----

----

| Delaware                                                                |   | 13-1502798                                    |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|
| (State      or other jurisdiction ofincorporation      or organization) |   | (IRS      EmployerIdentification      Number) |

| Title of Each      Class |   | Name of Exchange on Which      Registered |
|--------------------------|--------|-------------------------------------------|
| NONE                     |   | NONE                                      |

----

| PART      I |
|-------------|

----

| ·   | In      the second quarter, the Company announced capacity reductions due to      unprecedented high fuel costs and the other challenges facing the      industry.  In connection with these capacity reductions, the      Company concluded that a triggering event had occurred, requiring that      fixed assets be tested for impairment.  As a result of this      test, the Company concluded the carrying values of its McDonnell Douglas      MD-80 aircraft fleet was no longer recoverable. Consequently, the 2008      results include an impairment charge of $1.0 billion to write these and      certain related long-lived assets down to their estimated fair      values.  AMR Eagle also concluded that the carrying value of its      Embraer RJ-135 fleet was also no longer recoverable.  Based on      the terms of the capacity purchase agreement with AMR Eagle, American paid      AMR Eagle during the second quarter of 2008 for their $115 million      impairment charge related to the Embraer RJ-135 fleet which was recorded      as a component of special charges. Also in      connection with these capacity reductions, the Company recorded $68      million in expense for employee severance costs and a $33 million expense      related to the grounding of leased Airbus A300 aircraft prior to lease      expiration.  These charges are described in Note 2 to the      consolidated financial statements. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | American      recorded a settlement charge totaling $103 million related to lump sum      distributions from the Company’s defined benefit pension plans to pilots      who retired.  Pilot retirements resulted in $917 million in      total lump sum payments to pilot retirees.  The charge is      further described in Note 10 to the consolidated financial      statements. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

----

|     Year |   |  GallonsConsumed(in      millions) |   |   |   Total      Cost(in      millions) |   |   | Average      Cost Per Gallon(in      dollars) |   |   | Percent      of American's Operating Expenses |   |
|------------------------------|--------|-----------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-----------------------------------------------|--------|
|                         |   |                                    |   |   |                                          |   |   |                                          |   |   |                                          |   |
| 2006                         |   |                                    | 2,881  |   |                                          | $      | 5,784  |                                          |   | $      | 2.008                                         |   |   |   | 26.7 | % |
| 2007                         |   |                                    | 2,834  |   |                                          |   | 6,011  |                                          |   |   | 2.121                                         |   |   |   | 27.2 |   |
| 2008                         |   |                                    | 2,694  |   |                                          |   | 8,154  |                                          |   |   | 3.026                                         |   |   |   | 31.7 |   |

----

----

----

----

----

|   | • |   | limit      our ability to obtain additional funding for working capital, capital      expenditures, acquisitions and general corporate purposes, and adversely      affect the terms on which such funding can be obtained; |
|--------|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |   |                                                                                                                                                                                                                        |
|   | • |   | require      us to dedicate a substantial portion of our cash flow from operations to      payments on our indebtedness and other obligations, thereby reducing the      funds available for other purposes;                |
|   |    |   |                                                                                                                                                                                                                        |
|   | • |   | make      us more vulnerable to economic downturns; and                                                                                                                                                                     |
|   |    |   |                                                                                                                                                                                                                        |
|   | • |   | limit      our ability to withstand competitive pressures and reduce our flexibility      in responding to changing business and economic  conditions.                                                                      |

|   | • |   | actual      or potential changes in international, national, regional and local      economic, business and financial conditions, including recession,      inflation, higher interest rates, wars, terrorist attacks or political      instability; |
|--------|---------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |   |                                                                                                                                                                                                                                                 |
|   | • |   | changes      in consumer preferences, perceptions, spending patterns or demographic      trends;                                                                                                                                                     |
|   |    |   |                                                                                                                                                                                                                                                 |
|   | • |   | changes      in the competitive environment due to industry consolidation and other      factors;                                                                                                                                                    |

----

|   | • |   | actual      or potential disruptions to the air traffic control systems;  |
|--------|---------|--------|--------------------------------------------------------------------------------|
|   | • |   | increases      in costs of safety, security and environmentalmeasures;         |
|   |    |   |                                                                           |
|   | • |   | outbreaks      of diseases that affect travel behavior; and                    |
|   |    |   |                                                                           |
|   | • |   | weather      and natural disasters.                                            |

----

----

|   | • |   | changes      in law which affect the services that can be offered by airlines in      particular markets and at particular airports;                                                              |
|--------|---------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |   |                                                                                                                                                                                              |
|   | • |   | the      granting and timing of certain governmental approvals (including foreign      government approvals) needed for codesharing alliances and other      arrangements with other airlines;    |
|   |    |   |                                                                                                                                                                                              |
|   | • |   | restrictions      on competitive practices (for example court orders, or agency regulations      or orders, that would curtail an airline’s ability to respond to a      competitor);  |
|   |    |   |                                                                                                                                                                                              |
|   | • |   | the      adoption of regulations that impact customer service standards (for      example new passenger security standards, passenger bill of      rights);                                       |
|   |    |   |                                                                                                                                                                                              |
|   | • |   | restrictions      on airport operations, such as restrictions on the use of takeoff and      landing slots at airports or the auction of slot rights currently or      previously held by us; or  |
|   |    |   |                                                                                                                                                                                              |
|   | • |   | the      adoption of more restrictive locally imposed noise      restrictions.                                                                                                                    |

----

----

----

|   Equipment      Type    |   | Average      Seating Capacity |   |   |  Owned |   |   | Capital      Leased |   |   | Operating      Leased |   |   |  Total |   |   | AverageAge      (Years) |   |
|------------------------------------|--------|-------------------------------|--------|--------|-------------|--------|--------|---------------------|--------|--------|-----------------------|--------|--------|-------------|--------|--------|-------------------------|--------|
|                               |   |                          |   |   |        |   |   |                |   |   |                  |   |   |        |   |   |                    |   |
| American      Airlines Aircraft    |   |                          |   |   |        |   |   |                |   |   |                  |   |   |        |   |   |                    |   |
| Airbus      A300-600R              |   |                          | 267    |   |        |   | 10     |                |   |   | -                     |   |   |        | 16     |   |                    |   | 26 |   |   |   | 19 |   |
| Boeing      737-800                |   |                          | 148    |   |        |   | 62     |                |   |   | -                     |   |   |        | 15     |   |                    |   | 77 |   |   |   | 9 |   |
| Boeing      757-200                |   |                          | 188    |   |        |   | 92     |                |   |   | 1                     |   |   |        | 31     |   |                    |   | 124 |   |   |   | 14 |   |
| Boeing      767-200 Extended Range |   |                          | 167    |   |        |   | 3      |                |   |   | 11                    |   |   |        | 1      |   |                    |   | 15 |   |   |   | 22 |   |
| Boeing      767-300 Extended Range |   |                          | 225    |   |        |   | 47     |                |   |   | -                     |   |   |        | 11     |   |                    |   | 58 |   |   |   | 15 |   |
| Boeing      777-200 Extended Range |   |                          | 247    |   |        |   | 47     |                |   |   | -                     |   |   |        | -      |   |                    |   | 47 |   |   |   | 8 |   |
| McDonnell      Douglas MD-80       |   |                          | 140    |   |        |   | 108    |                |   |   | 64                    |   |   |        | 107    |   |                    |   | 279 |   |   |   | 19 |   |
| Super      ATR                     |   |                          | 64/66  |   |        |   | -      |                |   |   | -                     |   |   |        | 39     |   |                    |   | 39 |   |   |   | 14 |   |
| Total                              |   |                          |   |   |        |   | 369    |                |   |   | 76                    |   |   |        | 220    |   |                    |   | 665 |   |   |   | 15 |   |
|                               |   |                          |   |   |        |   |   |                |   |   |                  |   |   |        |   |   |                    |   |   |   |   |   |   |   |

|  Equipment      Type       |   | Owned  |   |   | Capital      Leased |   |   | Operating      Leased |   |   | Total  |   |
|---------------------------------|--------|--------|--------|--------|---------------------|--------|--------|-----------------------|--------|--------|--------|--------|
|                            |   |   |   |   |                |   |   |                  |   |   |   |   |
| American      Airlines Aircraft |   |   |   |   |                |   |   |                  |   |   |   |   |
| Airbus      A300-600R           |   |   | -      |   |                |   | -      |                  |   |   | 5      |   |   |   | 5 |   |
| Fokker      100                 |   |   | -      |   |                |   | -      |                  |   |   | 4      |   |   |   | 4 |   |
| McDonnell      Douglas MD-80    |   |   | 18     |   |                |   | 14     |                  |   |   | 6      |   |   |   | 38 |   |
| Total                           |   |   | 18     |   |                |   | 14     |                  |   |   | 15     |   |   |   | 47 |   |
|                            |   |   |   |   |                |   |   |                  |   |   |   |   |   |   |   |   |

----

|   Equipment      Type    |   |  2009 |   |   |  2010 |   |   |  2011 |   |   |  2012 |   |   |  2013 |   |   | 2014and      Thereafter |   |
|------------------------------------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|------------|--------|--------|-------------------------|--------|
|                               |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |                    |   |
| American      Airlines Aircraft    |   |       |   |   |       |   |   |       |   |   |       |   |   |       |   |   |                    |   |
| Airbus      A300-600R              |   |       | 2      |   |       |   | 6      |       |   |   | 8          |   |   |       | -      |   |                    |   | - |   |   |   | - |   |
| Boeing      737-800                |   |       | -      |   |       |   | -      |       |   |   | -          |   |   |       | -      |   |                    |   | 8 |   |   |   | 7 |   |
| Boeing      757-200                |   |       | 1      |   |       |   | -      |       |   |   | 1          |   |   |       | -      |   |                    |   | - |   |   |   | 30 |   |
| Boeing      767-200 Extended Range |   |       | 1      |   |       |   | 1      |       |   |   | 2          |   |   |       | 2      |   |                    |   | 6 |   |   |   | - |   |
| Boeing      767-300 Extended Range |   |       | -      |   |       |   | -      |       |   |   | -          |   |   |       | -      |   |                    |   | 3 |   |   |   | 8 |   |
| McDonnell      Douglas MD-80       |   |       | -      |   |       |   | 8      |       |   |   | 21         |   |   |       | 23     |   |                    |   | 27 |   |   |   | 92 |   |
| Super      ATR                     |   |       | -      |   |       |   | -      |       |   |   | -          |   |   |       | 1      |   |                    |   | 12 |   |   |   | 26 |   |
|                               |   |       | 4      |   |       |   | 15     |       |   |   | 32         |   |   |       | 26     |   |                    |   | 56 |   |   |   | 163 |   |

