Table	of	Contents

# UNITED	STATES	SECURITIES	AND	EXCHANGE	COMMISSION

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	Fiscal	Year	Ended	December	31,	2015

¨ TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

Commission	file	number	1-8400

# American	Airlines	Group	Inc.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	other	jurisdiction	of

incorporation	or	organization)

(Address	of	principal	executive	offices,	including	zip	code)

(I.R.S.	Employer

Identification	No.)

Registrant's	telephone	number,	including	area	code

(Former	name,	former	address	and	former	fiscal	year,	if	changed	since	last	report)

Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

Common	Stock,	$0.01	par	value	per	share

# Name	of	Exchange	on	Which	Registered

NASDAQ

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	None

Commission	file	number	1-2691

# American	Airlines,	Inc.

# Securities	registered	pursuant	to	Section	12(b)	of	the	Act:	None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.

American	Airlines	Group	Inc. Yes	þ No	¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or	for	such	shorter	period	that the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	pursuant	to	Rule	405	of

Regulation	S-T	(§232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such	files).

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§	229.405)	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.

Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	or	a	non-accelerated	filer.	See	definition	of	"accelerated	filer"	and	"large	accelerated	filer"	in	Rule	12b-2	of	the	Exchange Act.

American	Airlines	Group	Inc. 		 þ	Large	Accelerated	Filer 		 ¨	Accelerated	Filer 		 ¨	Non-accelerated	Filer 	 ¨	Smaller	Reporting	Company

American	Airlines,	Inc. 		 ¨	Large	Accelerated	Filer 		 ¨	Accelerated	Filer 		 þ	Non-accelerated	Filer 	 ¨	Smaller	Reporting	Company

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Act).

Indicate	by	check	mark	whether	the	registrant	has	filed	all	documents	and	reports	required	to	be	filed	by	Section	12,	13,	or	15(d)	of	the	Securities	Exchange	Act	of	1934	subsequent	to	the	distribution	of	securities under	a	plan	confirmed	by	a	court.

As	of	February	19,	2016,	there	were	603,018,015	shares	of	American	Airlines	Group	Inc.	common	stock	outstanding.	The	aggregate	market	value	of	the	voting	stock	held	by	non-affiliates	of	the	registrant	as	of June	30,	2015,	was	approximately	$27	billion.

As	of	February	19,	2016,	there	were	1,000	shares	of	American	Airlines,	Inc.	common	stock	outstanding,	all	of	which	were	held	by	American	Airlines	Group	Inc.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	proxy	statement	related	to	American	Airlines	Group	Inc.'s	2016	Annual	Meeting	of	Stockholders,	which	proxy	statement	will	be	filed	under	the	Securities	Exchange	Act	of	1934	within	120	days	of	the end	of	American	Airlines	Group	Inc.'s	fiscal	year	ended	December	31,	2015,	are	incorporated	by	reference	into	Part	III	of	this	Annual	Report	on	Form	10-K.

|  | American	Airlines	Group	Inc.<br>American	Airlines,	Inc.<br>Form	10-K<br>Year	Ended	December	31,	2015<br>Table	of	Contents<br>PART	I | Page |
| :--- | :--- | :--- |
| Item\t1. | \t Business | 5 |
| Item\t1A. | \t Risk\tFactors | 22 |
| Item\t1B. | \t Unresolved\tStaff\tComments | 44 |
| Item\t2. | Properties | 45 |
| Item\t3. | Legal\tProceedings | 48 |
| Item\t4. | \t Mine\tSafety\tDisclosures | 49 |
|  | PART\tII |  |
| Item\t5. | \t Market\tfor\tAmerican\tAirlines\tGroup's\tCommon\tStock,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof\tEquity\tSecurities | 50 |
| Item\t6. | Selected\tConsolidated\tFinancial\tData | 54 |
| Item\t7. | \t Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 59 |
| Item\t7A. | \t Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | \t100 |
| Item\t8A. | \t Consolidated\tFinancial\tStatements\tand\tSupplementary\tData\tof\tAmerican\tAirlines\tGroup\tInc. | \t103 |
| Item\t8B. | \t Consolidated\tFinancial\tStatements\tand\tSupplementary\tData\tof\tAmerican\tAirlines,\tInc. | \t172 |
| Item\t9. | \t Changes\tIn\tand\tDisagreements\twith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | \t229 |
| Item\t9A. | \t Controls\tand\tProcedures | \t229 |
|  | PART\tIII |  |
| Item\t10. | \t Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | \t233 |
| Item\t11. | Executive\tCompensation | \t233 |
| Item\t12. | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | \t233 |
| Item\t13. | \t Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | \t233 |
| Item\t14. | Principal\tAccountant\tFees\tand\tServices | \t233 |
|  | PART\tIV |  |
| Item\t15. | Exhibits\tand\tFinancial\tStatement\tSchedules | \t234 |
| SIGNATURES |  | \t235 |

This	combined	Annual	Report	on	Form	10-K	is	filed	by	American	Airlines	Group	Inc.	(formerly	named	AMR	Corporation)	(AAG)	and	its	wholly-owned	subsidiary American	Airlines,	Inc.	(American).	References	in	this	Annual	Report	on	Form	10-K	to	"we,"	"us,"	"our,"	the	"Company"	and	similar	terms	refer	to	AAG	and	its consolidated	subsidiaries.	As	more	fully	described	below,	on	December	9,	2013,	a	subsidiary	of	AMR	Corporation	merged	with	and	into	US	Airways	Group,	Inc.	(US Airways	Group),	which	survived	as	a	wholly-owned	subsidiary	of	AAG	(the	Merger).	On	December	30,	2015,	in	order	to	simplify	AAG's	internal	corporate	structure and	as	part	of	the	integration	efforts	following	the	business	combination	of	AAG	and	US	Airways	Group,	AAG	caused	US	Airways	Group	to	be	merged	with	and	into AAG,	with	AAG	as	the	surviving	corporation,	and,	immediately	thereafter,	US	Airways,	Inc.	(US	Airways),	a	subsidiary	of	US	Airways	Group,	merged	with	and	into American,	with	American	as	the	surviving	corporation.	As	a	result	of	the	Merger,	unless	otherwise	indicated,	information	in	this	Annual	Report	on	Form	10-K	regarding the	Company's	consolidated	results	of	operations	includes	the	results	of	US	Airways	Group's	wholly-owned	subsidiaries	beginning	on	December	9,	2013,	the	effective date	of	the	Merger.	In	addition,	unless	otherwise	indicated,	information	in	this	Annual	Report	on	Form	10-K	regarding	American's	consolidated	results	of	operations includes	the	results	of	US	Airways	for	the	post-Merger	period	from	December	9,	2013,	which	is	the	earliest	date	that	American	and	US	Airways	were	under	common control,	to	December	31,	2013	and	for	the	years	ended	December	31,	2014	and	2015.	"AMR"	or	"AMR	Corporation"	refers	to	the	Company	during	the	period	of	time prior	to	its	emergence	from	Chapter	11	and	its	acquisition	of	US	Airways	Group.	References	to	"US	Airways	Group"	and	"US	Airways"	represent	the	entities	during	the period	of	time	prior	to	December	30,	2015.	References	in	this	Annual	Report	on	Form	10-K	to	"mainline"	refer	to	the	operations	of	American,	as	applicable,	and	exclude regional	operations.

# Note	Concerning	Forward-Looking	Statements

Certain	of	the	statements	contained	in	this	report	should	be	considered	forward-looking	statements	within	the	meaning	of	the	Private	Securities	Litigation	Reform	Act of	1995.	These	forward-looking	statements	may	be	identified	by	words	such	as	"may,"	"will,"	"expect,"	"intend,"	"anticipate,"	"believe,"	"estimate,"	"plan,"	"project," "could,"	"should,"	"would,"	"continue,"	"seek,"	"target,"	"guidance,"	"outlook,"	"if	current	trends	continue,"	"optimistic,"	"forecast"	and	other	similar	words.	Such statements	include,	but	are	not	limited	to,	statements	about	the	benefits	of	the	Merger,	including	future	financial	and	operating	results,	our	plans,	objectives,	expectations and	intentions,	and	other	statements	that	are	not	historical	facts,	such	as,	without	limitation,	statements	that	discuss	the	possible	future	effects	of	current	known	trends	or uncertainties,	or	which	indicate	that	the	future	effects	of	known	trends	or	uncertainties	cannot	be	predicted,	guaranteed	or	assured.	These	forward-looking	statements	are based	on	our	current	objectives,	beliefs	and	expectations,	and	they	are	subject	to	significant	risks	and	uncertainties	that	may	cause	actual	results	and	financial	position and	timing	of	certain	events	to	differ	materially	from	the	information	in	the	forward-looking	statements.	These	risks	and	uncertainties	include,	but	are	not	limited	to, those	described	below	under	Part	I,	Item	1A.	Risk	Factors	and	the	following:	significant	operating	losses	in	the	future;	downturns	in	economic	conditions	that	adversely affect	our	business;	the	impact	of	continued	periods	of	high	volatility	in	fuel	costs,	increased	fuel	prices	and	significant	disruptions	in	the	supply	of	aircraft	fuel; competitive	practices	in	the	industry,	including	the	impact	of	low	cost	carriers,	airline	alliances	and	industry	consolidation;	the	challenges	and	costs	of	integrating operations	and	realizing	anticipated	synergies	and	other	benefits	of	the	Merger;	costs	of	ongoing	data	security	compliance	requirements	and	the	impact	of	any	significant data	security	breach;	our	substantial	indebtedness	and	other	obligations	and	the	effect	they	could	have	on	our	business	and	liquidity;	an	inability	to	obtain	sufficient financing	or	other	capital	to	operate	successfully	and	in	accordance	with	our	current	business	plan;	increased	costs	of	financing,	a	reduction	in	the	availability	of financing	and	fluctuations	in	interest	rates;	the	effect	our	high	level	of	fixed	obligations	may	have	on	our	ability	to	fund	general	corporate	requirements,	obtain	additional financing	and	respond	to	competitive	developments	and	adverse	economic	and	industry	conditions;	our	significant	pension	and	other	postretirement	benefit	funding obligations;	the	impact	of	any	failure	to	comply	with	the	covenants	contained	in	financing	arrangements;	provisions	in	credit	card	processing	and	other	commercial agreements	that	may	materially	reduce	our	liquidity;	the	impact	of	union	disputes,	employee	strikes	and	other	labor-related	disruptions;	any	inability	to	maintain	labor costs	at	competitive	levels;	interruptions	or	disruptions	in	service	at	one	or	more	of	our	hub	airports;	any	inability

to	obtain	and	maintain	adequate	facilities,	infrastructure	and	slots	to	operate	our	flight	schedule	and	expand	or	change	our	route	network;	our	reliance	on	third-party regional	operators	or	third-party	service	providers	that	have	the	ability	to	affect	our	revenue	and	the	public's	perception	about	our	services;	any	inability	to	effectively manage	the	costs,	rights	and	functionality	of	third-party	distribution	channels	on	which	we	rely;	extensive	government	regulation,	which	may	result	in	increases	in	our costs,	disruptions	to	our	operations,	limits	on	our	operating	flexibility,	reductions	in	the	demand	for	air	travel,	and	competitive	disadvantages;	the	impact	of	the	heavy taxation	on	the	airline	industry;	changes	to	our	business	model	that	may	not	successfully	increase	revenues	and	may	cause	operational	difficulties	or	decreased	demand; the	loss	of	key	personnel	or	inability	to	attract	and	retain	additional	qualified	personnel;	the	impact	of	conflicts	overseas,	terrorist	attacks	and	ongoing	security	concerns; the	global	scope	of	our	business	and	any	associated	economic	and	political	instability	or	adverse	effects	of	events,	circumstances	or	government	actions	beyond	our control,	 including	 the	 impact	 of	 foreign	 currency	 exchange	 rate	 fluctuations	 and	 limitations	 on	 the	 repatriation	 of	 cash	 held	 in	 foreign	 countries;	 the	 impact	 of environmental	and	noise	regulation;	the	impact	associated	with	climate	change,	including	increased	regulation	to	reduce	emissions	of	greenhouse	gases;	our	reliance	on technology	and	automated	systems	and	the	impact	of	any	failure	of	these	technologies	or	systems;	challenges	in	integrating	our	computer,	communications	and	other technology	systems;	losses	and	adverse	publicity	stemming	from	any	accident	involving	any	of	our	aircraft	or	the	aircraft	of	our	regional	or	codeshare	operators;	delays in	scheduled	aircraft	deliveries,	or	other	loss	of	anticipated	fleet	capacity,	and	failure	of	new	aircraft	to	perform	as	expected;	our	dependence	on	a	limited	number	of suppliers	for	aircraft,	aircraft	engines	and	parts;	the	impact	of	changing	economic	and	other	conditions	beyond	our	control,	including	global	events	that	affect	travel behavior	such	as	an	outbreak	of	a	contagious	disease,	and	volatility	and	fluctuations	in	our	results	of	operations	due	to	seasonality;	the	effect	of	a	higher	than	normal number	of	pilot	retirements	and	a	potential	shortage	of	pilots;	the	impact	of	possible	future	increases	in	insurance	costs	or	reductions	in	available	insurance	coverage;	the effect	on	our	financial	position	and	liquidity	of	being	party	to	or	involved	in	litigation;	an	inability	to	use	net	operating	losses	(NOLs)	carried	over	from	prior	taxable years	(NOL	Carryforwards);	any	impairment	in	the	amount	of	goodwill	we	recorded	as	a	result	of	the	application	of	the	acquisition	method	of	accounting	and	an	inability to	realize	the	full	value	of	AAG's	and	American's	respective	intangible	or	long-lived	assets	and	any	material	impairment	charges	that	would	be	recorded	as	a	result; price	volatility	of	our	common	stock;	the	effects	of	our	capital	deployment	program	and	the	limitation,	suspension	or	discontinuation	of	our	share	repurchase	program	or dividend	payments	thereunder;	delay	or	prevention	of	stockholders'	ability	to	change	the	composition	of	our	Board	of	Directors	and	the	effect	this	may	have	on	takeover attempts	that	some	of	our	stockholders	might	consider	beneficial;	the	effect	of	provisions	of	our	Restated	Certificate	of	Incorporation	(the	Certificate	of	Incorporation) and	Amended	and	Restated	Bylaws	(the	Bylaws)	that	limit	ownership	and	voting	of	our	equity	interests,	including	our	common	stock;	the	effect	of	limitations	in	our Certificate	of	Incorporation	on	acquisitions	and	dispositions	of	our	common	stock	designed	to	protect	our	NOL	Carryforwards	and	certain	other	tax	attributes,	which may	limit	the	liquidity	of	our	common	stock;	the	limitations	of	our	historical	consolidated	financial	information,	which	is	not	directly	comparable	to	our	financial information	for	prior	or	future	periods;	other	economic,	business,	competitive,	and/or	regulatory	factors	affecting	our	business,	including	those	set	forth	in	this	Annual Report	on	Form	10-K	(especially	in	Part	I,	Item	1A.	Risk	Factors	and	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of Operations)	and	in	our	other	filings	with	the	Securities	and	Exchange	Commission	(the	SEC),	and	other	risks	and	uncertainties	listed	from	time	to	time	in	our	filings	with the	SEC.

All	of	the	forward-looking	statements	are	qualified	in	their	entirety	by	reference	to	the	factors	discussed	in	Part	I,	Item	1A.	Risk	Factors	and	elsewhere	in	this	report. There	may	be	other	factors	of	which	we	are	not	currently	aware	that	may	affect	matters	discussed	in	the	forward-looking	statements	and	may	also	cause	actual	results	to differ	materially	from	those	discussed.	We	do	not	assume	any	obligation	to	publicly	update	or	supplement	any	forward-looking	statement	to	reflect	actual	results, changes	in	assumptions	or	changes	in	other	factors	affecting	such	statements	other	than	as	required	by	law.	Forward-looking	statements	speak	only	as	of	the	date	of	this Annual	Report	on	Form	10-K	or	as	of	the	dates	indicated	in	the	statements.

# PART	I

# ITEM	1.		BUSINESS

# Overview

American	Airlines	Group	Inc.	(AAG),	a	Delaware	corporation,	is	a	holding	company	and	its	principal,	wholly-owned	subsidiaries	are	American	Airlines,	Inc. (American),	Envoy	Aviation	Group	Inc.	(Envoy),	Piedmont	Airlines,	Inc.	(Piedmont),	and	PSA	Airlines,	Inc.	(PSA).	AAG	was	formed	in	1982	under	the	name	AMR Corporation	(AMR)	as	the	parent	company	of	American,	which	was	founded	in	1934.	On	December	9,	2013,	a	subsidiary	of	AMR	merged	with	and	into	US	Airways Group,	Inc.	(US	Airways	Group),	a	Delaware	corporation,	which	survived	as	a	wholly-owned	subsidiary	of	AAG,	and	AAG	emerged	from	Chapter	11.	Upon	closing	of the	Merger	and	emergence	from	Chapter	11,	AMR	changed	its	name	to	American	Airlines	Group	Inc.	On	December	30,	2015,	in	order	to	simplify	AAG's	internal corporate	structure	and	as	part	of	the	integration	efforts	following	the	business	combination	of	AAG	and	US	Airways	Group,	AAG	caused	US	Airways	Group	to	be merged	with	and	into	AAG,	with	AAG	as	the	surviving	corporation,	and,	immediately	thereafter,	US	Airways,	Inc.	(US	Airways),	a	Delaware	corporation	and	wholly- owned	subsidiary	of	US	Airways	Group,	merged	with	and	into	American,	with	American	as	the	surviving	corporation.	As	a	result	of	the	merger	of	US	Airways	and American,	US	Airways	 transferred	all	of	 its	assets,	 liabilities	and	off-balance	sheet	commitments	 to	American.	For	financial	reporting	purposes,	 this	 transaction constituted	a	transfer	of	assets	between	entities	under	common	control	and	was	accounted	for	at	historical	cost.	Certain	employees	of	American	continue	to	work	under the	terms	of	separate	collective	bargaining	agreements	that	were	applicable	to	them	as	employees	of	US	Airways.	Virtually	all	of	AAG's	operations	fall	within	the airline	industry.

AAG's	and	American's	principal	executive	offices	are	located	at	4333	Amon	Carter	Boulevard,	Fort	Worth,	Texas	76155.	AAG's	and	American's	telephone	number is	817-963-1234,	and	their	Internet	address	is	www.aa.com.	Information	contained	on	AAG's	and	American's	website	is	not	and	should	not	be	deemed	a	part	of	this report	or	any	other	report	or	filing	filed	with	or	furnished	to	the	SEC.

# Airline	Operations

As	noted	above,	AAG	is	a	holding	company	whose	primary	business	activity	is	the	operation	of	a	major	network	carrier	through	its	principal	wholly-owned	mainline operating	subsidiary,	American.

Together	with	our	wholly-owned	regional	airline	subsidiaries	and	third-party	regional	carriers	operating	as	American	Eagle,	our	airline	operates	an	average	of	nearly 6,700	flights	per	day	to	nearly	350	destinations	in	more	than	50	countries	from	our	hubs	in	Charlotte,	Chicago,	Dallas/Fort	Worth	(DFW),	Los	Angeles	(LAX),	Miami, New	York,	Philadelphia,	Phoenix	and	Washington,	D.C.	In	2015,	approximately	201	million	passengers	boarded	our	mainline	and	regional	flights.	As	of	December	31, 2015,	we	operated	946	mainline	aircraft	and	are	supported	by	our	regional	airline	subsidiaries	and	third-party	regional	carriers,	which	operated	an	additional	587 regional	aircraft.

American	is	a	founding	member	of	the	oneworld	alliance,	whose	members	and	members-elect	serve	nearly	1,000	destinations	with	14,250	daily	flights	to	150 countries.

Our	cargo	division	provides	a	wide	range	of	freight	and	mail	services,	with	facilities	and	interline	connections	available	across	the	globe.

See	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	"American	Airlines	Group	–	Year	in	Review," "AAG's	Results	of	Operations"	and	"American's	Results	of	Operations"	for	further	discussion	of	AAG's	and	American's	operating	results	and	operating	performance. Also,	see	Note	17	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	15	to	American's

Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	information	regarding	our	operating	segments	and	operating	revenue	in	principal	geographic	areas.

# Regional	Operations

Our	wholly-owned	regional	carriers,	Envoy,	Piedmont	and	PSA,	as	well	as	certain	third-party	regional	carriers	have	arrangements	with	us	to	provide	regional	feed under	the	trade	name	"American	Eagle."	American	Eagle	carriers	are	an	integral	component	of	our	operating	network.	We	rely	heavily	on	feeder	traffic	from	these regional	carriers,	which	carry	passengers	to	our	hubs	from	low-density	markets	that	are	uneconomical	for	us	to	serve	with	large	jets.	In	addition,	regional	carriers	offer complementary	service	in	our	existing	mainline	markets	by	operating	flights	during	off-peak	periods	between	mainline	flights.	During	2015,	approximately	54	million passengers	boarded	our	regional	carriers'	planes,	approximately	47%	of	whom	connected	to	or	from	our	mainline	flights.	Of	these	passengers,	approximately	24	million were	enplaned	by	our	wholly-owned	regional	carriers	and	approximately	30	million	were	enplaned	by	third-party	regional	carriers	operating	under	capacity	purchase agreements.

The	American	Eagle	arrangements	are	principally	 in	 the	form	of	capacity	purchase	agreements.	The	capacity	purchase	agreements	provide	 that	all	revenues, including	passenger,	mail	and	freight	revenues,	go	to	us.	In	return,	we	agree	to	pay	predetermined	fees	to	these	airlines	for	operating	an	agreed-upon	number	of	aircraft, without	regard	to	the	number	of	passengers	on	board.	In	addition,	these	agreements	provide	that	we	will	reimburse	100%	of	certain	variable	costs,	such	as	airport	landing fees	and	passenger	liability	insurance.	We	control	marketing,	scheduling,	ticketing,	pricing	and	seat	inventories.	A	very	small	number	of	regional	aircraft	are	operated	for us	under	prorate	agreements,	under	which	the	regional	carriers	receive	a	prorated	share	of	ticket	revenue	and	pay	certain	service	fees	to	us.	The	prorate	carriers	are responsible	for	all	costs	incurred	operating	the	applicable	aircraft.	All	American	Eagle	carriers	have	logos,	service	marks,	aircraft	paint	schemes	and	uniforms	similar	to our	mainline	operations.

# Chapter	11	Reorganization

On	 November	 29,	 2011	 (the	 Petition	 Date),	AMR	 Corporation,	 its	 principal	 subsidiary,	American,	 and	 certain	 of	AMR's	 other	 direct	 and	 indirect	 domestic subsidiaries	 (collectively,	 the	 Debtors),	 filed	 voluntary	 petitions	 for	 relief	 (the	 Chapter	 11	 Cases)	 under	 Chapter	 11	 of	 the	 United	 States	 Bankruptcy	 Code	 (the Bankruptcy	Code)	in	the	United	States	Bankruptcy	Court	for	the	Southern	District	of	New	York	(the	Bankruptcy	Court).	On	October	21,	2013,	the	Bankruptcy	Court entered	an	order	(the	Confirmation	Order)	approving	and	confirming	the	Debtors'	fourth	amended	joint	plan	of	reorganization	(as	amended,	the	Plan).

On	December	9,	2013	(the	Effective	Date),	the	Debtors	consummated	their	reorganization	pursuant	to	the	Plan,	principally	through	the	transactions	contemplated	by an	Agreement	and	Plan	of	Merger	(as	amended,	the	Merger	Agreement),	dated	as	of	February	13,	2013,	by	and	among	AMR,	AMR	Merger	Sub,	Inc.	(Merger	Sub)	and US	Airways	Group,	pursuant	to	which	Merger	Sub	merged	with	and	into	US	Airways	Group	(the	Merger),	with	US	Airways	Group	surviving	as	a	wholly-owned subsidiary	of	AMR	following	the	Merger.

In	connection	with	the	Chapter	11	Cases,	trading	in	AMR's	common	stock	and	certain	debt	securities	on	the	New	York	Stock	Exchange	(NYSE)	was	suspended	on January	5,	2012,	and	AMR's	common	stock	and	such	debt	securities	were	delisted	from	the	NYSE	on	January	30,	2012.	On	January	5,	2012,	AMR's	common	stock began	trading	under	the	symbol	"AAMRQ"	(CUSIP	001765106)	on	the	OTCQB	marketplace.	Pursuant	to	the	Plan,	on	the	Effective	Date	(i)	all	existing	shares	of AAG's	old	common	stock	formerly	traded	under	the	symbol	"AAMRQ"	were	canceled	and	(ii)	the	Company	was	authorized	to	issue	up	to	approximately	544	million shares	of	common	stock,	par	value	$0.01	per	share,	of	AAG	(AAG	Common	Stock)	by	operation	of	the	Plan	(excluding	shares	of	AAG	Common	Stock	issuable pursuant	to	the	Merger	Agreement).	On	the	Effective	Date,	the	AAG	Common	Stock	was	listed	on	the	NASDAQ	Global	Select	Market	under	the	symbol	"AAL,"	and AAMRQ	ceased	trading	on	the	OTCQB	marketplace.

Upon	emergence	from	Chapter	11,	AAG	issued	approximately	53	million	shares	of	AAG	Common	Stock	to	AMR's	old	equity	holders	and	certain	of	the	Debtors' employees,	and	issued	168	million	shares	of	AAG	Series	A	Convertible	Preferred	Stock,	par	value	$0.01	per	share	(the	AAG	Series	A	Preferred	Stock),	which	was mandatorily	convertible	into	new	AAG	Common	Stock	during	the	120-day	period	after	the	Effective	Date,	to	certain	creditors	and	employees	of	the	Debtors	(including shares	deposited	in	the	Disputed	Claims	Reserve	(as	defined	in	the	Plan)).	In	accordance	with	the	terms	of	the	Plan,	former	holders	of	AMR	common	stock	(previously traded	under	the	symbol	"AAMRQ")	received,	for	each	share	of	AMR	common	stock,	an	initial	distribution	of	approximately	0.0665	shares	of	the	AAG	Common	Stock as	of	the	Effective	Date.	Following	the	Effective	Date,	former	holders	of	AMR	common	stock	and	those	deemed	to	be	treated	as	such	in	connection	with	the	elections made	pursuant	to	the	Plan	have	received	through	December	31,	2015,	additional	aggregate	distributions	of	shares	of	AAG	Common	Stock	of	approximately	0.6776 shares	of	AAG	Common	Stock	for	each	share	of	AMR	common	stock	previously	held,	and	may	continue	to	receive	additional	distributions.	As	of	the	Effective	Date,	the adjusted	total	Double-Dip	General	Unsecured	Claims	(as	defined	in	the	Plan)	were	approximately	$2.5	billion	and	the	Allowed	Single-Dip	General	Unsecured	Claims	(as defined	in	the	Plan)	were	approximately	$2.5	billion.	The	Disputed	Claims	Reserve	established	under	the	Plan	was	initially	issued	30.4	million	shares,	which	shares	are reserved	for	distributions	to	holders	of	disputed	Single-Dip	Unsecured	Claims	(Single-Dip	Equity	Obligations)	whose	claims	ultimately	become	allowed	as	well	as	to certain	AMR	labor	groups	and	employees	who	received	a	deemed	claim	amount	based	upon	a	fixed	percentage	of	the	distributions	to	be	made	to	general	unsecured claimholders.	As	of	December	31,	2015,	 the	Disputed	Claims	Reserve	held	25.3	million	shares	of	AAG	Common	Stock	pending	distribution	of	 those	shares	 in accordance	with	the	Plan.

See	Part	II,	Item	5.	Market	for	American	Airlines	Group's	Common	Stock,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities,	Part	II,	Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations,	Note	2	and	Note	4	to	AAG's	Consolidated	Financial	Statements	in	Part	II, Item	8A	and	Note	2	and	Note	4	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	further	information	regarding	the	Chapter	11	Cases,	the	Merger and	the	Disputed	Claims	Reserve.

# Merger

Pursuant	to	the	Merger	Agreement	and	consistent	with	the	Plan,	each	share	of	common	stock,	par	value	$0.01	per	share,	of	US	Airways	Group	(the	US	Airways Group	Common	Stock)	was	converted	into	the	right	to	receive	one	share	of	AAG	Common	Stock.	The	aggregate	number	of	shares	of	AAG	Common	Stock	issuable	in the	Merger	to	holders	of	US	Airways	Group	equity	instruments	(including	stockholders,	holders	of	convertible	notes,	optionees,	and	holders	of	restricted	stock	units (RSUs))	represented	28%	of	the	diluted	equity	ownership	of	AAG.	The	remaining	72%	diluted	equity	ownership	in	AAG	(up	to	approximately	544	million	shares)	was or	is	distributable,	pursuant	to	the	Plan	(see	"Chapter	11	Reorganization"	above),	to	stakeholders,	labor	unions,	certain	employees	of	AMR	and	the	other	Debtors,	and former	holders	of	AMR	common	stock	(previously	traded	under	the	symbol	"AAMRQ")	such	that	the	aggregate	number	of	shares	of	AAG	Common	Stock	issuable under	the	Plan	will	not	exceed	72%	of	the	diluted	equity	ownership	of	AAG	as	of	the	time	of	the	Merger.

In	connection	with	the	completion	of	the	Merger,	the	NYSE	suspended	trading	in	the	US	Airways	Group	Common	Stock	prior	to	the	opening	of	the	market	on December	9,	2013.	The	US	Airways	Group	Common	Stock	was	delisted	from	the	NYSE	and	registration	of	the	US	Airways	Group	Common	Stock	under	Section	12(b) of	the	Exchange	Act	was	terminated.

See	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	"American	Airlines	Group	–	Year	in	Review," Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	"AAG's	Results	of	Operations,"	Note	2	and	Note	4	to	AAG's	Consolidated Financial	Statements	in	Part	II,	Item	8A	and	Note	2	and	Note	4	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	further	information	regarding	the Chapter	11	Cases	and	the	Merger.

# The	U.S.	Airline	Industry

In	2015,	the	U.S.	airline	industry	benefited	significantly	from	lower	fuel	prices.	However,	this	benefit	was	offset	in	part	by	a	decline	in	revenues	driven	by	reduced yields.

Jet	fuel	prices	closely	follow	the	price	of	Brent	crude	oil.	Oil	prices	declined	significantly	throughout	2015,	and	in	December,	the	price	of	Brent	crude	oil	fell	below $40	a	barrel	for	the	first	time	since	2009.	On	average,	the	price	of	Brent	crude	oil	per	barrel	was	approximately	47%	lower	in	2015	as	compared	to	2014.	The	average daily	spot	price	for	Brent	crude	oil	during	2015	was	$52	per	barrel	as	compared	to	an	average	daily	spot	price	of	$99	per	barrel	during	2014.	On	a	daily	basis,	Brent crude	oil	prices	fluctuated	during	2015	between	a	high	of	$66	per	barrel	to	a	low	of	$35	per	barrel,	and	closed	the	year	on	December	31,	2015	at	$37	per	barrel.

With	respect	to	revenue,	in	its	most	recent	data	available	through	the	third	quarter	of	2015,	Airlines	for	America,	the	trade	association	for	U.S.	airlines,	reported	U.S. industry	passenger	revenues	and	yields	declined	as	compared	to	2014.	Additionally,	domestic	markets	outperformed	international	markets	(Atlantic,	Pacific	and	Latin America)	in	both	yield	and	overall	revenue	performance.

While	jet	fuel	prices	have	declined	year-over-year	as	described	above,	uncertainty	exists	regarding	the	economic	conditions	driving	these	declines.	See	Part	I, Item	1A.	Risk	Factors	–	"Downturns	in	economic	conditions	adversely	affect	our	business"	and	"Our	business	is	dependent	on	the	price	and	availability	of	aircraft	fuel. Continued	periods	of	high	volatility	in	fuel	costs,	increased	fuel	prices	and	significant	disruptions	in	the	supply	of	aircraft	fuel	could	have	a	significant	negative	impact on	our	operating	results	and	liquidity."

# Competition

The	markets	in	which	we	operate	are	highly	competitive.	Price	competition	occurs	on	a	market-by-market	basis	through	price	discounts,	changes	in	pricing	structures, fare	matching,	target	promotions	and	loyalty	program	initiatives.	On	most	of	our	domestic	non-stop	routes,	we	currently	face	competing	service	from	at	least	one,	and sometimes	more	than	one,	domestic	airline,	including:	Alaska	Airlines,	Allegiant	Air,	Delta	Air	Lines,	Frontier	Airlines,	Hawaiian	Airlines,	JetBlue	Airways,	Southwest Airlines,	Spirit	Airlines,	United	Airlines	and	Virgin	America.	Competition	is	even	greater	between	cities	that	require	a	connection,	where	the	major	airlines	compete	via their	respective	hubs.	In	addition,	we	face	competition	on	some	of	our	connecting	routes	from	airlines	operating	point-to-point	service	on	such	routes.	We	also	compete with	all-cargo	and	charter	airlines	and,	particularly	on	shorter	segments,	ground	and	rail	transportation.

On	all	of	our	routes,	pricing	decisions	are	affected,	in	large	part,	by	the	need	to	meet	competition	from	other	airlines.	Airlines	typically	use	discount	fares	and	other promotions	to	stimulate	traffic	during	normally	slack	travel	periods,	when	they	begin	service	to	new	cities	or	when	they	have	excess	capacity,	to	generate	cash	flow,	to maximize	revenue	per	available	seat	mile	(ASM)	and	to	establish,	increase	or	preserve	market	share.	Discount	and	promotional	fares	are	generally	non-refundable	and may	be	subject	to	various	restrictions	such	as	minimum	stay	requirements,	advance	ticketing,	limited	seating	and	change	fees.	We	have	often	elected	to	match	discount or	promotional	fares	initiated	by	other	air	carriers	in	certain	markets	in	order	to	compete	in	those	markets.	Most	airlines	will	quickly	match	price	reductions	in	a particular	market.	In	addition,	low-fare,	low-cost	carriers,	such	as	Southwest	Airlines	and	Jet	Blue	Airways,	and	so-called	ultra	low-cost	carriers,	such	as	Allegiant	Air, Frontier	Airlines	and	Spirit	Airlines,	compete	in	many	of	the	markets	in	which	we	operate	and	competition	from	these	carriers	is	increasing.	For	example,	at	our	DFW hub	and	in	a	number	of	other	markets	we	face	more	competition	(as	measured	by	ASMs)	from	ultra	low-cost	carriers	than	from	major	network	carriers.

In	addition	to	price	competition,	airlines	compete	for	market	share	by	increasing	the	size	of	their	route	system	and	the	number	of	markets	they	serve.	The	American Eagle	regional	carriers	increase	the	number	of	markets	we	serve	by	flying	to	lower	demand	markets	and	providing	connections	at	our	hubs.	Many	of	our	competitors also	own	or	have	agreements	with	regional	airlines	which	provide	similar	services	at	their	hubs	and	other	locations.

We	also	compete	on	the	basis	of	scheduling	(frequency	and	flight	times),	availability	of	nonstop	flights,	on-time	performance,	type	of	equipment,	cabin	configuration, amenities	provided	to	passengers,	loyalty	programs,	the	automation	of	travel	agent	reservation	systems,	onboard	products,	markets	served	and	other	services.	We compete	with	both	major	network	airlines	and	low-cost	carriers	throughout	our	network.

In	addition	to	our	extensive	domestic	service,	we	provide	international	service	to	Central	and	South	America,	Asia,	Europe	and	Australia.	Revenues	from	foreign operations	(flights	serving	international	destinations)	were	approximately	30%	of	our	total	operating	revenues	in	2015.	In	2015,	we	expanded	our	global	footprint	by adding	38	new	routes,	including	20	international	and	18	domestic.	Notable	new	routes	include	DFW	to	Beijing,	LAX	to	Sydney	and	LAX	to	Mexico	City.	In	providing international	air	transportation,	we	compete	with	U.S.	airlines	to	provide	scheduled	passenger	and	cargo	service	between	the	U.S.	and	various	overseas	locations,	foreign investor-owned	airlines,	and	foreign	state-owned	or	state-affiliated	airlines,	including	carriers	based	in	the	Middle	East,	the	three	largest	of	which	we	believe	benefit from	significant	government	subsidies.

# Agreements	with	Other	Airlines

In	general,	carriers	that	have	the	greatest	ability	to	seamlessly	connect	passengers	to	and	from	markets	beyond	the	nonstop	city	pair	have	a	competitive	advantage.	In some	cases,	however,	foreign	governments	limit	U.S.	air	carriers'	rights	to	carry	passengers	beyond	designated	gateway	cities	in	foreign	countries.	To	improve	access	to each	other's	markets,	various	U.S.	and	foreign	air	carriers,	 including	American,	have	established	marketing	relationships	with	other	airlines	and	rail	companies. American	currently	has	marketing	relationships	with	Air	Berlin,	Air	Tahiti	Nui,	Alaska	Airlines,	British	Airways,	Cape	Air,	Cathay	Pacific,	Dragonair,	EL	AL,	Etihad Airways,	Fiji	Airways,	Finnair,	Gulf	Air,	Hainan	Airlines,	Hawaiian	Airlines,	Iberia,	Interjet,	Japan	Airlines,	Jet	Airways,	Jetstar	Group	(includes	Jetstar	Airways	and Jetstar	Japan),	Korean	Air,	LATAM	(includes	LAN	Airlines,	LAN	Argentina,	LAN	Colombia,	LAN	Ecuador,	LAN	Peru,	TAM	Airlines	and	TAM	Mercosur),	Malaysia Airlines,	Niki	Airlines,	Qantas	Airways,	Qatar	Airways,	Royal	Jordanian,	S7	Airlines,	Seaborne	Airlines	and	WestJet.

American	is	also	a	founding	member	of	the	oneworld	alliance,	which	includes	Air	Berlin,	British	Airways,	Cathay	Pacific	Airways,	Finnair,	Iberia,	Japan	Airlines, LAN	Airlines,	Malaysia	Airlines,	Qantas	Airways,	Qatar	Airways,	Royal	Jordanian,	S7	Airlines,	SriLankan	Airlines	and	TAM	Airlines.	The	 oneworld	alliance	links	the networks	of	the	member	carriers	to	enhance	customer	service	and	smooth	connections	to	the	destinations	served	by	the	alliance,	including	linking	the	carriers'	loyalty programs	and	access	to	the	carriers'	airport	lounge	facilities.	Together,	oneworld	members	and	members-elect	serve	nearly	1,000	destinations	with	14,250	daily	flights	to 150	countries.

American	is	party	to	antitrust-immunized	cooperation	agreements	with	British	Airways,	Iberia,	Finnair,	Royal	Jordanian,	Japan	Airlines,	LAN	Airlines	and	LAN Peru.	American	has	also	established	joint	business	agreements	(JBAs)	with	British	Airways,	Iberia	and	Finnair	and	separately	Japan	Airlines	that	enable	the	carriers	to cooperate	on	flights	between	particular	destinations	and	allow	pooling	and	sharing	of	certain	revenues	and	costs,	enhanced	loyalty	program	reciprocity	and	cooperation in	other	areas.	American	and	its	joint	business	partners	received	regulatory	approval	to	enter	into	these	JBAs.	In	addition,	American	applied	for	regulatory	approval	to enter	into	a	JBA	with	Qantas	Airways	and	has	or	will	be	applying	for	regulatory	approval	of	a	JBA	with	LATAM	Airlines	Group	air	carriers	in	the	relevant	jurisdictions affected	by	the	JBA.

# Industry	Regulation	and	Airport	Access

# General

Our	airlines	are	subject	 to	extensive	domestic	and	 international	regulatory	requirements.	The	Airline	Deregulation	Act	of	1978,	as	amended,	eliminated	most domestic	economic	regulation	of	passenger	and	freight	transportation.	However,	the	U.S.	Department	of	Transportation	(DOT)	and	the	Federal	Aviation	Administration (FAA)	still	exercise	significant	regulatory	authority	over	air	carriers.	The	DOT	maintains	jurisdiction	over	the

approval	of	domestic	and	international	codeshare	agreements,	international	route	authorities,	and	consumer	protection	and	competition	matters,	such	as	advertising, denied	boarding	compensation	and	baggage	liability.

The	FAA	regulates	significant	aspects	of	our	business,	primarily	in	the	areas	of	flight	operations,	maintenance,	and	other	operational	and	safety	areas.	Pursuant	to these	regulations,	our	airline	subsidiaries	have	FAA-approved	maintenance	programs	for	each	type	of	aircraft	they	operate.	The	programs	provide	for	the	ongoing maintenance	of	such	aircraft,	ranging	from	routine	inspections	to	unscheduled	repairs	and	comprehensive	scheduled	overhauls.	FAA	requirements	cover,	among	other things,	required	technology	and	necessary	onboard	equipment,	systems,	procedures	and	training	necessary	to	ensure	continuous	airworthiness	of	our	fleet	of	aircraft, safety	 measures	 and	 equipment,	 advanced	 navigation	 and	 communication	 gear,	 advanced	 collision	 avoidance	 and	 position	 reporting	 systems,	 airborne	 windshear avoidance	systems,	noise	abatement	standards,	other	environmental	concerns,	fuel	tank	inerting,	crew	scheduling	limitations	and	experience	requirements,	and	many other	technical	aspects	of	airline	operations.	We	are	also	obligated	to	comply	with	various	airworthiness	directives,	service	bulletins	and	other	requirements	designed	to safely	correct	known	issues	with	aircraft	or	major	components	that	are	discovered	after	original	type	certification	or	manufacture.	Some	of	these	directives	require	us	to perform	significant	maintenance	and	engineering	work	and	to	incur	substantial	additional	expenses.	Based	on	the	current	known	requirements	and	implementation schedules,	we	expect	to	remain	in	full	compliance	with	these	ongoing	airworthiness	requirements.	Our	failure	to	timely	comply	with	these	requirements	has	in	the	past, and	could	in	the	future,	result	in	fines	and	other	enforcement	actions	by	the	FAA	or	other	regulators.	The	FAA	also	operates	the	air	traffic	control	(ATC)	system	in	the United	States.

The	FAA	imposes	stringent	and	complicated	mandatory	rest	requirements	for	pilots,	which	are	in	addition	to	other	limitations	on	allowable	pilot	duty	times.	The	FAA also	recently	implemented	rules	that	increase	minimum	qualifications	for	pilots	to	operate	commercial	aircraft.	These	requirements	and	rules	have	increased	our	costs and	added	complication	to	our	crew	scheduling.

Airlines	are	obligated	to	collect	a	federal	excise	tax,	commonly	referred	to	as	the	"ticket	tax,"	on	domestic	and	international	air	transportation.	Airlines	collect	the ticket	tax,	along	with	certain	other	U.S.	and	foreign	taxes	and	user	fees	on	air	transportation,	and	pass	along	the	collected	amounts	to	the	appropriate	governmental agencies.	Although	these	taxes	are	not	our	operating	expenses,	they	represent	an	additional	cost	to	our	customers.	Similarly,	the	U.S.	Department	of	Agriculture's Animal	Plant	and	Health	Inspection	Service	very	recently	increased	the	fees	we	must	pay	for	arriving	international	flights,	and	for	certain	other	related	government services,	which	will	increase	our	incremental	costs	of	providing	cargo	services.	See	"Industry	Regulation	and	Airport	Access	–	Security,"	below	for	a	discussion	of passenger	fees.

Most	major	U.S.	airports	impose	a	passenger	facility	charge	(PFC).	The	ability	of	airports	to	increase	this	charge	(and	the	ability	of	airlines	to	contest	such	increases) is	restricted	by	federal	 legislation,	DOT	regulations	and	 judicial	decisions.	We	and	other	airlines	may	be	unable	 to	recover	all	of	 these	additional	charges	from passengers	through	increased	fares.	The	current	cap	on	the	PFC	is	$4.50	per	passenger,	but	the	industry	has	faced	repeated	efforts	in	Congress	to	raise	the	cap	to	a	higher level.

DOT	consumer	rules	that	took	effect	in	2010	require	procedures	for	customer	handling	during	long	onboard	delays,	including	additional	reporting	requirements	for airlines,	that	have	increased	the	cost	of	airline	operations	and	reduced	revenues.	The	DOT	has	been	aggressively	investigating	alleged	violations	of	these	rules.	In addition,	the	DOT	finalized	a	second	set	of	rules	that	further	regulate	airline	interactions	with	passengers	through	the	reservations	process,	at	the	airport	and	on	board	the aircraft.	These	rules	require	airlines	to	display	all	fares	in	an	"all	in"	basis,	with	the	price	of	the	air	travel	and	all	taxes	and	government	imposed	fees	rolled	into	the displayed	fare.	Enhanced	disclosure	of	ancillary	fees	such	as	baggage	fees	is	also	required.	Other	rules	apply	to	post-ticket	purchase	price	increases	and	an	expansion	of tarmac	delay	regulations	to	international	carriers.	A	third	rulemaking	that	would	further	regulate	consumer	interaction	with	airlines	is	pending	before	the	DOT,	with	a final	rule	expected	in	2016.

The	DOT	has	continued	its	efforts	to	further	regulate	airlines	through	increased	data	reporting	requirements,	expansion	of	the	Air	Carrier	Access	Act	and	greater oversight	of	the	methods	airlines	use	to	describe	and	sell	air	transportation	and	other	products	and	services.	Each	additional	regulation	or	other	form	of	regulatory oversight	increases	costs	and	adds	greater	complexity	to	our	operation.	In	this	environment,	no	assurance	can	be	given	that	compliance	with	these	new	rules,	anticipated rules	or	other	forms	of	regulatory	oversight	from	the	Department	of	Justice	(DOJ),	the	FAA	or	other	regulatory	bodies,	will	not	have	a	material	adverse	effect	on	our business.

Among	its	regulatory	responsibilities,	the	DOT	also	enforces	equal	access	to	air	transportation	for	disabled	passengers.	Over	time,	a	number	of	carriers,	including American,	have	entered	into	consent	orders	with	the	DOT	over	their	handling	of	disabled	passengers.	The	DOT	has	been	aggressive	in	prosecuting	disability	violations and	seeks	large	penalties.	We	expect	to	see	continued	DOT	emphasis	in	this	area	through	both	regulation	and	enforcement.

The	DOT	and	the	Antitrust	Division	of	the	DOJ	have	jurisdiction	over	airline	antitrust	matters.	The	U.S.	Postal	Service	has	jurisdiction	over	certain	aspects	of	the transportation	of	mail	and	related	services.	Labor	relations	in	the	air	transportation	industry	are	regulated	under	the	Railway	Labor	Act,	which	vests	in	the	National Mediation	 Board	 (NMB)	 certain	 functions	 with	 respect	 to	 disputes	 between	 airlines	 and	 labor	 unions	 relating	 to	 union	 representation	 and	 collective	 bargaining agreements	(CBAs).	In	addition,	as	a	result	of	heightened	levels	of	concern	regarding	data	privacy,	we	are	subject	to	an	increasing	number	of	domestic	and	foreign	laws regarding	the	privacy	and	security	of	passenger	and	employee	data.

# International

International	air	transportation	is	subject	to	extensive	government	regulation.	Our	operating	authority	in	international	markets	is	subject	to	aviation	agreements between	the	U.S.	and	the	respective	countries	or	governmental	authorities,	such	as	the	European	Union	(EU),	and	in	some	cases,	fares	and	schedules	require	the	approval of	the	DOT	and/or	the	relevant	foreign	governments.	Moreover,	alliances	with	international	carriers	may	be	subject	to	the	jurisdiction	and	regulations	of	various	foreign agencies.	Bilateral	and	multilateral	agreements	among	the	U.S.	and	various	foreign	governments	of	countries	we	serve	are	periodically	subject	to	renegotiation.	Changes in	U.S.	or	foreign	government	aviation	policies	could	result	in	the	alteration	or	termination	of	such	agreements,	diminish	the	value	of	route	authorities,	slots	or	other assets	located	abroad,	or	otherwise	adversely	affect	our	international	operations.	The	U.S.	government	has	negotiated	"open	skies"	agreements	with	many	countries, which	allow	unrestricted	route	authority	access	between	the	U.S.	and	the	foreign	markets.	While	the	U.S.	has	worked	to	increase	the	number	of	countries	with	which open	skies	agreements	are	in	effect,	a	number	of	important	markets	to	us	do	not	have	open	skies	agreements,	including	China,	Hong	Kong	and	Mexico.	In	addition,	at some	foreign	airports,	an	air	carrier	needs	slots	and	other	facilities	before	the	air	carrier	can	introduce	new	service	or	increase	existing	service.	The	availability	of	slots	is not	assured,	and	our	inability	to	obtain	and	retain	needed	slots	and	facilities	could	therefore	inhibit	our	efforts	to	compete	in	certain	international	markets.	See	"Industry Regulation	and	Airport	Access	–	Airport	Access	and	Operations,"	below	and	Part	I,	Item	1A.	Risk	Factors	–	"If	we	are	unable	to	obtain	and	maintain	adequate facilities	and	infrastructure	throughout	our	system	and,	at	some	airports,	adequate	slots,	we	may	be	unable	to	operate	our	existing	flight	schedule	and	to	expand	or change	our	route	network	in	the	future,	which	may	have	a	material	adverse	impact	on	our	operations"	for	additional	information.

# Security

The	Aviation	and	Transportation	Security	Act	(the	Aviation	Security	Act)	was	enacted	in	November	2001.	Under	the	Aviation	Security	Act,	substantially	all	aspects of	civil	aviation	security	screening	were	federalized	and	a	new	Transportation	Security	Administration	(TSA)	was	created	under	the	DOT.	The	TSA	was	then	transferred to	the	Department	of	Homeland	Security	pursuant	to	the	Homeland	Security	Act	of	2002.	The	Aviation	Security	Act,	among	other	matters,	mandates;	improved	flight deck	security;	carriage	of	federal	air	marshals	at	no	charge;	enhanced	security	screening	of	passengers,	baggage,	cargo,	mail,	employees	and	vendors;

enhanced	security	training;	fingerprint-based	background	checks	of	all	employees	and	vendor	employees	with	access	to	secure	areas	of	airports	pursuant	to	regulations issued	in	connection	with	the	Aviation	Security	Act;	and	the	provision	of	certain	passenger	data	to	the	U.S.	Customs	and	Border	Protection	Agency.	Funding	for	the TSA	is	provided	by	a	combination	of	air	carrier	fees,	passenger	fees	and	taxpayer	monies.	To	help	finance	the	cost	of	aviation	security,	air	carriers	are	required	to	collect and	remit	to	the	TSA	a	passenger	security	fee	of	$5.60	per	one-way	trip	and	not	more	than	$11.20	per	round	trip	on	qualifying	air	transportation	sold.

Implementation	of	and	compliance	with	the	requirements	of	the	Aviation	Security	Act	have	resulted	and	will	continue	to	result	in	increased	costs	for	us	and	our passengers	and	have	resulted	and	will	likely	continue	to	result	in	service	disruptions	and	delays.	As	a	result	of	competitive	pressure,	we	and	other	airlines	may	be	unable to	recover	all	of	these	additional	security	costs	from	passengers	through	increased	fares.	In	addition,	we	cannot	forecast	what	new	security	and	safety	requirements	may be	imposed	in	the	future	or	the	costs	or	financial	impact	of	complying	with	any	such	requirements.

# Airline	Fares

Airlines	are	permitted	to	establish	their	own	domestic	fares	without	governmental	regulation.	The	DOT	maintains	authority	over	certain	international	fares,	rates	and charges,	but	applies	this	authority	on	a	limited	basis.	In	addition,	international	fares	and	rates	are	sometimes	subject	to	the	jurisdiction	of	the	governments	of	the	foreign countries	which	we	serve.	While	air	carriers	are	required	to	file	and	adhere	to	international	fare	and	rate	tariffs,	substantial	commissions,	fare	overrides	and	discounts	to travel	agents,	brokers	and	wholesalers	characterize	many	international	markets.

# Airport	Access	and	Operations

Domestically,	any	U.S.	airline	authorized	by	the	DOT	is	generally	free	to	operate	scheduled	passenger	service	between	any	two	points	within	the	U.S.	and	its territories,	with	the	exception	of	certain	airports	that	require	landing	and	take	off	rights	and	authorizations	(slots)	and	other	facilities,	and	certain	airports	that	impose geographic	limitations	on	operations	or	curtail	operations	based	on	the	time	of	day.	Operations	at	four	major	domestic	airports	and	certain	foreign	airports	we	serve	are regulated	by	governmental	entities	through	allocations	of	slots	or	similar	regulatory	mechanisms	which	limit	the	rights	of	carriers	to	conduct	operations	at	those	airports. Each	slot	represents	the	authorization	to	land	at	or	take	off	from	the	particular	airport	during	a	specified	time	period.	In	addition	to	slot	restrictions,	operations	at LaGuardia	Airport	(LGA)	and	Ronald	Reagan	Washington	National	Airport	(DCA)	are	also	limited	based	on	the	stage	length	of	the	flight.

In	the	U.S.,	the	FAA	currently	regulates	the	allocation	of	slots,	slot	exemptions,	operating	authorizations,	or	similar	capacity	allocation	mechanisms	at	DCA	in Washington,	D.C.	and	three	New	York	City	airports:	Newark	Liberty	International	Airport,	John	F.	Kennedy	International	Airport	(JFK)	and	LGA.	There	is	currently an	open	Notice	of	Proposed	Rulemaking	concerning	the	management	and	use	of	slots	at	the	three	New	York	City	airports.	Our	operations	at	DCA	and	those	New	York City	airports	generally	require	the	allocation	of	slots	or	analogous	regulatory	authorities.	Similarly,	our	operations	at	Frankfurt,	London,	Paris	and	other	international airports	outside	the	U.S.	are	regulated	by	local	slot	authorities	pursuant	to	the	International	Air	Transport	Association's	Worldwide	Scheduling	Guidelines	(WSG)	and applicable	local	law.	We	currently	have	sufficient	slots	or	analogous	authorizations	to	operate	our	existing	flights	and	we	have	generally,	but	not	always,	been	able	to obtain	the	rights	to	expand	our	operations	and	to	change	our	schedules.	There	is	no	assurance	that	we	will	be	able	to	obtain	sufficient	slots	or	analogous	authorizations	in the	future	because,	among	other	reasons,	such	allocations	are	often	sought	after	by	other	airlines	and	are	subject	to	changes	in	governmental	policies.

In	connection	with	the	settlement	of	litigation	relating	to	the	Merger	brought	by	the	DOJ	and	certain	states,	we	entered	into	settlement	agreements	that	provided	for certain	asset	divestitures,	including	52	slot	pairs	at	DCA,	17	slot	pairs	at	LGA	and	gates	and	related	ground	facilities	necessary	to	operate	those	slot	pairs,	and	two	gates at	each	of	Boston	Logan	International	Airport,	Chicago	O'Hare	International	Airport	(ORD),	Dallas	Love	Field

Airport	(DAL),	LAX	and	Miami	International	Airport.	The	settlement	agreements	also	require	us	to	maintain	certain	hub	operations	and	continue	to	provide	service	to certain	specified	communities	for	limited	periods	of	time.	In	addition,	we	entered	into	a	related	settlement	with	the	DOT	related	to	small	community	service	from	DCA. Further,	as	a	consequence	of	the	Merger	clearance	process	in	the	EU,	we	made	one	pair	of	London	Heathrow	slots	available	for	use	by	another	carrier	and,	along	with	our JBA	partners,	we	made	one	pair	of	London	Heathrow	slots	available	to	competitors	for	use	for	up	to	six	years	in	different	markets.

Our	ability	to	provide	service	can	also	be	impaired	at	airports,	such	as	ORD	and	LAX,	where	the	airport	gate	and	other	facilities	are	inadequate	to	accommodate	all	of the	service	that	we	would	like	to	provide.

The	DOT	allows	local	airport	authorities	to	implement	procedures	designed	to	abate	special	noise	problems,	provided	such	procedures	do	not	unreasonably	interfere with	interstate	or	foreign	commerce	or	the	national	transportation	system.	Certain	locales,	including	Boston,	Washington	D.C.,	Chicago,	San	Diego	and	San	Francisco, among	others,	have	established	airport	restrictions	to	limit	noise,	including	restrictions	on	aircraft	types	to	be	used	and	limits	on	the	number	of	hourly	or	daily	operations or	the	time	of	these	operations.	In	some	instances,	these	restrictions	have	caused	curtailments	in	service	or	increases	in	operating	costs,	and	these	restrictions	could	limit the	ability	of	our	airline	subsidiaries	to	expand	their	operations	at	the	affected	airports.	Authorities	at	other	airports	may	adopt	similar	noise	regulations.	We	are continuing	to	see	an	increase	in	these	issues	throughout	the	country.	See	"Industry	Regulation	and	Airport	Access	–	Environmental	Matters,"	below.

# Civil	Reserve	Air	Fleet

We	participate	in	the	Civil	Reserve	Air	Fleet	(CRAF)	program,	which	is	a	voluntary	program	administered	by	the	U.S.	Air	Force	Air	Mobility	Command.	The General	Services	Administration	of	the	U.S.	Government	requires	that	airlines	participate	in	the	CRAF	program	in	order	to	receive	U.S.	Government	business.	We	are reimbursed	at	compensatory	rates	if	aircraft	are	activated	under	the	CRAF	program	or	when	participating	in	Department	of	Defense	business.	If	a	substantial	number	of our	aircraft	are	activated	for	operation	under	the	CRAF	program	at	a	time	of	war	or	other	national	emergency,	our	business	operations	and	financial	condition	may	be adversely	affected.	In	January	2014,	the	U.S.	Air	Force	proposed	significant	changes	to	the	CRAF	program	which	have	not	yet	taken	effect.	Together	with	other	industry participants,	we	are	working	with	the	U.S.	Air	Force	to	address	our	concerns	with	the	new	proposals.

# Environmental	Matters

Environmental	and	noise	regulation.	The	airline	industry	is	subject	to	various	laws	and	government	regulations	concerning	environmental	matters	in	the	U.S.	and other	countries.	U.S.	federal	laws	that	have	a	particular	impact	on	our	operations	include	the	Airport	Noise	and	Capacity	Act	of	1990	(ANCA),	the	Clean	Air	Act (CAA),	 the	 Resource	 Conservation	 and	 Recovery	 Act,	 the	 Clean	 Water	 Act,	 the	 Safe	 Drinking	 Water	 Act,	 and	 the	 Comprehensive	 Environmental	 Response, Compensation	and	Liability	Act	(CERCLA	or	the	Superfund	Act).	The	U.S.	Environmental	Protection	Agency	(EPA)	and	other	federal	agencies	have	been	authorized	to promulgate	regulations	that	have	an	impact	on	our	operations.	In	addition	to	these	federal	activities,	various	states	have	been	delegated	certain	authorities	under	the aforementioned	federal	statutes.	Many	state	and	local	governments	have	adopted	environmental	laws	and	regulations	which	are	similar	to	or	stricter	than	federal requirements.

The	ANCA	recognizes	the	rights	of	airport	operators	with	noise	problems	to	implement	local	noise	abatement	programs	so	long	as	they	do	not	interfere	unreasonably with	interstate	or	foreign	commerce	or	the	national	air	transportation	system.	Authorities	in	several	cities	have	promulgated	aircraft	noise	reduction	programs,	including the	imposition	of	nighttime	curfews.	The	ANCA	generally	requires	FAA	approval	of	local	noise	restrictions	on	aircraft.	While	we	have	had	sufficient	scheduling flexibility	to	accommodate	local	noise	restrictions	imposed	to	date,	our	operations	could	be	adversely	affected	if	locally-imposed	regulations	become	more	restrictive	or widespread.

The	environmental	 laws	 to	which	we	are	subject	 include	 those	related	 to	responsibility	for	potential	soil	and	groundwater	contamination.	We	are	conducting investigation	and	remediation	activities	to	address	soil	and	groundwater	conditions	at	several	sites,	including	airports	and	maintenance	bases.	We	anticipate	that	the ongoing	costs	of	such	activities	will	not	have	a	material	impact	on	our	operations.	In	addition,	we	have	been	named	as	a	potentially	responsible	party	(PRP)	at	certain Superfund	sites.	Our	alleged	volumetric	contributions	at	such	sites	are	relatively	small	in	comparison	to	total	contributions	of	all	PRPs;	we	anticipate	that	any	future payments	of	costs	at	such	sites	will	not	have	a	material	impact	on	our	operations.

Climate	change	regulation.	Many	aspects	of	our	operations	are	subject	to	increasingly	stringent	environmental	regulations	and	concerns	about	climate	change	and greenhouse	gas	(GHG)	emissions.	For	example,	the	EU	has	established	the	Emissions	Trading	Scheme	(ETS)	to	regulate	GHG	emissions	in	the	EU.	The	EU	adopted	a directive	in	2008	under	which	each	EU	member	state	is	required	to	extend	the	ETS	to	aviation	operations.	This	directive	would	have	required	us,	beginning	in	2012,	to annually	submit	emission	allowances	in	order	to	operate	flights	to	and	from	airports	in	the	European	Economic	Area	(EEA),	including	flights	between	the	U.S.	and	EU member	states.	However,	in	an	effort	to	allow	the	International	Civil	Aviation	Organization	(ICAO)	time	to	propose	an	alternate	scheme	to	manage	global	aviation emissions,	in	April	2013,	the	EU	suspended	for	one	year	the	ETS'	application	to	flights	entering	and	departing	the	EEA,	limiting	its	application,	for	flights	flown	in 2012,	to	intra-EEA	flights	only.	In	October	2013,	the	ICAO	Assembly	adopted	a	resolution	calling	for	the	development	through	ICAO	of	a	global,	market-based	scheme for	aviation	GHG	emissions,	to	be	finalized	in	2016	and	implemented	in	2020.	Subsequently,	the	EU	has	amended	the	EU	ETS	so	that	the	monitoring,	reporting	and submission	of	allowances	for	aviation	GHG	emissions	will	continue	to	be	limited	to	only	intra-EEA	flights	through	2016,	at	which	time	the	EU	will	evaluate	the	progress made	by	ICAO	and	determine	what,	if	any,	measures	to	take	related	to	aviation	GHG	emissions	from	2017	onwards.	The	U.S.	enacted	legislation	in	November	2012 which	encourages	the	DOT	to	seek	an	international	solution	through	ICAO	and	that	will	allow	the	U.S.	Secretary	of	Transportation	to	prohibit	U.S.	airlines	from participating	in	the	ETS.	The	effort	currently	underway	through	ICAO	to	reach	a	global	agreement	on	measures	to	manage	international	aviation	GHG	emission	growth could	significantly	impact	our	business,	particularly	to	the	extent	that	any	final	agreement	may	emphasize	a	collective	cost	sharing	approach	for	industry	emissions growth	over	a	cost	approach	based	on	individual	carrier	contribution	to	emission	growth.

In	addition,	in	December	2015,	at	the	21st	Conference	of	the	Parties	to	the	United	Nations	Framework	Convention	on	Climate	Change	(UNFCCC's	COP21),	over 190	countries,	including	the	United	States,	reached	an	agreement	to	reduce	global	GHG	emissions.	While	there	is	no	express	reference	to	aviation	in	this	international agreement,	to	the	extent	the	United	States	and	other	countries	implement	this	agreement,	either	with	respect	to	the	aviation	industry	or	with	respect	to	related	industries such	as	the	aviation	fuel	industry,	it	could	have	an	adverse	direct	or	indirect	effect	on	our	business.

Within	the	U.S.,	there	is	an	increasing	trend	toward	regulating	GHG	emissions	directly	under	the	CAA.	In	response	to	a	2012	ruling	by	the	U.S.	District	Court	for	the District	of	Columbia,	the	EPA	announced	in	June	2015	a	proposed	endangerment	finding	that	aircraft	engine	GHG	emissions	cause	or	contribute	to	air	pollution	that may	reasonably	be	anticipated	to	endanger	public	health	or	welfare.	If	the	EPA	finalizes	the	endangerment	finding,	the	EPA	is	obligated	under	the	CAA	to	set	aircraft engine	GHG	emission	standards.	It	is	anticipated	that	any	such	standards	established	by	EPA	would	closely	align	with	emission	standards	currently	being	developed	by ICAO.	In	February	2016,	the	ICAO	Committee	on	Aviation	Environmental	Protection	(CAEP)	recommended	that	ICAO	adopt	carbon	dioxide	certification	standards that	would	apply	to	new	type	aircraft	certified	beginning	in	2020,	and	would	be	phased	in	for	newly	manufactured	existing	aircraft	type	designs	starting	in	2023.

In	addition,	several	states	have	adopted	or	are	considering	initiatives	to	regulate	emissions	of	GHGs,	primarily	through	the	planned	development	of	GHG	emissions inventories	and/or	regional	GHG	cap	and	trade	programs.

These	regulatory	efforts,	both	internationally	and	in	the	U.S.	at	the	federal	and	state	levels,	are	still	developing,	and	we	cannot	yet	determine	what	the	final	regulatory programs	or	their	impact	will	be	in	the	U.S.,	the	EU	or	in

other	areas	in	which	we	do	business.	Depending	on	the	scope	of	such	regulation,	certain	of	our	facilities	and	operations,	or	the	operations	of	our	suppliers,	may	be subject	to	additional	operating	and	other	permit	requirements,	potentially	resulting	in	increased	operating	costs.

# Future	Regulatory	Developments

Future	regulatory	developments	and	actions	could	affect	operations	and	increase	operating	costs	for	the	airline	industry,	including	our	airline	subsidiaries.	See	Part	I, Item	1A.	Risk	Factors	–	"If	we	are	unable	to	obtain	and	maintain	adequate	facilities	and	infrastructure	throughout	our	system	and,	at	some	airports,	adequate	slots,	we may	be	unable	to	operate	our	existing	flight	schedule	and	to	expand	or	change	our	route	network	in	the	future,	which	may	have	a	material	adverse	impact	on	our operations,"	"Our	business	is	subject	to	extensive	government	regulation,	which	may	result	in	increases	in	our	costs,	disruptions	to	our	operations,	limits	on	our operating	flexibility,	reductions	in	the	demand	for	air	travel,	and	competitive	disadvantages"	and	"We	are	subject	to	many	forms	of	environmental	regulation	and	may incur	substantial	costs	as	a	result"	for	additional	information.

# Employees	and	Labor	Relations

The	airline	business	is	labor	intensive.	In	2015,	salaries,	wages	and	benefits	were	our	largest	expenses	and	represented	approximately	31%	of	our	operating	expenses.

The	table	below	presents	our	approximate	number	of	active	full-time	equivalent	employees	as	of	December	31,	2015.

|  | Mainline<br>Operations | Wholly-owned<br>Regional	Carriers | Total |
| :--- | :--- | :--- | :--- |
| Pilots\tand\tFlight\tCrew\tTraining\tInstructors | 13,100 | 3,200 | 16,300 |
| Flight\tAttendants | 24,100 | 1,900 | 26,000 |
| Maintenance\tpersonnel | 14,400 | 1,800 | 16,200 |
| Fleet\tService\tpersonnel | 16,100 | 3,200 | 19,300 |
| Passenger\tService\tpersonnel | 16,500 | 7,100 | 23,600 |
| Administrative\tand\tother | 14,700 | 2,400 | 17,100 |
| Total | 98,900 | 19,600 | \t118,500 |

As	of	December	31,	2015,	approximately	82%	of	AAG's	total	active	employees	were	represented	by	various	labor	unions	and	covered	by	CBAs	as	detailed	in	the table	below.

| Union | Class	or	Craft | Employees	(1) | Amendable	Date	(2) |
| :--- | :--- | :--- | :--- |
| Combined\tAmerican: |  |  |  |
| Allied\tPilots\tAssociation\t(APA) | Pilots | 12,800 | 12/31/2019 |
| Association\tof\tProfessional\tFlight\tAttendants\t(APFA) | Flight\tAttendants | 24,100 | 12/13/2019 |
| Airline\tCustomer\tService\tEmployee\tAssociation\t–\tCommunications |  |  |  |
| Workers\tof\tAmerica\tand\tInternational\tBrotherhood\tof\tTeamsters |  |  |  |
| (CWA-IBT) | Passenger\tService | 16,500 | 12/1/2020 |
| American\tMainline: |  |  |  |
| Transport\tWorkers\tUnion\t(TWU) | Mechanics\tand\tRelated | 9,300 | 9/12/2018 |
| TWU | Fleet\tService | 9,400 | 9/12/2018 |
| TWU | Stock\tClerks | 1,200 | 9/12/2018 |
| TWU | Simulator\tTechnicians | 100 | 9/12/2018 |
| TWU | Dispatchers | 200 | 9/12/2018 |
| TWU | Flight\tCrew\tTraining\tInstructors | 200 | 9/12/2018 |
| TWU | Maintenance\tControl\tTechnicians | 100 | 9/12/2018 |
| US\tAirways\tMainline\t(3): |  |  |  |
| TWU | Flight\tCrew\tTraining\tInstructors | 100 | 11/11/2011(4) |
| TWU | Flight\tSimulator\tEngineers | 100 | 11/11/2011(4) |
| TWU | Dispatchers | 200 | 6/30/2015(4) |
| International\tAssociation\tof\tMachinists\t&amp;\tAerospace\tWorkers\t(IAM) | Mechanics,\tStock\tClerks\tand\tRelated | 3,500 | 7/18/2018 |
| IAM | Maintenance\tTraining\tInstructors | 30 | 7/18/2018 |
| IAM | Fleet\tService | 6,400 | 7/18/2018 |
| Envoy: |  |  |  |
| Air\tLine\tPilots\tAssociations\t(ALPA) | Pilots | 1,800 | 12/23/2024 |
| Association\tof\tFlight\tAttendants-CWA\t(AFA) | Flight\tAttendants | 900 | 7/1/2020 |
| TWU | Ground\tSchool\tInstructors | 10 | 1/1/2019 |
| TWU | Mechanics\tand\tRelated | 1,100 | 12/31/2020 |
| TWU | Stock\tClerks | 100 | 12/31/2020 |
| TWU | Fleet\tService\tClerks | 3,100 | 1/1/2019 |
| TWU | Dispatchers | 100 | 1/1/2019 |
| Piedmont: |  |  |  |
| ALPA | Pilots | 400 | 9/19/2024 |
| AFA | Flight\tAttendants | 200 | 9/9/2019 |
| International\tBrotherhood\tof\tTeamsters\t(IBT) | Mechanics | 300 | 8/23/2012(4) |
| IBT | Stock\tClerks | 30 | 4/18/2014(4) |
| Communications\tWorkers\tof\tAmerica\t(CWA) | Fleet\tand\tPassenger\tService | 2,800 | 2/5/2017 |
| IBT | Dispatchers | 20 | 11/30/2019 |
| PSA: |  |  |  |
| ALPA | Pilots | 1,000 | 4/1/2023 |
| AFA | Flight\tAttendants | 800 | 4/30/2017 |
| IAM | Mechanics | 200 | 4/24/2016 |
| TWU | Dispatchers | 40 | 9/4/2014(4) |

(1) Approximate	number	of	active	full-time	equivalent	employees	covered	by	the	contract	as	of	December	31,	2015.

(2) See	discussion	below	regarding	the	process	for	combining	mainline	employee	groups	post-Merger.

(3) Although	US	Airways	merged	with	and	into	American	on	December	30,	2015,	certain	employees	of	American	continue	to	work	under	the	terms	of	separate	CBAs that	were	applicable	to	them	as	employees	of	US	Airways.

(4) Contracts	are	currently	amendable.

Relations	with	such	labor	organizations	are	governed	by	the	Railway	Labor	Act	(RLA).	Under	the	RLA,	the	National	Mediation	Board	(NMB)	is	responsible	for determining	which	union,	if	any,	is	designated	to	represent	employees.	In	an	airline	merger,	when	different	unions	represent	the	employees	at	the	merging	carrier,	a union	may	file	an	application	with	the	NMB	to	represent	the	combined	group	of	post-merger	employees.	The	application	is	reviewed	by	the	NMB,	which	considers whether	the	operations	of	the	merging	carriers	have	been	sufficiently	integrated	to	constitute	a	single	transportation	system.	After	the	integration	process	is	found	to	have created	a	single	 transportation	system,	 the	NMB	 then	conducts	an	 investigation	 to	determine	which	union,	 if	any,	 is	 to	be	 the	representative	of	 the	post-merger employees.	That	union	then	negotiates	a	joint	collective	bargaining	agreement	(JCBA)	covering	the	combined	group	of	post-merger	employees.

When	an	RLA	CBA	becomes	amendable,	if	either	party	to	the	agreement	wishes	to	modify	its	terms,	it	must	notify	the	other	party	in	the	manner	prescribed	under	the RLA	and	as	agreed	by	the	parties.	Under	the	RLA,	the	parties	must	meet	for	direct	negotiations,	and,	if	no	agreement	is	reached,	either	party	may	request	the	NMB	to appoint	a	federal	mediator.	The	RLA	prescribes	no	set	timetable	for	the	direct	negotiation	and	mediation	process.	It	is	not	unusual	for	those	processes	to	last	for	many months	and	even	for	several	years.	If	no	agreement	is	reached	in	mediation,	the	NMB	in	its	discretion	may	declare	under	the	RLA	at	some	time	that	an	impasse	exists, and	if	an	impasse	is	declared,	the	NMB	proffers	binding	arbitration	to	the	parties.	Either	party	may	decline	to	submit	to	binding	arbitration.	If	arbitration	is	rejected	by either	party,	an	initial	30-day	"cooling	off"	period	commences.	Following	the	conclusion	of	that	30-day	"cooling	off"	period,	if	no	agreement	has	been	reached,	"self- help"	(as	described	below)	can	begin	unless	a	Presidential	Emergency	Board	(PEB)	is	established.	A	PEB	examines	the	parties'	positions	and	recommends	a	solution. The	PEB	process	lasts	for	30	days	and	(if	no	resolution	is	reached)	is	followed	by	another	"cooling	off"	period	of	30	days.	At	the	end	of	a	"cooling	off"	period	(unless	an agreement	is	reached,	a	PEB	is	established,	or	action	is	taken	by	Congress),	the	labor	organization	may	exercise	"self-help,"	such	as	a	strike,	and	the	airline	may	resort	to its	own	"self-help,"	including	the	imposition	of	any	or	all	of	its	proposed	amendments	and	the	hiring	of	new	employees	to	replace	any	striking	workers.

In	2014	and	2015,	we	reached	agreements	with	several	labor	unions.	On	December	18,	2014,	we	reached	a	JCBA	with	the	APFA.	The	new	agreement	did	not	require ratification	and	was	effective	immediately	with	the	wage	increases	under	the	JCBA	becoming	effective	January	1,	2015.

On	January	3,	2015,	we	reached	a	tentative	agreement	with	the	APA	on	a	five-year	JCBA,	which	was	ratified	on	January	30,	2015.	The	new,	higher	pay	rates	were implemented	retroactive	to	December	2,	2014.

In	September	2015,	we	reached	an	agreement	with	the	CWA-IBT	for	a	new	JCBA	applicable	to	passenger	service	employees,	which	was	ratified	in	November	2015 and	provided	significant	pay	increases	for	combined	passenger	service	employees,	effective	immediately.

Most	of	the	other	mainline	American	ground	employees	are	covered	by	existing	TWU	agreements	that	will	not	become	amendable	until	2018.	The	approximate 10,000	US	Airways	mechanics,	fleet	service	agents	and	stores	employees	are	covered	by	IAM	agreements	that	also	become	amendable	in	2018.	In	August	2014,	the TWU	and	the	IAM	together	filed	single	transportation	system	applications	to	jointly	represent	the	combined	groups	of	mainline	US	Airways	and	mainline	American mechanics,	fleet	service	and	stores	employees.	The	NMB	certified	the	TWU-IAM	alliance	as	the	representative	of	the	American	mechanics,	fleet	service	and	stores employees,	and	JCBA	negotiations	for	those	combined	groups	are	now	underway.

The	TWU	represented	both	the	mainline	American	and	the	mainline	US	Airways	dispatchers,	flight	simulator	engineers	and	flight	crew	training	instructors	prior	to the	merger,	and	the	NMB	has	certified	the	TWU	as	the	representative	of	each	of	those	employee	groups	post-merger.

The	Merger	had	no	impact	on	the	CBAs	that	cover	the	employees	of	our	wholly-owned	subsidiary	airlines	which	are	not	being	merged	(Envoy,	Piedmont	and	PSA).

Certain	union-represented	American	mainline	employees	are	covered	by	agreements	that	are	not	currently	amendable.	Until	those	agreements	become	amendable, negotiations	for	JCBAs	will	be	conducted	outside	the	traditional	RLA	bargaining	process	described	above,	and,	in	the	meantime,	no	self-help	will	be	permissible.	The Piedmont	mechanics	and	stock	clerks	and	the	PSA	dispatchers	have	agreements	that	are	now	amendable	and	are	engaged	in	traditional	RLA	negotiations.

None	of	the	unions	representing	our	employees	presently	may	lawfully	engage	in	concerted	refusals	to	work,	such	as	strikes,	slow-downs,	sick-outs	or	other	similar activity,	against	us.	Nonetheless,	there	is	a	risk	that	disgruntled	employees,	either	with	or	without	union	involvement,	could	engage	in	one	or	more	concerted	refusals	to work	that	could	individually	or	collectively	harm	the	operation	of	our	airline	and	impair	our	financial	performance.

For	more	discussion,	see	Part	I,	Item	1A.	Risk	Factors	–	"Union	disputes,	employee	strikes	and	other labor-related	disruptions	may	adversely	affect	our operations."

# Aircraft	Fuel

Our	operations	and	financial	results	are	significantly	affected	by	the	availability	and	price	of	jet	fuel.	Based	on	our	2016	forecasted	mainline	and	regional	fuel consumption,	we	estimate	that,	as	of	December	31,	2015,	a	one	cent	per	gallon	increase	in	aviation	fuel	price	would	increase	our	2016	annual	fuel	expense	by	$44 million.

The	following	table	shows	annual	aircraft	fuel	consumption	and	costs,	including	taxes,	for	our	mainline	operations	for	2015	and	2014	(gallons	and	aircraft	fuel expense	in	millions).

| Year | Gallons | Average	Price<br>per	Gallon | Aircraft		Fuel<br>Expense | Mainline	Operating<br>Expenses |
| :--- | :--- | :--- | :--- | :--- |
| 2015 | \t3,611 | $1.72 | $6,226 | 21.6% |
| 2014 | \t3,644 | 2.91 | 10,592 | 33.2% |

Total	fuel	expenses	for	our	wholly-owned	and	third-party	regional	carriers	operating	under	capacity	purchase	agreements	of	American	were	$1.2	billion	and	$2.0 billion	for	the	years	ended	December	31,	2015	and	2014,	respectively.

As	of	December	31,	2015,	we	did	not	have	any	fuel	hedging	contracts	outstanding	to	hedge	our	fuel	consumption.	As	such,	and	assuming	we	do	not	enter	into	any future	transactions	to	hedge	our	fuel	consumption,	we	will	continue	to	be	fully	exposed	to	fluctuations	in	fuel	prices.	Our	current	policy	is	not	to	enter	into	transactions	to hedge	our	fuel	consumption,	although	we	review	that	policy	from	time	to	time	based	on	market	conditions	and	other	factors.

Fuel	prices	have	fluctuated	substantially	over	the	past	several	years.	We	cannot	predict	the	future	availability,	price	volatility	or	cost	of	aircraft	fuel.	Natural	disasters, political	disruptions	or	wars	involving	oil-producing	countries,	changes	in	fuel-related	governmental	policy,	the	strength	of	the	U.S.	dollar	against	foreign	currencies, changes	in	access	to	petroleum	product	pipelines	and	terminals,	speculation	in	the	energy	futures	markets,	changes	in	aircraft	fuel	production	capacity,	environmental concerns	and	other	unpredictable	events	may	result	in	fuel	supply	shortages,	additional	fuel	price	volatility	and	cost	increases	in	the	future.	See	Part	I,	Item	1A.	Risk Factors	–	"Our	business	is	dependent	on	the	price	and	availability	of	aircraft	fuel.	Continued	periods	of	high	volatility	in	fuel	costs,	increased	fuel	prices	and	significant disruptions	in	the	supply	of	aircraft	fuel	could	have	a	significant	negative	impact	on	our	operating	results	and	liquidity."

# Insurance

We	maintain	insurance	of	the	types	that	we	believe	are	customary	in	the	airline	industry,	including	insurance	for	public	liability,	passenger	liability,	property	damage, and	all-risk	coverage	for	damage	to	our	aircraft.	Principal	coverage	includes	liability	for	injury	to	members	of	the	public,	including	passengers,	damage	to

property	of	AAG,	its	subsidiaries	and	others,	and	loss	of	or	damage	to	flight	equipment,	whether	on	the	ground	or	in	flight.	We	also	maintain	other	types	of	insurance such	as	workers'	compensation	and	employer's	liability,	with	limits	and	deductibles	that	we	believe	are	standard	within	the	industry.

In	addition,	insurers	significantly	increased	the	premiums	for	aviation	insurance	in	general	following	September	11,	2001.	While	the	price	of	commercial	insurance has	declined	since	the	period	immediately	after	the	terrorist	attacks	of	September	11,	2001,	if	commercial	insurance	carriers	reduce	the	amount	of	insurance	coverage available	to	us	or	significantly	increase	its	cost,	we	would	be	materially	adversely	affected.	See	Part	I,	Item	1A.	Risk	Factors	–	"Increases	in	insurance	costs	or reductions	in	insurance	coverage	may	adversely	impact	our	operations	and	financial	results."

# Customer	Service

We	are	committed	to	consistently	delivering	safe,	reliable	and	convenient	service	to	our	customers	in	every	aspect	of	our	operation.	The	table	below	summarizes	the operating	statistics	we	reported	to	the	DOT	for	our	mainline	operations	for	the	years	ended	December	31,	2015	and	2014.	We	are	working	to	improve	these	metrics	by making	investments	in	our	operations,	which	include	the	hiring	of	additional	maintenance	personnel	to	reduce	the	time	aircraft	are	out	of	service.	We	are	also	making capital	investments	in	new	baggage	handling	technology.

|  | December	31, |  |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | Better\t(Worse) |
| On-time\tperformance\t(a) | \t80.1 | \t77.9 | 2.2pts |
| Completion\tfactor\t(b) | \t98.4 | \t98.4 | —pts |
| Mishandled\tbaggage\t(c) | \t3.97 | \t3.77 | (5.3)% |
| Customer\tcomplaints\t(d) | \t3.22 | \t2.12 | (51.9)% |

(a) Percentage	of	reported	flight	operations	arriving	less	than	15	minutes	after	the	scheduled	arrival	time.

(b) Percentage	of	scheduled	flight	operations	completed.

(c) Rate	of	mishandled	baggage	reports	per	1,000	passengers.

(d) Rate	of	customer	complaints	filed	with	the	DOT	per	100,000	enplanements.

# Loyalty	Program

Our	loyalty	program,	AAdvantage ®	was	established	to	develop	passenger	loyalty	by	offering	awards	to	travelers	for	their	continued	patronage.	AAdvantage	members earn	mileage	credits	by	flying	on	American,	the	American	Eagle	carriers,	the	third-party	regional	carriers	and	other	participating	airlines	or	by	using	services	of	other participants	in	these	programs.	Mileage	credits	can	be	redeemed	for	free	or	upgraded	travel	on	American,	the	American	Eagle	carriers	or	other	participating	airlines,	or for	other	awards.	Once	a	member	accrues	sufficient	mileage	for	an	award,	the	member	may	book	award	travel.	Most	travel	awards	are	subject	to	capacity-controlled seating.	A	member's	mileage	credit	does	not	expire	as	long	as	that	member	has	any	type	of	qualifying	activity	at	least	once	every	18	months.

In	2015,	we	completed	the	integration	of	the	US	Airways	Dividend	Miles	program	into	American's	AAdvantage	program.	Also,	to	ensure	we	are	rewarding	our	most loyal	customers,	we	announced	a	program	change	to	occur	in	the	second	half	of	2016,	whereby	customers	will	earn	award	miles	based	on	dollars	spent	rather	than distance	flown.

American	sells	mileage	credits	and	related	services	to	other	partners	in	the	AAdvantage	program	primarily	with	the	purpose	of	awarding	qualifying	members	based on	their	usage	of	our	co-branded	credit	cards	or	the	usage	of	other	services,	hotels	and	rental	cars	provided	by	partners.	There	are	over	1,000	program	partners,	including leading	credit	card	issuers	(Citibank	and	BarclaycardUS),	hotels,	car	rental	companies	and	other

products	and	services	companies.	We	believe	that	program	partners	benefit	from	the	sustained	purchasing	behavior	of	their	members,	which	translates	into	incremental and	recurring	streams	of	revenues	for	us.	Under	our	agreements	with	AAdvantage	members	and	program	partners,	we	reserve	the	right	to	change	the	AAdvantage program	at	any	time	without	notice,	and	may	end	the	program	with	six	months'	notice.	Program	rules,	partners,	special	offers,	awards	and	requisite	mileage	levels	for awards	are	subject	to	change.	As	of	December	31,	2015,	AAdvantage	had	approximately	853.6	billion	outstanding	award	miles.	During	2015,	AAdvantage	issued approximately	315	billion	miles,	of	which	approximately	58%	were	sold	to	program	partners.

We	and	other	participating	airline	partners	limit	the	number	of	seats	per	flight	that	are	available	for	redemption	by	award	recipients	by	using	various	inventory management	techniques.	We	charge	various	fees	for	issuing	awards	dependent	upon	destination	and	booking	method	and	for	issuing	awards	within	21	days	of	the	travel date.

All	 travel	 on	 eligible	 tickets	 will	 count	 toward	 qualification	 for	 elite	 status	 in	 the	AAdvantage	 program.	 Elite	 members	 can	 enjoy	 additional	 benefits	 of	 the AAdvantage	program,	including	First	and	Business	Class	check-in,	priority	security	and	priority	boarding,	complimentary	access	to	Preferred	Seats,	priority	baggage delivery,	and	checked	bags	at	no	charge.

See	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	"Critical	Accounting	Policies	and	Estimates"	for more	information	on	AAdvantage.

# Ticket	Distribution

Passengers	can	purchase	tickets	for	travel	on	American	through	several	distribution	channels	including	their	direct	websites	(www.aa.com),	our	reservations	centers and	third-party	distribution	channels,	including	those	provided	by	or	through	global	distribution	systems	(e.g.,	Amadeus,	Sabre	and	Travelport),	conventional	travel agents	and	online	travel	agents	(e.g.,	Expedia,	Orbitz	and	Travelocity).	To	remain	competitive,	we	will	need	to	successfully	manage	our	distribution	costs	and	rights, increase	our	distribution	flexibility	and	improve	the	functionality	of	third-party	distribution	channels,	while	maintaining	an	industry-competitive	cost	structure.	For	more discussion,	see	Part	I,	Item	1A.	Risk	Factors	–	"We	rely	on	third-party	distribution	channels	and	must	manage	effectively	the	costs,	rights	and	functionality	of	these channels."

# Seasonality	and	Other	Factors

Due	to	the	greater	demand	for	air	and	leisure	travel	during	the	summer	months,	revenues	in	the	airline	industry	in	the	second	and	third	quarters	of	the	year	tend	to	be greater	than	revenues	in	the	first	and	fourth	quarters	of	the	year.	General	economic	conditions,	fears	of	terrorism	or	war,	fare	initiatives,	fluctuations	in	fuel	prices,	labor actions,	weather,	natural	disasters,	outbreaks	of	disease,	and	other	factors	could	impact	this	seasonal	pattern.	Therefore,	our	quarterly	results	of	operations	are	not necessarily	indicative	of	operating	results	for	the	entire	year,	and	historical	operating	results	in	a	quarterly	or	annual	period	are	not	necessarily	indicative	of	future operating	results.

Unaudited	quarterly	financial	data	for	the	two-year	period	ended	December	31,	2015	is	included	in	Note	20	to	AAG's	Consolidated	Financial	Statements	in	Part	II, Item	8A	and	Note	18	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B.

# Available	Information

The	SEC	allows	AAG	and	American	to	incorporate	information	by	reference	into	this	Form	10-K.	This	means	that	AAG	and	American	can	disclose	important information	to	you	by	referring	you	to	another	document	filed	separately	with	the	SEC.	Any	information	incorporated	by	reference	into	this	Form	10-K	is	considered	to be	a	part	of	this	Form	10-K,	except	for	any	information	that	is	superseded	by	information	that	is	included	directly	in	this	Form	10-K	or	incorporated	by	reference subsequent	to	the	date	of	this	Form	10-K.	AAG	and	American	do	not	incorporate	the	contents	of	their	website	into	this	Form	10-K.

A	copy	of	this	Annual	Report	on	Form	10-K,	Quarterly	Reports	on	Form	10-Q,	Current	Reports	on	Form	8-K	and	amendments	to	those	reports	filed	or	furnished pursuant	to	Section	13(a)	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	as	amended	(the	Exchange	Act),	are	available	free	of	charge	at	www.aa.com	as	soon	as reasonably	practicable	after	we	electronically	file	such	material	with,	or	furnish	it	to,	the	SEC	and	at	the	website	maintained	by	the	SEC	at	www.sec.gov.

AAG	has	made	and	expects	to	make	public	disclosures	of	certain	information	regarding	AAG	and	its	subsidiaries	to	investors	and	the	general	public	by	means	of	the investor	relations	section	of	our	website	(www.aa.com)	as	well	as	through	the	use	of	social	media	sites,	including,	but	not	limited	to,	Facebook	and	Twitter	and	a website	 maintained	 by	 us	 to	 provide	 information	 regarding	AAG's	 reorganization	 pursuant	 to	 the	 Plan.	 Investors	 are	 encouraged	 to	 (i)	 join	American's	 circle (@AmericanAir) on Twitter, (ii) "like" American ( www.facebook.com/AmericanAirlines) on its Facebook page, (iii) follow American (www.google.com/+americanairlines) on	 Google+;	 (iv)	 follow	 American (www.instagram.com/americanair) on	 Instagram;	 (v)	 follow	 American (www.linkedin.com/company/american-airlines)	on	LinkedIn;	(vi)	subscribe	to	American	(www.youtube.com/user/americanairlines)	on	YouTube;	(vii)	follow	American (username	AmericanAir)	on	Snapchat;	and	(viii)	visit	www.amrcaseinfo.com	for	updated	information	regarding	the	Plan.	Neither	AAG	nor	American	incorporates	the contents	of	its	social	media	posts	or	websites	into	this	Annual	Report	on	Form	10-K.

