
AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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Balance Sheet
BALANCE SHEET (th e) 31/12/2010 31/12/2009 31/12/2008
Accounting practice Local GAAP Local GAAP Local GAAP
Exchange rate USD - EUR 0.74839 0.69416 0.71855
Total assets 16,780,424 15,940,576 16,180,219
Fixed assets 11,733,275 11,391,084 12,032,053
Intangible fixed assets 688,520 674,719 783,215
Tangible fixed assets 9,151,325 8,715,810 9,106,852
Other fixed assets 1,893,429 2,000,555 2,141,986
Current assets 5,047,149 4,549,492 4,148,166
Stocks 405,628 359,572 345,621
Debtors 538,093 516,451 572,681
Other current assets 4,103,428 3,673,468 3,229,864
Cash & cash equivalent 3,358,031 3,047,341 2,226,056
Shareholders funds -4,741,806 -4,080,243 -3,524,468
Capital 0 0 0
Other shareholders funds -4,741,806 -4,080,243 -3,524,468
Total liabilities 21,522,229 20,020,819 19,704,687
Non current liabilities 13,129,772 12,867,552 11,749,664
Long term debt 4,933,394 5,542,134 4,802,762
Other non-current liabilities 8,196,379 7,325,418 6,946,903
Current liabilities 8,392,457 7,153,268 7,955,023
Loans 1,178,716 611,551 1,014,587
Creditors 3,014,519 2,773,843 2,384,136
Other current liabilities 4,199,222 3,767,873 4,556,300
Total shareh. funds & liab. 16,780,424 15,940,576 16,180,219
NET DEBT (th e) 31/12/2010 31/12/2009 31/12/2008
Short term debts 1,178,716 611,551 1,014,587
Long term debt 4,933,394 5,542,134 4,802,762
Cash & cash equivalent 3,358,031 3,047,341 2,226,056
Net debt 2,754,079 3,106,344 3,591,293
31/12/2010 31/12/2009 31/12/2008
Working capital -2,070,798 -1,897,820 -1,465,834
Net Current Assets -3,345,308 -2,603,775 -3,806,857
31/12/2010 31/12/2009 31/12/2008
Days Sales Of Inventory (DIO) 9 10 7
Days Sales Outstanding (DSO) 12 14 12
Days Payable Outstanding (DPO) 66 73 51
Cash Conversion Cycle (DIO + DSO - DPO) -45 -49 -32
Page 5
AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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Income Statement
INCOME STATEMENT (th e) 31/12/2010 31/12/2009 31/12/2008
Accounting practice Local GAAP Local GAAP Local GAAP
Exchange rate USD - EUR 0.74839 0.69416 0.71855
Sales 14,787,458 12,235,871 15,516,283
Revenues growth (%) 20.9 -21.1 -
Other revenues +/- variation in inventories and contract in progress + Fixed assets
own construction capitalized1,789,403 1,576,426 1,510,384
Operating revenue / turnover 16,576,861 13,812,297 17,026,666
Total operating costs 16,463,854 14,619,599 18,502,560
Costs growth (%) 13 -21 -
Service costs - - -
Material costs - - -
Costs of employees - - -
EBITDA 812,753 -145,078 -741,539
Depreciation 699,746 662,224 734,354
EBIT 113,007 -807,302 -1,475,894
Financial P/L -490,196 -412,328 -342,746
Financial revenue 8,981 13,883 86,226
Financial expenses 499,177 426,211 428,972
Interest paid 467,744 375,538 385,141
P/L before tax -377,189 -1,219,630 -1,818,640
Extr. and other P/L - - -
Extr. and other revenue - - -
Extr. and other expenses - - -
P/L before tax + Extr. and other P/L - - -
Taxation -26,194 -196,446 0
P/L for period -350,995 -1,023,185 -1,818,640
31/12/2010 31/12/2009 31/12/2008
Costs of Good Sold 12,240,684 10,653,197 13,184,601
Gross Profit 4,336,178 3,159,100 3,842,066
Other Operating Expenses 4,223,171 3,966,402 5,317,959
31/12/2010 31/12/2009 31/12/2008
Cash flow 348,750 -360,961 -1,084,286
Added value - - -
31/12/2010 31/12/2009 31/12/2008
Number of employees 65,525 66,500 70,900
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AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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Evolutions and trends
Page 7
AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Qualitative information
Full overview It is an American airline company and a principal subsidiary of AMR Corporation, a commercial aviation business
and airline holding company. The company is the largest airline in the world in terms of total passengers - miles
transported and fleet size. It was founded in 1930 as American Airways. The US - based company has its corporate
headquarters located in Fort Worth, Texas. The company operates flights throughout the United States as well as
in Canada, Latin America, the Caribbean, Western Europe, Japan, China and India. Its hubs include: Dallas - Fort
International Airport; O’Hare International Airport; Miami International Airport; Lambert - St. Louis International
Airport; and Luis Moñuz Marin International Airport. Also in other major airports such as: Boston; Los Angeles;
Raleigh’Durham and New York’s Laguardia and John F. Kennedy International Airports. It is the founding member
of the Oneworld, a worldwide airline alliance. Its partner airline, American Eagle Airlines, is a regional airline based
in Texas and wholly owned by AMR Corporation. The company has established the AAdvantage frequent flyer
program to develop passenger’s loyalty by offering awards to travelers. It has built marketing relationships with
other airline and rail companies, such as Aer Lingus, Air Pacific, Air Sahara, Air Tahiti Nui, Alaska Airlines, British
Airways, Cathay Pacific, China Eastern Airlines, LAN Airlines, Mal v Hungarian Airlines, Mexicana, Qantas Airways,
Royal Jordanian, SN Brussels Airlines, SNCF French Rail, TAN, Turkish Airlines and Vietnam Airlines.