----

----

----

----

| PART      II |
|--------------|

----

----

----

----

----

----

----

----

----

|                         |   | Year      Ended December 31, |   |
|------------------------------|--------|------------------------------|--------|
|                         |   | 2008                         |   |   | 2007 |   |
| Revenues:                    |   |                         |   |   |   |   |
| Regional      Affiliates     |   | $                            | 2,486  |   |   | $ | 2,470 |   |
| Other                        |   |                         | 127    |   |   |   | 103 |   |
|                         |   | $                            | 2,613  |   |   | $ | 2,573 |   |
| Expenses:                    |   |                         |   |   |   |   |   |   |
| Regional      payments       |   | $                            | 2,639  |   |   | $ | 2,485 |   |
| Other      incurred expenses |   |                         | 424    |   |   |   | 311 |   |
|                         |   | $                            | 3,063  |   |   | $ | 2,796 |   |

----

|                                     |   |                              |   |
|------------------------------------------|--------|-----------------------------------|--------|
|                                     |   | Year      Ended December 31, 2008 |   |
|                                     |   | RASM                              |   |   |   |  Y-O-Y     |   |   | ASMs |   |   |   | Y-O-Y     |   |
|                                     |   | (cents)                           |   |   |  Change |   |   | (billions) |   |   |  Change |   |
|                                     |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |
| DOT      Domestic                        |   |                              | 10.81  |   |   |   | 5.5 | % |   |   | 101.9 |   |   |   | (6.1 | )% |
| International                            |   |                              | 11.71  |   |   |   | 10.1 |   |   |   | 61.7 |   |   |   | 0.5 |   |
|    DOT      Latin America |   |                              | 12.47  |   |   |   | 11.9 |   |   |   | 30.4 |   |   |   | 2.2 |   |
|    DOT      Atlantic      |   |                              | 10.96  |   |   |   | 6.6 |   |   |   | 24.6 |   |   |   | (1.4 | ) |
|    DOT      Pacific       |   |                              | 11.04  |   |   |   | 13.2 |   |   |   | 6.7 |   |   |   | (0.4 | ) |

----

| (in      millions) Operating      Expenses        |   | Year      ended December 31, 2008 |      |   | Change      from 2007 |   |   | Percentage      Change |   |   |
|--------------------------------------------------------|--------|-----------------------------------|-----------|--------|-----------------------|--------|--------|------------------------|--------|--------|
|                                                   |   |                              |      |   |                  |   |   |                   |   |   |
| Aircraft      fuel                                     |   | $                                 | 8,154     |   |                  | $      | 2,143  |                   |   |   | 35.7 | % |        (a) |
| Wages,      salaries and benefits                      |   |                              | 6,044     |   |                  |   | (88    | )                      |   |   | (1.4 | ) |   |
| Regional      payments to AMR Eagle                    |   |                              | 2,400     |   |                  |   | 116    |                   |   |   | 5.1 |   |   |
| Other      rentals and landing fees                    |   |                              | 1,180     |   |                  |   | 18     |                   |   |   | 1.5 |   |   |
| Depreciation      and amortization                     |   |                              | 1,022     |   |                  |   | 12     |                   |   |   | 1.2 |   |   |
| Commissions,      booking fees and credit card expense |   |                              |  997 |   |                  |   | (32    | )                      |   |   | (3.1 | ) |   |
| Maintenance,      materials and repairs                |   |                              | 978       |   |                  |   | 152    |                   |   |   | 18.4 |   |        (b) |
| Aircraft      rentals                                  |   |                              | 487       |   |                  |   | (92    | )                      |   |   | (15.9 | ) |        (c) |
| Food      service                                      |   |                              | 509       |   |                  |   | (15    | )                      |   |   | (2.9 | ) |   |
| Special      charges                                   |   |                              | 1,210     |   |                  |   | 1,147  |                   |   |   | * |   |        (d) |
| Other      operating expenses                          |   |                              | 2,769     |   |                  |   | 258    |                   |   |   | 10.3 |   |        (e) |
| Total      operating expenses                          |   | $                                 | 25,750    |   |                  | $      | 3,619  |                   |   |   | 16.4 | % |   |

| (a)   | Aircraft      fuel expense increased primarily due to a 42.7 percent increase in the      Company’s price per gallon of fuel (net of the impact of hedging gains of      $344 million) offset by a 4.9 percent decrease in the Company’s fuel      consumption, primarily due to reductions in available seat      miles. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Maintenance,      materials and repairs expense increased due to a heavier workscope of      scheduled and unscheduled airframe maintenance overhauls, dependability      initiatives, repair costs and volume, and contractual engine repair rates,      which are driven by aircraft age. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Aircraft      rental expense decreased principally due to lease expirations of Boeing      757 and McDonnell Douglas MD-80aircraft. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Special      charges are related to an impairment charge in the second quarter of 2008      of $1.0 billion to write down the Company’s McDonnell Douglas MD-80 fleet      and certain related long-lived assets to their estimated fair values. This      impairment charge was triggered by the record increase in fuel prices over      the preceding twelve months.  In addition, the Company took a      charge from AMR Eagle during 2008 for the $115 million impairment charge      related to the Embraer RJ-135 fleet recorded, accrued $68 million for      severance costs and $33 million related to the grounding of leased Airbus      A300 aircraft prior to lease expiration, both related to the capacity      reductions. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)   | Other      operating expenses increased due in part to an increase in foreign      exchange losses of $72 million. |
|-----------------|--------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                                                                 |   | Page   |   |
|----------------------------------------------------------------------|--------|--------|--------|
|                                                                 |   |   |   |
| Report      of Independent Registered Public Accounting Firm         |   |   | 41     |   |
|                                                                 |   |   |   |   |
| Consolidated      Statements of Operations                           |   |   | 42     |   |
|                                                                 |   |   |   |   |
| Consolidated      Balance Sheets                                     |   |   | 43-44  |   |
|                                                                 |   |   |   |   |
| Consolidated      Statements of Cash Flows                           |   |   | 45     |   |
|                                                                 |   |   |   |   |
| Consolidated      Statements of Stockholder’s Equity (Deficit) |   |   | 46     |   |
|                                                                 |   |   |   |   |
| Notes      to Consolidated Financial Statements                      |   |   | 47-76  |   |

----

----

| (in      millions)                                     |   |
|--------------------------------------------------------|--------|
|                                                   |   |   |   |
|                                                   |   | Year      Ended December 31, |   |
|                                                   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Revenues                                               |   |   |   |   |   |   |   |   |   |
| Passenger                                              |   | $ | 18,234 |   |   | $ | 17,651 |   |   | $ | 17,291 |   |
| Regional      Affiliates                               |   |   | 2,486 |   |   |   | 2,470 |   |   |   | 2,502 |   |
| Cargo                                                  |   |   | 874 |   |   |   | 825 |   |   |   | 827 |   |
| Other      revenues                                    |   |   | 2,102 |   |   |   | 1,887 |   |   |   | 1,870 |   |
| Total      operating revenues                          |   |   | 23,696 |   |   |   | 22,833 |   |   |   | 22,490 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Aircraft      fuel                                     |   |   | 8,154 |   |   |   | 6,011 |   |   |   | 5,784 |   |
| Wages,      salaries and benefits                      |   |   | 6,044 |   |   |   | 6,132 |   |   |   | 6,202 |   |
| Regional      payments to AMR Eagle                    |   |   | 2,400 |   |   |   | 2,284 |   |   |   | 2,189 |   |
| Other      rentals and landing fees                    |   |   | 1,180 |   |   |   | 1,162 |   |   |   | 1,154 |   |
| Depreciation      and amortization                     |   |   | 1,022 |   |   |   | 1,010 |   |   |   | 967 |   |
| Commissions,      booking fees and credit card expense |   |   | 997 |   |   |   | 1,029 |   |   |   | 1,076 |   |
| Maintenance,      materials and repairs                |   |   | 978 |   |   |   | 826 |   |   |   | 771 |   |
| Aircraft      rentals                                  |   |   | 487 |   |   |   | 579 |   |   |   | 587 |   |
| Food      service                                      |   |   | 509 |   |   |   | 524 |   |   |   | 500 |   |
| Special      charges                                   |   |   | 1,210 |   |   |   | 63 |   |   |   | - |   |
| Other      operating expenses                          |   |   | 2,769 |   |   |   | 2,511 |   |   |   | 2,445 |   |
| Total      operating expenses                          |   |   | 25,750 |   |   |   | 22,131 |   |   |   | 21,675 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Income (Loss)                           |   |   | (2,054 | ) |   |   | 702 |   |   |   | 815 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income (Expense)                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      income                                   |   |   | 176 |   |   |   | 327 |   |   |   | 275 |   |
| Interest      expense                                  |   |   | (569 | ) |   |   | (708 | ) |   |   | (795 | ) |
| Interest      capitalized                              |   |   | 33 |   |   |   | 20 |   |   |   | 29 |   |
| Related      party interest – net                |   |   | (56 | ) |   |   | (85 | ) |   |   | (47 | ) |
| Miscellaneous      – net                         |   |   | (61 | ) |   |   | 100 |   |   |   | (113 | ) |
|                                                   |   |   | (477 | ) |   |   | (346 | ) |   |   | (651 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      (Loss) Before Income Taxes                 |   |   | (2,531 | ) |   |   | 356 |   |   |   | 164 |   |
| Income      tax                                        |   |   | - |   |   |   | - |   |   |   | - |   |
| Net      Earnings (Loss)                               |   | $ | (2,531 | ) |   | $ | 356 |   |   | $ | 164 |   |
|                                                   |   |

----

| (in      millions, except shares and par value)                                                                                                                                        |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                   |   |   |
|                                                                                                                                                                                   |   | December      31, |
|                                                                                                                                                                                   |   | 2008 |   |   | 2007 |
| Assets                                                                                                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                                                                   |   |   |   |   |   |
| Current      Assets                                                                                                                                                                    |   |   |   |   |   |
| Cash                                                                                                                                                                                   |   | $ | 188 |   |   | $ | 145 |   |
| Short-term      investments                                                                                                                                                            |   |   | 2,910 |   |   |   | 4,286 |   |
| Restricted      cash and short-term investments                                                                                                                                        |   |   | 459 |   |   |   | 428 |   |
| Receivables,      less allowance for uncollectibleaccounts      (2008 - $49; 2007 - $40)                                                                                               |   |   | 797 |   |   |   | 1,003 |   |
| Inventories,      less allowance for obsolescence(2008      - $437; 2007 - $373)                                                                                                       |   |   | 481 |   |   |   | 544 |   |
| Fuel      derivative contracts                                                                                                                                                         |   |   | 188 |   |   |   | 416 |   |
| Fuel      derivative collateral deposits                                                                                                                                               |   |   | 575 |   |   |   | - |   |
| Other      current assets                                                                                                                                                              |   |   | 175 |   |   |   | 204 |   |
| Total      current assets                                                                                                                                                              |   |   | 5,773 |   |   |   | 7,026 |   |
|                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Equipment      and Property                                                                                                                                                            |   |   |   |   |   |   |   |   |   |
| Flight      equipment, at cost                                                                                                                                                         |   |   | 16,427 |   |   |   | 18,979 |   |
| Less      accumulated depreciation                                                                                                                                                     |   |   | 6,318 |   |   |   | 7,837 |   |
|                                                                                                                                                                                   |   |   | 10,109 |   |   |   | 11,142 |   |
|                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Purchase      deposits for flight equipment                                                                                                                                            |   |   | 670 |   |   |   | 239 |   |
|                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Other      equipment and property, at cost                                                                                                                                             |   |   | 4,958 |   |   |   | 5,064 |   |
| Less      accumulated depreciation                                                                                                                                                     |   |   | 2,633 |   |   |   | 2,698 |   |
|                                                                                                                                                                                   |   |   | 2,325 |   |   |   | 2,366 |   |
|                                                                                                                                                                                   |   |   | 13,104 |   |   |   | 13,747 |   |
|                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Equipment      and Property Under Capital Leases                                                                                                                                       |   |   |   |   |   |   |   |   |   |
| Flight      equipment                                                                                                                                                                  |   |   | 561 |   |   |   | 1,698 |   |
| Other      equipment and property                                                                                                                                                      |   |   | 215 |   |   |   | 215 |   |
|                                                                                                                                                                                   |   |   | 776 |   |   |   | 1,913 |   |
| Less      accumulated amortization                                                                                                                                                     |   |   | 536 |   |   |   | 1,151 |   |
|                                                                                                                                                                                   |   |   | 240 |   |   |   | 762 |   |
|                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Other      Assets                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |
| Route      acquisition costs, slots and airport operating and gate lease      rights,      less      accumulated amortization (2008 - $379; 2007 - $342) |   |   | 1,090 |   |   |   | 1,135 |   |
| Other      assets                                                                                                                                                                      |   |   | 2,311 |   |   |   | 2,715 |   |
|                                                                                                                                                                                   |   |   | 3,401 |   |   |   | 3,850 |   |
|                                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                                                                                                                                      |   | $ | 22,518 |   |   | $ | 25,385 |   |
|                                                                                                                                                                                   |