# ITEM	1A.		RISK	FACTORS

Below	are	certain	risk	factors	that	may	affect	our	business,	results	of	operations	and	financial	condition,	or	the	trading	price	of	our	common	stock	or	other	securities. We	caution	the	reader	that	these	risk	factors	may	not	be	exhaustive.	We	operate	in	a	continually	changing	business	environment,	and	new	risks	and	uncertainties	emerge from	time	to	time.	Management	cannot	predict	such	new	risks	and	uncertainties,	nor	can	it	assess	the	extent	to	which	any	of	the	risk	factors	below	or	any	such	new	risks and	uncertainties,	or	any	combination	thereof,	may	impact	our	business.

# Risks	Relating	to	the	Company	and	Industry-Related	Risks

# We	could	experience	significant	operating	losses	in	the	future.

For	a	number	of	reasons,	including	those	addressed	in	these	risk	factors,	we	might	fail	to	maintain	profitability	and	might	experience	significant	losses.	In	particular, the	condition	of	the	economy,	the	level	and	volatility	of	fuel	prices,	the	state	of	travel	demand	and	intense	competition	in	the	airline	industry	have	had,	and	will	continue to	have	an	impact	on	our	operating	results,	and	may	increase	the	risk	that	we	will	experience	losses.

# Downturns	in	economic	conditions	adversely	affect	our	business.

Due	to	the	discretionary	nature	of	business	and	leisure	travel	spending,	airline	industry	revenues	are	heavily	influenced	by	the	condition	of	the	U.S.	economy	and economies	in	other	regions	of	the	world.	Unfavorable	conditions	in	these	broader	economies	have	resulted,	and	may	result	in	the	future,	in	decreased	passenger	demand for	air	travel	and	changes	in	booking	practices,	both	of	which	in	turn	have	had,	and	may	have	in	the	future,	a	strong	negative	effect	on	our	revenues.	In	addition,	during challenging	economic	times,	actions	by	our	competitors	to	increase	their	revenues	can	have	an	adverse	impact	on	our	revenues.	See	"The	airline	industry	is	intensely competitive	and	dynamic"	below.	Certain	labor	agreements	to	which	we	are	a	party	limit	our	ability	to	reduce	the	number	of	aircraft	in	operation,	and	the	utilization	of such	aircraft,	below	certain	levels.	As	a	result,	we	may	not	be	able	to	optimize	the	number	of	aircraft	in	operation	in	response	to	a	decrease	in	passenger	demand	for	air travel.

# Our	business	is	dependent	on	the	price	and	availability	of	aircraft	fuel.	Continued	periods	of	high	volatility	in	fuel	costs,	increased	fuel	prices	and	significant disruptions	in	the	supply	of	aircraft	fuel	could	have	a	significant	negative	impact	on	our	operating	results	and	liquidity.

Our	operating	results	are	materially	impacted	by	changes	in	the	availability,	price	volatility	and	cost	of	aircraft	fuel,	which	represents	one	of	the	largest	single	cost items	in	our	business.	Jet	fuel	market	prices	have	fluctuated	substantially	over	the	past	several	years	and	prices	continue	to	be	highly	volatile.

Because	of	the	amount	of	fuel	needed	to	operate	our	business,	even	a	relatively	small	increase	or	decrease	in	the	price	of	fuel	can	have	a	material	effect	on	our operating	results	and	liquidity.	Due	to	the	competitive	nature	of	the	airline	industry	and	unpredictability	of	the	market,	we	can	offer	no	assurance	that	we	may	be	able	to increase	our	fares,	impose	fuel	surcharges	or	otherwise	increase	revenues	sufficiently	to	offset	fuel	price	increases.	Similarly,	we	cannot	predict	the	effect	or	the	actions of	our	competitors	if	the	current	low	fuel	prices	remain	in	place	for	a	significant	period	of	time.

Although	we	are	currently	able	to	obtain	adequate	supplies	of	aircraft	fuel,	we	cannot	predict	the	future	availability,	price	volatility	or	cost	of	aircraft	fuel.	Natural disasters,	political	disruptions	or	wars	involving	oil-producing	countries,	changes	in	fuel-related	governmental	policy,	the	strength	of	the	U.S.	dollar	against	foreign currencies,	changes	in	access	to	petroleum	product	pipelines	and	terminals,	speculation	in	the	energy	futures	markets,	changes	in	aircraft	fuel	production	capacity, environmental	concerns	and	other	unpredictable	events	may	result	in	fuel	supply	shortages,	additional	fuel	price	volatility	and	cost	increases	in	the	future.

We	have	a	large	number	of	older	aircraft	in	our	fleet,	and	these	aircraft	are	not	as	fuel	efficient	as	more	recent	models	of	aircraft,	including	those	we	have	on	order. We	intend	to	continue	to	execute	our	fleet	renewal	plans	to,	among	other	things,	improve	the	fuel	efficiency	of	our	fleet,	and	we	are	dependent	on	a	limited	number	of major	aircraft	manufacturers	to	deliver	aircraft	on	schedule.	If	we	experience	delays	in	delivery	of	the	more	fuel	efficient	aircraft	that	we	have	on	order,	we	will	be adversely	affected.

Our	aviation	fuel	purchase	contracts	generally	do	not	provide	meaningful	price	protection	against	increases	in	fuel	costs.	Prior	to	the	closing	of	the	Merger,	we	sought to	manage	the	risk	of	fuel	price	increases	by	using	derivative	contracts.	As	of	December	31,	2015,	we	did	not	have	any	fuel	hedging	contracts	outstanding.	As	such,	and assuming	we	do	not	enter	into	any	future	transactions	to	hedge	our	fuel	consumption,	we	will	continue	to	be	fully	exposed	to	fluctuations	in	fuel	prices.

Our	current	policy	is	not	to	enter	into	transactions	to	hedge	our	fuel	consumption,	although	we	review	that	policy	from	time	to	time	based	on	market	conditions	and other	factors.	If	in	the	future	we	enter	into	derivative	contracts	to	hedge	our	fuel	consumption,	there	can	be	no	assurance	that,	at	any	given	time,	we	will	have	derivatives in	place	to	provide	any	particular	level	of	protection	against	increased	fuel	costs	or	that	our	counterparties	will	be	able	to	perform	under	our	derivative	contracts.	To	the extent	we	use	derivative	contracts	that	have	the	potential	to	create	an	obligation	to	pay	upon	settlement	if	prices	decline	significantly,	such	derivative	contracts	may	limit our	ability	to	benefit	from	lower	fuel	costs	in	the	future.	Also,	a	rapid	decline	in	the	projected	price	of	fuel	at	a	time	when	we	have	fuel	hedging	contracts	in	place	could adversely	impact	our	short-term	liquidity,	because	hedge	counterparties	could	require	that	we	post	collateral	in	the	form	of	cash	or	letters	of	credit.	See	also	the discussion	in	Part	II,	Item	7A.	Quantitative	and	Qualitative	Disclosures	About	Market	Risk	–	"AAG's	Market	Risk	Sensitive	Instruments	and	Positions	–	Aircraft	Fuel" and	"American's	Market	Risk	Sensitive	Instruments	and	Positions	–	Aircraft	Fuel."

# The	airline	industry	is	intensely	competitive	and	dynamic.

Our	competitors	include	other	major	domestic	airlines	and	foreign,	regional	and	new	entrant	airlines,	as	well	as	joint	ventures	formed	by	some	of	these	airlines,	many of	which	have	more	financial	or	other	resources	and/or	lower	cost	structures	than	ours,	as	well	as	other	forms	of	transportation,	including	rail	and	private	automobiles.	In many	of	our	markets	we	compete	with	at	least	one	low-cost	air	carrier.	Our	revenues	are	sensitive	to	the	actions	of	other	carriers	in	many	areas	including	pricing, scheduling,	capacity	and	promotions,	which	can	have	a	substantial	adverse	impact	not	only	on	our	revenues,	but	on	overall	industry	revenues.	These	factors	may become	even	more	significant	in	periods	when	the	industry	experiences	large	losses,	as	airlines	under	financial	stress,	or	in	bankruptcy,	may	institute	pricing	structures intended	to	achieve	near-term	survival	rather	than	long-term	viability.

Low-cost	carriers,	including	so-called	ultra-low-cost	carriers,	have	a	profound	impact	on	industry	revenues.	Using	the	advantage	of	low	unit	costs,	these	carriers	offer lower	fares	in	order	to	shift	demand	from	larger,	more	established	airlines,	and	represent	significant	competitors,	particularly	for	customers	who	fly	infrequently	and	are price	sensitive	and	tend	not	to	be	loyal	to	any	one	particular	carrier.	Some	low-cost	carriers,	which	have	cost	structures	lower	than	ours,	have	better	recent	financial performance	and	have	announced	growth	strategies	including	commitments	to	acquire	significant	numbers	of	aircraft	for	delivery	in	the	next	few	years.	These	low-cost carriers	are	expected	to	continue	to	increase	their	market	share	through	growth	and,	potentially,	consolidation,	and	could	continue	to	have	an	impact	on	our	revenues	and overall	performance.	For	example,	as	a	result	of	divestitures	completed	in	connection	with	gaining	regulatory	approval	for	the	Merger,	low-fare,	low-cost	carriers	have gained	additional	access	in	a	number	of	markets,	including	DCA,	a	slot-controlled	airport.	The	actions	of	the	low-cost	carriers,	including	those	described	above,	could have	a	material	adverse	effect	on	our	operations	and	financial	performance.

Our	presence	in	international	markets	is	not	as	extensive	as	that	of	some	of	our	competitors.	We	derived	approximately	30%	of	our	operating	revenues	in	2015	from operations	outside	of	the	U.S.,	as	measured	and

reported	to	the	DOT.	In	providing	international	air	transportation,	we	compete	to	provide	scheduled	passenger	and	cargo	service	between	the	U.S.	and	various	overseas locations	with	U.S.	airlines,	foreign	investor-owned	airlines,	and	foreign	state-owned	or	state-affiliated	airlines,	including	carriers	based	in	the	Middle	East,	the	three largest	of	which	we	believe	benefit	from	significant	government	subsidies.	Our	international	service	exposes	us	to	foreign	economies	and	the	potential	for	reduced demand,	such	as	we	have	recently	experienced	in	Brazil	and	Venezuela,	when	any	foreign	countries	we	serve	suffer	adverse	local	economic	conditions.	In	addition,	open skies	agreements	with	an	increasing	number	of	countries	around	the	world	provide	international	airlines	with	open	access	to	U.S.	markets.	See	"Our	business	is	subject to	extensive	government	regulation,	which	may	result	in	increases	in	our	costs,	disruptions	to	our	operations,	limits	on	our	operating	flexibility,	reductions	in	the demand	for	air	travel,	and	competitive	disadvantages."

Certain	airline	alliances	have	been,	or	may	in	the	future	be,	granted	immunity	from	antitrust	regulations	by	governmental	authorities	for	specific	areas	of	cooperation, such	as	joint	pricing	decisions.	To	the	extent	alliances	formed	by	our	competitors	can	undertake	activities	that	are	not	available	to	us,	our	ability	to	effectively	compete may	be	hindered.	Our	ability	to	attract	and	retain	customers	is	dependent	upon,	among	other	things,	our	ability	to	offer	our	customers	convenient	access	to	desired markets.	Our	business	could	be	adversely	affected	if	we	are	unable	to	maintain	or	obtain	alliance	and	marketing	relationships	with	other	air	carriers	in	desired	markets.

We	are	party	to	antitrust-immunized	cooperation	agreements	with	British	Airways,	Iberia,	Finnair,	Royal	Jordanian,	Japan	Airlines,	LAN	Airlines	and	LAN	Peru.	We have	also	established	joint	business	agreements	(JBAs)	with	British	Airways,	Iberia,	and	Finnair,	and	separately	Japan	Airlines.	In	addition,	we	applied	for	regulatory approval	to	enter	into	a	JBA	with	Qantas	Airways	and	have	or	will	be	applying	for	regulatory	approval	of	a	JBA	with	LATAM	Airlines	Group	air	carriers	in	the	relevant jurisdictions	affected	by	that	JBA.	No	assurances	can	be	given	as	to	any	benefits	that	we	may	derive	from	such	arrangements	or	any	other	arrangements	that	may ultimately	be	implemented.

Additional	 mergers	 and	 other	 forms	 of	 industry	 consolidation,	 including	 antitrust	 immunity	 grants,	 may	 take	 place	 and	 may	 not	 involve	 us	 as	 a	 participant. Depending	on	which	carriers	combine	and	which	assets,	if	any,	are	sold	or	otherwise	transferred	to	other	carriers	in	connection	with	such	combinations,	our	competitive position	relative	to	the	post-combination	carriers	or	other	carriers	that	acquire	such	assets	could	be	harmed.	In	addition,	as	carriers	combine	through	traditional	mergers or	antitrust	immunity	grants,	their	route	networks	will	grow,	and	that	growth	will	result	in	greater	overlap	with	our	network,	which	in	turn	could	result	in	lower	overall market	share	and	revenues	for	us.	Such	consolidation	is	not	limited	to	the	U.S.,	but	could	include	further	consolidation	among	international	carriers	in	Europe	and elsewhere.

# We	may	be	unable	to	integrate	operations	successfully	and	realize	the	anticipated	synergies	and	other	benefits	of	the	Merger.

The	Merger	involved	the	combination	of	two	companies	that	operated	as	independent	public	companies	prior	to	the	Merger,	and	each	of	which	operated	its	own international	network	airline.	Historically,	the	integration	of	separate	airlines	has	often	proven	to	be	more	time	consuming	and	to	require	more	resources	than	initially estimated.	Although	we	received	a	single	operating	certificate	from	 the	FAA	for	American	and	US	Airways	on	April	8,	2015,	 implemented	a	single	 integrated reservation	system	on	October	17,	2015	and	merged	American	and	US	Airways	on	December	30,	2015,	we	must	continue	to	devote	significant	management	attention and	resources	to	integrating	our	business	practices,	cultures	and	operations.	Potential	difficulties	we	may	encounter	as	part	of	the	integration	process	include	the following:

•the	inability	to	successfully	combine	our	businesses	in	a	manner	that	permits	us	to	achieve	the	synergies	and	other	benefits	anticipated	to	result	from	the Merger;

•the	challenge	of	integrating	complex	systems,	operating	procedures,	regulatory	compliance	programs,	technology,	aircraft	fleets,	networks,	and	other	assets (including,	for	example,	our	flight	operations	systems	and	technology	which	supports	human	resources	functions)	in	a	manner	that	minimizes	any	adverse impact	on	customers,	suppliers,	employees,	and	other	constituencies;

•the	effects	of	divestitures	and	other	operational	commitments	entered	into	in	connection	with	the	settlement	of	the	litigation	brought	by	the	Department	of Justice	(DOJ)	and	certain	states	prior	to	the	closing	of	the	Merger,	including	those	involving	DAL	and	DCA;

•the	challenge	of	forming	and	maintaining	an	effective	and	cohesive	management	team;

•the	diversion	of	the	attention	of	our	management	and	other	key	employees;

•the	challenge	of	integrating	workforces	while	maintaining	focus	on	providing	consistent,	high	quality	customer	service	and	running	an	efficient	operation;

•the	risks	relating	to	integrating	various	computer,	communications	and	other	technology	systems	that	will	be	necessary	to	operate	American	and	US	Airways as	a	single	airline	and	to	achieve	cost	synergies	by	eliminating	redundancies	in	the	businesses;

•the	disruption	of,	or	the	loss	of	momentum	in,	our	ongoing	business;

•branding	or	rebranding	initiatives	may	involve	substantial	costs	and	may	not	be	favorably	received	by	customers;	and

•potential	unknown	liabilities,	liabilities	that	are	significantly	larger	than	we	currently	anticipate	and	unforeseen	increased	expenses	or	delays	associated	with the	Merger,	including	costs	in	excess	of	the	cash	transition	costs	that	we	currently	anticipate.

Accordingly,	we	may	not	be	able	to	realize	the	contemplated	benefits	of	the	Merger	fully,	or	it	may	take	longer	and	cost	more	than	expected	to	realize	such	benefits.

# Ongoing	data	security	compliance	requirements	could	increase	our	costs,	and	any	significant	data	breach	could	disrupt	our	operations	and	harm	our	reputation, business,	results	of	operations	and	financial	condition.

Our	business	requires	the	appropriate	and	secure	utilization	of	customer,	employee,	business	partner	and	other	sensitive	information.	We	cannot	be	certain	that advances	in	criminal	capabilities	(including	cyber-attacks	or	cyber	intrusions	over	the	Internet,	malware,	computer	viruses	and	the	like),	discovery	of	new	vulnerabilities or	attempts	to	exploit	existing	vulnerabilities	in	our	systems,	other	data	thefts,	physical	system	or	network	break-ins	or	inappropriate	access,	or	other	developments	will not	compromise	or	breach	the	technology	protecting	the	networks	that	access	and	store	sensitive	information.	The	risk	of	a	security	breach	or	disruption,	particularly through	 cyber-attack	 or	 cyber	 intrusion,	 including	 by	 computer	 hackers,	 foreign	 governments	 and	 cyber	 terrorists,	 has	 increased	 as	 the	 number,	 intensity	 and sophistication	of	attempted	attacks	and	intrusions	from	around	the	world	have	increased.	Furthermore,	there	has	been	heightened	legislative	and	regulatory	focus	on	data security	in	the	U.S.	and	abroad	(particularly	in	the	EU),	including	requirements	for	varying	levels	of	customer	notification	in	the	event	of	a	data	breach.

In	addition,	many	of	our	commercial	partners,	including	credit	card	companies,	have	imposed	data	security	standards	that	we	must	meet.	In	particular,	we	are required	by	the	Payment	Card	Industry	Security	Standards	Council,	founded	by	the	credit	card	companies,	to	comply	with	their	highest	level	of	data	security	standards. While	we	continue	our	efforts	to	meet	these	standards,	new	and	revised	standards	may	be	imposed	that	may	be	difficult	for	us	to	meet	and	could	increase	our	costs.

A	significant	data	security	breach	or	our	failure	to	comply	with	applicable	U.S.	or	foreign	data	security	regulations	or	other	data	security	standards	may	expose	us	to litigation,	claims	for	contract	breach,	fines,	sanctions	or	other	penalties,	which	could	disrupt	our	operations,	harm	our	reputation	and	materially	and	adversely	affect	our business,	results	of	operations	and	financial	condition.	Failure	to	address	these	issues	appropriately	could	also	give	rise	to	additional	legal	risks,	which,	in	turn,	could increase	the	size	and	number	of	litigation	claims	and	damages	asserted	or	subject	us	to	enforcement	actions,	fines	and	penalties	and	cause	us	to	incur	further	related	costs and	expenses.

# Our	indebtedness	and	other	obligations	are	substantial	and	could	adversely	affect	our	business	and	liquidity.

We	have	significant	amounts	of	indebtedness	and	other	obligations,	including	pension	obligations,	obligations	to	make	future	payments	on	flight	equipment	and property	leases,	and	substantial	non-cancelable	obligations	under	aircraft	and	related	spare	engine	purchase	agreements.	Moreover,	currently	a	substantial	portion	of	our assets	are	pledged	to	secure	our	indebtedness.	Our	substantial	indebtedness	and	other	obligations	could	have	important	consequences.	For	example,	they:

•	 may	make	it	more	difficult	for	us	to	satisfy	our	obligations	under	our	indebtedness;

•	 may	limit	our	ability	to	obtain	additional	funding	for	working	capital,	capital	expenditures,	acquisitions,	investments,	integration	costs,	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,	industry	conditions	and	catastrophic	external	events;

•limit	our	ability	to	respond	to	business	opportunities	and	to	withstand	operating	risks	that	are	customary	in	the	industry;	and

•contain	restrictive	covenants	that	could:

•limit	our	ability	to	merge,	consolidate,	sell	assets,	incur	additional	indebtedness,	issue	preferred	stock,	make	investments	and	pay	dividends;

•significantly	constrain	our	ability	to	respond,	or	respond	quickly,	to	unexpected	disruptions	in	our	own	operations,	the	U.S.	or	global	economies,	or	the businesses	in	which	we	operate,	or	to	take	advantage	of	opportunities	that	would	improve	our	business,	operations,	or	competitive	position	versus	other airlines;

•limit	our	ability	to	withstand	competitive	pressures	and	reduce	our	flexibility	in	responding	to	changing	business	and	economic	conditions;	and •result	in	an	event	of	default	under	our	indebtedness.

# We	will	need	to	obtain	sufficient	financing	or	other	capital	to	operate	successfully.

Our	business	plan	contemplates	significant	investments	in	modernizing	our	fleet	and	integrating	the	American	and	US	Airways	businesses.	Significant	capital resources	will	be	required	to	execute	this	plan.	We	estimate	that,	based	on	our	commitments	as	of	December	31,	2015,	our	planned	aggregate	expenditures	for	aircraft purchase	commitments	and	certain	engines	on	a	consolidated	basis	for	calendar	years	2016-2020	would	be	approximately	$18.0	billion.	Accordingly,	we	will	need substantial	financing	or	other	capital	resources.	In	addition,	as	of	the	date	of	this	report,	we	had	not	secured	financing	commitments	for	some	of	the	aircraft	that	we	have on	order,	and	we	cannot	be	assured	of	the	availability	or	cost	of	that	financing.	In	particular,	as	of	December	31,	2015,	we	did	not	have	financing	commitments	for	the following	aircraft	currently	on	order	and	scheduled	to	be	delivered	through	2017:	25	Airbus	A320	family	aircraft	in	2016	and	20	Airbus	A320	family	aircraft	in	2017,	8 Boeing	787	family	aircraft	in	2016	and	13	Boeing	787	family	aircraft	in	2017,	15	Boeing	737-800	aircraft	in	2016,	three	Boeing	737	MAX	family	aircraft	in	2017	and two	Boeing	777-300ER	aircraft	in	2016.	In	addition,	we	do	not	have	financing	commitments	in	place	for	substantially	all	aircraft	currently	on	order	and	scheduled	to	be delivered	in	2018	and	beyond.	The	number	of	aircraft	for	which	we	do	not	have	financing	may	change	as	we	exercise	purchase	options	or	otherwise	change	our	purchase and	delivery	schedules.	If	we	are	unable	to	arrange	financing	for	such	aircraft	at	customary	advance	rates	and	on	terms	and	conditions	acceptable	to	us,	we	may	need	to use	cash	from	operations	or	cash	on	hand	to	purchase	such	aircraft	or	may	seek	to	negotiate	deferrals	for	such	aircraft	with	the	aircraft	manufacturers.	Depending	on numerous	factors,	many	of	which	are	out	of	our	control,

such	as	the	state	of	the	domestic	and	global	economies,	the	capital	and	credit	markets'	view	of	our	prospects	and	the	airline	industry	in	general,	and	the	general availability	of	debt	and	equity	capital	at	the	time	we	seek	capital,	the	financing	or	other	capital	resources	that	we	will	need	may	not	be	available	to	us,	or	may	only	be available	on	onerous	terms	and	conditions.	There	can	be	no	assurance	that	we	will	be	successful	in	obtaining	financing	or	other	needed	sources	of	capital	to	operate successfully.	An	inability	to	obtain	necessary	financing	on	acceptable	terms	would	have	a	material	adverse	impact	on	our	business,	results	of	operations	and	financial condition.

# Increased	costs	of	financing,	a	reduction	in	the	availability	of	financing	and	fluctuations	in	interest	rates	could	adversely	affect	our	liquidity,	results	of operations	and	financial	condition.

Concerns	about	the	systemic	impact	of	inflation,	the	availability	and	cost	of	credit,	energy	costs	and	geopolitical	issues,	combined	with	continued	changes	in business	activity	levels	and	consumer	confidence,	increased	unemployment	and	volatile	oil	prices,	have	in	the	past	and	may	in	the	future	contribute	to	volatility	in	the capital	and	credit	markets.	These	market	conditions	could	result	in	illiquid	credit	markets	and	wider	credit	spreads.	Any	such	changes	in	the	domestic	and	global financial	markets	may	increase	our	costs	of	financing	and	adversely	affect	our	ability	to	obtain	financing	needed	for	the	acquisition	of	aircraft	that	we	have	contractual commitments	to	purchase	and	for	other	types	of	financings	we	may	seek	in	order	to	refinance	debt	maturities,	raise	capital	or	fund	other	types	of	obligations.	Any downgrades	to	our	credit	rating	may	likewise	increase	the	cost	and	reduce	the	availability	of	financing.

Further,	a	substantial	portion	of	our	indebtedness	bears	interest	at	fluctuating	interest	rates,	primarily	based	on	the	London	interbank	offered	rate	for	deposits	of	U.S. dollars	(LIBOR).	LIBOR	tends	to	fluctuate	based	on	general	economic	conditions,	general	interest	rates,	rates	set	by	the	Federal	Reserve	and	other	central	banks,	and	the supply	of	and	demand	for	credit	in	the	London	interbank	market.	We	have	not	hedged	our	interest	rate	exposure	with	respect	to	the	$1.87	billion	term	loan	facility	and the	$1.4	billion	revolving	credit	facility	provided	for	by	the	credit	and	guaranty	agreement,	entered	into	June	27,	2013	between	AAG,	American	and	certain	lenders	(as amended	and	restated	on	May	21,	2015	and	as	otherwise	amended,	the	2013	Credit	Facilities),	the	$1.6	billion	term	loan	facility	entered	into	on	May	23,	2013	between US	Airways	and	US	Airways	Group	and	certain	lenders	(as	amended,	the	2013	Citicorp	Credit	Facility),	the	$750	million	term	loan	facility	and	the	$1.0	billion revolving	credit	facility	entered	into	October	10,	2014,	between	AAG	and	American	and	certain	lenders	(as	amended	and	restated	on	April	20,	2015	and	as	otherwise amended,	the	2014	Credit	Facilities)	and	other	of	our	floating	rate	debt.	Accordingly,	our	interest	expense	for	any	particular	period	will	fluctuate	based	on	LIBOR	and other	variable	interest	rates.	To	the	extent	these	interest	rates	increase,	our	interest	expense	will	increase,	in	which	event	we	may	have	difficulties	making	interest payments	and	funding	our	other	fixed	costs,	and	our	available	cash	flow	for	general	corporate	requirements	may	be	adversely	affected.	See	also	the	discussion	of	interest rate	risk	in	Part	II,	Item	7A.	Quantitative	and	Qualitative	Disclosures	About	Market	Risk	–	"AAG's	Market	Risk	Sensitive	Instruments	and	Positions	–	Interest"	and "American's	Market	Risk	Sensitive	Instruments	and	Positions	–	Interest."

# Our	high	level	of	fixed	obligations	may	limit	our	ability	to	fund	general	corporate	requirements	and	obtain	additional	financing,	may	limit	our	flexibility	in responding	to	competitive	developments	and	causes	our	business	to	be	vulnerable	to	adverse	economic	and	industry	conditions.

We	 have	 a	 significant	 amount	 of	 fixed	 obligations,	 including	 debt,	 pension	 costs,	 aircraft	 leases	 and	 financings,	 aircraft	 purchase	 commitments, leases	 and developments	of	airport	and	other	facilities	and	other	cash	obligations.	We	also	have	certain	guaranteed	costs	associated	with	our	regional	operations.

As	a	result	of	the	substantial	fixed	costs	associated	with	these	obligations:

•a	decrease	in	revenues	results	in	a	disproportionately	greater	percentage	decrease	in	earnings;

•	 we	may	not	have	sufficient	liquidity	to	fund	all	of	these	fixed	obligations	if	our	revenues	decline	or	costs	increase;	and

•	 we	may	have	to	use	our	working	capital	to	fund	these	fixed	obligations	instead	of	funding	general	corporate	requirements,	including	capital	expenditures.

These	obligations	also	impact	our	ability	to	obtain	additional	financing,	if	needed,	and	our	flexibility	in	the	conduct	of	our	business,	and	could	materially	adversely affect	our	liquidity,	results	of	operations	and	financial	condition.

# We	have	significant	pension	and	other	postretirement	benefit	funding	obligations,	which	may	adversely	affect	our	liquidity,	results	of	operations	and	financial condition.

Our	pension	funding	obligations	are	significant.	The	amount	of	these	obligations	will	depend	on	the	performance	of	investments	held	in	trust	by	the	pension	plans, interest	rates	for	determining	liabilities	and	actuarial	experience.	Currently,	our	minimum	funding	obligation	for	our	pension	plans	is	subject	to	temporary	favorable rules	that	are	scheduled	to	expire	at	the	end	of	2017.	Our	pension	funding	obligations	are	likely	to	increase	materially	beginning	in	2019,	when	we	will	be	required	to make	contributions	relating	to	the	2018	fiscal	year.	In	addition,	we	may	have	significant	obligations	for	other	postretirement	benefits,	the	ultimate	amount	of	which depends	on,	among	other	things,	the	outcome	of	an	adversary	proceeding	related	to	retiree	medical	and	life	insurance	obligations	filed	in	the	Chapter	11	Cases.

# Any	failure	to	comply	with	the	covenants	contained	in	our	financing	arrangements	may	have	a	material	adverse	effect	on	our	business,	results	of	operations	and financial	condition.

The	terms	of	the	2013	Credit	Facilities,	the	2013	Citicorp	Credit	Facility	and	the	2014	Credit	Facilities	require	AAG	and	American	to	ensure	that	AAG	and	its restricted	subsidiaries	maintain	consolidated	unrestricted	cash	and	cash	equivalents	and	amounts	available	to	be	drawn	under	revolving	credit	facilities	in	an	aggregate amount	not	less	than	$2.0	billion,	and	the	2013	Citicorp	Credit	Facility	also	requires	AAG	and	the	other	obligors	thereunder	to	hold	not	less	than	$750	million	(subject	to partial	reductions	upon	certain	reductions	in	the	outstanding	amount	of	the	loan)	of	that	amount	in	accounts	subject	to	control	agreements.

Our	ability	to	comply	with	these	liquidity	covenants	while	paying	the	fixed	costs	associated	with	our	contractual	obligations	and	our	other	expenses,	including significant	pension	and	other	postretirement	funding	obligations	and	cash	transition	costs	associated	with	the	Merger,	will	depend	on	our	operating	performance	and	cash flow,	which	are	seasonal,	as	well	as	factors	including	fuel	costs	and	general	economic	and	political	conditions.

In	addition,	our	credit	facilities	and	certain	other	financing	arrangements	include	covenants	that,	among	other	things,	limit	our	ability	to	pay	dividends	and	make certain	other	payments,	make	certain	investments,	incur	additional	indebtedness,	enter	into	certain	affiliate	transactions	and	engage	in	certain	business	activities,	in	each case	subject	to	certain	exceptions.

The	 factors	 affecting	 our	 liquidity	 (and	 our	 ability	 to	 comply	 with	 related	 liquidity	 and	 other	 covenants)	 will	 remain	 subject	 to	 significant	 fluctuations	 and uncertainties,	many	of	which	are	outside	our	control.	Any	breach	of	our	liquidity	and	other	covenants	or	failure	to	timely	pay	our	obligations	could	result	in	a	variety	of adverse	consequences,	including	the	acceleration	of	our	indebtedness,	the	withholding	of	credit	card	proceeds	by	our	credit	card	processors	and	the	exercise	of	remedies by	our	creditors	and	lessors.	In	such	a	situation,	we	may	not	be	able	to	fulfill	our	contractual	obligations,	repay	the	accelerated	indebtedness,	make	required	lease payments	or	otherwise	cover	our	fixed	costs.

# If	our	financial	condition	worsens,	provisions	in	our	credit	card	processing	and	other	commercial	agreements	may	adversely	affect	our	liquidity.

We	have	agreements	with	companies	that	process	customer	credit	card	transactions	for	the	sale	of	air	travel	and	other	services.	These	agreements	allow	these processing	companies,	under	certain	conditions	(including,	with	respect	to	certain	agreements,	the	failure	of	American	to	maintain	certain	levels	of	liquidity)	to	hold	an amount	of	our	cash	(a	holdback)	equal	to	some	or	all	of	the	advance	ticket	sales	that	have	been	processed	by	that

company,	but	for	which	we	have	not	yet	provided	the	air	transportation.	We	are	not	currently	required	to	maintain	any	holdbacks	pursuant	to	these	requirements.	These holdback	requirements	can	be	modified	at	the	discretion	of	the	processing	companies	upon	the	occurrence	of	specific	events,	including	material	adverse	changes	in	our financial	condition.	An	increase	in	the	current	holdback	balances	to	higher	percentages	up	to	and	including	100%	of	relevant	advanced	ticket	sales	could	materially reduce	our	liquidity.	Likewise,	other	of	our	commercial	agreements	contain	provisions	that	allow	other	entities	to	impose	less-favorable	terms,	including	the	acceleration of	amounts	due,	in	the	event	of	material	adverse	changes	in	our	financial	condition.

# Union	disputes,	employee	strikes	and	other	labor-related	disruptions	may	adversely	affect	our	operations.

Relations	between	air	carriers	and	labor	unions	in	the	U.S.	are	governed	by	the	Railway	Labor	Act	(RLA).	Under	the	RLA,	collective	bargaining	agreements	(CBAs) generally	contain	"amendable	dates"	rather	than	expiration	dates,	and	the	RLA	requires	that	a	carrier	maintain	the	existing	terms	and	conditions	of	employment following	the	amendable	date	through	a	multi-stage	and	usually	lengthy	series	of	bargaining	processes	overseen	by	the	National	Mediation	Board	(NMB).	For	the	dates that	the	CBAs	with	our	major	work	groups	become	amendable	under	the	RLA,	see	Part	I,	Item	1.	Business	–	"Employees	and	Labor	Relations."

In	the	case	of	a	CBA	that	is	amendable	under	the	RLA,	if	no	agreement	is	reached	during	direct	negotiations	between	the	parties,	either	party	may	request	that	the NMB	appoint	a	federal	mediator.	The	RLA	prescribes	no	timetable	for	the	direct	negotiation	and	mediation	processes,	and	it	is	not	unusual	for	those	processes	to	last	for many	months	or	even	several	years.	If	no	agreement	is	reached	in	mediation,	the	NMB	in	its	discretion	may	declare	that	an	impasse	exists	and	proffer	binding	arbitration to	the	parties.	Either	party	may	decline	to	submit	to	arbitration,	and	if	arbitration	is	rejected	by	either	party,	a	30-day	"cooling	off"	period	commences.	During	or	after that	period,	a	Presidential	Emergency	Board	(PEB)	may	be	established,	which	examines	the	parties'	positions	and	recommends	a	solution.	The	PEB	process	lasts	for	30 days	and	is	followed	by	another	30-day	"cooling	off"	period.	At	the	end	of	a	"cooling	off"	period,	unless	an	agreement	is	reached	or	action	is	taken	by	Congress,	the labor	organization	may	exercise	"self-help,"	such	as	a	strike,	which	could	materially	adversely	affect	our	business,	results	of	operations	and	financial	condition.

None	of	the	unions	representing	our	employees	presently	may	lawfully	engage	in	concerted	refusals	to	work,	such	as	strikes,	slow-downs,	sick-outs	or	other	similar activity,	against	us.	Nonetheless,	there	is	a	risk	that	disgruntled	employees,	either	with	or	without	union	involvement,	could	engage	in	one	or	more	concerted	refusals	to work	that	could	individually	or	collectively	harm	the	operation	of	our	airline	and	impair	our	financial	performance.	See	Part	I,	Item	1.	Business	–	"Employees	and	Labor Relations."

# The	inability	to	maintain	labor	costs	at	competitive	levels	would	harm	our	financial	performance.

Currently,	we	believe	our	labor	costs	are	competitive	relative	to	the	other	large	network	carriers.	However,	we	cannot	provide	assurance	that	labor	costs	going forward	will	remain	competitive	because	some	of	our	agreements	are	amendable	now	and	others	may	become	amendable,	competitors	may	significantly	reduce	their labor	costs	or	we	may	agree	to	higher-cost	provisions	in	our	current	or	future	labor	negotiations.	As	of	December	31,	2015,	approximately	82%	of	our	employees	were represented	for	collective	bargaining	purposes	by	labor	unions.	Some	of	our	unions	have	brought	and	may	continue	to	bring	grievances	to	binding	arbitration,	including those	related	to	wages.	Unions	may	also	bring	court	actions	and	may	seek	to	compel	us	to	engage	in	bargaining	processes	where	we	believe	we	have	no	such	obligation. If	successful,	there	is	a	risk	these	judicial	or	arbitral	avenues	could	create	material	additional	costs	that	we	did	not	anticipate.

# Interruptions	or	disruptions	in	service	at	one	of	our	hub	airports	could	have	a	material	adverse	impact	on	our	operations.

We	operate	principally	through	hubs	in	Charlotte,	Chicago,	Dallas/Fort	Worth,	Los	Angeles,	Miami,	New	York	City,	Philadelphia,	Phoenix	and	Washington,	D.C.

Substantially	all	of	our	flights	either	originate	in	or	fly

into	one	of	these	locations.	A	significant	interruption	or	disruption	in	service	at	one	of	our	hubs	resulting	from	air	traffic	control	(ATC)	delays,	weather	conditions, natural	disasters,	growth	constraints,	relations	with	third-party	service	providers,	failure	of	computer	systems,	facility	disruptions,	labor	relations,	power	supplies,	fuel supplies,	terrorist	activities	or	otherwise	could	result	in	the	cancellation	or	delay	of	a	significant	portion	of	our	flights	and,	as	a	result,	could	have	a	severe	impact	on	our business,	results	of	operations	and	financial	condition.

# If	we	are	unable	to	obtain	and	maintain	adequate	facilities	and	infrastructure	throughout	our	system	and,	at	some	airports,	adequate	slots,	we	may	be	unable	to operate	our	existing	flight	schedule	and	to	expand	or	change	our	route	network	in	the	future,	which	may	have	a	material	adverse	impact	on	our	operations.

In	order	to	operate	our	existing	and	proposed	flight	schedule	and,	where	appropriate,	add	service	along	new	or	existing	routes,	we	must	be	able	to	maintain	and/or obtain	adequate	gates,	ticketing	facilities,	operations	areas,	and	office	space.	As	airports	around	the	world	become	more	congested,	we	will	not	always	be	able	to	ensure that	our	plans	for	new	service	can	be	implemented	in	a	commercially	viable	manner,	given	operating	constraints	at	airports	throughout	our	network,	including	due	to inadequate	facilities	at	desirable	airports.	Further,	our	operating	costs	at	airports	at	which	we	operate,	including	our	hubs,	may	increase	significantly	because	of	capital improvements	at	such	airports	that	we	may	be	required	to	fund,	directly	or	indirectly.	In	some	circumstances,	such	costs	could	be	imposed	by	the	relevant	airport authority	without	our	approval.

In	addition,	operations	at	four	major	domestic	airports,	certain	smaller	domestic	airports	and	certain	foreign	airports	served	by	us	are	regulated	by	governmental entities	through	the	use	of	slots	or	similar	regulatory	mechanisms	which	limit	the	rights	of	carriers	to	conduct	operations	at	those	airports.	Each	slot	represents	the authorization	to	land	at	or	take	off	from	the	particular	airport	during	a	specified	time	period	and	may	have	other	operational	restrictions	as	well.	In	the	U.S.,	the	FAA currently	regulates	the	allocation	of	slots	or	slot	exemptions	at	DCA	and	three	New	York	City	airports:	Newark	Liberty	International	Airport,	JFK	and	LGA.	Our operations	at	these	airports	generally	require	the	allocation	of	slots	or	similar	regulatory	authority.	Similarly,	our	operations	at	international	airports	in	Frankfurt,	London Heathrow,	 Paris	 and	 other	 airports	 outside	 the	 U.S.	 are	 regulated	 by	 local	 slot	 authorities	 pursuant	 to	 the	 International	Air	Transport	Association's	Worldwide Scheduling	Guidelines	and	applicable	 local	 law.	We	cannot	provide	any	assurance	 that	regulatory	changes	regarding	 the	allocation	of	slots	or	similar	regulatory authority	will	not	have	a	material	adverse	impact	on	our	operations.

In	connection	with	the	settlement	of	litigation	relating	to	the	Merger	brought	by	the	DOJ	and	certain	states,	we	entered	into	settlement	agreements	that	provide	for certain	asset	divestitures	including	52	slot	pairs	at	DCA,	17	slot	pairs	at	LGA	and	gates	and	related	ground	facilities	necessary	to	operate	those	slot	pairs,	and	two	gates at	each	of	Boston	Logan	International	Airport,	Chicago	O'Hare	International	Airport,	DAL,	LAX	and	Miami	International	Airport.	The	settlement	agreements	also require	us	to	maintain	certain	hub	operations	and	continue	to	provide	service	to	certain	specified	communities	for	limited	periods	of	time.	In	addition,	we	entered	into	a related	settlement	with	the	DOT	related	to	small	community	service	from	DCA.	Further,	as	a	consequence	of	the	Merger	clearance	process	in	the	European	Union	(EU), we	made	one	pair	of	London	Heathrow	slots	available	for	use	by	another	carrier	and,	along	with	our	JBA	partners,	we	made	one	pair	of	London	Heathrow	slots	available to	competitors	for	use	for	up	to	six	years	in	different	markets.

Our	ability	to	provide	service	can	also	be	impaired	at	airports,	such	as	Chicago	O'Hare	International	Airport	and	LAX,	where	the	airport	gate	and	other	facilities	are inadequate	to	accommodate	all	of	the	service	that	we	would	like	to	provide,	or	airports	such	as	DAL	where	we	have	no	access	to	gates	at	all.

Any	limitation	on	our	ability	to	acquire	or	maintain	adequate	gates,	ticketing	facilities,	operations	areas,	slots	(where	applicable),	or	office	space	could	have	a	material adverse	effect	on	our	business,	results	of	operations	and	financial	condition.

# If	we	encounter	problems	with	any	of	our	third-party	regional	operators	or	third-party	service	providers,	our	operations	could	be	adversely	affected	by	a	resulting decline	in	revenue	or	negative	public	perception	about	our	services.

A	significant	portion	of	our	regional	operations	are	conducted	by	third-party	operators	on	our	behalf,	primarily	under	capacity	purchase	agreements.	Due	to	our reliance	on	third	parties	to	provide	these	essential	services,	we	are	subject	to	the	risks	of	disruptions	to	their	operations,	which	may	result	from	many	of	the	same	risk factors	disclosed	in	this	report,	such	as	the	impact	of	adverse	economic	conditions,	the	inability	of	third	parties	to	hire	or	retain	necessary	personnel,	including	in particular	pilots,	and	other	risk	factors,	such	as	an	out-of-court	or	bankruptcy	restructuring	of	any	of	our	regional	operators.	We	may	also	experience	disruption	to	our regional	operations	if	we	terminate	the	capacity	purchase	agreement	with	one	or	more	of	our	current	operators	and	transition	the	services	to	another	provider.	As	our regional	segment	provides	revenues	to	us	directly	and	indirectly	(by	providing	flow	traffic	to	our	hubs),	any	significant	disruption	to	our	regional	operations	would	have a	material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition.

In	addition,	our	reliance	upon	others	to	provide	essential	services	on	behalf	of	our	operations	may	result	in	our	relative	inability	to	control	the	efficiency	and timeliness	of	contract	services.	We	have	entered	into	agreements	with	contractors	to	provide	various	facilities	and	services	required	for	our	operations,	including distribution	and	sale	of	airline	seat	inventory,	provision	of	information	technology	and	services,	regional	operations,	aircraft	maintenance,	ground	services	and	facilities, reservations	and	baggage	handling.	Similar	agreements	may	be	entered	 into	 in	any	new	markets	we	decide	 to	serve.	These	agreements	are	generally	subject	 to termination	after	notice	by	the	third-party	service	provider.	We	are	also	at	risk	should	one	of	these	service	providers	cease	operations,	and	there	is	no	guarantee	that	we could	replace	these	providers	on	a	timely	basis	with	comparably	priced	providers,	or	at	all.	Volatility	in	fuel	prices,	disruptions	to	capital	markets	and	adverse	economic conditions	in	general	have	subjected	certain	of	these	third-party	regional	carriers	to	significant	financial	pressures,	which	have	led	to	several	bankruptcies	among	these carriers.	Any	material	problems	with	the	efficiency	and	timeliness	of	contract	services,	resulting	from	financial	hardships	or	otherwise,	could	have	a	material	adverse effect	on	our	business,	results	of	operations	and	financial	condition.

# We	rely	on	third-party	distribution	channels	and	must	manage	effectively	the	costs,	rights	and	functionality	of	these	channels.

We	rely	on	third-party	distribution	channels,	including	those	provided	by	or	through	global	distribution	systems	(GDSs)	(e.g.,	Amadeus,	Sabre	and	Travelport), conventional	travel	agents	and	online	travel	agents	(OTAs)	(e.g.,	Expedia,	including	its	booking	sites	Orbitz	and	Travelocity,	and	The	Priceline	Group),	to	distribute	a significant	portion	of	our	airline	tickets,	and	we	expect	in	the	future	to	continue	to	rely	on	these	channels	and	hope	to	expand	their	ability	to	distribute	and	collect revenues	for	ancillary	products	(e.g.,	fees	for	selective	seating).	These	distribution	channels	are	more	expensive	and	at	present	have	less	functionality	in	respect	of ancillary	product	offerings	than	those	we	operate	ourselves,	such	as	our	call	centers	and	our	website.	Certain	of	these	distribution	channels	also	effectively	restrict	the manner	in	which	we	distribute	our	products	generally.	To	remain	competitive,	we	will	need	to	manage	successfully	our	distribution	costs	and	rights,	increase	our distribution	flexibility	and	improve	the	functionality	of	third-party	distribution	channels,	while	maintaining	an	industry-competitive	cost	structure.	These	imperatives may	affect	our	relationships	with	GDSs	and	OTAs,	including	as	consolidation	of	OTAs	continues	or	is	proposed	to	continue.	Any	inability	to	manage	our	third-party distribution	costs,	rights	and	functionality	at	a	competitive	level	or	any	material	diminishment	or	disruption	in	the	distribution	of	our	tickets	could	have	a	material adverse	effect	on	our	business,	results	of	operations	and	financial	condition.

# Our	business	is	subject	to	extensive	government	regulation,	which	may	result	in	increases	in	our	costs,	disruptions	to	our	operations,	limits	on	our	operating flexibility,	reductions	in	the	demand	for	air	travel,	and	competitive	disadvantages.

Airlines	are	subject	to	extensive	domestic	and	international	regulatory	requirements.	In	the	last	several	years,	Congress	has	passed	laws,	and	the	DOT,	the	FAA,	the U.S.	Transportation	Security	Administration	(TSA)	and

the	Department	of	Homeland	Security	have	issued	a	number	of	directives	and	other	regulations,	that	affect	the	airline	industry.	These	requirements	impose	substantial costs	on	us	and	restrict	the	ways	we	may	conduct	our	business.

For	example,	 the	FAA	from	 time	 to	 time	 issues	directives	and	other	regulations	relating	 to	 the	maintenance	and	operation	of	aircraft	 that	require	significant expenditures	or	operational	restrictions.	Our	failure	to	timely	comply	with	these	requirements	has	in	the	past	and	may	in	the	future	result	in	fines	and	other	enforcement actions	by	the	FAA	or	other	regulators.	In	the	future,	new	regulatory	requirements	could	have	a	material	adverse	effect	on	us	and	the	industry.

DOT	consumer	rules	 that	 took	effect	 in	2010	require	procedures	for	customer	handling	during	 long	onboard	delays,	further	regulate	airline	 interactions	with passengers	through	the	reservations	process,	at	the	airport,	and	onboard	the	aircraft,	and	require	disclosures	concerning	airline	fares	and	ancillary	fees	such	as	baggage fees.	The	DOT	has	been	aggressively	investigating	alleged	violations	of	these	rules.	Other	DOT	rules	apply	to	post-ticket	purchase	price	increases	and	an	expansion	of tarmac	delay	regulations	to	international	airlines.

The	Aviation	and	Transportation	Security	Act	mandates	the	federalization	of	certain	airport	security	procedures	and	imposes	additional	security	requirements	on airports	and	airlines,	most	of	which	are	funded	by	a	per-ticket	tax	on	passengers	and	a	tax	on	airlines.

The	results	of	our	operations,	demand	for	air	travel,	and	the	manner	in	which	we	conduct	business	each	may	be	affected	by	changes	in	law	and	future	actions	taken	by governmental	agencies,	including:

•changes	in	law	which	affect	the	services	that	can	be	offered	by	airlines	in	particular	markets	and	at	particular	airports,	or	the	types	of	fees	that	can	be	charged to	passengers;

•the	granting	and	timing	of	certain	governmental	approvals	(including	antitrust	or	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	new	passenger	security	standards	or	regulations	that	impact	customer	service	standards	(for	example,	a	"passenger	bill	of	rights");

•restrictions	on	airport	operations,	such	as	restrictions	on	the	use	of	slots	at	airports	or	the	auction	or	reallocation	of	slot	rights	currently	held	by	us;	and

•the	adoption	of	more	restrictive	locally-imposed	noise	restrictions.

Each	additional	regulation	or	other	form	of	regulatory	oversight	increases	costs	and	adds	greater	complexity	to	airline	operations	and,	in	some	cases,	may	reduce	the demand	for	air	travel.	There	can	be	no	assurance	that	our	compliance	with	new	rules,	anticipated	rules	or	other	forms	of	regulatory	oversight	will	not	have	a	material adverse	effect	on	us.

Any	significant	reduction	in	air	traffic	capacity	at	key	airports	in	the	U.S.	or	overseas	could	have	a	material	adverse	effect	on	our	business,	results	of	operations	and financial	condition.	In	addition,	the	ATC	system	is	not	successfully	managing	the	growing	demand	for	U.S.	air	travel.	ATC	towers	are	frequently	understaffed	in	certain of	our	hubs,	and	air	traffic	controllers	rely	on	outdated	technologies	that	routinely	overwhelm	the	system	and	compel	airlines	to	fly	inefficient,	indirect	routes.	The	ATC system's	inability	to	handle	existing	travel	demand	has	led	government	agencies	to	implement	short-term	capacity	constraints	during	peak	travel	periods	in	certain markets,	resulting	in	delays	and	disruptions	of	air	traffic.	The	outdated	technologies	also	cause	the	ATC	to	be	less	resilient	in	the	event	of	a	failure.	For	example,	in	2014 the	ATC	systems	in	Chicago	took	weeks	to	recover	following	a	fire	in	the	ATC	tower	at	Chicago	O'Hare	International	Airport,	which	resulted	in	thousands	of	cancelled flights.

On	February	14,	2012,	the	FAA	Modernization	and	Reform	Act	of	2012	was	signed.	The	law	provides	funding	for	the	FAA	to	rebuild	its	ATC	system,	including switching	from	radar	to	a	GPS-based	system.	It	is	uncertain	when	any	improvements	to	the	efficiency	of	the	ATC	system	will	take	effect.	Failure	to	update	the	ATC system	in	a	timely	manner	and	the	substantial	funding	requirements	that	may	be	imposed	on	airlines	of	a	modernized	ATC	system	may	have	a	material	adverse	effect	on our	business.

The	ability	of	U.S.	airlines	to	operate	international	routes	is	subject	to	change	because	the	applicable	arrangements	between	the	U.S.	and	foreign	governments	may	be amended	from	time	to	time	and	appropriate	slots	or	facilities	may	not	be	made	available.	We	currently	operate	a	number	of	international	routes	under	government arrangements	that	limit	the	number	of	airlines	permitted	to	operate	on	the	route,	the	capacity	of	the	airlines	providing	services	on	the	route,	or	the	number	of	airlines allowed	access	to	particular	airports.	If	an	open	skies	policy	were	to	be	adopted	for	any	of	these	routes,	such	an	event	could	have	a	material	adverse	impact	on	us	and could	result	in	the	impairment	of	material	amounts	of	our	related	tangible	and	intangible	assets.	In	addition,	competition	from	revenue-sharing	joint	ventures,	JBAs,	and other	alliance	arrangements	by	and	among	other	airlines	could	impair	the	value	of	our	business	and	assets	on	the	open	skies	routes.	For	example,	the	open	skies	air services	agreement	between	the	U.S.	and	the	EU,	which	took	effect	in	March	2008,	provides	airlines	from	the	U.S.	and	EU	member	states	open	access	to	each	other's markets,	with	freedom	of	pricing	and	unlimited	rights	to	fly	from	the	U.S.	to	any	airport	in	the	EU,	including	London	Heathrow	Airport.	As	a	result	of	the	agreement,	we face	increased	competition	in	these	markets,	including	London	Heathrow	Airport.

# The	airline	industry	is	heavily	taxed.

The	airline	industry	is	subject	to	extensive	government	fees	and	taxation	that	negatively	impact	our	revenue.	The	U.S.	airline	industry	is	one	of	the	most	heavily	taxed of	all	industries.	These	fees	and	taxes	have	grown	significantly	in	the	past	decade	for	domestic	flights,	and	various	U.S.	fees	and	taxes	also	are	assessed	on	international flights.	For	example,	as	permitted	by	federal	legislation,	most	major	U.S.	airports	impose	a	passenger	facility	charge	per	passenger	on	us.	In	addition,	the	governments	of foreign	countries	in	which	we	operate	impose	on	U.S.	airlines,	including	us,	various	fees	and	taxes,	and	these	assessments	have	been	increasing	in	number	and	amount	in recent	years.	Moreover,	we	are	obligated	to	collect	a	federal	excise	tax,	commonly	referred	to	as	the	"ticket	tax,"	on	domestic	and	international	air	transportation.	We collect	the	excise	tax,	along	with	certain	other	U.S.	and	foreign	taxes	and	user	fees	on	air	transportation	(such	as	passenger	security	fees),	and	pass	along	the	collected amounts	to	the	appropriate	governmental	agencies.	Although	these	taxes	are	not	operating	expenses,	they	represent	an	additional	cost	to	our	customers.	There	are continuing	efforts	in	Congress	and	in	other	countries	to	raise	different	portions	of	the	various	taxes,	fees,	and	charges	imposed	on	airlines	and	their	passengers.	Increases in	such	taxes,	fees	and	charges	could	negatively	impact	our	business,	results	of	operations	and	financial	condition.

Under	DOT	regulations,	all	governmental	taxes	and	fees	must	be	included	in	the	prices	we	quote	or	advertise	to	our	customers.	Due	to	the	competitive	revenue environment,	many	increases	in	these	fees	and	taxes	have	been	absorbed	by	the	airline	industry	rather	than	being	passed	on	to	the	customer.	Further	increases	in	fees	and taxes	may	reduce	demand	for	air	travel,	and	thus	our	revenues.

# Changes	to	our	business	model	that	are	designed	to	increase	revenues	may	not	be	successful	and	may	cause	operational	difficulties	or	decreased	demand.

We	have	a	number	of	measures	designed	to	increase	revenue	and	offset	costs.	These	measures	include	charging	separately	for	services	that	had	previously	been included	within	the	price	of	a	ticket	and	increasing	other	pre-existing	fees.	We	may	introduce	additional	initiatives	in	the	future;	however,	as	time	goes	on,	we	expect	that it	will	be	more	difficult	to	identify	and	implement	additional	initiatives.	We	cannot	assure	you	that	these	measures	or	any	future	initiatives	will	be	successful	in increasing	our	revenues.	Additionally,	the	implementation	of	these	initiatives	may	create	logistical	challenges	that	could	harm	the	operational	performance	of	our	airline. Also,	any	new	and	increased	fees	might	reduce	the	demand	for	air	travel	on	our	airline	or	across

the	industry	in	general,	particularly	if	weakened	economic	conditions	make	our	customers	more	sensitive	to	increased	travel	costs	or	provide	a	significant	competitive advantage	to	other	carriers	that	determine	not	to	institute	similar	charges.

# The	loss	of	key	personnel	upon	whom	we	depend	to	operate	our	business	or	the	inability	to	attract	additional	qualified	personnel	could	adversely	affect	our business.

We	believe	that	our	future	success	will	depend	in	large	part	on	our	ability	to	retain	or	attract	highly	qualified	management,	technical	and	other	personnel.	We	may	not be	successful	in	retaining	key	personnel	or	in	attracting	other	highly	qualified	personnel.	Any	inability	to	retain	or	attract	significant	numbers	of	qualified	management and	other	personnel	would	have	a	material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition.

# We	may	be	adversely	affected	by	conflicts	overseas	or	terrorist	attacks;	the	travel	industry	continues	to	face	ongoing	security	concerns.

Acts	of	 terrorism	or	fear	of	such	attacks,	 including	elevated	national	 threat	warnings,	wars	or	other	military	conflicts,	may	depress	air	 travel,	particularly	on international	routes,	and	cause	declines	in	revenues	and	increases	in	costs.	The	attacks	of	September	11,	2001	and	continuing	terrorist	threats,	attacks	and	attempted attacks	materially	impacted	and	continue	to	impact	air	travel.	Increased	security	procedures	introduced	at	airports	since	the	attacks	of	September	11,	2001	and	any	other such	measures	that	may	be	introduced	in	the	future	generate	higher	operating	costs	for	airlines.	The	Aviation	and	Transportation	Security	Act	mandated	improved	flight deck	security,	deployment	of	federal	air	marshals	on	board	flights,	improved	airport	perimeter	access	security,	airline	crew	security	training,	enhanced	security	screening of	passengers,	baggage,	cargo,	mail,	employees	and	vendors,	enhanced	training	and	qualifications	of	security	screening	personnel,	additional	provision	of	passenger	data to	 the	U.S.	Customs	and	Border	Protection	Agency	and	enhanced	background	checks.	A	concurrent	 increase	 in	airport	security	charges	and	procedures,	such	as restrictions	on	carry-on	baggage,	has	also	had	and	may	continue	to	have	a	disproportionate	impact	on	short-haul	travel,	which	constitutes	a	significant	portion	of	our flying	and	revenue.

# We	operate	a	global	business	with	international	operations	that	are	subject	to	economic	and	political	instability	and	have	been,	and	in	the	future	may	continue	to be,	adversely	affected	by	numerous	events,	circumstances	or	government	actions	beyond	our	control.

We	operate	a	global	business	with	operations	outside	of	the	U.S.	from	which	we	derived	approximately	30%	of	our	operating	revenues	in	2015,	as	measured	and reported	to	the	DOT.	Our	current	international	activities	and	prospects	have	been	and	in	the	future	could	be	adversely	affected	by	reversals	or	delays	in	the	opening	of foreign	markets,	increased	competition	in	international	markets,	exchange	controls	or	other	restrictions	on	repatriation	of	funds,	currency	and	political	risks	(including changes	in	exchange	rates	and	currency	devaluations),	environmental	regulation,	increases	in	taxes	and	fees	and	changes	in	international	government	regulation	of	our operations,	including	the	inability	to	obtain	or	retain	needed	route	authorities	and/or	slots.	In	particular,	fluctuations	in	foreign	currencies,	including	devaluations, exchange	controls	and	other	restrictions	on	the	repatriation	of	funds,	have	significantly	affected	and	may	continue	to	significantly	affect	our	operating	performance, liquidity	and	the	value	of	any	cash	held	outside	the	U.S.	in	local	currency.

Generally,	fluctuations	in	foreign	currencies,	including	devaluations,	cannot	be	predicted	by	us	and	can	significantly	affect	the	value	of	our	assets	located	outside	the United	States.	These	conditions,	as	well	as	any	further	delays,	devaluations	or	imposition	of	more	stringent	repatriation	restrictions,	may	materially	adversely	affect	our business,	results	of	operations	and	financial	condition.

# We	are	subject	to	many	forms	of	environmental	and	noise	regulation	and	may	incur	substantial	costs	as	a	result.

We	are	subject	to	increasingly	stringent	federal,	state,	local	and	foreign	laws,	regulations	and	ordinances	relating	to	the	protection	of	the	environment	and	noise reduction,	including	those	relating	to	emissions	to	the	air,

discharges	to	surface	and	subsurface	waters,	safe	drinking	water,	and	the	management	of	hazardous	substances,	oils	and	waste	materials.	Compliance	with	environmental laws	and	regulations	can	require	significant	expenditures,	and	violations	can	lead	to	significant	fines	and	penalties.

In	June	2015,	the	U.S.	Environmental	Protection	Agency	(EPA)	issued	revised	underground	storage	tank	regulations	that	could	affect	airport	fuel	hydrant	systems,	as certain	of	those	systems	may	need	to	be	modified	in	order	to	comply	with	applicable	portions	of	the	revised	regulations.	Additionally,	on	June	4,	2015,	the	EPA	reissued the	Multi-Sector	General	Permit	for	Stormwater	Discharges	from	Industrial	Activities.	Among	other	revisions,	the	reissued	permit	incorporates	the	EPA's	previously issued	Airport	Deicing	Effluent	Limitation	Guidelines	and	New	Source	Performance	Standards.	In	addition,	California	adopted	a	revised	State	Industrial	General	Permit for	Stormwater	Discharges	on	April	1,	2014,	which	became	effective	July	1,	2015.	This	permit	places	additional	reporting	and	monitoring	requirements	on	permittees and	requires	implementation	of	mandatory	best	management	practices.	While	the	cost	of	compliance	with	these	requirements	is	not	expected	to	be	significant,	the company	will	continue	to	monitor	and	evaluate	the	impact	of	these	requirements	on	airport	operations.	In	addition	to	the	EPA	and	state	regulations,	several	U.S.	airport authorities	 are	 actively	 engaged	 in	 efforts	 to	 limit	 discharges	 of	 de-icing	 fluid	 to	 the	 environment,	 often	 by	 requiring	 airlines	 to	 participate	 in	 the	 building	 or reconfiguring	of	airport	de-icing	facilities.	Such	efforts	are	likely	to	impose	additional	costs	and	restrictions	on	airlines	using	those	airports.	We	do	not	believe,	however, that	such	environmental	developments	will	have	a	material	impact	on	our	capital	expenditures	or	otherwise	materially	adversely	affect	our	operations,	operating	costs	or competitive	position.

We	are	also	subject	to	other	environmental	laws	and	regulations,	including	those	that	require	us	to	investigate	and	remediate	soil	or	groundwater	to	meet	certain remediation	standards.	Under	federal	 law,	generators	of	waste	materials,	and	current	and	former	owners	or	operators	of	facilities,	can	be	subject	 to	 liability	for investigation	and	remediation	costs	at	locations	that	have	been	identified	as	requiring	response	actions.	Liability	under	these	laws	may	be	strict,	joint	and	several, meaning	that	we	could	be	liable	for	the	costs	of	cleaning	up	environmental	contamination	regardless	of	fault	or	the	amount	of	wastes	directly	attributable	to	us.	We	have liability	for	investigation	and	remediation	costs	at	various	sites,	although	such	costs	are	currently	not	expected	to	have	a	material	adverse	effect	on	our	business.

We	have	various	leases	and	agreements	with	respect	to	real	property,	tanks	and	pipelines	with	airports	and	other	operators.	Under	these	leases	and	agreements,	we have	agreed	to	indemnify	the	lessor	or	operator	against	environmental	liabilities	associated	with	the	real	property	or	operations	described	under	the	agreement,	in	some cases	even	if	we	are	not	the	party	responsible	for	the	initial	event	that	caused	the	environmental	damage.	We	also	participate	in	leases	with	other	airlines	in	fuel consortiums	and	fuel	committees	at	airports,	where	such	indemnities	are	generally	joint	and	several	among	the	participating	airlines.

Governmental	authorities	in	several	U.S.	and	foreign	cities	are	also	considering,	or	have	already	implemented,	aircraft	noise	reduction	programs,	including	the imposition	of	nighttime	curfews	and	limitations	on	daytime	take	offs	and	landings.	We	have	been	able	to	accommodate	local	noise	restrictions	imposed	to	date,	but	our operations	could	be	adversely	affected	if	locally-imposed	regulations	become	more	restrictive	or	widespread.

# We	are	subject	to	risks	associated	with	climate	change,	including	increased	regulation	to	reduce	emissions	of	greenhouse	gases.

There	is	increasing	global	regulatory	focus	on	climate	change	and	greenhouse	gas	(GHG)	emissions.	For	example,	the	EU	has	established	the	Emissions	Trading Scheme	(ETS)	to	regulate	GHG	emissions	in	the	EU.	The	EU	adopted	a	directive	in	2008	under	which	each	EU	member	state	is	required	to	extend	the	ETS	to	aviation operations.	This	directive	would	have	required	us,	beginning	in	2012,	to	annually	submit	emission	allowances	in	order	to	operate	flights	to	and	from	airports	in	the European	Economic	Area	(EEA),	including	flights	between	the	U.S.	and	EU	member	states.	However,	in	an	effort	to	allow	the	International	Civil	Aviation	Organization (ICAO)	time	to	propose	an	alternate	scheme	to	manage	global	aviation	emissions,	in	April	2013,	the	EU	suspended	for

one	year	the	ETS'	application	to	flights	entering	and	departing	the	EEA,	limiting	its	application,	for	flights	flown	in	2012,	to	intra-EEA	flights	only.	In	October	2013,	the ICAO	Assembly	adopted	a	resolution	calling	for	the	development	through	ICAO	of	a	global,	market-based	scheme	for	aviation	GHG	emissions,	to	be	finalized	in	2016 and	implemented	in	2020.	Subsequently,	the	EU	has	amended	the	EU	ETS	so	that	the	monitoring,	reporting	and	submission	of	allowances	for	aviation	GHG	emissions will	continue	to	be	limited	to	only	intra-EEA	flights	through	2016,	at	which	time	the	EU	will	evaluate	the	progress	made	by	ICAO	and	determine	what,	if	any,	measures to	take	related	to	aviation	GHG	emissions	from	2017	onwards.	The	U.S.	enacted	legislation	in	November	2012	which	encourages	the	DOT	to	seek	an	international solution	through	ICAO	and	that	will	allow	the	U.S.	Secretary	of	Transportation	to	prohibit	U.S.	airlines	from	participating	in	the	ETS.	The	effort	currently	underway through	ICAO	to	reach	a	global	agreement	on	measures	to	manage	international	aviation	GHG	emission	growth	could	significantly	impact	our	business,	particularly	to the	extent	that	any	final	agreement	may	emphasize	a	collective	cost	sharing	approach	for	industry	emissions	growth	over	a	cost	approach	based	on	individual	carrier contribution	to	emission	growth.	Ultimately,	the	scope	and	application	of	ETS	or	other	emissions	trading	schemes	to	our	operations,	now	or	in	the	near	future,	remains uncertain.	We	 do	 not	 anticipate	 any	 significant	 emissions	 allowance	 expenditures	 in	 2016.	 Beyond	 2016,	 compliance	 with	 the	 ETS	 or	 similar	 emissions-related requirements	could	significantly	increase	our	operating	costs.	Further,	the	potential	impact	of	ETS	or	other	emissions-related	requirements	on	our	costs	will	ultimately depend	on	a	number	of	factors,	including	baseline	emissions,	the	price	of	emission	allowances	or	offsets	and	the	number	of	future	flights	subject	to	ETS	or	other emissions-related	requirements.	These	costs	have	not	been	completely	defined	and	could	fluctuate.

In	addition,	in	December	2015,	at	the	21st	Conference	of	the	Parties	to	the	United	Nations	Framework	Convention	on	Climate	Change	(UNFCCC's	COP21),	over 190	countries,	including	the	United	States,	reached	an	agreement	to	reduce	global	greenhouse	gas	emissions.	While	there	is	no	express	reference	to	aviation	in	this international	agreement,	to	the	extent	the	United	States	and	other	countries	implement	this	agreement	or	impose	other	climate	change	regulations,	either	with	respect	to the	aviation	industry	or	with	respect	to	related	industries	such	as	the	aviation	fuel	industry,	it	could	have	an	adverse	direct	or	indirect	effect	on	our	business.

Within	the	U.S.,	there	is	an	increasing	trend	toward	regulating	GHG	emissions	directly	under	the	Clean	Air	Act	(CAA).	In	response	to	a	2012	ruling	by	the	U.S. District	Court	for	the	District	of	Columbia,	the	EPA	announced	in	June	2015	a	proposed	endangerment	finding	that	aircraft	engine	GHG	emissions	cause	or	contribute	to air	pollution	that	may	reasonably	be	anticipated	to	endanger	public	health	or	welfare.	A	public	hearing	regarding	the	proposed	endangerment	finding	was	held	in	August 2015.	If	the	EPA	finalizes	the	endangerment	finding,	the	EPA	is	obligated	under	the	CAA	to	set	aircraft	engine	GHG	emission	standards.	It	is	anticipated	that	any	such standards	established	by	EPA	would	closely	align	with	emission	standards	currently	being	developed	by	ICAO.	In	February	2016,	the	ICAO	Committee	on	Aviation Environmental	Protection	(CAEP)	recommended	that	ICAO	adopt	carbon	dioxide	certification	standards	that	would	apply	to	new	type	aircraft	certified	beginning	in 2020,	and	would	be	phased	in	for	newly	manufactured	existing	aircraft	type	designs	starting	in	2023.

These	regulatory	efforts,	both	internationally	and	in	the	U.S.	at	the	federal	and	state	levels,	are	still	developing,	and	we	cannot	yet	determine	what	the	final	regulatory programs	or	their	impact	will	be	in	the	U.S.,	the	EU	or	in	other	areas	in	which	we	do	business.	However,	such	climate	change-related	regulatory	activity	in	the	future may	adversely	affect	our	business	and	financial	results	by	requiring	us	to	reduce	our	emissions,	purchase	allowances	or	otherwise	pay	for	our	emissions.	Such	activity may	also	impact	us	indirectly	by	increasing	our	operating	costs,	including	fuel	costs.

# We	rely	heavily	on	technology	and	automated	systems	to	operate	our	business,	and	any	failure	of	these	technologies	or	systems	could	harm	our	business,	results of	operations	and	financial	condition.

We	are	highly	dependent	on	technology	and	automated	systems	to	operate	our	business	and	achieve	low	operating	costs.	These	technologies	and	systems	include	our computerized	airline	reservation	system,	flight	operations	systems,	financial	planning,	management	and	accounting	systems,	telecommunications	systems,	website, maintenance	systems	and	check-in	kiosks.	In	order	for	our	operations	to	work	efficiently,	our	website	and	reservation	system	must	be	able	to	accommodate	a	high volume	of	traffic,	maintain	secure	information	and	deliver	flight	information,	as	well	as	issue	electronic	tickets	and	process	critical	financial	information	in	a	timely manner.	Substantially	all	of	our	tickets	are	issued	to	passengers	as	electronic	tickets.	We	depend	on	our	reservation	system,	which	is	hosted	and	maintained	under	a	long- term	contract	by	a	third-party	service	provider,	to	be	able	to	issue,	track	and	accept	these	electronic	tickets.	If	our	automated	systems	are	not	functioning	or	if	our	third- party	service	providers	were	to	fail	to	adequately	provide	technical	support,	system	maintenance	or	timely	software	upgrades	for	any	one	of	our	key	existing	systems,	we could	experience	service	disruptions	or	delays,	which	could	harm	our	business	and	result	in	the	loss	of	important	data,	increase	our	expenses	and	decrease	our	revenues. In	the	event	that	one	or	more	of	our	primary	technology	or	systems	vendors	goes	into	bankruptcy,	ceases	operations	or	fails	to	perform	as	promised,	replacement	services may	not	be	readily	available	on	a	timely	basis,	at	competitive	rates	or	at	all,	and	any	transition	time	to	a	new	system	may	be	significant.

Our	automated	systems	cannot	be	completely	protected	against	other	events	that	are	beyond	our	control,	including	natural	disasters,	power	failures,	terrorist	attacks, cyber-attacks,	data	theft,	equipment	and	software	failures,	computer	viruses	or	telecommunications	failures.	Substantial	or	sustained	system	failures	could	cause	service delays	or	failures	and	result	in	our	customers	purchasing	tickets	from	other	airlines.	We	cannot	assure	you	that	our	security	measures,	change	control	procedures	or disaster	recovery	plans	are	adequate	to	prevent	disruptions	or	delays.	Disruption	in	or	changes	to	these	systems	could	result	in	a	disruption	to	our	business	and	the	loss	of important	data.	Any	of	the	foregoing	could	result	in	a	material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition.

# We	face	challenges	in	integrating	our	computer,	communications	and	other	technology	systems.

Among	the	principal	risks	of	integrating	our	businesses	and	operations	are	the	risks	relating	to	integrating	various	computer,	communications	and	other	technology systems	that	will	be	necessary	to	operate	US	Airways	and	American	as	a	single	airline	and	to	achieve	cost	synergies	by	eliminating	redundancies	in	the	businesses.	While we	have	to	date	successfully	integrated	several	of	our	systems,	including	our	customer	reservations	system,	we	still	have	to	complete	several	additional	important	system integration	projects.	The	integration	of	these	systems	in	a	number	of	prior	airline	mergers	has	taken	longer,	been	more	disruptive	and	cost	more	than	originally	forecast. The	implementation	process	to	integrate	these	various	systems	will	involve	a	number	of	risks	that	could	adversely	impact	our	business,	results	of	operations	and financial	 condition.	 New	 systems	 will	 replace	 multiple	 legacy	 systems	 and	 the	 related	 implementation	 will	 be	 a	 complex	 and	 time-consuming	 project	 involving substantial	 expenditures	 for	 implementation	 consultants,	 system	 hardware,	 software	 and	 implementation	 activities,	 as	 well	 as	 the	 transformation	 of	 business	 and financial	processes.

As	with	any	large	project,	there	will	be	many	factors	that	may	materially	affect	the	schedule,	cost	and	execution	of	the	integration	of	our	computer,	communications and	other	technology	systems.	These	factors	include,	among	others:	problems	during	the	design,	implementation	and	testing	phases;	systems	delays	and/or	malfunctions; the	risk	that	suppliers	and	contractors	will	not	perform	as	required	under	their	contracts;	the	diversion	of	management	attention	from	daily	operations	to	the	project; reworks	due	to	unanticipated	changes	in	business	processes;	challenges	in	simultaneously	activating	new	systems	throughout	our	global	network;	difficulty	in	training employees	in	the	operations	of	new	systems;	the	risk	of	security	breach	or	disruption;	and	other	unexpected	events	beyond	our	control.	We	cannot	assure	you	that	our security	measures,	change	control	procedures	or	disaster	recovery	plans	will	be	adequate	to	prevent	disruptions	or	delays.	Disruptions	in	or	changes	to	these	systems could	result	in	a	disruption	to	our	business	and	the	loss	of	important	data.	Any	of	the	foregoing	could	result	in	a	material	adverse	effect	on	our	business,	results	of operations	and	financial	condition.

# We	are	at	risk	of	losses	and	adverse	publicity	stemming	from	any	accident	involving	any	of	our	aircraft	or	the	aircraft	of	our	regional	or	codeshare	operators.

If	one	of	our	aircraft,	an	aircraft	that	is	operated	under	our	brand	by	one	of	our	regional	operators,	or	an	aircraft	that	is	operated	by	an	airline	with	which	we	have	a marketing	alliance	or	codeshare	relationship	were	to	be	involved	in	an	accident,	incident	or	catastrophe,	we	could	be	exposed	to	significant	tort	liability.	The	insurance we	carry	to	cover	damages	arising	from	any	future	accidents	may	be	inadequate.	In	the	event	that	our	insurance	is	not	adequate,	we	may	be	forced	to	bear	substantial losses	from	an	accident.	In	addition,	any	accident,	incident	or	catastrophe	involving	an	aircraft	operated	by	us,	operated	under	our	brand	by	one	of	our	regional	operators or	operated	by	one	of	our	codeshare	partners	could	create	a	public	perception	that	our	aircraft	or	those	of	our	regional	operators	or	codeshare	partners	are	not	safe	or reliable,	which	could	harm	our	reputation,	result	in	air	travelers	being	reluctant	to	fly	on	our	aircraft	or	those	of	our	regional	operators	or	codeshare	partners,	and adversely	impact	our	business,	results	of	operations	and	financial	condition.

# Delays	in	scheduled	aircraft	deliveries	or	other	loss	of	anticipated	fleet	capacity,	and	failure	of	new	aircraft	to	perform	as	expected,	may	adversely	impact	our business,	results	of	operations	and	financial	condition.

The	success	of	our	business	depends	on,	among	other	things,	effectively	managing	the	number	and	types	of	aircraft	we	operate.	In	many	cases,	the	aircraft	we	intend to	operate	are	not	yet	in	our	fleet,	but	we	have	contractual	commitments	to	purchase	or	lease	them.	If	for	any	reason	we	were	unable	to	accept	or	secure	deliveries	of	new aircraft	on	contractually	scheduled	delivery	dates,	this	could	have	a	negative	impact	on	our	business,	results	of	operations	and	financial	condition.	Our	failure	to integrate	newly	purchased	aircraft	into	our	fleet	as	planned	might	require	us	to	seek	extensions	of	the	terms	for	some	leased	aircraft	or	otherwise	delay	the	exit	of	certain aircraft	from	our	fleet.	Such	unanticipated	extensions	or	delays	may	require	us	to	operate	existing	aircraft	beyond	the	point	at	which	it	is	economically	optimal	to	retire them,	resulting	in	increased	maintenance	costs.	If	new	aircraft	orders	are	not	filled	on	a	timely	basis,	we	could	face	higher	operating	costs	than	planned.	In	addition,	if	the aircraft	we	receive	do	not	meet	expected	performance	or	quality	standards,	including	with	respect	to	fuel	efficiency	and	reliability,	our	business,	results	of	operations	and financial	condition	could	be	adversely	impacted.

# We	depend	on	a	limited	number	of	suppliers	for	aircraft,	aircraft	engines	and	parts.

We	depend	on	a	limited	number	of	suppliers	for	aircraft,	aircraft	engines	and	many	aircraft	and	engine	parts.	As	a	result,	we	are	vulnerable	to	any	problems associated	with	the	supply	of	those	aircraft,	parts	and	engines,	including	design	defects,	mechanical	problems,	contractual	performance	by	the	suppliers,	or	adverse perception	by	the	public	that	would	result	in	customer	avoidance	or	in	actions	by	the	FAA	resulting	in	an	inability	to	operate	our	aircraft.

Our	business	has	been	and	will	continue	to	be	affected	by	many	changing	economic	and	other	conditions	beyond	our	control,	including	global	events	that	affect travel	behavior,	and	our	results	of	operations	could	be	volatile	and	fluctuate	due	to	seasonality.

Our	business,	results	of	operations	and	financial	condition	has	been	and	will	continue	to	be	affected	by	many	changing	economic	and	other	conditions	beyond	our control,	including,	among	others:

•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,	changes	in	airline	alliance	affiliations,	and	other	factors;

•actual	or	potential	disruptions	to	the	ATC	systems;

•increases	in	costs	of	safety,	security,	and	environmental	measures;

•outbreaks	of	diseases	that	affect	travel	behavior;	and

•	 weather	and	natural	disasters.

In	particular,	an	outbreak	of	a	contagious	disease	such	as	Ebola	virus,	Middle	East	Respiratory	Syndrome,	Severe	Acute	Respiratory	Syndrome,	H1N1	influenza virus,	avian	flu,	Zika	virus,	or	any	other	similar	illness,	if	it	were	to	persist	for	an	extended	period,	could	materially	affect	the	airline	industry	and	us	by	reducing revenues	and	adversely	impacting	our	operations	and	passengers'	travel	behavior.	As	a	result	of	these	or	other	conditions	beyond	our	control,	our	results	of	operations could	be	volatile	and	subject	to	rapid	and	unexpected	change.	In	addition,	due	to	generally	weaker	demand	for	air	travel	during	the	winter,	our	revenues	in	the	first	and fourth	quarters	of	the	year	could	be	weaker	than	revenues	in	the	second	and	third	quarters	of	the	year.

# A	higher	than	normal	number	of	pilot	retirements	and	a	potential	shortage	of	pilots	could	adversely	affect	us.

We	currently	have	a	higher	than	normal	number	of	pilots	eligible	for	retirement.	Among	other	things,	the	extension	of	pilot	careers	facilitated	by	the	FAA's	2007 modification	of	the	mandatory	retirement	age	from	age	60	to	age	65	has	now	been	fully	implemented,	resulting	in	large	numbers	of	pilots	in	the	industry	approaching	the revised	mandatory	retirement	age.	If	pilot	retirements	were	to	exceed	normal	levels	in	the	future,	it	may	adversely	affect	us	and	our	regional	partners.	On	January	4, 2014,	more	stringent	pilot	flight	and	duty	time	requirements	under	Part	117	of	the	Federal	Aviation	Regulations	took	effect.	In	addition,	in	July	2013,	the	FAA	issued regulations	that	increase	the	flight	experience	required	for	pilots	working	for	airlines	certificated	under	Part	121	of	the	Federal	Aviation	Regulations.	These	and	other factors	have	in	the	past	and	could	in	the	future	contribute	to	a	shortage	of	qualified	pilots,	particularly	for	our	regional	partners,	which	now	face	increased	competition from	large,	mainline	carriers	to	hire	pilots	to	replace	retiring	pilots.	If	we	or	our	regional	partners	are	unable	to	hire	adequate	numbers	of	pilots,	we	may	experience disruptions,	increased	costs	of	operations	and	other	adverse	effects.

# Increases	in	insurance	costs	or	reductions	in	insurance	coverage	may	adversely	impact	our	operations	and	financial	results.

The	terrorist	attacks	of	September	11,	2001	led	to	a	significant	increase	in	insurance	premiums	and	a	decrease	in	the	insurance	coverage	available	to	commercial	air carriers.	Accordingly,	our	insurance	costs	increased	significantly,	and	our	ability	to	continue	to	obtain	insurance	even	at	current	prices	remains	uncertain.	If	we	are unable	to	maintain	adequate	insurance	coverage,	our	business	could	be	materially	and	adversely	affected.	Additionally,	severe	disruptions	in	the	domestic	and	global financial	markets	could	adversely	impact	the	claims	paying	ability	of	some	insurers.	Future	downgrades	in	the	ratings	of	enough	insurers	could	adversely	impact	both	the availability	of	appropriate	insurance	coverage	and	its	cost.	Because	of	competitive	pressures	in	our	industry,	our	ability	to	pass	additional	insurance	costs	to	passengers is	limited.	As	a	result,	further	increases	in	insurance	costs	or	reductions	in	available	insurance	coverage	could	have	an	adverse	impact	on	our	financial	results.

# We	may	be	a	party	to	litigation	in	the	normal	course	of	business	or	otherwise,	which	could	affect	our	financial	position	and	liquidity.

From	time	to	time,	we	are	a	party	to	or	otherwise	involved	in	legal	proceedings,	claims	and	government	inspections	or	investigations	and	other	legal	matters,	both inside	and	outside	the	United	States,	arising	in	the	ordinary	course	of	our	business	or	otherwise.	We	are	currently	involved	in	various	legal	proceedings	and	claims	that have	not	yet	been	fully	resolved	and	additional	claims	may	arise	in	the	future.	Legal	proceedings	can	be	complex	and	take	many	months,	or	even	years,	to	reach resolution,	with	the	final	outcome	depending	on	a	number	of	variables,	some	of	which	are	not	within	our	control.	Litigation	is	subject	to	significant	uncertainty	and	may be	expensive,	time-consuming,	and	disruptive	to	our	operations.	Although	we	will	vigorously	defend

ourselves	in	such	legal	proceedings,	their	ultimate	resolution	and	potential	financial	and	other	impacts	on	us	are	uncertain.	For	these	and	other	reasons,	we	may	choose	to settle	legal	proceedings	and	claims,	regardless	of	their	actual	merit.	If	a	legal	proceeding	is	resolved	against	us,	it	could	result	in	significant	compensatory	damages,	and in	certain	circumstances	punitive	or	trebled	damages,	disgorgement	of	revenue	or	profits,	remedial	corporate	measures	or	injunctive	relief	imposed	on	us.	If	our	existing insurance	does	not	cover	the	amount	or	types	of	damages	awarded,	or	if	other	resolution	or	actions	taken	as	a	result	of	the	legal	proceeding	were	to	restrain	our	ability	to operate	or	market	our	services,	our	consolidated	financial	position,	results	of	operations	or	cash	flows	could	be	materially	adversely	affected.	In	addition,	 legal proceedings,	and	any	adverse	resolution	thereof,	can	result	in	adverse	publicity	and	damage	to	our	reputation,	which	could	adversely	impact	our	business.	Additional information	regarding	certain	legal	matters	in	which	we	are	involved	can	be	found	in	Part	I,	Item	3.	Legal	Proceedings.

# Our	ability	to	utilize	our	NOL	Carryforwards	may	be	limited.

Under	the	Internal	Revenue	Code	of	1986,	as	amended	(the	Code),	a	corporation	is	generally	allowed	a	deduction	for	net	operating	losses	(NOLs)	carried	over	from prior	taxable	years	(NOL	Carryforwards).	As	of	December	31,	2015,	we	had	available	NOL	Carryforwards	of	approximately	$8.0	billion	for	regular	federal	income	tax purposes	which	will	expire,	if	unused,	beginning	in	2023,	and	approximately	$4.0	billion	for	state	income	tax	purposes	which	will	expire,	if	unused,	between	2016	and 2034.	As	of	December	31,	2015,	the	amount	of	NOL	Carryforwards	for	state	income	tax	purposes	that	will	expire,	if	unused,	in	2016	is	$136	million.	Our	NOL Carryforwards	are	subject	to	adjustment	on	audit	by	the	Internal	Revenue	Service	and	the	respective	state	taxing	authorities.

A	corporation's	ability	to	deduct	its	federal	NOL	Carryforwards	and	to	utilize	certain	other	available	tax	attributes	can	be	substantially	constrained	under	the	general annual	limitation	rules	of	Section	382	of	the	Code	(Section	382)	if	it	undergoes	an	"ownership	change"	as	defined	in	Section	382	(generally	where	cumulative	stock ownership	changes	among	material	stockholders	exceed	50	percent	during	a	rolling	three-year	period).	We	experienced	an	ownership	change	in	connection	with	our emergence	from	the	Chapter	11	Cases	and	US	Airways	Group	experienced	an	ownership	change	in	connection	with	the	Merger.	The	general	limitation	rules	for	a	debtor in	a	bankruptcy	case	are	liberalized	where	the	ownership	change	occurs	upon	emergence	from	bankruptcy.	We	elected	to	be	covered	by	certain	special	rules	for	federal income	 tax	 purposes	 that	 permitted	 approximately	 $9.0	 billion	 (with	 $6.6	 billion	 of	 unlimited	 NOL	 still	 remaining	 at	 December	 31,	 2015)	 of	 our	 federal	 NOL Carryforwards	to	be	utilized	without	regard	to	the	annual	limitation	generally	imposed	by	Section	382.	If	the	special	rules	are	determined	not	to	apply,	our	ability	to utilize	such	federal	NOL	Carryforwards	may	be	subject	to	limitation.	Substantially	all	of	our	remaining	federal	NOL	Carryforwards	(attributable	to	US	Airways	Group and	its	subsidiaries)	are	subject	to	limitation	under	Section	382	as	a	result	of	the	Merger;	however,	our	ability	to	utilize	such	NOL	Carryforwards	is	not	anticipated	to	be effectively	constrained	as	a	result	of	such	limitation.	Similar	limitations	may	apply	for	state	income	tax	purposes.

Notwithstanding	the	foregoing,	an	ownership	change	subsequent	to	our	emergence	from	the	Chapter	11	Cases	may	severely	limit	or	effectively	eliminate	our	ability to	utilize	our	NOL	Carryforwards	and	other	tax	attributes.	To	reduce	the	risk	of	a	potential	adverse	effect	on	our	ability	to	utilize	our	NOL	Carryforwards,	our Certificate	of	Incorporation	contains	transfer	restrictions	applicable	to	certain	substantial	stockholders.	Although	the	purpose	of	these	transfer	restrictions	is	to	prevent	an ownership	change	from	occurring,	no	assurance	can	be	given	that	such	an	ownership	change	will	not	occur,	in	which	case	our	ability	to	utilize	our	NOL	Carryforwards and	other	tax	attributes	could	be	severely	limited	or	effectively	eliminated.

Our	ability	to	use	our	NOL	Carryforwards	also	will	depend	on	the	amount	of	taxable	income	generated	in	future	periods.	The	NOL	Carryforwards	may	expire	before we	can	generate	sufficient	taxable	income	to	use	them.

# The	application	of	the	acquisition	method	of	accounting	resulted	in	AAG	and	American	recording	a	significant	amount	of	goodwill,	which	is	tested	for impairment	at	least	annually.	In	addition,	AAG	and	American	may	never	realize	the	full	value	of	their	respective	intangible	assets	or	long-lived	assets,	causing them	to	record	material	impairment	charges.

In	accordance	with	applicable	acquisition	accounting	rules,	AAG	and	American	recorded	goodwill	on	their	respective	consolidated	balance	sheets	to	the	extent	the acquisition	purchase	price	of	US	Airways	Group	and	US	Airways,	respectively,	exceeded	the	net	fair	value	of	the	tangible	and	intangible	assets	and	liabilities	as	of	the applicable	acquisition	date.	Goodwill	is	not	amortized,	but	is	tested	for	impairment	at	least	annually.	Also,	in	accordance	with	applicable	accounting	standards,	AAG	and American	will	be	required	to	test	their	respective	indefinite-lived	intangible	assets	for	impairment	on	an	annual	basis,	or	more	frequently	if	conditions	indicate	that	an impairment	may	have	occurred.	In	addition,	AAG	and	American	are	required	to	test	certain	of	their	other	long-lived	assets	for	impairment	if	conditions	indicate	that	an impairment	may	have	occurred.

Future	impairment	of	goodwill	or	other	long-lived	assets	could	be	recorded	in	results	of	operations	as	a	result	of	changes	in	assumptions,	estimates,	or	circumstances, some	of	which	are	beyond	our	control.	Factors	which	could	result	in	an	impairment	could	include,	but	are	not	limited	to:	(i)	reduced	passenger	demand	as	a	result	of domestic	or	global	economic	conditions;	(ii)	higher	prices	for	jet	fuel;	(iii)	lower	fares	or	passenger	yields	as	a	result	of	increased	competition	or	lower	demand;	(iv)	a significant	increase	in	future	capital	expenditure	commitments;	and	(v)	significant	disruptions	to	our	operations	as	a	result	of	both	internal	and	external	events	such	as terrorist	activities,	actual	or	threatened	war,	labor	actions	by	employees,	or	further	industry	regulation.	There	can	be	no	assurance	that	a	material	impairment	charge	of goodwill	or	tangible	or	intangible	assets	will	be	avoided.	The	value	of	our	aircraft	could	be	impacted	in	future	periods	by	changes	in	supply	and	demand	for	these aircraft.	Such	changes	in	supply	and	demand	for	certain	aircraft	types	could	result	from	grounding	of	aircraft	by	us	or	other	airlines.	An	impairment	charge	could	have	a material	adverse	effect	on	our	business,	results	of	operations	and	financial	condition.

