Financial Report Captain John Feldvary Vice President – Finance/Treasurer Air Line Pilots Association, Int’l

Where Were We? On 12/31/98: b OCF in state of crisis ($179,300 in account) b ALPA had modest income surplus of $331,000 b Expenses of MCF exceeded income by $4.3M b UPAS lost $306, financial liability b Negative unrestricted member equity at $ -12.2M b Consolidated loss of $3.8M

Where Were We? On 12/31/98: b MCF balance was $57.4M b SMRA balance was $10.1M b ALPA’s risk management program needed to be expanded b Y2K financial accounting system needed to be implemented — first software upgrade in 12 years

Where Are We Now? 10/16/00 b OCF crisis behind us b Rewrite of Section 60 of ALPA’s Administrative Manual b Completed $80 million reinsurance agreement and continued to build Kitty Hawk capital b “Cleaned the house” b Financial software upgrade implemented b 1st sec/treas conference in years

Where Are We Now? 2000 OCF

Where Are We Now? 2000 MCF (Cash & Investments)

Where Are We Now? 2000 SMRA

Where Are We Now? 2000 Income to Date 2000 Project Revenue (1.95%)$98,039,615 Prorated for 8 months$65,359,743 Actual Dues Income per GL: U.S.$66,894,592U.S.$66,894,592 CAD in US$$ 2,337,856CAD in US$$ 2,337,856 Total 1.95% on 7/31/00$69,232,448 Excess of Actual Budgeted Income $ 3,872,705

Where Are We Going? 2001 Balanced Budget b $1.2 million off-the-top debt reduction b Spending limit interest of $485,000 and $500,000 from 1625 Corporation dedicated to debt reduction b LEC budgets at $40 per capita Increase of $1 above current $39 per capitaIncrease of $1 above current $39 per capita b Office automation charge backs to MEC Eliminated saving $597,000Eliminated saving $597,000

Where Are We Going? 2000 BOD Proposals b Modify LEC funding levels b Retain 1.95% member dues rate b Increase Kitty Hawk’s financial reserves