----

| (in      millions, except shares and par value)                                       |
|---------------------------------------------------------------------------------------|
|                                                                                  |   |   |
|                                                                                  |   | December      31, |
|                                                                                  |   | 2008 |   |   | 2007 |
| Liabilities      and Stockholder’s Equity (Deficit)                             |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |
| Current      Liabilities                                                              |   |   |   |   |   |
| Accounts      payable                                                                 |   | $ | 891 |   |   | $ | 1,083 |   |
| Accrued      salaries and wages                                                       |   |   | 484 |   |   |   | 520 |   |
| Fuel      derivative liability                                                        |   |   | 716 |   |   |   | - |   |
| Accrued      liabilities                                                              |   |   | 1,433 |   |   |   | 1,608 |   |
| Air      traffic liability                                                            |   |   | 3,708 |   |   |   | 3,986 |   |
| Payable      to affiliates                                                            |   |   | 2,427 |   |   |   | 1,610 |   |
| Current      maturities of long-term debt                                             |   |   | 1,305 |   |   |   | 382 |   |
| Current      obligations under capital leases                                         |   |   | 107 |   |   |   | 147 |   |
| Total      current liabilities                                                        |   |   | 11,071 |   |   |   | 9,336 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Long-Term      Debt, Less Current Maturities                                          |   |   | 6,102 |   |   |   | 6,600 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Obligations      Under Capital Leases,Less      Current Obligations                   |   |   | 582 |   |   |   | 680 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Other      Liabilities and Credits                                                    |   |   |   |   |   |   |   |   |   |
| Deferred      gains                                                                   |   |   | 297 |   |   |   | 319 |   |
| Pension      and postretirement benefits                                              |   |   | 6,613 |   |   |   | 3,620 |   |
| Other      liabilities and deferred credits                                           |   |   | 2,758 |   |   |   | 3,386 |   |
|                                                                                  |   |   | 9,668 |   |   |   | 7,325 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Commitments      and Contingencies                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Stockholder’s      Equity (Deficit)                                             |   |   |   |   |   |   |   |   |   |
| Common      stock - $1 par value;1,000      shares authorized, issued and outstanding |   |   | - |   |   |   | - |   |
| Additional      paid-in capital                                                       |   |   | 3,891 |   |   |   | 3,862 |   |
| Accumulated      other comprehensive income (loss)                                    |   |   | (3,287 | ) |   |   | 560 |   |
| Accumulated      deficit                                                              |   |   | (5,509 | ) |   |   | (2,978 | ) |
|                                                                                  |   |   | (4,905 | ) |   |   | 1,444 |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |   |   |   |   |   |   |   |   |
| Total      Liabilities and Stockholder’s Equity (Deficit)                       |   | $ | 22,518 |   |   | $ | 25,385 |   |
|                                                                                  |

----

| (in      millions)                                                                                        |   |
|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                      |   | Year      Ended December 31, |   |
|                                                                                                      |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Cash      Flow from Operating Activities:                                                                 |   |   |   |   |   |   |   |   |   |
| Net      earnings (loss)                                                                                  |   | $ | (2,531 | ) |   | $ | 356 |   |   | $ | 164 |   |
| Adjustments      to reconcile net income (loss) to net cash provided (used) by operating      activities: |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                                              |   |   | 877 |   |   |   | 850 |   |   |   | 835 |   |
| Amortization                                                                                              |   |   | 145 |   |   |   | 160 |   |   |   | 132 |   |
| Equity      based stock compensation                                                                      |   |   | 49 |   |   |   | 123 |   |   |   | 129 |   |
| Restructuring      and settlement charges                                                                 |   |   | 1,313 |   |   |   | 63 |   |   |   | - |   |
| Gain      on sale of investments                                                                          |   |   | - |   |   |   | (138 | ) |   |   | - |   |
| Redemption      payments under operating leases for special facility revenue      bonds                   |   |   | (188 | ) |   |   | (100 | ) |   |   | (28 | ) |
| Change      in assets and liabilities:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Decrease      (increase) in receivables                                                                   |   |   | 206 |   |   |   | (48 | ) |   |   | 11 |   |
| Decrease      (increase) in inventories                                                                   |   |   | (4 | ) |   |   | (109 | ) |   |   | (5 | ) |
| Decrease      (increase) in derivative collateral and unwound                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|   derivative      contracts                                                                     |   |   | (940 | ) |   |   | 164 |   |   |   | - |   |
| Increase      (decrease) in accounts payable and accrued       liabilities                           |   |   | (601 | ) |   |   | 340 |   |   |   | (206 | ) |
| Increase      (decrease) in air traffic liability                                                         |   |   | (277 | ) |   |   | 203 |   |   |   | 168 |   |
| Increase      (decrease) in other liabilities and deferred credits                                        |   |   | 104 |   |   |   | (134 | ) |   |   | 380 |   |
| Other,      net                                                                                           |   |   | 241 |   |   |   | (204 | ) |   |   | 17 |   |
| Net      cash provided by (used in) operating activities                                                  |   |   | (1,606 | ) |   |   | 1,526 |   |   |   | 1,597 |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flow from Investing Activities:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      expenditures, including purchase deposits onflight      equipment                            |   |   | (854 | ) |   |   | (670 | ) |   |   | (508 | ) |
| Net      decrease (increase) in short-term investments                                                    |   |   | 1,376 |   |   |   | 233 |   |   |   | (890 | ) |
| Net      decrease (increase) in restricted cash and      short-term investments                      |   |   | (31 | ) |   |   | 48 |   |   |   | 42 |   |
| Proceeds      from sale of equipment, property and   investments                           |   |   | 36 |   |   |   | 220 |   |   |   | 31 |   |
| Other                                                                                                     |   |   | 10 |   |   |   | 5 |   |   |   | (8 | ) |
| Net      cash provided by (used in) investing activities                                                  |   |   | 537 |   |   |   | (164 | ) |   |   | (1,333 | ) |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Flow from Financing Activities:                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |
| Payments      on long-term debt and capital lease obligations                                             |   |   | (568 | ) |   |   | (1,930 | ) |   |   | (955 | ) |
| Proceeds      from:                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Reimbursement      from construction reserve account                                                      |   |   | - |   |   |   | 59 |   |   |   | 145 |   |
| Issuance      of long-term debt                                                                           |   |   | 825 |   |   |   | - |   |   |   | - |   |
| Sale      leaseback transactions                                                                          |   |   | 151 |   |   |   | - |   |   |   | - |   |
| Funds      transferred from affiliates, net                                                               |   |   | 704 |   |   |   | 533 |   |   |   | 533 |   |
| Net      cash provided by (used in) financing activities                                                  |   |   | 1,112 |   |   |   | (1,338 | ) |   |   | (277 | ) |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash                                                                      |   |   | 43 |   |   |   | 25 |   |   |   | (13 | ) |
| Cash      at beginning of year                                                                            |   |   | 145 |   |   |   | 120 |   |   |   | 133 |   |
| Cash      at end of year                                                                                  |   | $ | 188 |   |   | $ | 145 |   |   | $ | 120 |   |
|                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                      |   |

----

| (in      millions)                                                                                |   |
|---------------------------------------------------------------------------------------------------|--------|
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |  CommonStock |   |   | AdditionalPaid-inCapital |   |   | AccumulatedOtherComprehensive Income (Loss ) |   | Accumulated      Deficit | Total          |   |   |    |   |
| Balance      at January 1, 2006                                                                   |   |   | - |   |   |   | 3,406 |   |   |   | (1,087 | )       $ | (3,498) |   |   | (1,179 | ) |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      earnings                                                                                 |   |   | - |   |   |   | - |   |   |   | - |   | 164 |   |   | 164 |   |   |   |   |
| Pension,      retiree medical and other liability                                                 |   |   | - |   |   |   | - |   |   |   | 748 |   | - |   |   | 748 |   |   |   |   |
| Net      changes in fair value of derivative financial instruments                                |   |   | - |   |   |   | - |   |   |   | (62 | ) | - |   |   | (62 | ) |   |   |   |
| Total      comprehensive loss                                                                     |   |   | - |   |   |   |   |   |   |   |   |   |   |   |   | 850  |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustment      resulting from adoption of SFAS 158                                               |   |   |   |   |   |   | - |   |   |   | (998 | ) |                       - |   |   | (998 | ) |   |   |   |   |
| Reclassification  and      amortization of stock compensation plans                     |   |   | - |   |   |   | 261 |   |   |   | - |   |                            - |   |   | 261 |   |   |   |   |   |
| Balance      at December 31, 2006                                                                 |   |   | - |   |   | $ | 3,667 |   |   | $ | (1,399 | )       $ | (3,334) |   | $ | (1,066 | ) |   |   |   |   |
| Net      earnings                                                                                 |   |   |   |   |   |   | - |   |   |   | - |   | 356 |   |   | 356 |   |   |   |   |   |
| Pension,      retiree medical and other liability                                                 |   |   | - |   |   |   |   |   |   |   | 1,744 |   | - |   |   | 1,744  |   |   |   |   |   |
| Net      changes in fair value of derivative financial instruments                                |   |   | - |   |   |   |  - |   |   |   |  221 |   | - |   |   | 221  |   |   |   |   |   |
| Unrealized      loss on investments                                                               |   |   | - |   |   |   | - |   |   |   | (6 | ) | - |   |   | (6)  |   |   |   |   |   |
|            Total      comprehensive income |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,315  |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      and amortization of stock compensation plans                                |   |   | - |   |   |   |  195 |   |   |   |  - |   | - |   |   | 195 |   |   |   |   |   |
| Balance      at December 31, 2007                                                                 |   |   | - |   |   | $ | 3,862 |   |   | $ | 560 |         $ | (2,978) |   | $ | 1,444 |   |   |   |   |   |
| Net      earnings                                                                                 |   |   | - |   |   |   | - |   |   |   | - |   | (2,531) |   |   | (2,531 | ) |   |   |   |   |
| Pension,      retiree medical and other liability                                                 |   |   |   |   |   |   | -  |   |   |   | (2,724 | ) | - |   |   | (2,724)  |   |   |   |   |   |
| Net      changes in fair value of derivative financial instruments                                |   |   |  - |   |   |   |  - |   |   |   | (1,116 | ) | - |   |   | (1,116)  |   |   |   |   |   |
| Unrealized      loss on investments                                                               |   |   | - |   |   |   | - |   |   |   | (7 | ) | - |   |   | (7)  |   |   |   |   |   |
|            Total      comprehensive income |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (6,378)  |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      and amortization of stock compensation plans                                |   |   |  - |   |   |   |  29 |   |   |   |  - |   | - |   |   |  29 |   |   |   |   |   |
| Balance      at December 31, 2008                                                                 |   | $ | - |   |   | $ | 3,891 |   |   | $ | (3,287 | )       $ | (5,509) |   | $ | (4,905 | ) |   |   |   |   |