# Risks	Relating	to	AAG's	Common	Stock

# The	price	of	our	common	stock	has	recently	been	and	may	in	the	future	be	volatile.

The	market	price	of	AAG	Common	Stock	may	fluctuate	substantially	due	to	a	variety	of	factors,	many	of	which	are	beyond	our	control,	including:

•	 AAG's	operating	and	financial	results	failing	to	meet	the	expectations	of	securities	analysts	or	investors;

•changes	in	financial	estimates	or	recommendations	by	securities	analysts;

•	 material	announcements	by	us	or	our	competitors;

•	 movements	in	fuel	prices;

•expectations	regarding	our	capital	deployment	program,	including	our	share	repurchase	program	and	any	future	dividend	payments	that	may	be	declared	by our	Board	of	Directors;

•new	regulatory	pronouncements	and	changes	in	regulatory	guidelines;

•general	and	industry-specific	economic	conditions;

•the	success	or	failure	of	AAG's	integration	efforts;

•changes	in	our	key	personnel;

•distributions	of	shares	of	AAG	Common	Stock	pursuant	to	the	Plan,	including	distributions	from	the	Disputed	Claims	Reserve	established	under	the	plan	of reorganization	upon	the	resolution	of	the	underlying	claims;

•public	sales	of	a	substantial	number	of	shares	of	AAG	Common	Stock	or	issuances	of	AAG	Common	Stock	upon	the	exercise	or	conversion	of	convertible securities,	options,	warrants,	RSUs,	SARs,	or	similar	rights;

•increases	or	decreases	in	reported	holdings	by	insiders	or	other	significant	stockholders;

•fluctuations	in	trading	volume;	and

•changes	in	market	values	of	airline	companies	as	well	as	general	market	conditions.

# We	cannot	guarantee	that	we	will	repurchase	our	common	stock	pursuant	to	our	share	repurchase	program	or	continue	to	pay	dividends	on	our	common	stock or	that	our	capital	deployment	program	will	enhance	long-term	stockholder	value.	Our	capital	deployment	program	could	increase	the	volatility	of	the	price	of our	common	stock	and	diminish	our	cash	reserves.

Since	July	2014,	as	part	of	our	capital	deployment	program,	our	Board	of	Directors	has	approved	several	share	repurchase	programs	aggregating	$7.0	billion	of authority	of	which,	as	of	December	31,	2015,	$2.4	billion	remained	unused	under	repurchase	programs	which	are	to	be	completed	no	later	than	December	31,	2016. Share	 repurchases	 under	 the	 repurchase	 programs	 may	 be	 made	 through	 a	 variety	 of	 methods,	 which	 may	 include	 open	 market	 purchases,	 privately	 negotiated transactions,	block	trades	or	accelerated	share	repurchase	transactions.	These	share	repurchase	programs	do	not	obligate	us	to	acquire	any	specific	number	of	shares	or	to repurchase	any	specific	number	of	shares	for	any	fixed	period,	and	may	be	suspended	at	any	time	at	our	discretion.	The	timing	and	amount	of	repurchases,	if	any,	will	be subject	to	market	and	economic	conditions,	applicable	legal	requirements	and	other	relevant	factors.	The	repurchase	program	may	be	limited,	suspended	or	discontinued at	any	time	without	prior	notice.

Although	our	Board	of	Directors	commenced	declaring	quarterly	cash	dividends	in	July	2014	as	part	of	our	capital	deployment	program,	any	future	dividends	that may	be	declared	and	paid	from	time	to	time	under	our	capital	deployment	program	will	be	subject	to	market	and	economic	conditions,	applicable	legal	requirements	and other	relevant	factors.	Our	capital	deployment	program	does	not	obligate	us	to	continue	a	dividend	for	any	fixed	period,	and	payment	of	dividends	may	be	suspended	at any	time	at	our	discretion.	We	will	continue	to	retain	future	earnings	to	develop	our	business,	as	opportunities	arise,	and	evaluate	on	a	quarterly	basis	the	amount	and timing	of	future	dividends	based	on	our	operating	results,	financial	condition,	capital	requirements	and	general	business	conditions.	The	amount	and	timing	of	any	future dividends	may	vary,	and	the	payment	of	any	dividend	does	not	assure	that	we	will	be	able	to	pay	dividends	in	the	future.

In	addition,	repurchases	of	AAG	Common	Stock	pursuant	to	our	share	repurchase	program	and	any	future	dividends	could	affect	our	stock	price	and	increase	its volatility.	The	existence	of	a	share	repurchase	program	and	any	future	dividends	could	cause	our	stock	price	to	be	higher	than	it	would	otherwise	be	and	could potentially	reduce	the	market	liquidity	for	our	stock.	Additionally,	our	share	repurchase	program	and	any	future	dividends	will	diminish	our	cash	reserves,	which	may impact	our	ability	to	finance	future	growth	and	to	pursue	possible	future	strategic	opportunities	and	acquisitions.	Further,	our	share	repurchase	program	may	fluctuate such	that	our	cash	flow	may	be	insufficient	to	fully	cover	our	share	repurchases.	Although	our	share	repurchase	program	is	intended	to	enhance	long-term	stockholder value,	there	is	no	assurance	that	it	will	do	so	because	the	market	price	of	our	common	stock	may	decline	below	the	levels	at	which	we	repurchased	shares	of	stock	and short-term	stock	price	fluctuations	could	reduce	the	program's	effectiveness.

# Certain	provisions	of	AAG's	Certificate	of	Incorporation	and	Bylaws	make	it	difficult	for	stockholders	to	change	the	composition	of	our	Board	of	Directors	and may	discourage	takeover	attempts	that	some	of	our	stockholders	might	consider	beneficial.

Certain	provisions	of	our	Restated	Certificate	of	Incorporation	(Certificate	of	Incorporation)	and	Amended	and	Restated	Bylaws	(Bylaws)	may	have	the	effect	of delaying	or	preventing	changes	in	control	if	our	Board	of	Directors	determines	that	such	changes	in	control	are	not	in	our	best	interest	and	the	best	interest	of	our stockholders.	These	provisions	include,	among	other	things,	the	following:

•advance	notice	procedures	for	stockholder	proposals	to	be	considered	at	stockholders'	meetings;

•the	ability	of	our	Board	of	Directors	to	fill	vacancies	on	the	board;

•a	prohibition	against	stockholders	taking	action	by	written	consent;

•a	prohibition	against	stockholders	calling	special	meetings	of	stockholders;

•a	requirement	that	holders	of	at	least	80%	of	the	voting	power	of	the	shares	entitled	to	vote	in	the	election	of	directors	approve	any	amendment	of	our	Bylaws submitted	to	stockholders	for	approval;	and

•super-majority	voting	requirements	to	modify	or	amend	specified	provisions	of	our	Certificate	of	Incorporation.

These	provisions	are	not	intended	to	prevent	a	takeover,	but	are	intended	to	protect	and	maximize	the	value	of	the	interests	of	our	stockholders.	While	these provisions	have	the	effect	of	encouraging	persons	seeking	to	acquire	control	of	our	company	to	negotiate	with	our	Board	of	Directors,	they	could	enable	our	Board	of Directors	to	prevent	a	transaction	that	some,	or	a	majority,	of	our	stockholders	might	believe	to	be	in	their	best	interests	and,	in	that	case,	may	prevent	or	discourage attempts	to	remove	and	replace	incumbent	directors.	In	addition,	we	are	subject	to	the	provisions	of	Section	203	of	the	Delaware	General	Corporation	Law,	which prohibits	business	combinations	with	interested	stockholders.	Interested	stockholders	do	not	include	stockholders	whose	acquisition	of	our	securities	is	approved	by	the Board	of	Directors	prior	to	the	investment	under	Section	203.

# AAG's	Certificate	of	Incorporation	and	Bylaws	include	provisions	that	limit	voting	and	acquisition	and	disposition	of	our	equity	interests.

Our	Certificate	of	Incorporation	and	Bylaws	include	certain	provisions	that	limit	voting	and	ownership	and	disposition	of	our	equity	interests,	including	AAG Common	Stock,	AAG	Series	A	Preferred	Stock	and	convertible	notes.	These	restrictions	may	adversely	affect	the	ability	of	certain	holders	of	AAG	Common	Stock	and our	other	equity	interests	to	vote	such	interests	and	adversely	affect	the	ability	of	persons	to	acquire	shares	of	AAG	Common	Stock	and	our	other	equity	interests.

# In	order	to	protect	AAG's	NOL	Carryforwards	and	certain	other	tax	attributes,	AAG's	Certificate	of	Incorporation	includes	certain	limitations	on	acquisitions and	dispositions	of	AAG's	Common	Stock,	which	may	limit	the	liquidity	of	our	common	stock.

To	reduce	the	risk	of	a	potential	adverse	effect	on	our	ability	to	use	our	NOL	Carryforwards	and	certain	other	tax	attributes	for	federal	income	tax	purposes,	our Certificate	of	Incorporation	contains	certain	restrictions	on	the	acquisition	and	disposition	of	AAG	Common	Stock	by	substantial	stockholders.	These	restrictions	may adversely	affect	the	ability	of	certain	holders	of	AAG	Common	Stock	to	dispose	of	or	acquire	shares	of	AAG	Common	Stock.	Although	the	purpose	of	these	transfer restrictions	is	to	prevent	an	"ownership	change"	(as	defined	in	Section	382)	from	occurring,	no	assurance	can	be	given	that	an	ownership	change	will	not	occur	even with	these	restrictions	in	place.

# The	historical	consolidated	financial	information	contained	in	this	report	is	not	directly	comparable	to	our	financial	information	for	prior	or	future	periods.

A	number	of	factors	render	our	historical	consolidated	financial information	not	directly	comparable to	our	financial information	for	prior	or	future	periods, including:

•because	the	Merger	was	completed	on	December	9,	2013,	AAG's	2013	consolidated	results	of	operations	include	the	results	of	US	Airways	Group	and	its subsidiaries	for	only	23	days	of	2013;

•the	Merger	was	accounted	for	using	the	acquisition	method	of	accounting	with	AAG	as	the	acquiring	entity,	resulting	in	an	adjustment	to	the	carrying	values	of the	assets	and	liabilities	of	US	Airways	Group	compared	to	its	historical	carrying	values;	and

•during	the	course	of	our	Chapter	11	Cases	and	in	connection	with	our	emergence	from	Chapter	11	and	the	effectiveness	of	the	Plan,	we	recorded	material expenses,	charges,	costs	and	other	accounting	entries	related	to	our	restructuring	process,	many	of	which	generally	had	not	been	incurred	in	the	past	and	are not	expected	to	be	incurred	in	the	future.

Due	to	these	and	other	factors	largely	related	to	the	Merger	and	the	Plan,	investors	are	cautioned	as	to	the	limitations	of	our	historical	financial	statements	and	urged to	review	carefully	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.

# ITEM	1B.			UNRESOLVED	STAFF	COMMENTS

The	Company	had	no	unresolved	Securities	and	Exchange	Commission	staff	comments	at	December	31,	2015.

# ITEM	2.		PROPERTIES

# Flight	Equipment	and	Fleet	Renewal

As	of	December	31,	2015,	American	operated	a	mainline	fleet	of	946	aircraft.	In	2015,	we	continued	our	extensive	fleet	renewal	program,	which	has	provided	us with	the	youngest	and	most	modern	fleet	of	the	U.S.	network	airlines.	During	2015,	American	took	delivery	of	75	new	mainline	aircraft	and	retired	112	aircraft.	We	are supported	by	our	wholly-owned	regional	airline	subsidiaries	and	third-party	regional	carriers	operating	as	American	Eagle	under	capacity	purchase	agreements.	As	of December	31,	2015,	American	Eagle	operated	587	regional	aircraft.	During	2015,	American	increased	its	regional	fleet	by	52	regional	aircraft.	We	removed	and	placed in	temporary	storage	20	Embraer	ERJ	140	aircraft	and	retired	11	other	regional	aircraft.

•	 We	continue	retiring	MD-80	aircraft	from	service,	which	are	being	replaced	by	next	generation,	more	fuel	efficient	Boeing	737-	800	and	Airbus	320	family aircraft.

•In	2015,	we	introduced	the	Boeing	787	Dreamliner	to	our	fleet.	As	of	December	31,	2015,	we	had	received	13	of	these	aircraft	out	of	our	order	of	42	aircraft.

The	Boeing	787	aircraft	is	also	more	fuel	efficient	than	similarly	sized	prior	generation	aircraft.

•	 Beginning	in	2012,	American	introduced	Boeing	777-300ERs	to	its	fleet.	At	the	end	of	the	year,	we	had	received	18	of	these	aircraft	and	have	2	aircraft remaining	to	be	delivered	in	2016.

•	 We	expect	to	begin	to	receive	the	Boeing	737	MAX	and	Airbus	A320neo	family	aircraft	in	2017	and	2019,	respectively,	each	of	which	will	be	powered	by next	generation	engine	technology	and	will	provide	significant	fuel	efficiency	gains.

•	 We	are	the	North	America	launch	customer	for	Airbus	A350	aircraft	and	expect	to	receive	22	of	these	aircraft	beginning	in	2017.

# Mainline

As	of	December	31,	2015,	American's	mainline	fleet	consisted	of	the	following	aircraft:

|  | Average	Seating<br>Capacity | Owned	(1) | Capital<br>Leased | Operating<br>Leased | Total | Average<br>Age<br>(Years) | Non-<br>Operating<br>Aircraft	(2) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Airbus\tA319 | 125 | 19 | — | 106 | \t125 | 12 | — |
| Airbus\tA320 | 150 | 10 | — | 45 | 55 | 15 | 4 |
| Airbus\tA321 | 177 | 128 | — | 46 | \t174 | 5 | — |
| Airbus\tA330-200 | 258 | 15 | — | — | 15 | 4 | — |
| Airbus\tA330-300 | 291 | 4 | — | 5 | 9 | 15 | — |
| Boeing\t737-800 | 159 | 103 | 19 | 142 | \t264 | 7 | — |
| Boeing\t757-200 | 181 | 46 | — | 18 | 64 | 19 | 43 |
| Boeing\t767-300ER | 213 | 39 | — | 6 | 45 | 21 | 10 |
| Boeing\t777-200ER | 249 | 44 | 3 | — | 47 | 15 | — |
| Boeing\t777-300ER | 310 | 16 | — | 2 | 18 | 2 | — |
| Boeing\t787-800 | 226 | 13 | — | — | 13 | 1 | — |
| Embraer\t190 | 99 | 20 | — | — | 20 | 8 | — |
| McDonnell\tDouglas\tMD-80 | 140 | 59 | 11 | 27 | 97 | 23 | 53 |
| Total |  | 516 | 33 | 397 | \t946 | 11 | 110 |

(1) As	of	December	31,	2015,	370	owned	aircraft	are	pledged	as	collateral	for	various	secured	financing	agreements.

(2) As	of	December	31,	2015,	the	majority	of	all	non-operating	aircraft	are	owned.

# Regional

As	of	December	31,	2015,	the	fleet	of	our	wholly-owned	regional	subsidiaries	consisted	of	the	following	aircraft:

|  | Average	Seating<br>Capacity | Owned	(1) | Operating<br>Leased | Total | Average<br>Age<br>(Years) | In<br>Temporary<br>Storage		(2) | Non-<br>Operating<br>Aircraft	(3) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Bombardier\tCRJ\t200 | 50 | 12 | 23 | 35 | 12 | — | — |
| Bombardier\tCRJ\t700 | 65 | 54 | 7 | 61 | 10 | — | — |
| Bombardier\tCRJ\t900 | 76 | 36 | — | 36 | 1 | — | — |
| De\tHavilland\tDash\t8-100 | 37 | 26 | — | 26 | 26 | — | 1 |
| De\tHavilland\tDash\t8-300 | 50 | — | 11 | 11 | 24 | — | — |
| Embraer\tERJ\t175 | 76 | 24 | — | 24 | 1 | — | — |
| Embraer\tERJ\t140 | 44 | 14 | — | 14 | 13 | 45 | — |
| Embraer\tERJ\t145 | 50 | 118 | — | \t118 | 14 | — | — |
| Saab\t340B | 34 | — | — | \t — | — | — | 29 |
| Total |  | 284 | 41 | \t325 | 12 | 45 | 30 |

(2) Aircraft	in	temporary	storage	are	excluded	in	the	count	of	operating	aircraft.

(3) As	of	December	31,	2015,	all	non-operating	aircraft	are	owned.

# Aircraft	Purchase	Commitments	and	Lease	Expirations

Our	committed	mainline	and	regional	aircraft	orders	and	contractual	lease	expirations,	for	the	capital	and	operating	leased	flight	equipment	included	in	the	tables above,	as	of	December	31,	2015,	are	presented	in	the	table	below.

|  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021	and<br>Thereafter |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Firm\torders\t(1) | \t 97 | \t 72 | \t 35 | \t 51 | \t 47 | 90 |
| Contractual\tmainline\tlease\texpirations | \t 12 | \t 33 | \t 23 | \t 31 | \t 19 | 312 |
| Contractual\twholly-owned\tregional\tsubsidiaries\tlease\texpirations | \t — | 3 | 3 | \t 10 | \t 15 | 10 |

(1) Includes	orders	for	regional	jets	as	follows:	42	in	2016	and	12	in	2017.	These	aircraft	may	be	operated	by	wholly-owned	regional	subsidiaries	or	leased	to	third- party	regional	carriers,	which	would	operate	the	aircraft	under	capacity	purchase	arrangements.

We	have	agreements	for	49	spare	engines	to	be	delivered	in	2016	and	beyond.

See	Note	15	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	13	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for additional	information	on	aircraft	acquisition	commitments,	payments	and	options.

# Third-Party	Regional	Carriers

As	of	December	31,	2015,	aircraft	contractually	obligated	to	American	with	third-party	regional	carriers	included:

| Carrier | Number	of	Aircraft |  |
| :--- | :--- | :--- |
| Air\tWisconsin\tAirlines\tCorporation | 70 | \tRegional\tjets |
| ExpressJet\tAirlines,\tInc. | 11 | \tRegional\tjets |
| Mesa\tAirlines,\tInc. | 64 | \tRegional\tjets |
| Republic\tAirline\tInc. | 105 | \tRegional\tjets |
| SkyWest\tAirlines,\tInc. | 12 | \tRegional\tjets |

See	Note	15	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	13	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for additional	information	on	our	capacity	purchase	agreements	with	third-party	regional	carriers.

# Other	Information

For	information	concerning	the	estimated	useful	lives	and	residual	values	for	owned	aircraft,	lease	terms	for	leased	aircraft	and	amortization	relating	to	aircraft	under capital	leases,	see	Note	5	and	Note	15	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	5	and	Note	13	to	American's	Consolidated	Financial Statements	in	Part	II,	Item	8B.

# Ground	Properties

At	each	airport	where	we	conduct	flight	operations,	we	lease	passenger,	operations	and	baggage	handling	space,	generally	from	the	airport	operator,	but	in	some cases	on	a	subleased	basis	from	other	airlines.	Our	main	operational	facilities	are	associated	with	our	hubs.	At	those	locations	and	in	other	cities	we	serve,	we	maintain administrative	offices,	terminal,	catering,	cargo,	training,	maintenance	and	other	facilities,	in	each	case	as	necessary	to	support	our	operations	in	the	particular	city.

We	own	our	corporate	headquarters	buildings	in	Fort	Worth,	Texas.	We	lease,	or	have	built	as	leasehold	improvements	on	leased	property,	most	of	our	airport	and terminal	facilities	in	the	U.S.	and	abroad,	our	training	facilities	in	Fort	Worth,	Texas,	our	principal	overhaul	and	maintenance	base	in	Tulsa,	Oklahoma,	our	regional reservation	offices,	and	local	ticket	and	administration	offices	throughout	the	U.S.	and	abroad.	In	September	2015,	we	completed	construction	on	a	new	state-of-the-art Integrated	Operations	Control	Center	in	Fort	Worth,	Texas,	which	serves	as	the	new	operations	control	facility	for	the	combined	airline.	In	October	2015,	we	announced plans	to	build	a	new	headquarters	campus	in	Fort	Worth,	Texas,	with	construction	presently	expected	to	be	completed	in	late	2018.

For	information	concerning	the	estimated	lives	and	residual	values	for	owned	ground	properties,	lease	terms	and	amortization	relating	to	ground	properties	under capital	leases,	and	acquisitions	of	ground	properties,	see	Note	5	and	Note	15	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	5	and	Note	13	to American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B.

# ITEM	3.		LEGAL	PROCEEDINGS

Chapter	11	Cases.	On	the	Petition	Date,	November	29,	2011,	the	Debtors	filed	the	Chapter	11	Cases.	On	October	21,	2013,	the	Bankruptcy	Court	entered	the Confirmation	Order	confirming	the	Plan.	On	the	Effective	Date,	December	9,	2013,	the	Debtors	consummated	their	reorganization	pursuant	to	the	Plan	and	completed the	Merger.	From	the	Petition	Date	through	the	Effective	Date,	pursuant	to	automatic	stay	provisions	under	the	Bankruptcy	Code	and	orders	granted	by	the	Bankruptcy Court,	actions	to	enforce	or	otherwise	effect	repayment	of	liabilities	preceding	the	Petition	Date	as	well	as	all	pending	litigation	against	the	Debtors	generally	were stayed.	Following	the	Effective	Date,	actions	to	enforce	or	otherwise	effect	repayment	of	liabilities	preceding	the	Petition	Date,	generally	have	been	permanently enjoined.	Any	unresolved	claims	will	continue	to	be	subject	to	the	claims	reconciliation	process	under	the	supervision	of	the	Bankruptcy	Court.	However,	certain pending	litigation	related	to	pre-petition	liabilities	may	proceed	in	courts	other	than	the	Bankruptcy	Court	to	determine	the	amount,	if	any,	of	such	litigation	claims	for purposes	of	treatment	under	the	Plan.

Pursuant	to	rulings	of	the	Bankruptcy	Court,	the	Plan	established	the	Disputed	Claims	Reserve	to	hold	shares	of	AAG	Common	Stock	reserved	for	issuance	to disputed	claimholders	at	the	Effective	Date	that	ultimately	become	holders	of	allowed	Single-Dip	Unsecured	Claims.	The	shares	provided	for	under	the	Plan	were determined	based	upon	a	Disputed	Claims	Reserve	amount	of	claims	of	approximately	$755	million,	representing	the	maximum	amount	of	additional	distributions	to subsequently	allowed	Single-Dip	Unsecured	Claims	under	the	Plan.	As	of	December	31,	2015,	there	were	approximately	25.3	million	shares	of	AAG	Common	Stock remaining	in	the	Disputed	Claims	Reserve.	As	disputed	claims	are	resolved,	the	claimants	will	receive	distributions	of	shares	from	the	Disputed	Claims	Reserve	on	the same	basis	as	if	such	distributions	had	been	made	on	or	about	the	Effective	Date.	However,	we	are	not	required	to	distribute	additional	shares	above	the	limits contemplated	by	the	Plan,	even	if	the	shares	remaining	for	distribution	are	not	sufficient	to	fully	pay	any	additional	allowed	unsecured	claims.	To	the	extent	that	any	of the	reserved	shares	remain	undistributed	upon	resolution	of	all	remaining	disputed	claims,	such	shares	will	not	be	returned	to	us	but	rather	will	be	distributed	to	former AMR	stockholders	as	of	the	Effective	Date.	However,	resolution	of	disputed	claims	could	have	a	material	effect	on	recoveries	by	holders	of	additional	allowed	Single- Dip	Unsecured	Claims	under	the	Plan	and	the	amount	of	additional	share	distributions,	if	any,	that	are	made	to	former	AMR	stockholders	as	the	total	number	of	shares	of AAG	Common	Stock	that	remain	available	for	distribution	upon	resolution	of	disputed	claims	is	limited	pursuant	to	the	Plan.

There	is	also	pending	in	the	Bankruptcy	Court	an	adversary	proceeding	relating	to	an	action	brought	by	American	to	seek	a	determination	that	certain	non-pension, post-employment	benefits	(OPEB)	are	not	vested	benefits	and	thus	may	be	modified	or	terminated	without	liability	to	American.	On	April	18,	2014,	the	Bankruptcy Court	granted	American's	motion	for	summary	judgment	with	respect	to	certain	non-union	employees,	concluding	that	their	benefits	were	not	vested	and	could	be terminated.	The	summary	judgment	motion	was	denied	with	respect	to	all	other	retirees.	The	Bankruptcy	Court	has	not	yet	scheduled	a	trial	on	the	merits	concerning whether	those	retirees'	benefits	are	vested,	and	American	cannot	predict	whether	it	will	receive	relief	from	obligations	to	provide	benefits	to	any	of	those	retirees.	Our financial	statements	presently	reflect	these	retirement	programs	without	giving	effect	to	any	modification	or	termination	of	benefits	that	may	ultimately	be	implemented based	upon	the	outcome	of	this	proceeding.	Separately,	both	the	APFA	and	TWU	have	filed	grievances	asserting	that	American	was	"successful"	in	its	Chapter	11	with respect	to	matters	related	to	OPEB	and,	accordingly,	by	operation	of	the	underlying	collective	bargaining	agreements,	American's	prior	contributions	to	certain	OPEB prefunding	trusts	attributable	to	active	employees	should	be	returned	to	those	active	employees.	These	amounts	aggregate	approximately	$212	million.	We	have	denied both	grievances	and	intend	to	defend	these	matters	vigorously.

DOJ	Antitrust	Civil	Investigative	Demand.	In	June	2015,	we	received	a	Civil	Investigative	Demand	(CID)	from	the	DOJ	as	part	of	an	investigation	into	whether	there have	been	illegal	agreements	or	coordination	of	air	passenger	capacity.	The	CID	seeks	documents	and	other	information	from	us,	and	other	airlines	have	announced	that they	have	received	similar	requests.	We	are	cooperating	fully	with	the	DOJ	investigation.	In	addition,

subsequent	to	announcement	of	the	delivery	of	CIDs	by	the	DOJ,	we,	along	with	Delta	Air	Lines,	Inc.,	Southwest	Airlines	Co.,	United	Airlines,	Inc.	and,	in	the	case	of litigation	filed	in	Canada,	Air	Canada,	have	been	named	as	defendants	in	approximately	100	putative	class	action	lawsuits	alleging	unlawful	agreements	with	respect	to air	passenger	capacity.	The	U.S.	lawsuits	were	the	subject	of	multiple	motions	to	consolidate	them	in	a	single	forum,	and	they	have	now	been	consolidated	in	the	Federal District	Court	for	the	District	of	Columbia.	Both	the	DOJ	investigation	and	these	lawsuits	are	in	their	very	early	stages	and	we	intend	to	defend	the	lawsuits	vigorously.

Private	Party	Antitrust	Action.	On	July	2,	2013,	a	lawsuit	captioned	Carolyn	Fjord,	et	al.,	v.	US	Airways	Group,	Inc.,	et	al.,	was	filed	in	the	United	States	District Court	for	the	Northern	District	of	California.	The	complaint	named	as	defendants	US	Airways	Group	and	US	Airways,	and	alleged	that	the	effect	of	the	Merger	may	be to	substantially	lessen	competition	or	tend	to	create	a	monopoly	in	violation	of	Section	7	of	the	Clayton	Antitrust	Act.	The	relief	sought	in	the	complaint	included	an injunction	against	 the	Merger,	or	divestiture.	On	August	6,	2013,	 the	plaintiffs	re-filed	 their	complaint	 in	 the	Bankruptcy	Court,	adding	AMR	and	American	as defendants,	and	on	October	2,	2013,	dismissed	the	initial	California	action.	On	November	27,	2013,	the	Bankruptcy	Court	denied	plaintiffs'	motion	to	preliminarily enjoin	the	Merger.	On	August	19,	2015,	after	three	previous	largely	unsuccessful	attempts	to	amend	their	complaint,	plaintiffs	filed	a	fourth	motion	for	leave	to	file	an amended	and	supplemental	complaint	to	add	a	claim	for	damages	and	demand	for	jury	trial,	as	well	as	claims	similar	to	those	in	the	putative	class	action	lawsuits regarding	air	passenger	capacity.	Thereafter,	plaintiffs	filed	a	request	with	the	Judicial	Panel	on	Multidistrict	Litigation	(JPML)	to	consolidate	the	Fjord	matter	with	the putative	class	action	lawsuits.	The	JPML	denied	that	request	on	October	15,	2015	and	plaintiffs'	request	for	further	relief	from	the	JPML	was	denied	on	February	4, 2016.	Accordingly,	the	parties	will	continue	to	litigate	the	matter	in	Bankruptcy	Court.	We	believe	this	lawsuit	is	without	merit	and	intend	to	vigorously	defend	against the	allegations.

DOJ	Civil	Investigative	Demand	Related	to	the	United	States	Postal	Service.	In	April	2015,	the	DOJ	informed	us	of	an	inquiry	regarding	American's	2009	and	2011 contracts	with	the	United	States	Postal	Service	for	the	international	transportation	of	mail	by	air.	In	October	2015,	we	received	a	CID	from	DOJ	seeking	certain information	relating	to	these	contracts.	The	DOJ	has	indicated	it	is	investigating	potential	violations	of	the	False	Claims	Act.	We	are	cooperating	fully	with	the	DOJ investigation.

General.	In	addition	to	the	specifically	identified	legal	proceedings,	we	and	our	subsidiaries	are	also	engaged	in	other	legal	proceedings	from	time	to	time.	Legal proceedings	can	be	complex	and	take	many	months,	or	even	years,	to	reach	resolution,	with	the	final	outcome	depending	on	a	number	of	variables,	some	of	which	are not	within	our	control.	Therefore,	although	we	will	vigorously	defend	ourselves	in	each	of	the	actions	described	above	and	such	other	legal	proceedings,	their	ultimate resolution	and	potential	financial	and	other	impacts	on	us	are	uncertain	but	could	be	material.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	may	be	a	party	to	litigation	in	the normal	course	of	business	or	otherwise,	which	could	affect	our	financial	position	and	liquidity."

# ITEM	4.		MINE	SAFETY	DISCLOSURES

Not	Applicable.

# PART	II

# ITEM	5.		MARKET	FOR	AMERICAN	AIRLINES	GROUP'S	COMMON	STOCK,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES

# OF	EQUITY	SECURITIES

# Stock	Exchange	Listing

Pursuant	to	the	Plan	and	in	accordance	with	the	Merger	Agreement,	effective	December	9,	2013,	all	existing	shares	of	AMR	Corporation	common	stock	(OTCQB: AAMRQ)	were	canceled	and	ceased	trading	on	the	OTCQB	market.	The	newly	authorized	and	issued	AAG	Common	Stock	began	trading	on	the	NASDAQ	Global Select	Market	(NASDAQ)	on	December	9,	2013	under	the	symbol	"AAL."	There	is	no	trading	market	for	the	common	stock	of	American,	which	is	a	wholly-owned subsidiary	of	AAG.

Information	on	securities	authorized	for	issuance	under	our	equity	compensation	plans	will	be	set	forth	in	our	Proxy	Statement	for	the	2016	Annual	Meeting	of Stockholders	of	American	Airlines	Group	Inc.	(the	Proxy	Statement)	under	the	caption	"Equity	Compensation	Plan	Information"	and	is	incorporated	by	reference	into this	Annual	Report	on	Form	10-K.

# Market	Prices	of	Common	Stock

The	following	table	sets	forth,	for	the	periods	indicated,	the	high	and	low	sale	prices	of	AAG	Common	Stock	on	NASDAQ:

| December	31 | Period | High | Low |
| :--- | :--- | :--- | :--- |
| 2015 | Fourth\tQuarter | $47.09 | $37.42 |
|  | Third\tQuarter | \t 44.59 | \t 34.10 |
|  | Second\tQuarter | \t 53.47 | \t 38.45 |
|  | First\tQuarter | \t 56.20 | \t 45.95 |
| 2014 | Fourth\tQuarter | $54.64 | $28.10 |
|  | Third\tQuarter | \t 44.00 | \t 34.34 |
|  | Second\tQuarter | \t 44.88 | \t 31.86 |
|  | First\tQuarter | \t 39.88 | \t 25.06 |

# Cash	Dividends	Paid

Our	Board	of	Directors	declared	the	following	cash	dividends:

In	January	2016,	we	announced	that	our	Board	of	Directors	had	declared	a	$0.10	per	share	dividend	for	stockholders	of	record	on	February	10,	2016,	and	payable	on February	24,	2016.

The	total	cash	payment	for	dividends	during	the	years	ended	December	31,	2015	and	2014	was	$278	million	and	$144	million,	respectively.	Any	future	dividends	that may	be	declared	and	paid	from	time	to	time	under	our

capital	deployment	program	will	be	subject	to	market	and	economic	conditions,	applicable	legal	requirements	and	other	relevant	factors.	Our	capital	deployment program	does	not	obligate	us	to	continue	a	dividend	for	any	fixed	period,	and	payment	of	dividends	may	be	suspended	at	any	time	at	our	discretion.

# Stock	Performance	Graph

The	following	stock	performance	graph	and	related	information	shall	not	be	deemed	"soliciting	material"	or	"filed"	with	the	Securities	and	Exchange	Commission, nor	shall	such	information	be	incorporated	by	reference	into	any	future	filings	under	the	Securities	Act	of	1933	or	the	Exchange	Act,	each	as	amended,	except	to	the extent	that	we	specifically	incorporate	it	by	reference	into	such	filing.

The	following	stock	performance	graph	compares	our	cumulative	total	stockholder	return	on	an	annual	basis	on	our	common	stock	with	the	cumulative	total	return on	the	Standard	and	Poor's	500	Stock	Index	and	the	AMEX	Airline	Index	from	December	9,	2013	(the	first	trading	day	of	AAG	Common	Stock)	through	December	31, 2015.	The	comparison	assumes	$100	was	invested	on	December	9,	2013	in	AAG	Common	Stock	and	in	each	of	the	foregoing	indices	and	assumes	reinvestment	of dividends.	The	stock	performance	shown	on	the	graph	below	represents	historical	stock	performance	and	is	not	necessarily	indicative	of	future	stock	price	performance.

|  | 12/9/2013 | 12/31/2013 | 12/31/2014 | 12/31/2015 |
| :--- | :--- | :--- | :--- | :--- |
| American\tAirlines\tGroup\tInc. | $100 | $103 | $219 | $175 |
| Amex\tAirline\tIndex | 100 | 102 | 152 | 127 |
| S&amp;P\t500 | 100 | 102 | 114 | 113 |

# Purchases	of	Equity	Securities	by	the	Issuer	and	Affiliated	Purchasers

Since	July	2014,	our	Board	of	Directors	has	approved	several	share	repurchase	programs	aggregating	$7.0	billion	of	authority	of	which,	as	of	December	31,	2015, $2.4	billion	remained	unused	under	repurchase	programs

which	are	to	be	completed	no	later	than	December	31,	2016.	Share	repurchases	under	the	repurchase	programs	may	be	made	through	a	variety	of	methods,	which	may include	open	market	purchases,	privately	negotiated	transactions,	block	trades	or	accelerated	share	repurchase	transactions.	Any	such	repurchases	will	be	made	from time	to	time	subject	to	market	and	economic	conditions,	applicable	legal	requirements	and	other	relevant	factors.	The	programs	do	not	obligate	us	to	repurchase	any specific	number	of	shares	and	may	be	suspended	at	any	time	at	our	discretion.

During	the	year	ended	December	31,	2015,	we	repurchased	85.1	million	shares	of	AAG	Common	Stock	for	$3.6	billion	at	a	weighted	average	cost	per	share	of $42.09.	During	the	year	ended	December	31,	2014,	we	repurchased	23.4	million	shares	of	AAG	Common	Stock	for	$1.0	billion	at	a	weighted	average	cost	per	share	of $42.72.	Since	the	inception	of	the	share	repurchase	programs	in	July	2014,	we	have	repurchased	108.5	million	shares	of	AAG	Common	Stock	for	$4.6	billion	at	a weighted	average	cost	per	share	of	$42.23.

Separate	from	our	share	repurchase	programs,	during	2015,	we	also	withheld	approximately	7.0	million	shares	of	AAG	Common	Stock	and	paid	approximately	$306 million	in	satisfaction	of	certain	tax	withholding	obligations	associated	with	employee	equity	awards.

The	following	table	displays	information	with	respect	to	our	purchases	of	shares	of	AAG	Common	Stock	during	the	three	months	ended	December	31,	2015.

|  |  | Average | Total	number	of	shares | shares	that	may	be |
| :--- | :--- | :--- | :--- | :--- |
| Period | Total\tnumber\tof\nshares\tpurchased | \t\t\t\t\tprice\tpaid\nper\tshare | purchased\tas\tpart\tof\tpublicly\nannounced\tplan\tor\tprogram | purchased\tunder\tthe\tplan\tor\tprogram\n(in\tmillions) |
| October\t2015 | 12,965,702 | $41.54 | 12,965,702 | $2,961 |
| November\t2015 | 5,623,408 | $43.10 | 5,623,408 | $2,718 |
| December\t2015 | 7,002,827 | $43.07 | 7,002,827 | $2,417 |

# Ownership	Restrictions

AAG's	Certificate	of	Incorporation	and	Bylaws	provide	that,	consistent	with	the	requirements	of	Subtitle	VII	of	Title	49	of	the	United	States	Code,	as	amended,	or	as the	same	may	be	from	time	to	time	amended	(the	Aviation	Act),	any	persons	or	entities	who	are	not	a	"citizen	of	the	United	States"	(as	defined	under	the	Aviation	Act and	administrative	interpretations	issued	by	the	DOT,	its	predecessors	and	successors,	from	time	to	time),	including	any	agent,	trustee	or	representative	of	such	persons or	entities	(a	non-citizen),	shall	not,	in	the	aggregate,	own	(beneficially	or	of	record)	and/or	control	more	than	(a)	24.9%	of	the	aggregate	votes	of	all	of	our	outstanding equity	securities	(as	defined,	which	definition	includes	our	capital	stock,	securities	convertible	into	or	exchangeable	for	shares	of	our	capital	stock,	including	our outstanding	convertible	notes,	and	any	options,	warrants	or	other	rights	to	acquire	capital	stock)	(the	voting	cap	amount)	or	(b)	49.0%	of	our	outstanding	equity securities	(the	absolute	cap	amount).	If	non-citizens	nonetheless	at	any	time	own	and/or	control	more	than	the	voting	cap	amount,	the	voting	rights	of	the	equity securities	in	excess	of	the	voting	cap	amount	shall	be	automatically	suspended	in	accordance	with	the	provisions	of	our	Certificate	of	Incorporation	and	Bylaws.	Voting rights	of	equity	securities,	if	any,	owned	(beneficially	or	of	record)	by	non-citizens	shall	be	suspended	in	reverse	chronological	order	based	upon	the	date	of	registration in	the	foreign	stock	record.	Further,	if	at	any	time	a	transfer	of	equity	securities	to	a	non-citizen	would	result	in	non-citizens	owning	more	than	the	absolute	cap	amount, such	transfer	shall	be	void	and	of	no	effect,	in	accordance	with	provisions	of	AAG's	Certificate	of	Incorporation	and	Bylaws.	In	the	event	that	we	determine	that	the equity	securities	registered	on	the	foreign	stock	record	or	the	stock	records	of	the	Company	exceed	the	absolute	cap	amount,	sufficient	shares	shall	be	removed	from	the foreign	stock	record	and	the	stock	records	of	the	Company	so	that	the	number	of	shares	entered	therein	does	not	exceed	the	absolute	cap	amount.	Shares	of	equity securities	shall	be	removed	from	the	foreign	stock	record	and	the	stock	records	of	the	Company	in	reverse	chronological	order	based	on	the	date	of	registration	in	the foreign	stock	record	and	the	stock	records	of	the	Company	(subject	to	Article	XIII,	Section	6	of	our	Bylaws,	which	provides	special	rules	applicable	to	equity	securities issued	upon	effectiveness	of	the	Plan	and

consummation	of	the	Merger).	Certificates	for	AAG's	equity	securities	must	bear	a	legend	set	forth	in	our	Certificate	of	Incorporation	stating	that	such	equity	securities are	subject	to	the	foregoing	restrictions.	Under	our	Bylaws,	it	is	the	duty	of	each	stockholder	who	is	a	non-citizen	to	register	his,	her	or	its	equity	securities	on	our foreign	stock	record.	In	addition,	our	Bylaws	provide	that	in	the	event	that	non-citizens	shall	own	(beneficially	or	of	record)	or	have	voting	control	over	any	equity securities,	the	voting	rights	of	such	persons	shall	be	subject	to	automatic	suspension	to	the	extent	required	to	ensure	that	we	are	in	compliance	with	applicable	provisions of	law	and	regulations	relating	to	ownership	or	control	of	a	U.S.	air	carrier.	See	AAG's	Certificate	of	Incorporation	and	Bylaws,	which	are	filed	at	Exhibits	3.1	and	3.2 hereto.

In	addition,	to	reduce	the	risk	of	a	potential	adverse	effect	on	our	ability	to	use	our	NOL	Carryforwards	and	certain	other	tax	attributes	for	federal	income	tax purposes,	our	Certificate	of	Incorporation	contains	certain	restrictions	on	the	acquisition	and	disposition	of	our	common	stock	by	substantial	stockholders	(generally holders	of	more	than	4.75%).

See	Part	I,	Item	1A.	Risk	Factors	–	"AAG's	Certificate	of	Incorporation	and	Bylaws	include	provisions	that	limit	voting	and	acquisition	and	disposition	of	our	equity interests,"	 and	"In	order	to	protect	AAG's	NOL	Carryforwards	and	certain	other	tax	attributes,	AAG's	Certificate	of	Incorporation	includes	certain	limitations	on acquisitions	and	dispositions	of	AAG's	Common	Stock,	which	may	limit	the	liquidity	of	our	common	stock."

# ITEM	6.		SELECTED	CONSOLIDATED	FINANCIAL	DATA

# Selected	Consolidated	Financial	Data	of	AAG

The	selected	consolidated	financial	data	presented	below	under	the	captions	"Consolidated	Statements	of	Operations	data"	and	"Consolidated	Balance	Sheet	data" for	the	years	ended	December	31,	2015,	2014	and	2013	and	as	of	December	31,	2015	and	2014	are	derived	from	AAG's	audited	consolidated	financial	statements included	elsewhere	in	this	report.	The	selected	consolidated	financial	data	for	the	years	ended	December	31,	2012	and	2011	and	as	of	December	31,	2013,	2012	and 2011	 are	 derived	 from	AAG's	 audited	 consolidated	 financial	 statements	 not	 included	 in	 this	 report.	The	 selected	 consolidated	 financial	 data	 should	 be	 read	 in conjunction	with	AAG's	consolidated	financial	statements	for	the	respective	periods,	the	related	notes	and	the	related	reports	of	KPMG	LLP	for	2015	and	2014	and Ernst	&	Young	LLP	for	2011	to	2013,	both	independent	registered	public	accounting	firms.	On	December	9,	2013,	a	subsidiary	of	AMR	Corporation	merged	with	and into	US	Airways	Group,	which	survived	as	a	wholly-owned	subsidiary	of	AAG.	On	December	30,	2015,	in	order	to	simplify	AAG's	internal	corporate	structure	and	as part	of	the	integration	efforts	following	the	business	combination	of	AAG	and	US	Airways	Group,	AAG	caused	US	Airways	Group	to	be	merged	with	and	into	AAG, with	AAG	as	the	surviving	corporation,	and,	immediately	thereafter,	US	Airways,	a	subsidiary	of	US	Airways	Group,	merged	with	and	into	American,	with	American	as the	surviving	corporation.	AAG's	consolidated	financial	data	provided	in	the	tables	below	include	the	results	of	US	Airways	Group	beginning	on	December	9,	2013,	the effective	date	of	the	Merger.

Pursuant	to	the	Plan	and	the	Merger	Agreement,	holders	of	AMR	common	stock	formerly	traded	under	the	symbol	"AAMRQ"	received	shares	of	AAG	Common Stock	principally	over	the	120-day	distribution	period	following	the	Effective	Date.	In	accordance	with	U.S.	Generally	Accepted	Accounting	Principles	(GAAP),	the 2013,	2012	and	2011	weighted	average	shares	and	earnings	(loss)	per	share	calculations	have	been	adjusted	to	retrospectively	reflect	these	distributions,	which	were	each made	at	the	rate	of	approximately	0.7441	shares	of	AAG	Common	Stock	per	share	of	AAMRQ.	Former	holders	of	AMR	common	stock	as	of	the	Effective	Date	may	in the	future	receive	additional	distributions	of	AAG	Common	Stock	dependent	upon	the	ultimate	distribution	of	shares	of	AAG	Common	Stock	to	holders	of	disputed claims.	Thus,	the	shares	and	related	earnings	per	share	calculations	prior	to	the	Effective	Date	may	change	in	the	future	to	reflect	additional	retrospective	adjustments	for future	AAG	Common	Stock	distributions	to	former	holders	of	AMR	common	stock.

|  | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | (In\tmillions,\texcept\tshare\tand\tper\tshare\tdata) | (In\tmillions,\texcept\tshare\tand\tper\tshare\tdata) | (In\tmillions,\texcept\tshare\tand\tper\tshare\tdata) |  |
| Consolidated\tStatements\tof\tOperations\tdata: |  |  |  |  |  |
| Total\toperating\trevenues | $40,990 | $42,650 | $26,743 | $24,855 | $23,979 |
| Total\toperating\texpenses | 34,786 | 38,401 | 25,344 | 24,707 | 25,016 |
| Operating\tincome\t(loss) | $6,204 | $4,249 | $1,399 | $148 | $(1,037) |
| Reorganization\titems,\tnet\t(1) | $— | $— | $(2,655) | $(2,208) | $(118) |
| Net\tincome\t(loss) | $7,610 | $2,882 | $(1,834) | $(1,876) | $(1,979) |
| Earnings\t(loss)\tper\tcommon\tshare: |  |  |  |  |  |
| Basic | $11.39 | $4.02 | $(6.54) | $(7.52) | $(7.95) |
| Diluted | $11.07 | $3.93 | $(6.54) | $(7.52) | $(7.95) |
| Shares\tused\tfor\tcomputation\t(in\tthousands): |  |  |  |  |  |
| Basic | \t 668,393 | \t 717,456 | 280,213 | 249,490 | 249,000 |
| Diluted | \t 687,355 | \t 734,016 | 280,213 | 249,490 | 249,000 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | $0.40 | $0.20 | $— | $— | $— |
| Consolidated\tBalance\tSheet\tdata\t(at\tend\tof\tperiod): |  |  |  |  |  |
| Total\tassets | $48,415 | $43,225 | $41,741 | $23,396 | $23,719 |
| Long-term\tdebt\tand\tcapital\tleases,\tnet\tof\tcurrent\tmaturities | 18,330 | 16,043 | 15,212 | 7,019 | 6,592 |
| Pension\tand\tpostretirement\tbenefits\t(2) | 7,450 | 7,562 | 5,828 | 6,780 | 9,204 |
| Mandatorily\tconvertible\tpreferred\tstock\tand\tother\tbankruptcy\tsettlement\tobligations | 193 | 325 | 5,928 | — | — |
| Liabilities\tsubject\tto\tcompromise | — | — | — | 6,606 | 4,843 |
| Stockholders'\tequity\t(deficit) | 5,635 | 2,021 | (2,731) | (7,987) | (7,111) |
| Consolidated\tStatements\tof\tOperations\tdata\texcluding\tspecial\titems\t(3)\t(Unaudited): |  |  |  |  |  |
| Operating\tincome\t(loss)\texcluding\tspecial\titems | $7,284 | $5,073 | $1,935 | $535 | $(238) |
| Net\tincome\t(loss)\texcluding\tspecial\titems | 6,269 | 4,184 | 1,244 | (130) | (1,062) |

(1) Reorganization	items	refer	to	revenues,	expenses	(including	professional	fees),	realized	gains	and	losses	and	provisions	for	losses	that	were	realized	or	incurred	as a	direct	result	of	the	Chapter	11	Cases.	See	Note	2	in	Part	II,	Item	8A	to	AAG's	Consolidated	Financial	Statements	for	further	information	on	reorganization items.

(2) Substantially	all	defined	benefit	pension	plans	were	frozen	effective	November	1,	2012.	Further,	we	significantly	modified	our	retiree	medical	plans	in	2012 resulting	in	the	recognition	of	a	negative	plan	amendment.	See	Note	13	in	Part	II,	Item	8A	to	AAG's	Consolidated	Financial	Statements	for	further	information	on retirement	benefits,	including	the	financial	impact	of	these	plan	changes.

(3) See	reconciliation	of	GAAP	to	non-GAAP	financial	measures	below.

A	number	of	factors	render	AAG's	historical	consolidated	financial	information	not	directly	comparable	to	its	financial	information	for	prior	or	future	periods.	See Part	I,	Item	1A.	Risk	Factors	–	"The	historical	consolidated	financial	information	contained	in	this	report	is	not	directly	comparable	to	our	financial	information	for prior	or	future	periods,"	and	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	and the	notes to	AAG's Consolidated	Financial	Statements	in	Part	II,	Item	8A.

# Reconciliation	of	GAAP	to	Non-GAAP	Financial	Measures

We	are	providing	disclosure	of	the	reconciliation	of	reported	non-GAAP	financial	measures	to	their	comparable	financial	measures	on	a	GAAP	basis.	We	believe that	the	non-GAAP	financial	measures	provide	investors	the	ability	to	measure	financial	performance	excluding	special	items,	which	is	more	indicative	of	our	ongoing performance	and	is	more	comparable	to	measures	reported	by	other	major	airlines.

|  |  | Year	Ended	December	31, | Year	Ended	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 | 2012 | 2011 |
|  |  |  | (In\tmillions) |  |  |
| Operating\tincome\t(loss)\t–\tGAAP | $6,204 | $4,249 | $1,399 | $148 | $(1,037) |
| Operating\tspecial\titems,\tnet\t(1) | 1,080 | 824 | 536 | 387 | 799 |
| Operating\tincome\t(loss)\texcluding\tspecial\titems | $7,284 | $5,073 | $1,935 | $535 | $(238) |
| Net\tincome\t(loss)\t–\tGAAP | $7,610 | $2,882 | $(1,834) | $(1,876) | $(1,979) |
| Operating\tspecial\titems,\tnet\t(1) | 1,080 | 824 | 536 | 387 | 799 |
| Nonoperating\tspecial\titems,\tnet\t(2) | 594 | 132 | 211 | (280) | — |
| Reorganization\titems,\tnet\t(3) | — | — | 2,655 | 2,208 | 118 |
| Income\ttax\tspecial\titems\t(4) | (3,015) | 346 | (324) | (569) | — |
| Net\tincome\t(loss)\texcluding\tspecial\titems | $6,269 | $4,184 | $1,244 | $(130) | $(1,062) |

# (1) Includes	the	following	operating	special	items,	net:

•In	2015,	special	items	principally	included	$1.1	billion	of	merger	integration	expenses	related	to	information	technology,	alignment	of	labor	union	contracts, professional	fees,	severance,	share-based	compensation,	fleet	restructuring,	re-branding	of	aircraft	and	airport	facilities,	relocation	and	training.

•In	 2014,	 special	 items	 principally	 included	 $818	 million	 of	 merger	 integration	 expenses	 related	 to	 information	 technology,	 alignment	 of	 labor	 union contracts,	professional	fees,	severance	and	retention,	share-based	compensation,	divestiture	of	London	Heathrow	slots,	fleet	restructuring,	re-branding	of aircraft	and	airport	facilities,	relocation	and	training.	In	addition,	we	recorded	a	net	charge	of	$81	million	for	bankruptcy	related	items	principally	consisting of	fair	value	adjustments	for	bankruptcy	settlement	obligations	and	an	$81	million	charge	to	revise	prior	estimates	of	certain	aircraft	residual	values	and	other spare	parts	asset	impairments.	These	charges	were	offset	in	part	by	a	$309	million	gain	on	the	sale	of	slots	at	DCA.

•In	2013,	special	items	included	$449	million	of	merger	related	expenses	related	to	the	alignment	of	labor	union	contracts,	professional	fees,	severance,	share- based	compensation	and	fees	for	US	Airways	to	exit	the	Star	Alliance	and	its	codeshare	agreement	with	United	Airlines.	In	addition,	we	recorded	a	$107 million	charge	related	to	American's	pilot	long-term	disability	obligation,	a	$45	million	charge	for	workers'	compensation	claims	and	a	$33	million	aircraft impairment	charge.	These	charges	were	offset	in	part	by	a	$67	million	gain	on	the	sale	of	slots	at	LGA	and	a	$31	million	special	credit	related	to	a	change	in accounting	method	resulting	from	the	modification	of	our	AAdvantage	miles	agreement	with	Citibank.

•In	2012,	special	items	consisted	of	$387	million	of	severance	and	related	charges	and	write-off	of	leasehold	improvements	on	aircraft	and	airport	facilities that	were	rejected	in	connection	with	the	Chapter	11	Cases.

•In	2011,	special	items	consisted	primarily	of	$725	million	related	to	the	impairment	of	certain	aircraft	and	gates,	$31	million	of	non-recurring	non-cash charges	related	to	certain	sale-leaseback	transactions	and	a	$43	million	revenue	reduction	as	a	result	of	a	decrease	in	the	breakage	assumption	related	to	the AAdvantage	loyalty	program	liability.

(2) Includes	the	following	nonoperating	special	items,	net:

•In	2015,	special	items	principally	included	a	$592	million	charge	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	us	due	to	continued	lack	of repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

•In	2014,	special	items	consisted	principally	of	$43	million	for	Venezuelan	foreign	currency	losses,	$56	million	of	early	debt	extinguishment	costs	related	to the	prepayment	of	7.50%	senior	secured	notes	and	other	indebtedness	and	$33	million	of	non-cash	interest	accretion	on	bankruptcy	settlement	obligations.

•In	2013,	special	items	consisted	of	interest	charges	of	$138	million	primarily	to	recognize	post-petition	interest	expense	on	unsecured	obligations	pursuant	to the	Plan	and	penalty	interest	related	to	10.5%	secured	notes	and	7.50%	senior	secured	notes,	a	$54	million	charge	related	to	the	premium	on	tender	for existing	enhanced	equipment	trust	certificate	(EETC)	financings	and	the	write-off	of	debt	issuance	costs	and	$19	million	in	charges	related	to	the	repayment of	existing	EETC	financings.

•In	2012,	special	items	consisted	of	a	$280	million	benefit	resulting	from	a	settlement	of	a	commercial	dispute.

(3) Includes	the	following	reorganization	items,	net	resulting	from	the	filing	of	voluntary	petitions	for	reorganization	under	Chapter	11	by	certain	of	AMR's	direct and	indirect	U.S.	subsidiaries	on	November	29,	2011:

•In	2013,	special	items	consisted	primarily	of	a	$1.7	billion	deemed	claim	to	employees	pursuant	to	the	Plan	as	well	as	professional	fees	and	estimated allowed	claim	amounts.

•In	2012	and	2011	special	items	consisted	primarily	of	estimated	claims	associated	with	restructuring	the	financing	arrangements	for	certain	debt,	aircraft leases,	and	rejecting	certain	special	facility	revenue	bonds,	as	well	as	professional	fees.

# (4) Includes	the	following	income	tax	special	items:

•In	2015,	special	items	totaled	a	net	credit	of	$3.0	billion.	In	connection	with	the	preparation	of	our	financial	statements	for	the	fourth	quarter	of	2015,	we determined	that	it	was	more	likely	than	not	that	substantially	all	of	our	deferred	tax	assets,	which	include	our	NOLs,	would	be	realized.	Accordingly,	we reversed	$3.0	billion	of	the	valuation	allowance	as	of	December	31,	2015,	which	resulted	in	a	special	$3.0	billion	non-cash	tax	benefit	recorded	in	the consolidated	statement	of	operations	for	2015.

•In	2014,	special	items	consisted	of	$346	million.	During	2014,	we	sold	our	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on	or	after June	30,	2014.	In	connection	with	this	sale,	we	recorded	a	special	non-cash	tax	provision	of	$330	million	in	the	second	quarter	of	2014	that	reversed	the	non- cash	tax	provision	which	was	recorded	in	other	comprehensive	income	(OCI),	a	subset	of	stockholders'	equity,	principally	in	2009.	This	provision	represents the	tax	effect	associated	with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	our	fuel	hedging	contracts.	In	accordance with	GAAP,	we	retained	the	$330	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

•In	2013,	special	items	consisted	of	a	$538	million	non-cash	income	tax	benefit	resulting	from	gains	recorded	in	OCI,	offset	in	part	by	a	$214	million	non- cash	charge	due	to	additional	valuation	allowance	required	to	reduce	deferred	tax	assets.

•In	2012,	special	items	consisted	of	a	$569	million	non-cash	income	tax	benefit	resulting	from	gains	recorded	in	OCI.

# Selected	Consolidated	Financial	Data	of	American

The	selected	consolidated	financial	data	presented	below	under	the	captions	"Consolidated	Statements	of	Operations	data"	and	"Consolidated	Balance	Sheet	data" for	the	years	ended	December	31,	2015,	2014	and	2013	and	as	of	December	31,	2015	and	2014	are	derived	from	American's	audited	consolidated	financial	statements included	elsewhere	in	this	report.	The	selected	consolidated	financial	data	for	the	years	ended	December	31,	2012	and	2011	and	as	of	December	31,	2013,	2012	and 2011	are	derived	from	American's	audited	consolidated	financial	statements	not	included	in	this	report.	On	December	30,	2015,	US	Airways	merged	with	and	into American,	with	American	as	the	surviving	corporation.	For	financial	reporting	purposes,	this	transaction	constituted	a	transfer	of	assets	between	entities	under	common control	and	is	reflected	in	American's	consolidated	financial	statements	as	though	the	transaction	had	occurred	on	December	9,	2013,	when	a	subsidiary	of	AMR merged	with	and	into	US	Airways	Group,	which	represents	the	earliest	date	that	American	and	US	Airways	were	under	common	control.	Thus,	the	full	years	of	2015	and 2014	and	the	period	from	December	9,	2013	to	December	31,	2013	are	comprised	of	the	financial	data	of	American	and	US	Airways.	The	periods	prior	to	December	9, 2013	are	comprised	of	the	financial	data	of	American	only.	The	selected	consolidated	financial	data	should	be	read	in	conjunction	with	American's	consolidated financial	statements	for	the	respective	periods,	the	related	notes	and	the	related	reports	of	KPMG	LLP	for	2015	and	2014	and	Ernst	&	Young	LLP	for	2011	to	2013,	both independent	registered	public	accounting	firms.

|  | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | (In\tmillions) |  |  |
| Consolidated\tStatements\tof\tOperations\tdata\t(1): |  |  |  |  |  |
| Total\toperating\trevenues | $41,084 | $42,763 | $26,701 | $24,825 | $23,957 |
| Total\toperating\texpenses | \t 34,895 | \t 38,497 | \t 25,341 | \t 24,743 | \t 25,111 |
| Operating\tincome\t(loss) | $6,189 | $4,266 | $1,360 | $82 | $(1,154) |
| Reorganization\titems,\tnet\t(2) | $—\t\t\t\t $— | $—\t\t\t\t $— | $(2,640) | $(2,179) | $(116) |
| Net\tincome\t(loss) | $8,120 | $2,948 | $(1,717) | $(1,926) | $(1,965) |
| Consolidated\tBalance\tSheet\tdata\t(at\tend\tof\tperiod): |  |  |  |  |  |
| Total\tassets | $50,438 | $42,786 | $41,699 | $23,150 | $23,460 |
| Long-term\tdebt\tand\tcapital\tleases,\tnet\tof\tcurrent\tmaturities | \t 16,592 | \t 14,804 | \t 14,718 | 7,046 | 6,619 |
| Pension\tand\tpostretirement\tbenefits\t(3) | 7,410 | 7,522 | 5,802 | 6,780 | 9,204 |
| Bankruptcy\tsettlement\tobligations | 193 | 325 | 5,424 | — | — |
| Liabilities\tsubject\tto\tcompromise | — | — | — | 5,694 | 3,952 |
| Stockholder's\tequity\t(deficit) | 9,698 | 1,406 | (4,398) | (9,962) | (9,037) |

# (1) Includes	the	following	special	items:

•In	2015,	total	special	items	were	a	net	credit	of	$1.8	billion	and	consisted	principally	of	a	net	special	$3.5	billion	non-cash	tax	benefit.	In	connection	with	the preparation	of	American's	financial	statements	for	the	fourth	quarter	of	2015,	management	determined	that	it	was	more	likely	than	not	that	substantially	all of	 its	 deferred	 tax	 assets,	 which	 include	 its	 NOLs,	 would	 be	 realized.	Accordingly,	American	 reversed	 $3.5	 billion	 of	 the	 valuation	 allowance	 as	 of December	31,	2015,	which	resulted	in	a	special	$3.5	billion	non-cash	tax	benefit	recorded	in	the	consolidated	statement	of	operations	for	2015.	These	credits were	offset	in	part	by	$1.1	billion	of	merger	integration	expenses	related	to	information	technology,	alignment	of	labor	union	contracts,	professional	fees, severance,	share-based	compensation,

fleet	restructuring,	re-branding	of	aircraft	and	airport	facilities,	relocation	and	training.	In	addition,	American	recorded	a	nonoperating	charge	of	$592	million to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	American	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in Venezuela.

•In	2014,	total	special	items	were	$1.3	billion	and	consisted	principally	of	$808	million	of	merger	integration	expenses	related	to	information	technology, alignment	 of	 labor	 union	 contracts,	 professional	 fees,	 severance	 and	 retention,	 share-based	 compensation,	 divestiture	 of	 London	 Heathrow	 slots,	 fleet restructuring,	re-branding	of	aircraft	and	airport	facilities,	relocation	and	training,	a	$328	million	non-cash	tax	charge	relating	to	the	sale	of	American's portfolio	of	fuel	hedging	contracts,	an	$81	million	charge	to	revise	prior	estimates	of	certain	aircraft	residual	values	and	other	spare	parts	asset	impairments and	$60	million	for	bankruptcy	related	items.	These	charges	were	offset	in	part	by	a	$309	million	gain	on	the	sale	of	slots	at	DCA.

•In	2013,	total	special	items	were	$325	million,	excluding	reorganization	items,	net	and	consisted	of	a	$214	million	non-cash	tax	charge	due	to	additional valuation	allowance	required	to	reduce	deferred	tax	assets,	$443	million	of	merger	related	expenses	related	to	the	alignment	of	labor	union	contracts, professional	fees,	severance	and	share-based	compensation,	a	$107	million	charge	related	to	American's	pilot	long-term	disability	obligation,	a	$54	million charge	related	to	the	premium	on	tender	for	existing	EETC	financings	and	the	write-off	of	debt	issuance	costs,	$48	million	of	interest	charges	primarily	to recognize	post-petition	interest	expense	on	unsecured	obligations	pursuant	to	the	Plan,	a	$43	million	charge	for	workers'	compensation	claims,	a	$33	million aircraft	impairment	charge	and	$19	million	in	charges	related	to	the	repayment	of	existing	EETC	financings.	These	charges	were	offset	in	part	by	a	$538 million	non-cash	income	tax	benefit	resulting	from	gains	recorded	in	OCI,	a	$67	million	gain	on	the	sale	of	slots	at	LGA	and	a	$31	million	special	credit related	to	a	change	in	accounting	method	resulting	from	the	modification	of	American's	AAdvantage	miles	agreement	with	Citibank.

•In	2012,	total	special	items	were	$463	million,	excluding	reorganization	items,	net	and	consisted	primarily	of	a	$569	million	non-cash	income	tax	benefit resulting	from	gains	recorded	in	OCI	and	a	$280	million	benefit	from	a	settlement	of	a	commercial	dispute,	offset	in	part	by	$386	million	of	severance	and related	charges	and	write-off	of	leasehold	improvements	on	aircraft	and	airport	facilities	that	were	rejected	in	connection	with	the	Chapter	11	Cases.

•In	2011,	total	special	items	were	$799	million,	excluding	reorganization	items,	net	and	consisted	primarily	of	$725	million	related	to	the	impairment	of certain	aircraft	and	gates,	$31	million	of	non-recurring	non-cash	charges	related	to	certain	sale-leaseback	transactions	and	a	$43	million	revenue	reduction	as a	result	of	a	decrease	in	the	breakage	assumption	related	to	the	AAdvantage	loyalty	program	liability.

(2) Reorganization	items,	net	refer	to	revenues,	expenses	(including	professional	fees),	realized	gains	and	losses	and	provisions	for	losses	that	are	realized	or	incurred as	 a	 direct	 result	 of	 the	 Chapter	 11	 Cases.	 See	 Note	 2	 in	 Part	 II,	 Item	 8B	 to	American's	 Consolidated	 Financial	 Statements	 for	 further	 information	 on reorganization	items.

(3) Substantially	all	defined	benefit	pension	plans	were	frozen	effective	November	1,	2012.	Further,	American	significantly	modified	its	retiree	medical	plans	in	2012 resulting	 in	 the	recognition	of	a	negative	plan	amendment.	See	Note	11	 to	American's	Consolidated	Financial	Statements	 in	Part	II,	 Item	 8B	 for	 further information	on	retirement	benefits,	including	the	financial	impact	of	these	plan	changes.

A	number	of	factors	render	American's	historical	consolidated	financial	information	not	directly	comparable	to	its	financial	information	for	prior	or	future	periods. See	Part	I,	Item	1A.	Risk	Factors	–	"The	historical	consolidated	financial	information	contained	in	this	report	is	not	directly	comparable	to	our	financial	information	for prior	or	future	periods,"	and	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	and	the	notes	to	American's Consolidated	Financial	Statements	in	Part	II,	Item	8B.

# ITEM	7.		MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS

# American	Airlines	Group

American	Airlines	and	American	Eagle	offer	an	average	of	nearly	6,700	flights	per	day	to	nearly	350	destinations	in	more	than	50	countries.	American	has	hubs	in Charlotte,	Chicago,	Dallas/Fort	Worth,	Los	Angeles,	Miami,	New	York,	Philadelphia,	Phoenix	and	Washington,	D.C.	American	is	a	founding	member	of	the	 oneworld alliance,	whose	members	and	members-elect	serve	nearly	1,000	destinations	with	14,250	daily	flights	to	150	countries.	In	2015,	approximately	201	million	passengers boarded	our	mainline	and	regional	flights.	As	of	December	31,	2015,	we	operated	946	mainline	aircraft	and	were	supported	by	our	regional	airline	subsidiaries	and third-party	regional	carriers,	which	operated	an	additional	587	regional	aircraft.

As	previously	discussed,	our	Merger	was	consummated	on	December	9,	2013.	Since the	Merger,	we	have	made	significant	progress towards	completing	our integration.	During	2015,	we	achieved	the	following:

•	 Adopted	a	single	reservations	system,	which	when	completed,	resulted	in	no	operational	or	customer	disruption

•	 Reached	ratified	contracts	with	industry-leading	pay	rates	for	pilots,	flight	attendants	and	customer	service	and	reservation	agents •	 Received	a	single	operating	certificate	from	the	Federal	Aviation	Administration,	allowing	American	to	be	regulated	as	one	airline •	 Merged	loyalty	programs	by	moving	US	Airways	Dividend	Miles	members	into	AAdvantage •	 Opened	the	new	state-of-the-art	Robert	W.	Baker	Integrated	Operations	Center	in	Fort	Worth

•	 Optimized	the	airline's	flight	schedules	at	Chicago	O'Hare	International	Airport	and	Dallas/Fort	Worth	International	Airport

•Substantially	completed	the	co-location	of	our	airport	operations	and	consolidated	all	mainline	operations	at	Dallas/Fort	Worth	International	Airport	into	three terminals,	gaining	efficiencies	in	gate	use	and	line	maintenance

•	 Announced	plans	to	masterplan	our	Fort	Worth	campus	and	build	a	new	corporate	headquarters	building	to	begin	the	process	of	modernizing	our	facilities	and co-locate	our	headquarters	staff	with	our	training	functions	and	integrated	operations	support	teams

# Year	in	Review

While	jet	fuel	prices	have	declined	year-over-year	as	described	above,	uncertainty	exists	regarding	the	economic	conditions	driving	these	declines.	See	Part	I,

Item	1A.	Risk	Factors	–	"Downturns	in	economic	conditions	adversely	affect	our	business"	and	"Our	business	is	dependent	on	the	price	and	availability	of	aircraft	fuel. Continued	periods	of	high	volatility	in	fuel	costs,	increased	fuel	prices	and	significant	disruptions	in	the	supply	of	aircraft	fuel	could	have	a	significant	negative	impact on	our	operating	results	and	liquidity."

Driven	by	substantially	lower	fuel	costs,	we	realized	operating	income	of	$6.2	billion	and	net	income	of	$7.6	billion	in	2015.	This	compares	to	operating	income	of $4.2	billion	and	net	income	of	$2.9	billion	in	2014.	As	a	result	of	not	hedging	our	fuel	consumption,	we	fully	benefited	from	the	decline	in	fuel	prices.

Excluding	the	effects	of	net	special	charges	(credits),	we	recognized	operating	income	of	$7.3	billion	and	net	income	of	$6.3	billion	in	2015	as	compared	to	operating income	of	$5.1	billion	and	net	income	of	$4.2	billion	in	2014.	This	represents	improvements	of	44%	and	50%,	respectively,	in	operating	income	and	net	income	in	2015.

| Mainline	and	regional	passenger	revenues | $35,512 | $37,124 | (4.3) |
| :--- | :--- | :--- | :--- |
| Total\toperating\trevenues | $40,990 | $42,650 | (3.9) |
| Mainline\tand\tregional\taircraft\tfuel\tand\trelated\ttaxes | $7,456 | $12,601 | (40.8) |
| Total\toperating\texpenses | $34,786 | $38,401 | (9.4) |
| Operating\tincome | $6,204 | $4,249 | 46.0 |
| Net\tincome | $7,610 | $2,882 | nm |
| Special\titems:\t(1) |  |  |  |
| Operating\tspecial\tcharges,\tnet | $1,080 | $824 |  |
| Nonoperating\tspecial\tcharges,\tnet | 594 | 132 |  |
| Income\ttax\tspecial\tcharges\t(credits),\tnet | (3,015) | 346 |  |
| Total\tnet\tspecial\tcharges\t(credits) | $(1,341) | $1,302 |  |

(1) AAG's	2015	results	were	impacted	by	a	net	special	credit	of	$1.3	billion,	consisting	principally	of	a	$3.0	billion	non-cash	tax	benefit	related	to	the	reversal	of	the Company's	valuation	allowance	for	its	deferred	tax	assets.	This	credit	was	offset	in	part	by	$1.1	billion	of	operating	special	charges,	consisting	principally	of merger	integration	expenses	and	a	$592	million	charge	related	to	a	write	off	of	the	value	of	Venezuelan	bolivars	held.	See	Part	II,	Item	7.	Management's Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	"AAG's	Results	of	Operations"	of	this	report	for	more	information	on	net	special items.

# Revenue

In	2015,	we	reported	operating	revenues	of	$41.0	billion.	Mainline	and	regional	passenger	revenues	were	$35.5	billion,	a	decrease	of	$1.6	billion,	or	4.3%,	as compared	to	2014.	The	decline	in	revenues	was	driven	by	a	6.5%	decrease	in	yield	due	to	competitive	growth	in	certain	domestic	markets,	including	Dallas/Fort	Worth and	international	weakness	resulting	from	foreign	currency	devaluation	relative	to	the	U.S.	dollar,	lower	fuel	surcharges,	and	continued	economic	softness	in	Latin America,	particularly	in	Brazil	and	Venezuela.	Our	mainline	and	regional	passenger	revenue	per	available	seat	mile	(PRASM)	was	13.21	cents	in	2015,	a	5.4%	decrease, as	compared	to	13.97	cents	in	2014.

# Cost	Control

We	remain	committed	to	actively	managing	our	cost	structure,	which	we	believe	is	necessary	in	an	industry	whose	economic	prospects	are	heavily	dependent	upon two	variables	we	cannot	control:	the	health	of	the	economy	and	the	price	of	fuel.	Our	2015	mainline	cost	per	available	seat	mile	(CASM)	excluding	special	items	and fuel	was	8.99	cents,	an	increase	of	4.2%	as	compared	to	2014.	The	increase	was	primarily	due	to	higher	salaries,	wages	and	benefits	driven	by	new	merger	related	labor contracts	with	industry-leading	pay	rates.	See	below	for	the	"Reconciliation	of	GAAP	Financial	Information	to	Non-GAAP	Financial	Information."

|  | December	31, | December	31, | Better |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | (Worse) |
| On-time\tperformance\t(a) | \t80.1 | \t77.9 | 2.2pts |
| Completion\tfactor\t(b) | \t98.4 | \t98.4 | —pts |
| Mishandled\tbaggage\t(c) | \t3.97 | \t3.77 | (5.3)% |
| Customer\tcomplaints\t(d) | \t3.22 | \t2.12 | (51.9)% |

# Liquidity	Position

As	of	December	31,	2015,	AAG's	total	cash,	short-term	investments	and	restricted	cash	and	short-term	investments	were	$6.9	billion,	of	which	$695	million	was restricted.	We	also	had	$2.4	billion	of	undrawn	revolving	line	of	credit	facilities.

|  | December	31, | December	31, |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
|  | (In\tmillions) |  |
| Cash\tand\tshort-term\tinvestments\t(1) | $6,254 | $7,303 |
| Restricted\tcash\tand\tshort-term\tinvestments\t(2) | 695 | 774 |
| Total\tcash,\tshort-term\tinvestments\tand\trestricted\tcash\tand\tshort-term\tinvestments | $6,949 | $8,077 |

(1) In	the	fourth	quarter	of	2015,	we	recognized	a	$592	million	special	charge	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	us,	due	to	continued	lack	of repatriations	and	deterioration	of	economic	conditions	in	Venezuela.	During	2014,	we	significantly	reduced	capacity	in	the	Venezuelan	market	and	we	no	longer accept	bolivars	as	payment	for	airline	tickets.

(2) Restricted	cash	and	short-term	investments	primarily	include	cash	collateral	to	secure	workers'	compensation	obligations.

In	2015,	we	utilized	cash	generated	from	operations	to	invest	in	our	airline.	We	continued	our	fleet	renewal	program	by	investing	more	than	$5.3	billion	in	new aircraft,	which	has	provided	us	with	the	youngest	and	most	modern	fleet	of	the	U.S.	network	airlines.	In	2015,	we	took	delivery	of	75	new	mainline	aircraft	while retiring	112	aircraft.	We	also	added	52	regional	aircraft	to	our	fleet	and	removed	31	regional	aircraft.

In	2015,	we	returned	$3.9	billion	to	our	shareholders	through	the	payment	of	$278	million	in	quarterly	dividends	and	the	repurchase	of	$3.6	billion	of	common	stock, or	85.1	million	shares.	In	addition,	in	2015	we	elected	to	pay	approximately	$306	million	in	satisfaction	of	certain	tax	withholding	obligations	associated	with	equity awards,	further	reducing	the	share	count	by	7.0	million.

These	cash	outflows	were	offset	in	part	by	proceeds	from	financing	transactions,	principally	aircraft	related.	We	ended	the	year	with	$8.7	billion	in	available	liquidity (including	available	lines	of	credit).	We	believe	it	is	important	to	retain	liquidity	levels	above	our	network	peers	as	we	expect	capital	expenditures	of	approximately	$4.5 billion	in	each	of	2016	and	2017	as	we	continue	our	fleet	renewal	program.	See	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and Results	of	Operations	–	"Commitments"	for	further	discussion	of	2015	financing	transactions	and	our	contractual	commitments.

We	have	taken	significant	actions	to	restore	our	competitiveness	and	to	complete	our	integration.	Although	it	is	difficult	to	predict	the	price	of	oil	or	the	strength	of the	economy,	we	believe	that	our	2015	financial	results	are	evidence	of	the	substantial	progress	we	have	made	and	can	continue	to	build	on.

# Reconciliation	of	GAAP	Financial	Information	to	Non-GAAP	Financial	Information

We	believe	that	the	presentation	of	mainline	CASM	excluding	fuel	is	useful	to	investors	as	both	the	cost	and	availability	of	fuel	are	subject	to	many	economic	and political	factors	beyond	our	control,	and	the	exclusion	of	special	items	provides	investors	the	ability	to	measure	financial	performance	in	a	way	that	is	more	indicative	of our	ongoing	performance	and	is	more	comparable	to	measures	reported	by	other	major	airlines.	Management	uses	mainline	CASM	excluding	special	items	and	fuel	to evaluate	our	operating	performance.	Amounts	may	not	recalculate	due	to	rounding.

|  | Year	Ended	December	31, |  |
| :--- | :--- | :--- |
|  | \t\t\t\t\t\t\t\t2015 | \t\t\t\t\t\t\t\t2014 |
|  | (In\tmillions,\texcept\tper\tASM\tamounts) |  |
| Total\toperating\texpenses | $34,786 | $38,401 |
| Less:\tRegional\texpenses: |  |  |
| Fuel | (1,230) | (2,009) |
| Other | (4,753) | (4,507) |
| Total\tmainline\toperating\texpenses | 28,803 | 31,885 |
| Less:\tSpecial\titems,\tnet | (1,051) | (800) |
| Mainline\toperating\texpenses,\texcluding\tspecial\titems | 27,752 | 31,085 |
| Less:\tAircraft\tfuel\tand\trelated\ttaxes | (6,226) | (10,592) |
| Mainline\toperating\texpenses,\texcluding\tspecial\titems\tand\tfuel | $21,526 | $20,493 |
| Available\tSeat\tMiles\t(ASM) | 239,375 | 237,522 |
| (In\tcents) |  |  |
| Mainline\toperating\texpenses\tper\tASM | 12.03 | 13.42 |
| Less:\tSpecial\titems,\tnet\tper\tASM | (0.44) | (0.34) |
| Mainline\toperating\texpenses\tper\tASM,\texcluding\tspecial\titems | 11.59 | 13.09 |
| Less:\tAircraft\tfuel\tand\trelated\ttaxes\tper\tASM | (2.60) | (4.46) |
| Mainline\toperating\texpenses\tper\tASM,\texcluding\tspecial\titems\tand\tfuel | 8.99 | 8.63 |

# AAG's	Results	of	Operations

In	2015,	we	realized	operating	income	of	$6.2	billion	and	net	income	of	$7.6	billion.	Our	2015	net	income	included	net	special	operating	charges	of	$1.1	billion	and total	net	special	credits	of	$1.3	billion.	Excluding	the	effects	of	these	special	charges	and	credits,	we	realized	operating	income	of	$7.3	billion	and	net	income	of	$6.3 billion.

In	2014,	we	realized	operating	income	of	$4.2	billion	and	net	income	of	$2.9	billion.	Our	2014	net	income	included	net	special	operating	charges	of	$824	million	and total	net	special	charges	of	$1.3	billion.	Excluding	the	effects	of	these	special	charges,	we	realized	operating	income	of	$5.1	billion	and	net	income	of	$4.2	billion.

We	completed	the	Merger	on	December	9,	2013.	Under	GAAP,	AAG's	results	do	not	include	the	financial	results	of	US	Airways	Group	prior	to	the	closing	of	the Merger.	Accordingly,	our	2014	period	GAAP	results	are	not	comparable	to	the	GAAP	results	for	2013	as	2013	excludes	the	results	of	US	Airways	Group	except	for	the 23	day	post-Merger	period	from	December	9,	2013	to	December	31,	2013.

In	2013,	we	realized	operating	income	of	$1.4	billion	and	net	loss	of	$1.8	billion.	Our	2013	net	income	included	net	special	operating	charges	of	$536	million	and total	net	special	charges	of	$3.1	billion.	Excluding	the	effects	of	these	special	charges,	we	realized	operating	income	of	$1.9	billion	and	net	income	of	$1.2	billion.

The	components	of	total	net	special	charges	(credits)	in	our	accompanying	consolidated	statements	of	operations	are	as	follows	(in	millions):

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Other\trevenue\tspecial\titem,\tnet\t(1) | $— | $— | $(31) |
| Mainline\toperating\tspecial\titems,\tnet\t(2) | 1,051 | 800 | 559 |
| Regional\toperating\tspecial\titems,\tnet\t(3) | 29 | 24 | 8 |
| Nonoperating\tspecial\titems,\tnet\t(4) | 594 | 132 | 211 |
| Reorganization\titems,\tnet\t(5) | — | — | \t 2,655 |
| Income\ttax\tspecial\titems,\tnet\t(6) | (3,015) | 346 | (324) |
| Total | $(1,341) | $1,302 | $3,078 |

(1) In	2013,	other	revenue	special	 item,	net	 included	a	credit to	other	revenues	related to	a	change in	accounting	method	resulting	from the	modification	of American's	AAdvantage	miles	agreement	with	Citibank.

(2) In	2015,	mainline	operating	special	items,	net	principally	included	$1.0	billion	of	merger	integration	expenses	related	to	information	technology,	alignment	of labor	union	contracts,	professional	fees,	severance,	share-based	compensation,	fleet	restructuring,	re-branding	of	aircraft	and	airport	facilities,	relocation	and training.

In	2014,	mainline	operating	special	items,	net	principally	included	$810	million	of	merger	integration	expenses	related	to	information	technology,	alignment	of labor	union	contracts,	professional	fees,	severance	and	retention,	share-based	compensation,	divestiture	of	London	Heathrow	slots,	fleet	restructuring,	re-branding of	aircraft	and	airport	facilities,	relocation	and	training.	In	addition,	we	recorded	a	net	charge	of	$81	million	for	bankruptcy	related	items	principally	consisting	of fair	value	adjustments	for	bankruptcy	settlement	obligations	and	an	$81	million	charge	to	revise	prior	estimates	of	certain	aircraft	residual	values	and	other	spare parts	asset	impairments.	These	charges	were	offset	in	part	by	a	$309	million	gain	on	the	sale	of	slots	at	DCA.

In	2013,	mainline	operating	special	items,	net	included	$443	million	of	merger	related	expenses	related	to	the	alignment	of	labor	union	contracts,	professional fees,	severance,	share-based	compensation	and	fees	for	US	Airways	to	exit	the	Star	Alliance	and	its	codeshare	agreement	with	United	Airlines.	In	addition,	we recorded	a	$107	million	charge	related	to	American's	pilot	long-term	disability	obligation,	a	$43	million	charge	for	workers'	compensation	claims	and	a	$33 million	aircraft	impairment	charge.	These	charges	were	offset	in	part	by	a	$67	million	gain	on	the	sale	of	slots	at	LGA.

(3) The	2015	regional	operating	special	items,	net	principally	related	to	merger	integration	expenses.

The	2014	regional	operating	special	items,	net	consisted	primarily	of	a	$24	million	charge	due	to	a	new	pilot	labor	contract	at	our	Envoy	regional	subsidiary	as well	as	$7	million	of	merger	integration	expenses,	offset	in	part	by	an	$8	million	gain	on	the	sale	of	certain	spare	parts.

(4) In	2015,	nonoperating	special	items,	net	principally	included	a	$592	million	charge	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	us	due	to continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

In	 2014,	 nonoperating	 special	 items,	 net	 principally	 included	 a	 $43	 million	 charge	 for	 Venezuelan	 foreign	 currency	 losses,	 $56	 million	 of	 early	 debt extinguishment	costs	primarily	related	to	the	prepayment	of	7.50%	senior	secured	notes	and	other	indebtedness	and	$33	million	of	non-cash	interest	accretion	on bankruptcy	settlement	obligations.

In	 2013,	 nonoperating	 special	 items,	 net	 consisted	 of	 interest	 charges	 of	 $138	 million	 primarily	 to	 recognize	 post-petition	 interest	 expense	 on	 unsecured obligations	pursuant	to	the	Plan	and	penalty	interest	related	to	10.5%	secured	notes	and	7.50%	senior	secured	notes,	a	$54	million	charge	related	to	the	premium on	tender	for	existing	EETC	financings	and	the	write-off	of	debt	issuance	costs	and	$19	million	in	charges	related	to	the	repayment	of	existing	EETC	financings.

(5) In	2013,	we	recognized	reorganization	expenses	as	a	result	of	the	filing	of	voluntary	petitions	for	relief	under	Chapter	11.	These	amounts	consisted	primarily	of estimated	allowed	claim	amounts	and	professional	fees.

(6) In	2015,	income	tax	special	items	totaled	a	net	credit	of	$3.0	billion.	In	connection	with	the	preparation	of	our	financial	statements	for	the	fourth	quarter	of	2015, we	determined	that	it	was	more	likely	than	not	that	substantially	all	of	our	deferred	tax	assets,	which	include	our	NOLs,	would	be	realized.	Accordingly,	we reversed	 $3.0	 billion	 of	 the	 valuation	 allowance	 as	 of	 December	 31,	 2015,	 which	 resulted	 in	 a	 special	 $3.0	 billion	 non-cash	 tax	 benefit	 recorded	 in	 the consolidated	statement	of	operations	for	2015.

In	2014,	income	tax	special	items,	net	were	$346	million.	During	2014,	we	sold	our	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on	or	after June	30,	2014.	In	connection	with	this	sale,	we	recorded	a	special	non-cash	tax	provision	of	$330	million	in	the	second	quarter	of	2014	that	reversed	the	non-cash tax	provision	which	was	recorded	in	other	comprehensive	income	(OCI),	a	subset	of	stockholders'	equity,	principally	in	2009.	This	provision	represents	the	tax effect	associated	with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	our	fuel	hedging	contracts.	In	accordance	with	GAAP,	we retained	the	$330	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

In	2013,	income	tax	special	items,	net	included	a	$538	million	non-cash	income	tax	benefit	from	continuing	operations.	We	are	required	to	consider	all	items (including	items	recorded	in	OCI)	in	determining	the	amount	of	tax	benefit	that	results	from	a	loss	from	continuing	operations	and	that	should	be	allocated	to continuing	operations.	As	a	result,	we	recorded	a	tax	benefit	on	the	loss	from	continuing	operations	for	the	year,	which	was	exactly	offset	by	income	tax	expense on	OCI.	However,	while	the	income	tax	benefit	from	continuing	operations	is	reported	on	the	income	statement,	the	income	tax	expense	on	OCI	is	recorded directly	to	accumulated	other	comprehensive	income	(loss),	which	is	a	component	of	stockholders'	equity.	Because	the	income	tax	expense	on	OCI	is	equal	to	the income	tax	benefit	from	continuing	operations,	our	year-end	net	deferred	tax	position	is	not	impacted	by	this	tax	allocation.	The	2013	tax	benefit	was	offset	in	part by	a	$214	million	tax	charge	attributable	to	additional	valuation	allowance	required	to	reduce	deferred	tax	assets	to	the	amount	we	believed	was	more	likely	than not	to	be	realized.

# Income	Taxes

At	December	31,	2015,	we	had	approximately	$8.0	billion	of	gross	NOL	Carryforwards	to	reduce	future	federal	taxable	income,	substantially	all	of	which	are expected	to	be	available	for	use	in	2016.	The	federal	NOL	Carryforwards	will	expire	beginning	in	2023	if	unused.	These	NOL	Carryforwards	include	an	unrealized	tax benefit	of	$1.2	billion	related	to	share-based	compensation	that	will	be	recorded	in	equity	when	realized.	We	also	had	approximately	$4.0	billion	of	NOL	Carryforwards to	reduce	future	state	taxable	income	at	December	31,	2015,	which	will	expire	in	years	2016	through	2034	if	unused.	Our	ability	to	deduct	our	NOL	Carryforwards	and to	utilize	certain	other	available	tax	attributes	can	be	substantially	constrained	under	the	general	annual	limitation	rules	of	Section	382	where	an	"ownership	change"	has occurred.	We	experienced	an	ownership	change	in	connection	with	our	emergence	from	the	Chapter	11	Cases,	and	US	Airways	Group	experienced	an	ownership	change in	connection	with	the	Merger.	As	a	result	of	the	Merger,	US	Airways	Group	is	now	included	in	the	AAG	consolidated	federal	and	state	income	tax	returns.	The	general limitation	rules	of	Section	382	for	a	debtor	in	a	bankruptcy	case	are	liberalized	where	the	ownership	change	occurs	upon	emergence	from	bankruptcy.	We	elected	to	be covered	 by	 certain	 special	 rules	 for	 federal	 income	 tax	 purposes	 that	 permitted	 approximately	 $9.0	 billion	 (with	 $6.6	 billion	 of	 unlimited	 NOL	 remaining	 at December	31,	2015)	of	our	federal	NOL	Carryforwards	to	be	utilized	without	regard	to	the	Section	382	annual	limitation	rules	unless	a	second	ownership	change occurred	on	or	before	December	9,	2015.	No	second	ownership	change	occurred	within	that	period.	Substantially	all	of	our	remaining	federal	NOL	Carryforwards (attributable	to	US	Airways	Group)	are	subject	to	limitation	under	Section	382;	however,	our	ability	to	utilize	such	NOL	Carryforwards	is	not	anticipated	to	be effectively	constrained	as	a	result	of	such	limitation.	Similar	limitations	may	apply	for	state	income	tax	purposes.	Our	ability	to	utilize	any	new	NOL	Carryforwards arising	after	the	ownership	changes	is	not	affected	by	the	annual	limitation	rules	imposed	by	Section	382	unless	another	ownership	change	occurs.

At	December	31,	2015,	we	had	an	Alternative	Minimum	Tax	(AMT)	credit	carryforward	of	approximately	$341	million	available	for	federal	income	tax	purposes, which	is	available	for	an	indefinite	period.

In	connection	with	the	preparation	of	our	financial	statements	for	the	fourth	quarter	of	2015,	we	determined	that	it	was	more	likely	than	not	that	substantially	all	of our	deferred	tax	assets,	which	include	our	NOLs,	would	be	realized.	Accordingly,	we	reversed	$3.0	billion	of	the	valuation	allowance	as	of	December	31,	2015,	which resulted	in	a	special	$3.0	billion	non-cash	tax	benefit	recorded	in	the	consolidated	statement	of	operations	for	2015.

Beginning	in	2016,	we	expect	to	record	income	tax	expense	with	an	effective	rate	of	approximately	38%,	which	will	be	substantially	non-cash	as	we	utilize	the	NOLs described	above	to	offset	cash	income	taxes	due.

For	the	year	ended	December	31,	2014,	we	recorded	a	$330	million	tax	provision,	which	included	$346	million	of	special	tax	charges	as	described	above.

For	the	year	ended	December	31,	2013,	we	recorded	a	$346	million	tax	benefit,	which	included	$324	million	of	net	special	tax	benefits	as	described	above.

