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Beverly GouletBeverly GouletVice President of Corporate Development and TreasurerVice President of Corporate Development and Treasurer
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Safe HarborSafe Harbor• Please note that many of our statements, including
any comments on matters related to our outlook for revenue and earnings, cost estimates, and forecasts of capacity, traffic, load factor, fuel costs and other matters will constitute forward-looking statements. These matters are subject to a number of factors that could cause actual results to differ from our expectations. These factors include domestic and international economic conditions, commodity prices, general competitive factors including, but not limited to, government regulations, uncertainty in domestic or international operations, acts of war or terrorism, our ability to access the capital markets and changes in the Company's business strategy, any of which could affect our actual results.
• Please note that many of our statements, including any comments on matters related to our outlook for revenue and earnings, cost estimates, and forecasts of capacity, traffic, load factor, fuel costs and other matters will constitute forward-looking statements. These matters are subject to a number of factors that could cause actual results to differ from our expectations. These factors include domestic and international economic conditions, commodity prices, general competitive factors including, but not limited to, government regulations, uncertainty in domestic or international operations, acts of war or terrorism, our ability to access the capital markets and changes in the Company's business strategy, any of which could affect our actual results.
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Safe Harbor (cont.)Safe Harbor (cont.)• Additional information concerning these and other
factors is contained in our Securities and Exchange Commission filings, including but not limited to our Form 10-K for the year ended Dec. 31, 2007.
• Additionally, please refer to the slide presentation accompanying today’s webcast at www.aa.com for reconciliation of any non-GAAP financial measurement we may discuss to what we think is the most appropriate GAAP measurement.
• Additional information concerning these and other factors is contained in our Securities and Exchange Commission filings, including but not limited to our Form 10-K for the year ended Dec. 31, 2007.
• Additionally, please refer to the slide presentation accompanying today’s webcast at www.aa.com for reconciliation of any non-GAAP financial measurement we may discuss to what we think is the most appropriate GAAP measurement.
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Oil PriceOil Price
$40
$60
$80
$100
$120
$140
1/2007 3/2007 5/2007 7/2007 9/200711/20071/2008 3/2008 5/2008 7/2008 9/2008
$ / B
arre
l
$40
$60
$80
$100
$120
$140
1/2007 3/2007 5/2007 7/2007 9/200711/20071/2008 3/2008 5/2008 7/2008 9/2008
$ / B
arre
l
1/ WTI Spot Prices1/ WTI Spot Prices
1/3/07 - $58.321/3/07 - $58.32
9/16/08 - $91.159/16/08 - $91.15
1/1/
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Crack SpreadCrack Spread
$10
$20
$30
$40
$50
$60
$70
8/2005 12/2005 4/2006 8/2006 12/2006 4/2007 8/2007 12/2007 4/2008 8/2008
$ / B
arre
l
$10
$20
$30
$40
$50
$60
$70
8/2005 12/2005 4/2006 8/2006 12/2006 4/2007 8/2007 12/2007 4/2008 8/2008
$ / B
arre
l
1/ Spread between WTI Spot Prices & US Gulf Coast Jet1/ Spread between WTI Spot Prices & US Gulf Coast Jet
10/5/05 - $67.62 10/5/05 - $67.62 9/16/08 - $71.909/16/08 - $71.90
1/1/
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2Q08 Results2Q08 Results
Net Earnings (Ex-Special Items 1/)
-$284 million
Fuel Price Impact on Expenses 2/
$840 million
Net Earnings (Ex-Special Items 1/)
-$284 million
Fuel Price Impact on Expenses 2/
$840 million
1/ Exlcudes $1.1 billion in special charges related to aircraft impairment and severance costs2/ Increase in expense due to year over year change in fuel price1/ Exlcudes $1.1 billion in special charges related to aircraft impairment and severance costs2/ Increase in expense due to year over year change in fuel price
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Fuel Increases Offset Cost ReductionsFuel Increases Offset Cost Reductions
2002-2007 Actuals; 2008 Forecast2002-2007 Actuals; 2008 Forecast
Cost Reductions2002 - 2008E
$6.0B
Cost Reductions2002 - 2008E
$6.0B
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Fuel HedgingFuel Hedging
• 3Q08– 39% hedged at $3.11/gal
• FY08– 37% hedged at $2.77/gal
• 3Q08– 39% hedged at $3.11/gal
• FY08– 37% hedged at $2.77/gal
Per Eagle Eye 8-K: Sep 18, 2008Per Eagle Eye 8-K: Sep 18, 2008
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Fuel Increases Offset Cost ReductionsFuel Increases Offset Cost Reductions
Fuel Increases2002 - 2008E
$6.9B
Fuel Increases2002 - 2008E
$6.9B
2002-2007 Actuals; 2008 Forecast2002-2007 Actuals; 2008 Forecast
Cost Reductions2002 - 2008E
$6.0B
Cost Reductions2002 - 2008E
$6.0B
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New and Modified FeesNew and Modified Fees
1st Checked Bag Fee
2nd Checked Bag Fee
Domestic Change Fee
Confirmed Flight Charge
Int’l Change Fee
Res Service Fee
Liquor and Food for Sale
1st Checked Bag Fee
2nd Checked Bag Fee
Domestic Change Fee
Confirmed Flight Charge
Int’l Change Fee
Res Service Fee
Liquor and Food for Sale
Several Several Hundreds of Hundreds of Millions of Millions of
DollarsDollars
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4Q Y-O-Y Scheduled Domestic Mainline Capacity
4Q Y-O-Y Scheduled Domestic Mainline Capacity
Announcement Date
4Q Y-O-Y Domestic Mainline Capacity
1/16/08 (0.2%)
4/16/08 (4.6%)
5/21/08 (11-12%)
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Aircraft RetirementsAircraft Retirements
30 MD-80
10 A300
37 Regional Jets 1/
26 Saabs
103 Total Aircraft
30 MD-80
10 A300
37 Regional Jets 1/
26 Saabs
103 Total Aircraft
1/ 8 of the 37 regional jet aircraft are non-owned and operated under capacity purchase arrangements1/ 8 of the 37 regional jet aircraft are non-owned and operated under capacity purchase arrangements
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Fleet ReplacementFleet Replacement
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18.917.5 17.1 16.3
13.6
11.010.1
0.02.04.06.08.0
10.012.014.016.018.020.0
2002 2003 2004 2005 2006 2007 2Q08
$ Bi
llion
18.917.5 17.1 16.3
13.6
11.010.1
0.02.04.06.08.0
10.012.014.016.018.020.0
2002 2003 2004 2005 2006 2007 2Q08
$ Bi
llion
Net DebtNet Debt
>$8B>$8B
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Pension FundingPension Funding
2003
76%
2003
76%
2007
96%
2007
96%
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AlliancesAlliances
Current and proposed transatlantic antitrust immunity Current transatlantic antitrust immunity
Proposed transatlantic antitrust immunity
* Announced new alliance members
*
**
*
* *
*
*
*
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Beverly GouletBeverly GouletVice President of Corporate Development and TreasurerVice President of Corporate Development and Treasurer