----

----

|                                                             |  Depreciable      Life                                                                                                               |
|------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                             |                                                                                                                                      |
| American      jet aircraft and engines                           | 20      – 30 years                                                                                                                  |
| Major      rotable parts, avionics and assemblies                | Life      of equipment to which applicable                                                                                                |
| Improvements      to leased flight equipment                     | Lesser      of lease term or expected useful life                                                                                         |
| Buildings      and improvements (principally onleased      land) | 5 –      30 years or term of lease, including estimated renewal options when      renewal is economically compelled at key airports |
| Furniture,      fixtures and other equipment                     | 3 –      10 years                                                                                                                   |
| Capitalized      software                                        | 3 –      10 years                                                                                                                   |

----

----

----

|                                        |   | Aircraft      Charges |   |   | Facility      Exit Costs |   |   | Employee      Charges |   |   | Other  |   |   | Total  |   |
|---------------------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
| Remaining      accrual at January 1, 2006   |   | $                     | 150    |   |                     | $      | 36     |                  |   | $      | -      |   |   | $      | -      |   |   | $ | 186 |   |
| Adjustments                                 |   |                  | (3     | )      |                     |   | (16    | )                     |   |   | -      |   |   |   | -      |   |   |   | (19 | ) |
| Payments                                    |   |                  | (21    | )      |                     |   | (1     | )                     |   |   | -      |   |   |   | -      |   |   |   | (22 | ) |
| Remaining      accrual at December 31, 2006 |   |                  | 126    |   |                     |   | 19     |                  |   |   | -      |   |   |   | -      |   |   |   | 145 |   |
| Restructuring      charges                  |   |                  | 63     |   |                     |   | -      |                  |   |   | -      |   |   |   | -      |   |   |   | 63 |   |
| Non-cash      charges                       |   |                  | (53    | )      |                     |   | -      |                  |   |   | -      |   |   |   | -      |   |   |   | (53 | ) |
| Payments                                    |   |                  | (12    | )      |                     |   | (1     | )                     |   |   | -      |   |   |   | -      |   |   |   | (13 | ) |
| Remaining      accrual at December 31, 2007 |   |                  | 124    |   |                     |   | 18     |                  |   |   | -      |   |   |   | -      |   |   |   | 142 |   |
| Capacity      reduction charges             |   |                  | 1,117  |   |                     |   | -      |                  |   |   | 68     |   |   |   | 25     |   |   |   | 1,210 |   |
| Non-cash      charges                       |   |                  | (1,103 | )      |                     |   | -      |                  |   |   | -      |   |   |   | (25    | ) |   |   | (1,128 | ) |
| Adjustments                                 |   |                  | 1      |   |                     |   | (2     | )                     |   |   | -      |   |   |   | -      |   |   |   | (1 | ) |
| Payments                                    |   |                  | (31    | )      |                     |   | -      |                  |   |   | (54    | )      |   |   | -      |   |   |   | (85 | ) |
| Remaining      accrual at December 31, 2008 |   | $                     | 108    |   |                     | $      | 16     |                  |   | $      | 14     |   |   | $      | -      |   |   | $ | 138 |   |
|                                        |   |                  |   |   |                     |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                         |   | December      31, |   |
|----------------------------------------------|--------|-------------------|--------|
|                                         |   | 2008              |   |   | 2007 |   |
|                                         |   |              |   |   |   |   |
| Overnight      investments and time deposits |   | $                 | 1,572  |   |   | $ | 488 |   |
| Corporate      and bank notes                |   |              | 1,016  |   |   |   | 3,781 |   |
| U.      S. government agency notes           |   |              | 322    |   |   |   | 17 |   |
|                                         |   |              |   |   |   |   |   |   |
|                                         |   | $                 | 2,910  |   |   | $ | 4,286 |   |

| Due      in one year or less              |   | $      | 2,910  |   |
|-------------------------------------------|--------|--------|--------|--------|
| Due      between one year and three years |   |   | -      |   |
| Due      after three years                |   |   | -      |   |
|                                      |   |   |   |   |
|                                      |   | $      | 2,910  |   |

----

| (in      millions)                                   |   | Fair Value Measurements as of December 31,      2008 |   |
|------------------------------------------------------|--------|------------------------------------------------------|--------|
| Description                                          |   | Total                                                |   |   | Level      1 |   |   | Level      2 |   |   | Level      3 |   |
|                                                 |   |                                                 |   |   |   |   |   |   |   |   |   |   |
| Short      term investments 1                        |   | $                                                    | 2,910  |   |   | $ | 1,405 |   |   | $ | 1,505 |   |   |   | - |   |
| Restricted      cash and short-term investments 1    |   |                                                 | 459    |   |   |   | 453 |   |   |   | 6 |   |   |   | - |   |
| Fuel      derivative contracts, net liability 1 |   |                                                 | (528   | ) |   |   | - |   |   |   | (528 | ) |   |   | - |   |
|                                                 |   |                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                |   | $                                                    | 2,841  |   |   | $ | 1,858 |   |   | $ | 983 |   |   | $ | - |   |

----

----

|  Year      Ending December 31,              |   | CapitalLeases |   |   | OperatingLeases |   |   |            |   |
|--------------------------------------------------|--------|---------------|--------|--------|-----------------|--------|--------|-----------------|--------|
|                                             |   |          |   |   |            |   |   |            |   |
| 2009                                             |   | $             | 181    |   |            | $      | 987    |            |   |   |   |
| 2010                                             |   |          | 143    |   |            |   | 923    |            |   |   |   |
| 2011                                             |   |          | 146    |   |            |   | 914    |            |   |   |   |
| 2012                                             |   |          | 97     |   |            |   | 732    |            |   |   |   |
| 2013                                             |   |          | 83     |   |            |   | 645    |            |   |   |   |
| 2014      and thereafter                         |   |          | 477    |   |            |   | 4,931  |            |   |   |   |
|                                             |   | $             | 1,127  |   |            | $      | 9,132  |        (1) |   |   |   |   |
|  Less      amount representing interest     |   |          | 438    |   |            |   |   |            |   |   |   |   |
|                                             |   |          |   |   |            |   |   |            |   |   |   |   |
| Present      value of net minimum lease payments |   | $             | 689    |   |            |   |   |            |   |   |   |   |

|   | (1) | As      of December 31, 2008, included in Accrued liabilities and Other      liabilities and deferred credits on the accompanying consolidated balance      sheet is approximately $1.1 billion relating to rent expense being      recorded in advance of future operating lease  payments. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                                                                              |   | December      31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|
|                                                                                                                              |   | 2008              |   |   | 2007 |   |
|                                                                                                                              |   |              |   |   |   |   |
| Secured      variable and fixed rate indebtedness due through 2021(effective      rates from 5.41% - 11.36% at December 31, 2008) |   | $                 | 2,633  |   |   | $ | 2,345 |   |
| Enhanced      equipment trust certificates due through 2012(rates      from 3.86% - 12.00% at December 31, 2008)                  |   |              | 2,382  |   |   |   | 2,482 |   |
| 6.0%      - 8.5% special facility revenue bonds due through 2036                                                                  |   |              | 1,674  |   |   |   | 1,688 |   |
| Credit      facility agreement due through 2010(effective      rate of 8.60% at December 31, 2008)                                |   |              | 691    |   |   |   | 440 |   |
| Other                                                                                                                             |   |              | 27     |   |   |   | 27 |   |
|                                                                                                                              |   |              | 7,407  |   |   |   | 6,982 |   |
|                                                                                                                              |   |              |   |   |   |   |   |   |
| Less      current maturities                                                                                                      |   |              | 1,305  |   |   |   | 382 |   |
|                                                                                                                              |   |              |   |   |   |   |   |   |
| Long-term      debt, less current maturities                                                                                      |   | $                 | 6,102  |   |   | $ | 6,600 |   |

----

----

----

| Fair      Value of Aircraft Fuel Derivative Instruments (all cash flow hedges under      SFAS 133)  |   |
|----------------------------------------------------------------------------------------------------------|--------|
| Asset      Derivatives as of December 31,                                                                |   | Liability      Derivatives as of December 31, |   |
| 2008                                                                                                     |   | 2007 |   | 2008 |   | 2007 |   |
| Balance      Sheet Location                                                                              |   | Fair      Value |   | Balance      Sheet Location |   | Fair      Value |   | Balance      Sheet Location |   | Fair      Value |   | Balance      Sheet Location |   | Fair      Value |   |
| Fuel      derivative contracts                                                                           |   | $ | - |   | Fuel      derivative contracts |   | $ | 416 |   | Fuel      derivative liability |   | $ | 528 |   | Accrued      liabilities |   | $ | - |   |

| Effect      of Aircraft Fuel Derivative Instruments on Statements of Operations (all      cash flow hedges under SFAS 133) |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amount      of Gain (Loss) Recognized in OCI on Derivative1                                                                |   | Location      of Gain (Loss) Reclassified from Accumulated OCI into Income 1 |   | Amount      of Gain (Loss) Reclassified from Accumulated OCI into Income 1 |   | Location      of Gain (Loss) Recognized in Income on Derivative 2 |   | Amount      of Gain (Loss) Recognized in Income on Derivative 2 |   |
| 2008                                                                                                                       |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $                                                                                                                          | (738   | ) |   | $ | 381 |   | Aircraft      Fuel |   | $ | 343 |   |   | $ | 148 |   | Aircraft      Fuel |   | $ | 1 |   |   | $ | 67 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1 Effective      portion of gain (loss)                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2 Ineffective      portion of gain (loss)                                                                        |   |   |   |   |   |