# Operating	Statistics

The	table	below	sets	forth	selected	mainline	and	regional	operating	data	for	the	years	ended	December	31,	2015	and	2014.	Operating	statistics	for	the	year	ended December	31,	2013	have	not	been	included	because	they	would	not	be	comparable	to	the	years	ended	December	31,	2015	or	2014	due	to	US	Airways	Group	results	only being	included	for	23	days	ended	December	31,	2013.

|  | Year	Ended	December	31,<br>						2015 | 2014 | (Decrease)<br>2015-2014 |
| :--- | :--- | :--- | :--- |
| Mainline |  |  |  |
| Revenue\tpassenger\tmiles\t(millions)\t(a) | 199,467 | 195,651 | 2.0% |
| Available\tseat\tmiles\t(millions)\t(b) | 239,375 | 237,522 | 0.8% |
| Passenger\tload\tfactor\t(percent)\t(c) | 83.3 | 82.4 | 0.9pts |
| Yield\t(cents)\t(d) | 14.56 | 15.74 | (7.5)% |
| Passenger\trevenue\tper\tavailable\tseat\tmile\t(cents)\t(e) | 12.13 | 12.97 | (6.5)% |
| Operating\tcost\tper\tavailable\tseat\tmile\t(cents)\t(f) | 12.03 | 13.42 | (10.4)% |
| Passenger\tenplanements\t(thousands)\t(g) | 146,814 | 145,574 | 0.9% |
| Departures\t(thousands) | 1,114 | 1,144 | (2.6)% |
| Aircraft\tat\tend\tof\tperiod | 946 | 983 | (3.8)% |
| Block\thours\t(thousands)\t(h) | 3,494 | 3,514 | (0.6)% |
| Average\tstage\tlength\t(miles)\t(i) | 1,226 | 1,205 | 1.7% |
| Fuel\tconsumption\t(gallons\tin\tmillions) | 3,611 | 3,644 | (0.9)% |
| Average\taircraft\tfuel\tprice\tincluding\trelated\ttaxes\t(dollars\tper\tgallon) | 1.72 | 2.91 | (40.7)% |
| Full-time\tequivalent\temployees\tat\tend\tof\tperiod | 98,900 | 94,400 | 4.8% |
| Regional\t(j) |  |  |  |
| Revenue\tpassenger\tmiles\t(millions)\t(a) | 23,543 | 22,219 | 6.0% |
| Available\tseat\tmiles\t(millions)\t(b) | 29,361 | 28,135 | 4.4% |
| Passenger\tload\tfactor\t(percent)\t(c) | 80.2 | 79.0 | 1.2pts |
| Yield\t(cents)\t(d) | 27.50 | 28.46 | (3.3)% |
| Passenger\trevenue\tper\tavailable\tseat\tmile\t(cents)\t(e) | 22.05 | 22.47 | (1.9)% |
| Operating\tcost\tper\tavailable\tseat\tmile\t(cents)\t(f) | 20.38 | 23.16 | (12.0)% |
| Passenger\tenplanements\t(thousands)\t(g) | 54,435 | 51,766 | 5.2% |
| Aircraft\tat\tend\tof\tperiod | 587 | 566 | 3.7% |
| Fuel\tconsumption\t(gallons\tin\tmillions) | 712 | 688 | 3.6% |
| Average\taircraft\tfuel\tprice\tincluding\trelated\ttaxes\t(dollars\tper\tgallon) | 1.73 | 2.92 | (40.9)% |
| Full-time\tequivalent\temployees\tat\tend\tof\tperiod\t(k) | 19,600 | 18,900 | 3.7% |
| Total\tMainline\tand\tRegional |  |  |  |
| Revenue\tpassenger\tmiles\t(millions)\t(a) | 223,010 | 217,870 | 2.4% |
| Available\tseat\tmiles\t(millions)\t(b) | 268,736 | 265,657 | 1.2% |
| Cargo\tton\tmiles\t(millions)\t(l) | 2,314 | 2,333 | (0.8)% |
| Passenger\tload\tfactor\t(percent)\t(c) | 83.0 | 82.0 | 1.0pts |
| Yield\t(cents)\t(d) | 15.92 | 17.04 | (6.5)% |
| Passenger\trevenue\tper\tavailable\tseat\tmile\t(cents)\t(e) | 13.21 | 13.97 | (5.4)% |
| Total\trevenue\tper\tavailable\tseat\tmile\t(cents) | 15.25 | 16.05 | (5.0)% |
| Cargo\tyield\tper\tton\tmile\t(cents)\t(m) | 32.84 | 37.50 | (12.4)% |
| Passenger\tenplanements\t(thousands)\t(g) | 201,249 | 197,340 | 2.0% |
| Aircraft\tat\tend\tof\tperiod | 1,533 | 1,549 | (1.0)% |
| Fuel\tconsumption\t(gallons\tin\tmillions) | 4,323 | 4,332 | (0.2)% |
| Average\taircraft\tfuel\tprice\tincluding\trelated\ttaxes\t(dollars\tper\tgallon) | 1.72 | 2.91 | (40.7)% |
| Full-time\tequivalent\temployees\tat\tend\tof\tperiod | 118,500 | 113,300 | 4.6% |

(b) Available	seat	mile	(ASM)	–	A	basic	measure	of	production.	One	ASM	represents	one	seat	flown	one	mile.

(c) Passenger	load	factor	–	The	percentage	of	available	seats	that	are	filled	with	revenue	passengers.

(d) Yield	–	A	measure	of	airline	revenue	derived	by	dividing	passenger	revenue	by	RPMs.

(e) Passenger	revenue	per	available	seat	mile	(PRASM)	–	Passenger	revenues	divided	by	ASMs.

(f) Operating	cost	per	available	seat	mile	(CASM)	–	Operating	expenses	divided	by	ASMs.

(g) Passenger	enplanements	–	The	number	of	passengers	on	board	an	aircraft,	including	local,	connecting	and	through	passengers.

(h) Block	hours	–	The	hours	measured	from	the	moment	an	aircraft	first	moves	under	its	own	power,	including	taxi	time,	for	the	purposes	of	flight	until	the	aircraft	is docked	at	the	next	point	of	landing	and	its	power	is	shut	down.

(i) Average	stage	length	–	The	average	of	the	distances	flown	on	each	segment	of	every	route.

(j) Regional	statistics	include	our	subsidiaries,	Envoy	Aviation	Group	Inc.	(Envoy),	Piedmont	Airlines,	Inc.	(Piedmont)	and	PSA	Airlines,	Inc.	(PSA),	and	operating statistics	from	our	capacity	purchase	agreements	with	Air	Wisconsin	Airlines	Corporation,	Chautauqua	Airlines,	Inc.,	ExpressJet	Airlines,	Inc.,	Mesa	Airlines, Inc.,	Republic	Airline	Inc.,	SkyWest	Airlines,	Inc.,	Compass	Airlines,	LLC	and	Trans	States	Airlines,	Inc.

(k) Regional	full-time	equivalent	employees	only	include	our	wholly-owned	regional	airline	subsidiaries,	Envoy,	Piedmont	and	PSA.

(l) Cargo	ton	miles	–	A	basic	measure	of	cargo	transportation.	One	cargo	ton	mile	represents	one	ton	of	cargo	transported	one	mile.

(m) Cargo	yield	per	ton	mile	–	Cargo	revenues	divided	by	total	mainline	and	regional	cargo	ton	miles.

# Operating	Revenues

|  | Year	Ended	December	31,<br>				2015 | 2014 | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- |
|  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |
| Mainline\tpassenger | $29,037 | $30,802 | (5.7) |
| Regional\tpassenger | 6,475 | 6,322 | 2.4 |
| Cargo | 760 | 875 | (13.1) |
| Other | 4,718 | 4,651 | 1.4 |
| Total\toperating\trevenues | $40,990 | $42,650 | (3.9) |

Total	operating	revenues	in	2015	decreased	$1.7	billion,	or	3.9%,	from	2014	principally	due	to	competitive	growth	and	weaker	international	yields	primarily	due	to foreign	currency	devaluation	relative	to	the	U.S.	dollar.	Significant	changes	in	the	components	of	operating	revenues	are	as	follows:

•	 Regional	passenger	revenues	were	$6.5	billion	in	2015	as	compared	to	$6.3	billion	in	2014.	Regional	RPMs	increased	6.0%	as	regional	capacity,	as	measured by	ASMs,	increased	4.4%,	resulting	in	a	1.2

•	 Cargo	revenue	decreased	$115	million,	or	13.1%,	in	2015	from	2014	driven	primarily	by	a	decrease	in	international	freight	yields.

# Operating	Expenses

|  | Year	Ended	December	31, |  | Percent |
| :--- | :--- | :--- | :--- |
|  |  |  | Increase |
|  | \t\t\t\t2015 | \t\t\t\t2014 | (Decrease) |
|  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |
| Aircraft\tfuel\tand\trelated\ttaxes | $6,226 | $10,592 | (41.2) |
| Salaries,\twages\tand\tbenefits | 9,524 | 8,508 | 11.9 |
| Maintenance,\tmaterials\tand\trepairs | 1,889 | 2,051 | (7.9) |
| Other\trent\tand\tlanding\tfees | 1,731 | 1,727 | 0.2 |
| Aircraft\trent | 1,250 | 1,250 | — |
| Selling\texpenses | 1,394 | 1,544 | (9.8) |
| Depreciation\tand\tamortization | 1,364 | 1,295 | 5.4 |
| Special\titems,\tnet | 1,051 | 800 | 31.3 |
| Other | 4,374 | 4,118 | 6.2 |
| Total\tmainline\toperating\texpenses | 28,803 | 31,885 | (9.7) |
| Regional\texpenses: |  |  |  |
| Fuel | 1,230 | 2,009 | (38.8) |
| Other | 4,753 | 4,507 | 5.4 |
| Total\tregional\toperating\texpenses | 5,983 | 6,516 | (8.2) |
| Total\toperating\texpenses | $34,786 | $38,401 | (9.4) |

Total	operating	expenses	were	$34.8	billion	in	2015,	a	decrease	of	$3.6	billion,	or	9.4%,	from	2014.	The	decrease	in	operating	expenses	was	primarily	due	to substantially	lower	aircraft	fuel	costs,	offset	in	part	by	higher	salaries,	wages	and	benefits	driven	by	new	merger	related	labor	contracts.	See	detailed	explanations	below relating	to	changes	in	operating	costs	per	ASM.

# Mainline	Operating	Expenses	per	ASM

Our	mainline	CASM	decreased	1.39	cents,	or	10.4%,	from	13.42	cents	in	2014	to	12.03	cents	in	2015	on	0.8%	increase	in	capacity	primarily	due	to	lower	fuel	prices. Excluding	special	items	and	aircraft	fuel	and	related	taxes,	our	mainline	CASM	increased	0.36	cents,	or	4.2%,	from	8.63	cents	in	2014	to	8.99	cents	in	2015,	primarily due	to	higher	salaries,	wages	and	benefits	due	to	new	merger	related	labor	contracts.

The	table	below	sets	forth	the	major	components	of	our	total	mainline	CASM	and	our	mainline	CASM	excluding	special	items	and	aircraft	fuel	and	related	taxes	for the	year	ended	December	31,	2015	and	2014:

| Aircraft	fuel	and	related	taxes | 2.60 | 4.46 | (41.7) |
| :--- | :--- | :--- | :--- |
| Salaries,\twages\tand\tbenefits | 3.98 | 3.58 | 11.1 |
| Maintenance,\tmaterials\tand\trepairs | 0.79 | 0.86 | (8.6) |
| Other\trent\tand\tlanding\tfees | 0.72 | 0.73 | (0.5) |
| Aircraft\trent | 0.52 | 0.53 | (0.8) |
| Selling\texpenses | 0.58 | 0.65 | (10.5) |
| Depreciation\tand\tamortization | 0.57 | 0.55 | 4.6 |
| Special\titems,\tnet | 0.44 | 0.34 | 30.3 |
| Other | 1.83 | 1.73 | 5.4 |
| Total\tmainline\tCASM | 12.03 | 13.42 | (10.4) |
| Special\titems,\tnet | (0.44) | (0.34) | 30.3 |
| Aircraft\tfuel\tand\trelated\ttaxes | (2.60) | (4.46) | (41.7) |
| Mainline\toperating\texpenses\tper\tASM,\texcluding\tspecial\titems\tand\taircraft\tfuel\tand\trelated\ttaxes\t(1) | 8.99 | 8.63 | 4.2 |

(1) We	believe	that	the	presentation	of	mainline	CASM	excluding	fuel	is	useful	to	investors	because	both	the	cost	and	availability	of	fuel	are	subject	to	many economic	and	political	factors	beyond	our	control,	and	the	exclusion	of	special	items	provides	investors	the	ability	to	measure	financial	performance	in	a	way	that is	more	indicative	of	our	ongoing	performance	and	that	is	more	comparable	to	measures	reported	by	other	major	airlines.	Management	uses	mainline	CASM excluding	special	items	and	fuel	to	evaluate	our	operating	performance.	Amounts	may	not	recalculate	due	to	rounding.

Significant	changes	in	the	components	of	mainline	operating	expense	per	ASM	are	as	follows:

•	 Aircraft	fuel	and	related	taxes	per	ASM	decreased	41.7%	primarily	due	to	a	40.7%	decrease	in	the	average	price	per	gallon	of	fuel	to	$1.72	in	2015	from	an average	price	per	gallon	of	$2.91	in	2014.

•Salaries,	wages	and	benefits	per	ASM	increased	11.1%	primarily	due	to	increased	costs	associated	with	the	new,	merger	related	pilot,	flight	attendant	and customer	service	and	reservation	agent	joint	collective	bargaining	agreements.

•	 Maintenance,	materials	and	repairs	per	ASM	decreased	8.6%	primarily	due	to	fewer	engine	overhauls	in	2015,	driven	by	our	fleet	renewal	program.

•Selling	expenses	per	ASM	decreased	10.5%	primarily	due	to	lower	contractually	negotiated	rates	for	certain	commissions	and	booking	fees	as	well	as	lower revenues	in	2015.

•	 Other	operating	expenses	per	ASM	increased	5.4%	in	2015	as	compared	to	2014	primarily	due	to	increases	in	crew	travel	and	certain	information	technology projects,	as	well	as	enhancements	to	our	aircraft	food	and	catering	offerings.

# Regional	Operating	Expenses

Total	regional	expenses	decreased	$533	million,	or	8.2%,	in	2015	to	$6.0	billion	from	$6.5	billion	in	2014.	The	year-over-year	decrease	was	primarily	due	to	a	$779 million,	or	38.8%,	decrease	in	fuel	costs,	offset	in	part	by	a	$246	million,	or	5.4%,	increase	in	other	regional	operating	expenses.	The	average	price	per	gallon	of	fuel decreased	40.9%	to	$1.73	in	2015	from	$2.92	in	2014.	The	increase	in	other	regional	operating	expenses	was	principally	due	to	increased	flying	under	capacity	purchase agreements.

# Nonoperating	Income	(Expense)

|  | Year	Ended	December	31,<br>				2015 | 2014 | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- |
|  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |
| Interest\tincome | $39 | $31 | 26.0 |
| Interest\texpense,\tnet\tof\tcapitalized\tinterest | (880) | (887) | (0.8) |
| Other,\tnet | (747) | (181) | nm |
| Total\tnonoperating\texpense,\tnet | $(1,588) | $(1,037) | 53.1 |

Our	short-term	investments	in	each	period	consisted	of	highly	liquid	investments	that	provided	nominal	returns.

The	following	table	provides	the	components	of	interest	expense:

|  | Year	Ended	December	31,<br>				2015 | 2014 | Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- |
|  | (In\tmillions) |  |  |
| Special\titems,\tnet | $— | $33 | $(33) |
| Amortization\tof\tdebt\tissuance\tcosts\tand\tdebt\tdiscounts | 42 | 39 | 3 |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations | 890 | 876 | 14 |
| Total\tinterest\texpense | 932 | 948 | (16) |
| Less:\tcapitalized\tinterest | (52) | (61) | 9 |
| Total\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | $880 | $887 | $(7) |

Other	nonoperating	expense,	net	in	2015	included	a	net	$594	million	in	other	nonoperating	special	charges	and	$159	million	of	foreign	currency	losses.	The	other nonoperating	special	charges	were	primarily	due	to	a	$592	million	write	off	of	all	of	the	value	of	Venezuelan	bolivars	held	by	us	due	to	continued	lack	of	repatriations and	deterioration	of	economic	conditions	in	Venezuela	and	$41	million	in	charges	principally	related	to	non-cash	write	offs	of	unamortized	debt	discount	and	debt issuance	costs	associated	with	refinancing	certain	of	our	secured	term	loan	facilities,	prepayments	of	certain	aircraft	financings	and	the	purchase	and	subsequent remarketing	of	certain	special	facility	revenue	bonds.	These	charges	were	offset	in	part	by	a	$22	million	gain	associated	with	the	sale	of	an	investment	and	a	$17	million early	debt	extinguishment	gain	associated	with	the	repayment	of	American's	AAdvantage	loan	with	Citibank.	The	foreign	currency	losses	were	driven	primarily	by	the strengthening	of	the	U.S.	dollar	relative	to	other	currencies	during	2015,	principally	in	Latin	American	and	European	markets,	including	a	34%	decrease	in	the	value	of the	Argentinian	peso,	a	30%	decrease	in	the	value	of	the	Brazilian	real,	a	14%	decrease	in	the	value	of	the	Mexican	peso,	a	10%	decrease	in	the	value	of	the	Euro	and	a 5%	decrease	in	the	value	of	the	British	pound.

Other	nonoperating	expense,	net	in	2014	consisted	of	$114	million	of	net	foreign	currency	losses,	including	a	$43	million	special	charge	for	Venezuelan	foreign currency	losses,	and	$56	million	in	other	nonoperating	special	charges	primarily	due	to	early	debt	extinguishment	costs	related	to	the	prepayment	of	our	7.50%	senior secured	notes	and	other	indebtedness.	The	foreign	currency	losses	were	driven	primarily	by	the	strengthening	of	the	U.S.	dollar	relative	to	other	currencies	during	2014, principally	in	the	Latin	American	market,	including	a	48%	decrease	in	the	value	of	the	Venezuelan	bolivar	and	a	14%	decrease	in	the	value	of	the	Brazilian	real.

|  |  |  |  | $	Change | Change	Excluding |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tEnded\tDecember\t31, | Year\tEnded\tDecember\t31, |  | due\tto | Merger\tImpact |  |
|  | \t\t\t\t2014 | \t\t\t\t2013 | $\tChange | Merger | \t\t\t\t$\t\t\t\t\t\t\t\t% | \t\t\t\t$\t\t\t\t\t\t\t\t% |
|  |  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |  |
| Mainline\tpassenger | $30,802 | $20,218 | $10,584 | $9,833 | $751 | 3.8 |
| Regional\tpassenger | 6,322 | 3,131 | 3,191 | 3,207 | (16) | (0.5) |
| Cargo | 875 | 685 | 190 | 149 | 41 | 6.1 |
| Other | 4,651 | 2,709 | 1,942 | 1,318 | 624 | 23.9 |
| Total\toperating\trevenues | $42,650 | $26,743 | $15,907 | $14,507 | $1,400 | 5.4 |

The	following	discussion	of	operating	revenues	excludes	the	results	of	the	Merger	in	order	to	provide	a	more	meaningful	year-over-year	comparison.

Total	operating	revenues	in	2014	increased	$1.4	billion,	or	5.4%,	from	2013,	which	was	driven	by	strong	demand	for	air	travel.	Significant	changes	in	the	components of	operating	revenues,	excluding	the	results	of	the	Merger,	are	as	follows:

•	 Mainline	passenger	revenues	increased	$751	million,	or	3.8%,	in	2014	from	2013	due	to	higher	yields	and	ASMs,	offset	in	part	by	slightly	lower	load	factors.

•	 Cargo	revenues	increased	$41	million,	or	6.1%,	in	2014	from	2013	driven	primarily	by	an	increase	in	international	freight	volumes.

•	 Other	revenues	increased	$624	million,	or	23.9%,	in	2014	from	2013	driven	primarily	by	higher	revenues	associated	with	our	loyalty	programs	driven	by	our affinity	card	agreement	with	Citibank.

|  |  |  |  | $	Change | Change	Excluding |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tEnded\tDecember\t31, | Year\tEnded\tDecember\t31, |  | due\tto | Merger\tImpact |  |
|  | \t\t\t\t2014 | \t\t\t\t2013 | $\tChange | Merger | \t\t\t\t$\t\t\t\t\t\t\t\t% | \t\t\t\t$\t\t\t\t\t\t\t\t% |
|  |  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |  |
| Aircraft\tfuel\tand\trelated\ttaxes | $10,592 | $7,839 | $2,753 | $3,190 | $(437) | (5.7) |
| Salaries,\twages\tand\tbenefits | 8,508 | 5,460 | 3,048 | 2,653 | 395 | 7.5 |
| Maintenance,\tmaterials\tand\trepairs | 2,051 | 1,260 | 791 | 679 | 112 | 9.2 |
| Other\trent\tand\tlanding\tfees | 1,727 | 1,152 | 575 | 547 | 28 | 2.5 |
| Aircraft\trent | 1,250 | 768 | 482 | 365 | 117 | 15.7 |
| Selling\texpenses | 1,544 | 1,158 | 386 | 424 | (38) | (3.3) |
| Depreciation\tand\tamortization | 1,295 | 853 | 442 | 375 | 67 | 7.9 |
| Special\titems,\tnet | 800 | 559 | 241 | (1) | 242 | 86.2 |
| Other | 4,118 | 2,969 | 1,149 | 1,079 | 70 | 2.4 |
| Total\tmainline\toperating\texpenses | $31,885 | $22,018 | $9,867 | $9,311 | $556 | 2.6 |
| Regional\texpenses: |  |  |  |  |  |  |
| Fuel | 2,009 | 1,120 | 889 | 947 | (58) | (5.4) |
| Other | 4,507 | 2,206 | 2,301 | 2,158 | 143 | 7.0 |
| Total\tregional\toperating\texpenses | 6,516 | 3,326 | 3,190 | 3,105 | 85 | 2.8 |
| Total\toperating\texpenses | $38,401 | $25,344 | $13,057 | $12,416 | $641 | 2.6 |

The	following	discussion	of	operating	expenses	excludes	the	results	of	the	Merger	in	order	to	provide	a	more	meaningful	year-over-year	comparison.

Total	operating	expenses	in	2014	increased	$641	million,	or	2.6%,	from	2013.	Significant	changes	in	the	components	of	mainline	operating	expenses,	excluding	the results	of	the	Merger,	are	as	follows:

•	 Aircraft	fuel	and	related	taxes	decreased	$437	million,	or	5.7%,	in	2014	from	2013	primarily	due	to	a	decrease	in	the	average	price	per	gallon	of	fuel.

•Salaries,	wages	and	benefits	increased	$395	million,	or	7.5%,	in	2014	from	2013	primarily	due	to	increased	costs	associated	with	merger	related	labor contracts.

•	 Maintenance,	materials	and	repairs	increased	$112	million,	or	9.2%,	in	2014	from	2013	primarily	due	to	an	increase	in	the	rate	per	engine	overhaul.

•	 Aircraft	rent	increased	$117	million,	or	15.7%,	in	2014	from	2013	primarily	as	a	result	of	new	leased	aircraft	deliveries	in	2014	as	we	continued	our	fleet renewal	program.

•	 Depreciation	and	amortization	increased	$67	million,	or	7.9%,	in	2014	from	2013	primarily	as	a	result	of	new	purchased	aircraft	deliveries	since	the	end	of 2013	as	we	continued	our	fleet	renewal	program.

Total	regional	expenses,	excluding	the	results	of	the	Merger,	increased	$85	million,	or	2.8%,	in	2014	from	2013.	Other	regional	operating	expenses	increased	$143 million,	or	7.0%,	primarily	due	to	higher	expenses	associated	with	certain	capacity	purchase	agreements,	offset	by	a	$58	million,	or	5.4%,	decrease	in	fuel	costs	as	a result	of	a	decrease	in	the	average	price	per	gallon	of	fuel.

|  |  |  |  | $	Change | Change	Excluding | Change	Excluding |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tEnded\tDecember\t31, |  |  | due\tto | Merger\tImpact |  |
|  | \t\t\t\t2014 | \t\t\t\t2013 | $\tChange | Merger | \t\t\t\t$\t\t\t\t\t\t\t\t% | \t\t\t\t$\t\t\t\t\t\t\t\t% |
|  |  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |  |
| Interest\tincome | $31 | $20 | $11 | $6 | $5 | 25.2 |
| Interest\texpense,\tnet\tof\tcapitalized\tinterest | (887) | (856) | (31) | (280) | 249 | (29.8) |
| Other,\tnet | (181) | (88) | (93) | (29) | (64) | 73.1 |
| Total\tnonoperating\texpense,\tnet | $(1,037) | $(924) | $(113) | $(303) | $190 | (21.0) |

Interest	income	was	$31	million	and	$20	million	in	2014	and	2013,	respectively.	Our	short-term	investments	in	each	period	consisted	of	highly	liquid	investments, which	provided	nominal	returns.

|  | Year	Ended	December	31,<br>				2014 | 2013 | Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- |
|  | (In\tmillions) |  |  |
| Special\titems\t(1) | $33 | $182 | $(149) |
| Amortization\tof\tdebt\tissuance\tcosts\tand\tdebt\tdiscounts | 38 | 33 | 5 |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations\t(2) | 568 | 668 | (100) |
| Total\tinterest\texpense | 639 | 883 | (244) |
| Less:\tcapitalized\tinterest | (53) | (48) | (5) |
| Total\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | 586 | 835 | (249) |
| US\tAirways\tGroup\ttotal\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | 301 | 21 | 280 |
| Total\tAAG\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | $887 | $856 | $31 |

The	following	discussion	of	nonoperating	income	and	expense	excludes	the	results	of	the	Merger	in	order	to	provide	a	more	meaningful	year-over-year	comparison.

Interest	expense,	net	of	capitalized	interest	decreased	$249	million	in	2014	from	2013	primarily	due	to	a	$149	million	decrease	in	special	charges	recognized	year- over-year	as	further	described	below,	as	well	as	refinancing	activities	that	resulted	in	$100	million	less	interest	expense	recognized	in	2014.

(1) In	2014,	we	recognized	$33	million	of	special	charges	relating	to	non-cash	interest	accretion	on	bankruptcy	settlement	obligations.	In	2013,	we	recognized	$138 million	of	special	charges	relating	to	post-petition	interest	expense	on	unsecured	obligations	pursuant	to	the	Plan	and	penalty	interest	related	to	American's	10.5% secured	notes	and	7.50%	senior	secured	notes.	In	addition,	in	2013	we	recorded	special	charges	of	$44	million	for	debt	extinguishment	costs	incurred	as	a	result of	the	repayment	of	certain	aircraft	secured	indebtedness,	including	cash	interest	charges	and	non-cash	write	offs	of	unamortized	debt	issuance	costs.

(2) As	a	result	of	the	2013	refinancing	activities	and	the	early	extinguishment	of	American's	7.50%	senior	secured	notes	in	2014,	we	recognized	$100	million	less interest	expense	in	2014	as	compared	to	2013.

Other	nonoperating	expense,	net	in	2013	consisted	principally	of	net	foreign	currency	losses	of	$56	million	and	early	debt	extinguishment	charges	of	$29	million.

# Reorganization	Items,	Net

Reorganization	items	refer	to	revenues,	expenses	(including	professional	fees),	realized	gains	and	losses	and	provisions	for	losses	that	are	realized	or	incurred	as	a direct	result	of	the	Chapter	11	Cases.	The	following	table	summarizes	the	components	included	in	reorganization	items,	net	on	AAG's	consolidated	statement	of operations	for	the	year	ended	December	31,	2013	(in	millions):

(1) In	exchange	for	employees'	contributions	to	the	successful	reorganization,	including	agreeing	to	reductions	in	pay	and	benefits,	we	agreed	in	the	Plan	to	provide each	employee	group	a	deemed	claim,	which	was	used	to	provide	a	distribution	of	a	portion	of	the	equity	of	the	reorganized	entity	to	those	employees.	Each employee	group	received	a	deemed	claim	amount	based	upon	a	portion	of	the	value	of	cost	savings	provided	by	that	group	through	reductions	to	pay	and	benefits as	well	as	through	certain	work	rule	changes.	The	total	value	of	this	deemed	claim	was	approximately	$1.7	billion.

(2) Amounts	 include	allowed	claims	(claims	approved	by	 the	Bankruptcy	Court)	and	estimated	allowed	claims	relating	 to	(i)	 the	rejection	or	modification	of financings	related	to	aircraft	and	(ii)	entry	of	orders	treated	as	unsecured	claims	with	respect	to	facility	agreements	supporting	certain	issuances	of	special	facility revenue	bonds.	The	Debtors	recorded	an	estimated	claim	associated	with	the	rejection	or	modification	of	a	financing

or	facility	agreement	when	the	applicable	motion	was	filed	with	the	Bankruptcy	Court	to	reject	or	modify	such	financing	or	facility	agreement	and	the	Debtors believed	that	it	was	probable	the	motion	would	be	approved,	and	there	was	sufficient	information	to	estimate	the	claim.	See	Note	2	to	AAG's	Consolidated Financial	Statements	in	Part	II,	Item	8A	for	further	information.

(3) Pursuant	to	the	Plan,	the	Debtors	agreed	to	allow	certain	post-petition	unsecured	claims	on	obligations.	As	a	result,	during	the	year	ended	December	31,	2013,	we recorded	reorganization	charges	to	adjust	estimated	allowed	claim	amounts	previously	recorded	on	rejected	special	facility	revenue	bonds	of	$180	million,	allowed general	unsecured	claims	related	to	the	1990	and	1994	series	of	special	facility	revenue	bonds	that	financed	certain	improvements	at	JFK,	and	rejected	bonds	that financed	certain	improvements	at	ORD,	which	are	included	in	the	table	above.

(4) The	Plan	allowed	unsecured	creditors	receiving	AAG	Series	A	Preferred	Stock	a	conversion	discount	of	3.5%.	Accordingly,	we	recorded	the	fair	value	of	such discount	upon	the	confirmation	of	the	Plan	by	the	Bankruptcy	Court.

# American's	Results	of	Operations

On	December	30,	2015,	in	order	to	simplify	AAG's	internal	corporate	structure	and	as	part	of	the	integration	efforts	following	the	business	combination	of	AAG	and US	Airways	Group,	US	Airways	merged	with	and	into	American,	with	American	as	the	surviving	corporation.	As	a	result	of	the	merger	of	US	Airways	and	American, US	Airways	transferred	all	of	its	assets,	liabilities	and	off-balance	sheet	commitments	to	American.	For	financial	reporting	purposes,	this	transaction	constituted	a transfer	of	assets	between	entities	under	common	control	and	was	accounted	for	at	historical	cost.	As	a	result,	American's	consolidated	financial	statements	as	well	as this	management's	discussion	and	analysis	of	financial	condition	and	results	of	operations	 in	 this	Annual	Report	on	Form	10-K	(unless	otherwise	 indicated)	are presented	as	though	the	transaction	had	occurred	on	December	9,	2013,	when	a	subsidiary	of	AMR	merged	with	and	into	US	Airways	Group,	which	represents	the earliest	date	that	American	and	US	Airways	were	under	common	control.	Thus,	the	full	years	of	2015	and	2014	and	the	period	from	December	9,	2013	to	December	31, 2013	are	comprised	of	the	financial	data	of	American	and	US	Airways.	The	periods	prior	to	December	9,	2013	are	comprised	of	the	financial	data	of	American	only.

In	2015,	American	realized	operating	income	of	$6.2	billion	and	net	income	of	$8.1	billion.	American's	2015	net	income	included	net	special	operating	charges	of $1.1	billion	and	total	net	special	credits	of	$1.8	billion.	Excluding	the	effects	of	these	special	charges	and	credits,	American	realized	operating	income	of	$7.3	billion	and net	income	of	$6.3	billion.

In	2014,	American	realized	operating	income	of	$4.3	billion	and	net	income	of	$2.9	billion.	American's	2014	net	income	included	net	special	operating	charges	of $788	million	and	total	net	special	charges	of	$1.3	billion.	Excluding	the	effects	of	these	special	charges,	American	realized	operating	income	of	$5.1	billion	and	net income	of	$4.2	billion.

In	2013,	American	realized	operating	income	of	$1.4	billion	and	a	net	loss	of	$1.7	billion.	American's	2013	net	loss	included	net	special	operating	charges	of	$528 million	and	total	net	special	charges	of	$3.0	billion.	Excluding	the	effects	of	these	charges,	American	realized	operating	income	of	$1.9	billion	and	net	income	of	$1.2 billion.

The	components	of	American's	total	net	special	charges	(credits)	included	in	American's	accompanying	consolidated	statements	of	operations	are	as	follows	(in millions):

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Other\trevenue\tspecial\titem,\tnet\t(1) | $— | $— | $(31) |
| Mainline\toperating\tspecial\titems,\tnet\t(2) | 1,051 | 783 | 559 |
| Regional\toperating\tspecial\titems,\tnet\t(3) | 18 | 5 | — |
| Nonoperating\tspecial\titems,\tnet\t(4) | 616 | 128 | 121 |
| Reorganization\titems,\tnet\t(5) | — | — | \t 2,640 |
| Income\ttax\tspecial\titems,\tnet\t(6) | (3,468) | 344 | (324) |
| Total | $(1,783) | $1,260 | $2,965 |

In	2014,	mainline	operating	special	items,	net	principally	included	$803	million	of	merger	integration	expenses	related	to	information	technology,	alignment	of labor	union	contracts,	professional	fees,	severance	and	retention,	share-based	compensation,	divestiture	of	London	Heathrow	slots,	fleet	restructuring,	re-branding of	aircraft	and	airport	facilities,	relocation	and	training.	In	addition,	American	recorded	a	net	charge	of	$60	million	for	bankruptcy	related	items	principally consisting	of	fair	value	adjustments	for	bankruptcy	settlement	obligations	and	an	$81	million	charge	to	revise	prior	estimates	of	certain	aircraft	residual	values and	other	spare	parts	asset	impairments.	These	charges	were	offset	in	part	by	a	$309	million	gain	on	the	sale	of	slots	at	DCA.

In	2013,	mainline	operating	special	items,	net	principally	included	$443	million	of	merger	related	expenses	related	to	the	alignment	of	labor	union	contracts, professional	fees,	severance,	share-based	compensation	and	fees	for	US	Airways	to	exit	the	Star	Alliance	and	its	codeshare	agreement	with	United	Airlines.	In addition,	American	recorded	a	$107	million	charge	related	to	American's	pilot	long-term	disability	obligation,	a	$43	million	charge	for	workers'	compensation claims	and	a	$33	million	aircraft	impairment	charge.	These	charges	were	offset	in	part	by	a	$67	million	gain	on	the	sale	of	slots	at	LGA.

(3) The	2015	and	2014	regional	operating	special	items,	net	principally	related	to	merger	integration	expenses.

(4) In	2015,	nonoperating	special	items,	net	principally	included	a	$592	million	charge	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	American	due	to continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

(5) In	2013,	American	recognized	reorganization	expenses	as	a	result	of	the	filing	of	voluntary	petitions	for	relief	under	Chapter	11.	These	amounts	consisted primarily	of	estimated	allowed	claim	amounts	and	professional	fees.

(6) In	2015,	income	tax	special	items	totaled	a	net	credit	of	$3.5	billion.	In	connection	with	the	preparation	of	American's	financial	statements	for	the	fourth	quarter of	2015,	management	determined	that	it	was	more	likely	than	not	that	substantially	all	of	its	deferred	tax	assets,	which	include	its	NOLs,	would	be	realized. Accordingly,	American	reversed	$3.5	billion	of	the	valuation	allowance	as	of	December	31,	2015,	which	resulted	in	a	special	$3.5	billion	non-cash	tax	benefit recorded	in	the	consolidated	statement	of	operations	for	2015.

In	2014,	income	tax	special	items,	net	were	$344	million.	During	2014,	American	sold	its	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on	or after	June	30,	2014.	In	connection	with	this	sale,	American	recorded	a	special	non-cash	tax	provision	of	$328	million	in	the	second	quarter	of	2014	that	reversed the	non-cash	tax	provision	which	was	recorded	in	OCI,	a	subset	of	stockholder's	equity,	principally	in	2009.	This	provision	represents	the	tax	effect	associated with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	American's	fuel	hedging	contracts.	In	accordance	with	GAAP,	American retained	the	$328	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

In	2013,	income	tax	special	items,	net	included	a	$538	million	non-cash	income	tax	benefit	from	continuing	operations.	American	is	required	to	consider	all	items (including	items	recorded	in	OCI)	in	determining	the	amount	of	tax	benefit	that	results	from	a	loss	from	continuing	operations	and	that	should	be	allocated	to continuing	operations.	As	a	result,	American	recorded	a	tax	benefit	on	the	loss	from	continuing	operations	for	the	year,	which	was	exactly	offset	by	income	tax expense	on	OCI.	However,	while	the	income	tax	benefit	from	continuing	operations	is	reported	on	the	income	statement,	the	income	tax	expense	on	OCI	is recorded	directly	to	accumulated	other	comprehensive	income	(loss),	which	is	a	component	of	stockholder's	equity.	Because	the	income	tax	expense	on	OCI	is equal	to	the	income	tax	benefit	from	continuing	operations,	American's	year-end	net	deferred	tax	position	is	not	impacted	by	this	tax	allocation.	The	2013	tax benefit	was	offset	in	part	by	a	$214	million	tax	charge	attributable	to	additional	valuation	allowance	required	to	reduce	deferred	tax	assets	to	the	amount	American believed	was	more	likely	than	not	to	be	realized.

At	December	31,	2015,	American	had	approximately	$8.8	billion	of	gross	NOL	Carryforwards	to	reduce	future	federal	taxable	income,	substantially	all	of	which	are expected	to	be	available	for	use	in	2016.	American	is	a	member	of	AAG's	consolidated	federal	and	certain	state	income	tax	returns.	The	amount	of	federal	NOL Carryforwards	available	in	those	returns	is	$8.0	billion,	substantially	all	of	which	is	expected	to	be	available	for	use	in	2016.	The	federal	NOL	Carryforwards	will	expire beginning	in	2023	if	unused.	These	NOL	Carryforwards	include	an	unrealized	tax	benefit	of	$1.2	billion	related	to	share-based	compensation	that	will	be	recorded	in equity	when	realized.	American	had	approximately	$3.7	billion	of	NOL	Carryforwards	to	reduce	future	state	taxable	income	at	December	31,	2015,	which	will	expire	in years	2016	 through	2034	 if	unused.	American's	ability	 to	deduct	 its	NOL	Carryforwards	and	 to	utilize	certain	other	available	 tax	attributes	can	be	substantially constrained	under	 the	general	annual	 limitation	rules	of	Section	382	where	an	"ownership	change"	has	occurred.	American	experienced	an	ownership	change	 in connection	with	its	emergence	from	the	Chapter	11	Cases,	and	US	Airways	Group	experienced	an	ownership	change	in	connection	with	the	Merger.	As	a	result	of	the Merger,	US	Airways	Group	is	now	included	in	the	AAG	consolidated	federal	and	state	income	tax	returns.	The	general	limitation	rules	of	Section	382	for	a	debtor	in	a bankruptcy	case	are	liberalized	where	the	ownership	change	occurs	upon	emergence	from	bankruptcy.	American	elected	to	be	covered	by	certain	special	rules	for	federal income	tax	purposes	that	permitted	approximately	$9.5	billion	(with	$7.3	billion	of	unlimited	NOL	remaining	at	December	31,	2015)	of	its	federal	NOL	Carryforwards to	be	utilized	without	regard	to	the	Section	382	annual	limitation	rules	unless	a	second	ownership	change	occurred	on	or	before	December	9,	2015.	No	second	ownership change	occurred	within	that	period.	Substantially	all	of	American's	remaining	federal	NOL	Carryforwards	(attributable	to	US	Airways	Group)	are	subject	to	limitation under	Section	382;	however,	American's	ability	to	utilize	such	NOL	Carryforwards	is	not	anticipated	to	be	effectively	constrained	as	a	result	of	such	limitation.	Similar limitations	may	apply	for	state	income	tax	purposes.	American's	ability	to	utilize	any	new	NOL	Carryforwards	arising	after	the	ownership	changes	is	not	affected	by	the annual	limitation	rules	imposed	by	Section	382	unless	another	ownership	change	occurs.

At	December	31,	2015,	American	had	an	Alternative	Minimum	Tax	(AMT)	credit	carryforward	of	approximately	$458	million	available	for	federal	income	tax purposes,	which	is	available	for	an	indefinite	period.

In	connection	with	the	preparation	of	American's	financial	statements	for	the	fourth	quarter	of	2015,	management	determined	that	it	was	more	likely	than	not	that substantially	all	of	its	deferred	tax	assets,	which	include	its	NOLs,	would	be	realized.	Accordingly,	American	reversed	$3.5	billion	of	the	valuation	allowance	as	of December	31,	2015,	which	resulted	in	a	special	$3.5	billion	non-cash	tax	benefit	recorded	in	the	consolidated	statement	of	operations	for	2015.

Beginning	in	2016,	American	expects	to	record	income	tax	expense	with	an	effective	rate	of	approximately	38%,	which	will	be	substantially	non-cash	as	American utilizes	the	NOLs	described	above	to	offset	cash	income	taxes	due.

For	the	year	ended	December	31,	2014,	American	recorded	a	$320	million	tax	provision,	which	included	$344	million	of	special	tax	charges	as	described	above.

For	the	year	ended	December	31,	2013,	American	recorded	a	$354	million	tax	benefit,	which	included	$324	million	of	net	special	tax	benefits	as	described	above.

|  | Year	Ended	December	31, |  | Percent |
| :--- | :--- | :--- | :--- |
|  |  |  | Increase |
|  | \t\t\t\t2015 | \t\t\t\t2014 | (Decrease) |
|  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |
| Mainline\tpassenger | $29,037 | $30,802 | (5.7) |
| Regional\tpassenger | 6,475 | 6,322 | 2.4 |
| Cargo | 760 | 875 | (13.1) |
| Other | 4,812 | 4,764 | 1.0 |
| Total\toperating\trevenues | $41,084 | $42,763 | (3.9) |

•	 Mainline	passenger	revenues	decreased	$1.8	billion,	or	5.7%,	in	2015	from	2014	driven	primarily	by	a	decrease	in	yield.

•	 Regional	passenger	revenues	increased	$153	million,	or	2.4%,	in	2015	from	2014	due	primarily	to	higher	ASMs,	offset	in	part	by	a	decrease	in	yield.

|  | Year	Ended	December	31, |  | Percent |
| :--- | :--- | :--- | :--- |
|  |  |  | Increase |
|  | \t\t\t\t2015 | \t\t\t\t2014 | (Decrease) |
|  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |
| Aircraft\tfuel\tand\trelated\ttaxes | $6,226 | $10,592 | (41.2) |
| Salaries,\twages\tand\tbenefits | 9,514 | 8,499 | 11.9 |
| Maintenance,\tmaterials\tand\trepairs | 1,889 | 2,051 | (7.9) |
| Other\trent\tand\tlanding\tfees | 1,731 | 1,727 | 0.2 |
| Aircraft\trent | 1,250 | 1,250 | — |
| Selling\texpenses | 1,394 | 1,544 | (9.7) |
| Depreciation\tand\tamortization | 1,364 | 1,301 | 4.8 |
| Special\titems,\tnet | 1,051 | 783 | 34.2 |
| Other | 4,378 | 4,186 | 4.6 |
| Total\tmainline\toperating\texpenses | 28,797 | 31,933 | (9.8) |
| Regional\texpenses: |  |  |  |
| Fuel | 1,230 | 2,009 | (38.8) |
| Other | 4,868 | 4,555 | 6.9 |
| Total\tregional\toperating\texpenses | 6,098 | 6,564 | (7.1) |
| Total\toperating\texpenses | $34,895 | $38,497 | (9.4) |

Total	operating	expenses	in	2015	decreased	$3.6	billion,	or	9.4%,	from	2014.	Significant	changes	in	the	components	of	mainline	operating	expenses	are	as	follows:

•Salaries,	wages	and	benefits	increased	$1.0	billion,	or	11.9%,	in	2015	from	2014	primarily	due	to	increased	costs	associated	with	the	new,	merger	related	pilot, flight	attendant	and	customer	service	and	reservation	agent	collective	bargaining	agreements.

•Selling	expenses	decreased	$150	million,	or	9.7%,	in	2015	from	2014	primarily	due	to	lower	contractually	negotiated	rates	for	certain	commissions	and booking	fees	as	well	as	lower	revenues	in	2015.

Total	regional	expenses	decreased	$466	million,	or	7.1%,	in	2015	to	$6.1	billion	from	$6.6	billion	in	2014.	The	year-over-year	decrease	was	primarily	due	to	a	$779 million,	or	38.8%,	decrease	in	fuel	costs,	offset	in	part	by	a	$313	million,	or	6.9%,	increase	in	other	regional	operating	expenses.	The	average	price	per	gallon	of	fuel decreased	40.9%	to	$1.73	in	2015	from	$2.92	in	2014.	The	increase	in	other	regional	operating	expenses	was	principally	due	to	increased	flying	under	capacity	purchase agreements.

|  | Year	Ended	December	31,<br>				2015 | 2014 | Percent<br>Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- |
|  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |
| Interest\tincome | $49 | $32 | 53.1 |
| Interest\texpense,\tnet\tof\tcapitalized\tinterest | (796) | (847) | (6.0) |
| Other,\tnet | (774) | (183) | nm |
| Total\tnonoperating\texpense,\tnet | $(1,521) | $(998) | 52.4 |

American's	short-term	investments	in	each	period	consisted	of	highly	liquid	investments	that	provided	nominal	returns.

|  | Year	Ended	December	31, |  | Increase |
| :--- | :--- | :--- | :--- |
|  | \t\t\t\t2015 | \t\t\t\t2014 | (Decrease) |
|  |  | (In\tmillions) |  |
| Special\titems,\tnet | $— | $29 | $(29) |
| Amortization\tof\tdebt\tissuance\tcosts\tand\tdebt\tdiscounts | 38 | 37 | 1 |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations | 810 | 842 | (32) |
| Total\tinterest\texpense | 848 | 908 | (60) |
| Less:\tcapitalized\tinterest | (52) | (61) | 9 |
| Total\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | $796 | $847 | $(51) |

Other	nonoperating	expense,	net	in	2015	included	a	net	$616	million	in	other	nonoperating	special	charges	and	$159	million	of	foreign	currency	losses.	The	other nonoperating	special	charges	consisted	of	a	$592	million	write	off	of	all	of	the	value	of	Venezuelan	bolivars	held	by	American	due	to	continued	lack	of	repatriations	and deterioration	of	economic	conditions	in	Venezuela	and	$41	million	in	charges	principally	related	to	non-cash	write	offs	of	unamortized	debt	discount	and	debt	issuance costs	associated	with	refinancing	certain	of	our	secured	term	loan	facilities,	prepayments	of	certain	aircraft	financings	and	the	purchase	and	subsequent	remarketing	of certain	special	facility	revenue	bonds.	These	charges	were	offset	in	part	by	a	$17	million	early	debt	extinguishment	gain	associated	with	the	repayment	of	American's AAdvantage	loan	with	Citibank.	The	foreign	currency	losses	were	driven	primarily	by	the	strengthening	of	the	U.S.	dollar	relative	to	other	currencies	during	2015, principally	in	Latin	American	and	European	markets,	including	a	34%	decrease	in	the	value	of	the	Argentinian	peso,	a	30%	decrease	in	the	value	of	the	Brazilian	real,	a 14%	decrease	in	the	value	of	the	Mexican	peso,	a	10%	decrease	in	the	value	of	the	Euro	and	a	5%	decrease	in	the	value	of	the	British	pound.

|  |  |  |  | $	Change | Change	Excluding |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tEnded\tDecember\t31, | Year\tEnded\tDecember\t31, |  | due\tto | Merger\tImpact |  |
|  | \t\t\t\t2014 | \t\t\t\t2013 | $\tChange | Merger | \t\t\t\t$\t\t\t\t\t\t\t\t% | \t\t\t\t$\t\t\t\t\t\t\t\t% |
|  |  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |  |
| Mainline\tpassenger | $30,802 | $20,218 | $10,584 | $9,833 | $751 | 3.8 |
| Regional\tpassenger | 6,322 | 3,131 | 3,191 | 3,207 | (16) | (0.5) |
| Cargo | 875 | 685 | 190 | 149 | 41 | 6.1 |
| Other | 4,764 | 2,667 | 2,097 | 1,492 | 605 | 23.6 |
| Total\toperating\trevenues | $42,763 | $26,701 | $16,062 | $14,681 | $1,381 | 5.4 |

The	following	discussion	of	operating	revenues	excludes	the	results	of	US	Airways	in	order	to	provide	a	more	meaningful	year-over-year	comparison.

Total	operating	revenues	in	2014	increased	$1.4	billion	or	5.4%,	which	was	driven	by	strong	demand	for	air	travel.	Significant	changes	in	the	components	of	operating revenues,	excluding	the	results	of	US	Airways,	are	as	follows:

•	 Mainline	passenger	revenues	increased	$751	million,	or	3.8%,	in	2014	from	2013	primarily	due	to	higher	yields	and	ASMs,	offset	in	part	by	slightly	lower	load factors.

•	 Other	revenues	increased	$605	million,	or	23.6%,	in	2014	from	2013	driven	primarily	by	higher	revenues	associated	with	American's	loyalty	program	driven by	American's	affinity	card	agreement	with	Citibank.

|  |  |  |  | $	Change | Change	Excluding |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tEnded\tDecember\t31, | Year\tEnded\tDecember\t31, |  | due\tto | Merger\tImpact |  |
|  | \t\t\t\t2014 | \t\t\t\t2013 | $\tChange | Merger | \t\t\t\t$\t\t\t\t\t\t\t\t% | \t\t\t\t$\t\t\t\t\t\t\t\t% |
|  |  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |  |
| Aircraft\tfuel\tand\trelated\ttaxes | $10,592 | $7,839 | $2,753 | $3,190 | $(437) | (5.7) |
| Salaries,\twages\tand\tbenefits | 8,499 | 5,452 | 3,047 | 2,652 | 395 | 7.5 |
| Maintenance,\tmaterials\tand\trepairs | 2,051 | 1,260 | 791 | 679 | 112 | 9.2 |
| Other\trent\tand\tlanding\tfees | 1,727 | 1,152 | 575 | 547 | 28 | 2.5 |
| Aircraft\trent | 1,250 | 768 | 482 | 365 | 117 | 15.7 |
| Selling\texpenses | 1,544 | 1,158 | 386 | 423 | (37) | (3.3) |
| Depreciation\tand\tamortization | 1,301 | 853 | 448 | 382 | 66 | 7.9 |
| Special\titems,\tnet | 783 | 559 | 224 | (1) | 225 | 80.0 |
| Other | 4,186 | 3,007 | 1,179 | 1,109 | 70 | 2.4 |
| Total\tmainline\toperating\texpenses | $31,933 | $22,048 | $9,885 | $9,346 | $539 | 2.5 |
| Regional\texpenses: |  |  |  |  |  |  |
| Fuel | 2,009 | 1,119 | 890 | 947 | (57) | (5.3) |
| Other | 4,555 | 2,174 | 2,381 | 2,286 | 95 | 4.7 |
| Total\tregional\toperating\texpenses | 6,564 | 3,293 | 3,271 | 3,233 | 38 | 1.3 |
| Total\toperating\texpenses | $38,497 | $25,341 | $13,156 | $12,579 | $577 | 2.4 |

The	following	discussion	of	operating	expenses	excludes	the	results	of	US	Airways	in	order	to	provide	a	more	meaningful	year-over-year	comparison.

Total	operating	expenses	in	2014	increased	$577	million,	or	2.4%,	from	2013.	Significant	changes	in	the	components	of	mainline	operating	expenses,	excluding	the results	of	US	Airways,	are	as	follows:

•	 Aircraft	rent	increased	$117	million,	or	15.7%,	in	2014	from	2013	primarily	as	a	result	of	new	leased	aircraft	deliveries	in	2014	as	American	continued	its	fleet renewal	program.

•	 Depreciation	and	amortization	increased	$66	million,	or	7.9%,	in	2014	from	2013	primarily	as	a	result	of	new	purchased	aircraft	deliveries	since	the	end	of 2013	as	American	continues	its	fleet	renewal	program.

Total	regional	expenses	increased	$38	million,	or	1.3%,	in	2014	from	2013.	Other	regional	operating	expenses	increased	$95	million,	or	4.7%,	primarily	due	to higher	expenses	associated	with	certain	capacity	purchase	agreements,	offset	by	a	$57	million,	or	5.3%,	decrease	in	fuel	costs	as	a	result	of	a	decrease	in	the	average price	per	gallon	of	fuel.

|  |  |  |  | $	Change | Change	Excluding | Change	Excluding |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tEnded\tDecember\t31, |  |  | due\tto | Merger\tImpact |  |
|  | \t\t\t\t2014 | \t\t\t\t2013 | $\tChange | Merger | \t\t\t\t$\t\t\t\t\t\t\t\t% | \t\t\t\t$\t\t\t\t\t\t\t\t% |
|  |  | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) | (In\tmillions,\texcept\tpercentage\tchanges) |  |  |
| Interest\tincome | $32 | $20 | $12 | $7 | $5 | 27.7 |
| Interest\texpense,\tnet\tof\tcapitalized\tinterest | (847) | (727) | (120) | (249) | 129 | (18.1) |
| Other,\tnet | (183) | (84) | (99) | (30) | (69) | 81.0 |
| Total\tnonoperating\texpense,\tnet | $(998) | $(791) | $(207) | $(272) | $65 | (8.4) |

Interest	income	was	$32	million	and	$20	million	in	2014	and	2013,	respectively.	American's	short-term	investments	in	each	period	consisted	of	highly	liquid investments	which	provided	nominal	returns.

|  | Year	Ended	December	31,<br>				2014 | 2013 | Increase<br>(Decrease) |
| :--- | :--- | :--- | :--- |
|  | (In\tmillions) |  |  |
| Special\titems\t(1) | $29 | $92 | $(63) |
| Amortization\tof\tdebt\tissuance\tcosts\tand\tdebt\tdiscounts | 38 | 33 | 5 |
| Interest\texpense\ton\tdebt\tand\tcapital\tlease\tobligations\t(2) | 567 | 632 | (65) |
| Total\tinterest\texpense | 634 | 757 | (123) |
| Less:\tcapitalized\tinterest | (53) | (47) | (6) |
| Total\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | 581 | 710 | (129) |
| US\tAirways\ttotal\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | 266 | 17 | 249 |
| Total\tAmerican\tinterest\texpense,\tnet\tof\tcapitalized\tinterest | $847 | $727 | $120 |

The	following	discussion	of	nonoperating	income	and	expense	excludes	the	results	of	US	Airways	in	order	to	provide	a	more	meaningful	year-over-year	comparison.

Interest	expense,	net	of	capitalized	interest	decreased	$129	million	in	2014	from	2013	primarily	due	to	a	$63	million	decrease	in	special	charges	recognized	year- over-year	as	further	described	below,	as	well	as	refinancing	activities	that	resulted	in	$65	million	less	interest	expense	recognized	in	2014.

(1) In	2014,	American	recognized	$29	million	of	special	charges	relating	to	non-cash	interest	accretion	on	bankruptcy	settlement	obligations.	In	2013,	American recognized	$48	million	of	special	charges	relating	to	post-petition	interest	expense	on	unsecured	obligations	pursuant	to	the	Plan	and	penalty	interest	related	to American's	10.5%	secured	notes	and	7.50%	senior	secured	notes.	In	addition,	in	2013	American	recorded	special	charges	of	$44	million	for	debt	extinguishment costs	incurred	as	a	result	of	the	repayment	of	certain	aircraft	secured	indebtedness,	including	cash	interest	charges	and	non-cash	write	offs	of	unamortized	debt issuance	costs.

(2) As	a	result	of	the	2013	refinancing	activities	and	the	early	extinguishment	of	American's	7.50%	senior	secured	notes	in	2014,	American	incurred	$65	million	less interest	expense	in	2014	as	compared	to	2013.

Other	nonoperating	expense,	net	in	2014	consisted	of	$92	million	of	net	foreign	currency	losses,	including	a	$43	million	special	charge	for	Venezuelan	foreign currency	losses,	and	$48	million	of	early	debt	extinguishment	costs	related	to	the	prepayment	of	American's	7.50%	senior	secured	notes	and	other	indebtedness.	The foreign	currency	losses	were	driven	primarily	by	the	strengthening	of	the	U.S.	dollar	relative	to	other	currencies	during	2014,	principally	in	the	Latin	American	market, including	a	48%	decrease	in	the	value	of	the	Venezuelan	bolivar	and	a	14%	decrease	in	the	value	of	the	Brazilian	real.

Reorganization	items	refer	to	revenues,	expenses	(including	professional	fees),	realized	gains	and	losses	and	provisions	for	losses	that	are	realized	or	incurred	as	a direct	result	of	the	Chapter	11	Cases.	The	following	table	summarizes	the	components	included	in	reorganization	items,	net	on	American's	consolidated	statement	of operations	for	the	year	ended	December	31,	2013	(in	millions):

(1) In	exchange	for	employees'	contributions	to	the	successful	reorganization,	including	agreeing	to	reductions	in	pay	and	benefits,	American	agreed	in	the	Plan	to provide	each	employee	group	a	deemed	claim,	which	was	used	to	provide	a	distribution	of	a	portion	of	the	equity	of	the	reorganized	entity	to	those	employees. Each	employee	group	received	a	deemed	claim	amount	based	upon	a	portion	of	the	value	of	cost	savings	provided	by	that	group	through	reductions	to	pay	and benefits	as	well	as	through	certain	work	rule	changes.	The	total	value	of	this	deemed	claim	was	approximately	$1.7	billion.

(2) Amounts	 include	allowed	claims	(claims	approved	by	 the	Bankruptcy	Court)	and	estimated	allowed	claims	relating	 to	(i)	 the	rejection	or	modification	of financings	related	to	aircraft	and	(ii)	entry	of	orders	treated	as	unsecured	claims	with	respect	to	facility	agreements	supporting	certain	issuances	of	special	facility revenue

bonds.	The	Debtors	recorded	an	estimated	claim	associated	with	the	rejection	or	modification	of	a	financing	or	facility	agreement	when	the	applicable	motion	was filed	with	the	Bankruptcy	Court	to	reject	or	modify	such	financing	or	facility	agreement	and	the	Debtors	believed	that	it	was	probable	the	motion	would	be approved,	and	there	was	sufficient	information	to	estimate	the	claim.	See	Note	2	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	further information.

(3) Pursuant	to	the	Plan,	the	Debtors	agreed	to	allow	certain	post-petition	unsecured	claims	on	obligations.	As	a	result,	during	the	year	ended	December	31,	2013, American	recorded	reorganization	charges	to	adjust	estimated	allowed	claim	amounts	previously	recorded	on	rejected	special	facility	revenue	bonds	of	$180 million,	allowed	general	unsecured	claims	related	to	the	1990	and	1994	series	of	special	facility	revenue	bonds	that	financed	certain	improvements	at	JFK,	and rejected	bonds	that	financed	certain	improvements	at	ORD,	which	are	included	in	the	table	above.

(4) The	Plan	allowed	unsecured	creditors	receiving	AAG	Series	A	Preferred	Stock	a	conversion	discount	of	3.5%.	Accordingly,	American	recorded	the	fair	value	of such	discount	upon	the	confirmation	of	the	Plan	by	the	Bankruptcy	Court.

# Liquidity	and	Capital	Resources

# Cash,	Short-Term	Investments	and	Restricted	Cash

As	of	December	31,	2015,	AAG's	total	cash,	short-term	investments	and	restricted	cash	and	short-term	investments	was	$6.9	billion,	of	which	$695	million	was restricted.	Additional	detail	is	provided	in	the	table	below	(in	millions):

|  | AAG | AAG | American | American |
| :--- | :--- | :--- | :--- | :--- |
|  | December\t31, |  | December\t31, | December\t31, |
|  | 2015 | 2014 | 2015 | 2014 |
| Cash | $390 | $994 | $364 | $984 |
| Short-term\tinvestments. | \t 5,864 | \t 6,309 | \t 5,862 | \t 6,306 |
| Restricted\tcash\tand\tshort-term\tinvestments\t(1) | 695 | 774 | 695 | 774 |
| Total\tcash,\tshort-term\tinvestments\tand\trestricted\tcash\tand\tshort-term\tinvestments | $6,949 | $8,077 | $6,921 | $8,064 |

(1) Our	restricted	cash	and	short-term	investments	related	primarily	to	collateral	held	to	support	workers'	compensation	obligations.

As	of	December	31,	2015,	$150	million	of	our	cash	and	short-term	investment	balances	were	held	as	foreign	currency	in	foreign	bank	accounts.	In	the	fourth	quarter of	2015,	we	recognized	a	$592	million	special	charge	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	us,	due	to	continued	lack	of	repatriations	and deterioration	of	economic	conditions	in	Venezuela.	During	2014,	we	significantly	reduced	capacity	in	the	Venezuelan	market	and	we	no	longer	accept	bolivars	as payment	for	airline	tickets.

As	 of	 December	 31,	 2014,	 $804	 million	 of	 our	 cash	 and	 short-term	 investment	 balances	 were	 held	 as	 foreign	 currency	 in	 foreign	 bank	 accounts,	 of	 which approximately	$656	million	was	held	in	Venezuelan	bolivars.	This	balance	included	approximately	$621	million	valued	at	6.3	bolivars	and	approximately	$35	million valued	at	12.0	bolivars,	with	the	rate	depending	on	the	date	we	submitted	our	repatriation	request	to	the	Venezuelan	government.

Generally,	fluctuations	in	foreign	currencies,	including	devaluations,	cannot	be	predicted	by	us	and	can	significantly	affect	the	value	of	our	cash	and	short-term investments	located	outside	the	United	States.	These	conditions,	as	well	as	any	further	delays,	devaluations	or	imposition	of	more	stringent	repatriation	restrictions,	may materially	adversely	affect	our	business,	results	of	operations	and	financial	condition.	See	Part	I,	Item	1A.

Risk	Factors	–	"We	operate	a	global	business	with	international	operations	that	are	subject	to	economic	and	political	instability	and	have	been,	and	in	the	future	may continue	to	be,	adversely	affected	by	numerous	events,	circumstances	or	government	actions	beyond	our	control"	for	additional	discussion	of	this	and	other	currency risks.

# Sources	and	Uses	of	Cash

# Operating	Activities

Net	cash	provided	by	operating	activities	was	$6.2	billion	and	$3.1	billion	in	2015	and	2014,	respectively,	a	year-over-year	increase	of	$3.2	billion.	The	increase	was primarily	due	to	increased	profitability	driven	by	substantially	lower	fuel	costs.	In	addition,	a	decrease	in	pension	contributions	from	$810	million	in	2014	to	$6	million in	2015	contributed	to	increased	operating	cash	flows.	Our	2015	profitability	was	negatively	affected	by	a	$592	million	charge	to	write	off	all	of	the	value	of	Venezuelan bolivars	held	by	us	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

# Investing	Activities

Net	cash	used	in	investing	activities	was	$5.6	billion	and	$2.9	billion	in	2015	and	2014,	respectively.

Principal	investing	activities	in	2015	included	expenditures	of	$6.2	billion	for	property	and	equipment,	consisting	primarily	of	the	purchase	of	114	newly	delivered aircraft	and	eight	spare	engines,	including	31	Airbus	A321	family	aircraft,	24	Embraer	175	aircraft,	20	Bombardier	CRJ900	aircraft,	17	Boeing	737-800	aircraft,	13 Boeing	787	aircraft,	seven	Airbus	A319	aircraft	and	two	Boeing	777	aircraft	and	the	purchase	of	five	Boeing	757	aircraft	previously	being	leased.	These	cash	outflows were	offset	in	part	by	$391	million	in	net	sales	of	short-term	investments	and	a	$79	million	decrease	in	restricted	cash	and	short-term	investments	primarily	due	to	lower collateral	requirements	with	respect	to	workers'	compensation	obligations.

Principal	investing	activities	in	2014	included	expenditures	of	$5.3	billion	for	property	and	equipment,	consisting	primarily	of	the	purchase	of	70	newly	delivered aircraft,	including	25	Airbus	A320	family	aircraft,	20	Boeing	737-800	aircraft,	16	Bombardier	CRJ900	aircraft,	six	Boeing	777	aircraft,	and	three	Airbus	A330	family aircraft,	the	purchase	of	aircraft	previously	leased,	including	nine	Airbus	A320	family	aircraft,	three	Airbus	A330	family	aircraft	and	three	Boeing	777	aircraft,	as	well as	pre-delivery	deposits	for	certain	aircraft	on	order.	These	cash	outflows	were	offset	in	part	by	$1.8	billion	in	net	sales	of	short-term	investments,	$307	million	in proceeds	from	the	sale	of	DCA	slots	and	a	$261	million	decrease	in	restricted	cash	and	short-term	investments	primarily	due	to	lower	collateral	requirements	with respect	to	workers'	compensation	obligations.

# Financing	Activities

Net	cash	used	in	financing	activities	was	$1.3	billion	and	$315	million	in	2015	and	2014,	respectively.

Principal	financing	activities	in	2015	included	share	repurchases	of	$3.6	billion,	debt	repayments	of	$2.2	billion,	including	the	$400	million	repayment	of	American's AAdvantage	loan	with	Citibank,	and	$278	million	in	dividend	payments.	These	cash	outflows	were	offset	in	part	by	proceeds	from	the	issuance	of	$5.0	billion	of	debt primarily	including	$4.2	billion	of	EETC	equipment	notes	and	other	aircraft	related	financings	and	$500	million	principal	amount	of	4.625%	senior	notes.

Principal	financing	activities	in	2014	included	$1.0	billion	in	stock	repurchases	and	debt	repayments	of	$3.1	billion,	including	the	$1.0	billion	prepayment	of American's	7.50%	senior	secured	notes	and	the	$366	million

prepayment	of	certain	airport	facility	revenue	bonds.	These	cash	outflows	were	offset	in	part	by	proceeds	from	the	issuance	of	$3.3	billion	of	debt,	primarily	including $1.8	billion	of	proceeds	from	EETC	equipment	notes	and	other	aircraft	related	financings,	$1.5	billion	of	proceeds	from	the	issuance	of	the	5.50%	senior	notes	and	the term	loan	under	the	2014	Credit	Facilities,	as	well	as	$811	million	of	proceeds	from	sale-leaseback	transactions	related	to	the	financing	of	20	Boeing	737-800	aircraft.

Net	cash	provided	by	operating	activities	was	$3.1	billion	and	$675	million	in	2014	and	2013,	respectively,	a	year-over-year	increase	of	$2.4	billion.	This	year-over- year	increase	is	principally	due	to	increased	profitability	and	the	inclusion	of	a	full	year	of	US	Airways	Group's	net	cash	provided	by	operating	activities	for	the	year ended	December	31,	2014.	These	increases	were	offset	in	part	by	higher	pension	contributions	made	during	2014.	During	the	years	ended	December	31,	2014	and	2013, we	 contributed	 $810	 million	 and	 $494	 million,	 respectively,	 to	 fund	 our	 defined	 benefit	 pension	 plans,	 representing	 a	 $316	 million	 year-over-year	 increase	 in contributions.

Principal	investing	activities	in	2013	included	expenditures	of	$3.1	billion	for	property	and	equipment,	consisting	primarily	of	the	purchase	of	39	newly	delivered aircraft,	including	31	Boeing	737-800	aircraft	and	eight	Boeing	777	aircraft	as	well	as	pre-delivery	deposits	for	certain	aircraft	on	order	and	$1.2	billion	in	net	purchases of	short-term	investments.	These	cash	outflows	were	offset	in	part	by	a	$147	million	decrease	in	restricted	cash	and	short-term	investments	primarily	due	to	lower collateral	requirements	with	respect	to	workers'	compensation	obligations	and	$128	million	in	proceeds	from	the	sale	of	certain	property	and	equipment.	Additionally,	in connection	with	the	Merger,	we	acquired	the	$206	million	cash	balance	of	US	Airways	Group.

Net	cash	used	in	financing	activities	was	$315	million	in	2014	as	compared	to	net	cash	provided	by	financing	activities	of	$3.8	billion	in	2013.

Principal	financing	activities	in	2014	included	$1.0	billion	in	stock	repurchases	and	debt	repayments	of	$3.1	billion,	including	the	$1.0	billion	prepayment	of American's	7.50%	senior	secured	notes	and	the	$366	million	prepayment	of	certain	airport	facility	revenue	bonds.	These	cash	outflows	were	offset	in	part	by	proceeds from	the	issuance	of	$3.3	billion	of	debt,	primarily	including	$1.8	billion	of	proceeds	from	EETC	equipment	notes	and	other	aircraft	related	financings,	$1.5	billion	of proceeds	from	the	issuance	of	the	5.50%	senior	notes	and	the	term	loan	under	the	2014	Credit	Facilities,	as	well	as	$811	million	of	proceeds	from	sale-leaseback transactions	related	to	the	financing	of	20	Boeing	737-800	aircraft.

Principal	financing	activities	in	2013	included	proceeds	from	the	issuance	of	debt	of	$5.1	billion,	including	the	$1.9	billion	2013	Term	Loan	Facility	and	several EETC	financings,	and	proceeds	from	sale-leaseback	transactions	of	$1.7	billion.	These	cash	inflows	were	offset	in	part	by	debt	repayments	of	$2.9	billion.

# American

Net	cash	provided	by	operating	activities	was	flat	at	$2.6	billion	in	each	of	2015	and	2014.	Cash	flows	were	generated	from	increased	profitability,	driven	by substantially	lower	fuel	costs	and	a	decrease	in	pension	contributions,	which	were	offset	in	part	by	American's	funding	of	share	repurchase	activities	performed	at	the AAG	parent	company	level.	American's	2015	profitability	was	negatively	affected	by	a	$592	million	charge	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by American	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

Net	cash	provided	by	financing	activities	was	$2.4	billion	and	$143	million	in	2015	and	2014,	respectively.

Principal	financing	activities	in	2015	included	proceeds	from	the	issuance	of	$4.5	billion	of	debt	primarily	including	$4.2	billion	of	EETC	equipment	notes	and	other aircraft	related	financings.	These	cash	inflows	were	offset	in	part	by	debt	repayments	of	$2.2	billion,	including	the	$400	million	repayment	of	American's	AAdvantage loan	with	Citibank.

Principal	financing	activities	in	2014	included	proceeds	from	the	issuance	of	$2.6	billion	of	debt,	primarily	including	$1.8	billion	of	EETC	equipment	notes	and	other aircraft	related	financings	and	$750	million	of	proceeds	from	issuance	of	the	term	loan	under	the	2014	Credit	Facilities,	as	well	as	$811	million	of	proceeds	from	sale- leaseback	transactions	related	to	the	financing	of	20	Boeing	737-800	aircraft.	These	cash	inflows	were	offset	in	part	by	debt	repayments	of	$3.0	billion,	including	the $1.0	billion	prepayment	of	American's	7.50%	senior	secured	notes	and	the	$366	million	prepayment	of	certain	airport	facility	revenue	bonds.

Net	cash	provided	by	operating	activities	was	$2.6	billion	and	$627	million	in	2014	and	2013,	respectively,	a	year-over-year	increase	of	$2.0	billion.	This	year-over- year	increase	is	principally	due	to	increased	profitability	and	the	inclusion	of	a	full	year	of	US	Airways'	net	cash	provided	by	operating	activities	for	the	year	ended December	31,	2014.	These	increases	were	offset	in	part	by	higher	pension	contributions	made	during	2014.	During	the	years	ended	December	31,	2014	and	2013, American	contributed	$809	million	and	$494	million,	respectively,	to	fund	its	defined	benefit	pension	plans,	representing	a	$315	million	year-over-year	increase	in contributions.

Principal	investing	activities	in	2013	included	expenditures	of	$3.1	billion	for	property	and	equipment,	consisting	primarily	of	the	purchase	of	39	newly	delivered aircraft,	including	31	Boeing	737-800	aircraft	and	eight	Boeing	777	aircraft	as	well	as	pre-delivery	deposits	for	certain	aircraft	on	order	and	$1.2	billion	in	net	purchases of	short-term	investments.	These	cash	outflows	were	offset	in	part	by	a	$147	million	decrease	in	restricted	cash	and	short-term	investments	primarily	due	to	lower collateral	requirements	with	respect	to	workers'	compensation	obligations	and	$115	million	in	proceeds	from	the	sale	of	certain	property	and	equipment.	Additionally,	in connection	with	the	Merger,	American	acquired	the	$200	million	cash	balance	of	US	Airways.

Net	cash	provided	by	financing	activities	was	$143	million	and	$3.9	billion	in	2014	and	2013,	respectively.

# Commitments

# Significant	Indebtedness

As	of	December	31,	2015,	AAG	and	American	had	$20.8	billion	and	$19.1	billion,	respectively,	in	long-term	debt	and	capital	leases	(including	current	maturities	of $2.2	billion	each).	See	Note	9	and	22	to	AAG's

Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	7	and	20	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	further	information	on all	indebtedness	as	of	December	31,	2015,	as	well	as	the	2016-1	EETC	financing	disclosed	as	a	subsequent	event.

# Credit	Ratings

The	following	table	details	our	credit	ratings	as	of	December	31,	2015:

* The	credit	agency	does	not	rate	this	category	for	this	entity.

A	decrease	in	our	credit	ratings	could	cause	our	borrowing	costs	to	increase,	which	would	increase	our	interest	expense	and	could	affect	our	net	income,	and	our credit	 ratings	 could	 adversely	 affect	 our	 ability	 to	 obtain	 additional	 financing.	 If	 our	 financial	 performance	 or	 industry	 conditions	 worsen,	 we	 may	 face	 future downgrades,	which	could	negatively	impact	our	borrowing	costs	and	the	prices	of	our	equity	or	debt	securities.	In	addition,	any	downgrade	of	our	credit	ratings	may indicate	a	decline	in	our	business	and	in	our	ability	to	satisfy	our	obligations	under	our	indebtedness.

# Aircraft	and	Engine	Purchase	Commitments

As	of	December	31,	2015,	we	had	definitive	purchase	agreements	with	Airbus,	Boeing	and	other	manufacturers	for	the	acquisition	of	the	following	mainline	and regional	aircraft:

|  | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Airbus |  |  |  |  |  |  |  |
| A320\tFamily | \t 25 | \t 20 | \t — | \t — | \t — | — | 45 |
| A320neo\tFamily | \t — | \t — | \t — | \t 25 | \t 25 | 50 | \t100 |
| A350\tXWB | \t — | 4 | \t 10 | 6 | 2 | — | 22 |
| Boeing |  |  |  |  |  |  |  |
| 737-800 | \t 20 | \t 20 | \t — | \t — | \t — | — | 40 |
| 737\tMAX\tFamily | \t — | 3 | \t 17 | \t 20 | \t 20 | 40 | \t100 |
| 777-300\tER | 2 | \t — | \t — | \t — | \t — | — | 2 |
| 787\tFamily | 8 | \t 13 | 8 | \t — | \t — | — | 29 |
| Bombardier |  |  |  |  |  |  |  |
| CRJ900\t(1) | \t 18 | \t — | \t — | \t — | \t — | — | 18 |
| Embraer |  |  |  |  |  |  |  |
| ERJ175\t(1) | \t 24 | \t 12 | \t — | \t — | \t — | — | 36 |
| Total | \t 97 | \t 72 | \t 35 | \t 51 | \t 47 | 90 | \t392 |

(1) These	aircraft	may	be	operated	by	wholly-owned	subsidiaries	or	leased	to	third-party	regional	carriers	which	would	operate	the	aircraft	under	capacity	purchase arrangements.

We	also	have	agreements	for	49	spare	engines	to	be	delivered	in	2016	and	beyond.	Under	all	of	our	aircraft	and	engine	purchase	agreements,	our	total	future commitments	as	of	December	31,	2015	are	expected	to	be	as	follows	(in	millions):

| commitments	as	of	December	31,	2015	are	expected	to	be	as	follows	(in	millions): |  |  |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021\tand\nThereafter | Total |
| Payments\tfor\tthe\tabove\taircraft\tcommitments\tand\tcertain\tengines\t(1) | $4,505 | $4,591 | $2,916 | $3,156 | $2,793 | $4,537 | $22,498 |

(1) These	amounts	are	net	of	purchase	deposits	currently	held	by	the	manufacturers	and	include	all	commitments	for	regional	aircraft.	American	has	granted	Boeing	a security	interest	in	its	purchase	deposits	with	Boeing.	Our	purchase	deposits	held	by	all	manufacturers	totaled	$1.1	billion	as	of	December	31,	2015.

In	April	2015,	we	amended	our	delivery	agreement	with	Boeing	to	defer	four	787	aircraft	from	2016	to	2017	and	one	787	aircraft	from	2017	to	2018.	In	June	2015, we	amended	our	delivery	agreement	with	Airbus	to	defer	delivery	of	10	A320neo	family	aircraft	in	2017	and	25	A320neo	family	aircraft	in	2018	to	years	2021	through 2023.	In	December	2015,	we	amended	our	delivery	agreement	with	Airbus	to	defer	two	A350	XWB	from	2017	to	2020.	These	deferrals	are	reflected	in	the	table	above.

As	of	December	31,	2015,	we	did	not	have	financing	commitments	for	the	following	aircraft	currently	on	order	and	scheduled	to	be	delivered	through	2017:	25 Airbus	A320	family	aircraft	in	2016	and	20	Airbus	A320	family	aircraft	in	2017,	8	Boeing	787	family	aircraft	in	2016	and	13	Boeing	787	family	aircraft	in	2017,	15 Boeing	737-800	aircraft	in	2016,	three	Boeing	737	MAX	family	aircraft	in	2017	and	two	Boeing	777-300ER	aircraft	in	2016.	In	addition,	we	do	not	have	financing commitments	in	place	for	substantially	all	aircraft	currently	on	order	and	scheduled	to	be	delivered	in	2018	and	beyond.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	will need	to	obtain	sufficient	financing	or	other	capital	to	operate	successfully."

# Credit	Card	Processing	Agreements

We	have	agreements	with	companies	that	process	customer	credit	card	transactions	for	the	sale	of	air	travel	and	other	services.	Credit	card	processors	have	financial risk	associated	with	tickets	purchased	for	travel	because,	although	the	processor	generally	forwards	the	cash	related	to	the	purchase	to	us	soon	after	the	purchase	is completed,	the	air	travel	generally	occurs	after	that	time,	and	the	processor	may	have	liability	if	we	do	not	ultimately	provide	the	air	travel	or	services	according	to	our fare	rules.	Our	agreements	allow	these	processing	companies,	under	certain	conditions,	to	hold	an	amount	of	our	cash	(referred	to	as	a	"holdback")	equal	to	a	portion	of advance	ticket	sales	that	have	been	processed	by	that	company,	but	for	which	we	have	not	yet	provided	the	air	transportation.	We	are	not	currently	required	to	maintain any	holdbacks	pursuant	to	these	requirements.	Certain	of	our	agreements	provide	that	these	holdback	requirements	can	be	modified	at	the	discretion	of	the	processing companies,	up	to	the	estimated	liability	for	future	air	travel	purchased	with	the	respective	credit	cards,	upon	the	occurrence	of	specified	events,	including	material adverse	changes	in	our	financial	condition.	The	amount	that	the	processing	companies	may	withhold	also	varies	as	a	result	of	changes	in	financial	risk	due	to	seasonal fluctuations	in	ticket	volume.	Additional	holdback	requirements	will	reduce	our	liquidity	in	the	form	of	unrestricted	cash	by	the	amount	of	the	holdbacks.

# Pension	Funding	Obligation

We	are	required	to	make	minimum	contributions	to	our	defined	benefit	pension	plans	under	the	minimum	funding	requirements	of	Employee	Retirement	Income Security	Act	of	1974	and	various	other	laws.

Based	on	our	current	funding	assumptions,	we	have	no	minimum	required	contributions	until	2018.	Currently,	our	minimum	funding	obligation	for	our	pension plans	is	subject	to	temporary	favorable	rules	that	are	scheduled	to	expire	at	the	end	of	2017.	Our	pension	funding	obligations	are	likely	to	increase	materially	following expiration	of	the	temporary	funding	rules,	when	we	will	be	required	to	make	contributions	relating	to	the	2018

fiscal	year.	The	amount	of	these	obligations	will	depend	on	the	performance	of	our	investments	held	in	trust	by	the	pension	plans,	interest	rates	for	determining	liabilities and	our	actuarial	experience.	See	Note	13	 to	AAG's	Consolidated	Financial	Statements	 in	Part	II,	Item	8A	and	Note	11	 to	American's	 Consolidated	 Financial Statements	in	Part	II,	Item	8B	for	further	information	on	retirement	benefits	as	of	December	31,	2015.

# Labor	Agreements

# Off-Balance	Sheet	Arrangements

An	off-balance	sheet	arrangement	is	any	transaction,	agreement	or	other	contractual	arrangement	involving	an	unconsolidated	entity	under	which	a	company	has (1)	made	guarantees,	(2)	a	retained	or	a	contingent	interest	in	transferred	assets,	(3)	an	obligation	under	derivative	instruments	classified	as	equity	or	(4)	any	obligation arising	out	of	a	material	variable	interest	in	an	unconsolidated	entity	that	provides	financing,	liquidity,	market	risk	or	credit	risk	support	to	us,	or	that	engages	in	leasing, hedging	or	research	and	development	arrangements	with	us.

We	have	no	off-balance	sheet	arrangements	of	the	types	described	in	the	first	three	categories	above	that	we	believe	may	have	a	material	current	or	future	effect	on financial	condition,	liquidity	or	results	of	operations.	Certain	guarantees	that	we	do	not	expect	to	have	a	material	current	or	future	effect	on	our	financial	condition, liquidity	or	results	of	operations	are	disclosed	in	Note	15	to	AAG's	Consolidated	Financial	Statements	included	in	Part	II,	Item	8A	and	Note	13	to	American's Consolidated	Financial	Statements	in	Part	II,	Item	8B.

# Special	Facility	Revenue	Bonds

We	guarantee	the	payment	of	principal	and	interest	of	certain	special	facility	revenue	bonds	issued	by	municipalities	primarily	to	build	or	improve	airport	facilities and	purchase	equipment	which	is	leased	to	us.	Under	such	leases,	we	are	required	to	make	rental	payments	through	2035,	sufficient	to	pay	maturing	principal	and interest	payments	on	the	related	bonds.	As	of	December	31,	2015,	the	remaining	lease	payments	guaranteeing	the	principal	and	interest	on	these	bonds	are	$617	million, which	are	accounted	for	as	operating	leases.

# Pass-Through	Trusts

We	have	financed	certain	aircraft	and	engines	with	pass-through	trust	certificates,	or	EETCs,	issued	by	pass-through	trusts.	These	trusts	are	off-balance	sheet	entities, the	primary	purpose	of	which	is	to	finance	our	acquisition	of	flight	equipment.	Rather	than	finance	each	aircraft	separately	when	such	aircraft	is	purchased,	delivered	or refinanced,	these	trusts	allow	American	to	raise	the	financing	for	several	aircraft	at	one	time	and,	if	applicable,	place	such	funds	in	escrow	pending	a	future	purchase, delivery	or	refinancing	of	the	relevant	aircraft.	The	trusts	were	also	structured	to	provide	for	certain	credit	enhancements,	such	as	liquidity	facilities	to	cover	certain interest	payments,	that	reduce	the	risks	to	the	purchasers	of	the	trust	certificates	and,	as	a	result,	reduce	the	cost	of	aircraft	financing	to	American.

Each	trust	covered	a	set	amount	of	aircraft	scheduled	to	be	delivered	or	refinanced	upon	the	issuance	of	the	EETC	or	within	a	specific	period	of	time	thereafter.	At	the time	of	each	covered	aircraft	financing,	the	relevant	trust	used	the	proceeds	of	the	issuance	of	the	EETC	(which	may	have	been	available	at	the	time	of	issuance	thereof or	held	in	escrow	until	the	date	of	delivery	of	the	applicable	aircraft)	to	purchase	equipment	notes	relating	to	the	financed	aircraft.	The	equipment	notes	were	issued,	at American	or,	in	the	case	of	equipment	notes	issued	by	US	Airways	prior	to	its	merger	with	and	into	American,	at	US	Airways'	election,	in	connection	with	a	mortgage financing	of	the	aircraft	or,	in	certain	cases,	by	a	separate	owner	trust	in	connection	with	a	leveraged	lease	financing	of	the	aircraft.	In	the	case	of	a	leveraged	lease financing,	the	owner	trust	then	leased	the	aircraft	to	American	or	US	Airways.	In	both	cases,	the	equipment	notes	are	secured	by	a	security	interest	in	the	aircraft.	On December	30,	2015,	American	assumed	all	of	US	Airways'	obligations	under	all	outstanding	equipment	notes	previously	issued	by	US	Airways.	The	pass-through	trust certificates	are	not	direct	obligations	of,	nor	are	they	guaranteed	by,	AAG	or	American.	However,	in	the	case	of	mortgage	financings,	the	equipment	notes	issued	to	the trusts	are	direct	obligations	of	American	and,	in	certain	instances,	are	guaranteed	by	AAG.	As	of	December	31,	2015,	$8.7	billion	associated	with	these	mortgage financings	is	reflected	as	debt	in	the	accompanying	consolidated	balance	sheet.

With	respect	to	leveraged	leases,	American	evaluated	whether	the	leases	had	characteristics	of	a	variable	interest	entity.	American	concluded	the	leasing	entities	met the	criteria	for	variable	interest	entities.	American	generally	is	not	the	primary	beneficiary	of	the	leasing	entities	if	the	lease	terms	are	consistent	with	market	terms	at	the inception	of	the	lease	and	do	not	include	a	residual	value	guarantee,	fixed-price	purchase	option	or	similar	feature	that	obligates	American	to	absorb	decreases	in	value	or entitles	American	to	participate	in	increases	in	the	value	of	the	aircraft.	American	does	not	provide	residual	value	guarantees	to	the	bondholders	or	equity	participants	in the	trusts.	Some	leases	have	a	fair	market	value	or	a	fixed	price	purchase	option	that	allows	American	to	purchase	the	aircraft	at	or	near	the	end	of	the	lease	term. However,	the	option	price	approximates	an	estimate	of	the	aircraft's	fair	value	at	the	option	date.	Under	this	feature,	American	does	not	participate	in	any	increases	in	the value	of	the	aircraft.	American	concluded	it	is	not	the	primary	beneficiary	under	these	arrangements.	Therefore,	American	accounts	for	its	EETC	leveraged	lease financings	as	operating	leases.	American's	total	future	obligations	under	these	leveraged	lease	financings	are	$1.8	billion	as	of	December	31,	2015.

# AAG	Contractual	Obligations

The	following	table	provides	details	of	our	future	cash	contractual	obligations	as	of	December	31,	2015.	The	table	does	not	include	commitments	that	are	contingent on	events	or	other	factors	that	are	uncertain	or	unknown	at	this	time.

|  | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| American |  |  |  |  |  |  |  |
| Debt\tand\tcapital\tlease\tobligations\t(1),\t(3) | $2,266 | $1,598 | $1,634 | $2,628 | $3,081 | $7,820 | $19,027 |
| Interest\tobligations\t(2),\t(3) | 796 | 742 | 698 | 601 | 472 | 1,314 | 4,623 |
| Commitments\tfor\taircraft\tand\tengine\tpurchases\t(4) | 4,505 | 4,591 | \t 2,916 | 3,156 | 2,793 | 4,537 | \t 22,498 |
| Operating\tlease\tcommitments\t(5) | 2,187 | 2,069 | \t 1,824 | 1,642 | 1,493 | 4,704 | \t 13,919 |
| Regional\tcapacity\tpurchase\tagreements\t(6) | 1,672 | 1,553 | \t 1,249 | 1,075 | 881 | 2,393 | 8,823 |
| Minimum\tpension\tobligations\t(7) | — | — | 164 | 1,205 | 902 | 4,199 | 6,470 |
| Retiree\tmedical\tand\tother\tpurchase\tobligations\t(7) | 435 | 241 | 206 | 178 | 90 | 355 | 1,505 |
| Total\tAmerican\tContractual\tObligations | $11,861 | $10,794 | $8,691 | $10,485 | $9,712 | $ 25,322 | $76,865 |
| AAG\tParent\tand\tOther\tAAG\tSubsidiaries |  |  |  |  |  |  |  |
| Debt\tand\tcapital\tlease\tobligations\t(1) | $—\t\t\t $— | $—\t\t\t $— | $500 | $750 | $506 | $24 | $1,780 |
| Interest\tobligations\t(2) | 97 | 97 | 82 | 67 | 14 | 9 | 366 |
| Operating\tlease\tcommitments | 11 | 9 | 5 | 1 | — | — | 26 |
| Total\tAAG\tContractual\tObligations | $11,969 | $10,900 | $9,278 | $11,303 | $10,232 | $ 25,355 | $79,037 |

(1) Amounts	represent	contractual	amounts	due.	For	American,	excludes	$228	million	and	for	AAG	Parent	and	other	AAG	subsidiaries,	excludes	$18	million	of unamortized	debt	discount	and	debt	issuance	costs	as	of	December	31,	2015.

(2) For	variable-rate	debt,	future	interest	obligations	are	estimated	using	the	current	forward	rates	at	December	31,	2015.

(3) Includes	$8.7	billion	of	future	principal	payments	and	$2.3	billion	of	future	interest	payments,	respectively,	as	of	December	31,	2015,	related	to	EETCs	associated with	mortgage	financings	for	the	purchase	of	certain	aircraft.

(4) See	Part	II,	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	"Liquidity	and	Capital	Resources"	for	additional information	about	these	obligations.

(5) Includes	$1.8	billion	of	future	minimum	lease	payments	related	to	EETC	leverage	leased	financings	of	certain	aircraft	as	of	December	31,	2015.

(6) Represents	minimum	payments	under	capacity	purchase	agreements	with	 third-party	regional	carriers.	These	commitments	are	estimates	of	costs	based	on assumed	minimum	levels	of	flying	under	the	capacity	purchase	agreements	and	our	actual	payments	could	differ	materially.

(7) Includes	minimum	pension	contributions	based	on	actuarially	determined	estimates	and	other	postretirement	benefit	payments	based	on	estimated	payments through	2025.	See	Note	11	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B.

