AMR Corporation is an American airline holding company headquartered in Fort Worth, Texas. It is the parent company of American Airlines, which operates domestic and international flights. AMR has been in business since 1934 and currently employs over 84,000 people with a fleet of 900 aircraft serving 250 cities in 40 countries. In 2008, AMR reported total revenue of $23.766 billion but total expenses of $25.655 billion, resulting in an operating loss of $1.889 billion for the year. AMR has a high debt ratio of 0.9 and a current ratio of 0.63. The presentation recommends that AMR continue cutting costs, focus on restructuring long-term debt, increase aircraft lease buy-

1. AMR 2008 Financial Analysis Presented by James L. Adams Jr. For Academic & Demonstration Purposes Only br />

2. Disclaimer The resulting financial analysis is a snap-shot of AMR and should in now way be used as a conclusive or definitive determination about the organization or it’s interests, holdings, agents or parties. The purpose of this study is for academic research only and should not be used as a determining factor in regards to investment decisions or contract negotiations.

3. AMR Corporation A Brief History of AMR Services Stock Market Activity Financials Current News Recommendations AGENDA

5. HQ: Fort Worth, TX

6. Industry: Airlines

7. Sector: Services

8. Inc: Delaware 1982

9. Status: Public Held

10. Exchange: NYSE

12. (Domestic & International)

13. American Eagle /Connections

14. (Domestic Regional)

15. 13k employees

16. Established 1984

18. Employees: 84,100

19. 900 Aircraft Fleet

20. Serves 40 Countries

21. 250 Cities

23. Directors

24. CEO/Chair/President

25. Gerard J. Aprey

26. CFO

27. Thomas Horton

28. General Counsel

29. Gary Kennedy

30. EVP Marketing

31. David Garton

32. EVP Operations

34. Spokes & Hubs

35. American Connections

36. Available Capacity

37. Seat availability

38. Reporting

39. Consolidated

40. Balance Sheet

41. Statement of Cash-flows

43. Debt Ratio = 0.90

44. Current Ratio = 0.63

45. Cost of Debt = 6.34%

46. Cost of Equity = 13.64%

47. Beta = 1.33

48. Risk Free Rate = 3.00%

49. WACC = 7.08%

51. Total Equity = US$1.3b

53. SEC 10K Notes Lengthy contracts with Boeing beyond 2013. Cash deposits for orders amounting to $910 million Leveraging some current & future aircraft for short-term collateral debt. Not actively pursuing futures for fuel. Loss of fiscal policies due to creditor requirements. Contract obligations for co-branding in marketing. Enduring losses for larger aircraft returned to Boeing under penalty at about US$33 million.

54. Current News Industry decrease in corporate & passenger demand. The industry is going to reduce passenger incentives to absorb losses. Fuel prices may be on the decline in the Middle East but has not transferred in the U.S. Future labor negotiations.

55. Conclusion Management’s philosophy contributes to the current debt issue. A decision may have to be made to verify capacity in comparison to cost of new aircraft. Orders may need to be cancelled to be used to assist in eliminating short-term debt obligations. A focus needs to be applied toward fuel futures.

56. Recommendations Continue to cut operational cost (personnel). Focus on restructuring long-term debt. Increase number of lease buy-backs. Conduct labor negotiations through arbitration.