----

----

|                                              |   | December      31,   |   |
|---------------------------------------------------|--------|---------------------|--------|
|                                              |   | 2008                |   |   | 2007 |   |
|                                              |   | Carrying      Value |   |   | FairValue |   |   | Carrying      Value |   |   | FairValue |   |
|                                              |   |                |   |   |   |   |   |   |   |   |   |   |
| Secured      variable and fixed rate indebtedness |   | $                   | 2,633  |   |   | $ | 1,649 |   |   | $ | 2,345 |   |   | $ | 2,185 |   |
| Enhanced      equipment trust certificates        |   |                | 2,382  |   |   |   | 1,886 |   |   |   | 2,482 |   |   |   | 2,472 |   |
| 6.0%      - 8.5% special facility revenue bonds   |   |                | 1,674  |   |   |   | 1,001 |   |   |   | 1,688 |   |   |   | 1,801 |   |
| Credit      facility agreement                    |   |                | 691    |   |   |   | 545 |   |   |   | 440 |   |   |   | 423 |   |
| Other                                             |   |                | 27     |   |   |   | 28 |   |   |   | 27 |   |   |   | 28 |   |
|                                              |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | $                   | 7,407  |   |   | $ | 5,109 |   |   | $ | 6,982 |   |   | $ | 6,909 |   |

|                                                                      |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Unrecognized      Tax Benefit at January 1                                |   | $      | 38     |   |   | $      | 40 |   |
|    Decreases      due to settlements with taxing authority |   |   | (15    | )      |   |   | (2 | ) |
| Unrecognized      Tax Benefit at December 31                              |   | $      | 23     |   |   | $      | 38 |   |

----

|                                                               |   | Year      Ended December 31, |   |
|--------------------------------------------------------------------|--------|------------------------------|--------|
|                                                               |   | 2008                         |   |   | 2007 |   |   | 2006 |   |
|                                                               |   |                         |   |   |   |   |   |   |   |
| Statutory      income tax provision expense/(benefit)              |   | $                            | (886   | ) |   | $ | 125 |   |   | $ | 57 |   |
| State      income tax expense/(benefit), net of federal tax effect |   |                         | (35    | ) |   |   | 4 |   |   |   | 8 |   |
| Meal      expense                                                  |   |                         | 6      |   |   |   | 7 |   |   |   | 6 |   |
| Change      in valuation allowance                                 |   |                         | 955    |   |   |   | (130 | ) |   |   | (77 | ) |
| Other,      net                                                    |   |                         | (40    | ) |   |   | (6 | ) |   |   | 6 |   |
|                                                               |   |                         |   |   |   |   |   |   |   |   |   |   |
| Income      tax benefit                                            |   | $                            | -      |   |   | $ | - |   |   | $ | - |   |

|                                              |   | December      31, |   |
|---------------------------------------------------|--------|-------------------|--------|
|                                              |   | 2008              |   |   | 2007 |   |
| Deferred      tax assets:                         |   |              |   |   |   |   |
| Postretirement      benefits other than pensions  |   | $                 | 1,166  |   |   | $ | 1,160 |   |
| Rent      expense                                 |   |              | 368    |   |   |   | 417 |   |
| Alternative      minimum tax credit carryforwards |   |              | 541    |   |   |   | 544 |   |
| Operating      loss carryforwards                 |   |              | 2,045  |   |   |   | 1,774 |   |
| Frequent      flyer obligation                    |   |              | 337    |   |   |   | 307 |   |
| Gains      from lease transactions                |   |              | 73     |   |   |   | 95 |   |
| Pension                                           |   |              | 1,531  |   |   |   | 404 |   |
| Other                                             |   |              | 984    |   |   |   | 646 |   |
|    Total      deferred tax assets  |   |              | 7,045  |   |   |   | 5,347 |   |
|    Valuation      allowance        |   |              | (3,407 | ) |   |   | (1,129 | ) |
| Net      deferred tax assets                      |   |              | 3,638  |   |   |   | 4,218 |   |
|                                              |   |              |   |   |   |   |   |   |
| Deferred      tax liabilities:                    |   |              |   |   |   |   |   |   |
| Accelerated      depreciation and amortization    |   |              | (3,504 | ) |   |   | (3,981 | ) |
| Other                                             |   |              | (134   | ) |   |   | (237 | ) |
| Total      deferred tax liabilities               |   |              | (3,638 | ) |   |   | (4,218 | ) |
|                                              |   |              |   |   |   |   |   |   |
| Net      deferred tax liability                   |   | $                 | -      |   |   | $ | - |   |

----

----

|                          |   |                             |                        |   |                             |   |                  |                             |   |
|-------------------------------|--------|----------------------------------|-----------------------------|--------|----------------------------------|--------|-----------------------|----------------------------------|--------|
|                          |   |                             |                        |   |                             |   |                  |                             |   |
|                          |   | 2008                             |                        |   | 2007                             |   |                  | 2006                             |   |
|                          |   |                             |                        |   |                             |   |                  |                             |   |
| Expected      volatility      |   |         53.0% to 55.9% |                        |   |         49.7% to 51.6% |   |                  |         52.5% to 55.0% |   |
| Expected      term (in years) |   |                             | 4.0     |   |                             |   | 4.0    |                             |   |   | 4.0    |   |
| Risk-free      rate           |   |         2.98% to 3.15% |                        |   |         4.43% to 5.03% |   |                  |         4.35% to 5.07% |   |
| Annual      forfeiture rate   |   |                             | 10.0%        |   |                             |   | 10.0%       |                             |   |   | 10.0%    |   |

|                                                                                          |   |                            |              |   |                                     |   |        |                      |   |   |                                 |   |
|-----------------------------------------------------------------------------------------------|--------|---------------------------------|-------------------|--------|------------------------------------------|--------|-------------|---------------------------|--------|--------|--------------------------------------|--------|
|                                                                                          |   | LTIP      Plans                 |              |   | The      2003 Plan                       |   |
|                                                                                          |   |    Options/SSARs |              |   | Weighted      AverageExercise      Price |   |        |    Options |   |   | Weighted      Average Exercise Price |   |
|                                                                                          |   |                            |              |   |                                     |   |        |                      |   |   |                                 |   |
|  Outstanding      at January 1                                                           |   |                            | 11,844,615        |   |                                     | $      | 27.76       |                      |   |   | 14,276,053                           |   |   | $ | 5.66 |   |
| Granted                                                                                       |   |                            | 2,722,740         |   |                                     |   | 8.23        |                      |   |   | -                                    |   |   |   | - |   |
| Exercised                                                                                     |   |                            | (500              | )      |                                     |   | 4.25        |                      |   |   | (347,057                             | )      |   |   | 5.25 |   |
| Forfeited      or Expired                                                                     |   |                            | (760,907          | )      |                                     |   | 28.26       |                      |   |   | (119,004                             | )      |   |   | 6.83 |   |
|              Outstanding at December 31                    |   |                            | 13,805,948        |   |                                     |   |  23.88 |                      |   |   | 13,809,992                           |   |   |   |  5.66 |   |
|  Exercisable      at December 31                                                         |   |                            | 9,714,226         |   |                                     |   |  28.48 |                      |   |   | 13,491,727                           |   |   |   |  5.52 |   |
|  Weighted      Average Remaining Contractual Term of Options Outstanding (in      years) |   |                            |     4.3 |   |                                     |   |        |                      |   |   |     4.4                    |   |   |   |   |   |
|  Aggregate      Intrinsic Value of Options Outstanding                                   |   | $                               |  7,605,694   |   |                                     |   |        |                      |   | $      |  70,509,340                     |   |   |   |   |   |

----

|                                                                       |   |  Options/SSARs |       |   | WeightedAverage        Grant Date Fair Value |   |
|----------------------------------------------------------------------------|--------|---------------------|------------|--------|-------------------------------------------------------------|--------|
|  Outstanding      at January 1                                        |   |                | 2,965,521  |   |                                                        | $      | 8.07 |   |
| Granted                                                                    |   |                | 2,722,740  |   |                                                        |   | 3.78 |   |
| Vested                                                                     |   |                | (1,260,844 | )      |                                                        |   | 6.55 |   |
| Forfeited                                                                  |   |                | (17,430    | )      |                                                        |   | 4.78 |   |
|              Outstanding at December 31 |   |                | 4,409,987  |   |                                                        |   | 5.87 |   |

----

|                                                                                  |   |  Awards |       | Weighted Average Remaining      Contractual Term |      |  Aggregate      Intrinsic Value |
|---------------------------------------------------------------------------------------|--------|--------------|------------|-------------------------------------------------------|-----------|--------------------------------------|
|                                                                                  |   |         |       |                                                  |      |                                 |
| Outstanding      at January 1                                                         |   |         | 5,400,441  |                                                  |      |                                 |   |
| Reclassified      to liability awards                                                 |   |         | (97,215    | )                                                     |      |                                 |   |
| Granted                                                                               |   |         | 2,850,240  |                                                  |      |                                 |   |
| Settled                                                                               |   |         | (2,330,852 | )                                                     |      |                                 |   |
| Forfeited      or Expired                                                             |   |         | (56,361    | )                                                     |      |                                 |   |
|          Outstanding      at December 31 |   |         | 5,766,253  |                                                  |  1.5 |                                 |  $   61,360,092 |

|                                                                             |   | Shares |      |        Weighted      AverageRemaining      Contractual Term |      |  Aggregate      Intrinsic Value |
|----------------------------------------------------------------------------------|--------|--------|-----------|------------------------------------------------------------------|-----------|--------------------------------------|
|                                                                             |   |   |      |                                                             |      |                                 |
| Outstanding      at January 1                                                    |   |   | 3,668,797 |                                                             |      |                                 |   |
| Granted                                                                          |   |   | 1,009,278 |                                                             |      |                                 |   |
| Settled                                                                          |   |   | (565,235  | )                                                                |      |                                 |   |
| Forfeited      or Expired                                                        |   |   | (64,962   | )                                                                |      |                                 |   |
|               Outstanding at December 31 |   |   | 4,047,878 |                                                             |  3.9 |                                 |  $   43,190,858 |