# Capital	Raising	Activity	and	Other	Possible	Actions

In	light	of	our	significant	financial	commitments	related	to,	among	other	things,	new	aircraft	and	the	servicing	and	amortization	of	existing	debt	and	equipment leasing	arrangements,	we	and	our	subsidiaries	will	regularly

consider,	and	enter	 into	negotiations	related	 to,	capital	raising	activity,	which	may	 include	 the	entry	 into	 leasing	 transactions	and	future	 issuances	of	secured	or unsecured	debt	obligations	or	additional	equity	securities	in	public	or	private	offerings	or	otherwise.	The	cash	available	from	operations	and	these	sources,	however,	may not	be	sufficient	to	cover	cash	contractual	obligations	because	economic	factors	may	reduce	the	amount	of	cash	generated	by	operations	or	increase	costs.	For	instance, an	economic	downturn	or	general	global	instability	caused	by	military	actions,	terrorism,	disease	outbreaks	or	natural	disasters	could	reduce	the	demand	for	air	travel, which	would	reduce	the	amount	of	cash	generated	by	operations.	An	increase	in	costs,	either	due	to	an	increase	in	borrowing	costs	caused	by	a	reduction	in	credit	ratings or	a	general	increase	in	interest	rates,	or	due	to	an	increase	in	the	cost	of	fuel,	maintenance,	or	aircraft,	aircraft	engines	or	parts,	could	decrease	the	amount	of	cash available	to	cover	cash	contractual	obligations.	Moreover,	the	2013	Credit	Facilities,	the	2014	Credit	Facilities,	the	2013	Citicorp	Credit	Facility	and	certain	of	our	other financing	arrangements	contain	significant	minimum	cash	balance	requirements.	As	a	result,	we	cannot	use	all	of	our	available	cash	 to	fund	operations,	capital expenditures	and	cash	obligations	without	violating	these	requirements.

In	the	past,	we	have	from	time	to	time	refinanced,	redeemed	or	repurchased	our	debt	and	taken	other	steps	to	reduce	or	otherwise	manage	the	aggregate	amount	and cost	 of	 our	 debt	 or	 lease	 obligations	 or	 otherwise	 improve	 our	 balance	 sheet.	 Going	 forward,	 depending	 on	 market	 conditions,	 our	 cash	 position	 and	 other considerations,	we	may	continue	to	take	such	actions.

# Basis	of	Presentation

See	Note	5	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	5	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for information	regarding	the	basis	of	presentation.

# Critical	Accounting	Policies	and	Estimates

The	preparation	of	financial	statements	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	requires	management	to	make	certain estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities,	revenues	and	expenses,	and	the	disclosure	of	contingent	assets	and	liabilities	at	the date	of	the	financial	statements.	We	believe	our	estimates	and	assumptions	are	reasonable;	however,	actual	results	could	differ	from	those	estimates.	Critical	accounting policies	are	defined	as	those	that	are	reflective	of	significant	judgments	and	uncertainties	and	potentially	result	in	materially	different	results	under	different	assumptions and	conditions.	We	have	identified	the	following	critical	accounting	policies	that	impact	the	preparation	of	our	Consolidated	Financial	Statements.	See	the	summary	of significant	accounting	policies	included	in	Note	5	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	5	to	American's	Consolidated	Financial Statements	in	Part	II,	Item	8B	for	additional	discussion	of	the	application	of	these	estimates	and	other	accounting	policies.

# Passenger	Revenue

Passenger	revenue	is	recognized	when	transportation	is	provided.	Ticket	sales	for	transportation	that	has	not	yet	been	provided	are	initially	deferred	and	recorded	as air	traffic	liability	on	the	consolidated	balance	sheets.	The	air	traffic	liability	represents	tickets	sold	for	future	travel	dates	and	estimated	future	refunds	and	exchanges	of tickets	sold	for	past	travel	dates.	The	balance	in	the	air	traffic	liability	fluctuates	throughout	the	year	based	on	seasonal	travel	patterns	and	fare	sale	activity.	Our	air traffic	liability	was	$3.7	billion	and	$4.3	billion	as	of	December	31,	2015	and	2014,	respectively.

The	majority	of	tickets	sold	are	nonrefundable.	A	small	percentage	of	tickets,	some	of	which	are	partially	used	tickets,	expire	unused.	Due	to	complex	pricing structures,	refund	and	exchange	policies,	and	interline	agreements	with	other	airlines,	certain	amounts	are	recognized	in	revenue	using	estimates	regarding	both	the timing	of	the

revenue	recognition	and	the	amount	of	revenue	to	be	recognized.	These	estimates	are	generally	based	on	the	analysis	of	our	historical	data.	We	and	other	airline	industry participants	have	consistently	applied	this	accounting	method	to	estimate	revenue	from	forfeited	tickets	at	the	date	of	travel.	Estimated	future	refunds	and	exchanges included	in	the	air	traffic	liability	are	routinely	evaluated	based	on	subsequent	activity	to	validate	the	accuracy	of	our	estimates.	Any	adjustments	resulting	from	periodic evaluations	of	the	estimated	air	traffic	liability	are	included	in	results	of	operations	during	the	period	in	which	the	evaluations	are	completed.

# Long-lived	Assets

Long-lived	assets	consist	of	flight	equipment	along	with	other	fixed	assets	and	amortizing	intangible	assets	such	as	certain	slots,	customer	relationships,	marketing agreements	and	tradenames.	In	addition	to	the	original	cost,	the	recorded	value	of	our	fixed	assets	is	impacted	by	a	number	of	estimates	made,	including	estimated	useful lives,	salvage	values	and	our	determination	as	to	whether	aircraft	are	temporarily	or	permanently	grounded.	Amortizing	intangible	assets	are	originally	recorded	at	their acquired	fair	values	and	are	subsequently	amortized	over	their	estimated	useful	lives.	See	Note	5	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and Note	5	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	further	information.

We	record	impairment	charges	on	long-lived	assets	used	in	operations	when	events	and	circumstances	indicate	that	the	assets	may	be	impaired.	An	asset	or	group	of assets	is	considered	impaired	when	the	undiscounted	cash	flows	estimated	to	be	generated	by	the	assets	are	less	than	the	carrying	amount	of	the	assets	and	the	net	book value	of	the	assets	exceeds	their	estimated	fair	value.	If	such	assets	are	considered	to	be	impaired,	the	impairment	to	be	recognized	is	measured	by	the	amount	by	which the	carrying	amount	of	the	assets	exceeds	the	fair	value	of	the	assets.	Cash	flow	estimates	are	based	on	historical	results	adjusted	to	reflect	management's	best	estimate of	 future	 market	 and	 operating	 conditions,	 including	 our	 current	 fleet	 plan	 and	 considerations	 of	 any	 modifications	 thereto.	 Estimates	 of	 fair	 value	 represent management's	best	estimate	based	on	appraisals,	industry	trends	and	reference	to	market	rates	and	transactions.

The	majority	of	American's	fleet	types	are	depreciated	over	25-30	years.	It	is	possible	that	the	ultimate	lives	of	our	aircraft	will	be	significantly	different	than	the current	estimate	due	to	unforeseen	events	in	the	future	that	impact	our	fleet	plan,	including	positive	or	negative	developments	in	the	areas	described	above.	For	example, operating	the	aircraft	for	a	longer	period	will	result	in	higher	maintenance,	fuel	and	other	operating	costs	than	if	we	replaced	the	aircraft.

# Goodwill	and	Indefinite-lived	Assets

Goodwill	represents	the	excess	of	the	purchase	price	over	the	fair	value	of	the	net	assets	acquired	and	liabilities	assumed.	Goodwill	is	not	amortized	but	tested	for impairment	annually	on	October	1 	or	more	frequently	if	events	or	circumstances	indicate	that	goodwill	may	be	impaired.	We	have	one	consolidated	reporting	unit. st

Our	indefinite-lived	intangible	assets	other	than	goodwill	include	certain	international	slots	and	route	authorities	and	domestic	airport	slots.	Indefinite-lived	intangible assets	are	not	amortized	but	tested	for	impairment	annually	on	October	1 	or	more	frequently	if	events	or	circumstances	indicate	that	the	asset	may	be	impaired. st

Goodwill	and	indefinite-lived	intangible	assets	are	measured	for	impairment	by	initially	performing	a	qualitative	screen.	Under	the	qualitative	approach,	we	analyze the	following	factors	to	determine	if	events	and	circumstances	have	affected	the	fair	value	of	goodwill	and	indefinite-lived	intangible	assets:	(1)	negative	trends	in	our market	capitalization,	(2)	an	increase	in	fuel	prices,	(3)	declining	per	mile	passenger	yields,	(4)	lower	passenger	demand	as	a	result	of	a	weakened	U.S.	and	global economy	and	(5)	changes	to	the	regulatory	environment.

If	we	determine	that	it	is	more	likely	than	not	that	the	asset	value	may	be	impaired,	we	use	the	quantitative	approach	to	assess	the	asset's	fair	value	and	the	amount	of the	impairment.	Under	the	quantitative	approach,	we

calculate	the	fair	value	of	the	asset	using	the	following	assumptions:	(1)	our	projected	revenues,	expenses	and	cash	flows,	(2)	an	estimated	weighted	average	cost	of capital,	(3)	assumed	discount	rates	depending	on	the	asset	(4)	a	tax	rate	and	(5)	market	prices	for	comparable	assets.	These	assumptions	are	consistent	with	those	which hypothetical	market	participants	would	use.	If	the	asset's	carrying	value	exceeds	its	fair	value	calculated	using	the	quantitative	approach,	we	will	record	an	impairment charge	for	the	difference	in	fair	value	and	carrying	value.

Based	upon	our	annual	testing,	there	were	no	impairments	of	our	goodwill	and	indefinite-lived	assets	in	2015.

# Business	Combination	Measurements

In	 accordance	 with	 applicable	 accounting	 standards,	 we	 estimated	 the	 fair	 value	 of	 US	Airways'	 assets	 and	 liabilities	 as	 of	 the	 closing	 date	 of	 the	 Merger, December	9,	2013.	These	fair	value	adjustments	did	not	result	in	gains	or	losses,	but	were	instead	an	input	to	the	calculation	of	goodwill	related	to	the	excess	of	the purchase	price	over	the	fair	value	of	the	tangible	and	identifiable	intangible	assets	acquired	and	liabilities	assumed	by	us	in	the	Merger.

The	fair	values	of	the	assets	acquired	and	liabilities	assumed	were	determined	using	the	market,	income	and	cost	approaches.	The	fair	value	measurements	were primarily	based	on	significant	inputs	that	are	not	observable	in	the	market,	other	than	certain	long-term	debt	assumed	in	the	Merger.	The	market	approach,	which indicates	value	for	a	subject	asset	based	on	available	market	pricing	for	comparable	assets,	was	utilized	to	estimate	the	fair	value	of	US	Airways'	aircraft	and	operating leases.	The	market	approach	used	included	prices	and	other	relevant	information	generated	by	market	transactions	involving	comparable	assets,	as	well	as	pricing	guides and	other	sources.	We	considered	the	current	market	for	the	aircraft,	the	maintenance	condition	of	the	aircraft	and	the	expected	proceeds	from	the	sale	of	the	assets, among	other	factors.	We	also	utilized	the	market	approach	to	value	certain	intangible	assets	such	as	airport	take	off	and	landing	slots	when	sufficient	market	information was	available.	The	income	approach	was	primarily	used	to	value	intangible	assets,	including	customer	relationships,	marketing	agreements,	certain	international	route authorities,	and	the	US	Airways	tradename.	The	income	approach	indicates	value	for	a	subject	asset	based	on	the	present	value	of	cash	flows	projected	to	be	generated by	the	asset.	Projected	cash	flows	are	discounted	at	a	required	market	rate	of	return	that	reflects	the	relative	risk	of	achieving	the	cash	flows	and	the	time	value	of	money. The	cost	approach,	which	estimates	value	by	determining	the	current	cost	of	replacing	an	asset	with	another	of	equivalent	economic	utility,	was	used,	as	appropriate,	for certain	assets	for	which	the	market	and	income	approaches	could	not	be	applied	due	to	the	nature	of	the	asset.	The	cost	to	replace	a	given	asset	reflects	the	estimated reproduction	or	replacement	cost	for	the	asset,	less	an	allowance	for	loss	in	value	due	to	depreciation.	The	fair	value	of	the	US	Airways	Dividend	Miles	loyalty	program liability	was	determined	based	on	the	weighted	average	equivalent	ticket	value	of	outstanding	miles	which	were	expected	to	be	redeemed	for	future	travel	at	December	9, 2013.	The	weighted	average	equivalent	ticket	value	contemplates	differing	classes	of	service,	domestic	and	international	itineraries	and	the	carrier	providing	the	award travel.

We	currently	operate	the	loyalty	program,	AAdvantage.	This	program	awards	mileage	credits	to	passengers	who	fly	on	American	and	oneworld	carriers,	as	well	as certain	other	partner	airlines	that	participate	in	the	program.	Mileage	credits	can	also	be	earned	through	purchases	from	other	non-airline	partners	that	participate	in	our loyalty	program.	Mileage	credits	can	be	redeemed	for	travel	on	American	or	other	participating	partner	airlines,	in	which	case	we	pay	a	fee.

We	use	the	incremental	cost	method	to	account	for	the	portion	of	our	loyalty	program	liability	incurred	when	AAdvantage	members	earn	mileage	credits	by	flying	on American	or	our	regional	affiliates.	We	have	an	obligation	to	provide	future	travel	when	these	mileage	credits	are	redeemed	and	therefore	have	recorded	a	liability	for mileage	credits	outstanding.

The	incremental	cost	liability	includes	all	mileage	credits	that	are	expected	to	be	redeemed,	including	mileage	credits	earned	by	members	whose	mileage	account balances	have	not	yet	reached	the	minimum	mileage	credit	level	required	to	redeem	an	award.	Additionally,	outstanding	mileage	credits	are	subject	to	expiration	if unused.	In	calculating	the	liability,	we	estimate	how	many	mileage	credits	will	never	be	redeemed	for	travel	and	exclude	those	mileage	credits	from	the	estimate	of	the liability.	Estimates	are	also	made	for	the	number	of	miles	that	will	be	used	per	award	redemption	and	the	number	of	travel	awards	that	will	be	redeemed	on	partner airlines.	These	estimates	are	based	on	historical	program	experience	as	well	as	consideration	of	enacted	program	changes,	as	applicable.	Changes	in	the	liability	resulting from	members	earning	additional	mileage	credits	or	changes	in	estimates	are	recorded	in	the	consolidated	statements	of	operations	as	a	part	of	passenger	revenue.

The	liability	for	outstanding	mileage	credits	is	valued	based	on	the	estimated	incremental	cost	of	carrying	one	additional	passenger.	Incremental	cost	primarily includes	unit	costs	incurred	for	fuel,	food,	and	insurance	as	well	as	fees	incurred	when	travel	awards	are	redeemed	on	partner	airlines.	No	profit	or	overhead	margin	is included	in	the	accrual	of	incremental	cost.	These	estimates	are	generally	updated	based	upon	our	12-month	historical	average	of	such	costs.

As	of	December	31,	2015	and	2014,	the	liability	for	outstanding	mileage	credits	for	the	AAdvantage	program	accounted	for	under	the	incremental	cost	method	was $657	million	and	$674	million,	respectively,	and	is	included	on	the	consolidated	balance	sheets	within	loyalty	program	liability.

In	addition,	we	applied	the	acquisition	method	of	accounting	in	connection	with	the	Merger	and	therefore	recorded	the	liability	for	outstanding	US	Airways'	mileage credits	at	fair	value,	an	amount	significantly	in	excess	of	incremental	cost.	As	of	December	31,	2015	and	2014,	the	liability	for	these	outstanding	mileage	credits expected	to	be	redeemed	for	future	travel	awards	was	$296	million	and	$611	million,	respectively,	and	is	included	on	the	consolidated	balance	sheets	within	loyalty program	liability.	This	liability	is	amortized	into	passenger	revenue	on	a	straight-line	basis	over	the	period	in	which	the	mileage	credits	are	expected	to	be	redeemed	for travel.	All	new	miles	earned	will	be	recorded	as	a	liability	based	on	the	incremental	cost	method	discussed	above.

American	also	sells	loyalty	program	mileage	credits	to	participating	airline	partners	and	non-airline	business	partners.	Sales	of	mileage	credits	to	non-airline	business partners	is	comprised	of	two	components,	transportation	and	marketing.	Historically,	we	have	used	the	residual	method	of	accounting	to	determine	the	values	of	each component	as	there	had	not	been	a	material	modification	to	any	significant	agreements	since	the	adoption	of	Accounting	Standards	Update	(ASU)	No.	2009-13, "Revenue	Recognition	(Topic	605)	–	Multiple-Deliverable	Revenue	Arrangements"	on	January	1,	2011.

In	2013,	American	and	Citibank	amended	 their	AAdvantage	co-branded	credit	card	agreement,	which	resulted	 in	a	material	modification	of	 the	 terms	of	 the arrangement.	Also,	in	connection	with	the	acquisition	of	US	Airways	on	December	9,	2013,	a	material	modification	occurred	on	all	of	US	Airways'	agreements	in connection	with	the	Merger.	Therefore,	subsequent	to	the	amendments	of	these	arrangements,	we	have	applied	the	relative	selling	price	method	to	determine	the	values of	each	deliverable.	Under	the	relative	selling	price	approach,	we	identified	five	revenue	elements	for	the	co-branded	credit	card	agreements	with	Citibank	and	Barclays: the	transportation	component;	use	of	the	American	brand	including	access	to	loyalty	program	member	lists;	advertising;	lounge	access;	and	baggage	services	(together excluding	the	transportation	component,	the	marketing	component).

The	transportation	component	represents	the	estimated	selling	price	of	future	travel	awards	and	is	determined	using	historical	transaction	information,	including information	related	to	customer	redemption	patterns.	The	transportation	component	is	deferred	based	on	its	relative	selling	price	and	is	amortized	into	passenger	revenue on	a	straight-line	basis	over	the	period	in	which	the	mileage	credits	are	expected	to	be	redeemed	for	travel.

The	marketing	component	represents	services	provided	to	our	business	partners	and	relates	primarily	to	the	use	of	the	American	brand	including	access	to	loyalty program	member	lists.	The	marketing	services	are	provided

periodically,	but	no	less	than	monthly.	Accordingly,	the	marketing	component	is	considered	earned	and	recognized	in	other	revenues	in	the	period	of	the	mileage	sale.

Upon	application	of	the	relative	selling	price	method	in	2013	for	American's	Citibank	modification,	we	reduced	our	travel	component	liability	and	recorded	other revenue	of	approximately	$31	million.	As	a	result	of	the	change	in	the	marketing	component	value	when	the	relative	selling	price	method	is	applied,	we	now	defer	less revenue	per	mile	sold.

As	of	December	31,	2015	and	2014,	American	had	$1.5	billion	in	deferred	revenue	from	the	sale	of	mileage	credits	(recorded	within	loyalty	program	liability	on	the consolidated	balance	sheets).	For	the	years	ended	December	31,	2015,	2014	and	2013,	the	marketing	component	of	mileage	sales	recognized	at	the	time	of	sale	in	other revenues	was	approximately	$1.5	billion,	$1.4	billion	and	$834	million,	respectively.

A	change	to	certain	estimates	used	in	the	calculation	of	incremental	cost	could	have	a	material	impact	on	the	liability.	A	one	percentage	point	increase	or	decrease	in the	percentage	of	travel	awards	redeemed	on	partner	airlines	would	have	an	approximate	$35	million	impact	on	the	liability	as	of	December	31,	2015.	A	10%	increase or	decrease	in	the	assumed	price	per	gallon	of	fuel	would	have	an	approximate	$12	million	impact	on	the	liability	as	of	December	31,	2015.

A	change	to	the	estimated	fair	value	of	the	transportation	component	could	have	a	significant	impact	on	revenue.	A	10%	increase	or	decrease	in	the	estimated	fair value	of	the	transportation	component	would	have	an	approximately	$75	million	impact	on	revenue	recognized	in	2015.

The	number	of	one	way	travel	award	redemptions	during	the	year	ended	December	31,	2015,	was	8.3	million	representing	6.5%	of	our	total	mainline	and	regional RPMs	during	that	period.	We	believe	displacement	of	revenue	passengers	is	minimal	given	our	load	factors	and	our	ability	to	manage	loyalty	program	seat	inventory.

# Pensions	and	Retiree	Medical	and	Other	Postretirement	Benefits

We	recognize	the	funded	status	(i.e.,	the	difference	between	the	fair	value	of	plan	assets	and	the	projected	benefit	obligations)	of	our	pension	and	other	postretirement plans	in	the	consolidated	balance	sheet	with	a	corresponding	adjustment	to	accumulated	other	comprehensive	income	(loss).

Our	pension	and	other	postretirement	benefit	costs	and	liabilities	are	calculated	using	various	actuarial	assumptions	and	methodologies.	We	use	certain	assumptions including,	but	not	limited	to,	the	selection	of	the:	(i)	discount	rate;	(ii)	expected	return	on	plan	assets;	(iii)	expected	health	care	cost	trend	rate	and	(iv)	the	estimated	age of	pilot	retirement	(as	discussed	below).	These	assumptions	as	of	December	31	were:

|  | 2015 | 2014 |
| :--- | :--- | :--- |
| Pension\tdiscount\trate\t(1) | \t4.70% | \t4.30% |
| Other\tpostretirement\tbenefits\tdiscount\trate\t(1) | \t4.42% | \t4.00% |
| Expected\treturn\ton\tplan\tassets\t(2) | \t8.00% | \t8.00% |
| Expected\thealth\tcare\tcost\ttrend\trate\t(3): |  |  |
| Pre-65\tindividuals |  |  |
| Initial | \t5.21% | \t5.25% |
| Ultimate\t(2024) | \t4.56% | \t4.55% |
| Post-65\tindividuals |  |  |
| Initial | \t5.21% | \t5.25% |
| Ultimate\t(2024) | \t4.56% | \t4.55% |
| Pilot\tRetirement\tAge | 62 | 62 |

(1) When	 establishing	 our	 discount	 rate	 to	 measure	 our	 obligations,	 we	 match	 high	 quality	 corporate	 bonds	 available in the	 marketplace	 whose	 cash flows approximate	our	projected	benefit	disbursements.	Lowering

the	discount	rate	by	50	basis	points	as	of	December	31,	2015	would	increase	our	pension	and	other	postretirement	benefits	obligations	by	approximately	$1.2 billion	and	$52	million,	respectively,	and	increase	estimated	2016	pension	expense	by	$7	million	and	decrease	estimated	2016	other	postretirement	benefit expense	by	less	than	$1	million.

(2) The	expected	return	on	plan	assets	is	based	upon	an	evaluation	of	our	historical	trends	and	experience	taking	into	account	current	and	expected	market	conditions and	our	target	asset	allocation	of	31%	longer	duration	corporate	and	U.S.	government/agency	bonds,	32%	U.S.	value	stocks,	19%	developed	international	stocks, 10%	emerging	markets	stocks	and	bonds	and	8%	alternative	(private)	investments.	The	expected	return	on	plan	assets	component	of	our	net	periodic	benefit	cost is	calculated	based	on	the	fair	value	of	plan	assets	and	our	target	asset	allocation.	Lowering	the	expected	long-term	rate	of	return	on	plan	assets	by	50	basis	points as	of	December	31,	2015	would	increase	estimated	2016	pension	expense	and	other	postretirement	benefit	expense	by	approximately	$47	million	and	$1	million, respectively.

(3) The	health	care	cost	trend	rate	is	based	upon	an	evaluation	of	our	historical	trends	and	experience	taking	into	account	current	and	expected	market	conditions. Increasing	the	assumed	health	care	cost	trend	rate	by	100	basis	points	would	increase	estimated	2016	other	postretirement	benefits	expense	by	$3	million.

During	2015,	we	revised	our	mortality	assumptions	to	incorporate	the	new	mortality	improvement	scale	issued	by	the	Society	of	Actuaries.	This	resulted	in	a	decrease in	the	projected	benefit	obligations	of	our	pension	and	retiree	medical	programs	of	$161	million	and	$9	million,	respectively.	We	also	reviewed	and	revised	certain	other economic	and	demographic	assumptions	including	the	pension	and	retiree	medical	discount	rates	and	health	care	cost	and	trend	rates.	The	net	effect	of	changing	these assumptions	for	the	pension	and	retiree	medical	plans	resulted	in	a	decrease	of	$940	million	and	$119	million,	respectively,	in	the	projected	benefit	obligation	at December	31,	2015	primarily	due	to	the	increase	in	the	pension	discount	rate.

See	Note	13	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	11	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for additional	information	regarding	our	retirement	benefits.

Income	taxes	are	accounted	for	under	the	asset	and	liability	method.	Deferred	tax	assets	and	liabilities	are	recognized	for	the	future	tax	consequences	attributable	to differences	 between	 the	 financial	 statement	 carrying	 amounts	 of	 existing	 assets	 and	 liabilities	 and	 their	 respective	 tax	 bases	 and	 operating	 loss	 and	 tax	 credit carryforwards.	A	valuation	allowance	is	established,	if	necessary,	for	the	amount	of	any	tax	benefits	that,	based	on	available	evidence,	are	not	expected	to	be	realized.

# Recent	Accounting	Pronouncements

See	Note	5	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	and	Note	5	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for further	information	on	recent	accounting	pronouncements.

# ITEM	7A.	QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

# AAG's	Market	Risk	Sensitive	Instruments	and	Positions

The	risk	inherent	in	our	market	risk	sensitive	instruments	and	positions	is	the	potential	loss	arising	from	adverse	changes	in	the	price	of	fuel,	foreign	currency exchange	rates	and	interest	rates	as	discussed	below.	The	sensitivity	analyses	presented	do	not	consider	the	effects	that	such	adverse	changes	may	have	on	overall economic	activity,	nor	do	they	consider	additional	actions	management	may	take	to	mitigate	our	exposure	to	such	changes.	Therefore,	actual	results	may	differ.	See Note	11	to	AAG's	Consolidated	Financial	Statements	in	Part	II,	Item	8A	for	additional	discussion	regarding	risk	management	matters.

Our	operating	results	are	materially	impacted	by	changes	in	the	availability,	price	volatility	and	cost	of	aircraft	fuel,	which	represents	one	of	the	largest	single	cost items	in	our	business.	Because	of	the	amount	of	fuel	needed	to	operate	our	airlines,	even	a	relatively	small	increase	or	decrease	in	the	price	of	fuel	can	have	a	material effect	on	our	costs	and	 liquidity.	Jet	fuel	market	prices	have	fluctuated	substantially	over	 the	past	several	years	with	market	spot	prices	ranging	from	a	 low	of approximately	$1.00	per	gallon	to	a	high	of	approximately	$3.34	per	gallon	during	the	period	from	January	1,	2012	to	December	31,	2015.

As	of	December	31,	2015,	we	did	not	have	any	fuel	hedging	contracts	outstanding	to	hedge	our	fuel	consumption.	As	such,	and	assuming	we	do	not	enter	into	any future	transactions	to	hedge	our	fuel	consumption,	we	will	continue	to	be	fully	exposed	to	fluctuations	in	fuel	prices.	Our	current	policy	is	not	to	enter	into	transactions	to hedge	our	fuel	consumption,	although	we	review	that	policy	from	time	to	time	based	on	market	conditions	and	other	factors.	Our	2016	forecasted	mainline	and	regional fuel	consumption	is	presently	approximately	4.4	billion	gallons,	and	based	on	this	forecast,	a	one	cent	per	gallon	increase	in	aviation	fuel	price	would	result	in	a	$44 million	increase	in	annual	expense.

# Foreign	Currency

We	are	exposed	to	the	effect	of	foreign	exchange	rate	fluctuations	on	the	U.S.	dollar	value	of	foreign	currency-denominated	operating	revenues	and	expenses.	Our largest	exposure	comes	from	the	British	pound,	Euro,	Canadian	dollar	and	various	Latin	American	currencies,	primarily	the	Brazilian	real.	We	do	not	currently	have	a foreign	currency	hedge	program.	A	uniform	10%	relative	strengthening	in	the	value	of	the	U.S.	dollar	from	2015	levels	relative	to	each	of	the	currencies	in	which	we have	 foreign	 currency	 exposure	 would	 have	 resulted	 in	 an	 increase	 in	 our	 total	 nonoperating	 expense,	 net	 of	 approximately	 $220	 million	 for	 the	 year	 ended December	31,	2015,	and	does	not	address	any	exposure	to	foreign	currency	held	on	our	consolidated	balance	sheet.

Generally,	fluctuations	in	foreign	currencies,	including	devaluations,	cannot	be	predicted	by	us	and	can	significantly	affect	the	value	of	our	assets	located	outside	the United	States.	These	conditions,	as	well	as	any	further	delays,	devaluations	or	imposition	of	more	stringent	repatriation	restrictions,	may	materially	adversely	affect	our business,	results	of	operations	and	financial	condition.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	operate	a	global	business	with	international	operations	that	are	subject to	economic	and	political	instability	and	have	been,	and	in	the	future	may	continue	to	be,	adversely	affected	by	numerous	events,	circumstances	or	government	actions beyond	our	control"	for	additional	discussion	of	this	and	other	currency	risks.

# Interest

Our	earnings	are	also	affected	by	changes	in	interest	rates	due	to	the	impact	those	changes	have	on	our	interest	income	from	short-term	investments,	and	our	interest expense	from	variable-rate	debt	instruments.	Our	largest	exposure	with	respect	to	variable	rate	debt	comes	from	changes	in	the	London	Interbank	Offered	Rate	(LIBOR). We	had	variable	rate	debt	instruments	representing	approximately	38%	of	our	total	long-term	debt	at

December	31,	2015.	We	currently	do	not	have	an	interest	rate	hedge	program.	If	our	interest	rates	increased	10%	in	2015,	our	interest	expense	would	have	increased	by approximately	$23	million.

Additional	information	regarding	our	debt	obligations	as	of	December	31,	2015	is	as	follows	(in	millions):

|  | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed-rate\tdebt | $1,200 | $1,121 | $1,651 | $1,946 | $1,360 | $5,698 | $12,976 |
| Weighted\tavg.\tinterest\trate | 5.0% | 5.1% | 5.0% | 4.9% | 4.9% | 5.7% |  |
| Variable-rate\tdebt | $1,066 | $477 | $483 | $1,432 | $2,227 | $2,146 | $7,831 |
| Weighted\tavg.\tinterest\trate | 3.0% | 3.0% | 3.0% | 2.9% | 2.8% | 1.0% |  |

# American's	Market	Risk	Sensitive	Instruments	and	Positions

The	risk	inherent	in	American's	market	risk	sensitive	instruments	and	positions	is	the	potential	loss	arising	from	adverse	changes	in	the	price	of	fuel,	foreign currency	exchange	rates	and	interest	rates	as	discussed	below.	The	sensitivity	analyses	presented	do	not	consider	the	effects	that	such	adverse	changes	may	have	on overall	economic	activity,	nor	do	they	consider	additional	actions	management	may	take	to	mitigate	American's	exposure	to	such	changes.	Therefore,	actual	results	may differ.	See	Note	9	to	American's	Consolidated	Financial	Statements	in	Part	II,	Item	8B	for	additional	discussion	regarding	risk	management	matters.

American's	operating	results	are	materially	impacted	by	changes	in	the	availability,	price	volatility	and	cost	of	aircraft	fuel,	which	represents	one	of	the	largest	single cost	items	in	American's	business.	Because	of	the	amount	of	fuel	needed	to	operate	American,	even	a	relatively	small	increase	or	decrease	in	the	price	of	fuel	can	have	a material	effect	on	American's	costs	and	liquidity.	Jet	fuel	market	prices	have	fluctuated	substantially	over	the	past	several	years	with	market	spot	prices	ranging	from	a low	of	approximately	$1.00	per	gallon	to	a	high	of	approximately	$3.34	per	gallon	during	the	period	from	January	1,	2012	to	December	31,	2015.

As	of	December	31,	2015,	American	did	not	have	any	fuel	hedging	contracts	outstanding	to	hedge	its	fuel	consumption.	As	such,	and	assuming	American	does	not enter	into	any	future	transactions	to	hedge	its	fuel	consumption,	American	will	continue	to	be	fully	exposed	to	fluctuations	in	fuel	prices.	American's	current	policy	is not	to	enter	into	transactions	to	hedge	its	fuel	consumption,	although	American	reviews	that	policy	from	time	to	time	based	on	market	conditions	and	other	factors. American's	2016	forecasted	mainline	and	regional	fuel	consumption	is	presently	approximately	4.4	billion	gallons,	and	based	on	this	forecast,	a	one	cent	per	gallon increase	in	aviation	fuel	price	would	result	in	a	$44	million	increase	in	annual	expense.

American	is	exposed	to	the	effect	of	foreign	exchange	rate	fluctuations	on	the	U.S.	dollar	value	of	foreign	currency-denominated	operating	revenues	and	expenses. American's	largest	exposure	comes	from	the	British	pound,	Euro,	Canadian	dollar	and	various	Latin	American	currencies,	primarily	the	Brazilian	real.	American	does not	currently	have	a	foreign	currency	hedge.	A	uniform	10%	strengthening	in	the	value	of	the	U.S.	dollar	from	2015	levels	relative	to	each	of	the	currencies	in	which American	has	foreign	currency	exposure	would	have	resulted	 in	an	 increase	 in	 its	nonoperating	expense,	net	of	approximately	$220	million	for	 the	year	ended December	31,	2015,	and	does	not	address	any	exposure	to	foreign	currency	held	on	its	consolidated	balance	sheet.

Generally,	fluctuations	in	foreign	currencies,	including	devaluations,	cannot	be	predicted	by	American	and	can	significantly	affect	the	value	of	American's	assets located	outside	the	United	States.	These	conditions,	as	well	as

any	further	delays,	devaluations	or	imposition	of	more	stringent	repatriation	restrictions,	may	materially	adversely	affect	American's	business,	results	of	operations	and financial	condition.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	operate	a	global	business	with	international	operations	that	are	subject	to	economic	and	political	instability and	have	been,	and	in	the	future	may	continue	to	be,	adversely	affected	by	numerous	events,	circumstances	or	government	actions	beyond	our	control"	for	additional discussion	of	this	and	other	currency	risks.

American's	earnings	are	also	affected	by	changes	in	interest	rates	due	to	the	impact	those	changes	have	on	its	interest	income	from	short-term	investments,	and	its interest	expense	from	variable-rate	debt	instruments.	American's	largest	exposure	with	respect	to	variable	rate	debt	comes	from	changes	in	the	LIBOR.	American	had variable	rate	debt	instruments	representing	approximately	41%	of	its	total	long-term	debt	at	December	31,	2015.	American	currently	does	not	have	an	interest	rate	hedge program.	If	American's	interest	rates	increased	10%	in	2015,	American's	interest	expense	would	have	increased	by	approximately	$23	million.

Additional	information	regarding	American's	debt	obligations	as	of	December	31,	2015	is	as	follows	(in	millions):

|  | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fixed-rate\tdebt | $1,200 | $1,121 | $1,151 | $1,196 | $854 | $5,674 | $11,196 |
| Weighted\tavg.\tinterest\trate | 5.0% | 5.0% | 5.0% | 4.9% | 4.9% | 5.6% |  |
| Variable-rate\tdebt | $1,066 | $477 | $483 | $1,432 | $2,227 | $2,146 | $7,831 |
| Weighted\tavg.\tinterest\trate | 3.0% | 3.0% | 3.0% | 2.9% | 2.8% | 1.0% |  |

# ITEM	8A.	CONSOLIDATED	FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA	OF	AMERICAN	AIRLINES	GROUP	INC.

# Report	of	Independent	Registered	Public	Accounting	Firm

# The	Board	of	Directors	and	Stockholders

We	have	audited	the	accompanying	consolidated	balance	sheets	of	American	Airlines	Group	Inc.	and	subsidiaries	(the	Company)	as	of	December	31,	2015	and	2014, and	the	related	consolidated	statements	of	operations,	comprehensive	income	(loss),	cash	flows,	and	stockholders'	equity	(deficit)	for	the	years	then	ended.	These consolidated	financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	these	consolidated	financial statements	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test basis,	evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	the	consolidated	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	financial	position	of	American	Airlines	Group	Inc. and	subsidiaries	as	of	December	31,	2015	and	2014,	and	the	results	of	their	operations	and	their	cash	flows	for	the	years	then	ended,	in	conformity	with	U.S.	generally accepted	accounting	principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	Company's	internal	control	over financial	reporting	as	of	December	31,	2015,	based	on	criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	(COSO),	and	our	report	dated	February	24,	2016	expressed	an	unqualified	opinion	on	the	effectiveness	of	the	Company's internal	control	over	financial	reporting.

Dallas,	Texas

We	have	audited	the	accompanying	consolidated	statements	of	operations,	comprehensive	income	(loss),	stockholders'	equity	(deficit)	and	cash	flows	of	American Airlines	Group	Inc.	(the	Company)	(formerly	AMR	Corporation)	for	the	year	ended	December	31,	2013.	These	consolidated	financial	statements	are	the	responsibility	of the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on	our	audit.	We	did	not	audit	the	financial	statements	of	US Airways	Group,	Inc.,	a	wholly-owned	subsidiary	of	the	Company,	which	statements	reflect	operating	revenues	constituting	3%	of	consolidated	operating	revenues	for the	year	ended	December	31,	2013.	Those	financial	statements	were	audited	by	other	auditors	whose	report	has	been	furnished	to	us,	and	our	opinion,	insofar	as	it	relates to	data	included	for	such	wholly-owned	subsidiary,	is	based	solely	on	the	report	of	other	auditors.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test basis,	evidence	supporting	the	amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant estimates	made	by	management,	as	well	as	evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audit	and	the	report	of	other	auditors	provide	a reasonable	basis	for	our	opinion.

In	our	opinion,	based	on	our	audit	and	the	report	of	other	auditors,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated results	of	American	Airlines	Group	Inc.'s	operations	and	its	cash	flows	for	the	year	ended	December	31,	2013	in	conformity	with	U.S.	generally	accepted	accounting principles.

# CONSOLIDATED	STATEMENTS	OF	OPERATIONS

# (In	millions,	except	shares	and	per	share	amounts)

|  | 2015 | Year	Ended	December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Operating\trevenues: |  |  |  |
| Mainline\tpassenger | $29,037 | $30,802 | $20,218 |
| Regional\tpassenger | 6,475 | 6,322 | 3,131 |
| Cargo | 760 | 875 | 685 |
| Other | 4,718 | 4,651 | 2,709 |
| Total\toperating\trevenues | 40,990 | 42,650 | 26,743 |
| Operating\texpenses: |  |  |  |
| Aircraft\tfuel\tand\trelated\ttaxes | 6,226 | 10,592 | 7,839 |
| Salaries,\twages\tand\tbenefits | 9,524 | 8,508 | 5,460 |
| Regional\texpenses | 5,983 | 6,516 | 3,326 |
| Maintenance,\tmaterials\tand\trepairs | 1,889 | 2,051 | 1,260 |
| Other\trent\tand\tlanding\tfees | 1,731 | 1,727 | 1,152 |
| Aircraft\trent | 1,250 | 1,250 | 768 |
| Selling\texpenses | 1,394 | 1,544 | 1,158 |
| Depreciation\tand\tamortization | 1,364 | 1,295 | 853 |
| Special\titems,\tnet | 1,051 | 800 | 559 |
| Other | 4,374 | 4,118 | 2,969 |
| Total\toperating\texpenses | 34,786 | 38,401 | 25,344 |
| Operating\tincome | 6,204 | 4,249 | 1,399 |
| Nonoperating\tincome\t(expense): |  |  |  |
| Interest\tincome | 39 | 31 | 20 |
| Interest\texpense,\tnet\tof\tcapitalized\tinterest | (880) | (887) | (856) |
| Other,\tnet | (747) | (181) | (88) |
| Total\tnonoperating\texpense,\tnet | (1,588) | (1,037) | (924) |
| Income\tbefore\treorganization\titems,\tnet | 4,616 | 3,212 | 475 |
| Reorganization\titems,\tnet | — | — | (2,655) |
| Income\t(loss)\tbefore\tincome\ttaxes | 4,616 | 3,212 | (2,180) |
| Income\ttax\tprovision\t(benefit) | (2,994) | 330 | (346) |
| Net\tincome\t(loss) | $7,610 | $2,882 | $(1,834) |
| Earnings\t(loss)\tper\tshare: |  |  |  |
| Basic | $11.39 | $4.02 | $(6.54) |
| Diluted | $11.07 | $3.93 | $(6.54) |
| Weighted\taverage\tshares\toutstanding\t(in\tthousands): |  |  |  |
| Basic | \t 668,393 | \t 717,456 | \t 280,213 |
| Diluted | \t 687,355 | \t 734,016 | \t 280,213 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | $0.40 | $0.20 | $— |

See	accompanying	notes	to	consolidated	financial	statements.

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME	(LOSS)

# (In	millions)

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Net\tincome\t(loss) | $7,610 | $2,882 | $(1,834) |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |
| Defined\tbenefit\tpension\tplans\tand\tretiree\tmedical: |  |  |  |
| Amortization\tof\tactuarial\tloss\tand\tprior\tservice\tcost | (108) | (163) | (142) |
| Current\tyear\tchange | (51) | (2,633) | 1,577 |
| Derivative\tfinancial\tinstruments: |  |  |  |
| Change\tin\tfair\tvalue | — | (54) | 18 |
| Reclassification\tinto\tearnings | (9) | (4) | 34 |
| Unrealized\tloss\ton\tinvestments: |  |  |  |
| Net\tchange\tin\tvalue | (5) | (3) | (1) |
| Reversal\tof\tnon-cash\ttax\tprovision\t(benefit) | — | 330 | (538) |
| Total\tother\tcomprehensive\tincome\t(loss) | (173) | (2,527) | 948 |
| Total\tcomprehensive\tincome\t(loss) | $7,437 | $355 | $(886) |

# CONSOLIDATED	BALANCE	SHEETS

# (In	millions,	except	shares	and	par	value)

|  | December	31,<br>2015 | 2014 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| Current\tassets |  |  |
| Cash | $390 | $994 |
| Short-term\tinvestments | 5,864 | 6,309 |
| Restricted\tcash\tand\tshort-term\tinvestments | 695 | 774 |
| Accounts\treceivable,\tnet | 1,425 | 1,771 |
| Aircraft\tfuel,\tspare\tparts\tand\tsupplies,\tnet | 863 | 1,004 |
| Prepaid\texpenses\tand\tother | 748 | 898 |
| Total\tcurrent\tassets | 9,985 | 11,750 |
| Operating\tproperty\tand\tequipment |  |  |
| Flight\tequipment | 33,185 | 28,213 |
| Ground\tproperty\tand\tequipment | 6,402 | 5,900 |
| Equipment\tpurchase\tdeposits | 1,067 | 1,230 |
| Total\tproperty\tand\tequipment,\tat\tcost | 40,654 | 35,343 |
| Less\taccumulated\tdepreciation\tand\tamortization | (13,144) | (12,259) |
| Total\tproperty\tand\tequipment,\tnet | 27,510 | 23,084 |
| Other\tassets |  |  |
| Goodwill | 4,091 | 4,091 |
| Intangibles,\tnet\tof\taccumulated\tamortization\tof\t$502\tand\t$447,\trespectively | 2,249 | 2,240 |
| Deferred\ttax\tasset | 2,477 | — |
| Other\tassets | 2,103 | 2,060 |
| Total\tother\tassets | 10,920 | 8,391 |
| Total\tassets | $48,415 | $43,225 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |
| Current\tliabilities |  |  |
| Current\tmaturities\tof\tlong-term\tdebt\tand\tcapital\tleases | $2,231 | $1,677 |
| Accounts\tpayable | 1,563 | 1,377 |
| Accrued\tsalaries\tand\twages | 1,205 | 1,194 |
| Air\ttraffic\tliability | 3,747 | 4,252 |
| Loyalty\tprogram\tliability | 2,525 | 2,807 |
| Other\taccrued\tliabilities | 2,334 | 2,097 |
| Total\tcurrent\tliabilities | 13,605 | 13,404 |
| Noncurrent\tliabilities |  |  |
| Long-term\tdebt\tand\tcapital\tleases,\tnet\tof\tcurrent\tmaturities | 18,330 | 16,043 |
| Pension\tand\tpostretirement\tbenefits | 7,450 | 7,562 |
| Deferred\tgains\tand\tcredits,\tnet | 667 | 829 |
| Bankruptcy\tsettlement\tobligations | 193 | 325 |
| Other\tliabilities | 2,535 | 3,041 |
| Total\tnoncurrent\tliabilities | 29,175 | 27,800 |
| Commitments\tand\tcontingencies\t(Note\t15) |  |  |
| Stockholders'\tequity |  |  |
| 697,474,535\tshares\tissued\tand\toutstanding\tat\tDecember\t31,\t2014 | 6 | 7 |
| Additional\tpaid-in\tcapital | 11,591 | 15,135 |
| Accumulated\tother\tcomprehensive\tloss | (4,732) | (4,559) |
| Accumulated\tdeficit | (1,230) | (8,562) |
| Total\tstockholders'\tequity | 5,635 | 2,021 |
| Total\tliabilities\tand\tstockholders'\tequity | $48,415 | $43,225 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2015 | December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Cash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Net\tincome\t(loss) | $7,610 | $2,882 | $(1,834) |
| Adjustments\tto\treconcile\tnet\tincome\t(loss)\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 1,609 | 1,513 | 1,020 |
| Debt\tdiscount\tand\tlease\tamortization | (122) | (171) | — |
| Special\titems,\tnon-cash | 273 | 52 | 95 |
| Pension\tand\tpostretirement | (193) | (163) | (154) |
| Deferred\tincome\ttaxes | (3,014) | 346 | (324) |
| Share-based\tcompensation | 284 | 304 | 39 |
| Reorganization\titems,\tnon-cash | — | — | 2,112 |
| Interest\texpense,\tnon-cash | — | — | 181 |
| Other,\tnet | (12) | 3 | (76) |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Decrease\t(increase)\tin\taccounts\treceivable | 352 | (160) | (93) |
| Increase\tin\tother\tcurrent\tassets | (90) | (45) | (29) |
| Decrease\tin\tderivative\tcollateral | — | — | 1 |
| Increase\tin\taccounts\tpayable\tand\taccrued\tliabilities | 173 | 110 | 71 |
| Increase\t(decrease)\tin\tair\ttraffic\tliability | (505) | (97) | 150 |
| Increase\t(decrease)\tin\tloyalty\tprogram\tliability | (295) | (229) | 38 |
| Contributions\tto\tpension\tplans | (6) | (810) | (494) |
| Increase\t(decrease)\tin\tother\tassets\tand\tliabilities | 185 | (455) | (28) |
| Net\tcash\tprovided\tby\toperating\tactivities | 6,249 | 3,080 | 675 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |
| Capital\texpenditures\tand\taircraft\tpurchase\tdeposits | (6,151) | (5,311) | (3,114) |
| Acquisition\tof\tUS\tAirways\tGroup | — | — | 206 |
| Purchases\tof\tshort-term\tinvestments | (8,126) | (5,380) | (3,342) |
| Sales\tof\tshort-term\tinvestments | 8,517 | 7,179 | 2,161 |
| Decrease\tin\trestricted\tcash\tand\tshort-term\tinvestments | 79 | 261 | 147 |
| Net\tproceeds\tfrom\tslot\ttransaction | — | 307 | — |
| Proceeds\tfrom\tsale\tof\tan\tinvestment | 52 | — | — |
| Proceeds\tfrom\tsale\tof\tproperty\tand\tequipment | 35 | 33 | 128 |
| Net\tcash\tused\tin\tinvesting\tactivities | (5,594) | (2,911) | (3,814) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |
| Payments\ton\tlong-term\tdebt\tand\tcapital\tleases | (2,153) | (3,132) | (2,926) |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | 5,009 | 3,302 | 5,134 |
| Deferred\tfinancing\tcosts | (87) | (106) | (120) |
| Sale-leaseback\ttransactions | 43 | 811 | 1,700 |
| Exercise\tof\tstock\toptions | — | 10 | — |
| Treasury\tstock\trepurchases | (3,846) | (1,062) | — |
| Dividend\tpayments | (278) | (144) | — |
| Other\tfinancing\tactivities | 53 | 6 | 11 |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\tactivities | (1,259) | (315) | 3,799 |
| Net\tincrease\t(decrease)\tin\tcash | (604) | (146) | 660 |
| Cash\tat\tbeginning\tof\tyear | 994 | 1,140 | 480 |
| Cash\tat\tend\tof\tyear | $390 | $994 | $1,140 |

# CONSOLIDATED	STATEMENTS	OF	STOCKHOLDERS'	EQUITY	(DEFICIT)

# (In	millions,	except	share	amounts)

|  | Common<br>Stock | Additional<br>Paid-in<br>Capital | Treasury<br>Stock | Other<br>Comprehensive<br>Income	(Loss) | Accumulated<br>Deficit | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2012 | 254 | 4,568 | (367) | (2,980) | (9,462) | (7,987) |
| Net\tloss | — | — | — | — | (1,834) | (1,834) |
| Changes\tin\tpension,\tretiree\tmedical\tand\tother\tliability | — | — | — | 1,435 | — | 1,435 |
| Net\tchanges\tin\tfair\tvalue\tof\tderivative\tfinancial\tinstruments | — | — | — | 52 | — | 52 |
| Reversal\tof\tnon-cash\ttax\tbenefit | — | — | — | (538) | — | (538) |
| Issuance\tof\t6,249,185\tshares\tto\temployees\tpursuant\tto\tstock\toption\tand\tdeferred\tstock\tincentive\tplans | 6 | 2 | — | — | — | 8 |
| Issuance\tof\t37,208,354\tshares\tin\texchange\tfor\tredemption\tof\tAMR\tCorporation\tdebt | 37 | 484 | — | — | — | 521 |
| Cancellation\tof\tpre-reorganization\tcommon\tstock | (297) | (70) | 367 | — | — | — |
| Issuance\tof\t319,412,943\tshares\tof\tpost-reorganization\tcommon\tstock | 3 | 592 | — | — | — | 595 |
| Issuance\tof\t197,363,088\tshares\tin\texchange\tfor\tUS\tAirways\tGroup\tcommon\tstock | 2 | 4,590 | — | — | — | 4,592 |
| Equity\tcomponent\tof\tUS\tAirways\tGroup\tconvertible\tdebt\tassumed\tin\tMerger | — | 88 | — | — | — | 88 |
| Issuance\tof\t9,993,882\tshares\tfor\tOptional\tConversion\tof\tPreferred\tShares | — | 269 | — | — | — | 269 |
| Share-based\tcompensation\texpense | — | 69 | — | — | — | 69 |
| Issuance\tof\t35,609\tshares\tto\temployees\tpursuant\tto\tstock\toption\tand\tdeferred\tstock\tincentive\tplans | — | — | — | — | — | — |
| Change\tin\tunrealized\tloss\ton\tinvestments | — | — | — | (1) | — | (1) |
| Balance\tat\tDecember\t31,\t2013 | 5 | 10,592 | — | (2,032) | (11,296) | (2,731) |
| Net\tincome | — | — | — | — | 2,882 | 2,882 |
| Changes\tin\tpension,\tretiree\tmedical\tand\tother\tliability | — | — | — | (2,796) | — | (2,796) |
| Net\tchanges\tin\tfair\tvalue\tof\tderivative\tfinancial\tinstruments | — | — | — | (58) | — | (58) |
| Reversal\tof\tnon-cash\ttax\tbenefit | — | — | — | 330 | — | 330 |
| Cash\ttax\twithholding\ton\tshares\tissued | — | (110) | — | — | — | (110) |
| Purchase\tand\tretirement\tof\t23,406,472\tof\tAAG\tCommon\tStock | — | (1,000) | — | — | — | (1,000) |
| Dividends\tdeclared\ton\tcommon\tstock\t($0.20\tper\tshare) | — | — | — | — | (148) | (148) |
| US\tAirways\tGroup\tconvertible\tdebt\tsettled\twith\tcash | — | (154) | — | — | — | (154) |
| Issuance\tof\t5,701,776\tshares\tof\tcommon\tstock\tpursuant\tto\temployee\tstock\tplans | — | 10 | — | — | — | 10 |
| Issuance\tof\t57,393,096\tshares\tof\tpost-reorganization\tcommon\tstock | 1 | 1,604 | — | — | — | 1,605 |
| Issuance\tof\t130,980,613\tshares\tfor\tOptional\tConversion\tof\tPreferred\tShares | 1 | 3,889 | — | — | — | 3,890 |
| Share-based\tcompensation\texpense | — | 304 | — | — | — | 304 |
| Change\tin\tunrealized\tloss\ton\tinvestments | — | — | — | (3) | — | (3) |
| Balance\tat\tDecember\t31,\t2014 | 7 | 15,135 | — | (4,559) | (8,562) | 2,021 |
| Net\tincome | — | — | — | — | 7,610 | 7,610 |
| Changes\tin\tpension,\tretiree\tmedical\tand\tother\tliability | — | — | — | (159) | — | (159) |
| Net\tchanges\tin\tfair\tvalue\tof\tderivative\tfinancial\tinstruments | — | — | — | (9) | — | (9) |
| Cash\ttax\twithholding\ton\tshares\tissued | — | (306) | — | — | — | (306) |
| Purchase\tand\tretirement\tof\t85,141,691\tshares\tof\tAAG\tCommon\tStock | (1) | (3,585) | — | — | — | (3,586) |
| Dividends\tdeclared\ton\tcommon\tstock\t($0.40\tper\tshare) | — | — | — | — | (278) | (278) |
| Issuance\tof\t12,289,537\tshares\tof\tcommon\tstock\tpursuant\tto\temployee\tstock\tplans | — | — | — | — | — | — |
| Settlement\tof\tSingle-dip\tunsecured\tclaims\theld\tin\tdistributed\tclaims\treserve | — | 63 | — | — | — | 63 |
| Share-based\tcompensation\texpense | — | 284 | — | — | — | 284 |
| Change\tin\tunrealized\tloss\ton\tinvestments | — | — | — | (5) | — | (5) |
| Balance\tat\tDecember\t31,\t2015 | $6 | $11,591 | $— | $(4,732) | $(1,230) | $ 5,635 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	OF	AMERICAN	AIRLINES	GROUP	INC.

# 1.		Nature	of	Operations	and	Operating	Environment

American	Airlines	Group	Inc.	(AAG	or	the	Company),	a	Delaware	corporation,	is	a	holding	company	whose	primary	business	activity	is	the	operation	of	a	major network	air	carrier	through	its	subsidiaries,	American	Airlines,	Inc.	(American)	and	its	wholly-owned	regional	subsidiaries,	Envoy	Aviation	Group	Inc.	(Envoy), Piedmont	Airlines,	Inc.	(Piedmont)	and	PSA	Airlines,	Inc.	(PSA)	that	operate	under	capacity	purchase	agreements	as	American	Eagle.

The	Company	has	hubs	in	Charlotte,	Chicago,	Dallas/Fort	Worth,	Los	Angeles,	Miami,	New	York	City,	Philadelphia,	Phoenix	and	Washington,	D.C.	Together	with American	Eagle,	the	Company	operates	an	average	of	nearly	6,700	flights	per	day	to	nearly	350	destinations	in	more	than	50	countries.	In	2015,	the	Company	had approximately	201	million	passengers	boarding	 its	mainline	and	regional	flights.	As	of	December	31,	2015,	 the	Company	operated	946	mainline	aircraft	and	 is supported	by	its	regional	airline	subsidiaries	and	third-party	regional	carriers	operating	as	American	Eagle	under	capacity	purchase	agreements,	which	operated	an additional	587	regional	aircraft.

On	December	30,	2015,	in	order	to	simplify	AAG's	internal	corporate	structure	and	as	part	of	the	integration	efforts	following	the	business	combination	of	AAG	and US	Airways	Group,	Inc.	(US	Airways	Group),	AAG	caused	US	Airways	Group	to	be	merged	with	and	into	AAG,	with	AAG	as	the	surviving	corporation,	and, immediately	thereafter,	US	Airways,	Inc.	(US	Airways),	a	Delaware	corporation	and	wholly-owned	subsidiary	of	US	Airways	Group,	merged	with	and	into	American, with	American	as	the	surviving	corporation.	As	a	result	of	the	merger	of	US	Airways	and	American,	US	Airways	transferred	all	of	its	assets,	liabilities	and	off-balance sheet	commitments	to	American.	For	financial	reporting	purposes,	this	transaction	constituted	a	transfer	of	assets	between	entities	under	common	control	and	was accounted	for	at	historical	cost.	As	part	of	the	transfer	of	assets	and	liabilities	to	American,	all	of	US	Airways'	obligations	with	respect	to	certain	pass	through	trusts	and the	leases	of	related	aircraft	and	engines	were	transferred	to	American.

As	of	December	31,	2015,	the	Company	employed	approximately	118,500	active	full-time	equivalent	employees,	of	which	19,600	were	employed	by	its	regional operations.	Approximately	82%	of	employees	are	covered	by	collective	bargaining	agreements	with	various	labor	unions.

# 2.		Emergence	from	Chapter	11

On	November	29,	2011	(the	Petition	Date),	AMR	Corporation	(AMR,	renamed	American	Airlines	Group	Inc.,	upon	 the	closing	of	 the	Merger),	 its	principal subsidiary,	American,	and	certain	of	AMR's	other	direct	and	indirect	domestic	subsidiaries	(collectively,	the	Debtors),	filed	voluntary	petitions	for	relief	(the	Chapter	11 Cases)	under	Chapter	11	of	the	United	States	Bankruptcy	Code	(the	Bankruptcy	Code)	in	the	United	States	Bankruptcy	Court	for	the	Southern	District	of	New	York	(the Bankruptcy	Court).	On	October	21,	2013,	the	Bankruptcy	Court	entered	an	order	(the	Confirmation	Order)	approving	and	confirming	the	Debtors'	fourth	amended	joint plan	of	reorganization	(as	amended,	the	Plan).

On	December	9,	2013	(the	Effective	Date),	the	Debtors	consummated	their	reorganization	pursuant	to	the	Plan,	principally	through	the	transactions	contemplated	by an	Agreement	and	Plan	of	Merger	(as	amended,	the	Merger	Agreement),	dated	as	of	February	13,	2013,	by	and	among	AMR,	AMR	Merger	Sub,	Inc.	(Merger	Sub)	and US	Airways	Group,	pursuant	to	which	Merger	Sub	merged	with	and	into	US	Airways	Group	(the	Merger),	with	US	Airways	Group	surviving	as	a	wholly-owned subsidiary	of	the	Company	following	the	Merger.	Pursuant	to	the	Merger	Agreement,	each	share	of	common	stock,	par	value	$0.01	per	share,	of	US	Airways	Group	was converted	into	the	right	to	receive	one	share	of	AAG	common	stock,	par	value	$0.01	per	share	(AAG	Common	Stock).

From	the	Petition	Date	through	the	Effective	Date,	pursuant	to	automatic	stay	provisions	under	the	Bankruptcy	Code	and	orders	granted	by	the	Bankruptcy	Court,	all actions	to	enforce	or	otherwise	effect	repayment	of	liabilities	preceding	the	Petition	Date	as	well	as	all	pending	litigation	against	the	Debtors	generally	were	stayed. Following	the	Effective	Date,	actions	to	enforce	or	otherwise	effect	repayment	of	liabilities	preceding	the	Petition	Date	generally	have	been	permanently	enjoined.	Any unresolved	claims	will	continue	to	be	subject	to	the	claims	reconciliation	process	under	the	supervision	of	the	U.S.	Bankruptcy	Court.	However,	certain	pending litigation	related	to	pre-petition	liabilities	may	proceed	in	courts	other	than	the	U.S.	Bankruptcy	Court	to	the	extent	the	parties	to	such	litigation	have	obtained	relief from	the	permanent	injunction.

# Plan	of	Reorganization

The	Plan	implements	the	Merger	and	incorporates	a	compromise	and	settlement	of	certain	intercreditor	and	intercompany	claim	issues.

Pursuant	to	the	Plan,	all	shares	of	AMR	common	stock	outstanding	prior	to	the	Effective	Date	were	canceled.	AAG's	Certificate	of	Incorporation,	which	was approved	in	connection	with	the	Plan,	authorizes	the	issuance	of	1.75	billion	new	shares	of	AAG	Common	Stock	and	200	million	shares	of	AAG	Series	A	Preferred Stock,	par	value	$0.01	per	share	(AAG	Series	A	Preferred	Stock).	Of	the	authorized	AAG	Series	A	Preferred	Stock,	approximately	168	million	shares	were	designated "Series	A	Convertible	Preferred	Stock,"	with	a	stated	value	of	$25.00	per	share,	and	issued	in	accordance	with	the	Plan.	AAG	Common	Stock	is	listed	on	the	NASDAQ Global	Select	Market	under	the	symbol	"AAL"	and	began	trading	on	December	9,	2013.	AAG	Series	A	Preferred	Stock	was	listed	on	the	NASDAQ	Global	Select Market	under	the	symbol	"AALCP"	from	December	9,	2013	until	its	final	mandatory	conversion	on	April	8,	2014.	In	addition,	the	2013	Incentive	Award	Plan	(the	2013 Plan)	authorizes	the	grant	of	awards	for	the	issuance	of	40	million	shares	of	AAG	Common	Stock	plus	any	shares	underlying	awards	granted	under	the	2013	Plan,	or	any pre-existing	US	Airways	Group	plan,	that	are	forfeited,	terminate	or	are	cash	settled	(in	whole	or	in	part)	without	a	payment	being	made	in	the	form	of	shares.	In addition,	any	shares	that	were	available	for	issuance	under	the	US	Airways	Group	2011	Incentive	Award	Plan	(the	2011	Plan)	as	of	the	effective	date	of	the	Merger	may be	used	for	awards	under	the	2013	Plan;	provided,	that	awards	using	such	available	shares	shall	not	be	made	after	the	date	awards	or	grants	could	have	been	made	under 2011	Plan	and	shall	only	be	made	to	individuals	who	were	not	providing	services	to	AMR	prior	to	the	Merger.

The	Plan	contains	the	following	provisions	relating	to	the	treatment	of	pre-petition	claims	against	the	Debtors	and	other	holders	of	allowed	interests	in	the	Debtors:

•all	secured	claims	against	the	Debtors	have	been	reinstated;

•allowed	administrative	claims,	priority	claims	and	convenience	claims	have	been	or	will	be	paid	in	full	in	cash;

•other	holders	of	allowed	pre-petition	unsecured	claims,	holders	of	allowed	interests	and	certain	employees	of	AMR	received	or	will	receive	72%	of	AAG Common	Stock	(on	a	fully	converted	basis)	authorized	to	be	issued	pursuant	to	the	Plan	and	in	connection	with	the	Merger	under	the	following	provisions:

•all	creditors	holding	general	unsecured	claims	against	American	 that	are	guaranteed	by	AAG	and	general	unsecured	claims	against	AAG	 that	are guaranteed	by	American	(Double-Dip	Unsecured	Claims)	were	treated	the	same	under	the	Plan.	Holders	of	Double-Dip	Unsecured	Claims	received,	at	the Effective	Date,	their	recovery	in	shares	of	AAG	Series	A	Preferred	Stock	with	a	stated	amount	equal	to	the	allowed	amount	of	their	claims,	including post-petition	interest	at	the	non-default	rate;

•all	creditors	holding	Single-Dip	Unsecured	Claims	were	treated	the	same	regardless	of	whether	the	claim	was	asserted	against	the	AAG	Debtors,	the American	Debtors,	or	other	Debtors.	As	used	herein,	"Single-Dip	Unsecured	Claims"	means	the	general	unsecured	claims	against	the	Debtors	that	were not

guaranteed	by	any	other	Debtor,	other	than	the	claims	of	the	Debtors'	labor	unions	representing	mainline	workers.	Holders	of	Single-Dip	Unsecured Claims	received	a	portion	of	their	recovery	in	shares	of	AAG	Series	A	Preferred	Stock	at	the	Effective	Date	and	their	remaining	recovery	in	shares	of AAG	Common	Stock	during	the	120-day	period	after	the	Effective	Date;

•holders	of	certain	labor-related	deemed	claims	and	certain	non-management,	non-union	employees	as	specified	in	the	Plan	received,	at	the	Effective	Date, the	right	to	receive	an	allocation	of	shares	of	AAG	Common	Stock	representing	23.6%	of	the	total	number	of	shares	of	AAG	Common	Stock	ultimately distributed	to	holders	of	pre-petition	general	unsecured	creditors	against	the	Debtors.	On	the	Effective	Date,	pursuant	to	the	Plan,	an	initial	allocation	of approximately	39	million	shares	of	AAG	Common	Stock	was	made	related	to	these	labor	and	employee	groups,	of	which	approximately	27	million	shares were	distributed	on	the	Effective	Date	and	approximately	13	million	shares	of	which	were	withheld	in	connection	with	the	Company	making	a	cash payment	of	approximately	$300	million	for	certain	required	withholding	taxes;

•holders	of	allowed	 interests	 in	AMR	(primarily	holders	of	AMR	common	stock	existing	 immediately	prior	 to	 the	Effective	Date)	received,	at	 the Effective	Date,	a	distribution	of	approximately	26	million	shares	of	AAG	Common	Stock	representing	3.5%	of	the	total	number	of	shares	of	AAG Common	Stock	contemplated	for	issuance	pursuant	to	the	Plan	and	received	an	additional	267	million	shares	of	AAG	Common	Stock	during	the	120-day period	after	the	Effective	Date;	and

•holders	of	disputed	claims	at	the	Effective	Date,	to	the	extent	such	disputed	claims	become	allowed	Single-Dip	Unsecured	Claims	after	the	Effective	Date, are	eligible	to	receive	shares	of	AAG	Common	Stock	held	in	reserve	(the	Disputed	Claims	Reserve),	beginning	180	days	after	the	Effective	Date. Disputed	claimholders	that	subsequently	become	holders	of	Single-Dip	Unsecured	Claims	will	receive,	subject	to	the	availability	of	sufficient	shares	in the	Disputed	Claims	Reserve,	the	number	of	shares	of	AAG	Common	Stock	that	the	disputed	claimholder	would	have	received	had	such	claimholder	been a	holder	of	Single-Dip	Unsecured	Claims	as	of	the	Effective	Date.

The	Plan	contemplated	the	distribution	of	up	to	756	million	shares	of	AAG	Common	Stock,	however	this	amount	was	reduced	by	approximately	20	million	shares because	certain	tax	withholdings	for	employees	were	paid	in	cash	as	permitted	under	the	Plan.	In	accordance	with	the	Plan,	the	Company	issued	the	remaining	shares	of AAG	Common	Stock	over	the	120-day	distribution	period,	except	for	shares	held	in	the	Disputed	Claims	Reserve.	In	addition,	pursuant	to	the	Plan,	approximately 197	million	shares	of	AAG	Common	Stock	were	distributed	to	holders	of	outstanding	shares	of	US	Airways	Group	common	stock.

The	AAG	Series	A	Preferred	Stock,	while	outstanding,	voted	and	participated	in	accordance	with	the	terms	of	the	underlying	Certificate	of	Designation.	One	quarter of	the	shares	of	AAG	Series	A	Preferred	Stock	initially	issued	was	mandatorily	convertible	on	each	of	the	30th,	60th,	90th	and	120th	days	after	the	Effective	Date, subject	to	additional	voluntary	conversions.	The	initial	stated	value	of	each	share	of	AAG	Series	A	Preferred	Stock	was	$25.00	and	accrued	dividends	at	6.25%	per annum,	calculated	daily,	while	outstanding.	Additionally,	AAG	Series	A	Preferred	Stock	converted	to	AAG	Common	Stock	based	upon	the	volume	weighted	average price	of	the	shares	of	AAG	Common	Stock	on	the	five	trading	days	immediately	preceding	the	conversion	date,	at	a	3.5%	fixed	discount,	subject	to	a	conversion	price floor	of	$10.875	per	share	and	a	conversion	price	cap	of	$33.8080	per	share,	below	or	above	which	the	conversion	rate	remains	fixed.	As	of	April	8,	2014,	all	shares	of AAG	Series	A	Preferred	Stock	had	been	converted	into	AAG	Common	Stock.

Pursuant	to	rulings	of	the	Bankruptcy	Court,	the	Plan	established	the	Disputed	Claims	Reserve	that	was	initially	issued	30.4	million	shares	of	AAG	Common	Stock reserved	for	issuance	to	disputed	claimholders	at	the	Effective	Date	that	ultimately	become	holders	of	allowed	Single-Dip	Unsecured	Claims	(Single-Dip	Equity Obligations)	as	well	as	to	certain	AMR	labor	groups	and	employees	who	received	a	deemed	claim	amount	based	upon	a	fixed	percentage	of	the	distributions	to	be	made to	general	unsecured	claimholders.	As	of	December	31,

2014,	the	Disputed	Claims	Reserve	held	26.8	million	shares	of	AAG	Common	Stock	pending	distribution	of	those	shares	in	accordance	with	the	Plan.	On	February	10, 2015,	approximately	0.8	million	shares	of	AAG	Common	Stock	held	in	the	Disputed	Claims	Reserve	were	distributed	to	holders	of	allowed	Single-Dip	Unsecured Claims,	to	holders	of	certain	labor-related	deemed	claims,	and	to	holders	of	certain	non-management,	non-union	employee	deemed	claims	as	specified	in	the	Plan,	and the	Company	repurchased	less	than	0.1	million	shares	of	AAG	Common	Stock	for	an	aggregate	of	$4	million	from	the	Disputed	Claims	Reserve	at	the	then-prevailing market	price	in	order	to	fund	cash	tax	obligations	resulting	from	this	distribution.	On	July	14,	2015,	approximately	0.6	million	shares	of	AAG	Common	Stock	held	in	the Disputed	Claims	Reserve	were	distributed	to	holders	of	allowed	Single-Dip	Unsecured	Claims,	to	holders	of	certain	labor-related	deemed	claims,	and	to	holders	of certain	non-management,	non-union	employee	deemed	claims	as	specified	in	the	Plan,	and	the	Company	repurchased	less	than	0.1	million	shares	of	AAG	Common Stock	for	an	aggregate	of	$2	million	from	the	Disputed	Claims	Reserve	at	the	then-prevailing	market	price	in	order	to	fund	cash	tax	obligations	resulting	from	this distribution.	As	of	December	31,	2015,	there	were	approximately	25.3	million	shares	of	AAG	Common	Stock	remaining	in	the	Disputed	Claims	Reserve.	As	disputed claims	are	resolved,	the	claimants	will	receive	distributions	of	shares	from	the	Disputed	Claims	Reserve	on	the	same	basis	as	if	such	distributions	had	been	made	on	or about	the	Effective	Date.	To	the	extent	that	any	of	the	reserved	shares	remain	undistributed	upon	resolution	of	all	remaining	disputed	claims,	such	shares	will	not	be returned	to	the	Company	but	rather	will	be	distributed	to	former	AMR	stockholders	as	of	the	Effective	Date.	The	Company	is	not	required	to	distribute	additional	shares above	the	limits	contemplated	by	the	Plan	described	above.

In	addition,	from	the	Effective	Date	through	December	31,	2015,	the	Company	has	made	the	following	cash	disbursements	under	the	Plan:

•$385	million	in	cash	to	the	pension	plans	in	connection	with	missed	contributions	to	the	pension	plans	during	the	Chapter	11	Cases	and	interest	and	penalty interest	thereon;

•$108	million	in	cash	to	holders	in	partial	or	full	satisfaction	of	their	claims,	including	to	holders	of	administrative	claims,	and	state	and	local	priority	tax	claims;

•$196	million	in	cure	payments	to	holders	of	secured	debt;	and

•	 Approximately	$570	million	for	payroll	and	other	taxes	associated	with	equity	distributions	to	employees	and	distributions	from	the	Disputed	Claims	Reserve.

Several	parties	have	filed	appeals	seeking	reconsideration	of	the	Confirmation	Order.	See	Note	15	for	more	information.

The	reconciliation	process	with	respect	to	the	remaining	claims	will	take	considerable	time	post-emergence.	The	Company's	estimate	of	the	amounts	of	disputed claims	that	will	ultimately	become	allowed	Single-Dip	Unsecured	Claims	are	included	in	bankruptcy	settlement	obligations	on	the	Company's	consolidated	balance sheet	as	of	December	31,	2015.	As	these	claims	are	resolved,	or	where	better	information	becomes	available	and	is	evaluated,	the	Company	will	make	adjustments	to	the liabilities	recorded	on	the	Company's	consolidated	financial	statements	as	appropriate.	Any	such	adjustments	could	be	material	to	the	Company's	financial	position	or results	of	operations	in	any	given	period.

# Availability	and	Utilization	of	Net	Operating	Losses

Upon	emergence	from	bankruptcy,	the	Debtors	experienced	an	"ownership	change"	as	defined	in	Section	382	of	the	Internal	Revenue	Code	of	1986,	as	amended (Section	382),	which	could	potentially	limit	the	ability	to	utilize	certain	tax	attributes	including	the	Debtors'	substantial	net	operating	losses	(NOLs).	The	general limitation	rules	for	a	debtor	in	a	bankruptcy	case	are	liberalized	where	the	ownership	change	occurs	upon	emergence	from	bankruptcy.	The	Debtors	elected	to	be covered	by	certain	special	rules	for	federal	income	tax

purposes	that	permitted	approximately	$9.0	billion	(with	$6.6	billion	of	unlimited	NOL	still	remaining	at	December	31,	2015)	of	the	federal	NOLs	carried	over	from prior	taxable	years	(NOL	Carryforwards)	to	be	utilized	without	regard	to	the	annual	limitation	generally	imposed	by	Section	382.	See	Note	10	for	additional	information related	to	tax	matters.

Moreover,	an	ownership	change	subsequent	to	the	Debtors'	emergence	from	bankruptcy	may	further	limit	or	effectively	eliminate	the	ability	to	utilize	the	Debtors' NOL	Carryforwards	and	other	tax	attributes.	To	reduce	the	risk	of	a	potential	adverse	effect	on	the	Debtors'	ability	to	utilize	the	NOL	Carryforwards,	AAG's	Restated Certificate	of	Incorporation	(the	Certificate	of	Incorporation)	contains	transfer	restrictions	applicable	to	certain	substantial	stockholders.	Although	the	purpose	of	these transfer	restrictions	is	to	prevent	an	ownership	change	from	occurring,	there	can	be	no	assurance	that	an	ownership	change	will	not	occur	even	with	these	transfer restrictions.	A	copy	of	the	Certificate	of	Incorporation	was	attached	as	Exhibit	3.1	to	a	Current	Report	on	Form	8-K	filed	by	the	Company	with	the	SEC	on	December	9, 2013.

Reorganization	items	refer	to	revenues,	expenses	(including	professional	fees),	realized	gains	and	losses	and	provisions	for	losses	that	are	realized	or	incurred	in	the Chapter	11	Cases.	The	following	table	summarizes	the	components	included	in	reorganization	items,	net	on	the	consolidated	statement	of	operations	for	the	year	ended December	31,	2013	(in	millions):

(1) In	exchange	for	employees'	contributions	to	the	successful	reorganization,	including	agreeing	to	reductions	in	pay	and	benefits,	the	Company	agreed	in	the	Plan	to provide	each	employee	group	a	deemed	claim,	which	was	used	to	provide	a	distribution	of	a	portion	of	the	equity	of	the	reorganized	entity	to	those	employees. Each	employee	group	received	a	deemed	claim	amount	based	upon	a	portion	of	the	value	of	cost	savings	provided	by	that	group	through	reductions	to	pay	and benefits	as	well	as	through	certain	work	rule	changes.	The	total	value	of	this	deemed	claim	was	approximately	$1.7	billion.

(2) Amounts	 include	allowed	claims	(claims	approved	by	 the	Bankruptcy	Court)	and	estimated	allowed	claims	relating	 to	(i)	 the	rejection	or	modification	of financings	related	to	aircraft	and	(ii)	entry	of	orders	treated	as	unsecured	claims	with	respect	to	facility	agreements	supporting	certain	issuances	of	special	facility revenue	bonds.	The	Debtors	recorded	an	estimated	claim	associated	with	the	rejection	or	modification	of	a	financing	or	facility	agreement	when	the	applicable motion	was	filed	with	the	Bankruptcy	Court	to	reject	or	modify	such	financing	or	facility	agreement	and	the	Debtors	believed	that	it	was	probable	the	motion would	be	approved,	and	there	was	sufficient	information	to	estimate	the	claim.

(3) Pursuant	to	the	Plan,	the	Debtors	agreed	to	allow	certain	post-petition	unsecured	claims	on	obligations.	As	a	result,	during	the	year	ended	December	31,	2013,	the Company	recorded	reorganization	charges	to	adjust	estimated	allowed	claim	amounts	previously	recorded	on	rejected	special	facility	revenue	bonds	of	$180 million,	allowed	general	unsecured	claims	related	to	the	1990	and	1994	series	of	special	facility	revenue	bonds	that	financed	certain	improvements	at	John	F. Kennedy	International	Airport	(JFK),	and	rejected	bonds	that	financed	certain	improvements	at	Chicago	O'Hare	International	Airport	(ORD),	which	are	included in	the	table	above.

(4) The	Plan	allowed	unsecured	creditors	receiving	AAG	Series	A	Preferred	Stock	a	conversion	discount	of	3.5%.	Accordingly,	the	Company	recorded	the	fair	value of	such	discount	upon	the	confirmation	of	the	Plan	by	the	Bankruptcy	Court.

# 3.		Bankruptcy	Settlement	Obligations

As	of	December	31,	2015	and	2014,	the	components	of	bankruptcy	settlement	obligations	on	the	consolidated	balance	sheets	are	as	follows	(in	millions):

|  | December	31, | December	31, |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
| Single-Dip\tEquity\tObligations | $147 | $248 |
| Labor-related\tdeemed\tclaim | 46 | 77 |
| Total | $193 | $325 |

The	Single-Dip	Equity	Obligations,	while	outstanding,	do	not	vote	or	participate	in	accordance	with	the	terms	of	the	Plan.	These	equity	obligations,	representing	the amount	of	total	Single-Dip	Unsecured	Claims	not	satisfied	through	the	issuance	of	AAG	Series	A	Preferred	Stock	at	the	Effective	Date,	represented	an	unconditional obligation	to	transfer	a	variable	number	of	shares	of	AAG	Common	Stock	based	predominantly	on	a	fixed	monetary	amount	known	at	inception,	and,	as	such,	were	not treated	as	equity,	but	rather	as	liabilities,	until	the	120th	day	after	emergence,	which	was	April	8,	2014.	As	of	April	8,	2014,	the	Company	has	issued	shares	of	AAG Common	Stock	to	satisfy	the	obligation	amount	at	emergence,	plus	accrued	dividends	of	12%	per	annum,	calculated	daily,	through	such	date,	based	on	the	volume weighted	average	price	of	the	shares	of	AAG	Common	Stock,	at	a	3.5%	discount,	as	specified	in	the	Plan.	The	amount	of	the	remaining	Single-Dip	Equity	Obligations at	December	31,	2015	is	the	Company's	estimate	of	its	obligation	for	disputed	claims	of	$147	million	and	is	calculated	based	on	the	fair	value	of	the	shares	expected	to be	issued,	measured	as	if	the	obligations	were	settled	using	the	closing	price	of	AAG	Common	Stock	at	December	31,	2015.	Additional	allowed	claims	will	receive 30.7553	shares,	subject	to	reduction	for	expenses	of	the	Disputed	Claims	Reserve,	including	tax	liabilities,	for	each	$1,000	of	allowed	claims.	For	accounting	purposes, the	value	of	the	shares	expected	to	be	issued	is	marked-to-market	each	period	until	issued.	Accordingly,	changes	in	the	value	of	AAG	Common	Stock	could	result	in future	increases	and	decreases	in	this	obligation.

In	exchange	for	employees'	contributions	to	the	successful	reorganization	of	the	Company,	including	agreeing	to	reductions	in	pay	and	benefits,	the	Company	agreed in	the	Plan	to	provide	each	employee	group	a	deemed	claim	which	was	used	to	provide	a	distribution	of	a	portion	of	the	equity	of	the	reorganized	entity	to	those employees.	Each	employee	group	received	a	deemed	claim	amount	based	upon	a	fixed	percentage	of	the	distributions	to	be	made	to	general	unsecured	claimholders.	The fair	value	based	on	the	expected	number	of	shares	to	be	distributed	to	satisfy	this	deemed	claim,	as	adjusted,	was	approximately	$1.5	billion.	From	the	Effective	Date through	December	31,	2015,	the	Company	has	made	distributions	of	$1.0	billion	in	AAG	Common	Stock	and	paid	approximately	$555	million	in	cash	to	cover	payroll and	other	taxes	related	to	the	equity	distributions.	As	of	December	31,	2015,	the	liability	to	certain	AMR	labor	groups	and	employees	of	$46	million	represents	the estimated	fair	value	of	the	remaining	shares	expected	to	be	issued	in	satisfaction	of	such	obligation,	measured	as	if	the	obligation	were	settled	using	the	closing	price	of AAG	Common	Stock	at	December	31,	2015.	For	accounting	purposes,	the	value	of	the	remaining	shares	expected	to	be	issued	to	satisfy	the	labor	claim	is	marked-to- market	each	period	until	issued.	Accordingly,	changes	in	the	value	of	AAG	Common	Stock	could	result	in	future	increases	and	decreases	in	this	obligation.

On	February	10,	2015	and	July	14,	2015,	approximately	0.8	million	and	0.6	million	shares,	respectively,	of	AAG	Common	Stock	held	in	the	Disputed	Claims Reserve	were	distributed	to	holders	of	allowed	Single-Dip

Unsecured	Claims,	to	holders	of	certain	labor-related	deemed	claims	and	to	holders	of	certain	non-management,	non-union	employee	deemed	claims	as	specified	in	the Plan,	and	0.1	million	shares	in	the	aggregate	were	withheld	to	fund	cash	tax	obligations	resulting	from	these	distributions.

# 4.		Merger	and	Related	Matters

# Description	of	Transaction

As	previously	discussed	in	Note	2,	on	the	Effective	Date,	the	Debtors	consummated	their	reorganization	and	the	Merger	pursuant	to	the	Plan.	The	Merger	has	been accounted	for	as	a	business	acquisition	using	the	acquisition	method	of	accounting	in	accordance	with	Financial	Accounting	Standards	Board	(FASB)	Accounting Standards	 Codification	 (ASC)	 805,	 "Business	 Combinations"	 (ASC	 805),	 with	AAG	 considered	 the	 acquirer	 of	 US	Airways	 Group.	The	 acquisition	 method	 of accounting	requires,	among	other	things,	that	assets	acquired	and	liabilities	assumed	be	recognized	on	the	balance	sheet	at	their	fair	values	as	of	the	acquisition	date.	The acquisition	values	have	also	been	reflected	in	US	Airways	Group's	separate-entity	financial	statements	as	of	December	9,	2013.	The	excess	of	the	purchase	price	over the	net	fair	value	of	assets	and	liabilities	acquired	was	recorded	as	goodwill.	Goodwill	is	not	amortized,	but	is	tested	for	impairment	at	least	annually.

# Slot	Divestitures

As	a	stipulation	for	the	Merger	to	be	approved	by	the	Department	of	Justice	(DOJ),	the	Company	was	required	to	divest	certain	airport	take	off	and	landing	rights (slots)	at	LaGuardia	Airport	(LGA)	and	Ronald	Reagan	Washington	National	Airport	(DCA).	In	2014,	the	Company	divested	the	required	DCA	slots	and	received	$307 million	in	cash	as	well	as	24	slots	at	JFK.	The	Company	recognized	a	net	gain	of	$309	million	related	to	these	divestitures,	which	has	been	included	in	special	items,	net in	the	consolidated	statement	of	operations.	In	2013,	the	Company	recognized	a	gain	of	$67	million	related	to	the	sale	of	the	LGA	slots,	which	has	been	included	in special	items,	net	in	the	consolidated	statement	of	operations.

In	2013,	the	European	Commission	cleared	under	the	EU	Merger	Regulation	the	proposed	merger	between	US	Airways	and	American.	As	a	consequence	of	the merger	clearance	process	in	the	EU,	the	Company	was	required	to	make	available	one	pair	of	London	Heathrow	slots	for	use	by	another	carrier	between	London	and Philadelphia,	which	the	acquiring	carrier	can	deploy	on	another	London	Heathrow	city	pair	after	operating	the	slots	on	London-Philadelphia	for	a	period	of	not	less	than three	consecutive	years.	In	addition,	along	with	the	Company's	joint	business	agreement	partners,	the	Company	was	required	to	make	available	for	an	initial	period	of	up to	seven	years	one	pair	of	Heathrow	slots	for	service	between	London	and	Miami	that	may	be	operated	via	an	intermediate	point.	In	connection	with	these	requirements and	upon	making	these	slots	available,	in	2014,	the	Company	recorded	a	$43	million	non-cash	charge,	which	has	been	included	in	special	items,	net	in	the	consolidated statement	of	operations.

# Fair	Value	of	Consideration	Transferred

The	fair	value	of	the	consideration	transferred,	or	the	purchase	price,	was	derived	as	described	below	based	on	the	outstanding	shares	of	US	Airways	Group	common stock	at	December	9,	2013,	the	exchange	ratio	of	one	share	of	AAG	Common	Stock	for	each	share	of	US	Airways	Group	common	stock,	and	a	price	per	share	of	AAG Common	Stock	of	$22.55,	which	represented	the	closing	price	of	US	Airways	Group	common	stock	on	December	6,	2013,	the	last	day	such	shares	traded	on	the	New York	Stock	Exchange.	US	Airways	Group	equity	awards	outstanding	at	the	close	of	the	Merger	converted	into	equity	awards	with	respect	to	AAG	Common	Stock. Vested	equity	awards	held	by	employees	of	US	Airways	Group	are	considered	part	of	the	purchase	price.

# Allocation	of	Consideration	Transferred

The	Merger	has	been	accounted	for	using	the	acquisition	method	of	accounting	in	accordance	with	ASC	805,	with	AAG	treated	as	the	acquirer	of	US	Airways	Group for	accounting	purposes.	The	acquisition	method	of	accounting	requires,	among	other	things,	that	assets	acquired	and	liabilities	assumed	be	recognized	on	the	balance sheet	at	their	fair	values	as	of	the	acquisition	date.	The	excess	of	the	purchase	price	over	the	net	fair	value	of	assets	acquired	and	liabilities	assumed	was	recorded	as goodwill.	Goodwill	is	not	amortized,	but	is	tested	for	impairment	at	least	annually.

The	fair	values	of	the	assets	acquired	and	liabilities	assumed	were	determined	using	the	market,	income	and	cost	approaches.	The	fair	value	measurements	were primarily	based	on	significant	inputs	that	are	not	observable	in	the	market,	other	than	certain	long-term	debt	assumed	in	the	Merger.	The	market	approach,	which indicates	value	for	a	subject	asset	based	on	available	market	pricing	for	comparable	assets,	was	utilized	to	estimate	the	fair	value	of	US	Airways'	aircraft	and	operating leases.	The	market	approach	included	prices	and	other	relevant

information	 generated	 by	 market	 transactions	 involving	 comparable	 assets,	 as	 well	 as	 pricing	 guides	 and	 other	 sources.	The	 current	 market	 for	 the	 aircraft,	 the maintenance	condition	of	the	aircraft	and	the	expected	proceeds	from	the	sale	of	the	assets,	among	other	factors,	were	considered.	The	market	approach	was	utilized	to value	certain	intangible	assets	such	as	airport	take	off	and	landing	slots	when	sufficient	market	information	was	available.	The	income	approach	was	primarily	used	to value	intangible	assets,	including	customer	relationships,	marketing	agreements,	certain	international	route	authorities,	and	the	US	Airways	tradename.	The	income approach	indicates	value	for	a	subject	asset	based	on	the	present	value	of	cash	flows	projected	to	be	generated	by	the	asset.	Projected	cash	flows	are	discounted	at	a required	market	rate	of	return	that	reflects	the	relative	risk	of	achieving	the	cash	flows	and	the	time	value	of	money.	The	cost	approach,	which	estimates	value	by determining	the	current	cost	of	replacing	an	asset	with	another	of	equivalent	economic	utility,	was	used,	as	appropriate,	for	certain	assets	for	which	the	market	and income	approaches	could	not	be	applied	due	to	the	nature	of	the	asset.	The	cost	to	replace	a	given	asset	reflects	the	estimated	reproduction	or	replacement	cost	for	the asset,	less	an	allowance	for	loss	in	value	due	to	depreciation.	The	fair	value	of	US	Airways'	Dividend	Miles	loyalty	program	liability	was	determined	based	on	the weighted	average	equivalent	ticket	value	of	outstanding	miles	which	were	expected	to	be	redeemed	for	future	travel	at	December	9,	2013.	The	weighted	average equivalent	ticket	value	contemplates	differing	classes	of	service,	domestic	and	international	itineraries	and	the	carrier	providing	the	award	travel.

# Pro-forma	Impact	of	the	Merger

The	Company's	unaudited	pro-forma	results	presented	below	include	the	effects	of	the	Merger	as	if	it	had	been	consummated	as	of	January	1,	2012.	The	pro-forma results	include	the	depreciation	and	amortization	associated	with	the	acquired	tangible	and	intangible	assets,	lease	and	debt	fair	value	adjustments,	the	elimination	of	any deferred	gains	or	losses,	adjustments	relating	to	reflecting	the	fair	value	of	the	loyalty	program	liability	and	the	impact	of	income	changes	on	profit	sharing	expense, among	others.	In	addition,	the	pro-forma	results	below	reflect	the	impact	of	higher	wage	rates	related	to	memorandums	of	understanding	with	US	Airways'	pilots	that became	effective	upon	closing	of	the	Merger,	as	well	as	the	elimination	of	the	Company's	reorganization	items,	net	and	Merger	transition	costs.	However,	the	pro-forma results	do	not	include	any	anticipated	synergies	or	other	expected	benefits	of	the	Merger.	Accordingly,	the	unaudited	pro-forma	financial	information	below	is	not necessarily	indicative	of	either	future	results	of	operations	or	results	that	might	have	been	achieved	had	the	acquisition	been	consummated	as	of	January	1,	2012.

# 5.		Basis	of	Presentation	and	Summary	of	Significant	Accounting	Policies

# (a)	Basis	of	Presentation

The	consolidated	financial	statements	for	the	full	years	of	2015	and	2014	and	the	period	from	December	9,	2013	to	December	31,	2013	include	the	accounts	of	the Company	and	its	wholly-owned	subsidiaries.	For	the	periods	prior	to	December	9,	2013,	the	consolidated	financial	statements	do	not	include	the	accounts	of	US Airways	Group.	All	significant	intercompany	transactions	have	been	eliminated.

