American Airlines 2007 Annual Report Download - page 36

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33
Pension Obligations The Company is required to make minimum contributions to its defined benefit pension
plans under the minimum funding requirements of the Employee Retirement Income Security Act (ERISA). The
Company’s estimated 2008 contributions to its defined benefit pension plans are approximately $350 million,
which exceeds the amount required to be contributed under the provisions of the Pension Funding Equity Act of
2004 and the Pension Protection Act of 2006.
Results of Operations
The Company recorded net earnings of $504 million in 2007 compared to $231 million in 2006. The Company’s
2007 results reflected an improvement in revenues somewhat offset by fuel prices and certain other costs that
were higher in 2007 compared to 2006. The 2007 and 2006 results were impacted by productivity improvements
and by cost reductions resulting from progress under the Turnaround Plan. The 2007 results include the impact
of several items including: a $138 million gain on the sale of AMR’s stake in ARINC included in Other Income,
Miscellaneous – net, a $39 million gain to reflect the positive impact of the change to an 18-month expiration of
AAdvantage miles included in Passenger revenue, and a $63 million charge associated with the retirement and
planned disposal of 24 MD-80 aircraft and certain other equipment that previously had been temporarily stored
included in Other operating expenses.
The Company’s 2005 results were impacted by a $155 million aircraft charge, a $73 million facility charge, an $80
million charge for the termination of a contract, a $37 million gain related to the resolution of a debt restructuring
and a $22 million credit for the reversal of an insurance reserve. All of these amounts are included in Other
operating expenses in the consolidated statement of operations, except for a portion of the facility charge which is
included in Other rentals and landing fees. Also included in the 2005 results was a $69 million fuel tax credit. Of
this amount, $55 million is included in Aircraft fuel expense and $14 million is included in Interest income in the
consolidated statement of operations. The Company did not record a tax provision or benefit associated with its
2007 or 2006 earnings or 2005 losses.