History Founded in 1930 as American Airways.
Primary business line Operates as an American airline company.
Secondary business line Not available.
Main activity Services.
Secondary activity Not available.
Main products and services Operates flights.
Size estimate Largest airline in the world in terms of total passengers - miles transported and fleet size.
Strategy, organization and policy Not available.
Strategic alliances American Eagle Airlines; Aer Lingus; Air Pacific; Air Sahara; Air Tahiti Nui; Alaska Airlines; British Airways; Cathay
Pacific; China Eastern Airlines; LAN Airlines; Mal v Hungarian Airlines; Mexicana; Qantas Airways; Royal Jordanian;
SN Brussels Airlines; SNCF French Rail; TAN; Turkish Airlines; Vietnam Airlines.
Membership of a network Oneworld.
Main brand names Not available.
Main domestic country United States of America.
Main foreign countries or regions Canada; Latin America; Caribbean; Western Europe; Japan; China; India.
Main production sites Not available.
Main distribution sites Not available.
Page 8
AMERICAN AIRLINES INCTuesday, 29 November 2011
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Main sales representation sites Not available.
Main customers Not available.
Auditor/Advisor/Bank
name type address
ERNST & YOUNG LLP Auditor -
Board
Not available.
Sharehoders (the first twenty shareholders ordered by Direct %))
AMR CORP Rating: B
Country ISO code US Operating revenue (MIL $) 22,170
NACE Rev. 2, Core code - Total Assets (MIL $) 25,088
Direct % 100.00 Number of Employees 78,250
Total % 100.00 Information date 2010/12
Address: Not available
Subsidiaries (the first twenty subsidiaries ordered by Direct %)
AA 2002 CLASS C CERTIFICATE CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
Page 9
AMERICAN AIRLINES INCTuesday, 29 November 2011
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
AA 2002 CLASS D CERTIFICATE CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AA 2003 - 1 CLASS C CERTIFICATE CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AA 2003 - 1 CLASS D CERTIFICATE CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AA 2004 - 1 CLASS B NOTE CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AA 2005 - 1 CLASS C CERTIFICATE CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AA REAL ESTATE HOLDING GP LLC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AA REAL ESTATE HOLDING LP Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
ADMIRALS CLUB INC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AMERICAN AIRLINES IP LICENSING HOLDING LLC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
Page 10
AMERICAN AIRLINES INCTuesday, 29 November 2011
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
AMERICAN AIRLINES MARKETING SERVICES LLC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AMERICAN AIRLINES REALITY (NYC) HOLDINGS INC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AMERICAN AIRLINES VACATIONS LLC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AMERICAN AVIATION SUPPLY LLC Rating: -
Country ISO code US Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AMERICAN AIR LINES DE MEXICO, S.A. DE C.V. Rating: -
Country ISO code MX Operating revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 100.00 Number of Employees -
Total % 100.00 Information date 2010/12
AAV TOURS LLC Rating: -
Country ISO code US Operating revenue (MIL $) 6
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 50
Total % - Information date 2011/08
AMERICAN AIRLINES AUSTRALIAN TOURS, INC. Rating: -
Country ISO code US Operating revenue (MIL $) 0
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 3
Total % - Information date 2011/02
AMERICAN AIRLINES CREW Rating: -
Country ISO code US Operating revenue (MIL $) 0
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 2
Total % - Information date 2011/06
AMERICAN AIRLINES FUEL CORPORATION Rating: -
Country ISO code US Operating revenue (MIL $) 1
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 5
Total % - Information date 2011/06
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AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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AMR VENTURES III, INC. Rating: -
Country ISO code US Operating revenue (MIL $) 0
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 4
Total % - Information date 2011/07
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AMERICAN AIRLINES INCTuesday, 29 November 2011
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ASKMORE rating guide
General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of
an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk
factors.