The	preparation	of	financial	statements	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	(GAAP)	requires	management	to	make certain	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities,	revenues	and	expenses,	and	the	disclosure	of	contingent	assets	and	liabilities at	the	date	of	the	financial	statements.	Actual	results	could	differ	from	those	estimates.	The	most	significant	areas

of	judgment	relate	to	passenger	revenue	recognition,	impairment	of	goodwill,	impairment	of	long-lived	and	intangible	assets,	business	combination	measurements,	the loyalty	program,	pensions	and	retiree	medical	and	other	postretirement	benefits	and	the	deferred	tax	asset	valuation	allowance.

# (b)	Chapter	11	Matters

In	accordance	with	GAAP,	 the	Debtors	(as	defined	 in	Note	2	above)	applied	ASC	852	"Reorganizations"	(ASC	852)	 in	preparing	 the	consolidated	financial statements	for	periods	subsequent	to	the	Chapter	11	Cases	(as	defined	in	Note	2	above).	ASC	852	requires	that	the	financial	statements	distinguish	transactions	and events	that	are	directly	associated	with	the	reorganization	from	the	ongoing	operations	of	the	business.	Accordingly,	certain	revenues,	expenses	(including	professional fees),	realized	gains	and	losses	and	provisions	for	losses	that	are	realized	or	incurred	in	the	Chapter	11	Cases	for	2013	are	presented	in	reorganization	items,	net	on	the accompanying	consolidated	statement	of	operations.

# (c)	Restricted	Cash	and	Short-term	Investments

The	Company	has	restricted	cash	and	short-term	investments	related	primarily	to	collateral	held	to	support	workers'	compensation	obligations.

# (d)	Aircraft	Fuel,	Spare	Parts,	and	Supplies,	Net

Aircraft	fuel,	spare	parts,	and	supplies,	net	are	recorded	at	net	realizable	value	based	on	average	costs.	These	items	are	expensed	when	used.	An	allowance	for obsolescence	is	provided	for	aircraft	spare	parts	and	supplies.

# (e)	Operating	Property	and	Equipment

Operating	property	and	equipment	are	recorded	at	cost.	Interest	expense	related	to	the	acquisition	of	certain	property	and	equipment,	including	aircraft	purchase deposits,	is	capitalized	as	an	additional	cost	of	the	asset.	Interest	capitalized	for	the	years	ended	December	31,	2015,	2014	and	2013	was	$52	million,	$61	million	and $47	million,	respectively.	Property	and	equipment	is	depreciated	and	amortized	to	residual	values	over	the	estimated	useful	lives	or	the	lease	term,	whichever	is	less, using	the	straight-line	method.	Costs	of	major	improvements	that	enhance	the	usefulness	of	the	asset	are	capitalized	and	depreciated	over	the	estimated	useful	life	of	the asset	or	the	modifications,	whichever	is	less.	The	depreciable	lives	used	for	the	principal	depreciable	asset	classifications	are:

Residual	values	for	aircraft,	engines,	major	rotable	parts,	avionics	and	assemblies	are	generally	5%	to	10%.

Equipment	and	property	under	capital	leases	are	amortized	over	the	term	of	the	leases	or,	in	the	case	of	certain	aircraft,	over	their	expected	useful	lives.	Lease	terms vary	but	are	generally	12	to	30	years	for	aircraft	and	three	to	30	years	for	other	leased	equipment	and	property.

The	Company	records	impairment	charges	on	long-lived	assets	used	in	operations	when	events	and	circumstances	indicate	that	the	assets	may	be	impaired.	An	asset or	group	of	assets	is	considered	impaired	when	the	undiscounted	cash	flows	estimated	to	be	generated	by	the	assets	are	less	than	the	carrying	amount	of	the	assets	and the	net	book	value	of	the	assets	exceeds	their	estimated	fair	value.	If	such	assets	are	considered	to	be	impaired,	the	impairment	to	be	recognized	is	measured	by	the amount	by	which	the	carrying	amount	of	the	assets	exceeds	the	fair	value	of	the	assets.	Assets	to	be	disposed	of	are	reported	at	the	lower	of	the	carrying	amount	or	fair value	less	cost	to	sell.

# (f)	Income	Taxes

# (g)	Goodwill

Goodwill	represents	the	excess	of	the	purchase	price	over	the	fair	value	of	the	net	assets	acquired	and	liabilities	assumed.	Goodwill	is	not	amortized	but	tested	for impairment	annually	on	October	1 	or	more	frequently	if	events	or	circumstances	indicate	that	goodwill	may	be	impaired.	The	Company	has	one	consolidated	reporting unit. st

Goodwill	is	measured	for	impairment	by	initially	performing	a	qualitative	screen	and,	if	necessary,	then	comparing	the	fair	value	of	the	reporting	unit	to	its	carrying value,	including	goodwill.	If	the	fair	value	of	the	reporting	unit	is	less	than	the	carrying	value,	a	second	step	is	performed	to	determine	the	implied	fair	value	of	goodwill. If	the	implied	fair	value	of	goodwill	is	lower	than	its	carrying	value,	an	impairment	charge	equal	to	the	difference	is	recorded.	Based	upon	the	Company's	annual measurement,	there	was	no	goodwill	impairment	in	2015.

# (h)	Other	Intangibles,	Net

Intangible	assets	consist	primarily	of	airport	slots,	customer	relationships,	marketing	agreements,	international	slots	and	route	authorities,	gate	leasehold	rights	and tradenames.	Intangible	assets	with	estimable	useful	lives	are	amortized	over	their	respective	estimated	useful	lives	and	reviewed	for	impairment	whenever	events	or changes	in	circumstances	indicate	that	the	carrying	value	may	not	be	recoverable.

The	following	table	provides	information	relating	to	the	Company's	amortizable	intangible	assets	as	of	December	31,	2015	and	2014	(in	millions):

|  | December	31, | December	31, |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
| Domestic\tairport\tslots | $365 | $365 |
| Customer\trelationships | 300 | 300 |
| Marketing\tagreements | 105 | 105 |
| Tradenames | 35 | 35 |
| Airport\tgate\tleasehold\trights | 137 | 138 |
| Accumulated\tamortization | (502) | (447) |
| Total | $440 | $496 |

Domestic	airport	slots	and	airport	gate	leasehold	rights	are	amortized	on	a	straight-line	basis	over	25	years.	The	customer	relationships,	marketing	agreements	and tradenames	were	identified	as	intangible	assets	subject	to	amortization	and	are	amortized	on	a	straight-line	basis	over	approximately	nine	years,	30	years	and	15	months, respectively.

The	Company	recorded	amortization	expense	related	to	these	intangible	assets	of	approximately	$55	million,	$81	million	and	$20	million	for	the	years	ended December	31,	2015,	2014	and	2013,	respectively.	The	Company	expects	to	record	annual	amortization	expense	for	the	aforementioned	definite-life	intangible	assets	as follows	(in	millions):

The	Company's	indefinite-lived	assets	include	certain	international	slots	and	route	authorities	and	domestic	airport	slots.	Indefinite-lived	assets	are	not	amortized	but instead	are	reviewed	for	impairment	annually	on	October	1 	or	more	frequently	if	events	or	circumstances	indicate	that	the	asset	may	be	impaired.	As	of	December	31, 2015	and	2014,	the	Company	had	$1.8	billion	and	$1.7	billion,	respectively,	of	indefinite-lived	intangible	assets	on	its	consolidated	balance	sheets. st

The	Company's	indefinite-lived	intangible	assets	are	reviewed	for	impairment	by	initially	performing	a	qualitative	screen	to	determine	whether	the	Company	believes it	is	more	likely	than	not	that	an	asset	has	been	impaired.	If	the	Company	believes	an	impairment	has	occurred,	the	Company	then	evaluates	for	impairment	by comparing	the	estimated	fair	value	of	assets	to	the	carrying	value.	An	impairment	charge	is	recognized	if	the	asset's	estimated	fair	value	is	less	than	its	carrying	value. Based	upon	the	Company's	annual	review,	there	was	no	indefinite-lived	intangible	asset	impairment	in	2015.

# (i)	Loyalty	Program

The	Company	currently	operates	the	loyalty	program,	AAdvantage.	This	program	awards	mileage	credits	to	passengers	who	fly	on	American	and	oneworld	carriers, as	well	as	certain	other	partner	airlines	that	participate	in	the	program.	Mileage	credits	can	also	be	earned	through	purchases	from	other	non-airline	partners	that participate	in	the	Company's	loyalty	program.	Mileage	credits	can	be	redeemed	for	travel	on	American	or	other	participating	partner	airlines,	 in	which	case	 the Company	pays	a	fee.

The	Company	uses	the	incremental	cost	method	to	account	for	the	portion	of	its	loyalty	program	liability	incurred	when	AAdvantage	members	earn	mileage	credits by	flying	on	American	or	its	regional	affiliates.	The	Company	has	an	obligation	to	provide	future	travel	when	these	mileage	credits	are	redeemed	and	therefore	has recorded	a	liability	for	mileage	credits	outstanding.

The	incremental	cost	liability	includes	all	mileage	credits	that	are	expected	to	be	redeemed,	including	mileage	credits	earned	by	members	whose	mileage	account balances	have	not	yet	reached	the	minimum	mileage	credit	level	required	to	redeem	an	award.	Additionally,	outstanding	mileage	credits	are	subject	to	expiration	if unused.	In	calculating	the	liability,	the	Company	estimates	how	many	mileage	credits	will	never	be	redeemed	for	travel	and	excludes	those	mileage	credits	from	the estimate	of	the	liability.	Estimates	are	also	made	for	the	number	of	miles	that	will	be	used	per	award	redemption	and	the	number	of	travel	awards	that	will	be	redeemed on	partner

airlines.	These	estimates	are	based	on	historical	program	experience	as	well	as	consideration	of	enacted	program	changes,	as	applicable.	Changes	in	the	liability	resulting from	members	earning	additional	mileage	credits	or	changes	in	estimates	are	recorded	in	the	consolidated	statements	of	operations	as	a	part	of	passenger	revenue.

The	liability	for	outstanding	mileage	credits	is	valued	based	on	the	estimated	incremental	cost	of	carrying	one	additional	passenger.	Incremental	cost	primarily includes	unit	costs	incurred	for	fuel,	food,	and	insurance	as	well	as	fees	incurred	when	travel	awards	are	redeemed	on	partner	airlines.	No	profit	or	overhead	margin	is included	in	the	accrual	of	incremental	cost.	These	estimates	are	generally	updated	based	upon	the	Company's	12-month	historical	average	of	such	costs.

In	addition,	the	Company	applied	the	acquisition	method	of	accounting	in	connection	with	the	Merger	and	therefore	recorded	the	liability	for	outstanding	US Airways'	mileage	credits	at	fair	value,	an	amount	significantly	in	excess	of	incremental	cost.	As	of	December	31,	2015	and	2014,	the	liability	for	these	outstanding mileage	credits	expected	to	be	redeemed	for	future	travel	awards	was	$296	million	and	$611	million,	respectively,	and	is	included	on	the	consolidated	balance	sheets within	loyalty	program	liability.	This	liability	is	amortized	into	passenger	revenue	on	a	straight-line	basis	over	the	period	in	which	the	mileage	credits	are	expected	to	be redeemed	for	travel.	All	new	miles	earned	will	be	recorded	as	a	liability	based	on	the	incremental	cost	method	discussed	above.

American	also	sells	loyalty	program	mileage	credits	to	participating	airline	partners	and	non-airline	business	partners.	Sales	of	mileage	credits	to	non-airline	business partners	is	comprised	of	two	components,	transportation	and	marketing.	Historically,	the	Company	has	used	the	residual	method	of	accounting	to	determine	the	values	of each	component	as	there	had	not	been	a	material	modification	to	any	significant	agreements	since	the	adoption	of	Accounting	Standards	Update	(ASU)	No.	2009-13, "Revenue	Recognition	(Topic	605)	–	Multiple-Deliverable	Revenue	Arrangements"	on	January	1,	2011.

In	2013,	American	and	Citibank	amended	 their	AAdvantage	co-branded	credit	card	agreement,	which	resulted	 in	a	material	modification	of	 the	 terms	of	 the arrangement.	Also,	in	connection	with	the	acquisition	of	US	Airways	on	December	9,	2013,	a	material	modification	occurred	on	all	of	US	Airways'	agreements	in connection	with	the	Merger.	Therefore,	subsequent	to	the	amendments	of	these	arrangements,	the	Company	applied	the	relative	selling	price	method	to	determine	the values	of	each	deliverable.	Under	the	relative	selling	price	approach,	the	Company	identified	five	revenue	elements	for	the	co-branded	credit	card	agreements	with Citibank	and	Barclays:	the	transportation	component;	use	of	the	American	brand	including	access	to	loyalty	program	member	lists;	advertising;	lounge	access;	and baggage	services	(together	excluding	the	transportation	component,	the	marketing	component).

The	marketing	component	represents	services	provided	to	the	Company's	business	partners	and	relates	primarily	to	the	use	of	the	American	brand	including	access	to loyalty	program	member	lists.	The	marketing	services	are	provided	periodically,	but	no	less	than	monthly.	Accordingly,	the	marketing	component	is	considered	earned and	recognized	in	other	revenues	in	the	period	of	the	mileage	sale.

Upon	application	of	the	relative	selling	price	method	in	2013	for	American's	Citibank	modification,	the	Company	reduced	its	travel	component	liability	and	recorded other	revenue	of	approximately	$31	million.	As	a	result	of	the	change	in	the	marketing	component	value	when	the	relative	selling	price	method	is	applied,	the	Company now	defers	less	revenue	per	mile	sold.

As	of	December	31,	2015	and	2014,	the	Company	had	$1.5	billion	in	deferred	revenue	from	the	sale	of	mileage	credits	(recorded	within	loyalty	program	liability	on the	consolidated	balance	sheets).	For	the	years	ended	December	31,	2015,	2014	and	2013,	the	marketing	component	of	mileage	sales	recognized	at	the	time	of	sale	in other	revenues	was	approximately	$1.5	billion,	$1.4	billion	and	$834	million,	respectively.

# (j)	Passenger	Revenue

Passenger	revenue	is	recognized	when	transportation	is	provided.	Ticket	sales	for	transportation	that	has	not	yet	been	provided	are	initially	deferred	and	recorded	as air	traffic	liability	on	the	consolidated	balance	sheets.	The	air	traffic	liability	represents	tickets	sold	for	future	travel	dates	and	estimated	future	refunds	and	exchanges	of tickets	sold	for	past	travel	dates.	The	balance	in	the	air	traffic	liability	fluctuates	throughout	the	year	based	on	seasonal	travel	patterns	and	fare	sale	activity.	The Company's	air	traffic	liability	was	$3.7	billion	and	$4.3	billion	as	of	December	31,	2015	and	2014,	respectively.

The	majority	of	tickets	sold	are	nonrefundable.	A	small	percentage	of	tickets,	some	of	which	are	partially	used	tickets,	expire	unused.	Due	to	complex	pricing structures,	refund	and	exchange	policies,	and	interline	agreements	with	other	airlines,	certain	amounts	are	recognized	in	revenue	using	estimates	regarding	both	the timing	of	the	revenue	recognition	and	the	amount	of	revenue	to	be	recognized.	These	estimates	are	generally	based	on	the	analysis	of	the	Company's	historical	data.	The Company	and	other	airline	industry	participants	have	consistently	applied	this	accounting	method	to	estimate	revenue	from	forfeited	tickets	at	the	date	of	travel. Estimated	future	refunds	and	exchanges	included	in	the	air	traffic	liability	are	routinely	evaluated	based	on	subsequent	activity	to	validate	the	accuracy	of	the	Company's estimates.	Any	adjustments	resulting	from	periodic	evaluations	of	the	estimated	air	traffic	liability	are	included	in	results	of	operations	during	the	period	in	which	the evaluations	are	completed.

The	Company	purchases	capacity,	or	ASMs,	generated	by	its	wholly-owned	regional	air	carriers	and	the	capacity	of	third-party	carriers	including	Air	Wisconsin Airlines	Corporation	(Air	Wisconsin),	Republic	Airline	Inc.	(Republic),	Mesa	Airlines,	Inc.	(Mesa),	SkyWest	Airlines,	Inc.	(SkyWest),	ExpressJet	Airlines,	Inc. (ExpressJet),	Compass	Airlines,	LLC	(Compass)	and	Trans	States	Airlines,	Inc.	(Trans	States)	in	certain	markets.	The	Company's	wholly-owned	regional	air	carriers and	third-party	carriers	operate	regional	aircraft	as	part	of	American	Eagle	carriers.	The	Company	classifies	revenues	generated	from	transportation	on	these	carriers	as regional	passenger	revenues.	Liabilities	related	to	tickets	sold	by	the	Company	for	travel	on	these	air	carriers	are	also	included	in	the	Company's	air	traffic	liability	and are	subsequently	recognized	as	revenue	in	the	same	manner	as	described	above.

Various	taxes	and	fees	assessed	on	the	sale	of	tickets	to	end	customers	are	collected	by	the	Company	as	an	agent	and	remitted	to	taxing	authorities.	These	taxes	and fees	have	been	presented	on	a	net	basis	in	the	accompanying	consolidated	statements	of	operations	and	recorded	as	a	liability	until	remitted	to	the	appropriate	taxing authority.

# (k)	Maintenance,	Materials	and	Repairs

Maintenance	and	repair	costs	for	owned	and	leased	flight	equipment	are	charged	to	operating	expense	as	incurred,	except	costs	incurred	for	maintenance	and	repair under	flight	hour	maintenance	contract	agreements,	which	are	accrued	based	on	contractual	terms	when	an	obligation	exists.

# (l)	Selling	Expenses

Selling	expenses	include	commissions,	credit	card	fees,	computerized	reservations	systems	fees	and	advertising.	Advertising	expenses	are	expensed	as	incurred. Advertising	expense	was	$110	million,	$92	million	and	$166	million	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.

# (m)	Share-based	Compensation

The	Company	accounts	for	its	share-based	compensation	expense	based	on	the	fair	value	of	the	stock	award	at	the	time	of	grant,	which	is	recognized	ratably	over	the vesting	period	of	the	stock	award.	The	fair	value	of	stock	options	and	stock	appreciation	rights	is	estimated	using	a	Black-Scholes	option	pricing	model.	The	fair	value	of restricted	stock	units	is	based	on	the	market	price	of	the	underlying	shares	of	common	stock	on	the	date	of	grant.	See	Note	18	for	further	discussion	of	share-based compensation.

# (n)	Deferred	Gains	and	Credits,	Net

Included	within	deferred	gains	and	credits,	net	are	amounts	deferred	and	amortized	into	future	periods	associated	with	the	adjustment	of	leases	to	fair	value	in connection	with	the	application	of	acquisition	accounting,	deferred	gains	on	the	sale-leaseback	of	aircraft	and	certain	vendor	incentives.	The	Company	periodically receives	vendor	incentives	in	connection	with	acquisition	of	aircraft	and	engines.	These	credits	are	deferred	until	aircraft	and	engines	are	delivered	and	then	applied	as	a reduction	to	the	cost	of	the	related	equipment.

# (o)	Foreign	Currency	Gains	and	Losses

Foreign	currency	gains	and	losses	are	recorded	as	part	of	other	nonoperating	expense,	net	in	the	consolidated	statements	of	operations.	Foreign	currency	losses	for 2015,	2014	and	2013	were	$751	million,	$114	million	and	$56	million,	respectively.	The	2015	period	included	a	$592	million	special	charge	to	write	off	all	of	the	value of	Venezuelan	bolivars	held	by	the	Company	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

# (p)	Other	Operating	Expenses

Other	operating	expenses	includes	expenses	associated	with	ground	and	cargo	handling,	crew	travel,	aircraft	food	and	catering,	passenger	accommodation,	airport security,	international	navigation	fees	and	certain	general	and	administrative	expenses.

# (q)	Regional	Expenses

Expenses	associated	with	the	Company's	wholly-owned	regional	airlines	and	third-party	regional	carriers	operating	under	the	brand	name	American	Eagle	are classified	as	regional	expenses	on	the	consolidated	statements	of	operations.	Regional	expenses	consist	of	the	following	(in	millions):

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Aircraft\tfuel\tand\trelated\ttaxes | $1,230 | $2,009 | $1,120 |
| Salaries,\twages\tand\tbenefits | \t 1,187 | \t 1,140 | 692 |
| Capacity\tpurchases\tfrom\tthird-party\tregional\tcarriers\t(1) | \t 1,591 | \t 1,475 | 269 |
| Maintenance,\tmaterials\tand\trepairs | 305 | 367 | 284 |
| Other\trent\tand\tlanding\tfees | 476 | 419 | 236 |
| Aircraft\trent | 7 | 35 | 4 |
| Selling\texpenses | 333 | 307 | 154 |
| Depreciation\tand\tamortization | 243 | 217 | 168 |
| Special\titems,\tnet | 29 | 24 | 8 |
| Other | 582 | 523 | 391 |
| Total\tregional\texpenses | $5,983 | $6,516 | $3,326 |

(1) For	the	years	ended	December	31,	2015	and	2014,	the	component	of	capacity	purchase	expenses	related	to	aircraft	deemed	to	be	leased	was	approximately	$492 million	and	$447	million,	respectively.

# (r)	Recent	Accounting	Pronouncements

In	May	2014,	the	FASB	issued	ASU	2014-09,	"Revenue	from	Contracts	with	Customers	(Topic	606)."	ASU	2014-09	completes	the	joint	effort	by	the	FASB	and International	Accounting	Standards	Board	(IASB)	 to	 improve	financial	reporting	by	creating	common	revenue	recognition	guidance	for	GAAP	and	International Financial	Reporting	Standards	(IFRS).	ASU	2014-09	applies	to	all	companies	that	enter	into	contracts	with	customers	to	transfer	goods	or	services.	ASU	2014-09	is effective	for	public	entities	for	interim	and	annual	reporting	periods	beginning	after	December	15,	2017.	Early	application	is	permitted,	but	not	before	interim	and	annual reporting	periods	beginning	after	December	15,	2016.	Entities	have	the	choice	to	apply	ASU	2014-09	either	retrospectively	to	each	reporting	period	presented	or	by recognizing	the	cumulative	effect	of	applying	ASU	2014-09	at	the	date	of	initial	application	and	not	adjusting	comparative	information.	The	Company	is	currently evaluating	the	requirements	of	ASU	2014-09	and	has	not	yet	determined	its	impact	on	the	Company's	consolidated	financial	statements.

On	February	18,	2015,	the	FASB	issued	ASU	2015-02,	"Consolidation	(Topic	810)."	ASU	2015-02	amends	both	the	variable	interest	entity	and	voting	interest	entity consolidation	models.	The	standard	is	effective	for	public	reporting	entities	in	fiscal	periods	beginning	after	December	15,	2015,	and	early	adoption	is	permitted.	This standard	is	not	expected	to	have	a	material	impact	on	the	Company's	consolidated	financial	statements.

In	April	2015,	the	FASB	issued	ASU	2015-03,	"Interest	–	Imputation	of	Interest	(Subtopic	835-30):	Simplifying	the	Presentation	of	Debt	Issuance	Costs."	The update	requires	debt	issuance	costs	related	to	a	recognized	debt	liability	to	be	presented	in	the	balance	sheet	as	a	direct	deduction	from	the	carrying	amount	of	the	related debt	liability	instead	of	being	presented	as	an	asset.	ASU	2015-03	requires	retrospective	application,	represents	a	change	in	accounting	principle	and	is	effective	for fiscal	years	beginning	after	December	15,	2015.	The	Company	early	 adopted	 this	 standard	 during	 the	 fourth	 quarter	 2015,	 utilizing	 retrospective	 application	 as permitted.	As	such,	certain	prior	period	amounts	have	been	reclassified	to	conform	to	the	current	presentation.	As	a	result,	the	Company	reclassified	$184	million	of	debt issuance	costs	within	other	assets	to	reduce	current	maturities	of	long-term	debt	and	capital	leases	by	$31	million	and	to	reduce	long-term	debt	and	capital	leases	by $153	million	on	the	consolidated	balance	sheet	as	of	December	31,	2014.

In	May	2015,	the	FASB	issued	ASU	2015-07,	"Fair	Value	Measurement	(Topic	820):	Disclosures	for	Investments	in	Certain	Entities	that	Calculate	Net	Asset	Value per	Share	(or	Its	Equivalent)."	Under	ASU	2015-07,	investments	for	which	fair	value	is	measured	at	net	asset	value	per	share	(or	its	equivalent)	using	the	practical expedient	should	not	be	categorized	in	the	fair	value	hierarchy.	ASU	2015-07	is	effective	for	fiscal	years	beginning	after	December	15,	2015,	and	interim	periods	within those	fiscal	years.	Early	adoption	is	permitted.	ASU	2015-07	is	not	expected	to	have	a	material	impact	on	the	Company's	consolidated	financial	statements.

In	November	2015,	the	FASB	issued	ASU	2015-17,	"Income	Taxes	(Topic	740):	Balance	Sheet	Classification	of	Deferred	Taxes,"	which	changes	how	deferred taxes	are	classified	on	the	balance	sheet.	ASU	2015-17	eliminates	the	current	requirement	to	present	deferred	tax	liabilities	and	assets	as	current	and	noncurrent	on	the balance	sheet.	Deferred	tax	liabilities	and	assets	are	now	required	to	be	classified	as	noncurrent	on	the	balance	sheet.	Entities	have	the	choice	to	apply	ASU	2015-17 either	prospectively	to	all	deferred	tax	liabilities	and	assets	or	retrospectively	to	all	periods	presented.	The	update	is	effective	for	annual	and	interim	periods	in	fiscal years	beginning	after	December	15,	2016.	The	Company	early	adopted	this	standard	during	the	fourth	quarter	2015,	utilizing	retrospective	application	as	permitted.	As such,	certain	prior	period	amounts	have	been	reclassified	to	conform	to	the	current	presentation.	As	a	result,	the	Company	reclassified	$361	million	of	current	deferred income	tax	assets	within	prepaid	expenses	and	other	to	reduce	deferred	income	taxes	within	other	liabilities	on	the	consolidated	balance	sheet	as	of	December	31,	2014.

In	January	2016,	the	FASB	issued	ASU	2016-01,	"Financial	Instruments	–	Overall	(Subtopic	825-10)."	ASU	2016-01	makes	several	modifications	to	Subtopic	825- 10	including	the	elimination	of	the	available-for-sale	classification	of	equity	investments,	and	requires	equity	investments	with	readily	determinable	fair	values	to	be measured	at	fair	value	with	changes	in	fair	value	recognized	in	net	income.	ASU	2016-01	is	effective	for	interim	and	annual	periods	beginning	after	December	15,	2017 and	is	not	expected	to	have	a	material	impact	on	the	Company's	consolidated	financial	statements.

# 6.		Special	Items,	Net

   The	Company's	special	items,	net	on	the	consolidated	statements	of	operations	are	as	follows	(in	millions):

(1) The	2015	mainline	operating	special	items	totaled	a	net	charge	of	$1.1	billion,	which	principally	included	$1.0	billion	of	merger	integration	expenses	related	to information	technology,	alignment	of	labor	union	contracts,	professional	fees,	severance,	share-based	compensation,	fleet	restructuring,	re-branding	of	aircraft and	airport	facilities,	relocation	and	training.

The	2014	mainline	operating	special	items	totaled	a	net	charge	of	$800	million,	which	principally	included	$810	million	of	merger	integration	expenses	related	to information	 technology,	 alignment	 of	 labor	 union	 contracts,	 professional	 fees,	 severance	 and	 retention,	 share-based	 compensation,	 divestiture	 of	 London Heathrow	slots,	fleet	restructuring,	re-branding	of	aircraft	and	airport	facilities,	relocation	and	training.	In	addition,	the	Company	recorded	a	net	charge	of	$81 million	for	bankruptcy	related	items	principally	consisting	of	fair	value	adjustments	for	bankruptcy	settlement	obligations	and	an	$81	million	charge	to	revise prior	estimates	of	certain	aircraft	residual	values	and	other	spare	parts	asset	impairments.	These	charges	were	offset	in	part	by	a	$309	million	gain	on	the	sale	of slots	at	DCA.

The	2013	mainline	operating	special	items,	net	principally	included	$443	million	of	merger	related	expenses	related	to	the	alignment	of	labor	union	contracts, professional	fees,	severance,	share-based	compensation	and	fees	for	US	Airways	to	exit	the	Star	Alliance	and	its	codeshare	agreement	with	United	Airlines.	In addition,	 the	 Company	 recorded	 a	 $107	 million	 charge	 related	 to	 American's	 pilot	 long-term	 disability	 obligation,	 a	 $43	 million	 charge	 for	 workers' compensation	claims	and	a	$33	million	aircraft	impairment	charge.	These	charges	were	offset	in	part	by	a	$67	million	gain	on	the	sale	of	slots	at	LGA.

The	following	additional	amounts	are	also	included	in	the	consolidated	statements	of	operations	as	follows	(in	millions):

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Other\trevenue\tspecial\titem,\tnet\t(1) | $— | $ — | $(31) |
| Regional\toperating\tspecial\titems,\tnet\t(2) | 29 | 24 | 8 |
| Nonoperating\tspecial\titems,\tnet\t(3) | 594 | \t 132 | 211 |
| Reorganization\titems,\tnet\t(4) | — | — | \t 2,655 |
| Income\ttax\tspecial\titems,\tnet\t(5) | (3,015) | \t 346 | (324) |

(1) The	2013	other	revenue	special	item,	net	included	a	credit	to	other	revenues	related	to	a	change	in	accounting	method	resulting	from	the	modification	of American's	AAdvantage	miles	agreement	with	Citibank.

The	2014	regional	operating	special	items,	net	consisted	primarily	of	a	$24	million	charge	due	to	a	new	pilot	labor	contract	at	the	Company's	Envoy	regional subsidiary,	as	well	as	$7	million	of	merger	integration	expenses,	offset	in	part	by	an	$8	million	gain	on	the	sale	of	certain	spare	parts.

(3) The	2015	nonoperating	special	items	totaled	a	net	charge	of	$594	million,	which	principally	included	a	$592	million	charge	to	write	off	all	of	the	value	of Venezuelan	bolivars	held	by	the	Company	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

The	2014	nonoperating	special	items	totaled	a	net	charge	of	$132	million,	which	principally	included	a	$43	million	charge	for	Venezuelan	foreign	currency losses,	$56	million	of	early	debt	extinguishment	costs	primarily	related	to	the	prepayment	of	7.50%	senior	secured	notes	and	other	indebtedness	and	$33	million of	non-cash	interest	accretion	on	bankruptcy	settlement	obligations.

The	2013	nonoperating	special	 items,	net	consisted	of	 interest	charges	of	$138	million	primarily	 to	recognize	post-petition	 interest	expense	on	unsecured obligations	pursuant	to	the	Plan	and	penalty	interest	related	to	10.5%	secured	notes	and	7.50%	senior	secured	notes,	a	$54	million	charge	related	to	the	premium on	tender	for	existing	enhanced	equipment	trust	certificates	(EETC)	financings	and	the	write-off	of	debt	issuance	costs	and	$19	million	in	charges	related	to	the repayment	of	existing	EETC	financings.

(4) In	2013,	the	Company	recognized	reorganization	expenses	as	a	result	of	the	filing	of	voluntary	petitions	for	relief	under	Chapter	11.	These	amounts	consisted primarily	of	estimated	allowed	claim	amounts	and	professional	fees.

(5) In	2015,	income	tax	special	items	totaled	a	net	credit	of	$3.0	billion.	In	connection	with	the	preparation	of	the	Company's	financial	statements	for	the	fourth quarter	of	2015,	management	determined	that	it	was	more	likely	than	not	that	substantially	all	of	its	deferred	tax	assets,	which	include	its	NOLs,	would	be realized.	Accordingly,	the	Company	reversed	$3.0	billion	of	the	valuation	allowance	as	of	December	31,	2015,	which	resulted	in	a	special	$3.0	billion	non-cash tax	benefit	recorded	in	the	consolidated	statement	of	operations	for	2015.

In	2014,	income	tax	special	items,	net	were	$346	million.	During	2014,	the	Company	sold	its	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on or	after	June	30,	2014.	In	connection	with	this	sale,	the	Company	recorded	a	special	non-cash	tax	provision	of	$330	million	in	the	second	quarter	of	2014	that reversed	the	non-cash	tax	provision	which	was	recorded	in	other	comprehensive	income	(OCI),	a	subset	of	stockholders'	equity,	principally	in	2009.	This provision	represents	the	tax	effect	associated	with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	the	Company's	fuel	hedging contracts.	In	accordance	with	GAAP,	the	Company	retained	the	$330	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

In	2013,	income	tax	special	items,	net	included	a	$538	million	non-cash	income	tax	benefit	from	continuing	operations.	The	Company	is	required	to	consider	all items	(including	items	recorded	in	OCI)	in	determining	the	amount	of	tax	benefit	that	results	from	a	loss	from	continuing	operations	and	that	should	be	allocated to	continuing	operations.	As	a	result,	the	Company	recorded	a	tax	benefit	on	the	loss	from	continuing	operations	for	the	year,	which	was	exactly	offset	by	income tax	expense	on	OCI.	However,	while	the	income	tax	benefit	from	continuing	operations	is	reported	on	the	income	statement,	the	income	tax	expense	on	OCI	is recorded	directly	to	accumulated	other	comprehensive	income	(loss),	which	is	a	component	of	stockholders'	equity.	Because	the	income	tax	expense	on	OCI	is equal	to	the	income	tax	benefit	from	continuing	operations,	the	Company's	year-end	net	deferred	tax	position	is	not	impacted	by	this	tax	allocation.	The	2013	tax benefit	was	offset	in	part	by	a	$214	million	tax	charge	attributable	to	additional	valuation	allowance	required	to	reduce	deferred	tax	assets	to	the	amount	the Company	believed	was	more	likely	than	not	to	be	realized.

# 7.		Earnings	(Loss)	Per	Share

Pursuant	to	the	Plan	and	the	Merger	Agreement,	holders	of	AMR	common	stock	formerly	traded	under	the	symbol	"AAMRQ"	received	shares	of	AAG	Common Stock	principally	over	the	120-day	distribution	period	following	the	Effective	Date.	In	accordance	with	GAAP,	the	2013	weighted	average	shares	and	earnings	(loss)	per share	calculations	have	been	adjusted	to	retrospectively	reflect	these	distributions	which	were	each	made	at	the	rate	of	approximately	0.7441	shares	of	AAG	Common Stock	per	share	of	AMR	common	stock.	Former	holders	of	AMR	common	stock	as	of	the	Effective	Date	may	in	the	future	receive	additional	distributions	of	AAG Common	Stock	dependent	upon	the	ultimate	distribution	of	shares	of	AAG	Common	Stock	to	holders	of	disputed	claims.	Thus,	the	shares	and	related	earnings	per	share calculations	prior	to	the	Effective	Date	may	change	in	the	future	to	reflect	additional	retrospective	adjustments	for	future	AAG	Common	Stock	distributions	to	former holders	of	AMR	common	stock.

As	of	December	31,	2015,	all	shares	pursuant	to	the	Plan	have	been	issued	and	are	outstanding	for	purposes	of	the	Company's	basic	and	diluted	earnings	per	share calculation	in	connection	with	the	conversion	of	AAG	Series	A	Preferred	Stock	and	satisfaction	of	other	bankruptcy	settlement	obligations	related	to	allowed	unsecured claims,	including	disputed	claims,	labor-related	deemed	claims	and	former	holders	of	AMR	common	stock.

The	following	table	sets	forth	the	computation	of	basic	and	diluted	earnings	(loss)	per	share	(in	millions,	except	share	and	per	share	amounts	in	thousands):

|  | 2015 | Year	Ended	December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Basic\tEarnings\t(Loss)\tPer\tShare: |  |  |  |
| Net\tincome\t(loss) | $7,610 | $2,882 | $(1,834) |
| Weighted-average\tshares\toutstanding\t(in\tthousands) | \t 668,393 | \t 717,456 | \t 280,213 |
| Basic\tearnings\t(loss)\tper\tshare | $11.39 | $4.02 | $(6.54) |
| Diluted\tEarnings\t(Loss)\tPer\tShare: |  |  |  |
| Net\tincome\t(loss) | $7,610 | $2,882 | $(1,834) |
|  | — | 3 | — |
| Net\tincome\t(loss)\tfor\tpurposes\tof\tcomputing\tdiluted\tearnings\t(loss)\tper\tshare | $7,610 | $2,885 | $(1,834) |
| Share\tcomputation\tfor\tdiluted\tearnings\t(loss)\tper\tshare\t(in\tthousands): |  |  |  |
| Weighted-average\tshares\toutstanding | \t 668,393 | \t 717,456 | \t 280,213 |
| Dilutive\teffect\tof\tstock\tawards | 18,962 | 15,603 | — |
| Assumed\tconversion\tof\tconvertible\tsenior\tnotes | — | 957 | — |
| Weighted\taverage\tcommon\tshares\toutstanding\t–\tas\tadjusted | \t 687,355 | \t 734,016 | \t 280,213 |
| Diluted\tearnings\t(loss)\tper\tshare | $11.07 | $3.93 | $(6.54) |
| The\tfollowing\twere\texcluded\tfrom\tthe\tcalculation\tof\tdiluted\tearnings\t(loss)\tper\tshare\t(in\tthousands):\nStock\toptions,\tSARs\tand\tRSUs\tbecause\tinclusion\twould\tbe\tantidilutive | 764 | 226 | 7,674 |

(a) In	March	2014,	the	Company	notified	the	holders	of	US	Airways	Group's	7.25%	convertible	senior	notes	that	it	had	elected	to	settle	all	future	conversions	solely in	cash	instead	of	shares	of	AAG	Common	Stock	in	accordance	with	the	related	indenture.	Thus,	the	diluted	shares	include	the	weighted	average	impact	of	the 7.25%	convertible	senior	notes	only	for	the	period	from	January	1,	2014	to	March	12,	2014.	In	addition,	under	GAAP,	the	Company	must	adjust	the	numerator for	purposes	of	calculating	diluted	earnings	per	share	by	the	change	in	fair	value	of	the	conversion	feature	from	March	12,	2014	to	May	15,	2014,	which	increased GAAP	net	income	for	purposes	of	computing	diluted	earnings	per	share	by	$3	million	for	the	year	ended	December	31,	2014.

# 8.		Share	Repurchase	Programs	and	Dividends

Since	 July	 2014,	 the	 Company's	 Board	 of	 Directors	 have	 approved	 several	 share	 repurchase	 programs	 aggregating	 $7.0	 billion	 of	 authority	 of	 which,	 as	 of December	 31,	 2015,	 $2.4	 billion	 of	 authority	 remained	 unused	 under	 repurchase	 programs	 which	 are	 to	 be	 completed	 no	 later	 than	 December	 31,	 2016.	 Share repurchases	under	the	repurchase	programs	may	be	made	through	a	variety	of	methods,	which	may	include	open	market	purchases,	privately	negotiated	transactions, block	trades	or	accelerated	share	repurchase	transactions.	Any	such	repurchases	will	be	made	from	time	to	time	subject	to	market	and	economic	conditions,	applicable legal	requirements	and	other	relevant	factors.	The	programs	do	not	obligate	the	Company	to	repurchase	any	specific	number	of	shares	and	may	be	suspended	at	any	time at	the	Company's	discretion.

During	the	year	ended	December	31,	2015,	the	Company	repurchased	85.1	million	shares	of	AAG	Common	Stock	for	$3.6	billion	at	a	weighted	average	cost	per share	of	$42.09.	During	the	year	ended	December	31,	2014,	the	Company	repurchased	23.4	million	shares	of	AAG	Common	Stock	for	$1.0	billion	at	a	weighted average	cost	per	share	of	$42.72.	Since	the	inception	of	the	share	repurchase	programs	in	July	2014,	the	Company	has	repurchased	108.5	million	shares	of	AAG Common	Stock	for	$4.6	billion	at	a	weighted	average	cost	per	share	of	$42.23.

The	Company's	Board	of	Directors	declared	the	following	cash	dividends:

The	total	cash	payment	for	dividends	during	the	years	ended	December	31,	2015	and	2014	was	$278	million	and	$144	million,	respectively.	Any	future	dividends	that may	be	declared	and	paid	from	time	to	time	under	the	Company's	capital	deployment	program	will	be	subject	to	market	and	economic	conditions,	applicable	legal requirements	and	other	relevant	factors.	The	Company's	capital	deployment	program	does	not	obligate	it	to	continue	a	dividend	for	any	fixed	period,	and	payment	of dividends	may	be	suspended	at	any	time	at	the	Company's	discretion.

Long-term	debt	and	capital	lease	obligations	included	in	the	consolidated	balance	sheets	consisted	of	(in	millions):

|  | December	31,<br>2015 | 2014 |
| :--- | :--- | :--- |
| Secured |  |  |
|  | $1,867 | $1,872 |
|  | 743 | 750 |
|  | 980 | 990 |
|  | 588 | 594 |
| (d) | 8,693 | 7,028 |
| (e) | 4,183 | 2,952 |
|  | 1,080 | 1,100 |
| AAdvantage\tLoan\t(g) | — | 433 |
|  | 923 | 994 |
|  | \t 19,057 | \t 16,713 |
| Unsecured |  |  |
|  | 750 | 750 |
|  | 500 | 500 |
|  | 500 | — |
|  | 1,750 | 1,250 |
| Total\tlong-term\tdebt\tand\tcapital\tlease\tobligations | \t 20,807 | \t 17,963 |
| Less:\tTotal\tunamortized\tdebt\tdiscount\tand\tdebt\tissuance\tcosts | 246 | 243 |
| Less:\tCurrent\tmaturities | 2,231 | 1,677 |
| Long-term\tdebt\tand\tcapital\tlease\tobligations,\tnet\tof\tcurrent\tmaturities | $18,330 | $16,043 |
| The\ttable\tbelow\tshows\tavailability\tunder\trevolving\tcredit\tfacilities,\tall\tof\twhich\twere\tundrawn,\tas\tof\tDecember\t31,\t2015\t(in\tmillions): |  |  |
| 2013\tRevolving\tFacility | 2013\tRevolving\tFacility | $1,400 |
| 2014\tRevolving\tFacility |  | \t 1,025 |
| Total | Total | $2,425 |

Secured	financings	are	collateralized	by	assets,	primarily	aircraft,	engines,	simulators,	rotable	aircraft	parts,	airport	leasehold	rights,	route	authorities	and	airport	slots. At	December	31,	2015,	the	Company	was	operating	35	aircraft	under	capital	leases.	Leases	can	generally	be	renewed	at	rates	based	on	fair	market	value	at	the	end	of	the lease	term	for	a	number	of	additional	years.	At	December	31,	2015,	the	maturities	of	long-term	debt	and	capital	lease	obligations	are	as	follows	(in	millions):

# (a)	2013	Credit	Facilities

On	June	27,	2013,	American	and	AAG	entered	into	a	Credit	and	Guaranty	Agreement	(as	amended,	restated,	amended	and	restated	or	otherwise	modified,	the	2013 Credit	Agreement)	with	Deutsche	Bank	AG	New	York	Branch,	as	administrative	agent,	and	certain	lenders	that	originally	provided	for	a	$1.9	billion	term	loan	facility scheduled	to	mature	on	June	27,	2019	(the	2013	Term	Loan	Facility)	and	a	$1.0	billion	revolving	credit	facility	scheduled	to	mature	on	June	27,	2018	(the	2013 Revolving	Facility).	The	maturity	of	the	term	loan	facility	was	subsequently	extended	to	June	2020	and	the	revolving	credit	facility	commitments	were	subsequently increased	to	$1.4	billion	with	an	extended	maturity	date	of	October	10,	2020,	all	of	which	is	further	described	below.

On	May	21,	2015,	American	amended	and	restated	the	2013	Credit	Agreement	pursuant	to	which	it	refinanced	the	2013	Term	Loan	Facility	(the	$1.9	billion	2015 Term	Loan	Facility	and,	together	with	the	2013	Revolving	Facility,	the	2013	Credit	Facilities)	to	extend	the	maturity	date	to	June	2020	and	reduce	the	LIBOR	margin from	3.00%	to	2.75%.	In	addition,	American	entered	into	certain	amendments	to	reflect	the	ability	for	American	to	make	future	modifications	to	the	collateral	pledged, subject	to	certain	restrictions.	The	$1.9	billion	2015	Term	Loan	Facility	is	repayable	in	annual	installments,	with	the	first	installment	in	an	amount	equal	to	1.25%	of	the principal	amount	commencing	on	June	27,	2016	and	installments	thereafter,	in	an	amount	equal	to	1.0%	of	the	principal	amount,	with	any	unpaid	balance	due	on	the maturity	date.	As	of	December	31,	2015,	$1.9	billion	of	principal	was	outstanding	under	the	$1.9	billion	2015	Term	Loan	Facility.	Voluntary	prepayments	may	be	made by	American	at	any	time.

On	October	10,	2014,	American	and	AAG	amended	the	2013	Credit	Agreement	to	extend	the	maturity	date	of	the	2013	Revolving	Facility	to	October	10,	2019	and increased	the	commitments	thereunder	to	an	aggregate	principal	amount	of	$1.4	billion	while	reducing	the	letter	of	credit	commitments	thereunder	to	$300	million.	On October	26,	2015,	American,	AAG,	US	Airways	Group	and	US	Airways	amended	the	2013	Credit	Agreement	to	extend	the	maturity	date	of	the	2013	Revolving	Facility to	October	10,	2020.	The	2013	Revolving	Facility	provides	that	American	may	from	time	to	time	borrow,	repay	and	reborrow	loans	thereunder	and	have	letters	of	credit issued	thereunder.	As	of	December	31,	2015,	there	were	no	borrowings	or	letters	of	credit	outstanding	under	the	2013	Revolving	Facility.

The	2013	Credit	Facilities	bear	interest	at	an	index	rate	plus	an	applicable	index	margin	or,	at	American's	option,	LIBOR	(subject	to	a	floor	of	0.75%,	with	respect	to the	$1.9	billion	2015	Term	Loan	Facility)	plus	a	LIBOR	margin	of	3.00%	with	respect	to	the	2013	Revolving	Facility	and	2.75%	with	respect	to	the	$1.9	billion	2015 Term	Loan	Facility;	provided	that	American's	corporate	credit	rating	is	Ba3	or	higher	from	Moody's	and	BB-	or	higher	from	S&P,	the	applicable	LIBOR	margin	would be	2.50%	for	the	$1.9	billion	2015	Term	Loan

Facility.	As	of	December	31,	2015,	American	satisfied	this	ratings	test	and	accordingly,	the	LIBOR	margin	for	the	$1.9	billion	2015	Term	Loan	Facility	was	2.50%.	The 2013	Revolving	Credit	Facility	is	subject	to	an	undrawn	fee	of	0.75%.

Upon	consummation	of	the	Merger,	US	Airways	Group	and	US	Airways	joined	the	2013	Credit	Facilities	as	guarantors.	Following	the	joinder,	certain	minimum dollar-thresholds	under	the	negative	and	financial	covenants	in	the	2013	Credit	Facilities	were	automatically	increased.

Subject	to	certain	limitations	and	exceptions,	the	2013	Credit	Facilities	are	secured	by	certain	collateral,	including	certain	slots,	route	authorities	and	airport	gate leasehold	rights.	The	obligations	of	American	under	the	2013	Credit	Facilities	are	guaranteed	by	AAG.	American	is	required	to	maintain	a	certain	minimum	ratio	of appraised	value	of	the	collateral	to	the	outstanding	loans	under	the	2013	Credit	Facilities	as	further	described	below	in	"Collateral	Related	Covenants."

The	2013	Credit	Facilities	contain	events	of	default	customary	for	similar	financings,	including	cross	default	to	other	material	indebtedness.	Upon	the	occurrence	of an	event	of	default,	the	outstanding	obligations	under	the	2013	Credit	Facilities	may	be	accelerated	and	become	due	and	payable	immediately.	In	addition,	if	a	"change of	control"	(as	defined	in	the	2013	Credit	Agreement)	occurs,	American	will	(absent	an	amendment	or	waiver)	be	required	to	repay	at	par	the	loans	outstanding	under the	2013	Credit	Facilities	and	terminate	the	2013	Revolving	Facility.	The	2013	Credit	Facilities	also	include	covenants	that,	among	other	things,	require	AAG	to maintain	a	minimum	aggregate	liquidity	(as	defined	in	the	2013	Credit	Facilities)	of	not	less	than	$2.0	billion,	and	limit	the	ability	of	AAG	and	its	restricted	subsidiaries to	pay	dividends	and	make	certain	other	payments,	make	certain	investments,	incur	additional	indebtedness,	incur	liens	on	the	collateral,	dispose	of	the	collateral,	enter into	certain	affiliate	transactions	and	engage	in	certain	business	activities,	in	each	case	subject	to	certain	exceptions.

# (b)	2014	Credit	Facilities

On	October	10,	2014,	American,	AAG,	US	Airways	Group	and	US	Airways	entered	into	a	Credit	and	Guaranty	Agreement	(as	amended,	restated,	amended	and restated	or	otherwise	modified,	the	2014	Credit	Agreement)	with	Citibank,	N.A.,	as	administrative	agent,	and	certain	lenders	that	originally	provided	for	a	$750	million term	 loan	facility	scheduled	 to	mature	on	October	10,	2021	(the	2014	Term	Loan	Facility)	and	a	$400	million	revolving	credit	facility	scheduled	 to	mature	on October	10,	2019	(the	2014	Revolving	Facility).	The	revolving	credit	facility	commitments	were	subsequently	increased	to	$1.025	billion	with	an	extended	maturity	date of	October	10,	2020	as	further	described	below.

On	April	20,	2015,	American	amended	and	restated	the	2014	Credit	Agreement	pursuant	to	which	it	refinanced	the	2014	Term	Loan	Facility	(the	$750	million	2015 Term	Loan	Facility	and,	together	with	the	2014	Revolving	Facility,	the	2014	Credit	Facilities)	to	reduce	the	LIBOR	margin	from	3.50%	to	3.00%	and	entered	into certain	amendments	to	reflect	the	release	of	certain	existing	collateral	and	the	addition	of	certain	new	collateral,	as	well	as	the	ability	for	American	to	make	future modifications	to	the	collateral	pledged,	subject	to	certain	restrictions.	The	$750	million	2015	Term	Loan	Facility	is	repayable	in	annual	installments	in	an	amount	equal to	1.00%	of	the	original	principal	balance	with	any	unpaid	balance	due	on	the	maturity	date.	As	of	December	31,	2015,	$743	million	of	principal	was	outstanding	under the	$750	million	2015	Term	Loan	Facility.	Voluntary	prepayments	may	be	made	by	American	at	any	time.

On	October	26,	2015,	American,	AAG,	US	Airways	Group	and	US	Airways	amended	the	2014	Credit	Agreement	to	increase	the	commitments	under	the	2014 Revolving	Facility	to	an	aggregate	principal	amount	of	$1.025	billion	and	extend	the	maturity	date	to	October	10,	2020.	The	2014	Revolving	Facility	provides	that American	may	from	time	to	time	borrow,	repay	and	reborrow	loans	thereunder.	American	may	have	letters	of	credit	issued	under	the	2014	Revolving	Facility	in	an aggregate	amount	outstanding	at	any	time	up	to	$300	million.	As	of	December	31,	2015,	there	were	no	borrowings	or	letters	of	credit	outstanding	under	the	2014 Revolving	Facility.

The	2014	Credit	Facilities	bear	interest	at	an	index	rate	plus	an	applicable	index	margin	or,	at	American's	option,	LIBOR	(subject	to	a	floor	of	0.75%	in	the	case	of the	$750	million	2015	Term	Loan	Facility)	plus	a	LIBOR	margin	of	3.00%	with	respect	to	the	2014	Revolving	Facility	and	3.00%	with	respect	to	the	2015	Term	Loan Facility;	provided	that,	American's	corporate	credit	rating	is	Ba3	or	higher	from	Moody's	and	BB-	or	higher	from	S&P,	the	applicable	LIBOR	margin	would	be	2.75% for	the	$750	million	2015	Term	Loan	Facility.	As	of	December	31,	2015,	American	satisfied	this	ratings	test	and	accordingly,	the	LIBOR	margin	for	the	$750	million 2015	Term	Loan	Facility	was	2.75%.	The	2014	Revolving	Facility	is	subject	to	an	undrawn	fee	of	0.75%.

The	2014	Credit	Facilities	contain	events	of	default	customary	for	similar	financings,	including	cross	default	to	other	material	indebtedness.	Upon	the	occurrence	of an	event	of	default,	the	outstanding	obligations	under	the	2014	Credit	Facilities	may	be	accelerated	and	become	due	and	payable	immediately.	In	addition,	if	a	"change of	control"	(as	defined	in	the	2014	Credit	Agreement)	occurs	with	respect	to	AAG,	American	will	(absent	an	amendment	or	waiver)	be	required	to	repay	at	par	the	loans outstanding	under	the	2014	Credit	Facilities	and	terminate	the	2014	Revolving	Facility.	The	2014	Credit	Facilities	also	include	covenants	that,	among	other	things, require	AAG	to	maintain	a	minimum	aggregate	liquidity	(as	defined	in	the	2014	Credit	Facilities)	of	not	less	than	$2.0	billion,	and	limit	the	ability	of	AAG	and	its restricted	subsidiaries	to	pay	dividends	and	make	certain	other	payments,	make	certain	investments,	incur	liens	on	the	collateral,	dispose	of	the	collateral,	enter	into certain	affiliate	transactions	and	engage	in	certain	business	activities,	in	each	case	subject	to	certain	exceptions.

# (c)	2013	Citicorp	Credit	Facility

On	May	23,	2013,	US	Airways	entered	into	a	term	loan	credit	facility	(as	amended,	the	2013	Citicorp	Credit	Facility)	with	Citicorp	North	America,	Inc.,	as administrative	agent,	and	certain	lenders.	US	Airways	Group	guaranteed	the	obligations	of	US	Airways	under	the	2013	Citicorp	Credit	Facility,	and	AAG	and	certain other	subsidiaries	of	AAG	are	guarantors	of	those	obligations.	On	December	30,	2015,	in	connection	with	the	merger	of	US	Airways	Group	with	and	into	AAG	and	the merger	of	US	Airways	with	and	into	American,	AAG	and	American	entered	into	an	assumption	agreement	pursuant	to	which	they	assumed	the	obligations	of	US Airways	Group	and	US	Airways,	respectively,	in	connection	with	the	2013	Citicorp	Credit	Facility.

The	2013	Citicorp	Credit	Facility	consists	of	tranche	B-1	term	loans	(Tranche	B-1)	and	tranche	B-2	term	loans	(Tranche	B-2).	As	of	December	31,	2015,	$980 million	of	principal	was	outstanding	under	Tranche	B-1	and	$588	million	of	principal	was	outstanding	under	Tranche	B-2.	Voluntary	prepayments	may	be	made	by American	at	any	time.

The	2013	Citicorp	Credit	Facility	bears	interest	at	an	index	rate	plus	an	applicable	index	margin	or,	at	American's	option,	LIBOR	(subject	to	a	floor	of	0.75%)	plus an	applicable	LIBOR	margin.	As	of	December	31,	2015,	the	applicable	LIBOR	margin	was	2.75%	for	Tranche	B-1	and	2.25%	for	Tranche	B-2.

Tranche	B-1	and	Tranche	B-2	mature	on	May	23,	2019	and	November	23,	2016,	respectively	(unless	otherwise	extended	by	the	applicable	parties),	and	each	is repayable	in	annual	installments	to	be	paid	on	each	anniversary	of	the	closing	date	in	an	amount	equal	to	1.00%	of	the	initial	aggregate	principal	amount	of	the	loans with	any	unpaid	balance	due	on	the	maturity	date	of	the	respective	tranche.

Subject	to	certain	limitations	and	exceptions,	the	obligations	under	the	2013	Citicorp	Credit	Facility	are	secured	by	liens	on	certain	take	off	and	landing	slots	at	LGA, spare	parts	and	certain	other	assets.	The	obligations

of	American	under	the	2013	Citicorp	Credit	Facility	are	guaranteed	by	AAG.	American	is	required	to	maintain	a	certain	minimum	ratio	of	appraised	value	of	the collateral	to	the	outstanding	loans	under	the	2013	Citicorp	Credit	Facility	as	further	described	below	in	"Collateral	Related	Covenants."

The	2013	Citicorp	Credit	Facility	agreement	contains	events	of	default	customary	for	similar	financings,	including	a	cross-default	provision	to	certain	other	material indebtedness	of	American	and	certain	of	its	affiliates.	Upon	the	occurrence	of	an	event	of	default,	the	outstanding	obligations	under	the	2013	Citicorp	Credit	Facility may	be	accelerated	and	become	due	and	payable	immediately.	In	addition,	if	a	"change	of	control"	(as	defined	in	the	2013	Citicorp	Credit	Facility	agreement)	occurs, American	will	(absent	an	amendment	or	waiver)	be	required	to	repay	the	outstanding	loans	in	full	together	with	accrued	interest	thereon	to	the	date	of	such	prepayment. The	2013	Citicorp	Credit	Facility	agreement	 includes	affirmative,	negative	and	 financial	 covenants	 that,	 among	 other	 things,	 (a)	 require	AAG	 and	 its	 restricted subsidiaries	to	maintain	unrestricted	liquidity	of	not	less	than	$2.0	billion,	with	not	less	than	$750	million	held	in	accounts	subject	to	control	agreements,	and	(b)	restrict the	ability	of	AAG	and	its	subsidiaries	party	to	the	2013	Citicorp	Credit	Facility	to	make	certain	investments,	pay	dividends	and	make	certain	other	payments,	make certain	acquisitions,	incur	liens	on	the	collateral,	dispose	of	collateral,	enter	into	certain	affiliate	transactions,	enter	into	certain	hedging	transactions,	and	engage	in certain	business	activities,	in	each	case	subject	to	certain	exceptions.

# (d)	Aircraft	Enhanced	Equipment	Trust	Certificates	(EETCs)

In	March	2015,	American	created	two	pass-through	trusts	which	issued	approximately	$1.2	billion	aggregate	face	amount	of	Series	2015-1	Class	A	and	Class	B EETCs	(the	2015-1	EETCs)	in	connection	with	the	financing	of	28	aircraft	owned	by	American	(the	2015-1	EETC	Aircraft).

As	of	December	31,	2015,	the	entire	$1.2	billion	of	the	proceeds	from	the	sale	of	the	2015-1	EETCs	had	been	used	to	purchase	equipment	notes	issued	by	American in	two	series:	Series	A	equipment	notes	in	the	amount	of	$948	million	bearing	interest	at	3.375%	per	annum	and	Series	B	equipment	notes	in	the	amount	of	$266	million bearing	interest	at	3.70%	per	annum.	Interest	and	principal	payments	on	the	equipment	notes	are	payable	semi-annually	in	May	and	November	of	each	year,	which began	in	November	2015.	The	final	payments	on	the	Series	A	and	Series	B	equipment	notes	are	due	in	May	2027	and	May	2023,	respectively.	These	equipment	notes are	secured	by	liens	on	the	2015-1	EETC	Aircraft.

In	September	2015,	American	created	three	pass-through	trusts	which	issued	approximately	$1.1	billion	aggregate	face	amount	of	Series	2015-2	Class	AA,	Class	A and	Class	B	EETCs	(the	2015-2	EETCs)	in	connection	with	the	financing	of	21	aircraft	owned	by	American	(the	2015-2	EETC	Aircraft).

As	of	December	31,	2015,	the	entire	$1.1	billion	of	the	proceeds	from	the	sale	of	the	2015-2	EETCs	had	been	used	to	purchase	equipment	notes	issued	by	American in	three	series:	Series	AA	equipment	notes	in	the	amount	of	$583	million	bearing	interest	at	3.60%	per	annum,	Series	A	equipment	notes	in	the	amount	of	$239	million bearing	interest	at	4.00%	per	annum	and	Series	B	equipment	notes	in	the	amount	of	$239	million	bearing	interest	at	4.40%	per	annum.	Interest	and	principal	payments on	the	equipment	notes	are	payable	semi-annually	in	March	and	September	of	each	year,	with	interest	payments	beginning	in	March	2016	and	principal	payments beginning	in	September	2016.	The	final	payments	on	the	Series	AA	and	Series	A	equipment	notes	are	due	in	September	2027	and	the	final	payment	on	the	Series	B equipment	notes	is	due	in	September	2023.	These	equipment	notes	are	secured	by	liens	on	the	2015-2	EETC	Aircraft.

# (e)	Other	Aircraft	Financing	Transactions

In	2015,	the	Company	prepaid	$72	million	principal	amount	of	outstanding	debt	secured	by	certain	aircraft.

In	2015,	the	Company	entered	into	loan	agreements	to	borrow	$1.9	billion	in	connection	with	the	financing	of	certain	aircraft.	The	notes	mature	in	2022	through	2027 and	bear	interest	at	a	rate	of	LIBOR	plus	an	applicable	margin	averaging	1.82%.

# (f)	Obligations	Associated	with	Special	Facility	Revenue	Bonds

In	December	2014,	American	acquired	approximately	$112	million	aggregate	principal	amount	of	special	facility	revenue	bonds	related	to	the	Tulsa	International Airport,	when	such	bonds	were	mandatorily	tendered	to	American.	The	acquisition	of	these	bonds	resulted	in	an	$11	million	reduction	of	a	capital	lease	obligation	and	a $50	million	reduction	of	a	long-term	operating	lease	obligation	included	in	other	long-term	liabilities	on	American's	consolidated	balance	sheet	as	of	December	31, 2014.	American	exercised	its	option	to	remarket	approximately	$104	million	of	these	bonds	in	May	2015.	The	remarketed	bonds	bear	interest	at	5.0%	per	annum	from the	date	of	initial	issuance	and	delivery	of	the	bonds	on	May	27,	2015,	until	the	day	preceding	June	1,	2025,	on	which	date	the	bonds	will	be	subject	to	mandatory	tender for	purchase	by	American.	In	connection	with	 the	remarketing	of	 these	special	facility	revenue	bonds,	American	received	cash	proceeds	of	$112	million.	As	of December	31,	2015,	$11	million	is	reflected	as	a	capital	lease	and	$52	million	is	reflected	in	other	long-term	liabilities	on	American's	consolidated	balance	sheet.

In	June	2015,	American	exercised	its	right	to	adjust	the	interest	rate	on	approximately	$365	million	aggregate	principal	amount	of	special	facility	revenue	bonds related	to	the	John	F.	Kennedy	International	Airport,	which	were	bearing	interest	at	8.50%	per	annum.	In	August	2015,	these	bonds	were	purchased	by	American	and subsequently	remarketed.	The	remarketed	bonds	bear	interest	at	2.00%	per	annum	from	the	date	of	initial	issuance	and	delivery	of	the	bonds	in	August	2015,	until August	2016,	when	the	bonds	will	be	subject	to	mandatory	tender	for	purchase	by	American.	The	$365	million	obligation	is	reflected	in	current	maturities	of	long-term debt	and	capital	leases	on	American's	consolidated	balance	sheet	as	of	December	31,	2015.

# (g)	AAdvantage	Loan

Effective	January	2,	2015,	American	exercised	its	loan	repayment	right	with	respect	to	the	full	value	of	the	outstanding	balance	of	the	AAdvantage	Loan	with Citibank	for	$400	million.

In	September	2014,	the	Company	issued	$750	million	aggregate	principal	amount	of	5.50%	senior	notes	due	2019	(the	5.50%	senior	notes).	These	notes	bear	interest at	a	rate	of	5.50%	per	annum,	which	is	payable	semi-annually	in	arrears	on	each	April	1	and	October	1,	and	began	on	April	1,	2015.	The	5.50%	senior	notes	mature	on October	1,	2019	and	are	fully	and	unconditionally	guaranteed	by	American.	The	5.50%	senior	notes	are	senior	unsecured	obligations	of	the	Company.	The	indenture	for the	5.50%	senior	notes	contains	covenants	and	events	of	default	generally	customary	for	similar	financings.	In	addition,	if	the	Company	experiences	specific	kinds	of changes	of	control,	the	Company	must	offer	to	repurchase	the	5.50%	senior	notes	at	a	price	of	101%	of	the	principal	amount	plus	accrued	and	unpaid	interest,	if	any,	to (but	not	including)	the	repurchase	date.	Upon	the	occurrence	of	certain	events	of	default,	the	5.50%	senior	notes	may	be	accelerated	and	become	due	and	payable.	When issued,	the	5.50%	senior	notes	were	fully	and	unconditionally	guaranteed	by	US	Airways	Group	and	US	Airways.	On	December	30,	2015,	AAG,	American	and	the trustee	entered	into	a	first	supplemental	indenture	agreement	to	the	5.50%	senior	notes,	in	which	AAG	assumed	the	obligations	of	US	Airways	Group	as	guarantor	and American	assumed	the	obligations	of	US	Airways	as	guarantor,	in	each	case,	under	the	5.50%	senior	notes.

In	May	2013,	US	Airways	Group	issued	its	6.125%	Senior	Notes	due	2018	(the	6.125%	senior	notes).	The	6.125%	senior	notes	bear	interest	at	a	rate	of	6.125%	per annum,	which	is	payable	semi-annually	in	arrears	on	each	June	1	and	December	1	and	began	on	December	1,	2013.	The	6.125%	senior	notes	mature	on	June	1,	2018 and,	prior	to	the	execution	of	the	third	supplemental	indenture	agreement	(as	described	below),	were	fully	and	unconditionally	guaranteed	by	US	Airways	when	issued. In	connection	with	the	closing	of	the	Merger,	AAG	and	American	each	also	provided	a	full	and	unconditional	guarantee	of	the	payment	obligations	of	US	Airways Group	under	the	6.125%	senior	notes.	The	indenture	for	the	6.125%	senior	notes	contains	covenants	and	events	of	default	generally	customary	for	similar	financings.	In addition,	if	the	Company	experiences	specific	kinds	of	changes	of	control,	the	Company	must	offer	to	repurchase	the	6.125%	senior	notes	at	a	price	of	101%	of	the principal	amount	plus	accrued	and	unpaid	interest,	if	any,	to	(but	not	including)	the	repurchase	date.	Upon	the	occurrence	of	certain	events	of	default,	the	6.125%	senior notes	may	be	accelerated	and	become	due	and	payable.	The	6.125%	senior	notes	are	general	unsecured	senior	obligations	of	the	Company.	On	December	30,	2015, AAG,	American	and	the	trustee	entered	into	a	third	supplemental	indenture	agreement	to	the	6.125%	senior	notes,	in	which	AAG	assumed	the	obligations	of	US	Airways Group	as	issuer	and	American	assumed	the	obligations	of	US	Airways	as	guarantor,	in	each	case,	under	the	6.125%	senior	notes.

In	March	2015,	the	Company	issued	$500	million	aggregate	principal	amount	of	4.625%	senior	notes	due	2020	(the	4.625%	senior	notes).	These	notes	bear	interest	at a	rate	of	4.625%	per	annum,	which	is	payable	semi-annually	in	arrears	on	each	March	1	and	September	1,	which	began	on	September	1,	2015.	The	4.625%	senior	notes mature	on	March	1,	2020	and	are	fully	and	unconditionally	guaranteed	by	American.	The	4.625%	senior	notes	are	senior	unsecured	obligations	of	the	Company.	The indenture	for	the	4.625%	senior	notes	contains	covenants	and	events	of	default	generally	customary	for	similar	financings.	In	addition,	if	the	Company	experiences specific	kinds	of	changes	of	control,	the	Company	must	offer	to	repurchase	the	4.625%	senior	notes	in	whole	or	in	part	at	a	repurchase	price	of	101%	of	the	aggregate principal	amount	plus	accrued	and	unpaid	interest,	if	any,	to	(but	not	including)	the	repurchase	date.	Upon	the	occurrence	of	certain	events	of	default,	the	4.625%	senior notes	may	be	accelerated	and	become	due	and	payable.	When	issued,	the	4.625%	senior	notes	were	fully	and	unconditionally	guaranteed	by	US	Airways	Group	and	US Airways.	On	December	30,	2015,	AAG,	American	and	the	trustee	entered	into	a	first	supplemental	indenture	agreement	to	the	4.625%	senior	notes,	in	which	AAG assumed	the	obligations	of	US	Airways	Group	as	guarantor	and	American	assumed	the	obligations	of	US	Airways	as	guarantor,	in	each	case,	under	the	4.625%	senior notes.

# Guarantees

As	of	December	31,	2015,	AAG	had	issued	guarantees	covering	approximately	$1.1	billion	of	American's	special	facility	revenue	bonds	(and	interest	thereon)	and $8.6	billion	of	American's	secured	debt	(and	interest	thereon),	including	the	2013	Credit	Facilities,	the	2014	Credit	Facilities,	the	2013	Citicorp	Credit	Facility	and certain	EETC	financings.

# Collateral	Related	Covenants

Certain	of	the	Company's	debt	financing	agreements	contain	loan	to	value	ratio	covenants	and	require	it	to	annually	appraise	the	related	collateral.	Pursuant	to	such agreements,	if	the	loan	to	value	(LTV)	ratio	exceeds	a	specified	threshold,	the	Company	is	required,	as	applicable,	to	pledge	additional	qualifying	collateral	(which	in some	cases	may	include	cash	collateral),	or	pay	down	such	financing,	in	whole	or	in	part.

Specifically,	the	Company	is	required	to	meet	certain	collateral	coverage	tests	on	an	annual	basis	for	three	credit	facilities,	as	described	below:

(1) With	respect	to	spare	parts,	one	physical	appraisal	and	one	desktop	appraisal	are	required	in	each	fiscal	year.

At	December	31,	2015,	the	Company	was	in	compliance	with	the	applicable	collateral	coverage	tests	as	of	the	most	recent	measurement	dates.

The	significant	components	of	the	income	tax	provision	(benefit)	were	(in	millions):

| 2015 | 2014 | 2013 |
| :--- | :--- | :--- |
| $20 | $ (16) | $(22) |
| (3,014) | \t 346 | (324) |
| $(2,994) | $330 | $(346) |

The	income	tax	provision	(benefit)	differed	from	amounts	computed	at	the	statutory	federal	income	tax	rate	as	follows	(in	millions):

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Statutory\tincome\ttax\tprovision\t(benefit) | $1,616 | $1,123 | $(763) |
| State\tincome\ttax\tprovision\t(benefit),\tnet\tof\tfederal\ttax\teffect | 72 | 75 | (8) |
| Book\texpenses\t(benefits)\tnot\tdeductible\tfor\ttax\tpurposes | 57 | (1) | 27 |
| Bankruptcy\tadministration\texpenses | 3 | 95 | 83 |
| Interest\tcutback\tto\tnet\toperating\tloss\t(NOL) | — | — | 141 |
| Alternative\tminimum\ttax\tcredit\trefund | — | (24) | (22) |
| Change\tin\tvaluation\tallowance | (4,742) | (1,323) | 717 |
| Tax\tprovision\t(benefit)\tresulting\tfrom\tOCI\tallocation | — | 330 | (538) |
| Other,\tnet | — | 55 | 17 |
| Income\ttax\tprovision\t(benefit) | $(2,994) | $330 | $(346) |

The	Company	provides	a	valuation	allowance	for	its	deferred	tax	assets,	which	includes	the	NOLs,	when	it	is	more	likely	than	not	that	some	portion,	or	all,	of	its deferred	tax	assets	will	not	be	realized.	The	ultimate	realization	of	deferred	tax	assets	is	dependent	upon	the	generation	of	future	taxable	income.	The	Company considers	all	available	positive	and	negative	evidence	and	makes	certain	assumptions	in	evaluating	the	realizability	of	its	deferred	tax	assets.	As	of	December	31,	2015, after	considering	all	positive	and	negative	evidence,	including	the	completion	of	certain	critical	merger	integration	milestones	as	well	as	the	Company's	financial performance,	the	Company	concluded	that	substantially	all	of	its	deferred	income	tax	assets	were	more	likely	than	not	to	be	realized.	Accordingly,	the	Company reversed	the	valuation	allowance,	which	resulted	in	a	special	$3.0	billion	non-cash	tax	benefit	recorded	in	the	consolidated	statement	of	operations	for	2015.

For	the	year	ended	December	31,	2014,	the	Company	recorded	a	$330	million	tax	provision.	During	2014,	the	Company	sold	its	portfolio	of	fuel	hedging	contracts that	were	scheduled	to	settle	on	or	after	June	30,	2014.	In	connection	with	this	sale,	the	Company	recorded	a	special	non-cash	tax	provision	of	$330	million	in	the	second quarter	of	2014	that	reversed	the	non-cash	tax	provision	which	was	recorded	in	OCI,	a	subset	of	stockholders'	equity,	principally	in	2009.	This	provision	represents	the tax	effect	associated	with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	the	Company's	fuel	hedging	contracts.	In	accordance	with GAAP,	the	Company	retained	the	$330	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

For	the	year	ended	December	31,	2013,	the	Company	recorded	a	$346	million	tax	benefit.	This	benefit	included	a	$538	million	special	non-cash	income	tax	benefit from	continuing	operations.	The	Company	is	required	to	consider	all	items	(including	items	recorded	in	OCI)	in	determining	the	amount	of	tax	benefit	that	results	from	a loss	from	continuing	operations	and	that	should	be	allocated	to	continuing	operations.	As	a	result,	the	Company	recorded	a	tax	benefit	on	the	loss	from	continuing operations	for	the	year,	which	was	exactly	offset	by	income	tax	expense	on	OCI.	However,	while	the	income	tax	benefit	from	continuing	operations	is	reported	on	the income	statement,	the	income	tax	expense	on	OCI	is	recorded	directly	to	accumulated	OCI,	which	is	a	component	of	stockholders'	equity.	Because	the	income	tax expense	on	OCI	is	equal	to	the	income	tax	benefit	from	continuing	operations,	the	Company's	net	deferred	tax	position	is	not	impacted	by	this	tax	allocation.	The	2013 tax	benefit	was	offset	in	part	by	a	$214	million	special	tax	provision	attributable	to	additional	valuation	allowance	required	to	reduce	deferred	tax	assets	to	the	amount the	Company	believed	was	more	likely	than	not	to	be	realized.

In	addition	to	the	changes	in	the	valuation	allowance	from	operations	described	in	the	table	above,	the	valuation	allowance	was	also	impacted	by	the	changes	in	the components	of	accumulated	other	comprehensive	income	(loss),	described	in	Note	14.	The	total	decrease	in	the	valuation	allowance	was	$4.8	billion	and	$197	million	in 2015	and	2014,	respectively.	The	total	increase	in	the	valuation	allowance	was	$602	million	in	2013.

The	components	of	the	Company's	deferred	tax	assets	and	liabilities	were	(in	millions):

|  | December	31,<br>2015 | 2014 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Postretirement\tbenefits\tother\tthan\tpensions | $340 | $386 |
| Rent\texpense | 134 | 180 |
| Alternative\tminimum\ttax\tcredit\tcarryforwards | 346 | 346 |
| Operating\tloss\tcarryforwards | 2,558 | 3,461 |
| Pensions | 2,436 | 2,403 |
| Loyalty\tprogram\tobligation | 590 | 948 |
| Gains\tfrom\tlease\ttransactions | 262 | 207 |
| Reorganization\titems | 57 | 64 |
| Other | 1,200 | 1,210 |
| Total\tdeferred\ttax\tassets | 7,923 | 9,205 |
| Valuation\tallowance | (22) | (4,816) |
| Net\tdeferred\ttax\tassets | 7,901 | 4,389 |
| Deferred\ttax\tliabilities: |  |  |
| Accelerated\tdepreciation\tand\tamortization | (5,158) | (4,829) |
| Other | (266) | (98) |
| Total\tdeferred\ttax\tliabilities | (5,424) | (4,927) |
| Net\tdeferred\ttax\tasset\t(liability) | $2,477 | $(538) |

At	December	31,	2015,	the	Company	had	approximately	$8.0	billion	of	gross	NOL	Carryforwards	to	reduce	future	federal	taxable	income,	substantially	all	of	which are	expected	to	be	available	for	use	in	2016.	The	federal	NOL	Carryforwards	will	expire	beginning	in	2023	if	unused.	These	NOL	Carryforwards	include	an	unrealized tax	benefit	of	$1.2	billion	related	to	share-based	compensation	that	will	be	recorded	in	equity	when	realized.	The	Company	also	had	approximately	$4.0	billion	of	NOL Carryforwards	to	reduce	future	state	taxable	income	at	December	31,	2015,	which	will	expire	in	years	2016	through	2034	if	unused.	As	of	December	31,	2015,	the amount	 of	 NOL	 Carryforwards	 for	 state	 income	 tax	 purposes	 that	 will	 expire,	 if	 unused,	 in	 2016	 is	 $136	 million.	 The	 Company's	 ability	 to	 deduct	 its	 NOL Carryforwards	and	to	utilize	certain	other	available	tax	attributes	can	be	substantially	constrained	under	the	general	annual	limitation	rules	of	Section	382	where	an "ownership	change"	has	occurred.	The	Company	experienced	an	ownership	change	in	connection	with	its	emergence	from	the	Chapter	11	Cases,	and	US	Airways	Group experienced	an	ownership	change	in	connection	with	the	Merger.	As	a	result	of	the	Merger,	US	Airways	Group	is	now	included	in	the	AAG	consolidated	federal	and state	 income	 tax	returns.	The	general	 limitation	rules	of	Section	382	for	a	debtor	 in	a	bankruptcy	case	are	 liberalized	where	 the	ownership	change	occurs	upon emergence	from	bankruptcy.	The	Company	elected	to	be	covered	by	certain	special	rules	for	federal	income	tax	purposes	that	permitted	approximately	$9.0	billion	(with $6.6	billion	of	unlimited	NOL	still	remaining	at	December	31,	2015)	of	its	federal	NOL	Carryforwards	to	be	utilized	without	regard	to	the	Section	382	annual	limitation rules	unless	a	second	ownership	change	occurred	on	or	before	December	9,	2015.	No	second	ownership	change	occurred	within	that	period.	Substantially	all	of	the Company's	remaining	federal	NOL	Carryforwards	(attributable	to	US	Airways	Group)	are	subject	to	limitation	under	Section	382;	however,	the	Company's	ability	to utilize	such	NOL	Carryforwards	is	not	anticipated	to	be	effectively	constrained	as	a	result	of	such	limitation.	Similar	limitations	may	apply	for	state	income	tax purposes.	The	Company's	ability	to	utilize	any	new	NOL	Carryforwards	arising	after	the	ownership	changes	is	not	affected	by	the	annual	limitation	rules	imposed	by Section	382	unless	another	ownership	change	occurs.	Under	the	Section	382	limitation,	cumulative	stock	ownership	changes	among	material	stockholders	exceeding 50%	during	a	rolling	three-year	period	can	potentially	limit	a	company's	future	use	of	NOLs	and	tax	credits.	See	Part	I,

Item	1A.	Risk	Factors	–	"Our	ability	to	utilize	our	NOL	Carryforwards	may	be	limited"	for	unaudited	additional	discussion	of	this	risk.

At	December	31,	2015,	the	Company	had	an	Alternative	Minimum	Tax	credit	carryforward	of	approximately	$341	million	available	for	federal	income	tax	purposes, which	is	available	for	an	indefinite	period.

The	Company	files	its	tax	returns	as	prescribed	by	the	tax	laws	of	the	jurisdictions	in	which	it	operates.	The	Company's	2012	through	2014	tax	years	are	still	subject to	examination	by	the	Internal	Revenue	Service.	Various	state	and	foreign	jurisdiction	tax	years	remain	open	to	examination	and	the	Company	is	under	examination,	in administrative	 appeals,	 or	 engaged	 in	 tax	 litigation	 in	 certain	 jurisdictions.	 The	 Company	 believes	 that	 the	 effect	 of	 any	 assessments	 will	 be	 immaterial	 to	 its consolidated	financial	statements.

In	November	2015,	the	FASB	issued	ASU	2015-17,	"Income	Taxes	(Topic	740):	Balance	Sheet	Classification	of	Deferred	Taxes,"	which	changes	how	deferred taxes	are	classified	on	the	balance	sheet.	The	update	eliminates	the	current	requirement	to	present	deferred	tax	liabilities	and	assets	as	current	and	noncurrent	on	the balance	sheet.	Deferred	tax	liabilities	and	assets	are	now	required	to	be	classified	as	noncurrent	on	the	balance	sheet.	Entities	have	the	choice	to	apply	ASU	2015-17 either	prospectively	to	all	deferred	tax	liabilities	and	assets	or	retrospectively	to	all	periods	presented.	The	update	is	effective	for	annual	and	interim	periods	in	fiscal years	beginning	after	December	15,	2016.	The	Company	early	adopted	this	standard	during	the	fourth	quarter	2015,	utilizing	retrospective	application	as	permitted.	As such,	certain	prior	period	amounts	have	been	reclassified	to	conform	to	the	current	presentation.	As	a	result,	the	Company	reclassified	$361	million	of	current	deferred income	tax	assets	within	prepaid	expenses	and	other	to	reduce	deferred	income	taxes	within	other	liabilities	on	the	consolidated	balance	sheet	as	of	December	31,	2014.

# 11.		Risk	Management

The	Company's	economic	prospects	are	heavily	dependent	upon	two	variables	it	cannot	control:	the	health	of	the	economy	and	the	price	of	fuel.

Due	to	the	discretionary	nature	of	business	and	leisure	travel	spending,	airline	industry	revenues	are	heavily	influenced	by	the	condition	of	the	U.S.	economy	and economies	in	other	regions	of	the	world.	Unfavorable	conditions	in	these	broader	economies	have	resulted,	and	may	result	in	the	future,	in	decreased	passenger	demand for	air	travel	and	changes	in	booking	practices,	both	of	which	in	turn	have	had,	and	may	have	in	the	future,	a	strong	negative	effect	on	the	Company's	revenues.	In addition,	during	challenging	economic	times,	actions	by	its	competitors	to	increase	their	revenues	can	have	an	adverse	impact	on	the	Company's	revenues.

The	Company's	operating	results	are	materially	impacted	by	changes	in	the	availability,	price	volatility	and	cost	of	aircraft	fuel,	which	represents	one	of	the	largest single	cost	items	in	the	Company's	business.	Jet	fuel	market	prices	have	fluctuated	substantially	over	the	past	several	years	and	prices	continue	to	be	highly	volatile. Because	of	the	amount	of	fuel	needed	to	operate	the	Company's	business,	even	a	relatively	small	increase	or	decrease	in	the	price	of	fuel	can	have	a	material	effect	on	the Company's	operating	results	and	liquidity.

These	additional	factors	could	impact	the	Company's	results	of	operations,	financial	performance	and	liquidity.

# (a)	Credit	Risk

Most	of	the	Company's	receivables	relate	to	tickets	sold	to	individual	passengers	through	the	use	of	major	credit	cards	or	to	tickets	sold	by	other	airlines	and	used	by passengers	on	American.	These	receivables	are	short-term,	mostly	being	settled	within	seven	days	after	sale.	Bad	debt	losses,	which	have	been	minimal	in	the	past,	have been	considered	in	establishing	allowances	for	doubtful	accounts.	The	Company	does	not	believe	it	is	subject	to	any	significant	concentration	of	credit	risk.

# (b)	Interest	Rate	Risk

The	Company	has	exposure	to	market	risk	associated	with	changes	in	interest	rates	related	primarily	to	its	variable	rate	debt	obligations.	Interest	rates	on	$7.8	billion principal	amount	of	long-term	debt	as	of	December	31,	2015	are	subject	to	adjustment	to	reflect	changes	in	floating	interest	rates.	The	weighted	average	effective	interest rate	on	the	Company's	variable	rate	debt	was	2.93%	at	December	31,	2015.	The	Company	does	not	currently	have	an	interest	rate	hedge	program.

# (c)	Foreign	Currency	Risk

The	Company	is	exposed	to	the	effect	of	foreign	exchange	rate	fluctuations	on	the	U.S.	dollar	value	of	foreign	currency-denominated	operating	revenues	and expenses.	The	Company's	largest	exposure	comes	from	the	British	pound,	Euro,	Canadian	dollar	and	various	Latin	American	currencies,	primarily	the	Brazilian	real. The	Company	does	not	currently	have	a	foreign	currency	hedge	program.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	operate	a	global	business	with	international operations that	 are	 subject to	 economic	 and	 political instability	 and	 have	 been,	 and in the future	 may	 continue to	 be,	 adversely	 affected	 by	 numerous	 events, circumstances	or	government	actions	beyond	our	control"	for	unaudited	additional	discussion.

# 12.		Investments	and	Fair	Value	Measurements

# Assets	Measured	at	Fair	Value	on	a	Recurring	Basis

The	Company	utilizes	the	market	approach	to	measure	fair	value	for	its	financial	assets.	The	market	approach	uses	prices	and	other	relevant	information	generated	by market	transactions	involving	identical	or	comparable	assets.	The	Company's	short-term	investments	classified	as	Level	2	primarily	utilize	broker	quotes	in	a	non-active market	for	valuation	of	these	securities.	No	changes	in	valuation	techniques	or	inputs	occurred	during	the	year	ended	December	31,	2015.

Assets	measured	at	fair	value	on	a	recurring	basis	are	summarized	below	(in	millions):

|  |  | Fair	Value	Measurements	as	of	December	31,	2015 | Fair	Value	Measurements	as	of	December	31,	2015 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | \t\t\t\tTotal | \t\t\t\tLevel\t1 | \t\t\t\tLevel\t2 | \t\t\t\tLevel\t3 |
| Short-term\tinvestments\t(1),\t(2): |  |  |  |  |
| Money\tmarket\tfunds | $1,010 | $1,010 | $— | $— |
| Government\tagency\tinvestments | 1 | — | 1 | — |
| Corporate\tobligations | 2,191 | — | 2,191 | — |
| Bank\tnotes/certificates\tof\tdeposit/time\tdeposits | 2,662 | — | 2,662 | — |
|  | 5,864 | 1,010 | 4,854 | — |
| Restricted\tcash\tand\tshort-term\tinvestments\t(1) | 695 | 695 | — | — |
| Total | $6,559 | $1,705 | $4,854 | $— |

(1) Unrealized	gains	or	losses	on	short-term	investments	and	restricted	cash	and	short-term	investments	are	recorded	in	accumulated	other	comprehensive	loss	at	each measurement	date.

(2) All	short-term	investments	are	classified	as	available-for-sale	and	stated	at	fair	value.	The	Company's	short-term	investments	mature	in	one	year	or	less	except	for $734	million	of	corporate	obligations	and	$1.2	billion	of	bank	notes/certificates	of	deposit/time	deposits.

|  |  | Fair	Value	Measurements	as	of	December	31,	2014 | Fair	Value	Measurements	as	of	December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | \t\t\t\tTotal | \t\t\t\tLevel\t1 | \t\t\t\tLevel\t2 | \t\t\t\tLevel\t3 |
| Short-term\tinvestments\t(1),\t(2): |  |  |  |  |
| Money\tmarket\tfunds | $954 | $954 | $— | $— |
| Government\tagency\tinvestments | 101 | — | 101 | — |
| Repurchase\tagreements | 46 | — | 46 | — |
| Corporate\tobligations | 3,927 | — | 3,927 | — |
| Bank\tnotes/certificates\tof\tdeposit/time\tdeposits | 1,281 | — | 1,281 | — |
|  | 6,309 | 954 | 5,355 | — |
| Restricted\tcash\tand\tshort-term\tinvestments\t(1) | 774 | 774 | — | — |
| Total | $7,083 | $1,728 | $5,355 | $— |

(2) All	short-term	investments	are	classified	as	available-for-sale	and	stated	at	fair	value.	The	Company's	short-term	investments	mature	in	one	year	or	less	except	for $1.1	billion	of	corporate	obligations	and	$575	million	of	bank	notes/certificates	of	deposit/time	deposits.

There	were	no	Level	1	to	Level	2	transfers	during	the	years	ended	December	31,	2015	or	2014.

# Fair	Value	of	Debt

The	fair	value	of	the	Company's	long-term	debt	was	estimated	using	quoted	market	prices	or	discounted	cash	flow	analyses,	based	on	the	Company's	current estimated	incremental	borrowing	rates	for	similar	types	of	borrowing	arrangements.	If	the	Company's	long-term	debt	was	measured	at	fair	value,	it	would	have	been classified	as	Level	2	in	the	fair	value	hierarchy.

The	carrying	value	and	estimated	fair	value	of	the	Company's	long-term	debt,	including	current	maturities,	were	as	follows	(in	millions):

|  | December	31,	2015 | December	31,	2015 | December	31,	2014 | December	31,	2014 |
| :--- | :--- | :--- | :--- | :--- |
|  | Carrying\nValue | Fair\nValue | Carrying\nValue | Fair\nValue |
| Long-term\tdebt,\tincluding\tcurrent\tmaturities | $20,561 | $21,111 | $17,720 | $18,542 |

# Cash	and	Short-term	Investments

Generally,	fluctuations	in	foreign	currencies,	including	devaluations,	cannot	be	predicted	by	the	Company	and	can	significantly	affect	the	value	of	the	Company's cash	and	short-term	 investments	 located	outside	 the	United	States.	These	conditions,	as	well	as	any	further	delays,	devaluations	or	 imposition	of	more	stringent repatriation	restrictions,	may	materially	adversely	affect	the	Company's	business,	results	of	operations	and	financial	condition.	See	Part	I,	Item	1A.	Risk	Factors	–	"We operate	a	global	business	with	international	operations	that	are	subject	to	economic	and	political	instability	and	have	been,	and	in	the	future	may	continue	to	be, adversely	affected	by	numerous	events,	circumstances	or	government	actions	beyond	our	control"	for	unaudited	additional	discussion	of	this	and	other	currency	risks.

# 13.		Retirement	Benefits

The	Company	sponsors	defined	benefit	and	defined	contribution	pension	plans	for	eligible	employees.	The	defined	benefit	plans	provide	benefits	for	participating employees	based	on	years	of	service	and	average	compensation	for	a	specified	period	of	time	before	retirement.	Effective	November	1,	2012,	substantially	all	of	the Company's	defined	benefit	pension	plans	were	frozen	and	the	Company	began	providing	enhanced	benefits	under	its	defined	contribution	plans	for	certain	groups.	The Company	uses	a	December	31	measurement	date	for	all	of	its	defined	benefit	plans.	The	Company	also	provides	certain	retiree	medical	and	other	postretirement benefits,	including	health	care	and	life	insurance	benefits,	to	retired	employees.	Effective	November	1,	2012,	the	Company	modified	its	retiree	medical	and	life	coverage to	eliminate	the	company	subsidy	for	employees	who	retire	on	or	after	November	1,	2012.	As	a	result	of	modifications	to	its	retiree	medical	plans	in	2012,	the	Company recognized	a	negative	plan	amendment	of	$1.9	billion,	which	is	included	as	a	component	of	actuarial	gain	in	OCI	and	will	be	amortized	over	the	future	service	life	of	the active	plan	participants	for	whom	the	benefit	was	eliminated,	or	approximately	eight	years.	As	of	December	31,	2015,	$1.1	billion	of	actuarial	gain	remains	to	be amortized.