----

----

|                                                 |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                                 |   | 2008                  |   |   | 2007                                    |   |   | 2008 |   |   | 2007 |   |
|                                                 |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Reconciliation of benefit      obligation            |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Obligation      at January 1                         |   | $                     | 10,451 |   |                                    | $      | 11,048 |   |   | $ | 2,672 |   |   | $ | 3,256 |   |
| Service      cost                                    |   |                  | 324    |   |                                    |   | 370 |   |   |   | 54 |   |   |   | 71 |   |
| Interest      cost                                   |   |                  | 684    |   |                                    |   | 672 |   |   |   | 172 |   |   |   | 194 |   |
| Actuarial      (gain) loss                           |   |                  | 254    |   |                                    |   | (1,021 | ) |   |   | 22 |   |   |   | (693 | ) |
| Plan      amendments                                 |   |                  | (14    | )      |                                    |   | - |   |   |   | - |   |   |   | - |   |
| Benefit      payments                                |   |                  | (815   | )      |                                    |   | (618 | ) |   |   | (141 | ) |   |   | (156 | ) |
| Obligation      at December 31                       |   | $                     | 10,884 |   |                                    | $      | 10,451 |   |   | $ | 2,779 |   |   | $ | 2,672 |   |
|                                                 |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation of fair value of plan      assets     |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at January 1          |   | $                     | 9,099  |   |                                    | $      | 8,565 |   |   | $ | 224 |   |   | $ | 202 |   |
| Actual      return on plan assets                    |   |                  | (1,659 | )      |                                    |   | 766 |   |   |   | (75 | ) |   |   | 9 |   |
| Employer      contributions                          |   |                  | 89     |   |                                    |   | 386 |   |   |   | 153 |   |   |   | 168 |   |
| Benefit      payments                                |   |                  | (815   | )      |                                    |   | (618 | ) |   |   | (141 | ) |   |   | (155 | ) |
|                                                 |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets at December 31        |   | $                     | 6,714  |   |                                    | $      | 9,099 |   |   | $ | 161 |   |   | $ | 224 |   |
|                                                 |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Funded      status at December 31                    |   | $                     | (4,170 | )      |                                    | $      | (1,352 | ) |   | $ | (2,618 | ) |   | $ | (2,448 | ) |
|                                                 |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Amounts recognized in theconsolidated balance sheets |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Current      liability                               |   | $                     | 11     |   |                                    | $      | 6 |   |   | $ | 163 |   |   | $ | 170 |   |
| Noncurrent      liability                            |   |                  | 4,159  |   |                                    |   | 1,346 |   |   |   | 2,455 |   |   |   | 2,278 |   |
|                                                 |   | $                     | 4,170  |   |                                    | $      | 1,352 |   |   | $ | 2,618 |   |   | $ | 2,448 |   |
|  Amounts recognized inother comprehensive loss  |   |                  |   |   |                                    |   |   |   |   |   |   |   |   |   |   |   |
| Net      actuarial loss (gain)                       |   | $                     | 2,839  |   |                                    | $      | 245 |   |   | $ | (458 | ) |   | $ | (605 | ) |
| Prior      service cost (credit)                     |   |                  | 108    |   |                                    |   | 137 |   |   |   | (53 | ) |   |   | (65 | ) |
|                                                 |   | $                     | 2,947  |   |                                    | $      | 382 |   |   | $ | (511 | ) |   | $ | (670 | ) |

----

| For plans with accumulated      benefitobligations exceeding the fair      valueof plan assets |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                                                                           |   | 2008                  |   |   | 2007                                    |   |   | 2008 |   |   | 2007 |   |
| Projected      benefit obligation (PBO)                                                        |   | $                     | 10,884 |   |                                    | $      | 10,451 |   |   | $ | - |   |   | $ | - |   |
| Accumulated      benefit obligation (ABO)                                                      |   |                  | 9,656  |   |                                    |   | 9,486 |   |   |   | - |   |   |   | - |   |
| Accumulated      postretirement benefit obligation (APBO)                                      |   |                  | -      |   |                                    |   | - |   |   |   | 2,779 |   |   |   | 2,672 |   |
| Fair      value of plan assets                                                                 |   |                  | 6,714  |   |                                    |   | 9,099 |   |   |   | 161 |   |   |   | 224 |   |
| ABO      less fair value of plan assets                                                        |   |                  | 2,942  |   |                                    |   | 387 |   |   |   | - |   |   |   | - |   |

|                                                     |   | Pension      Benefits |      |
|----------------------------------------------------------|--------|-----------------------|-----------|
|                                                     |   | 2008                  |      |   | 2007 |   |   | 2006 |   |
|                                                     |   |                  |      |   |   |   |   |   |   |
| Components of net periodic benefit      cost             |   |                  |      |   |   |   |   |   |   |
| Defined      benefit plans:                              |   |                  |      |   |   |   |   |   |   |
| Service      cost                                        |   | $                     | 324       |   |   | $ | 370 |   |   | $ | 399 |   |
| Interest      cost                                       |   |                  | 684       |   |   |   | 672 |   |   |   | 641 |   |
| Expected      return on assets                           |   |                  | (789      | ) |   |   | (747 | ) |   |   | (669 | ) |
| Amortization      of:                                    |   |                  |      |   |   |   |   |   |   |   |   |   |
| Transition      asset                                    |   |                  | -         |   |   |   | - |   |   |   | (1 | ) |
| Prior      service cost                                  |   |                  | 16        |   |   |   | 16 |   |   |   | 16 |   |
| Settlement                                               |   |                  | 103       |   |   |   | - |   |   |   | - |   |
| Unrecognized      net loss                               |   |                  | 3         |   |   |   | 25 |   |   |   | 81 |   |
|                                                     |   |                  |      |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost for defined benefit plans |   |                  |  341 |   |   |   | 336 |   |   |   | 467 |   |
|                                                     |   |                  |      |   |   |   |   |   |   |   |   |   |
| Defined      contribution plans                          |   |                  | 156       |   |   |   | 151 |   |   |   | 150 |   |
|                                                     |   |                  |      |   |   |   |   |   |   |   |   |   |
|                                                     |   | $                     | 497       |   |   | $ | 487 |   |   | $ | 617 |   |

|                                         |   | Retiree      Medical and Other Benefits |   |
|----------------------------------------------|--------|-----------------------------------------|--------|
|                                         |   | 2008                                    |   |   | 2007 |   |   | 2006 |   |
|                                         |   |                                    |   |   |   |   |   |   |   |
| Components of net periodic benefit      cost |   |                                    |   |   |   |   |   |   |   |
| Service      cost                            |   | $                                       | 54     |   |   | $ | 70 |   |   | $ | 78 |   |
| Interest      cost                           |   |                                    | 172    |   |   |   | 194 |   |   |   | 194 |   |
| Expected      return on assets               |   |                                    | (20    | ) |   |   | (18 | ) |   |   | (15 | ) |
| Amortization      of:                        |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Prior      service cost                      |   |                                    | (13    | ) |   |   | (13 | ) |   |   | (10 | ) |
| Unrecognized      net loss (gain)            |   |                                    | (22    | ) |   |   | (7 | ) |   |   | 1 |   |
|                                         |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Net      periodic benefit cost               |   | $                                       | 171    |   |   | $ | 226 |   |   | $ | 248 |   |

----

|                                                                                      |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|-------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                                                                      |   | 2008                  |   |   | 2007                                    |   |   | 2008 |   |   | 2007 |   |
|                                                                                      |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Weighted-average assumptions used to determine      benefit obligations as of December 31 |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Discount      rate                                                                        |   |                  | 6.50   | %      |                                    |   | 6.50 | % |   |   | 6.50 | % |   |   | 6.50 | % |
| Salary      scale (ultimate)                                                              |   |                  | 3.78   |   |                                    |   | 3.78 |   |   |   | - |   |   |   | - |   |

|                                                                                                             |   | Pension      Benefits |   |   | Retiree      Medical and Other Benefits |   |
|------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------|--------|-----------------------------------------|--------|
|                                                                                                             |   | 2008                  |   |   | 2007                                    |   |   | 2008 |   |   | 2007 |   |
|                                                                                                             |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Weighted-average assumptions used to determine net      periodic benefit cost for the years ended December    31 |   |                  |   |   |                                    |   |   |   |   |   |   |   |
| Discount      rate                                                                                               |   |                  | 6.50   | %      |                                    |   | 6.00 | % |   |   | 6.00 | % |   |   | 6.00 | % |
| Salary      scale (ultimate)                                                                                     |   |                  | 3.78   |   |                                    |   | 3.78 |   |   |   | - |   |   |   | - |   |
| Expected      return on plan assets                                                                              |   |                  | 8.75   |   |                                    |   | 8.75 |   |   |   | 8.75 |   |   |   | 8.75 |   |

|                                      |   | 2008   |   |   | 2007   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |
| Long      duration bonds                  |   |   | 48     | %      |   |   | 41 | % |
| U.S.      stocks                          |   |   | 22     |   |   |   | 26 |   |
| International      stocks                 |   |   | 15     |   |   |   | 21 |   |
| Emerging      markets stocks and bonds    |   |   | 4      |   |   |   | 5 |   |
| Alternative      (private) investments    |   |   | 11     |   |   |   | 7 |   |
|       Total |   |   | 100    | %      |   |   | 100 | % |

----

|                                                                                        |   | Pre-65      Individuals |   |   | Post-65      Individuals |   |
|---------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|--------------------------|--------|
|                                                                                        |   | 2008                    |   |   | 2007                     |   |   | 2008 |   |   | 2007 |   |
|                                                                                        |   |                    |   |   |                     |   |   |   |   |   |   |   |
| Assumed health care trend rates at December      31                                         |   |                    |   |   |                     |   |   |   |   |   |   |   |
| Health      care cost trend rate assumed for next year                                      |   |                    | 7.5    | %      |                     |   | 7.0 | % |   |   | 7.5 | % |   |   | 7.0 | % |
| Rate      to which the cost trend rate is assumed to decline (the ultimate trend      rate) |   |                    | 4.5    | %      |                     |   | 4.5 | % |   |   | 4.5 | % |   |   | 4.5 | % |
| Year      that the rate reaches the ultimate trend rate                                     |   |  2015              |   |   |  2010               |   |   |  2015 |   |   |  2010 |   |

|                                                                                     |   | One      Percent Increase |   |   | One      Percent Decrease |   |
|------------------------------------------------------------------------------------------|--------|---------------------------|--------|--------|---------------------------|--------|
|                                                                                     |   |                      |   |   |                      |   |
| Impact      on 2008 service and interest cost                                            |   |                      | 20     |   |                      |   | (20 | ) |
| Impact      on postretirement benefit obligation  as      of December 31, 2008 |   |                      | 224    |   |                      |   | (219 | ) |

|                   |   | Pension |   |   | Retiree      Medical and Other |   |
|------------------------|--------|---------|--------|--------|--------------------------------|--------|
|                   |   |    |   |   |                           |   |
| 2009                   |   | $       | 514    |   |                           | $      | 163 |   |
| 2010                   |   |    | 565    |   |                           |   | 168 |   |
| 2011                   |   |    | 587    |   |                           |   | 176 |   |
| 2012                   |   |    | 617    |   |                           |   | 175 |   |
| 2013                   |   |    | 728    |   |                           |   | 181 |   |
| 2014      – 2018 |   |    | 4,372  |   |                           |   | 1,007 |   |

----

|                              |   | 2008   |   |
|-----------------------------------|--------|--------|--------|
|                              |   | Cost   |   |   | Accumulated      Amortization |   |   | Net      Book Value |   |
| Amortized      intangible assets: |   |   |   |   |   |   |   |   |   |
| Airport      operating rights     |   | $      | 447    |   |   | $ | 253 |   |   | $ | 194 |   |
| Gate      lease rights            |   |   | 182    |   |   |   | 114 |   |   |   | 68 |   |
| Total                             |   | $      | 629    |   |   | $ | 367 |   |   | $ | 262 |   |

|                              |   | 2007   |   |
|-----------------------------------|--------|--------|--------|
|                              |   | Cost   |   |   | Accumulated      Amortization |   |   | Net      Book Value |   |
| Amortized      intangible assets: |   |   |   |   |   |   |   |   |   |
| Airport      operating rights     |   | $      | 449    |   |   | $ | 235 |   |   | $ | 214 |   |
| Gate      lease rights            |   |   | 182    |   |   |   | 107 |   |   |   | 75 |   |
| Total                             |   | $      | 631    |   |   | $ | 342 |   |   | $ | 289 |   |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |

----

|   Pension      and RetireeMedical      Liability              |   |  Unrealized      Gain/(Loss) on Investments |   | Derivative      Financial Instruments |   |   |  Income Tax      Benefit                                                                                                                                 |   | Total  |   |    |       |                     |                            |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------------|------------|--------------------------|---------------------------------|
|                                                                    |   |                                             |   |                                  |   |   |                                                                                                                                                          |   |   |   |         |       |                     |                            |   |
| Balance      at January 1, 2006                                         |   |                                             | $      | (1,206                                | )      |   | $                           4                        |   |   |   | $            | 79         |      |           $ | 36 |   |   | $                       (1,087) |   |   |   |
| Current      year net change                                            |   |                                             |   | 748                                   |   |   | -                                                                                                                                                             |   |   |   |         | -          |                     |                            | -  |   |   | 748 |   |   |   |
| Reclassification      of derivative financial instruments into earnings |   |                                             |   |   -                              |   |   |   -                                                                                                                                                      |   |   |   |         | (88        | )                        |                            | -  |   |   |   (88) |   |   |   |
| Change      in fair value of derivative financial instruments           |   |                                             |   |   -                              |   |   |   -                                                                                                                                                      |   |   |   |         |   26  |                     |                            |        - |   |   |   26 |   |   |   |
| Adjustment      resulting from adoption of SFAS 158                |   |                                             |   | (998                                  | )      |   |                           - |   |   |   |         | -          |                     |                            | -  |   |   |                           (998) |   |   |   |   |   |   |
| Balance      at December 31, 2006                                       |   |                                             |   | (1,456                                | )      |   | 4                                                                                                                                                             |   |   |   |         | 17         |                     |                            | 36  |   |   | (1,399) |   |   |   |
| Current      year change                                                |   |                                             |   | 1,723                                 |   |   | (6                                                                                                                                                            | )      |   |   |         | -          |                     |                            | -  |   |   | 1,717 |   |   |   |
| Amortization      of actuarial loss and prior service cost              |   |                                             |   |  21                              |   |   |                                - |   |   |   |         | -     |                     |                            | -  |   |   |                           21 |   |   |   |   |   |   |
| Reclassification      of derivative financial instruments into earnings |   |                                             |   |   -                              |   |   |   -                                                                                                                                                      |   |   |   |         | (158       | )                        |                            | -  |   |   |   (158) |   |   |   |
| Change      in fair value ofderivative      financialinstruments        |   |                                             |   |   -                              |   |   |   -                                                                                                                                                      |   |   |   |         |   379 |                     |                            | -  |   |   |   379 |   |   |   |
| Balance      at December 31, 2007                                       |   |                                             |   | 288                                   |   |   | (2                                                                                                                                                            | )      |   |   |         | 238        |                     |                            | 36 |   |   | 560 |   |   |   |
| Current      year change                                                |   |                                             |   | (2,707                                | )      |   | (7                                                                                                                                                            | )      |   |   |         | -          |                     |                            | -  |   |   | (2,714) |   |   |   |
| Amortization      of actuarial loss and prior service cost              |   |                                             |   | (17                                   | )      |   |                                                                                                                                                          |   |   |   |         |       |                     |                            |        - |   |   | (17) |   |   |   |   |   |   |
| Reclassification      of derivative financial instruments into earnings |   |                                             |   |   -                              |   |   |   -                                                                                                                                                      |   |   |   |         | (378       | )                        |                            | -  |   |   |   (378) |   |   |   |
| Change      in fair value ofderivative      financialinstruments        |   |                                             |   |   -                              |   |   |   -                                                                                                                                                      |   |   |   |         | (738       | )                        |                            | -  |   |   |   (738) |   |   |   |
| Balance      at December 31, 2008                                       |   |                                             | $      | (2,436                                | )      |   | $                          (9                             | )      |   |   | $            | (878       | )              |           $ |        36 |   |   | $                       (3,287) |   |   |   |

----

----

|                             |   | Year      Ended December 31, |   |
|----------------------------------|--------|------------------------------|--------|
|                             |   | 2008                         |   |   | 2007 |   |   | 2006 |   |
|                             |   |                         |   |   |   |   |   |   |   |
| DOT      Domestic                |   | $                            | 14,065 |   |   | $ | 14,077 |   |   | $ | 14,086 |   |
| DOT      Latin America           |   |                         | 4,927  |   |   |   | 4,268 |   |   |   | 4,024 |   |
| DOT      Atlantic                |   |                         | 3,671  |   |   |   | 3,556 |   |   |   | 3,409 |   |
| DOT      Pacific                 |   |                         | 1,033  |   |   |   | 932 |   |   |   | 971 |   |
|                             |   |                         |   |   |   |   |   |   |   |   |   |   |
| Total      consolidated revenues |   | $                            | 23,696 |   |   | $ | 22,833 |   |   | $ | 22,490 |   |

|                         |   | FirstQuarter |   |   | Second      Quarter |   |   | Third      Quarter |   |   | Fourth      Quarter |   |
|------------------------------|--------|--------------|--------|--------|---------------------|--------|--------|--------------------|--------|--------|---------------------|--------|
| 2008                         |   |         |   |   |                |   |   |               |   |   |                |   |
| Operating      revenues      |   | $            | 5,673  |   |                | $      | 6,155  |               |   | $      | 6,402               |   |   | $ | 5,466 |   |
| Operating      income (loss) |   |         | (234   | )      |                |   | (1,339 | )                  |   |   | (268                | )      |   |   | (213 | ) |
| Net      earnings (loss)     |   |         | (344   | )      |                |   | (1,463 | )                  |   |   | (396                | )      |   |   | (328 | ) |
|                         |   |         |   |   |                |   |   |               |   |   |                |   |   |   |   |   |
| 2007                         |   |         |   |   |                |   |   |               |   |   |                |   |   |   |   |   |
| Operating      revenues      |   | $            | 5,401  |   |                | $      | 5,853  |               |   | $      | 5,921               |   |   | $ | 5,656 |   |
| Operating      income (loss) |   |         | 183    |   |                |   | 394    |               |   |   | 265                 |   |   |   | (140 | ) |
| Net      earnings (loss)     |   |         | 51     |   |                |   | 271    |               |   |   | 148                 |   |   |   | (109 | ) |
|                         |   |         |   |   |                |   |   |               |   |   |                |   |   |   |   |   |

----

----

----

----

| PART      III |
|---------------|

|                                            |   | 2008   |   |   | 2007   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                            |   |   |   |   |   |   |
|     Audit      Fees         |   | $      | 2,466  |   |   | $      | 2,442 |   |
|     Audit      Related Fees |   |   | 400    |   |   |   | 395 |   |
|     Tax      Fees           |   |   | 172    |   |   |   | 74 |   |
|     Total                   |   | $      | 3,038  |   |   | $      | 2,911 |   |

----

| PART      IV |
|--------------|

| (a) | (1) | The      following financial statements and Independent Auditors’ Report are filed      as part of this report: |
|-----|-----|-----------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                          |   | Page   |     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|
|                                                                                                                                                                                                                          |   |   |     |
|         Report      of Independent Registered Public Accounting Firm                                                                                                                  |   |   | 41       |   |
|                                                                                                                                                                                                                          |   |   |     |   |
|         Consolidated      Statements of Operations for the Years Ended        December 31,      2008, 2007 and 2006                           |   |   |  42 |   |
|                                                                                                                                                                                                                          |   |   |     |   |
|         Consolidated      Balance Sheets at December 31, 2008 and 2007                                                                                                                |   |   | 43-44    |   |
|                                                                                                                                                                                                                          |   |   |     |   |
|         Consolidated      Statements of Cash Flows for the Years Ended        December 31,      2008, 2007 and 2006                           |   |   |  45 |   |
|                                                                                                                                                                                                                          |   |   |     |   |
|         Consolidated      Statements of Stockholder’s Equity (Deficit) for the        Years      Ended December 31, 2008, 2007 and 2006 |   |   |  46 |   |
|                                                                                                                                                                                                                          |   |   |     |   |
|         Notes      to Consolidated Financial Statements                                                                                                                               |   |   | 47-76    |   |

|   | (2) | The      following financial statement schedule is filed as part of this      report: |
|--------|-----|---------------------------------------------------------------------------------------|

|   |   | Page |
|--------|--------|------|

|                                                                                                            |   |   |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|         Schedule II      Valuation and Qualifying Accounts and Reserves |   |   | 85     |   |

|   | Schedules      not included have been omitted because they are not applicable or because      the required information is included in the consolidated financial      statements or notes thereto. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Exhibits      required to be filed by Item 601 of Regulation S-K. (Where the amount of      securities authorized to be issued under any of American's long-term debt      agreements does not exceed 10 percent of American's assets, pursuant to      paragraph (b)(4) of Item 601 of Regulation S-K, in lieu of filing such as      an exhibit, American hereby agrees to furnish to the Commission upon      request a copy of any agreement with respect to such long-term      debt.) |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | Exhibit |
|--------|---------|

| 10.1   | Information      Technology Services Agreement, dated July 1, 1996, between American and      The Sabre Group, Inc., incorporated by reference to Exhibit 10.6 to The      Sabre Group Holdings, Inc.’s Registration Statement on Form S-1, file      number 333-09747.  Confidential treatment was granted as to a      portion of this document. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2   | Bylaws      of American Airlines, Inc., amended January 22, 2003, incorporated by      reference to American’s report on Form 10-K for the year ended December      31, 2002. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Gerard J. Arpey dated May 21, 1998, incorporated by      reference to Exhibit 10.61 to AMR’s report on Form 10-K for the year ended      December 31, 1998. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Peter M. Bowler, dated May 21, 1998, incorporated by      reference to Exhibit 10.63 to AMR’s report on Form 10-K for the year ended      December 31, 1998. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Daniel P. Garton, dated May 21, 1998, incorporated      by reference to Exhibit 10.66 to AMR’s report on Form 10-K for the year      ended December 31, 1998. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Monte E. Ford, dated November 15, 2000, incorporated      by reference to Exhibit 10.74 to AMR’s report on Form 10-K for the year      ended December 31, 2000. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Henry C. Joyner, dated January 19, 2000,      incorporated by reference to Exhibit 10.74 to AMR’s report on Form 10-K      for the year ended December 31,1999. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and William K. Ris, Jr., dated October 20, 1999,      incorporated by reference to Exhibit 10.79 to AMR’s report on Form 10-K      for the year ended December 31,1999. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9   | For      of Amendment to Executive Termination Benefits Agreement dated as January      1, 2005. |
|------------------|--------------------------------------------------------------------------------------------------|