The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial
companies by using data included in financial statements.
The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy
model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the
model are obtained by applying newly developed numerical methodologies, drawing together financial theory,
data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective
algorithm that produces a classification of each company, by taking into account any attributes (such as sector and
country) characterizing a firm.
The model gives the opportunity to assign a rating to a company even without considering a complete data analysis
and allows to process quality information. It induces a better understanding of a company’s strength and weakness
thanks to sophisticated data mining tools and taking into account the analyst knowledge.
The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the
rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium
between the different aspects, better will be the final rating.
This is done studying, evaluating and aggregating the most important sections of the financial and economic
behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.
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AMERICAN AIRLINES INCTuesday, 29 November 2011
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D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
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Rating scale
Rating class Rating macro class Assessment
AAA
Healthy
The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent
economic and financial flow and fund equilibrium.
AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial
equilibrium. Difference from AAA is slight.
AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in
circumstances and economic conditions than companies in higher rated categories.
BBB
Balanced
Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial
commitments could be affected by serious unfavourable events.
BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions.
B
Vulnerable
The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic
conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.
CCC
A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial
fundamentals. Adverse market events and an inadequate management could affect with high probability the
company’s solvency.
CC
Risky
The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the
company’s strong disequilibrium could increase.
CThe company shows considerable pathological situations. The company’s capacity to meet its financial
commitments is very low.
D The company has not any longer the capacity to meet its financial commitments.
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AMERICAN AIRLINES INCTuesday, 29 November 2011
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Fundamental Credit Rating Ratios
Analysis area Ratio Assessment
Solvency ratios
Leverage ratioThis measures the level of total liabilities of the company in comparison
with equity.
Assets to debtThis indicates company’s solvency. The company shows a level of deficit
when the value of this ratio is under one unit.
Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.
whether a company covers the fixed assets with long term capital.
Liquidity ratios
Current ratioThis measures whether a company has sufficient short-term assets to cover
its short-term liabilities.
Quick ratioThis compares current liabilities only to those assets that can be readily
turned into cash.
Profitability and economic ratios
Return on Investement(ROI)This measures the profitability of company investments without regard to
the way the investment is financed.
Return on Equity(ROE) This measures the profitability of the equity.
Asset turnover
This indicates the investments turnover with regards to sales. The level
assumed from the ratio depends on the sector in which the company
operates.
Profit margin This indicates the profitability of sales.
Interest coverage ratio Interest Paid coverage
This indicate the ability of the company to cover interest expenses through
the economic margins (Gross profit and EBIT) and through the cash flow
from operating activities.
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MORE Credit Limit, Probability of default and Confidence Level
MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial
relationship with the analyzed company with an outlook of one year.
modeFinance used the following values associated with the company analyzed while computing the credit limit:
• Size;
• Years in Business;
• Average number of suppliers;
• Liquidity of the company and the comparison with its sector;
• The funds dedicated to be paid to suppliers;
• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).
The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual
public data. This value should be reviewed by paying attention to the Confidence Level value and by using other
information such as other business information, news... etc; and private information such as the relationship with
client, history of payments, guarantees and the knowledge of the sector.
Probability of default e Confidence
Level
In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of
confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go
into default.
As the probability of default is strongly affected by the economic climate that the company is operating in,
companies in the same MORE class will not necessarily have the same probability of default.
The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:
Confidence =
∑Available Information∑
Total Information
The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in
availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the
MORE rating is able to take into account for each company.
For companies with fully populated records a confidence level of 100% would be applied: companies where no
financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.
Page 16
AMERICAN AIRLINES INCTuesday, 29 November 2011
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key
D C CC CCC B BB BBB A AA AAA
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Notes and disclaimer
NOTES The present analysis was based on the company available financial statements as provided by Bureau Van Dijk
Electronic Publishing - ORBIS database (lack of both Notes to financial statements and Report on operations).
DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any
form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of
the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot
be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will
be based on information gathered in good faith from both primary and secondary sources, whose accuracy we
are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken
based on any information that may subsequently prove to be incorrect.
Contacts
Company modeFinance
Products MORE rating
Where AREA Science Park
34149 Trieste, via Padriciano 99 - ITALY
Info [email protected]
web www.modefinance.com
Phone +39 040 3755337