# Year	End	Information

The	following	table	provides	a	reconciliation	of	the	changes	in	the	pension	and	retiree	medical	and	other	postretirement	benefit	obligations	and	fair	value	of	assets	for the	years	ended	December	31,	2015	and	2014,	and	a	statement	of	funded	status	as	of	December	31,	2015	and	2014	(in	millions):

|  | Pension	Benefits<br>2015 | 2014 | Retiree	Medical	and	Other<br>Postretirement	Benefits<br>				2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| Reconciliation\tof\tbenefit\tobligation: |  |  |  |  |
| Obligation\tat\tJanuary\t1 | $17,594 | $14,899 | $1,325 | $1,385 |
| Service\tcost | 2 | 3 | 3 | 1 |
| Interest\tcost | 737 | 746 | 50 | 61 |
| Actuarial\t(gain)\tloss | (1,159) | 2,573 | (177) | (39) |
| Plan\tamendments | — | — | — | 33 |
| Settlements | (3) | (20) | — | — |
| Benefit\tpayments | (776) | (607) | (94) | (112) |
| Other | — | — | 24 | (4) |
| Obligation\tat\tDecember\t31 | $16,395 | $17,594 | $1,131 | $1,325 |
| Reconciliation\tof\tfair\tvalue\tof\tplan\tassets: |  |  |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tJanuary\t1 | $10,986 | $10,057 | $244 | $239 |
| Actual\treturn\ton\tplan\tassets | (506) | 746 | (10) | 11 |
| Employer\tcontributions | 6 | 810 | 89 | 106 |
| Settlements | (3) | (20) | — | — |
| Benefit\tpayments | (776) | (607) | (94) | (112) |
| Other\t(1) | — | — | 24 | — |
| Fair\tvalue\tof\tplan\tassets\tat\tDecember\t31 | 9,707 | \t 10,986 | 253 | 244 |
| Funded\tstatus\tat\tDecember\t31 | $(6,688) | $(6,608) | $(878) | $(1,081) |
| Amounts\trecognized\tin\tthe\tconsolidated\tbalance\tsheets: |  |  |  |  |
| Current\tliability | $7 | $10 | $109 | $117 |
| Noncurrent\tliability\t(2) | 6,681 | 6,598 | 769 | 964 |
|  | $6,688 | $6,608 | $878 | $1,081 |
| Amounts\trecognized\tin\tother\tcomprehensive\tincome: |  |  |  |  |
| Net\tactuarial\tloss\t(gain) | $5,047 | $4,961 | $(339) | $(199) |
| Prior\tservice\tcost\t(benefit)\t(2) | 216 | 245 | (1,084) | (1,326) |
|  | $5,263 | $5,206 | $(1,423) | $(1,525) |

|  | Pension	Benefits<br>								2015 | 2014 | Retiree	Medical	and<br>Other	Postretirement	Benefits<br>								2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| For\tplans\twith\taccumulated\tbenefit\tobligations\texceeding\tthe\tfair\tvalue\tof\tplan |  |  |  |  |
| assets: |  |  |  |  |
| Projected\tbenefit\tobligation\t(PBO) | $16,369 | $17,560 | $— | $— |
| Accumulated\tbenefit\tobligation\t(ABO) | 16,357 | 17,548 | — | — |
| Accumulated\tpostretirement\tbenefit\tobligation\t(APBO) | — | — | 1,129 | 1,324 |
| Fair\tvalue\tof\tplan\tassets | 9,677 | 10,950 | 253 | 244 |
| ABO\tless\tfair\tvalue\tof\tplan\tassets | 6,680 | 6,598 | — | — |

(1) At	December	31,	2015,	certain	trust	assets	totaling	approximately	$24	million,	were	added	to	the	retiree	medical	plan	asset	values	that	were	previously	offset against	the	benefit	obligation.

(2) The	2015	noncurrent	liability	does	not	include	$17	million	of	other	postretirement	benefits	or	$1	million	of	prior	service	costs.	The	2014	noncurrent	liability	does not	include	$18	million	of	other	postretirement	benefits	or	$2	million	of	prior	service	costs.

The	following	tables	provide	the	components	of	net	periodic	benefit	cost	(income)	for	the	years	ended	December	31,	2015,	2014	and	2013	(in	millions):

|  | 2015 | Pension	Benefits<br>				2014 | 2013 | 2015 | Retiree	Medical	and<br>Other	Postretirement	Benefits<br>				2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Defined\tbenefit\tplans: |  |  |  |  |  |  |
| Service\tcost | $2 | $3 | $3 | $3 | $1 | $— |
| Interest\tcost | 737 | 746 | 654 | 50 | 61 | 50 |
| Expected\treturn\ton\tassets | (851) | (786) | (720) | (19) | (19) | (16) |
| Curtailments | — | — | 2 | — | — | — |
| Settlements | 1 | 4 | (1) | — | — | — |
| Amortization\tof: |  |  |  |  |  |  |
| Prior\tservice\tcost\t(benefit)\t(1) | 28 | 28 | 28 | (243) | (244) | (251) |
| Unrecognized\tnet\tloss\t(gain) | 112 | 43 | 90 | (9) | (8) | (9) |
| Net\tperiodic\tbenefit\tcost\t(income)\tfor\tdefined\tbenefit\tplans | 29 | 38 | 56 | (218) | (209) | (226) |
| Defined\tcontribution\tplans | 662 | 546 | 328 | N/A | N/A | N/A |
|  | $691 | $584 | $384 | $(218) | $(209) | $(226) |

(1) The	2015	prior	service	cost	does	not	include	amortization	of	$3	million	related	to	other	postretirement	benefits.	The	2014	prior	service	cost	does	not	include amortization	of	$14	million	related	to	other	postretirement	benefits.

The	estimated	amount	of	unrecognized	net	loss	for	the	defined	benefit	pension	plans	that	will	be	amortized	from	accumulated	other	comprehensive	income	(loss)	into net	periodic	benefit	cost	over	the	next	fiscal	year	is	$126	million.

The	estimated	amount	of	unrecognized	net	gain	for	the	retiree	medical	and	other	postretirement	plans	that	will	be	amortized	from	accumulated	other	comprehensive income	(loss)	into	net	periodic	benefit	cost	over	the	next	fiscal	year	is	$16	million.

|  | Pension	Benefits<br>				2015 | 2014 | Retiree	Medical	and<br>Other		Postretirement	Benefits<br>				2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| Weighted-average\tassumptions\tused\tto\tdetermine\tbenefit\tobligations\tas\tof |  |  |  |  |
| December\t31: |  |  |  |  |
| Discount\trate | 4.70% | 4.30% | 4.42% | 4.00% |
| Weighted-average\tassumptions\tused\tto\tdetermine\tnet\tperiodic\tbenefit\tcost\tfor\tthe |  |  |  |  |
| years\tended\tDecember\t31: |  |  |  |  |
| Discount\trate\t1/1\t–\t12/31 | 4.30% | 5.10% | 4.00% | 4.74% |
| Expected\treturn\ton\tplan\tassets | 8.00% | 8.00% | 8.00% | 8.00% |

As	of	December	31,	2015,	the	Company's	estimate	of	the	long-term	rate	of	return	on	plan	assets	was	8%	based	on	the	target	asset	allocation.	Expected	returns	on longer	duration	bonds	are	based	on	yields	to	maturity	of	the	bonds	held	at	year-end.	Expected	returns	on	other	assets	are	based	on	a	combination	of	long-term	historical returns,	actual	returns	on	plan	assets	achieved	over	the	last	ten	years,	current	and	expected	market	conditions,	and	expected	value	to	be	generated	through	active management,	currency	overlay	and	securities	lending	programs.

The	objectives	of	the	Company's	investment	policies	are	to:	maintain	sufficient	income	and	liquidity	to	pay	retirement	benefits;	produce	a	long-term	rate	of	return that	meets	or	exceeds	the	assumed	rate	of	return	for	plan	assets;	limit	the	volatility	of	asset	performance	and	funded	status;	and	diversify	assets	among	asset	classes	and investment	managers.

Based	on	these	investment	objectives,	a	long-term	strategic	asset	allocation	has	been	established.	This	strategic	allocation	seeks	to	balance	the	potential	benefit	of improving	funded	position	with	the	potential	risk	that	the	funded	position	would	decline.	The	current	strategic	target	asset	allocation	is	as	follows:

Public	equity	and	emerging	market	fixed	income	securities	are	used	to	provide	diversification	and	are	expected	to	generate	higher	returns	over	the	long-term	than longer	duration	U.S.	bonds.	Public	stocks	are	managed	using	a	value	investment	approach	in	order	to	participate	in	the	returns	generated	by	stocks	in	the	long-term, while	 reducing	 year-over-year	 volatility.	 Longer	 duration	 U.S.	 bonds	 are	 used	 to	 partially	 hedge	 the	 assets	 from	 declines	 in	 interest	 rates.	Alternative	 (private) investments	are	used	to	provide	expected	returns	in	excess	of	the	public	markets	over	the	long-term.	Additionally,	the	pension	plan's	master	trust	engages	currency overlay	managers	in	an	attempt	to	increase	returns	by	protecting	non-U.S.	dollar	denominated	assets	from	a	rise	in	the	relative	value	of	the	U.S.	dollar.	The	pension plan's	master	trust	also	participates	in	securities	lending	programs	to	generate	additional	income	by	loaning	plan	assets	to	borrowers	on	a	fully	collateralized	basis.	These programs	are	subject	to	market	risk.

Investments	in	securities	traded	on	recognized	securities	exchanges	are	valued	at	the	last	reported	sales	price	on	the	last	business	day	of	the	year.	Securities	traded	in the	over-the-counter	market	are	valued	at	the	last	bid	price.	The	money	market	fund	is	valued	at	fair	value	which	represents	the	net	asset	value	of	the	shares	of	such	fund as	of	the	close	of	business	at	the	end	of	the	period.	Investments	in	limited	partnerships	are	carried	at	estimated	net	asset	value	as	determined	by	and	reported	by	the general	 partners	 of	 the	 partnerships	 and	 represent	 the	 proportionate	 share	 of	 the	 estimated	 fair	 value	 of	 the	 underlying	 assets	 of	 the	 limited	 partnerships. Common/collective	trusts	are	valued	at	net	asset	value	based	on	the	fair	values	of	the	underlying	investments	of	the	trusts	as	determined	by	the	sponsor	of	the	trusts.	The pension	plan's	master	trust	also	invests	in	a	103-12	investment	entity	(the	103-12	Investment	Trust)	which	is	designed	to	invest	plan	assets	of	more	than	one	unrelated employer.	The	103-12	Investment	Trust	is	valued	at	net	asset	value	which	is	determined	by	the	issuer	at	the	end	of	each	month	and	is	based	on	the	aggregate	fair	value	of trust	assets	less	liabilities,	divided	by	the	number	of	units	outstanding.	No	changes	in	valuation	techniques	or	inputs	occurred	during	the	year.

The	fair	value	of	the	Company's	pension	plan	assets	at	December	31,	2015	and	2014,	by	asset	category,	are	as	follows	(in	millions):

|  | Active	Markets | Significant | Significant |  |
| :--- | :--- | :--- | :--- | :--- |
|  | for\tIdentical | Observable | Unobservable |  |
| Asset\tCategory | Assets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Cash\tand\tcash\tequivalents | $287 | $— | $— | $287 |
| Equity\tsecurities: |  |  |  |  |
| International\tmarkets\t(a),\t(b) | 2,873 | — | — | \t 2,873 |
| Large-cap\tcompanies\t(b) | 1,999 | — | — | \t 1,999 |
| Mid-cap\tcompanies\t(b) | 361 | — | — | 361 |
| Small-cap\tcompanies\t(b) | 18 | — | — | 18 |
| Mutual\tfunds\t(c) | 47 | — | — | 47 |
| Fixed\tincome: |  |  |  |  |
| Corporate\tbonds\t(d) | — | 2,204 | — | \t 2,204 |
| Government\tSecurities\t(e) | — | 917 | — | 917 |
| U.S.\tmunicipal\tsecurities | — | 48 | — | 48 |
| Alternative\tinstruments: |  |  |  |  |
| Private\tequity\tpartnerships\t(f) | — | — | 722 | 722 |
| Common/collective\ttrusts\tand\t103-12\tInvestment\tTrust\t(g) | — | 219 | — | 219 |
| Insurance\tgroup\tannuity\tcontracts | — | — | 2 | 2 |
| Dividend\tand\tinterest\treceivable | 50 | — | — | 50 |
| Due\tto/from\tbrokers\tfor\tsale\tof\tsecurities\t–\tnet | 23 | — | — | 23 |
| Other\tassets\t–\tnet | 8 | — | — | 8 |
| Other\tliabilities\t–\tnet | (71) | — | — | (71) |
| Total | $5,595 | $3,388 | $724 | $9,707 |

a) Holdings	are	diversified	as	follows:	16%	United	Kingdom,	12%	Japan,	10%	France,	7%	Switzerland,	7%	Netherlands,	6%	Republic	of	Korea,	11%	of	other emerging	markets	and	the	remaining	31%	with	no	concentration	greater	than	5%	in	any	one	country.

b) There	are	no	significant	concentrations	of	holdings	by	company	or	industry.

c) Investment	includes	mutual	funds	invested	40%	in	equity	securities	of	large-cap,	mid-cap	and	small-cap	U.S.	companies,	35%	in	U.S.	treasuries	and	corporate bonds	and	25%	in	equity	securities	of	international	companies.

d) Includes	approximately	74%	investments	in	corporate	debt	with	a	Standard	and	Poor's	(S&P)	rating	lower	than	A	and	26%	investments	in	corporate	debt	with	an S&P	rating	A	or	higher.	Holdings	include	82%	U.S.	companies,	16%	international	companies	and	2%	emerging	market	companies.

e) Includes	approximately	75%	investments	in	U.S.	domestic	government	securities	and	25%	in	emerging	market	government	securities.	There	are	no	significant foreign	currency	risks	within	this	classification.

f) Includes	limited	partnerships	that	invest	primarily	in	U.S.	(89%)	and	European	(11%)	buyout	opportunities	of	a	range	of	privately	held	companies.	The	pension plan's	master	trust	does	not	have	the	right	to	redeem	its	limited	partnership	investment	at	its	net	asset	value,	but	rather	receives	distributions	as	the	underlying assets	are	liquidated.	It	is	estimated	that	the	underlying	assets	of	these	funds	will	be	gradually	liquidated	over	the	next	one	to	ten	years.	Additionally,	the	pension plan's	master	trust	has	future	funding	commitments	of	approximately	$428	million	over	the	next	ten	years.

g) Investment	includes	73%	in	an	emerging	market	103-12	Investment	Trust	with	investments	in	emerging	country	equity	securities,	14%	in	Canadian	segregated balanced	value,	income	growth	and	diversified	pooled	funds	and	13%	in	a	common/collective	trust	investing	in	securities	of	smaller	companies	located	outside the	U.S.,	including	developing	markets.	Requests	for	withdrawals	must	meet	specific	requirements	with	advance	notice	of	redemption	preferred.

|  |  | Fair	Value	Measurements	as	of	December	31,	2014 | Fair	Value	Measurements	as	of	December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Quoted\tPrices\tin | Significant | Significant |  |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Cash\tand\tcash\tequivalents | $332 | $— | $— | $332 |
| Equity\tsecurities: |  |  |  |  |
| International\tmarkets\t(a),\t(b) | 2,943 | — | — | 2,943 |
| Large-cap\tcompanies\t(b) | 2,488 | — | — | 2,488 |
| Mid-cap\tcompanies\t(b) | 362 | — | — | 362 |
| Small-cap\tcompanies\t(b) | 21 | — | — | 21 |
| Mutual\tfunds\t(c) | 51 | — | — | 51 |
| Fixed\tincome: |  |  |  |  |
| Corporate\tbonds\t(d) | — | 2,384 | — | 2,384 |
| Government\tSecurities\t(e) | — | 1,184 | — | 1,184 |
| U.S.\tmunicipal\tsecurities | — | 65 | — | 65 |
| Alternative\tinstruments: |  |  |  |  |
| Private\tequity\tpartnerships\t(f) | — | — | 818 | 818 |
| Common/collective\ttrusts\tand\t103-12\tInvestment\tTrust\t(g) | — | 240 | — | 240 |
| Insurance\tgroup\tannuity\tcontracts | — | — | 2 | 2 |
| Dividend\tand\tinterest\treceivable | 52 | — | — | 52 |
| Due\tto/from\tbrokers\tfor\tsale\tof\tsecurities\t–\tnet | 39 | — | — | 39 |
| Other\tassets\t–\tnet | 5 | — | — | 5 |
| Total | $6,293 | $3,873 | $820 | $10,986 |

c) Investment	includes	mutual	funds	invested	46%	in	equity	securities	of	large-cap,	mid-cap	and	small-cap	U.S.	companies,	35%	in	U.S.	treasuries	and	corporate bonds	and	18%	in	equity	securities	of	international	companies.

d) Includes	approximately	74%	investments	in	corporate	debt	with	an	S&P	rating	lower	than	A	and	26%	investments	in	corporate	debt	with	an	S&P	rating	A	or higher.	Holdings	include	81%	U.S.	companies,	16%	international	companies	and	3%	emerging	market	companies.

f) Includes	limited	partnerships	that	invest	primarily	in	U.S.	(91%)	and	European	(9%)	buyout	opportunities	of	a	range	of	privately	held	companies.	The	pension plan's	master	trust	does	not	have	the	right	to	redeem	its	limited	partnership	investment	at	its	net	asset	value,	but	rather	receives	distributions	as	the	underlying assets	are	liquidated.	It	is	estimated	that	the	underlying	assets	of	these	funds	will	be	gradually	liquidated	over	the	next	one	to	ten	years.	Additionally,	the	pension plan's	master	trust	has	future	funding	commitments	of	approximately	$403	million	over	the	next	ten	years.

Changes	in	fair	value	measurements	of	Level	3	investments	during	the	year	ended	December	31,	2015,	were	as	follows	(in	millions):

|  | Private		Equity<br>Partnerships | Insurance	Group<br>Annuity	Contracts |
| :--- | :--- | :--- |
| Beginning\tbalance\tat\tDecember\t31,\t2014 | $818 | $2 |
| Actual\treturn\ton\tplan\tassets: |  |  |
| Relating\tto\tassets\tstill\theld\tat\tthe\treporting\tdate | (105) | — |
| Relating\tto\tassets\tsold\tduring\tthe\tperiod | 115 | — |
| Purchases | 145 | — |
| Sales | (251) | — |
| Ending\tbalance\tat\tDecember\t31,\t2015 | $722 | $2 |

|  | Equity<br>Partnerships | Insurance	Group<br>Annuity	Contracts |
| :--- | :--- | :--- |
| Beginning\tbalance\tat\tDecember\t31,\t2013 | $848 | $2 |
| Actual\treturn\ton\tplan\tassets: |  |  |
| Relating\tto\tassets\tstill\theld\tat\tthe\treporting\tdate | (38) | — |
| Relating\tto\tassets\tsold\tduring\tthe\tperiod | 158 | — |
| Purchases | 148 | — |
| Sales | (298) | — |
| Ending\tbalance\tat\tDecember\t31,\t2014 | $818 | $2 |

The	fair	value	of	the	Company's	other	postretirement	benefit	plan	assets	at	December	31,	2015	by	asset	category,	were	as	follows	(in	millions):

|  |  | Fair	Value	Measurements	as	of	December	31,	2015 | Fair	Value	Measurements	as	of	December	31,	2015 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Quoted\tPrices\tin | Significant | Significant |  |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Money\tmarket\tfund | $4 | $— | $— | $4 |
| Mutual\tfunds\t–\tInstitutional\tClass | 19 | — | $— | $19 |
| Mutual\tfunds\t–\tAMR\tClass | — | 230 | — | \t 230 |
| Total | $23 | $230 | $— | $253 |

|  |  | Fair	Value	Measurements	as	of	December	31,	2014 | Fair	Value	Measurements	as	of	December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Quoted\tPrices\tin | Significant | Significant |  |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Money\tmarket\tfund | $2 | $— | $— | $2 |
| Mutual\tfunds\t–\tAMR\tClass | — | 242 | — | \t 242 |
| Total | $2 | $242 | $— | $244 |

Investments	in	the	other	postretirement	benefit	plan's	mutual	funds	are	valued	by	quoted	prices	on	the	active	market,	which	is	fair	value	and	represents	the	net	asset value	of	the	shares	of	such	funds	as	of	the	close	of	business	at	the	end	of	the	period.	AMR	Class	shares	are	offered	without	a	sales	charge	to	participants.	Purchases	are restricted	to	certain	retirement	benefit	plans,	including	the	Company's	other	postretirement	benefit	plan,	resulting	in	a	fair	value	classification	of	Level	2.	Investments include	approximately	27%	and	28%	of	investments	in	non-U.S.	common	stocks	in	2015	and	2014,	respectively.	Net	asset	value	is	based	on	the	fair	market	value	of	the funds'	underlying	assets	and	liabilities	at	the	date	of	determination.

   A	one	percentage	point	change	in	the	assumed	health	care	cost	trend	rates	would	have	the	following	effects	(in	millions):

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	of	1974	and	various	other	laws.	Based	on	current	funding	assumptions,	the	Company	has	no	minimum	required	contributions	until	2018.	Currently, the	Company's	minimum	funding	obligation	for	its	pension	plans	is	subject	to	temporary	favorable	rules	that	are	scheduled	to	expire	at	the	end	of	2017.	The	Company's pension	funding	obligations	are	likely	to	increase	materially	following	expiration	of	the	temporary	funding	rules,	when	the	Company	will	be	required	to

make	contributions	relating	to	the	2018	fiscal	year.	The	amount	of	these	obligations	will	depend	on	the	performance	of	the	Company's	investments	held	in	trust	by	the pension	plans,	interest	rates	for	determining	liabilities	and	the	Company's	actuarial	experience.

The	following	benefit	payments,	which	reflect	expected	future	service	as	appropriate,	are	expected	to	be	paid	(in	millions):

Reclassifications	out	of	accumulated	other	comprehensive	income	(loss)	for	the	years	ended	December	31,	2015	and	2014	are	as	follows	(in	millions):

| Details	about	accumulated	other	comprehensive<br>income	(loss)	components | Year	Ended	December	31,<br>2015 | 2014 | statement	where	net	income<br>(loss)	is		presented |
| :--- | :--- | :--- | :--- |
| Amortization\tof\tpension\tand\tretiree\tmedical\tliability: |  |  |  |
| Prior\tservice\tcost | $(212) | $(202) | Salaries,\twages\tand\tbenefits |
| Actuarial\tloss | 104 | 39 | Salaries,\twages\tand\tbenefits |
| Derivative\tfinancial\tinstruments: |  |  |  |
| Cash\tflow\thedges | (9) | (4) | Aircraft\tfuel\tand\trelated\ttaxes |
| Net\tunrealized\tchange\ton\tinvestments: |  |  |  |
| Net\tchange\tin\tvalue | 1 | (3) | Other\tnonoperating,\tnet |
| Income\ttax\tbenefit\t(provision): |  |  |  |
| Reversal\tof\tnon-cash\ttax\tprovision | — | 330 | Income\ttax\tprovision\t(benefit) |
| Total\treclassifications\tfor\tthe\tperiod | $(116) | $160 |  |

During	2014,	the	Company	sold	its	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on	or	after	June	30,	2014.	In	connection	with	this	sale,	the Company	recorded	a	special	non-cash	tax	provision	of	$330	million	in	the	statement	of	operations	for	the	second	quarter	of	2014	that	reversed	the	non-cash	tax	provision which	was	recorded	in	OCI,	a	subset	of	stockholders'	equity,	principally	in	2009.	This	provision	represented	the	tax	effect	associated	with	gains	recorded	in	OCI principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	the	Company's	fuel	hedging	contracts.	In	accordance	with	GAAP,	the	Company	retained	the	$330	million	tax provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

Amounts	allocated	to	OCI	for	income	taxes	as	further	described	in	Note	10	will	remain	in	accumulated	other	comprehensive	income	(loss)	until	the	Company	ceases all	related	activities,	such	as	termination	of	the	pension	plan.

# 15.		Commitments,	Contingencies	and	Guarantees

#    (a)	Aircraft	and	Engine	Purchase	Commitments

Under	 all	 of	 the	 Company's	 aircraft	 and	 engine	 purchase	 agreements, its total	 future	 commitments	 as	 of	 December	 31,	 2015	 are	 expected to	 be	 as	 follows (approximately,	in	millions):

(1) These	amounts	are	net	of	purchase	deposits	currently	held	by	the	manufacturers	and	include	all	commitments	for	wholly-owned	regional	aircraft.	American	has granted	Boeing	a	security	interest	in	its	purchase	deposits	with	Boeing.	The	Company's	purchase	deposits	totaled	$1.1	billion	as	of	December	31,	2015.

As	of	December	31,	2015,	the	Company	did	not	have	financing	commitments	for	the	following	aircraft	currently	on	order	and	scheduled	to	be	delivered	through 2017:	25	Airbus	A320	family	aircraft	in	2016	and	20	Airbus	A320	family	aircraft	in	2017,	8	Boeing	787	family	aircraft	in	2016	and	13	Boeing	787	family	aircraft	in 2017,	15	Boeing	737-800	aircraft	in	2016,	three	Boeing	737	MAX	family	aircraft	in	2017	and	two	Boeing	777-300ER	aircraft	in	2016.	In	addition,	the	Company	did	not have	financing	commitments	in	place	for	substantially	all	aircraft	currently	on	order	and	scheduled	to	be	delivered	in	2018	and	beyond.	See	Part	I,	Item	1A.	Risk	Factors –	"We	will	need	to	obtain	sufficient	financing	or	other	capital	to	operate	successfully"	for	unaudited	additional	discussion.

# (b)	Facility	and	support	commitments

The	Company	has	contracts	related	to	facility	construction	or	improvement	projects,	primarily	at	airport	locations,	as	well	as	information	technology	support.	The contractual	obligations	related	to	these	contracts	are	presented	in	the	table	below	(in	millions):

|  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021	and<br>Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Facility\tconstruction\tor\timprovement\tcontracts | $211 | $2 | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $213 |
| Information\ttechnology\tcontracts | \t 160 | \t 136 | \t 107 | \t 88 | 6 | — | \t 497 |

# (c)	Capacity	Purchase	Agreements	with	Third-Party	Regional	Carriers

As	of	December	31,	2015,	the	Company's	capacity	purchase	agreements	with	third-party	regional	carriers	had	expiration	dates	ranging	from	2017	to	2027,	with rights	of	American	to	extend	the	respective	terms	of	each	agreement.	See	Part	I,	Item	2.	Properties	for	unaudited	information	on	the	aircraft	contractually	obligated	to	the Company	under	such	capacity	purchase	agreements	with	third-party	regional	carriers.

The	Company	has	entered	into	agreements	with	the	third-party	regional	carriers	that	operate	certain	of	their	aircraft	using	American's	flight	designator	codes. American	controls	the	scheduling,	pricing,	reservations,	ticketing	and	seat	inventories	of	those	aircraft	and	retains	all	revenues	associated	with	flights	by	those	aircraft. American	pays	the	third-party	regional	carriers	an	amount,	as	defined	in	the	applicable	agreement,	based	on	the	airlines'	costs	of	operating	those	flights.	In	addition, these	agreements	provide	that	certain	variable	costs,	such	as	airport	landing	fees,	fuel	and	passenger	liability	insurance,	will	be	100%	paid	for	or	reimbursed	by	the Company.	As	of	December	31,	2015,	the	Company's	minimum	fixed	obligations	under	its	capacity	purchase	agreements	with	third-party	regional	carriers	were	as follows	(approximately,	in	millions):

| 2016 | 2017 | 2018 | 2019 | 2020 | 2021	and<br>Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $1,672 | $1,553 | $1,249 | $1,075 | $881 | $2,393 | $8,823 |

(1) Represents	minimum	payments	under	capacity	purchase	agreements	with	 third-party	regional	carriers.	These	commitments	are	estimates	of	costs	based	on assumed	minimum	levels	of	flying	under	the	capacity	purchase	agreements	and	the	Company's	actual	payments	could	differ	materially.	These	obligations	also include	the	portion	of	the	Company's	future	obligations	related	to	aircraft	deemed	to	be	leased	in	the	amount	of	approximately	$469	million	in	2016,	$414	million in	2017,	$334	million	in	2018,	$292	million	in	2019,	$235	million	in	2020	and	$704	million	in	2021	and	thereafter.

# (d)	Operating	Leases

The	Company	leases	certain	aircraft,	engines	and	ground	equipment,	in	addition	to	the	majority	of	its	ground	facilities	and	terminal	space.	As	of	December	31,	2015, the	Company	had	438	aircraft	under	operating	leases,	with	remaining	terms	ranging	from	one	month	to	approximately	12	years.	Airports	are	utilized	for	flight	operations under	lease	arrangements	with	the	municipalities	or	agencies	owning	or	controlling	such	airports.	Substantially	all	leases	provide	that	the	lessee	must	pay	taxes, maintenance,	insurance	and	certain	other	operating	expenses	applicable	to	the	leased	property.	Some	leases	also	include	renewal	and	purchase	options.

As	of	December	31,	2015,	obligations	under	noncancellable	operating	leases	for	future	minimum	lease	payments	were	as	follows	(in	millions):

|  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021	and<br>Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Future\tminimum\tlease\tpayments\t(1) | $2,198 | $2,078 | $1,829 | $1,643 | $1,493 | $4,704 | $13,945 |

(1) As	of	December	31,	2015,	$294	million	is	included	on	the	accompanying	consolidated	balance	sheet	in	accrued	liabilities	and	deferred	gains	and	credits,	net relating	to	rent	expense	being	recorded	in	advance	of	future	operating	lease	payments.

# (e)	Off-Balance	Sheet	Arrangements

# Aircraft

The	Company	currently	operates	263	owned	aircraft	and	138	leased	aircraft	which	were	financed	with	enhanced	equipment	trust	certificates,	or	EETCs,	issued	by pass-through	trusts.	These	trusts	are	off-balance	sheet	entities,	the	primary	purpose	of	which	is	to	finance	the	acquisition	of	flight	equipment.	Rather	than	finance	each aircraft	separately	when	such	aircraft	was	purchased,	delivered	or	refinanced,	these	trusts	allowed	American	to

raise	the	financing	for	several	aircraft	at	one	time	and	place	such	funds	in	escrow	pending	the	purchase,	delivery	or	refinancing	of	the	relevant	aircraft.	The	trusts	were also	structured	to	provide	for	certain	credit	enhancements,	such	as	liquidity	facilities	to	cover	certain	interest	payments,	that	reduce	the	risks	to	the	purchasers	of	the	trust certificates	and,	as	a	result,	reduce	the	cost	of	aircraft	financing	to	American.

Each	trust	covered	a	set	amount	of	aircraft	scheduled	to	be	delivered	or	refinanced	within	a	specific	period	of	time.	At	the	time	of	each	covered	aircraft	financing,	the relevant	trust	uses	the	funds	in	escrow	to	purchase	equipment	notes	relating	to	the	financed	aircraft.	The	equipment	notes	are	issued,	at	American's	election,	in connection	with	a	mortgage	financing	of	the	aircraft	or,	in	certain	cases,	by	a	separate	owner	trust	in	connection	with	a	leveraged	lease	financing	of	the	aircraft.	In	the case	of	a	leveraged	lease	financing,	the	owner	trust	then	leases	the	aircraft	to	American.	In	both	cases,	the	equipment	notes	are	secured	by	a	security	interest	in	the aircraft.	The	EETCs	are	not	direct	obligations	of,	nor	are	they	guaranteed	by,	AAG	or	American.	However,	in	the	case	of	mortgage	financings,	the	equipment	notes issued	to	the	trusts	are	direct	obligations	of	American	and,	in	certain	instances,	are	guaranteed	by	AAG.	As	of	December	31,	2015,	$8.7	billion	associated	with	these mortgage	financings	is	reflected	as	debt	in	the	accompanying	consolidated	balance	sheet.

With	respect	to	leveraged	leases,	American	evaluated	whether	the	leases	had	characteristics	of	a	variable	interest	entity.	American	concluded	the	leasing	entities	met the	criteria	for	variable	interest	entities.	American	generally	is	not	the	primary	beneficiary	of	the	leasing	entities	if	the	lease	terms	are	consistent	with	market	terms	at	the inception	of	the	lease	and	do	not	include	a	residual	value	guarantee,	fixed-price	purchase	option	or	similar	feature	that	obligates	American	to	absorb	decreases	in	value	or entitles	American	to	participate	in	increases	in	the	value	of	the	aircraft.	American	does	not	provide	residual	value	guarantees	to	the	bondholders	or	equity	participants	in the	trusts.	Some	leases	have	a	fair	market	value	or	a	fixed	price	purchase	option	that	allows	American	to	purchase	the	aircraft	at	or	near	the	end	of	the	lease	term. However,	the	option	price	approximates	an	estimate	of	the	aircraft's	fair	value	at	the	option	date.	Under	this	feature,	American	does	not	participate	in	any	increases	in	the value	of	the	aircraft.	American	concluded	it	was	not	the	primary	beneficiary	under	these	arrangements.	Therefore,	American	accounts	for	its	EETC	leveraged	lease financings	as	operating	leases.	American's	total	future	obligations	under	these	leveraged	lease	financings	are	$1.8	billion	as	of	December	31,	2015,	which	are	included	in the	future	minimum	lease	payments	table	above.

AAG	guarantees	the	payment	of	principal	and	interest	of	certain	special	facility	revenue	bonds	issued	by	municipalities	primarily	to	build	or	improve	airport	facilities and	purchase	equipment	which	is	leased	to	American.	Under	such	leases,	American	is	required	to	make	rental	payments	through	2035,	sufficient	to	pay	maturing principal	and	interest	payments	on	the	related	bonds.	As	of	December	31,	2015,	the	remaining	lease	payments	guaranteeing	the	principal	and	interest	on	these	bonds	are $617	million,	which	are	accounted	for	as	operating	leases.

# (f)	Legal	Proceedings

Pursuant	to	rulings	of	the	Bankruptcy	Court,	the	Plan	established	the	Disputed	Claims	Reserve	to	hold	shares	of	AAG	Common	Stock	reserved	for	issuance	to disputed	claimholders	at	the	Effective	Date	that	ultimately	become	holders	of	allowed	Single-Dip	Unsecured	Claims.	The	shares	provided	for	under	the	Plan	were determined	based	upon	a	Disputed	Claims	Reserve	amount	of	claims	of	approximately	$755	million,	representing	the	maximum	amount	of	additional	distributions	to subsequently	allowed	Single-Dip	Unsecured	Claims	under	the	Plan.	As	of	December	31,	2015,	there	were	approximately	25.3	million	shares	of	AAG	Common	Stock remaining	in	the	Disputed	Claims	Reserve.	As	disputed	claims	are	resolved,	the	claimants	will	receive	distributions	of	shares	from	the	Disputed	Claims	Reserve	on	the same	basis	as	if	such	distributions	had	been	made	on	or	about	the	Effective	Date.	However,	the	Company	is	not	required	to	distribute	additional	shares	above	the	limits contemplated	by	the	Plan,	even	if	the	shares	remaining	for	distribution	are	not	sufficient	to	fully	pay	any	additional	allowed	unsecured	claims.	To	the	extent	that	any	of the	reserved	shares	remain	undistributed	upon	resolution	of	all	remaining	disputed	claims,	such	shares	will	not	be	returned	to	the	Company	but	rather	will	be	distributed to	former	AMR	stockholders	as	of	the	Effective	Date.	However,	resolution	of	disputed	claims	could	have	a	material	effect	on	recoveries	by	holders	of	additional	allowed Single-Dip	Unsecured	Claims	under	the	Plan	and	the	amount	of	additional	share	distributions,	if	any,	that	are	made	to	former	AMR	stockholders	as	the	total	number	of shares	of	AAG	Common	Stock	that	remain	available	for	distribution	upon	resolution	of	disputed	claims	is	limited	pursuant	to	the	Plan.

There	is	also	pending	in	the	Bankruptcy	Court	an	adversary	proceeding	relating	to	an	action	brought	by	American	to	seek	a	determination	that	certain	non-pension, post-employment	benefits	(OPEB)	are	not	vested	benefits	and	thus	may	be	modified	or	terminated	without	liability	to	American.	On	April	18,	2014,	the	Bankruptcy Court	granted	American's	motion	for	summary	judgment	with	respect	to	certain	non-union	employees,	concluding	that	their	benefits	were	not	vested	and	could	be terminated.	The	summary	judgment	motion	was	denied	with	respect	to	all	other	retirees.	The	Bankruptcy	Court	has	not	yet	scheduled	a	trial	on	the	merits	concerning whether	those	retirees'	benefits	are	vested,	and	American	cannot	predict	whether	it	will	receive	relief	from	obligations	to	provide	benefits	to	any	of	those	retirees.	The Company's	financial	statements	presently	reflect	these	retirement	programs	without	giving	effect	to	any	modification	or	termination	of	benefits	that	may	ultimately	be implemented	based	upon	the	outcome	of	this	proceeding.	Separately,	both	the	APFA	and	TWU	have	filed	grievances	asserting	that	American	was	"successful"	in	its Chapter	11	with	respect	to	matters	related	to	OPEB	and,	accordingly,	by	operation	of	the	underlying	collective	bargaining	agreements,	American's	prior	contributions	to certain	OPEB	prefunding	trusts	attributable	to	active	employees	should	be	returned	to	those	active	employees.	These	amounts	aggregate	approximately	$212	million.	The Company	has	denied	both	grievances	and	intends	to	defend	these	matters	vigorously.

DOJ	Antitrust	Civil	Investigative	Demand.	In	June	2015,	the	Company	received	a	Civil	Investigative	Demand	(CID)	from	the	DOJ	as	part	of	an	investigation	into whether	there	have	been	illegal	agreements	or	coordination	of	air	passenger	capacity.	The	CID	seeks	documents	and	other	information	from	the	Company,	and	other airlines	 have	 announced	 that	 they	 have	 received	 similar	 requests.	 The	 Company	 is	 cooperating	 fully	 with	 the	 DOJ	 investigation.	 In	 addition,	 subsequent	 to announcement	of	the	delivery	of	CIDs	by	the	DOJ,	the	Company,	along	with	Delta	Air	Lines,	Inc.,	Southwest	Airlines	Co.,	United	Airlines,	Inc.	and,	in	the	case	of litigation	filed	in	Canada,	Air	Canada,	have	been	named	as	defendants	in	approximately	100	putative	class	action	lawsuits	alleging	unlawful	agreements	with	respect	to air	passenger	capacity.	The	U.S.	lawsuits	were	the	subject	of	multiple	motions	to	consolidate	them	in	a	single	forum,	and	they	have	now	been	consolidated	in	the	Federal District	Court	for	the	District	of	Columbia.	Both	the	DOJ	investigation	and	these	lawsuits	are	in	their	very	early	stages	and	the	Company	intends	to	defend	the	lawsuits vigorously.

Private	Party	Antitrust	Action.	On	July	2,	2013,	a	lawsuit	captioned	Carolyn	Fjord,	et	al.,	v.	US	Airways	Group,	Inc.,	et	al.,	was	filed	in	the	United	States	District Court	for	the	Northern	District	of	California.	The	complaint	named	as	defendants	US	Airways	Group	and	US	Airways,	and	alleged	that	the	effect	of	the	Merger	may	be to	substantially	lessen	competition	or	tend	to	create	a	monopoly	in	violation	of	Section	7	of	the	Clayton

Antitrust	Act.	The	relief	sought	in	the	complaint	included	an	injunction	against	the	Merger,	or	divestiture.	On	August	6,	2013,	the	plaintiffs	re-filed	their	complaint	in	the Bankruptcy	Court,	adding	AMR	and	American	as	defendants,	and	on	October	2,	2013,	dismissed	the	initial	California	action.	On	November	27,	2013,	the	Bankruptcy Court	denied	plaintiffs'	motion	to	preliminarily	enjoin	the	Merger.	On	August	19,	2015,	after	three	previous	largely	unsuccessful	attempts	to	amend	their	complaint, plaintiffs	filed	a	fourth	motion	for	leave	to	file	an	amended	and	supplemental	complaint	to	add	a	claim	for	damages	and	demand	for	jury	trial,	as	well	as	claims	similar	to those	in	the	putative	class	action	lawsuits	regarding	air	passenger	capacity.	Thereafter,	plaintiffs	filed	a	request	with	the	Judicial	Panel	on	Multidistrict	Litigation	(JPML) to	consolidate	the	Fjord	matter	with	the	putative	class	action	lawsuits.	The	JPML	denied	that	request	on	October	15,	2015	and	plaintiffs'	request	for	further	relief	from the	JPML	was	denied	on	February	4,	2016.	Accordingly,	the	parties	will	continue	to	litigate	the	matter	in	Bankruptcy	Court.	The	Company	believes	this	lawsuit	is without	merit	and	intends	to	vigorously	defend	against	the	allegations.

DOJ	Civil	Investigative	Demand	Related	to	the	United	States	Postal	Service.	In	April	2015,	the	DOJ	informed	the	Company	of	an	inquiry	regarding	American's 2009	and	2011	contracts	with	the	United	States	Postal	Service	for	the	international	transportation	of	mail	by	air.	In	October	2015,	the	Company	received	a	CID	from DOJ	seeking	certain	information	relating	to	these	contracts.	The	DOJ	has	indicated	it	is	investigating	potential	violations	of	the	False	Claims	Act.	The	Company	is cooperating	fully	with	the	DOJ	investigation.

General.	In	addition	to	the	specifically	identified	legal	proceedings,	the	Company	and	its	subsidiaries	are	also	engaged	in	other	legal	proceedings	from	time	to	time. Legal	proceedings	can	be	complex	and	take	many	months,	or	even	years,	to	reach	resolution,	with	the	final	outcome	depending	on	a	number	of	variables,	some	of	which are	not	within	the	Company's	control.	Therefore,	although	the	Company	will	vigorously	defend	itself	in	each	of	the	actions	described	above	and	such	other	legal proceedings,	their	ultimate	resolution	and	potential	financial	and	other	impacts	on	the	Company	are	uncertain	but	could	be	material.	See	Part	I,	Item	1A.	Risk	Factors	– "We	may	be	a	party	to	litigation	in	the	normal	course	of	business	or	otherwise,	which	could	affect	our	financial	position	and	liquidity"	for	unaudited	additional discussion.

# (g)	Guarantees	and	Indemnifications

The	Company	is	a	party	to	many	routine	contracts	in	which	it	provides	general	indemnities	in	the	normal	course	of	business	to	third	parties	for	various	risks.	The Company	is	not	able	to	estimate	the	potential	amount	of	any	liability	resulting	from	the	indemnities.	These	indemnities	are	discussed	in	the	following	paragraphs.

In	its	aircraft	financing	agreements,	the	Company	generally	indemnifies	the	financing	parties,	trustees	acting	on	their	behalf	and	other	relevant	parties	against liabilities	(including	certain	taxes)	resulting	from	the	financing,	manufacture,	design,	ownership,	operation	and	maintenance	of	the	aircraft	regardless	of	whether	these liabilities	(or	taxes)	relate	to	the	negligence	of	the	indemnified	parties.

The	Company's	loan	agreements	and	other	LIBOR-based	financing	transactions	(including	certain	leveraged	aircraft	leases)	generally	obligate	the	Company	to reimburse	the	applicable	lender	for	incremental	costs	due	to	a	change	in	law	that	imposes	(i)	any	reserve	or	special	deposit	requirement	against	assets	of,	deposits	with	or credit	extended	by	such	lender	related	to	the	loan,	(ii)	any	tax,	duty	or	other	charge	with	respect	to	the	loan	(except	standard	income	tax)	or	(iii)	capital	adequacy requirements.	In	addition,	the	Company's	loan	agreements	and	other	financing	arrangements	typically	contain	a	withholding	tax	provision	that	requires	the	Company	to pay	additional	amounts	to	the	applicable	lender	or	other	financing	party,	generally	if	withholding	taxes	are	imposed	on	such	lender	or	other	financing	party	as	a	result	of a	change	in	the	applicable	tax	law.

These	increased	cost	and	withholding	tax	provisions	continue	for	the	entire	term	of	the	applicable	transaction,	and	there	is	no	limitation	on	the	maximum	additional amounts	the	Company	could	be	obligated	to	pay	under	such

provisions.	Any	failure	to	pay	amounts	due	under	such	provisions	generally	would	trigger	an	event	of	default	and,	in	a	secured	financing	transaction,	would	entitle	the lender	to	foreclose	on	the	collateral	to	realize	the	amount	due.

In	certain	transactions,	including	certain	aircraft	financing	leases	and	loans,	the	lessors,	lenders	and/or	other	parties	have	rights	to	terminate	the	transaction	based	on changes	in	foreign	tax	law,	illegality	or	certain	other	events	or	circumstances.	In	such	a	case,	the	Company	may	be	required	to	make	a	lump	sum	payment	to	terminate the	relevant	transaction.

The	Company	has	general	indemnity	clauses	in	many	of	its	airport	and	other	real	estate	leases	where	the	Company	as	lessee	indemnifies	the	lessor	(and	related parties)	against	liabilities	related	to	the	Company's	use	of	the	leased	property.	Generally,	these	indemnifications	cover	liabilities	resulting	from	the	negligence	of	the indemnified	 parties,	 but	 not	 liabilities	 resulting	 from	 the	 gross	 negligence	 or	 willful	 misconduct	 of	 the	 indemnified	 parties.	 In	 addition,	 the	 Company	 provides environmental	indemnities	in	many	of	these	leases	for	contamination	related	to	the	Company's	use	of	the	leased	property.

Under	certain	contracts	with	third	parties,	the	Company	indemnifies	the	third-party	against	legal	liability	arising	out	of	an	action	by	the	third-party,	or	certain	other parties.	The	terms	of	these	contracts	vary	and	the	potential	exposure	under	these	indemnities	cannot	be	determined.	The	Company	has	liability	insurance	protecting	the Company	for	some	of	the	obligations	it	has	undertaken	under	these	indemnities.

The	Company	is	involved	in	certain	claims	and	litigation	related	to	its	operations.	The	Company	is	also	subject	to	regulatory	assessments	in	the	ordinary	course	of business.	The	Company	establishes	reserves	for	litigation	and	regulatory	matters	when	those	matters	present	loss	contingencies	that	are	both	probable	and	can	be reasonably	estimated.	In	the	opinion	of	management,	liabilities,	if	any,	arising	from	these	regulatory	matters,	claims	and	litigation	will	not	have	a	material	adverse	effect on	the	Company's	consolidated	financial	position,	results	of	operations,	or	cash	flows,	after	consideration	of	available	insurance.

# (h)	Other

As	a	result	of	the	terrorist	attacks	of	September	11,	2001	(the	Terrorist	Attacks)	and	the	subsequent	liability	protections	provided	for	by	the	Air	Transportation	Safety and	System	Stabilization	Act	(the	Stabilization	Act),	the	Company	recorded	a	liability	for	the	Terrorist	Attacks	claims	equal	to	the	related	insurance	receivable	due	to American.	The	Stabilization	Act	provides	that,	notwithstanding	any	other	provision	of	law,	liability	for	all	claims,	whether	compensatory	or	punitive,	arising	from	the Terrorist	Attacks,	against	any	air	carrier	shall	not	exceed	the	liability	coverage	maintained	by	the	air	carrier.	As	of	December	31,	2015,	the	remaining	liability	and	the amount	of	the	offsetting	receivable	were	each	$974	million.

# 16.		Supplemental	Cash	Flow	Information

Supplemental	disclosure	of	cash	flow	information	and	non-cash	investing	and	financing	activities	are	as	follows	(in	millions):

|  | 2015 | Year	Ended	December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Non-cash\tinvesting\tand\tfinancing\tactivities: |  |  |  |
| Settlement\tof\tbankruptcy\tobligations | $63 | $5,495 | $864 |
| Acquisition\tof\tUS\tAirways\tGroup,\tnet | — | — | \t 4,386 |
| Capital\tlease\tobligations | 5 | 747 | — |
| Supplemental\tinformation: |  |  |  |
| Interest\tpaid,\tnet\tof\tamounts\tcapitalized | \t 873 | 814 | 713 |
| Income\ttaxes\tpaid | 20 | 7 | 12 |

# 17.		Operating	Segments	and	Related	Disclosures

The	Company	is	managed	as	a	single	business	unit	that	provides	air	transportation	for	passengers	and	cargo.	This	allows	it	to	benefit	from	an	integrated	revenue pricing	and	route	network	that	includes	American	and	AAG's	wholly-owned	and	third-party	regional	carriers	that	fly	under	capacity	purchase	agreements	operating	as American	Eagle.	The	flight	equipment	of	all	these	carriers	is	combined	to	form	one	fleet	that	is	deployed	through	a	single	route	scheduling	system.	When	making resource	allocation	decisions,	the	chief	operating	decision	maker	evaluates	flight	profitability	data,	which	considers	aircraft	type	and	route	economics,	but	gives	no weight	to	the	financial	impact	of	the	resource	allocation	decision	on	an	individual	carrier	basis.	The	objective	in	making	resource	allocation	decisions	is	to	maximize consolidated	financial	results,	not	the	individual	results	of	American	or	American	Eagle.

The	Company's	operating	revenues	by	geographic	region	as	defined	by	the	U.S.	Department	of	Transportation	(DOT)	are	summarized	below	(in	millions):

|  |  | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| DOT\tDomestic | $28,761 | $28,568 | $15,376 |
| DOT\tLatin\tAmerica | 5,539 | 6,964 | 6,288 |
| DOT\tAtlantic | 5,146 | 5,652 | 3,756 |
| DOT\tPacific | 1,544 | 1,466 | 1,323 |
| Total\tconsolidated\trevenues | $40,990 | $42,650 | $26,743 |

The	Company	attributes	operating	revenues	by	geographic	region	based	upon	the	origin	and	destination	of	each	flight	segment.	The	Company's	tangible	assets	consist primarily	of	flight	equipment,	which	are	mobile	across	geographic	markets	and,	therefore,	have	not	been	allocated.

# 18.			Share-based	Compensation

In	December	2013,	the	Board	of	Directors	of	AAG	approved	the	2013	AAG	Incentive	Award	Plan	(the	2013	Plan).	Awards	may	be	in	the	form	of	an	option, restricted	stock	award,	restricted	stock	unit	award,	performance	award,	dividend	equivalent	award,	deferred	stock	award,	deferred	stock	unit	award,	stock	payment award	or	stock	appreciation	right.	The	2013	Plan	authorizes	the	grant	of	awards	for	the	issuance	of	40	million	shares	plus	any	shares	underlying	awards	granted	under the	2013	Plan,	or	any	pre-existing	US	Airways	Group	plan,	that	are	forfeited,	terminate	or	are	cash	settled	(in	whole	or	in	part)	without	a	payment	being	made	in	the form	of	shares.	In	addition,	any	shares	that	were	available	for	issuance	under	the	US	Airways	Group	2011	Incentive	Award	Plan	(the

2011	Plan)	as	of	the	effective	date	of	the	Merger	may	be	used	for	awards	under	the	2013	Plan;	provided,	that	awards	using	such	available	shares	under	the	2011	Plan shall	not	be	made	after	the	date	awards	or	grants	could	have	been	made	under	the	2011	Plan	and	shall	only	be	made	to	individuals	who	were	not	providing	services	to AAG	prior	to	the	Merger.	Awards	granted	under	the	2013	Plan	upon	the	assumption	of,	or	in	substitution	for,	outstanding	awards	in	connection	with	a	corporate transaction,	such	as	a	merger,	will	not	reduce	the	shares	authorized	for	issuance	under	the	2013	Plan.

In	addition,	pursuant	to	the	Plan,	and	as	approved	by	the	Bankruptcy	Court,	certain	officers,	directors	and	employees	received	share-based	incentive	awards	related	to the	Merger	and	future	service.	Awards	issued	in	conjunction	with	the	Plan	are	discussed	in	more	detail	below.

All	outstanding	US	Airways	Group	equity	awards	were	converted	into	equity	awards	with	respect	to	AAG	Common	Stock	using	an	exchange	ratio	of	1	to	1	and	had	a fair	value	of	approximately	$141	million	at	the	Merger,	which	was	included	in	the	purchase	price.	These	awards	have	the	same	terms	and	conditions	as	were	applicable to	such	equity	awards	immediately	prior	to	the	Merger	closing	date.

The	Company's	net	income	for	the	years	ended	December	31,	2015,	2014	and	2013	included	$274	million,	$381	million	and	$92	million,	respectively,	of	share-based compensation	costs.	Of	the	2015,	2014	and	2013	amounts,	$198	million,	$224	million	and	$42	million,	respectively,	were	related	to	the	Merger	and	recorded	in	special items,	net	on	the	accompanying	consolidated	statements	of	operations.

During	2015,	the	Company	withheld	approximately	7.0	million	shares	of	AAG	common	stock	and	paid	approximately	$306	million	in	satisfaction	of	certain	tax withholding	obligations	associated	with	employee	equity	awards.

# (a)	Restricted	Stock	Unit	Awards	(RSUs)

The	Company	has	granted	RSUs	with	service	conditions	(time	vested)	and	performance	conditions.	The	grant-date	fair	value	of	RSUs	is	equal	to	the	market	price	of the	underlying	shares	of	common	stock	on	the	date	of	grant.	For	time	vested	awards,	the	expense	is	recognized	on	a	straight-line	basis	over	the	vesting	period	for	the entire	award.	For	awards	with	performance	conditions,	the	expense	is	recognized	based	on	the	expected	achievement	at	each	reporting	period.	Stock-settled	RSUs	are classified	as	equity	awards	as	the	vesting	results	in	the	issuance	of	shares	of	AAG	Common	Stock.	Cash-settled	restricted	stock	unit	awards	(CRSUs)	are	classified	as liability	awards	as	the	vesting	results	in	payment	of	cash	by	the	Company.	The	Company	granted	certain	RSU	awards	in	connection	with	the	Merger	as	follows:

# Alignment	Awards

On	December	9,	2013,	alignment	awards	were	granted	in	the	form	of	RSUs.	The	awards	were	provided	to	legacy	AMR	employees	in	order	to	align	interests	and create	parity	with	peers	at	US	Airways	Group,	and	one-third	of	the	awards	vested	on	the	Company's	emergence	from	bankruptcy.	The	remaining	awards	vested	equally on	the	one	and	two	year	anniversary	of	emergence.	The	awards	of	employees	terminated	in	connection	with	the	Merger	became	fully	vested	on	the	date	of	termination. Compensation	expenses	for	these	awards	were	recorded	in	special	items,	net	on	the	consolidated	statements	of	operations.

# Merger	Equity	Grant

The	Merger	Equity	Grant	was	granted	on	the	Effective	Date	to	certain	officers	and	directors	and	employees	in	the	form	of	RSUs	and	settled	in	equity	for	domestic employees	and	in	cash	for	international	employees.	Subject	to	the	executive's	continued	employment,	each	RSU	vested	on	December	16,	2015	with	respect	to	(i)	50%	of the

RSUs	which	were	time	vested;	(ii)	25%	of	the	RSUs	as	the	Company	was	issued	a	Single	Operating	Certificate	in	April	2015;	and	(iii)	25%	of	the	RSUs	as	the compensation	committee	of	the	Board	of	Directors	determined	that	the	Company	had	achieved	at	least	$1.0	billion	in	net	synergies	with	respect	to	fiscal	year	2015. Compensation	expenses	for	these	awards	were	recorded	in	special	items,	net	on	the	consolidated	statements	of	operations.

Stock-settled	RSU	award	activity	for	all	plans	for	the	years	ended	December	31,	2015,	2014	and	2013	is	as	follows	(shares	in	thousands):

| Outstanding	at	January	1,	2013 | — | $— |
| :--- | :--- | :--- |
| Granted | 22,101 | 24.60 |
| Assumed\tUS\tAirways\tGroup\tawards | 3,164 | 22.55 |
| Vested\tand\treleased | (1,386) | 24.58 |
| Forfeited | — | — |
| Outstanding\tat\tDecember\t31,\t2013 | 23,879 | $24.33 |
| Granted | 3,467 | 37.07 |
| Vested\tand\treleased | (4,193) | 23.84 |
| Forfeited | (1,811) | 25.10 |
| Outstanding\tat\tDecember\t31,\t2014 | 21,342 | $26.43 |
| Granted | 2,213 | 46.62 |
| Vested\tand\treleased | (17,163) | 25.20 |
| Forfeited | (785) | 27.12 |
| Outstanding\tat\tDecember\t31,\t2015 | 5,607 | $38.08 |

As	of	December	31,	2015,	there	was	$117	million	of	unrecognized	compensation	cost	related	to	stock-settled	RSUs.	These	costs	are	expected	to	be	recognized	over	a weighted	average	period	of	one	year.	The	total	fair	value	of	stock-settled	RSUs	vested	during	the	years	ended	December	31,	2015,	2014	and	2013	was	$750	million, $154	million	and	$31	million,	respectively.

As	of	December	31,	2015,	the	Company	had	a	nominal	amount	of	CRSUs	outstanding.	The	total	cash	paid	for	CRSUs	vested	during	the	years	ended	December	31, 2015,	2014	and	2013	was	$10	million,	$12	million	and	less	than	$1	million,	respectively.

# (b)	Stock	Options	and	Stock	Appreciation	Rights

No	stock	options	or	stock	appreciation	rights	have	been	granted	subsequent	to	the	Merger	closing	date.	The	Company	assumed	US	Airways	Group's	outstanding stock	options	and	stock	appreciation	rights	in	connection	with	the	Merger.	These	stock	options	and	stock	appreciation	rights	were	granted	with	an	exercise	price	equal	to the	underlying	common	stock's	fair	value	at	 the	date	of	each	grant,	have	service	conditions,	become	exercisable	over	a	 three-year	vesting	period	and	expire	 if unexercised	at	the	end	of	their	term,	which	ranges	from	seven	to	ten	years.	Stock	options	and	stock-settled	stock	appreciation	rights	(SARs)	are	classified	as	equity awards	as	the	exercise	results	in	the	issuance	of	shares	of	AAG	Common	Stock.	Cash-settled	stock	appreciation	rights	(CSARs)	are	classified	as	liability	awards	as	the exercise	results	in	payment	of	cash	by	the	Company.	Stock	appreciation	rights	are	expensed	on	a	straight-line	basis	over	the	vesting	period	for	the	entire	award.	There	are no	unrecognized	compensation	costs	for	stock	options.

Stock	option	and	SAR	award	activity	for	all	plans	for	the	years	ended	December	31,	2015,	2014	and	2013	is	as	follows	(stock	options	and	SARs	in	thousands):

|  |  | Average | Weighted	Average |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Stock\tOptions | Exercise | Remaining | Aggregate |
|  | and\tSARS | Price | Contractual\tTerm | Intrinsic\tValue |
|  | (In\tthousands) |  | (In\tyears) | (In\tmillions) |
| Assumed\tUS\tAirways\tGroup\tawards\tat\tDecember\t9,\t2013 | 11,200 | $12.84 |  |  |
| Granted | — | — |  |  |
| Exercised | (42) | 14.42 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2013 | 11,158 | $12.84 |  |  |
| Granted | — | — |  |  |
| Exercised | (4,109) | 10.74 |  |  |
| Forfeited | — | — |  |  |
| Expired | (42) | 41.73 |  |  |
| Balance\tat\tDecember\t31,\t2014 | 7,007 | $13.90 |  |  |
| Granted | — | — |  |  |
| Exercised | (2,985) | 12.09 |  |  |
| Forfeited | — | — |  |  |
| Expired | (9) | 45.75 |  |  |
| Balance\tat\tDecember\t31,\t2015 | 4,013 | $15.17 | 1.9 | $111 |
| Vested\tor\texpected\tto\tvest\tat\tDecember\t31,\t2015 | 4,013 | $15.17 | 1.9 | $111 |
| Exercisable\tat\tDecember\t31,\t2015 | 3,996 | $15.17 | 1.9 | $110 |

CSAR	award	activity	for	all	plans	for	the	years	ended	December	31,	2015,	2014	and	2013	is	as	follows	(CSARs	in	thousands):

|  | CSARs | Average<br>Exercise<br>Price | Weighted	Average<br>Remaining<br>Contractual	Term | Aggregate<br>Intrinsic<br>Value |
| :--- | :--- | :--- | :--- | :--- |
|  | (In\tthousands) |  | (In\tyears) | (In\tmillions) |
| Assumed\tUS\tAirways\tGroup\tawards\tat\tDecember\t9,\t2013 | 2,888 | $6.25 |  |  |
| Granted | — | — |  |  |
| Exercised | (23) | 5.10 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2013 | 2,865 | $6.26 |  |  |
| Granted | — | — |  |  |
| Exercised | (1,254) | 6.18 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2014 | 1,611 | $6.33 |  |  |
| Granted | — | — |  |  |
| Exercised | (760) | 6.31 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2015 | 851 | $6.35 | 1.4 | $31 |
| Vested\tor\texpected\tto\tvest\tat\tDecember\t31,\t2015 | 851 | $6.35 | 1.4 | $31 |
| Exercisable\tat\tDecember\t31,\t2015 | 851 | $6.35 | 1.4 | $31 |

As	of	December	31,	2015,	there	were	less	than	a	million	of	total	unrecognized	compensation	costs	related	to	SARs	which	are	expected	to	be	recognized	in	2016.	The total	intrinsic	value	of	stock	options	and	SARs	exercised	during	the	years	ended	December	31,	2015,	2014	and	the	23	day	period	ended	December	31,	2013	was	$102 million,	$105	million	and	less	than	$1	million,	respectively.

As	of	December	31,	2015,	the	weighted	average	fair	value	of	outstanding	CSARs	was	$35.76	per	share	and	the	related	liability	was	$31	million.	These	CSARs	are fully	vested	and	will	continue	to	be	remeasured	at	fair	value	at	each	reporting	date	until	all	awards	are	settled.	Total	cash	paid	for	CSARs	exercised	during	the	years ended	December	31,	2015,	2014	and	the	23	day	period	ended	December	31,	2013	was	$31	million,	$42	million	and	less	than	$1	million,	respectively.

# 19.		Valuation	and	Qualifying	Accounts	(in	millions)

|  | Balance		at<br>Beginning<br>of	Year | Changes	Charged		to<br>Statement	of<br>Operations<br>Accounts | Payments | Write-offs<br>(Net	of<br>Recoveries) | Sales,<br>Retirements<br>and<br>Transfers | Balance		at<br>End<br>of	Year |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance\tfor\tobsolescence\tof\tinventories |  |  |  |  |  |  |
| Year\tended\tDecember\t31,\t2015 | $673 | $50 | $— | $(4) | $9 | $728 |
| Year\tended\tDecember\t31,\t2014 | 547 | 142 | — | (4) | (12) | 673 |
| Year\tended\tDecember\t31,\t2013 | 546 | 24 | — | (23) | — | 547 |
| Allowance\tfor\tuncollectible\taccounts |  |  |  |  |  |  |
| Year\tended\tDecember\t31,\t2015 | $17 | $46 | $— | $(22) | $— | $41 |
| Year\tended\tDecember\t31,\t2014 | 41 | 6 | — | (30) | — | 17 |
| Year\tended\tDecember\t31,\t2013 | 44 | 3 | — | (6) | — | 41 |
| Reserves\tfor\tenvironmental\tremediation\tcosts |  |  |  |  |  |  |
| Year\tended\tDecember\t31,\t2015 | $10 | $— | $(1) | $—\t\t\t $— | $—\t\t\t $— | $9 |
| Year\tended\tDecember\t31,\t2014 | 11 | — | (1) | — | — | 10 |
| Year\tended\tDecember\t31,\t2013 | 13 | 2 | (1) | (3) | — | 11 |

# 20.		Quarterly	Financial	Data	(Unaudited)

Unaudited	summarized	financial	data	by	quarter	for	2015	and	2014	(in	millions,	except	share	and	per	share	amounts):

|  | First	Quarter | Second	Quarter | Third	Quarter | Fourth	Quarter |
| :--- | :--- | :--- | :--- | :--- |
| 2015 |  |  |  |  |
| Operating\trevenues | $9,827 | $10,827 | $10,706 | $9,630 |
| Operating\texpenses | 8,611 | 8,906 | 8,707 | 8,562 |
| Operating\tincome | 1,216 | 1,921 | 1,999 | 1,068 |
| Net\tincome | 932 | 1,704 | 1,693 | 3,281 |
| Earnings\tper\tshare: |  |  |  |  |
| Basic | $1.34 | $2.47 | $2.56 | $5.24 |
| Diluted | $1.30 | $2.41 | $2.49 | $5.09 |
| Shares\tused\tfor\tcomputation\t(in\tthousands): |  |  |  |  |
| Basic | 696,415 | 688,727 | 661,869 | 626,559 |
| Diluted | 716,930 | 707,611 | 680,739 | 644,140 |
| 2014 |  |  |  |  |
| Operating\trevenues | $9,995 | $11,355 | $11,139 | $10,160 |
| Operating\texpenses | 9,265 | 9,956 | 9,879 | 9,300 |
| Operating\tincome | 730 | 1,399 | 1,260 | 860 |
| Net\tincome | 480 | 864 | 942 | 597 |
| Earnings\tper\tshare: |  |  |  |  |
| Basic | $0.66 | $1.20 | $1.31 | $0.84 |
| Diluted | $0.65 | $1.17 | $1.28 | $0.82 |
| Shares\tused\tfor\tcomputation\t(in\tthousands): |  |  |  |  |
| Basic | 723,971 | 720,600 | 719,067 | 706,185 |
| Diluted | 741,335 | 734,767 | 735,196 | 724,767 |

The	Company's	fourth	quarter	2015	results	include	$2.0	billion	of	total	net	special	credits	consisting	principally	of	a	$3.0	billion	non-cash	tax	benefit	recorded	in connection	with	the	reversal	of	the	Company's	tax	valuation	allowance,	offset	in	part	by	a	nonoperating	net	special	charge	of	$592	million	to	write	off	all	of	the	value	of Venezuelan	bolivars	held	by	the	Company	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela	and	$450	million	in	total operating	special	charges	primarily	consisting	of	merger	integration	expenses.

The	Company's	fourth	quarter	2014	results	include	$507	million	of	total	net	special	charges	consisting	principally	of	$280	million	of	merger	integration	expenses,	a net	$116	million	charge	for	bankruptcy	related	items	principally	consisting	of	fair	value	adjustments	for	bankruptcy	settlement	obligations	and	a	$70	million	charge related	primarily	to	certain	spare	parts	asset	impairments.

# 21.		Financial	Information	for	Subsidiary	Guarantors	and	Non-guarantor	Subsidiaries

There	are	various	cross-guarantees	among	the	Company	and	American	with	respect	to	publicly	held	debt	securities.	In	accordance	with	Rule	3-10	of	Regulation	S-X, the	Company	is	providing	the	following	consolidating	financial	information	as	of	and	for	the	years	ended	December	31,	2015	and	2014	for	American	Airlines	Group (Parent),	American	and	all	other	non-guarantor	subsidiaries,	together	with	the	consolidating	adjustments	necessary	to	present	the	Company's	results	on	a	consolidated basis.

# CONSOLIDATING	STATEMENT	OF	OPERATIONS

|  | Airlines	Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations<br>and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues: |  |  |  |  |  |
| Mainline\tpassenger | $— | $29,037 | $— | $— | $29,037 |
| Regional\tpassenger | — | 6,475 | — | — | 6,475 |
| Cargo | — | 760 | — | — | 760 |
| Other | — | 4,812 | 2,742 | (2,836) | 4,718 |
| Total\toperating\trevenues | — | \t 41,084 | 2,742 | (2,836) | 40,990 |
| Operating\texpenses: |  |  |  |  |  |
| Aircraft\tfuel\tand\trelated\ttaxes | — | 6,226 | — | — | 6,226 |
| Salaries,\twages\tand\tbenefits | — | 9,514 | 783 | (773) | 9,524 |
| Regional\texpenses | — | 6,098 | — | (115) | 5,983 |
| Maintenance,\tmaterials\tand\trepairs | — | 1,889 | 304 | (304) | 1,889 |
| Other\trent\tand\tlanding\tfees | — | 1,731 | 44 | (44) | 1,731 |
| Aircraft\trent | — | 1,250 | 151 | (151) | 1,250 |
| Selling\texpenses | — | 1,394 | — | — | 1,394 |
| Depreciation\tand\tamortization | — | 1,364 | 44 | (44) | 1,364 |
| Special\titems,\tnet | — | 1,051 | 7 | (7) | 1,051 |
| Other | 4 | 4,378 | 1,390 | (1,398) | 4,374 |
| Total\toperating\texpenses | 4 | \t 34,895 | 2,723 | (2,836) | 34,786 |
| Operating\tincome\t(loss) | (4) | 6,189 | 19 | — | 6,204 |
| Nonoperating\tincome\t(expense): |  |  |  |  |  |
| Interest\tincome | 6 | 49 | 9 | (25) | 39 |
| Interest\texpense,\tnet | (99) | (796) | (10) | 25 | (880) |
| Equity\tin\tearnings\tof\tsubsidiaries | 7,624 | — | — | (7,624) | — |
| Other,\tnet | 22 | (774) | 1 | 4 | (747) |
| Total\tnonoperating\tincome\t(expense),\tnet | 7,553 | (1,521) | — | (7,620) | (1,588) |
| Income\tbefore\tincome\ttaxes | 7,549 | 4,668 | 19 | (7,620) | 4,616 |
| Income\ttax\tbenefit | (61) | (3,452) | (23) | 542 | (2,994) |
| Net\tincome | $7,610 | $8,120 | $42 | $(8,162) | $7,610 |

# CONSOLIDATING	STATEMENT	OF	COMPREHENSIVE	INCOME

|  | Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations<br>and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tincome | $7,610 | $8,120 | $42 | $(8,162) | $7,610 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |  |  |
| Defined\tbenefit\tpension\tplans\tand\tretiree\tmedical: |  |  |  |  |  |
| Amortization\tof\tactuarial\tloss\tand\tprior\tservice\tcost | — | (109) | — | 1 | (108) |
| Current\tyear\tchange | — | (51) | 1 | (1) | (51) |
| Derivative\tfinancial\tinstruments: |  |  |  |  |  |
| Reclassification\tinto\tearnings | — | (9) | — | — | (9) |
| Unrealized\tloss\ton\tinvestments: |  |  |  |  |  |
| Net\tchange\tin\tvalue | — | (6) | — | 1 | (5) |
| Total\tother\tcomprehensive\tincome\t(loss) | — | (175) | 1 | 1 | (173) |
| Total\tcomprehensive\tincome | $7,610 | $7,945 | $43 | $(8,161) | $7,437 |

|  | Airlines	Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations<br>and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\trevenues: |  |  |  |  |  |
| Mainline\tpassenger | $— | $30,802 | $— | $— | $30,802 |
| Regional\tpassenger | — | 6,322 | — | — | 6,322 |
| Cargo | — | 875 | — | — | 875 |
| Other | — | 4,764 | 3,278 | (3,391) | 4,651 |
| Total\toperating\trevenues | — | \t 42,763 | 3,278 | (3,391) | 42,650 |
| Operating\texpenses: |  |  |  |  |  |
| Aircraft\tfuel\tand\trelated\ttaxes | — | \t 10,592 | — | — | 10,592 |
| Salaries,\twages\tand\tbenefits | — | 8,499 | 782 | (773) | 8,508 |
| Regional\texpenses | — | 6,564 | — | (48) | 6,516 |
| Maintenance,\tmaterials\tand\trepairs | — | 2,051 | 352 | (352) | 2,051 |
| Other\trent\tand\tlanding\tfees | — | 1,727 | 32 | (32) | 1,727 |
| Aircraft\trent | — | 1,250 | 94 | (94) | 1,250 |
| Selling\texpenses | — | 1,544 | — | — | 1,544 |
| Depreciation\tand\tamortization | — | 1,301 | 40 | (46) | 1,295 |
| Special\titems,\tnet | 18 | 783 | 18 | (19) | 800 |
| Other | 6 | 4,186 | 1,951 | (2,025) | 4,118 |
| Total\toperating\texpenses | 24 | \t 38,497 | 3,269 | (3,389) | 38,401 |
| Operating\tincome\t(loss) | (24) | 4,266 | 9 | (2) | 4,249 |
| Nonoperating\tincome\t(expense): |  |  |  |  |  |
| Interest\tincome | 9 | 32 | 2 | (12) | 31 |
| Interest\texpense,\tnet | (51) | (847) | (1) | 12 | (887) |
| Equity\tin\tearnings\tof\tsubsidiaries | 3,008 | — | — | (3,008) | — |
| Other,\tnet | (53) | (183) | 2 | 53 | (181) |
| Total\tnonoperating\tincome\t(expense),\tnet | 2,913 | (998) | 3 | (2,955) | (1,037) |
| Income\tbefore\tincome\ttaxes | 2,889 | 3,268 | 12 | (2,957) | 3,212 |
| Income\ttax\tprovision | 7 | 320 | 16 | (13) | 330 |
| Net\tincome\t(loss) | $2,882 | $2,948 | $(4) | $(2,944) | $2,882 |

# CONSOLIDATING	STATEMENT	OF	COMPREHENSIVE	INCOME	(LOSS)

|  | Airlines<br>Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations<br>and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tincome\t(loss) | $2,882 | $2,948 | $(4) | $(2,944) | $2,882 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |  |  |
| Defined\tbenefit\tpension\tplans\tand\tretiree\tmedical: |  |  |  |  |  |
| Amortization\tof\tactuarial\tloss\tand\tprior\tservice\tcost | — | (163) | — | — | (163) |
| Current\tyear\tchange | — | (2,621) | (12) | — | (2,633) |
| Derivative\tfinancial\tinstruments: |  |  |  |  |  |
| Change\tin\tfair\tvalue | (2) | (52) | — | — | (54) |
| Reclassification\tinto\tearnings | — | (4) | — | — | (4) |
| Unrealized\tgain\t(loss)\ton\tinvestments: |  |  |  |  |  |
| Net\tchange\tin\tvalue | 1 | (4) | — | — | (3) |
| Reversal\tof\tnon-cash\ttax\tprovision | 2 | 328 | — | — | 330 |
| Total\tother\tcomprehensive\tincome\t(loss) | 1 | (2,516) | (12) | — | (2,527) |
| Total\tcomprehensive\tincome\t(loss) | $2,883 | $432 | $(16) | $(2,944) | $355 |

# CONDENSED	CONSOLIDATING	BALANCE	SHEET

|  | Airlines	Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations	and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |  |  |
| Current\tassets |  |  |  |  |  |
| Cash | $19 | $364 | $7 | $— | $390 |
| Short-term\tinvestments | — | 5,862 | 2 | — | 5,864 |
| Restricted\tcash\tand\tshort-term\tinvestments | — | 695 | — | — | 695 |
| Accounts\treceivable,\tnet | 1 | 1,420 | 18 | (14) | 1,425 |
| Receivables\tfrom\trelated\tparties,\tnet | — | 1,981 | 66 | (2,047) | — |
| Aircraft\tfuel,\tspare\tparts\tand\tsupplies,\tnet | — | 796 | 67 | — | 863 |
| Prepaid\texpenses\tand\tother | — | 740 | 8 | — | 748 |
| Total\tcurrent\tassets | 20 | \t 11,858 | 168 | (2,061) | 9,985 |
| Operating\tproperty\tand\tequipment | — | \t 27,236 | 274 | — | 27,510 |
| Other\tassets |  |  |  |  |  |
| Investments\tin\tsubsidiaries | 9,433 | — | — | (9,433) | — |
| Goodwill | — | 4,091 | — | — | 4,091 |
| Intangibles,\tnet\tof\taccumulated\tamortization | — | 2,249 | — | — | 2,249 |
| Deferred\ttax\tasset | 40 | 2,932 | 62 | (557) | 2,477 |
| Other\tassets | 13 | 2,073 | 36 | (19) | 2,103 |
| Total\tother\tassets | 9,486 | \t 11,345 | 98 | (10,009) | 10,920 |
| Total\tassets | $9,506 | $50,439 | $540 | $(12,070) | $48,415 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |
| Current\tliabilities |  |  |  |  |  |
| Current\tmaturities\tof\tlong-term\tdebt\tand\tcapital\tleases | $— | $2,234 | $— | $(3) | $2,231 |
| Accounts\tpayable | — | 1,517 | 62 | (16) | 1,563 |
| Payables\tto\trelated\tparties,\tnet | 2,031 | — | — | (2,031) | — |
| Air\ttraffic\tliability | — | 3,747 | — | — | 3,747 |
| Loyalty\tprogram\tliability | — | 2,525 | — | — | 2,525 |
| Other\taccrued\tliabilities | 69 | 3,354 | 115 | 1 | 3,539 |
| Total\tcurrent\tliabilities | 2,100 | \t 13,377 | 177 | (2,049) | 13,605 |
| Noncurrent\tliabilities |  |  |  |  |  |
| Long-term\tdebt\tand\tcapital\tleases,\tnet\tof\tcurrent\tmaturities | 1,771 | \t 16,592 | — | (33) | 18,330 |
| Pension\tand\tpostretirement\tbenefits | — | 7,410 | 40 | — | 7,450 |
| Bankruptcy\tsettlement\tobligations | — | 193 | — | — | 193 |
| Other\tliabilities | — | 3,169 | 53 | (20) | 3,202 |
| Total\tnoncurrent\tliabilities | 1,771 | \t 27,364 | 93 | (53) | 29,175 |
| Stockholders'\tequity |  |  |  |  |  |
| Common\tstock | 6 | — | — | — | 6 |
| Additional\tpaid-in\tcapital | 11,591 | \t 16,521 | 198 | (16,719) | 11,591 |
| Accumulated\tother\tcomprehensive\tloss | (4,732) | (4,831) | (11) | 4,842 | (4,732) |
| Retained\tearnings\t(deficit) | (1,230) | (1,992) | 83 | 1,909 | (1,230) |
| Total\tstockholders'\tequity | 5,635 | 9,698 | 270 | (9,968) | 5,635 |
| Total\tliabilities\tand\tstockholders'\tequity | $9,506 | $50,439 | $540 | $(12,070) | $48,415 |

|  | Airlines	Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations	and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| ASSETS |  |  |  |  |  |
| Current\tassets |  |  |  |  |  |
| Cash | $3 | $984 | $7 | $— | $994 |
| Short-term\tinvestments | — | 6,306 | 3 | — | 6,309 |
| Restricted\tcash\tand\tshort-term\tinvestments | — | 774 | — | — | 774 |
| Accounts\treceivable,\tnet | — | 1,769 | 15 | (13) | 1,771 |
| Receivables\tfrom\trelated\tparties,\tnet | 2,050 | — | 526 | (2,576) | — |
| Aircraft\tfuel,\tspare\tparts\tand\tsupplies,\tnet | — | 919 | 85 | — | 1,004 |
| Prepaid\texpenses\tand\tother | 154 | 885 | 15 | (156) | 898 |
| Total\tcurrent\tassets | 2,207 | 11,637 | 651 | (2,745) | 11,750 |
| Operating\tproperty\tand\tequipment | — | 22,805 | 279 | — | 23,084 |
| Other\tassets |  |  |  |  |  |
| Investments\tin\tsubsidiaries | 1,849 | — | — | (1,849) | — |
| Goodwill | — | 4,091 | — | — | 4,091 |
| Intangibles,\tnet\tof\taccumulated\tamortization | — | 2,240 | — | — | 2,240 |
| Other\tassets | 53 | 2,014 | 38 | (45) | 2,060 |
| Total\tother\tassets | 1,902 | 8,345 | 38 | (1,894) | 8,391 |
| Total\tassets | $4,109 | $42,787 | $968 | $(4,639) | $43,225 |
| LIABILITIES\tAND\tSTOCKHOLDERS'\tEQUITY |  |  |  |  |  |
| Current\tliabilities |  |  |  |  |  |
| Current\tmaturities\tof\tlong-term\tdebt\tand\tcapital\tleases | $— | $1,678 | $— | $(1) | $1,677 |
| Accounts\tpayable | — | 1,316 | 61 | — | 1,377 |
| Payables\tto\trelated\tparties,\tnet | 634 | 1,703 | 239 | (2,576) | — |
| Air\ttraffic\tliability | — | 4,252 | — | — | 4,252 |
| Loyalty\tprogram\tliability | — | 2,807 | — | — | 2,807 |
| Other\taccrued\tliabilities | 17 | 3,139 | 138 | (3) | 3,291 |
| Total\tcurrent\tliabilities | 651 | 14,895 | 438 | (2,580) | 13,404 |
| Noncurrent\tliabilities |  |  |  |  |  |
| Long-term\tdebt\tand\tcapital\tleases,\tnet\tof\tcurrent\tmaturities | 1,282 | 14,804 | 1 | (44) | 16,043 |
| Pension\tand\tpostretirement\tbenefits | — | 7,522 | 40 | — | 7,562 |
| Bankruptcy\tsettlement\tobligations | — | 325 | — | — | 325 |
| Other\tliabilities | 155 | 3,835 | 291 | (411) | 3,870 |
| Total\tnoncurrent\tliabilities | 1,437 | 26,486 | 332 | (455) | 27,800 |
| Stockholders'\tequity |  |  |  |  |  |
| Common\tstock | 7 | — | — | — | 7 |
| Additional\tpaid-in\tcapital | 15,135 | 16,174 | 199 | (16,373) | 15,135 |
| Accumulated\tother\tcomprehensive\tloss | (4,559) | (4,656) | (12) | 4,668 | (4,559) |
| Retained\tearnings\t(deficit) | (8,562) | (10,112) | 11 | 10,101 | (8,562) |
| Total\tstockholders'\tequity | 2,021 | 1,406 | 198 | (1,604) | 2,021 |
| Total\tliabilities\tand\tstockholders'\tequity | $4,109 | $42,787 | $968 | $(4,639) | $43,225 |

# CONDENSED	CONSOLIDATING	STATEMENT	OF	CASH	FLOWS

|  | Airlines	Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations<br>and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $3,595 | $2,587 | $67 | $— | $6,249 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |  |  |
| Capital\texpenditures\tand\taircraft\tpurchase\tdeposits | — | (6,075) | (76) | — | (6,151) |
| Purchases\tof\tshort-term\tinvestments | — | (8,126) | — | — | (8,126) |
| Sales\tof\tshort-term\tinvestments | — | 8,517 | — | — | 8,517 |
| Decrease\tin\trestricted\tcash\tand\tshort-term\tinvestments | — | 79 | — | — | 79 |
| Proceeds\tfrom\tsale\tof\tan\tinvestment | 52 | — | — | — | 52 |
| Proceeds\tfrom\tsale\tof\tproperty\tand\tequipment | — | 26 | 9 | — | 35 |
| Net\tcash\tprovided\tby\t(used\tin)\tinvesting\tactivities | 52 | (5,579) | (67) | — | (5,594) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |  |  |
| Payments\ton\tlong-term\tdebt\tand\tcapital\tleases | — | (2,153) | — | — | (2,153) |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | 500 | 4,509 | — | — | 5,009 |
| Deferred\tfinancing\tcosts | (7) | (80) | — | — | (87) |
| Sale-leaseback\ttransactions | — | 43 | — | — | 43 |
| Treasury\tstock\trepurchases | (3,846) | — | — | — | (3,846) |
| Dividend\tpayments | (278) | — | — | — | (278) |
| Other\tfinancing\tactivities | — | 53 | — | — | 53 |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\tactivities | (3,631) | 2,372 | — | — | (1,259) |
| Net\tincrease\t(decrease)\tin\tcash | 16 | (620) | — | — | (604) |
| Cash\tat\tbeginning\tof\tyear | 3 | 984 | 7 | — | 994 |
| Cash\tat\tend\tof\tyear | $19 | $364 | $7 | $— | $390 |

|  | Airlines	Group<br>(Parent<br>Company<br>Only) | American | Non-<br>Guarantor<br>Subsidiaries | Eliminations<br>and<br>Reclassifications | American<br>Airlines<br>Group	Inc.<br>Consolidated |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby\toperating\tactivities | $458 | $2,578 | $44 | $— | $3,080 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |  |  |
| Capital\texpenditures\tand\taircraft\tpurchase\tdeposits | — | (5,256) | (55) | — | (5,311) |
| Purchases\tof\tshort-term\tinvestments | — | (5,380) | — | — | (5,380) |
| Sales\tof\tshort-term\tinvestments | — | 7,179 | — | — | 7,179 |
| Decrease\tin\trestricted\tcash\tand\tshort-term\tinvestments | — | 261 | — | — | 261 |
| Net\tproceeds\tfrom\tslot\ttransaction | — | 307 | — | — | 307 |
| Proceeds\tfrom\tsale\tof\tproperty\tand\tequipment | — | 20 | 13 | — | 33 |
| Net\tcash\tused\tin\tinvesting\tactivities | — | (2,869) | (42) | — | (2,911) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |  |  |
| Payments\ton\tlong-term\tdebt\tand\tcapital\tleases | — | (2,955) | (1) | (176) | (3,132) |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | 750 | 2,552 | — | — | 3,302 |
| Deferred\tfinancing\tcosts | (11) | (95) | — | — | (106) |
| Sale-leaseback\ttransactions | — | 811 | — | — | 811 |
| Exercise\tof\tstock\toptions | 10 | — | — | — | 10 |
| Treasury\tstock\trepurchases | (1,062) | — | — | — | (1,062) |
| Dividend\tpayments | (144) | — | — | — | (144) |
| Funds\ttransferred\tto\taffiliates,\tnet | — | (176) |  | 176 | — |
| Other\tfinancing\tactivities | — | 6 | — | — | 6 |
| Net\tcash\tprovided\tby\t(used\tin)\tfinancing\tactivities | (457) | 143 | (1) | — | (315) |
| Net\tincrease\t(decrease)\tin\tcash | 1 | (148) | 1 | — | (146) |
| Cash\tat\tbeginning\tof\tyear | 2 | 1,132 | 6 | — | 1,140 |
| Cash\tat\tend\tof\tyear | $3 | $984 | $7 | $— | $994 |

# 22.		Subsequent	Events

# Dividend	Declaration

In	January	2016,	the	Company	announced	that	its	Board	of	Directors	had	declared	a	$0.10	per	share	dividend	for	stockholders	of	record	on	February	10,	2016,	and payable	on	February	24,	2016.	Any	future	dividends	that	may	be	declared	and	paid	from	time	to	time	under	the	Company's	capital	deployment	program	will	be	subject to	market	and	economic	conditions,	applicable	legal	requirements	and	other	relevant	factors.	The	Company's	capital	deployment	program	does	not	obligate	it	to continue	a	dividend	for	any	fixed	period,	and	payment	of	dividends	may	be	suspended	at	any	time	at	the	Company's	discretion.

In	January	2016,	American	created	three	pass-through	trusts	which	issued	approximately	$1.1	billion	aggregate	face	amount	of	Series	2016-1	Class	AA,	Class	A	and Class	B	EETCs	in	connection	with	the	financing	of	22	aircraft	owned	by	American	(the	2016-1	EETC	Aircraft).

All	of	the	proceeds	received	from	the	sale	of	the	2016-1	EETCs	have	been	used	to	purchase	equipment	notes	issued	by	American	in	three	series:	Series	AA equipment	notes	in	the	amount	of	$584	million	bearing	interest	at	3.575%	per	annum,	Series	A	equipment	notes	in	the	amount	of	$262	million	bearing	interest	at 4.10%	per	annum	and	Series	B	equipment	notes	in	the	amount	of	$228	million	bearing	interest	at	5.25%	per	annum.	Interest	and	principal	payments	on	the	equipment notes	are	payable	semi-annually	in	January	and	July	of	each	year,	beginning	in	July	2016.	The	final	payments	on	the	Series	AA	and	Series	A	equipment	notes	are	due	in January	2028	and	the	final	payment	on	the	Series	B	equipment	notes	is	due	in	January	2024.	These	equipment	notes	are	secured	by	liens	on	the	2016-1	EETC	Aircraft.

# ITEM	8B.	CONSOLIDATED	FINANCIAL	STATEMENTS	AND	SUPPLEMENTARY	DATA	OF	AMERICAN	AIRLINES,	INC.

We	have	audited	the	accompanying	consolidated	balance	sheets	of	American	Airlines,	Inc.	and	subsidiaries	(American)	as	of	December	31,	2015	and	2014,	and	the related	consolidated	statements	of	operations,	comprehensive	income	(loss),	cash	flows,	and	stockholder's	equity	(deficit)	for	the	years	then	ended.	These	consolidated financial	statements	are	the	responsibility	of	the	American's	management.	Our	responsibility	is	to	express	an	opinion	on	these	consolidated	financial	statements	based	on our	audits.

In	our	opinion,	the	consolidated	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	financial	position	of	American	Airlines,	Inc.	and subsidiaries	as	of	December	31,	2015	and	2014,	and	the	results	of	their	operations	and	their	cash	flows	for	the	years	then	ended,	in	conformity	with	U.S.	generally accepted	accounting	principles.

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	American's	internal	control	over financial	reporting	as	of	December	31,	2015,	based	on	criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	(COSO),	and	our	report	dated	February	24,	2016	expressed	an	unqualified	opinion	on	the	effectiveness	of	American's internal	control	over	financial	reporting.

We	have	audited	the	accompanying	consolidated	statements	of	operations,	comprehensive	income	(loss),	stockholders'	equity	(deficit)	and	cash	flows	of	American Airlines,	Inc.	(the	Company)	for	the	year	ended	December	31,	2013.	These	consolidated	financial	statements	are	the	responsibility	of	the	Company's	management.	Our responsibility	is	to	express	an	opinion	on	these	financial	statements	based	on	our	audit.	We	did	not	audit	the	financial	statements	of	US	Airways,	Inc.	(US	Airways),	a wholly-owned	 subsidiary	 of	 the	 Company,	 which	 statements	 reflect	 operating	 revenues	 constituting	 4%	 of	 consolidated	 operating	 revenues	 for	 the	 year	 ended December	31,	2013.	Those	financial	statements	were	audited	by	other	auditors	whose	report	has	been	furnished	to	us,	and	our	opinion,	insofar	as	it	relates	to	data included	for	such	wholly-owned	subsidiary,	is	based	solely	on	the	report	of	other	auditors.