| 10.10   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Gary F. Kennedy dated February 3, 2003, incorporated      by reference to Exhibit 10.55 to AMR’s report on Form 10-K for the year      ended December 31, 2002. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Robert W. Reding dated May 20, 2003, incorporated by      reference to Exhibit 10.71 to AMR’s report on Form 10-K for the year ended      December 31, 2003. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12   | Employment      agreement between AMR, American Airlines and William K. Ris, Jr. dated      November 11, 1999, incorporated by reference to Exhibit 10.73 to AMR’s      report on Form 10-K for the year ended December 31,  2003. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13   | Employment      agreement between AMR, American Airlines and Robert W. Reding dated May      21, 2003, incorporated by reference to Exhibit 10.94 to AMR’s report on      Form 10-K for the year ended December 31,2004. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.14   | Amendment      of employment agreement between AMR, American Airlines and Thomas W.      Horton dated July 15, 2008, incorporated by reference to Exhibit 10.5 to      AMR’s report on Form 10-Q for the quarterly period ended June 30,      2008. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15   | Amended      and Restated Executive Termination Benefits Agreement between AMR,      American Airlines and Jeffrey J. Brundage dated April 1, 2004,      incorporated by reference to Exhibit 10.5 to AMR’s report on Form 10-Q for      the quarterly period ended March 31,2004. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16   | Supplemental      Executive Retirement Program for Officers of American Airlines, Inc., as      amended and restated as of January 1,2005. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17   | Aircraft      Purchase Agreement by and between American Airlines, Inc. and The Boeing      Company, dated October 31, 1997, incorporated by reference to Exhibit      10.48 to AMR Corporation’s report on Form 10-K for the year ended December      31, 1997.  Confidential treatment was granted as to a portion of      this document. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18   | Letter      Agreement dated November 17, 2004 and Purchase Agreement Supplements dated      January 11, 2005 between the Boeing Company and American Airlines, Inc.,      incorporated by reference to Exhibit 10.99 to AMR’s report on Form 10-K      for the year ended December 31, 2004. Confidential treatment was granted      as to a portion of theseagreements. |
|-------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19   | Letter      Agreement between the Boeing Company and American Airlines, Inc. dated May      5, 2005, incorporated by reference to Exhibit 10.7 to AMR’s report on Form      10-Q for the quarterly period ended June 30, 2005.  Confidential      treatment was granted as to a portion of this  agreement. |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20   | Trust      Agreement Under Supplemental Retirement Program for Officers of American      Airlines, Inc., as amended and restated as of June 1,  2007. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21   | Trust      Agreement Under Supplemental Executive Retirement Program for Officers of      American Airlines, Inc Participating in the $uper $aver Plus Plan, as amended and      restated as of June 1, 2007. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22   | Credit      Agreement dated as of December 17, 2004, among American Airlines, Inc.,      AMR Corporation, the Lenders from time to time party thereto, Citicorp      USA, Inc., as Administrative Agent for the Lenders, JPMorgan Chase Bank,      N.A., as Syndication Agent and Citigroup Global Markets Inc. and J.P.      Morgan Securities Inc., as Joint Lead Arrangers and Joint Book-Running      Managers, incorporated by reference to Exhibit 10.103 to AMR’s report on      Form 10-K for the year ended December 31,2004. |
|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23   | 2009      Annual Incentive Plan for American, incorporated by reference to Exhibit      99.1 to AMR’s current report on Form 8-K dated January 23,      2009. |
|-------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated August 17, 2007, incorporated by reference to Exhibit 10.24      to American Airlines Inc.’s reported on Form 10-K from the year ended      December 31, 2007. Portions of this Exhibit have been omitted and filed      separately with the Securities and Exchange Commission pursuant to a      confidential treatment request under Rule 24b-2 of the Securities and      Exchange Act of 1934, as amended. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.25   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated November 20, 2007, incorporated by reference to Exhibit      10.25 to American Airlines Inc.’s reported on Form 10-K from the year      ended December 31, 2007.  Portions of this Exhibit have been      omitted and filed separately with the Securities and Exchange Commission      pursuant to a confidential treatment request under Rule 24b-2 of the      Securities and Exchange Act of 1934, as amended. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated December 10, 2007, incorporated by reference to Exhibit      10.26 to American Airlines Inc.’s reported on Form 10-K from the year      ended December 31, 2007.  Portions of this Exhibit have been      omitted and filed separately with the Securities and Exchange Commission      pursuant to a confidential treatment request under Rule 24b-2 of the      Securities and Exchange Act of 1934, as amended. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated January 20, 2008, incorporated by reference to Exhibit      10.27 to American Airlines Inc.’s reported on Form 10-K from the year      ended December 31, 2007.  Portions of this Exhibit have been      omitted and filed separately with the Securities and Exchange Commission      pursuant to a confidential treatment request under Rule 24b-2 of the      Securities and Exchange Act of 1934, as amended. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.28   | Purchase      Agreement Supplement by and between American Airlines, Inc. and The Boeing      Company, dated February 11, 2008, incorporated by reference to Exhibit      10.28 to American Airlines Inc.’s reported on Form 10-K from the year      ended December 31, 2007.   Portions of this Exhibit have      been omitted and filed separately with the Securities and Exchange      Commission pursuant to a confidential treatment request under Rule 24b-2      of the Securities and Exchange Act of 1934, as amended. |
|-------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.29   | Purchase      Agreement No. 3219 between American Airlines, Inc. and The Boeing Company,      dated as of October 15, 2008.  this Exhibit have been omitted      and filed separately with the Securities and Exchange Commission pursuant      to a confidential treatment request under Rule 24b-2 of the Securities and      Exchange Act of 1934, as amended, incorporated by reference to Exhibit      10.138 to AMR’s report on Form 10-K for the year ended December 31,      2008. |
|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                   12 | Computation      of ratio of earnings to fixed charges for the years ended December 31,      2008, 2007, 2006, 2005, and 2004. |
|--------|----------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|

|   |                   23 | Consent      of Independent Registered Public Accounting  Firm. |
|--------|----------------------------------------------------------------------------------|-----------------------------------------------------------------|

| 31.1   | Certification      of Chief Executive Officer pursuant to Rule  13a-14(a). |
|------------------|----------------------------------------------------------------------------|

| 31.2   | Certification      of Chief Financial Officer pursuant to Rule  13a-14(a). |
|------------------|----------------------------------------------------------------------------|

| 32   | Certification      pursuant to Rule 13a-14(b) and section 906 of the Sarbanes-Oxley Act of      2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18,      United States Code). |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| By:    | /s/      Gerard J. Arpey                             |
|--------|------------------------------------------------------|
|   | Gerard      J. Arpey                                 |
|   | Chairman,      President and Chief Executive Officer |
|   | (Principal      Executive Officer)                   |
|   |                                                 |   |

| /s/      Gerard J. Arpey                                                               |   | /s/      Thomas W. Horton                                                                                  |   |
|----------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|
| Gerard      J. Arpey                                                                   |   | Thomas      W. Horton                                                                                      |   |   |
| Director,      Chairman and Chief Executive Officer (Principal Executive      Officer) |   | Executive      Vice President and Chief Financial Officer(Principal      Financial and Accounting Officer) |   |

| /s/      John W. Bachmann                 |   | /s/      Michael A. Miles        |
|-------------------------------------------|--------|----------------------------------|
| John      W. Bachmann, Director           |   | Michael      A. Miles, Director  |
|                                      |   |                             |
|                                      |   |                             |
| /s/      David L. Boren                   |   | /s/      Philip J. Purcell       |
| David      L. Boren, Director             |   | Philip      J. Purcell, Director |
|                                      |   |                             |
|                                      |   |                             |
| /s/      Armando M. Codina                |   | /s/      Ray M. Robinson         |
| Armando      M. Codina, Director          |   | Ray      M. Robinson, Director   |
|                                      |   |                             |
|                                      |   |                             |
| /s/      Rajat K. Gupta                   |   | /s/      Judith Rodin            |
| Rajat      K. Gupta, Director             |   | Judith      Rodin, Director      |
|                                      |   |                             |
|                                      |   |                             |
| /s/      Alberto Ibargüen            |   | /s/      Matthew K. Rose         |
| Alberto      Ibargüen,      Director |   | Matthew      K. Rose, Director   |
|                                      |   |                             |
|                                      |   |                             |
| /s/      Ann McLaughlin Korologos         |   | /s/      Roger T. Staubach       |
| Ann      McLaughlin Korologos, Director   |   | Roger      T. Staubach, Director |
|                                      |   |                             |
|                                      |   |                             |
|  Date: February      18, 2009   |   |                             |
|                                      |   |                             |

----

|                                                  |   |  Balanceatbeginning of year |   |   | Changes      charged to statement of operations accounts |   |     Payments |   |  Write-offs      (netof      recoveries) |   |        Sales retirements  and      transfers |                                                                                                     | Balance at end of year |     |
|-------------------------------------------------------|--------|---------------------------------------|--------|--------|----------------------------------------------------------|--------|----------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------------------|----------------------------------------------------------------------------------------------------------|------------------------|--------------------|
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |
| Year      ended December 31, 2008                     |   |                                  |   |   |                                                     |   |                             |   |                                          |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |
| Allowance      forobsolescence      of inventories    |   | $                                     | 373    |   |                                                     | $      | 88                               |   | $                                             | -      |                                                   |          -          |  $                |  (24)         |   | $ | 437 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Allowance      foruncollectible      accounts         |   |                                  | 40     |   |                                                     |   | 6                                |   |                                          | -      |                                                   | 3                                                                                                   |                   |  -            |   |   | 49 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Reserves      for environmentalremediation      costs |   |                                  | 21     |   |                                                     |   | 2                                |   |                                          | (5)    |                                                   |  -                                                                                                  |                   |  -            |   |   | 18 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Year      ended December 31, 2007                     |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Allowance      forobsolescence      of inventories    |   | $                                     | 364    |   |                                                     | $      | 24                               |   | $                                             | -      |  $                                                | -                                                                                                        |  $                |  (15)         |   | $ | 373 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Allowance      foruncollectible      accounts         |   |                                  | 44     |   |                                                     |   | (1)                              |   |                                          | -      |                                                   | (3)                                                                                                 |                   |  -            |   |   | 40 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Reserves      for environmentalremediation      costs |   |                                  | 33     |   |                                                     |   | -                                |   |                                          | (7)    |                                                   |  (5)                                                                                                |                   |  -            |   |   | 21 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Year      ended December 31, 2006                     |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Allowance      forobsolescence      of inventories    |   | $                                     | 363    |   |                                                     | $      | 21                               |   | $                                             | -      |  $                                                | -                                                                                                        |  $                |  (20)         |   | $ | 364 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Allowance      foruncollectible      accounts         |   |                                  | 59     |   |                                                     |   | 3                                |   |                                          | -      |                                                   | (25)                                                                                                |                   |  7            |   |   | 44 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
| Reserves      for environmentalremediation      costs |   |                                  | 40     |   |                                                     |   | 2                                |   |                                          | (9)    |                                                   |  -                                                                                                  |                   |  -            |   |   | 33 |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |
|                                                  |   |                                  |   |   |                                                     |   |                             |   |                                          |   |                                                   |                                                                                                     |                   |               |   |   |   |   |   |   |