In	our	opinion,	based	on	our	audit	and	the	report	of	other	auditors,	the	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	consolidated results	of	American	Airlines,	Inc.'s	operations	and	its	cash	flows	for	the	year	ended	December	31,	2013	 in	conformity	with	U.S.	generally	accepted	accounting principles.

As	discussed	in	Note	5	to	the	consolidated	financial	statements,	US	Airways	merged	with	and	into	American	Airlines,	Inc.	on	December	30,	2015;	therefore,	the	2013 financial	statements	are	presented	as	though	the	transaction	occurred	on	December	9,	2013,	which	represents	the	earliest	date	that	the	Company	and	US	Airways	were under	common	control.

|  | 2015 | Year	Ended	December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Operating\trevenues: |  |  |  |
| Mainline\tpassenger | $29,037 | $30,802 | $20,218 |
| Regional\tpassenger | 6,475 | 6,322 | 3,131 |
| Cargo | 760 | 875 | 685 |
| Other | 4,812 | 4,764 | 2,667 |
| Total\toperating\trevenues | 41,084 | 42,763 | 26,701 |
| Operating\texpenses: |  |  |  |
| Aircraft\tfuel\tand\trelated\ttaxes | 6,226 | 10,592 | 7,839 |
| Salaries,\twages\tand\tbenefits | 9,514 | 8,499 | 5,452 |
| Regional\texpenses | 6,098 | 6,564 | 3,293 |
| Maintenance,\tmaterials\tand\trepairs | 1,889 | 2,051 | 1,260 |
| Other\trent\tand\tlanding\tfees | 1,731 | 1,727 | 1,152 |
| Aircraft\trent | 1,250 | 1,250 | 768 |
| Selling\texpenses | 1,394 | 1,544 | 1,158 |
| Depreciation\tand\tamortization | 1,364 | 1,301 | 853 |
| Special\titems,\tnet | 1,051 | 783 | 559 |
| Other | 4,378 | 4,186 | 3,007 |
| Total\toperating\texpenses | 34,895 | 38,497 | 25,341 |
| Operating\tincome | 6,189 | 4,266 | 1,360 |
| Nonoperating\tincome\t(expense): |  |  |  |
| Interest\tincome | 49 | 32 | 20 |
| Interest\texpense,\tnet\tof\tcapitalized\tinterest | (796) | (847) | (727) |
| Other,\tnet | (774) | (183) | (84) |
| Total\tnonoperating\texpense,\tnet | (1,521) | (998) | (791) |
| Income\tbefore\treorganization\titems,\tnet | 4,668 | 3,268 | 569 |
| Reorganization\titems,\tnet | — | — | (2,640) |
| Income\t(loss)\tbefore\tincome\ttaxes | 4,668 | 3,268 | (2,071) |
| Income\ttax\tprovision\t(benefit) | (3,452) | 320 | (354) |
| Net\tincome\t(loss) | $8,120 | $2,948 | $(1,717) |

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Net\tincome\t(loss) | $8,120 | $2,948 | $(1,717) |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |
| Defined\tbenefit\tpension\tplans\tand\tretiree\tmedical: |  |  |  |
| Amortization\tof\tactuarial\tloss\tand\tprior\tservice\tcost | (109) | (163) | (142) |
| Current\tyear\tchange | (51) | (2,621) | 1,577 |
| Derivative\tfinancial\tinstruments: |  |  |  |
| Change\tin\tfair\tvalue | — | (52) | 18 |
| Reclassification\tinto\tearnings | (9) | (4) | 34 |
| Unrealized\tloss\ton\tinvestments: |  |  |  |
| Net\tchange\tin\tvalue | (6) | (4) | (1) |
| Reversal\tof\tnon-cash\ttax\tprovision\t(benefit) | — | 328 | (538) |
| Total\tother\tcomprehensive\tincome\t(loss) | (175) | (2,516) | 948 |
| Total\tcomprehensive\tincome\t(loss) | $7,945 | $432 | $(769) |

|  | December	31,<br>2015 | 2014 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| Current\tassets |  |  |
| Cash | $364 | $984 |
| Short-term\tinvestments | 5,862 | 6,306 |
| Restricted\tcash\tand\tshort-term\tinvestments | 695 | 774 |
| Accounts\treceivable,\tnet | 1,420 | 1,769 |
| Receivables\tfrom\trelated\tparties,\tnet | 1,981 | — |
| Aircraft\tfuel,\tspare\tparts\tand\tsupplies,\tnet | 796 | 919 |
| Prepaid\texpenses\tand\tother | 740 | 885 |
| Total\tcurrent\tassets | 11,858 | 11,637 |
| Operating\tproperty\tand\tequipment |  |  |
| Flight\tequipment | 32,838 | 27,852 |
| Ground\tproperty\tand\tequipment | 6,224 | 5,762 |
| Equipment\tpurchase\tdeposits | 1,067 | 1,230 |
| Total\tproperty\tand\tequipment,\tat\tcost | 40,129 | 34,844 |
| Less\taccumulated\tdepreciation\tand\tamortization | (12,893) | (12,039) |
| Total\tproperty\tand\tequipment,\tnet | 27,236 | 22,805 |
| Other\tassets |  |  |
| Goodwill | 4,091 | 4,091 |
| Intangibles,\tnet\tof\taccumulated\tamortization\tof\t$502\tand\t$447,\trespectively | 2,249 | 2,240 |
| Deferred\ttax\tasset | 2,932 | — |
| Other\tassets | 2,073 | 2,014 |
| Total\tother\tassets | 11,345 | 8,345 |
| Total\tassets | $50,439 | $42,787 |
| LIABILITIES\tAND\tSTOCKHOLDER'S\tEQUITY |  |  |
| Current\tliabilities |  |  |
| Current\tmaturities\tof\tlong-term\tdebt\tand\tcapital\tleases | $2,234 | $1,678 |
| Accounts\tpayable | 1,517 | 1,316 |
| Accrued\tsalaries\tand\twages | 1,156 | 1,126 |
| Air\ttraffic\tliability | 3,747 | 4,252 |
| Loyalty\tprogram\tliability | 2,525 | 2,807 |
| Payables\tto\trelated\tparties,\tnet | — | 1,703 |
| Other\taccrued\tliabilities | 2,198 | 2,013 |
| Total\tcurrent\tliabilities | 13,377 | 14,895 |
| Noncurrent\tliabilities |  |  |
| Long-term\tdebt\tand\tcapital\tleases,\tnet\tof\tcurrent\tmaturities | 16,592 | 14,804 |
| Pension\tand\tpostretirement\tbenefits | 7,410 | 7,522 |
| Deferred\tgains\tand\tcredits,\tnet | 667 | 829 |
| Bankruptcy\tsettlement\tobligations | 193 | 325 |
| Other\tliabilities | 2,502 | 3,006 |
| Total\tnoncurrent\tliabilities | 27,364 | 26,486 |
| Commitments\tand\tcontingencies\t(Note\t13) |  |  |
| Stockholder's\tequity |  |  |
|  | — | — |
| Additional\tpaid-in\tcapital | 16,521 | 16,174 |
| Accumulated\tother\tcomprehensive\tloss | (4,831) | (4,656) |
| Accumulated\tdeficit | (1,992) | (10,112) |
| Total\tstockholder's\tequity | 9,698 | 1,406 |
| Total\tliabilities\tand\tstockholder's\tequity | $50,439 | $42,787 |

|  | 2015 | December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Cash\tflows\tfrom\toperating\tactivities: |  |  |  |
| Net\tincome\t(loss) | $8,120 | $2,948 | $(1,717) |
| Adjustments\tto\treconcile\tnet\tincome\t(loss)\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 1,560 | 1,469 | 1,003 |
| Debt\tdiscount\tand\tlease\tamortization | (126) | (171) | — |
| Special\titems,\tnon-cash | 295 | 91 | 82 |
| Pension\tand\tpostretirement | (194) | (163) | (154) |
| Deferred\tincome\ttaxes | (3,467) | 344 | (324) |
| Share-based\tcompensation | 284 | 300 | 34 |
| Reorganization\titems,\tnon-cash | — | — | 2,098 |
| Interest\texpense,\tnon-cash | — | — | 45 |
| Other,\tnet | (21) | 7 | (77) |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Decrease\t(increase)\tin\taccounts\treceivable | 354 | (176) | (94) |
| Decrease\t(increase)\tin\tother\tcurrent\tassets | (105) | (73) | 1 |
| Decrease\tin\tderivative\tcollateral | — | — | 1 |
| Increase\tin\taccounts\tpayable\tand\taccrued\tliabilities | 214 | 74 | 83 |
| Increase\t(decrease)\tin\tair\ttraffic\tliability | (505) | (97) | 150 |
| Decrease\tin\tpayables\tto\trelated\tparties,\tnet | (3,695) | (527) | (51) |
| Increase\t(decrease)\tin\tloyalty\tprogram\tliability | (295) | (229) | 38 |
| Contributions\tto\tpension\tplans | (6) | (809) | (494) |
| Increase\t(decrease)\tin\tother\tassets\tand\tliabilities | 174 | (410) | 3 |
| Net\tcash\tprovided\tby\toperating\tactivities | 2,587 | 2,578 | 627 |
| Cash\tflows\tfrom\tinvesting\tactivities: |  |  |  |
| Capital\texpenditures\tand\taircraft\tpurchase\tdeposits | (6,075) | (5,256) | (3,099) |
| Acquisition\tof\tUS\tAirways | — | — | 200 |
| Purchases\tof\tshort-term\tinvestments | (8,126) | (5,380) | (3,342) |
| Sales\tof\tshort-term\tinvestments | 8,517 | 7,179 | 2,159 |
| Decrease\tin\trestricted\tcash\tand\tshort-term\tinvestments | 79 | 261 | 147 |
| Net\tproceeds\tfrom\tslot\ttransaction | — | 307 | — |
| Proceeds\tfrom\tsale\tof\tproperty\tand\tequipment | 26 | 20 | 115 |
| Net\tcash\tused\tin\tinvesting\tactivities | (5,579) | (2,869) | (3,820) |
| Cash\tflows\tfrom\tfinancing\tactivities: |  |  |  |
| Payments\ton\tlong-term\tdebt\tand\tcapital\tleases | (2,153) | (2,955) | (2,925) |
| Proceeds\tfrom\tissuance\tof\tlong-term\tdebt | 4,509 | 2,552 | 5,134 |
| Deferred\tfinancing\tcosts | (80) | (95) | (120) |
| Sale-leaseback\ttransactions | 43 | 811 | 1,700 |
| Funds\ttransferred\tfrom\t(to)\taffiliates,\tnet | — | (176) | 53 |
| Other\tfinancing\tactivities | 53 | 6 | 9 |
| Net\tcash\tprovided\tby\tfinancing\tactivities | 2,372 | 143 | 3,851 |
| Net\tincrease\t(decrease)\tin\tcash | (620) | (148) | 658 |
| Cash\tat\tbeginning\tof\tyear | 984 | 1,132 | 474 |
| Cash\tat\tend\tof\tyear | $364 | $984 | $1,132 |

|  | Common<br>Stock | Additional<br>Paid-in<br>Capital | Other<br>Comprehensive<br>Income	(Loss) | Accumulated<br>Deficit | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2012 | — | 4,469 | (3,088) | (11,343) | (9,962) |
| Merger\timpact: |  |  |  |  |  |
| Issuance\tof\tnew\tstock\tby\tAAG\tpursuant\tto\tMerger | — | 5,431 | — | — | 5,431 |
| Net\tloss | — | — | — | (1,717) | (1,717) |
| Changes\tin\tpension,\tretiree\tmedical\tand\tother\tliability | — | — | 1,435 | — | 1,435 |
| Net\tchanges\tin\tfair\tvalue\tof\tderivative\tfinancial\tinstruments | — | — | 52 | — | 52 |
| Reversal\tof\tnon-cash\ttax\tbenefit | — | — | (538) | — | (538) |
| Share-based\tcompensation\texpense | — | 78 | — | — | 78 |
| Intercompany\tequity\ttransfer | — | 824 | — | — | 824 |
| Change\tin\tunrealized\tloss\ton\tinvestments | — | — | (1) | — | (1) |
| Balance\tat\tDecember\t31,\t2013 | — | 10,802 | (2,140) | (13,060) | (4,398) |
| Net\tincome | — | — | — | 2,948 | 2,948 |
| Changes\tin\tpension,\tretiree\tmedical\tand\tother\tliability | — | — | (2,784) | — | (2,784) |
| Net\tchanges\tin\tfair\tvalue\tof\tderivative\tfinancial\tinstruments | — | — | (56) | — | (56) |
| Reversal\tof\tnon-cash\ttax\tprovision | — | — | 328 | — | 328 |
| Share-based\tcompensation\texpense | — | 300 | — | — | 300 |
| Intercompany\tequity\ttransfer | — | 5,072 | — | — | 5,072 |
| Change\tin\tunrealized\tloss\ton\tinvestments | — | — | (4) | — | (4) |
| Balance\tat\tDecember\t31,\t2014 | $— | $16,174 | $(4,656) | $(10,112) | $1,406 |
| Net\tincome | — | — | — | 8,120 | 8,120 |
| Changes\tin\tpension,\tretiree\tmedical\tand\tother\tliability | — | — | (160) | — | (160) |
| Net\tchanges\tin\tfair\tvalue\tof\tderivative\tfinancial\tinstruments | — | — | (9) | — | (9) |
| Share-based\tcompensation\texpense | — | 284 | — | — | 284 |
| Intercompany\tequity\ttransfer | — | 63 | — | — | 63 |
| Change\tin\tunrealized\tloss\ton\tinvestments | — | — | (6) | — | (6) |
| Balance\tat\tDecember\t31,\t2015 | $— | $16,521 | $(4,831) | $(1,992) | $9,698 |

# NOTES	TO	CONSOLIDATED	FINANCIAL	STATEMENTS	OF	AMERICAN	AIRLINES,	INC.

American	Airlines,	Inc.	(American)	is	a	Delaware	corporation	whose	primary	business	activity	is	the	operation	of	a	major	network	air	carrier.	American	is	a	wholly- owned	subsidiary	of	American	Airlines	Group	Inc.	(AAG;	formerly	AMR	Corporation),	which	owns	all	of	American's	outstanding	common	stock,	par	value	$1.00	per share.

American	has	hubs	in	Charlotte,	Chicago,	Dallas/Fort	Worth,	Los	Angeles,	Miami,	New	York	City,	Philadelphia,	Phoenix	and	Washington,	D.C.

On	December	30,	2015,	in	order	to	simplify	AAG's	internal	corporate	structure	and	as	part	of	the	integration	efforts	following	the	business	combination	of	AAG	and US	Airways	Group,	Inc.	(US	Airways	Group),	AAG	caused	US	Airways	Group	to	be	merged	with	and	into	AAG,	with	AAG	as	the	surviving	corporation,	and, immediately	thereafter,	US	Airways,	Inc.	(US	Airways),	a	Delaware	corporation	and	wholly-owned	subsidiary	of	US	Airways	Group,	merged	with	and	into	American, with	American	as	the	surviving	corporation.	As	a	result	of	the	merger	of	US	Airways	and	American,	US	Airways	transferred	all	of	its	assets,	liabilities	and	off-balance sheet	commitments	to	American.	For	financial	reporting	purposes,	this	transaction	constituted	a	transfer	of	assets	between	entities	under	common	control	and	was accounted	for	at	historical	cost.	As	part	of	the	transfer	of	assets	and	liabilities	to	American,	all	of	US	Airways'	obligations	with	respect	to	certain	pass	through	trusts	and the	leases	of	related	aircraft	and	engines	were	transferred	to	American.	See	Note	5(a)	for	further	information.

As	of	December	31,	2015,	American	employed	approximately	98,900	active	full-time	equivalent	employees,	of	which	approximately	85%	are	covered	by	collective bargaining	agreements	with	various	labor	unions.

On	December	9,	2013	(the	Effective	Date),	the	Debtors	consummated	their	reorganization	pursuant	to	the	Plan,	principally	through	the	transactions	contemplated	by an	Agreement	and	Plan	of	Merger	(as	amended,	the	Merger	Agreement),	dated	as	of	February	13,	2013,	by	and	among	AMR,	AMR	Merger	Sub,	Inc.	(Merger	Sub)	and US	Airways	Group,	pursuant	to	which	Merger	Sub	merged	with	and	into	US	Airways	Group	(the	Merger),	with	US	Airways	Group	surviving	as	a	wholly-owned subsidiary	of	AAG	following	the	Merger.	Pursuant	to	the	Merger	Agreement,	each	share	of	common	stock,	par	value	$0.01	per	share,	of	US	Airways	Group	was converted	into	the	right	to	receive	one	share	of	AAG	common	stock,	par	value	$0.01	per	share	(AAG	Common	Stock).

•all	creditors	holding	Single-Dip	Unsecured	Claims	were	treated	the	same	regardless	of	whether	the	claim	was	asserted	against	the	AAG	Debtors,	the American	Debtors,	or	other	Debtors.	As	used	herein,	"Single-Dip	Unsecured	Claims"	means	the	general	unsecured	claims	against	the	Debtors	that	were not	guaranteed	by	any	other	Debtor,	other	than	the	claims	of	the	Debtors'	labor	unions	representing	mainline	workers.	Holders	of	Single-Dip	Unsecured Claims	received	a	portion	of	their	recovery	in	shares	of	AAG	Series	A	Preferred	Stock	at	the	Effective	Date	and	their	remaining	recovery	in	shares	of AAG	Common	Stock	during	the	120-day	period	after	the	Effective	Date;

•holders	of	certain	labor-related	deemed	claims	and	certain	non-management,	non-union	employees	as	specified	in	the	Plan	received,	at	the	Effective	Date, the	right	to	receive	an	allocation	of	shares	of	AAG	Common	Stock	representing	23.6%	of	the	total	number	of	shares	of	AAG	Common	Stock	ultimately distributed	to	holders	of	pre-petition	general	unsecured	creditors	against	the	Debtors.	On

the	Effective	Date,	pursuant	to	the	Plan,	an	initial	allocation	of	approximately	39	million	shares	of	AAG	Common	Stock	was	made	related	to	these	labor and	employee	groups,	of	which	approximately	27	million	shares	were	distributed	on	the	Effective	Date	and	approximately	13	million	shares	of	which were	withheld	in	connection	with	American	making	a	cash	payment	of	approximately	$300	million	for	certain	required	withholding	taxes;

The	Plan	contemplated	the	distribution	of	up	to	756	million	shares	of	AAG	Common	Stock,	however	this	amount	was	reduced	by	approximately	20	million	shares because	certain	tax	withholdings	for	employees	were	paid	in	cash	as	permitted	under	the	Plan.	In	accordance	with	the	Plan,	AAG	issued	the	remaining	shares	of	AAG Common	Stock	over	the	120-day	distribution	period,	except	for	shares	held	in	the	Disputed	Claims	Reserve.	In	addition,	pursuant	to	the	Plan,	approximately	197	million shares	of	AAG	Common	Stock	were	distributed	to	holders	of	outstanding	shares	of	US	Airways	Group	common	stock.

Pursuant	to	rulings	of	the	Bankruptcy	Court,	the	Plan	established	the	Disputed	Claims	Reserve	that	was	initially	issued	30.4	million	shares	of	AAG	Common	Stock reserved	for	issuance	to	disputed	claimholders	at	the	Effective	Date	that	ultimately	become	holders	of	allowed	Single-Dip	Unsecured	Claims	(Single-Dip	Equity Obligations)	as	well	as	to	certain	AMR	labor	groups	and	employees	who	received	a	deemed	claim	amount	based	upon	a	fixed	percentage	of	the	distributions	to	be	made to	general	unsecured	claimholders.	As	of	December	31,	2014,	the	Disputed	Claims	Reserve	held	26.8	million	shares	of	AAG	Common	Stock	pending	distribution	of those	shares	in	accordance	with	the	Plan.	On	February	10,	2015,	approximately	0.8	million	shares	of	AAG	Common	Stock	held	in	the	Disputed	Claims	Reserve	were distributed	to	holders	of	allowed	Single-Dip	Unsecured	Claims,	to	holders	of	certain	labor-related	deemed	claims,	and	to	holders	of	certain	non-management,	non-union employee	deemed	claims	as	specified	in	the	Plan,	and	American	repurchased	less	than	0.1	million	shares	of	AAG	Common	Stock	for	an	aggregate	of	$4	million	from the	Disputed	Claims	Reserve	at	the	then-prevailing	market	price	in	order	to	fund	cash	tax	obligations	resulting	from	this	distribution.	On	July	14,	2015,	approximately 0.6	million	shares	of	AAG	Common	Stock	held	in	the	Disputed	Claims	Reserve	were	distributed

to	holders	of	allowed	Single-Dip	Unsecured	Claims,	to	holders	of	certain	labor-related	deemed	claims,	and	to	holders	of	certain	non-management,	non-union	employee deemed	claims	as	specified	in	the	Plan,	and	American	repurchased	less	than	0.1	million	shares	of	AAG	Common	Stock	for	an	aggregate	of	$2	million	from	the	Disputed Claims	Reserve	at	 the	 then-prevailing	market	price	 in	order	 to	fund	cash	 tax	obligations	resulting	from	 this	distribution.	As	of	December	31,	2015,	 there	were approximately	25.3	million	shares	of	AAG	Common	Stock	remaining	in	the	Disputed	Claims	Reserve.	As	disputed	claims	are	resolved,	the	claimants	will	receive distributions	of	shares	from	the	Disputed	Claims	Reserve	on	the	same	basis	as	if	such	distributions	had	been	made	on	or	about	the	Effective	Date.	To	the	extent	that	any of	the	reserved	shares	remain	undistributed	upon	resolution	of	all	remaining	disputed	claims,	such	shares	will	not	be	returned	to	AAG	but	rather	will	be	distributed	to former	AMR	stockholders	as	of	the	Effective	Date.	AAG	is	not	required	to	distribute	additional	shares	above	the	limits	contemplated	by	the	Plan	described	above.

In	addition,	from	the	Effective	Date	through	December	31,	2015,	American	has	made	the	following	cash	disbursements	under	the	Plan:

The	reconciliation	process	with	respect	to	the	remaining	claims	will	take	considerable	time	post-emergence.	American's	estimate	of	the	amounts	of	disputed	claims that	will	ultimately	become	allowed	Single-Dip	Unsecured	Claims	are	included	in	bankruptcy	settlement	obligations	on	American's	consolidated	balance	sheet	as	of December	31,	2015.	As	these	claims	are	resolved,	or	where	better	information	becomes	available	and	is	evaluated,	American	will	make	adjustments	to	the	liabilities recorded	on	American's	consolidated	financial	statements	as	appropriate.	Any	such	adjustments	could	be	material	 to	American's	financial	position	or	results	of operations	in	any	given	period.

Upon	emergence	from	bankruptcy,	American	experienced	an	"ownership	change"	as	defined	in	Section	382	of	the	Internal	Revenue	Code	of	1986,	as	amended (Section	382),	which	could	potentially	limit	the	ability	to	utilize	certain	tax	attributes	including	American's	substantial	net	operating	losses	(NOLs).	The	general limitation	rules	for	a	debtor	in	a	bankruptcy	case	are	liberalized	where	the	ownership	change	occurs	upon	emergence	from	bankruptcy.	American	elected	to	be	covered by	certain	special	rules	for	federal	income	tax	purposes	that	permitted	approximately	$9.5	billion	(with	$7.3	billion	of	unlimited	NOL	still	remaining	at	December	31, 2015)	of	the	federal	NOLs	carried	over	from	prior	taxable	years	(NOL	Carryforwards)	to	be	utilized	without	regard	to	the	annual	limitation	generally	imposed	by Section	382.	See	Note	8	for	additional	information	related	to	tax	matters.

Moreover,	an	ownership	change	subsequent	to	American's	emergence	from	bankruptcy	may	further	limit	or	effectively	eliminate	the	ability	to	utilize	American's NOL	Carryforwards	and	other	tax	attributes.	To	reduce	the	risk	of	a	potential	adverse	effect	on	American's	ability	to	utilize	the	NOL	Carryforwards,	AAG's	Restated 182

Certificate	of	Incorporation	(the	Certificate	of	Incorporation)	contains	transfer	restrictions	applicable	to	certain	substantial	stockholders.	Although	the	purpose	of	these transfer	restrictions	is	to	prevent	an	ownership	change	from	occurring,	there	can	be	no	assurance	that	an	ownership	change	will	not	occur	even	with	these	transfer restrictions.	A	copy	of	the	Certificate	of	Incorporation	was	attached	as	Exhibit	3.1	to	a	Current	Report	on	Form	8-K	filed	by	AAG	with	the	SEC	on	December	9,	2013.

(3) Pursuant	to	the	Plan,	the	Debtors	agreed	to	allow	certain	post-petition	unsecured	claims	on	obligations.	As	a	result,	during	the	year	ended	December	31,	2013, American	recorded	reorganization	charges	to	adjust	estimated	allowed	claim	amounts	previously	recorded	on	rejected	special	facility	revenue	bonds	of	$180 million,	allowed	general	unsecured	claims	related	to	the	1990	and	1994	series	of	special	facility	revenue	bonds	that	financed	certain	improvements	at	John	F. Kennedy	International	Airport	(JFK),	and	rejected	bonds	that	financed	certain	improvements	at	Chicago	O'Hare	International	Airport	(ORD),	which	are	included in	the	table	above.

As	of	December	31,	2015	and	2014,	the	components	of	bankruptcy	settlement	obligations	on	American's	consolidated	balance	sheets	are	as	follows	(in	millions):

|  | December	31, | December	31, |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
| Single-Dip\tEquity\tObligations | $147 | $248 |
| Labor-related\tdeemed\tclaim | 46 | 77 |
| Total | $193 | $325 |

The	Single-Dip	Equity	Obligations,	while	outstanding,	do	not	vote	or	participate	in	accordance	with	the	terms	of	the	Plan.	These	equity	obligations,	representing	the amount	of	total	Single-Dip	Unsecured	Claims	not	satisfied	through	the	issuance	of	AAG	Series	A	Preferred	Stock	at	the	Effective	Date,	represented	an	unconditional obligation	to	transfer	a	variable	number	of	shares	of	AAG	Common	Stock	based	predominantly	on	a	fixed	monetary	amount	known	at	inception,	and,	as	such,	were	not treated	as	equity,	but	rather	as	liabilities,	until	the	120th	day	after	emergence,	which	was	April	8,	2014.	As	of	April	8,	2014,	AAG	has	issued	shares	of	AAG	Common Stock	to	satisfy	the	obligation	amount	at	emergence,	plus	accrued	dividends	of	12%	per	annum,	calculated	daily,	through	such	date,	based	on	the	volume	weighted average	price	of	the	shares	of	AAG	Common	Stock,	at	a	3.5%	discount,	as	specified	in	the	Plan.	The	amount	of	the	remaining	Single-Dip	Equity	Obligations	at December	31,	2015	is	American's	estimate	of	its	obligation	for	disputed	claims	of	$147	million	and	is	calculated	based	on	the	fair	value	of	the	shares	expected	to	be issued,	measured	as	if	the	obligations	were	settled	using	the	closing	price	of	AAG	Common	Stock	at	December	31,	2015.	Additional	allowed	claims	will	receive 30.7553	shares,	subject	to	reduction	for	expenses	of	the	Disputed	Claims	Reserve,	including	tax	liabilities,	for	each	$1,000	of	allowed	claims.	For	accounting	purposes, the	value	of	the	shares	expected	to	be	issued	is	marked-to-market	each	period	until	issued.	Accordingly,	changes	in	the	value	of	AAG	Common	Stock	could	result	in future	increases	and	decreases	in	this	obligation.

In	exchange	for	employees'	contributions	to	the	successful	reorganization	of	AAG,	including	agreeing	to	reductions	in	pay	and	benefits,	AAG	and	American	agreed in	the	Plan	to	provide	each	employee	group	a	deemed	claim	which	was	used	to	provide	a	distribution	of	a	portion	of	the	equity	of	the	reorganized	entity	to	those employees.	Each	employee	group	received	a	deemed	claim	amount	based	upon	a	fixed	percentage	of	the	distributions	to	be	made	to	general	unsecured	claimholders.	The fair	value	based	on	the	expected	number	of	shares	to	be	distributed	to	satisfy	this	deemed	claim,	as	adjusted,	was	approximately	$1.5	billion.	From	the	Effective	Date through	December	31,	2015,	AAG	has	made	distributions	of	$1.0	billion	in	AAG	Common	Stock	and	paid	approximately	$555	million	in	cash	to	cover	payroll	and	other taxes	related	to	the	equity	distributions.	As	of	December	31,	2015,	the	liability	to	certain	AMR	labor	groups	and	employees	of	$46	million	represents	the	estimated	fair value	of	the	remaining	shares	expected	to	be	issued	in	satisfaction	of	such	obligation,	measured	as	if	the	obligation	were	settled	using	the	closing	price	of	AAG	Common Stock	at	December	31,	2015.	For	accounting	purposes,	the	value	of	the	remaining	shares	expected	to	be	issued	to	satisfy	the	labor	claim	is	marked-to-market	each	period until	issued.	Accordingly,	changes	in	the	value	of	AAG	Common	Stock	could	result	in	future	increases	and	decreases	in	this	obligation.

On	February	10,	2015	and	July	14,	2015,	approximately	0.8	million	and	0.6	million	shares,	respectively,	of	AAG	Common	Stock	held	in	the	Disputed	Claims Reserve	 were	 distributed	 to	 holders	 of	 allowed	 Single-Dip	 Unsecured	 Claims,	 to	 holders	 of	 certain	 labor-related	 deemed	 claims	 and	 to	 holders	 of	 certain	 non- management,	non-union	employee	deemed	claims	as	specified	in	the	Plan,	and	0.1	million	shares	in	the	aggregate	were	withheld	to	fund	cash	tax	obligations	resulting from	these	distributions.

As	previously	discussed	in	Note	2,	on	the	Effective	Date,	the	Debtors	consummated	their	reorganization	and	the	Merger	pursuant	to	the	Plan.	The	Merger	has	been accounted	for	as	a	business	acquisition	using	the	acquisition	method	of	accounting	in	accordance	with	Financial	Accounting	Standards	Board	(FASB)	Accounting Standards	 Codification	 (ASC)	 805,	 "Business	 Combinations"	 (ASC	 805),	 with	AAG	 considered	 the	 acquirer	 of	 US	Airways	 Group.	The	 acquisition	 method	 of accounting	requires,	among	other	things,	that	assets	acquired	and	liabilities	assumed	be	recognized	on	the	balance	sheet	at	their	fair	values	as	of	the	acquisition	date.	The excess	of	the	purchase	price	over	the	net	fair	value	of	assets	and	liabilities	acquired	was	recorded	as	goodwill.	Goodwill	is	not	amortized,	but	is	tested	for	impairment	at least	annually.	As	a	result	of	US	Airways	Group	becoming	a	wholly-owned	subsidiary	of	AAG,	US	Airways	Group	applied	push	down	accounting	to	US	Airways.

As	a	stipulation	for	the	Merger	to	be	approved	by	the	Department	of	Justice	(DOJ),	American	was	required	to	divest	certain	airport	take	off	and	landing	rights	(slots) at	LaGuardia	Airport	(LGA)	and	Ronald	Reagan	Washington	National	Airport	(DCA).	In	2014,	American	divested	the	required	DCA	slots	and	received	$307	million	in cash	as	well	as	24	slots	at	JFK.	American	recognized	a	net	gain	of	$309	million	related	to	these	divestitures,	which	has	been	included	in	special	items,	net	in	the consolidated	statement	of	operations.	In	2013,	American	recognized	a	gain	of	$67	million	related	to	the	sale	of	the	LGA	slots,	which	has	been	included	in	special	items, net	in	the	consolidated	statement	of	operations.

In	2013,	the	European	Commission	cleared	under	the	EU	Merger	Regulation	the	proposed	merger	between	US	Airways	and	American.	As	a	consequence	of	the merger	clearance	process	in	the	EU,	American	was	required	to	make	available	one	pair	of	London	Heathrow	slots	for	use	by	another	carrier	between	London	and Philadelphia,	which	the	acquiring	carrier	can	deploy	on	another	London	Heathrow	city	pair	after	operating	the	slots	on	London-Philadelphia	for	a	period	of	not	less	than three	consecutive	years.	In	addition,	along	with	American's	joint	business	agreement	partners,	American	was	required	to	make	available	for	an	initial	period	of	up	to seven	years	one	pair	of	Heathrow	slots	for	service	between	London	and	Miami	that	may	be	operated	via	an	intermediate	point.	In	connection	with	these	requirements and	upon	making	these	slots	available,	in	2014,	American	recorded	a	$43	million	non-cash	charge,	which	has	been	included	in	special	items,	net	in	the	consolidated statement	of	operations.

The	Merger	has	been	accounted	for	using	the	acquisition	method	of	accounting	in	accordance	with	ASC	805,	with	AAG	treated	as	the	acquirer	of	US	Airways	Group for	accounting	purposes.	The	acquisition	method	of	accounting	requires,	among	other	things,	that	assets	acquired	and	liabilities	assumed	be	recognized	on	the	balance sheet	at	their	fair	values	as	of	the	acquisition	date.	The	acquisition	values	have	been	pushed	down	to	US	Airways	as	of	December	9,	2013.	The	amount	of	acquisition pushed	down	to	US	Airways	was	$5.4	billion,	the	remainder	of	the	purchase	price	being	pushed	down	to	US	Airways	Group	and	its	other	subsidiaries	based	on	the	fair value	of	their	net	assets.	The	excess	of	the	pushed	down	acquisition	value	over	the	net	fair	value	of	assets	acquired	and	liabilities	assumed	was	recorded	as	goodwill. Goodwill	is	not	amortized,	but	is	tested	for	impairment	at	least	annually.

The	fair	values	of	the	assets	acquired	and	liabilities	assumed	were	determined	using	the	market,	income	and	cost	approaches.	The	fair	value	measurements	were primarily	based	on	significant	inputs	that	are	not	observable	in	the	market,	other	than	certain	long-term	debt	assumed	in	the	Merger.	The	market	approach,	which indicates	value	for	a	subject	asset	based	on	available	market	pricing	for	comparable	assets,	was	utilized	to	estimate	the	fair	value	of	US	Airways'	aircraft	and	operating leases.	The	market	approach	included	prices	and	other	relevant	information	generated	by	market	transactions	involving	comparable	assets,	as	well	as	pricing	guides	and other	sources.	The	current	market	for	the	aircraft,	the	maintenance	condition	of	the	aircraft	and	the	expected	proceeds	from	the	sale	of	the	assets,	among	other	factors, were	considered.	The	market	approach	was	utilized	to	value	certain	intangible	assets	such	as	airport	take	off	and	landing	slots	when	sufficient	market	information	was available.	The	income	approach	was	primarily	used	to	value	intangible	assets,	including	customer	relationships,	marketing	agreements,	certain	international	route authorities,	and	the	US	Airways	tradename.	The	income	approach	indicates	value	for	a	subject	asset	based	on	the	present	value	of	cash	flows	projected	to	be	generated by

the	asset.	Projected	cash	flows	are	discounted	at	a	required	market	rate	of	return	that	reflects	the	relative	risk	of	achieving	the	cash	flows	and	the	time	value	of	money. The	cost	approach,	which	estimates	value	by	determining	the	current	cost	of	replacing	an	asset	with	another	of	equivalent	economic	utility,	was	used,	as	appropriate,	for certain	assets	for	which	the	market	and	income	approaches	could	not	be	applied	due	to	the	nature	of	the	asset.	The	cost	to	replace	a	given	asset	reflects	the	estimated reproduction	or	replacement	cost	for	the	asset,	less	an	allowance	for	loss	in	value	due	to	depreciation.	The	fair	value	of	US	Airways'	Dividend	Miles	loyalty	program liability	was	determined	based	on	the	weighted	average	equivalent	ticket	value	of	outstanding	miles	which	were	expected	to	be	redeemed	for	future	travel	at	December	9, 2013.	The	weighted	average	equivalent	ticket	value	contemplates	differing	classes	of	service,	domestic	and	international	itineraries	and	the	carrier	providing	the	award travel.

American's	unaudited	pro-forma	results	presented	below	include	the	effects	of	the	Merger	as	if	it	had	been	consummated	as	of	January	1,	2012.	The	pro-forma results	include	the	depreciation	and	amortization	associated	with	the	acquired	tangible	and	intangible	assets,	lease	and	debt	fair	value	adjustments,	the	elimination	of	any deferred	gains	or	losses,	adjustments	relating	to	reflecting	the	fair	value	of	the	loyalty	program	liability	and	the	impact	of	income	changes	on	profit	sharing	expense, among	others.	In	addition,	the	pro-forma	results	below	reflect	the	impact	of	higher	wage	rates	related	to	memorandums	of	understanding	with	US	Airways'	pilots	that became	effective	upon	closing	of	the	Merger,	as	well	as	the	elimination	of	American's	reorganization	items,	net	and	Merger	transition	costs.	However,	the	pro-forma results	do	not	include	any	anticipated	synergies	or	other	expected	benefits	of	the	Merger.	Accordingly,	the	unaudited	pro-forma	financial	information	below	is	not necessarily	indicative	of	either	future	results	of	operations	or	results	that	might	have	been	achieved	had	the	acquisition	been	consummated	as	of	January	1,	2012.

On	December	30,	2015,	US	Airways	merged	with	and	into	American,	which	is	reflected	in	American's	consolidated	financial	statements	as	though	the	transaction had	occurred	on	December	9,	2013,	when	a	subsidiary	of	AMR	merged	with	and	into	US	Airways	Group.	Thus,	the	full	years	of	2015	and	2014	and	the	period	from December	9,	2013	to	December	31,	2013	are	comprised	of	the	consolidated	financial	data	of	American	and	US	Airways.	For	the	periods	prior	to	December	9,	2013,	the financial	data	reflects	the	results	of	American	only.	For	financial	reporting	purposes,	the	transaction	constituted	a	transfer	of	assets	between	entities	under	common control	and	was	accounted	for	in	a	manner	similar	to	the	pooling	of	interests	method	of	accounting.	Under	this	method,	the	carrying	amount	of	net	assets	recognized	in the	balance	sheets	of	each	combining	entity	are	carried	forward	to	the	balance	sheet	of	the	combined	entity	and	no	other	assets	or	liabilities	are	recognized.

The	preparation	of	financial	statements	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	(GAAP)	requires	management	to	make certain	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities,	revenues	and	expenses,	and	the	disclosure	of	contingent	assets	and	liabilities at	the	date	of	the	financial	statements.	Actual	results	could	differ	from	those	estimates.	The	most	significant	areas	of	judgment	relate	to	passenger	revenue	recognition, impairment	of	goodwill,	impairment	of	long-lived	and

intangible	assets,	business	combination	measurements,	the	loyalty	program,	pensions	and	retiree	medical	and	other	postretirement	benefits	and	the	deferred	tax	asset valuation	allowance.	All	significant	intercompany	transactions	have	been	eliminated.

American	has	restricted	cash	and	short-term	investments	related	primarily	to	collateral	held	to	support	workers'	compensation	obligations.

American	records	impairment	charges	on	long-lived	assets	used	in	operations	when	events	and	circumstances	indicate	that	the	assets	may	be	impaired.	An	asset	or group	of	assets	is	considered	impaired	when	the	undiscounted	cash	flows	estimated	to	be	generated	by	the	assets	are	less	than	the	carrying	amount	of	the	assets	and	the net	book	value	of	the	assets	exceeds	their	estimated	fair	value.	If	such	assets	are	considered	to	be	impaired,	the	impairment	to	be	recognized	is	measured	by	the	amount by	which	the	carrying	amount	of	the	assets	exceeds	the	fair	value	of	the	assets.	Assets	to	be	disposed	of	are	reported	at	the	lower	of	the	carrying	amount	or	fair	value	less cost	to	sell.

Goodwill	represents	the	excess	of	the	purchase	price	over	the	fair	value	of	the	net	assets	acquired	and	liabilities	assumed.	Goodwill	is	not	amortized	but	tested	for impairment	annually	on	October	1 	or	more	frequently	if	events	or	circumstances	indicate	that	goodwill	may	be	impaired.	American	has	one	consolidated	reporting	unit. st

Goodwill	is	measured	for	impairment	by	initially	performing	a	qualitative	screen	and,	if	necessary,	then	comparing	the	fair	value	of	the	reporting	unit	to	its	carrying value,	including	goodwill.	If	the	fair	value	of	the	reporting	unit	is	less	than	the	carrying	value,	a	second	step	is	performed	to	determine	the	implied	fair	value	of	goodwill. If	 the	 implied	fair	value	of	goodwill	 is	 lower	 than	 its	carrying	value,	an	 impairment	charge	equal	 to	 the	difference	 is	recorded.	Based	upon	American's	annual measurement,	there	was	no	goodwill	impairment	in	2015.

The	following	table	provides	information	relating	to	American's	amortizable	intangible	assets	as	of	December	31,	2015	and	2014	(in	millions):

|  | December	31, | December	31, |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
| Domestic\tairport\tslots | $365 | $365 |
| Customer\trelationships | 300 | 300 |
| Marketing\tagreements | 105 | 105 |
| Tradenames | 35 | 35 |
| Airport\tgate\tleasehold\trights | 137 | 138 |
| Accumulated\tamortization | (502) | (447) |
| Total | $440 | $496 |

American	 recorded	 amortization	 expense	 related	 to	 these	 intangible	 assets	 of	 approximately	 $55	 million,	 $81	 million	 and	 $20	 million	 for	 the	 years	 ended December	31,	2015,	2014	and	2013,	respectively.	American	expects	to	record	annual	amortization	expense	for	the	aforementioned	definite-life	intangible	assets	as follows	(in	millions):

American's	indefinite-lived	assets	include	certain	international	slots	and	route	authorities	and	domestic	airport	slots.	Indefinite-lived	assets	are	not	amortized	but instead	are	reviewed	for	impairment	annually	on	October	1 	or	more	frequently	if	events	or	circumstances	indicate	that	the	asset	may	be	impaired.	As	of	December	31, 2015	and	2014,	American	had	$1.8	billion	and	$1.7	billion,	respectively,	of	indefinite-lived	intangible	assets	on	its	consolidated	balance	sheets. st

American's	indefinite-lived	intangible	assets	are	reviewed	for	impairment	by	initially	performing	a	qualitative	screen	to	determine	whether	American	believes	it	is more	likely	than	not	that	an	asset	has	been	impaired.	If	American	believes	an	impairment	has	occurred,	American	then	evaluates	for	impairment	by	comparing	the estimated	fair	value	of	assets	to	the	carrying	value.	An	impairment	charge	is	recognized	if	the	asset's	estimated	fair	value	is	less	than	its	carrying	value.	Based	upon American's	annual	review,	there	was	no	indefinite-lived	intangible	asset	impairment	in	2015.

American	currently	operates	the	loyalty	program,	AAdvantage.	This	program	awards	mileage	credits	to	passengers	who	fly	on	American	and	oneworld	carriers,	as well	as	certain	other	partner	airlines	that	participate	in	the	program.	Mileage	credits	can	also	be	earned	through	purchases	from	other	non-airline	partners	that	participate in	American's	loyalty	program.	Mileage	credits	can	be	redeemed	for	travel	on	American	or	other	participating	partner	airlines,	in	which	case	American	pays	a	fee.

American	uses	the	incremental	cost	method	to	account	for	the	portion	of	its	loyalty	program	liability	incurred	when	AAdvantage	members	earn	mileage	credits	by flying	on	American	or	its	regional	affiliates.	American	has	an	obligation	to	provide	future	travel	when	these	mileage	credits	are	redeemed	and	therefore	has	recorded	a liability	for	mileage	credits	outstanding.

The	incremental	cost	liability	includes	all	mileage	credits	that	are	expected	to	be	redeemed,	including	mileage	credits	earned	by	members	whose	mileage	account balances	have	not	yet	reached	the	minimum	mileage	credit	level	required	to	redeem	an	award.	Additionally,	outstanding	mileage	credits	are	subject	to	expiration	if unused.	In	calculating	the	liability,	American	estimates	how	many	mileage	credits	will	never	be	redeemed	for	travel	and	excludes	those	mileage	credits	from	the estimate	of	the	liability.	Estimates	are	also	made	for	the	number	of	miles	that	will	be	used	per	award	redemption	and	the	number	of	travel	awards	that	will	be	redeemed on	partner	airlines.	These	estimates	are	based	on	historical	program	experience	as	well	as	consideration	of	enacted	program	changes,

as	applicable.	Changes	in	the	liability	resulting	from	members	earning	additional	mileage	credits	or	changes	in	estimates	are	recorded	in	the	consolidated	statements	of operations	as	a	part	of	passenger	revenue.

The	liability	for	outstanding	mileage	credits	is	valued	based	on	the	estimated	incremental	cost	of	carrying	one	additional	passenger.	Incremental	cost	primarily includes	unit	costs	incurred	for	fuel,	food,	and	insurance	as	well	as	fees	incurred	when	travel	awards	are	redeemed	on	partner	airlines.	No	profit	or	overhead	margin	is included	in	the	accrual	of	incremental	cost.	These	estimates	are	generally	updated	based	upon	American's	12-month	historical	average	of	such	costs.

In	addition,	American	applied	the	acquisition	method	of	accounting	in	connection	with	the	Merger	and	therefore	recorded	the	liability	for	outstanding	US	Airways' mileage	credits	at	fair	value,	an	amount	significantly	in	excess	of	incremental	cost.	As	of	December	31,	2015	and	2014,	the	liability	for	these	outstanding	mileage	credits expected	to	be	redeemed	for	future	travel	awards	was	$296	million	and	$611	million,	respectively,	and	is	included	on	the	consolidated	balance	sheets	within	loyalty program	liability.	This	liability	is	amortized	into	passenger	revenue	on	a	straight-line	basis	over	the	period	in	which	the	mileage	credits	are	expected	to	be	redeemed	for travel.	All	new	miles	earned	will	be	recorded	as	a	liability	based	on	the	incremental	cost	method	discussed	above.

American	also	sells	loyalty	program	mileage	credits	to	participating	airline	partners	and	non-airline	business	partners.	Sales	of	mileage	credits	to	non-airline	business partners	is	comprised	of	two	components,	transportation	and	marketing.	Historically,	American	has	used	the	residual	method	of	accounting	to	determine	the	values	of each	component	as	there	had	not	been	a	material	modification	to	any	significant	agreements	since	the	adoption	of	Accounting	Standards	Update	(ASU)	No.	2009-13, "Revenue	Recognition	(Topic	605)	–	Multiple-Deliverable	Revenue	Arrangements"	on	January	1,	2011.

In	2013,	American	and	Citibank	amended	 their	AAdvantage	co-branded	credit	card	agreement	which	resulted	 in	a	material	modification	of	 the	 terms	of	 the arrangement.	Also,	in	connection	with	the	acquisition	of	US	Airways	on	December	9,	2013,	a	material	modification	occurred	on	all	of	US	Airways'	agreements	in connection	with	the	Merger.	Therefore,	subsequent	to	the	amendments	of	these	arrangements,	American	applied	the	relative	selling	price	method	to	determine	the	values of	each	deliverable.	Under	the	relative	selling	price	approach,	American	identified	five	revenue	elements	for	the	co-branded	credit	card	agreements	with	Citibank	and Barclays:	the	transportation	component;	use	of	the	American	brand	including	access	to	loyalty	program	member	lists;	advertising;	lounge	access;	and	baggage	services (together	excluding	the	transportation	component,	the	marketing	component).

The	marketing	component	represents	services	provided	to	American's	business	partners	and	relates	primarily	to	the	use	of	the	American	brand	including	access	to loyalty	program	member	lists.	The	marketing	services	are	provided	periodically,	but	no	less	than	monthly.	Accordingly,	the	marketing	component	is	considered	earned and	recognized	in	other	revenues	in	the	period	of	the	mileage	sale.

Upon	application	of	the	relative	selling	price	method	in	2013	for	American's	Citibank	modification,	American	reduced	its	travel	component	liability	and	recorded other	revenue	of	approximately	$31	million.	As	a	result	of	the	change	in	the	marketing	component	value	when	the	relative	selling	price	method	is	applied,	American	now defers	less	revenue	per	mile	sold.

Passenger	revenue	is	recognized	when	transportation	is	provided.	Ticket	sales	for	transportation	that	has	not	yet	been	provided	are	initially	deferred	and	recorded	as air	traffic	liability	on	the	consolidated	balance	sheets.	The	air	traffic	liability	represents	tickets	sold	for	future	travel	dates	and	estimated	future	refunds	and	exchanges	of tickets	sold	for	past	travel	dates.	The	balance	in	the	air	traffic	liability	fluctuates	throughout	the	year	based	on	seasonal	travel	patterns	and	fare	sale	activity.	American's air	traffic	liability	was	$3.7	billion	and	$4.3	billion	as	of	December	31,	2015	and	2014,	respectively.

The	majority	of	tickets	sold	are	nonrefundable.	A	small	percentage	of	tickets,	some	of	which	are	partially	used	tickets,	expire	unused.	Due	to	complex	pricing structures,	refund	and	exchange	policies,	and	interline	agreements	with	other	airlines,	certain	amounts	are	recognized	in	revenue	using	estimates	regarding	both	the timing	of	the	revenue	recognition	and	the	amount	of	revenue	to	be	recognized.	These	estimates	are	generally	based	on	the	analysis	of	American's	historical	data. American	and	other	airline	industry	participants	have	consistently	applied	this	accounting	method	to	estimate	revenue	from	forfeited	tickets	at	the	date	of	travel. Estimated	future	refunds	and	exchanges	included	in	the	air	traffic	liability	are	routinely	evaluated	based	on	subsequent	activity	to	validate	the	accuracy	of	American's estimates.	Any	adjustments	resulting	from	periodic	evaluations	of	the	estimated	air	traffic	liability	are	included	in	results	of	operations	during	the	period	in	which	the evaluations	are	completed.

American	purchases	capacity,	or	ASMs,	generated	by	AAG's	wholly-owned	regional	air	carriers	and	the	capacity	of	third-party	carriers	including	Air	Wisconsin Airlines	Corporation	(Air	Wisconsin),	Republic	Airline	Inc.	(Republic),	Mesa	Airlines,	Inc.	(Mesa),	SkyWest	Airlines,	Inc.	(SkyWest),	ExpressJet	Airlines,	Inc. (ExpressJet),	Compass	Airlines,	LLC	(Compass)	and	Trans	States	Airlines,	Inc.	(Trans	States)	in	certain	markets.	AAG's	wholly-owned	regional	air	carriers	and	third- party	carriers	operate	regional	aircraft	as	part	of	American	Eagle	carriers.	American	classifies	revenues	generated	from	transportation	on	these	carriers	as	regional passenger	revenues.	Liabilities	related	to	tickets	sold	by	American	for	travel	on	these	air	carriers	are	also	included	in	American's	air	traffic	liability	and	are	subsequently recognized	as	revenue	in	the	same	manner	as	described	above.

Various	taxes	and	fees	assessed	on	the	sale	of	tickets	to	end	customers	are	collected	by	American	as	an	agent	and	remitted	to	taxing	authorities.	These	taxes	and	fees have	been	presented	on	a	net	basis	in	the	accompanying	consolidated	statements	of	operations	and	recorded	as	a	liability	until	remitted	to	the	appropriate	taxing authority.

American	accounts	for	its	share-based	compensation	expense	based	on	the	fair	value	of	the	stock	award	at	the	time	of	grant,	which	is	recognized	ratably	over	the vesting	period	of	the	stock	award.	The	fair	value	of	stock	options	and	stock	appreciation	rights	is	estimated	using	a	Black-Scholes	option	pricing	model.	The	fair	value	of restricted	stock	units	is	based	on	the	market	price	of	the	underlying	shares	of	common	stock	on	the	date	of	grant.	See	Note	16	for	further	discussion	of	share-based compensation.

Included	within	deferred	gains	and	credits,	net	are	amounts	deferred	and	amortized	into	future	periods	associated	with	the	adjustment	of	leases	to	fair	value	in connection	with	the	application	of	acquisition	accounting,	deferred	gains	on	the	sale-leaseback	of	aircraft	and	certain	vendor	incentives.	American	periodically	receives vendor	incentives	in	connection	with	acquisition	of	aircraft	and	engines.	These	credits	are	deferred	until	aircraft	and	engines	are	delivered	and	then	applied	as	a reduction	to	the	cost	of	the	related	equipment.

Foreign	currency	gains	and	losses	are	recorded	as	part	of	other	nonoperating	expense,	net	in	American's	consolidated	statements	of	operations.	Foreign	currency losses	for	2015,	2014	and	2013	were	$751	million,	$114	million	and	$56	million,	respectively.	The	2015	period	included	a	$592	million	special	charge	to	write	off	all	of the	value	of	Venezuelan	bolivars	held	by	American	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

Expenses	associated	with	American's	 third-party	regional	carriers	operating	under the	brand	name	American	Eagle	are	classified	as	regional	expenses	on the consolidated	statements	of	operations.	Regional	expenses	consist	of	the	following	(in	millions):

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Aircraft\tfuel\tand\trelated\ttaxes | $1,230 | $2,009 | $1,119 |
| Salaries,\twages\tand\tbenefits | 276 | 228 | 29 |
| Capacity\tpurchases\tfrom\tthird-party\tregional\tcarriers\t(1) | \t 3,246 | \t 3,187 | \t 1,359 |
| Maintenance,\tmaterials\tand\trepairs | 1 | 6 | — |
| Other\trent\tand\tlanding\tfees | 436 | 386 | 217 |
| Selling\texpenses | 333 | 307 | 153 |
| Depreciation\tand\tamortization | 197 | 168 | 150 |
| Special\titems,\tnet | 18 | 5 | — |
| Other | 361 | 268 | 266 |
| Total\tregional\texpenses | $6,098 | $6,564 | $3,293 |

In	May	2014,	the	FASB	issued	ASU	2014-09,	"Revenue	from	Contracts	with	Customers	(Topic	606)."	ASU	2014-09	completes	the	joint	effort	by	the	FASB	and International	Accounting	Standards	Board	(IASB)	 to	 improve	financial	reporting	by	creating	common	revenue	recognition	guidance	for	GAAP	and	International Financial	Reporting	Standards	(IFRS).	ASU	2014-09	applies	to	all	companies	that	enter	into	contracts	with	customers	to	transfer	goods	or	services.	ASU	2014-09	is effective	for	public	entities	for	interim	and	annual	reporting	periods	beginning	after	December	15,	2017.	Early	application	is	permitted,	but	not	before	interim	and	annual reporting	periods	beginning	after	December	15,	2016.	Entities	have	the	choice	to	apply	ASU	2014-09	either	retrospectively	to	each	reporting	period	presented	or	by recognizing	the	cumulative	effect	of	applying	ASU	2014-09	at	the	date	of	initial	application	and	not	adjusting	comparative	information.	American	is	currently	evaluating the	requirements	of	ASU	2014-09	and	has	not	yet	determined	its	impact	on	American's	consolidated	financial	statements.

On	February	18,	2015,	the	FASB	issued	ASU	2015-02,	"Consolidation	(Topic	810)."	ASU	2015-02	amends	both	the	variable	interest	entity	and	voting	interest	entity consolidation	models.	The	standard	is	effective	for	public	reporting	entities	in	fiscal	periods	beginning	after	December	15,	2015,	and	early	adoption	is	permitted.	This standard	is	not	expected	to	have	a	material	impact	on	American's	consolidated	financial	statements.

In	April	2015,	the	FASB	issued	ASU	2015-03,	"Interest—Imputation	of	Interest	(Subtopic	835-30):	Simplifying	the	Presentation	of	Debt	Issuance	Costs."	The update	requires	debt	issuance	costs	related	to	a	recognized	debt	liability	to	be	presented	in	the	balance	sheet	as	a	direct	deduction	from	the	carrying	amount	of	the	related debt	liability	instead	of	being	presented	as	an	asset.	ASU	2015-03	requires	retrospective	application,	represents	a	change	in	accounting	principle	and	is	effective	for fiscal	years	beginning	after	December	15,	2015.	American	early	adopted	this	standard	during	the	fourth	quarter	2015,	utilizing	retrospective	application	as	permitted.	As such,	certain	prior	period	amounts	have	been	reclassified	to	conform	to	the	current	presentation.	As	a	result,	American	reclassified	$174	million	of	debt	issuance	costs within	other	assets	to	reduce	current	maturities	of	long-term	debt	and	capital	leases	by	$29	million	and	to	reduce	long-term	debt	and	capital	leases	by	$145	million	on the	consolidated	balance	sheet	as	of	December	31,	2014.

In	May	2015,	the	FASB	issued	ASU	2015-07,	"Fair	Value	Measurement	(Topic	820):	Disclosures	for	Investments	in	Certain	Entities	that	Calculate	Net	Asset	Value per	Share	(or	Its	Equivalent)."	Under	ASU	2015-07,	investments	for	which	fair	value	is	measured	at	net	asset	value	per	share	(or	its	equivalent)	using	the	practical expedient	should	not	be	categorized	in	the	fair	value	hierarchy.	ASU	2015-07	is	effective	for	fiscal	years	beginning	after	December	15,	2015,	and	interim	periods	within those	fiscal	years.	Early	adoption	is	permitted.	ASU	2015-07	is	not	expected	to	have	a	material	impact	on	American's	consolidated	financial	statements.

In	November	2015,	the	FASB	issued	ASU	2015-17,	"Income	Taxes	(Topic	740):	Balance	Sheet	Classification	of	Deferred	Taxes,"	which	changes	how	deferred taxes	are	classified	on	the	balance	sheet.	ASU	2015-17	eliminates	the	current	requirement	to	present	deferred	tax	liabilities	and	assets	as	current	and	noncurrent	on	the balance	sheet.	Deferred	tax	liabilities	and	assets	are	now	required	to	be	classified	as	noncurrent	on	the	balance	sheet.	Entities	have	the	choice	to	apply	ASU	2015-17 either	prospectively	to	all	deferred	tax	liabilities	and	assets	or	retrospectively	to	all	periods	presented.	The	update	is	effective	for	annual	and	interim	periods	in	fiscal years	beginning	after	December	15,	2016.	American	early	adopted	this	standard	during	the	fourth	quarter	2015,	utilizing	retrospective	application	as	permitted.	As	such, certain	prior	period	amounts	have	been	reclassified	to	conform	to	the	current	presentation.	As	a	result,	American	reclassified	$314	million	of	current	deferred	income	tax assets	within	prepaid	expenses	and	other	to	reduce	deferred	income	taxes	within	other	liabilities	on	the	consolidated	balance	sheet	as	of	December	31,	2014.

In	January	2016,	the	FASB	issued	ASU	2016-01,	"Financial	Instruments—Overall	(Subtopic	825-10)."	ASU	2016-01	makes	several	modifications	to	Subtopic	825- 10	including	the	elimination	of	the	available-for-sale

classification	of	equity	investments,	and	requires	equity	investments	with	readily	determinable	fair	values	to	be	measured	at	fair	value	with	changes	in	fair	value recognized	in	net	income.	ASU	2016-01	is	effective	for	interim	and	annual	periods	beginning	after	December	15,	2017	and	is	not	expected	to	have	a	material	impact	on American's	consolidated	financial	statements.

   American's	special	items,	net	on	the	consolidated	statements	of	operations	are	as	follows	(in	millions):

The	2014	mainline	operating	special	items	totaled	a	net	charge	of	$783	million,	which	principally	included	$807	million	of	merger	integration	expenses	related	to information	 technology,	 alignment	 of	 labor	 union	 contracts,	 professional	 fees,	 severance	 and	 retention,	 share-based	 compensation,	 divestiture	 of	 London Heathrow	slots,	fleet	restructuring,	re-branding	of	aircraft	and	airport	facilities,	relocation	and	training.	In	addition,	American	recorded	a	net	charge	of	$60	million for	bankruptcy	related	items	principally	consisting	of	fair	value	adjustments	for	bankruptcy	settlement	obligations	and	an	$81	million	charge	to	revise	prior estimates	of	certain	aircraft	residual	values	and	other	spare	parts	asset	impairments.	These	charges	were	offset	in	part	by	a	$309	million	gain	on	the	sale	of	slots	at DCA.

The	2013	mainline	operating	special	items,	net	principally	included	$443	million	of	merger	related	expenses	related	to	the	alignment	of	labor	union	contracts, professional	fees,	severance,	share-based	compensation	and	fees	for	US	Airways	to	exit	the	Star	Alliance	and	its	codeshare	agreement	with	United	Airlines.	In addition,	American	recorded	a	$107	million	charge	related	to	American's	pilot	long-term	disability	obligation,	a	$43	million	charge	for	workers'	compensation claims	and	a	$33	million	aircraft	impairment	charge.	These	charges	were	offset	in	part	by	a	$67	million	gain	on	the	sale	of	slots	at	LGA.

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Other\trevenue\tspecial\titem,\tnet\t(1) | $— | $ — | $(31) |
| Regional\toperating\tspecial\titems,\tnet\t(2) | 18 | 5 | — |
| Nonoperating\tspecial\titems,\tnet\t(3) | 616 | \t 128 | 121 |
| Reorganization\titems,\tnet\t(4) | — | — | \t 2,640 |
| Income\ttax\tspecial\titems,\tnet\t(5) | (3,468) | \t 344 | (324) |

(3) The	2015	nonoperating	special	items	totaled	a	net	charge	of	$616	million,	which	principally	included	a	$592	million	charge	to	write	off	all	of	the	value	of Venezuelan	bolivars	held	by	American	due	to	continued	lack	of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela.

In	2014,	income	tax	special	items,	net	were	$344	million.	During	2014,	American	sold	its	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on	or after	June	30,	2014.	In	connection	with	this	sale,	American	recorded	a	special	non-cash	tax	provision	of	$328	million	in	the	second	quarter	of	2014	that	reversed the	non-cash	tax	provision	which	was	recorded	in	other	comprehensive	income	(OCI),	a	subset	of	stockholder's	equity,	principally	in	2009.	This	provision represents	the	tax	effect	associated	with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	American's	fuel	hedging	contracts.	In accordance	with	GAAP,	American	retained	the	$328	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

Secured	financings	are	collateralized	by	assets,	primarily	aircraft,	engines,	simulators,	rotable	aircraft	parts,	airport	leasehold	rights,	route	authorities	and	airport	slots. At	December	31,	2015,	American	was	operating	35	aircraft	under	capital	leases.	Leases	can	generally	be	renewed	at	rates	based	on	fair	market	value	at	the	end	of	the lease	term	for	a	number	of	additional	years.	At	December	31,	2015,	the	maturities	of	long-term	debt	and	capital	lease	obligations	are	as	follows	(in	millions):

The	2013	Credit	Facilities	bear	interest	at	an	index	rate	plus	an	applicable	index	margin	or,	at	American's	option,	LIBOR	(subject	to	a	floor	of	0.75%,	with	respect	to the	$1.9	billion	2015	Term	Loan	Facility)	plus	a	LIBOR	margin	of	3.00%	with	respect	to	the	2013	Revolving	Facility	and	2.75%	with	respect	to	the	$1.9	billion	2015 Term	Loan	Facility;	provided	that	American's	corporate	credit	rating	is	Ba3	or	higher	from	Moody's	and	BB-	or	higher	from	S&P,	the	applicable	LIBOR	margin	would be	2.50%	for	the	$1.9	billion	2015	Term	Loan	Facility.	As	of	December	31,	2015,	American	satisfied	this	ratings	test	and	accordingly,	the	LIBOR	margin	for	the	$1.9 billion	2015	Term	Loan	Facility	was	2.50%.	The	2013	Revolving	Credit	Facility	is	subject	to	an	undrawn	fee	of	0.75%.

The	2013	Credit	Facilities	contain	events	of	default	customary	for	similar	financings,	including	cross	default	to	other	material	indebtedness.	Upon	the	occurrence	of an	event	of	default,	the	outstanding	obligations	under	the

2013	Credit	Facilities	may	be	accelerated	and	become	due	and	payable	immediately.	In	addition,	if	a	"change	of	control"	(as	defined	in	the	2013	Credit	Agreement) occurs,	American	will	(absent	an	amendment	or	waiver)	be	required	to	repay	at	par	the	loans	outstanding	under	the	2013	Credit	Facilities	and	terminate	the	2013 Revolving	Facility.	The	2013	Credit	Facilities	also	include	covenants	that,	among	other	things,	require	AAG	to	maintain	a	minimum	aggregate	liquidity	(as	defined	in the	2013	Credit	Facilities)	of	not	less	than	$2.0	billion,	and	limit	the	ability	of	AAG	and	its	restricted	subsidiaries	to	pay	dividends	and	make	certain	other	payments, make	certain	investments,	incur	additional	indebtedness,	incur	liens	on	the	collateral,	dispose	of	the	collateral,	enter	into	certain	affiliate	transactions	and	engage	in certain	business	activities,	in	each	case	subject	to	certain	exceptions.

Subject	to	certain	limitations	and	exceptions,	the	obligations	under	the	2013	Citicorp	Credit	Facility	are	secured	by	liens	on	certain	take	off	and	landing	slots	at	LGA, spare	parts	and	certain	other	assets.	The	obligations	of	American	under	the	2013	Citicorp	Credit	Facility	are	guaranteed	by	AAG.	American	is	required	to	maintain	a certain	minimum	ratio	of	appraised	value	of	the	collateral	to	the	outstanding	loans	under	the	2013	Citicorp	Credit	Facility	as	further	described	below	in	"Collateral Related	Covenants."

The	2013	Citicorp	Credit	Facility	agreement	contains	events	of	default	customary	for	similar	financings,	including	a	cross-default	provision	to	certain	other	material indebtedness	of	American	and	certain	of	its	affiliates.	Upon	the	occurrence	of	an	event	of	default,	the	outstanding	obligations	under	the	2013	Citicorp	Credit	Facility may	be	accelerated	and	become	due	and	payable	immediately.	In	addition,	if	a	"change	of	control"	(as	defined	in	the	2013	Citicorp	Credit	Facility	agreement)	occurs, American	will	(absent	an	amendment	or	waiver)	be	required	to	repay	the	outstanding	loans	in	full	together	with	accrued	interest	thereon	to	the	date	of	such	prepayment. The	2013	Citicorp	Credit	Facility	agreement	 includes	affirmative,	negative	and	 financial	 covenants	 that,	 among	 other	 things,	 (a)	 require	AAG	 and	 its	 restricted subsidiaries	to	maintain	unrestricted	liquidity	of	not	less	than	$2.0	billion,	with	not	less	than	$750	million	held	in	accounts	subject	to	control	agreements,	and	(b)	restrict the	ability

of	AAG	and	its	subsidiaries	party	to	the	2013	Citicorp	Credit	Facility	to	make	certain	investments,	pay	dividends	and	make	certain	other	payments,	make	certain acquisitions,	incur	liens	on	the	collateral,	dispose	of	collateral,	enter	into	certain	affiliate	transactions,	enter	into	certain	hedging	transactions,	and	engage	in	certain business	activities,	in	each	case	subject	to	certain	exceptions.

In	2015,	American	prepaid	$72	million	principal	amount	of	outstanding	debt	secured	by	certain	aircraft.

In	2015,	American	entered	into	loan	agreements	to	borrow	$1.9	billion	in	connection	with	the	financing	of	certain	aircraft.	The	notes	mature	in	2022	through	2027 and	bear	interest	at	a	rate	of	LIBOR	plus	an	applicable	margin	averaging	1.82%.

In	December	2014,	American	acquired	approximately	$112	million	aggregate	principal	amount	of	special	facility	revenue	bonds	related	to	the	Tulsa	International Airport,	when	such	bonds	were	mandatorily	tendered	to	American.	The	acquisition	of	these	bonds	resulted	in	an	$11	million	reduction	of	a	capital	lease	obligation	and	a 201

$50	million	reduction	of	a	long-term	operating	lease	obligation	included	in	other	long-term	liabilities	on	American's	consolidated	balance	sheet	as	of	December	31, 2014.	American	exercised	its	option	to	remarket	approximately	$104	million	of	these	bonds	in	May	2015.	The	remarketed	bonds	bear	interest	at	5.0%	per	annum	from the	date	of	initial	issuance	and	delivery	of	the	bonds	on	May	27,	2015,	until	the	day	preceding	June	1,	2025,	on	which	date	the	bonds	will	be	subject	to	mandatory	tender for	purchase	by	American.	In	connection	with	 the	remarketing	of	 these	special	facility	revenue	bonds,	American	received	cash	proceeds	of	$112	million.	As	of December	31,	2015,	$11	million	is	reflected	as	a	capital	lease	and	$52	million	is	reflected	in	other	long-term	liabilities	on	American's	consolidated	balance	sheet.

As	of	December	31,	2015,	American	had	issued	guarantees	covering	AAG's	$750	million	aggregate	principal	amount	of	5.50%	senior	notes	due	2019,	$500	million aggregate	principal	amount	of	6.125%	senior	notes	due	2018	and	$500	million	aggregate	principal	amount	of	4.625%	senior	notes	due	2020.

Certain	of	American's	debt	financing	agreements	contain	loan	to	value	ratio	covenants	and	require	American	to	annually	appraise	the	related	collateral.	Pursuant	to such	agreements,	if	the	loan	to	value	(LTV)	ratio	exceeds	a	specified	threshold,	American	is	required,	as	applicable,	to	pledge	additional	qualifying	collateral	(which	in some	cases	may	include	cash	collateral),	or	pay	down	such	financing,	in	whole	or	in	part.

Specifically,	American	is	required	to	meet	certain	collateral	coverage	tests	on	an	annual	basis	for	three	credit	facilities,	as	described	below:

At	December	31,	2015,	American	was	in	compliance	with	the	applicable	collateral	coverage	tests	as	of	the	most	recent	measurement	dates.

| 2015 | 2014 | 2013 |
| :--- | :--- | :--- |
| $15 | $ (24) | $(30) |
| (3,467) | \t 344 | (324) |
| $(3,452) | $320 | $(354) |

|  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| Statutory\tincome\ttax\tprovision\t(benefit) | $1,635 | $1,144 | $(725) |
| State\tincome\ttax\tprovision\t(benefit),\tnet\tof\tfederal\ttax\teffect | 71 | 81 | (18) |
| Book\texpenses\tnot\tdeductible\tfor\ttax\tpurposes | 55 | 4 | 25 |
| Bankruptcy\tadministration\texpenses | 3 | 86 | 82 |
| Interest\tcutback\tto\tnet\toperating\tloss\t(NOL) | — | — | 53 |
| Alternative\tminimum\ttax\tcredit\trefund | — | (29) | (30) |
| Change\tin\tvaluation\tallowance | (5,216) | (1,285) | 780 |
| Tax\tprovision\t(benefit)\tresulting\tfrom\tOCI\tallocation | — | 328 | (538) |
| Other,\tnet | — | (9) | 17 |
| Income\ttax\tprovision\t(benefit) | $(3,452) | $320 | $(354) |

American	provides	a	valuation	allowance	for	its	deferred	tax	assets,	which	includes	the	NOLs,	when	it	is	more	likely	than	not	that	some	portion,	or	all,	of	its	deferred tax	assets	will	not	be	realized.	The	ultimate	realization	of	deferred	tax	assets	is	dependent	upon	the	generation	of	future	taxable	income.	American	considers	all	available positive	and	negative	evidence	and	makes	certain	assumptions	in	evaluating	the	realizability	of	its	deferred	tax	assets.	As	of	December	31,	2015,	after	considering	all positive	and	negative	evidence,	including	the	completion	of	certain	critical	merger	integration	milestones	as	well	as	American's	financial	performance,	American concluded	that	substantially	all	of	its	deferred	income	tax	assets	were	more	likely	than	not	to	be	realized.	Accordingly,	American	reversed	the	valuation	allowance, which	resulted	in	a	special	$3.5	billion	non-cash	tax	benefit	recorded	in	the	consolidated	statement	of	operations	for	2015.

For	the	year	ended	December	31,	2014,	American	recorded	a	$320	million	tax	provision.	During	2014,	American	sold	its	portfolio	of	fuel	hedging	contracts	that	were scheduled	to	settle	on	or	after	June	30,	2014.	In	connection	with	this	sale,	American	recorded	a	special	non-cash	tax	provision	of	$328	million	in	the	second	quarter	of 2014	that	reversed	the	non-cash	tax	provision	which	was	recorded	in	OCI,	a	subset	of	stockholder's	equity,	principally	in	2009.	This	provision	represents	the	tax	effect associated	with	gains	recorded	in	OCI	principally	in	2009	due	to	a	net	increase	in	the	fair	value	of	American's	fuel	hedging	contracts.	In	accordance	with	GAAP, American	retained	the	$328	million	tax	provision	in	OCI	until	the	last	contract	was	settled	or	terminated.

For	the	year	ended	December	31,	2013,	American	recorded	a	$354	million	tax	benefit.	This	benefit	included	a	$538	million	special	non-cash	income	tax	benefit	from continuing	operations.	American	is	required	to	consider	all	items	(including	items	recorded	in	OCI)	in	determining	the	amount	of	tax	benefit	that	results	from	a	loss	from continuing	operations	and	that	should	be	allocated	to	continuing	operations.	As	a	result,	American	recorded	a	tax	benefit	on	the	loss	from	continuing	operations	for	the year,	which	was	exactly	offset	by	income	tax	expense	on	OCI.	However,	while	the	income	tax	benefit	from	continuing	operations	is	reported	on	the	income	statement, the	income	tax	expense	on	OCI	is	recorded	directly	to	accumulated	OCI,	which	is	a	component	of	stockholder's	equity.	Because	the	income	tax	expense	on	OCI	is	equal to	the	income	tax	benefit	from	continuing	operations,	American's	net	deferred	tax	position	is	not	impacted	by	this	tax	allocation.	The	2013	tax	benefit	was	offset	in	part by	a	$214	million	special	tax	provision	attributable	to	additional	valuation	allowance	required	to	reduce	deferred	tax	assets	to	the	amount	American	believed	was	more likely	than	not	to	be	realized.

In	addition	to	the	changes	in	the	valuation	allowance	from	operations	described	in	the	table	above,	the	valuation	allowance	was	also	impacted	by	the	changes	in	the components	of	accumulated	other	comprehensive

income	(loss),	described	in	Note	12.	The	total	decrease	in	the	valuation	allowance	was	$5.2	billion	and	$525	million	in	2015	and	2014,	respectively.	The	total	increase	in the	valuation	allowance	was	$221	million	in	2013.

The	components	of	American's	deferred	tax	assets	and	liabilities	were	(in	millions):

|  | December	31,<br>2015 | 2014 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets: |  |  |
| Postretirement\tbenefits\tother\tthan\tpensions | $340 | $379 |
| Rent\texpense | 134 | 121 |
| Alternative\tminimum\ttax\tcredit\tcarryforwards | 458 | 458 |
| Operating\tloss\tcarryforwards | 2,818 | 3,737 |
| Pensions | 2,420 | 2,394 |
| Loyalty\tprogram\tobligation | 590 | 948 |
| Gains\tfrom\tlease\ttransactions | 261 | 208 |
| Reorganization\titems | 57 | 64 |
| Other | 1,123 | 1,172 |
| Total\tdeferred\ttax\tassets | 8,201 | 9,481 |
| Valuation\tallowance | (14) | (5,196) |
| Net\tdeferred\ttax\tassets | 8,187 | 4,285 |
| Deferred\ttax\tliabilities: |  |  |
| Accelerated\tdepreciation\tand\tamortization | (5,011) | (4,579) |
| Other | (244) | (242) |
| Total\tdeferred\ttax\tliabilities | (5,255) | (4,821) |
| Net\tdeferred\ttax\tasset\t(liability) | $2,932 | $(536) |

At	December	31,	2015,	American	had	approximately	$8.8	billion	of	gross	NOL	Carryforwards	to	reduce	future	federal	taxable	income,	substantially	all	of	which	are expected	to	be	available	for	use	in	2016.	American	is	a	member	of	AAG's	consolidated	federal	and	certain	state	income	tax	returns.	The	amount	of	federal	NOL Carryforwards	available	in	those	returns	is	$8.0	billion,	substantially	all	of	which	is	expected	to	be	available	for	use	in	2016.	The	federal	NOL	Carryforwards	will	expire beginning	in	2023	if	unused.	These	NOL	Carryforwards	include	an	unrealized	tax	benefit	of	$1.2	billion	related	to	share-based	compensation	that	will	be	recorded	in equity	when	realized.	American	also	had	approximately	$3.7	billion	of	NOL	Carryforwards	to	reduce	future	state	taxable	income	at	December	31,	2015,	which	will expire	in	years	2016	through	2034	if	unused.	As	of	December	31,	2015,	the	amount	of	NOL	Carryforwards	for	state	income	tax	purposes	that	will	expire,	if	unused,	in 2016	is	$106	million.	American's	ability	to	deduct	its	NOL	Carryforwards	and	to	utilize	certain	other	available	tax	attributes	can	be	substantially	constrained	under	the general	annual	limitation	rules	of	Section	382	where	an	"ownership	change"	has	occurred.	American	experienced	an	ownership	change	in	connection	with	its	emergence from	the	Chapter	11	Cases,	and	US	Airways	Group	experienced	an	ownership	change	in	connection	with	the	Merger.	As	a	result	of	the	Merger,	US	Airways	Group	is now	included	in	the	AAG	consolidated	federal	and	state	income	tax	returns.	The	general	limitation	rules	of	Section	382	for	a	debtor	in	a	bankruptcy	case	are	liberalized where	the	ownership	change	occurs	upon	emergence	from	bankruptcy.	American	elected	to	be	covered	by	certain	special	rules	for	federal	income	tax	purposes	that permitted	approximately	$9.5	billion	(with	$7.3	billion	of	unlimited	NOL	still	remaining	at	December	31,	2015)	of	its	federal	NOL	Carryforwards	to	be	utilized	without regard	to	the	Section	382	annual	limitation	rules	unless	a	second	ownership	change	occurred	on	or	before	December	9,	2015.	No	second	ownership	change	occurred within	 that	 period.	 Substantially	 all	 of	 American's	 remaining	 federal	 NOL	 Carryforwards	 (attributable	 to	 US	 Airways	 Group)	 are	 subject	 to	 limitation	 under Section	382;	however,	American's	ability	to	utilize	such	NOL	Carryforwards	is	not	anticipated	to	be	effectively

constrained	as	a	result	of	such	limitation.	Similar	limitations	may	apply	for	state	income	tax	purposes.	American's	ability	to	utilize	any	new	NOL	Carryforwards	arising after	the	ownership	changes	is	not	affected	by	the	annual	limitation	rules	imposed	by	Section	382	unless	another	ownership	change	occurs.	Under	the	Section	382 limitation,	cumulative	stock	ownership	changes	among	material	stockholders	exceeding	50%	during	a	rolling	three-year	period	can	potentially	limit	a	company's	future use	of	NOLs	and	tax	credits.	See	Part	I,	Item	1A.	Risk	Factors	–	"Our	ability	to	utilize	our	NOL	Carryforwards	may	be	limited"	for	unaudited	additional	discussion	of this	risk.

At	December	31,	2015,	American	had	an	Alternative	Minimum	Tax	credit	carryforward	of	approximately	$458	million	available	for	federal	income	tax	purposes, which	is	available	for	an	indefinite	period.

American	files	its	tax	returns	as	prescribed	by	the	tax	laws	of	the	jurisdictions	in	which	it	operates.	American's	2012	through	2014	tax	years	are	still	subject	to examination	by	the	Internal	Revenue	Service.	Various	state	and	foreign	jurisdiction	tax	years	remain	open	to	examination	and	American	is	under	examination,	in administrative	appeals,	or	engaged	in	tax	litigation	in	certain	jurisdictions.	American	believes	that	the	effect	of	any	assessments	will	be	immaterial	to	its	consolidated financial	statements.

In	November	2015,	the	FASB	issued	ASU	2015-17,	"Income	Taxes	(Topic	740):	Balance	Sheet	Classification	of	Deferred	Taxes,"	which	changes	how	deferred taxes	are	classified	on	the	balance	sheet.	The	update	eliminates	the	current	requirement	to	present	deferred	tax	liabilities	and	assets	as	current	and	noncurrent	on	the balance	sheet.	Deferred	tax	liabilities	and	assets	are	now	required	to	be	classified	as	noncurrent	on	the	balance	sheet.	Entities	have	the	choice	to	apply	ASU	2015-17 either	prospectively	to	all	deferred	tax	liabilities	and	assets	or	retrospectively	to	all	periods	presented.	The	update	is	effective	for	annual	and	interim	periods	in	fiscal years	beginning	after	December	15,	2016.	American	early	adopted	this	standard	during	the	fourth	quarter	2015,	utilizing	retrospective	application	as	permitted.	As	such, certain	prior	period	amounts	have	been	reclassified	to	conform	to	the	current	presentation.	As	a	result,	American	reclassified	$314	million	of	current	deferred	income	tax assets	within	prepaid	expenses	and	other	to	reduce	deferred	income	taxes	within	other	liabilities	on	the	consolidated	balance	sheet	as	of	December	31,	2014.

American's	economic	prospects	are	heavily	dependent	upon	two	variables	it	cannot	control:	the	health	of	the	economy	and	the	price	of	fuel.

Due	to	the	discretionary	nature	of	business	and	leisure	travel	spending,	airline	industry	revenues	are	heavily	influenced	by	the	condition	of	the	U.S.	economy	and economies	in	other	regions	of	the	world.	Unfavorable	conditions	in	these	broader	economies	have	resulted,	and	may	result	in	the	future,	in	decreased	passenger	demand for	air	travel	and	changes	in	booking	practices,	both	of	which	in	turn	have	had,	and	may	have	in	the	future,	a	strong	negative	effect	on	American's	revenues.	In	addition, during	challenging	economic	times,	actions	by	its	competitors	to	increase	their	revenues	can	have	an	adverse	impact	on	American's	revenues.

American's	operating	results	are	materially	impacted	by	changes	in	the	availability,	price	volatility	and	cost	of	aircraft	fuel,	which	represents	one	of	the	largest	single cost	items	in	American's	business.	Jet	fuel	market	prices	have	fluctuated	substantially	over	the	past	several	years	and	prices	continue	to	be	highly	volatile.	Because	of	the amount	of	fuel	needed	to	operate	American's	business,	even	a	relatively	small	increase	or	decrease	in	the	price	of	fuel	can	have	a	material	effect	on	American's	operating results	and	liquidity.

These	additional	factors	could	impact	American's	results	of	operations,	financial	performance	and	liquidity.

Most	of	American's	receivables	relate	to	tickets	sold	to	individual	passengers	through	the	use	of	major	credit	cards	or	to	tickets	sold	by	other	airlines	and	used	by passengers	on	American.	These	receivables	are	short-term,	mostly	being	settled	within	seven	days	after	sale.	Bad	debt	losses,	which	have	been	minimal	in	the	past,	have been	considered	in	establishing	allowances	for	doubtful	accounts.	American	does	not	believe	it	is	subject	to	any	significant	concentration	of	credit	risk.

American	has	exposure	to	market	risk	associated	with	changes	in	interest	rates	related	primarily	to	its	variable	rate	debt	obligations.	Interest	rates	on	$7.8	billion principal	amount	of	long-term	debt	as	of	December	31,	2015	are	subject	to	adjustment	to	reflect	changes	in	floating	interest	rates.	The	weighted	average	effective	interest rate	on	American's	variable	rate	debt	was	2.93%	at	December	31,	2015.	American	does	not	currently	have	an	interest	rate	hedge	program.

American	is	exposed	to	the	effect	of	foreign	exchange	rate	fluctuations	on	the	U.S.	dollar	value	of	foreign	currency-denominated	operating	revenues	and	expenses. American's	largest	exposure	comes	from	the	British	pound,	Euro,	Canadian	dollar	and	various	Latin	American	currencies,	primarily	the	Brazilian	real.	American	does not	currently	have	a	foreign	currency	hedge	program.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	operate	a	global	business	with	international	operations	that	are	subject	to economic	and	political	instability	and	have	been,	and	in	the	future	may	continue	to	be,	adversely	affected	by	numerous	events,	circumstances	or	government	actions beyond	our	control"	for	unaudited	additional	discussion.

# 10.		Investments	and	Fair	Value	Measurements

American	utilizes	the	market	approach	to	measure	fair	value	for	its	financial	assets.	The	market	approach	uses	prices	and	other	relevant	information	generated	by market	transactions	involving	identical	or	comparable	assets.	American's	short-term	investments	classified	as	Level	2	primarily	utilize	broker	quotes	in	a	non-active market	for	valuation	of	these	securities.	No	changes	in	valuation	techniques	or	inputs	occurred	during	the	year	ended	December	31,	2015.

(2) All	short-term	investments	are	classified	as	available-for-sale	and	stated	at	fair	value.	American's	short-term	investments	mature	in	one	year	or	less	except	for $734	million	of	corporate	obligations	and	$1.2	billion	of	bank	notes/certificates	of	deposit/time	deposits.

|  |  | Fair	Value	Measurements	as	of	December	31,	2014 | Fair	Value	Measurements	as	of	December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | \t\t\t\tTotal | \t\t\t\tLevel\t1 | \t\t\t\tLevel\t2 | \t\t\t\tLevel\t3 |
| Short-term\tinvestments\t(1),\t(2): |  |  |  |  |
| Money\tmarket\tfunds | $951 | $951 | $— | $— |
| Government\tagency\tinvestments | 101 | — | 101 | — |
| Repurchase\tagreements | 46 | — | 46 | — |
| Corporate\tobligations | 3,927 | — | 3,927 | — |
| Bank\tnotes/certificates\tof\tdeposit/time\tdeposits | 1,281 | — | 1,281 | — |
|  | 6,306 | 951 | 5,355 | — |
| Restricted\tcash\tand\tshort-term\tinvestments\t(1) | 774 | 774 | — | — |
| Total | $7,080 | $1,725 | $5,355 | $— |

(2) All	short-term	investments	are	classified	as	available-for-sale	and	stated	at	fair	value.	American's	short-term	investments	mature	in	one	year	or	less	except	for $1.1	billion	of	corporate	obligations	and	$575	million	of	bank	notes/certificates	of	deposit/time	deposits.

The	fair	value	of	American's	long-term	debt	was	estimated	using	quoted	market	prices	or	discounted	cash	flow	analyses,	based	on	American's	current	estimated incremental	borrowing	rates	for	similar	types	of	borrowing	arrangements.	If	American's	long-term	debt	was	measured	at	fair	value,	it	would	have	been	classified	as Level	2	in	the	fair	value	hierarchy.

The	carrying	value	and	estimated	fair	value	of	American's	long-term	debt,	including	current	maturities,	were	as	follows	(in	millions):

|  | December	31,	2015 | December	31,	2015 | December	31,	2014 | December	31,	2014 |
| :--- | :--- | :--- | :--- | :--- |
|  | Carrying\nValue | Fair\nValue | Carrying\nValue | Fair\nValue |
| Long-term\tdebt,\tincluding\tcurrent\tmaturities | $18,826 | $19,378 | $16,482 | $17,245 |

Generally,	fluctuations	in	foreign	currencies,	including	devaluations,	cannot	be	predicted	by	American	and	can	significantly	affect	the	value	of	American's	cash	and short-term	investments	located	outside	the	United	States.	These	conditions,	as	well	as	any	further	delays,	devaluations	or	imposition	of	more	stringent	repatriation restrictions,	may	materially	adversely	affect	American's	business,	results	of	operations	and	financial	condition.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	operate	a	global business	with	international	operations	that	are	subject	to	economic	and	political	instability	and	have	been,	and	in	the	future	may	continue	to	be,	adversely	affected	by numerous	events,	circumstances	or	government	actions	beyond	our	control"	for	unaudited	additional	discussion	of	this	and	other	currency	risks.

American	sponsors	defined	benefit	and	defined	contribution	pension	plans	for	eligible	employees.	The	defined	benefit	plans	provide	benefits	for	participating employees	based	on	years	of	service	and	average	compensation	for	a	specified	period	of	time	before	retirement.	Effective	November	1,	2012,	substantially	all	of American's	defined	benefit	pension	plans	were	frozen	and	American	began	providing	enhanced	benefits	under	 its	defined	contribution	plans	for	certain	groups. American	uses	a	December	31	measurement	date	for	all	of	its	defined	benefit	plans.	American	also	provides	certain	retiree	medical	and	other	postretirement	benefits, including	health	care	and	life	insurance	benefits,	to	retired	employees.	Effective	November	1,	2012,	American	modified	its	retiree	medical	and	life	coverage	to	eliminate the	company	subsidy	for	employees	who	retire	on	or	after	November	1,	2012.	As	a	result	of	modifications	to	its	retiree	medical	plans	in	2012,	American	recognized	a negative	plan	amendment	of	$1.9	billion,	which	is	included	as	a	component	of	actuarial	gain	in	OCI	and	will	be	amortized	over	the	future	service	life	of	the	active	plan participants	for	whom	the	benefit	was	eliminated,	or	approximately	eight	years.	As	of	December	31,	2015,	$1.1	billion	of	actuarial	gain	remains	to	be	amortized.

|  | Pension	Benefits<br>								2015 | 2014 | Retiree	Medical	and	Other<br>Postretirement	Benefits<br>								2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| Reconciliation\tof\tbenefit\tobligation: |  |  |  |  |
| Obligation\tat\tJanuary\t1 | $17,504 | $14,826 | $1,324 | $1,383 |
| Service\tcost | 2 | 2 | 3 | 1 |
| Interest\tcost | 733 | 742 | 50 | 61 |
| Actuarial\t(gain)\tloss | (1,153) | 2,559 | (178) | (39) |
| Plan\tamendments | — | — | — | 33 |
| Settlements | (3) | (20) | — | — |
| Benefit\tpayments | (773) | (605) | (94) | (111) |
| Other | — | — | 24 | (4) |
| Obligation\tat\tDecember\t31 | $16,310 | $17,504 | $1,129 | $1,324 |
| Reconciliation\tof\tfair\tvalue\tof\tplan\tassets: |  |  |  |  |
| Fair\tvalue\tof\tplan\tassets\tat\tJanuary\t1 | $10,935 | $10,009 | $244 | $239 |
| Actual\treturn\ton\tplan\tassets | (505) | 742 | (10) | 11 |
| Employer\tcontributions | 6 | 809 | 89 | 105 |
| Settlements | (3) | (20) | — | — |
| Benefit\tpayments | (773) | (605) | (94) | (111) |
| Other\t(1) | — | — | 24 | — |
| Fair\tvalue\tof\tplan\tassets\tat\tDecember\t31 | 9,660 | 10,935 | 253 | 244 |
| Funded\tstatus\tat\tDecember\t31 | $(6,650) | $(6,569) | $(876) | $(1,080) |
| Amounts\trecognized\tin\tthe\tconsolidated\tbalance\tsheets: |  |  |  |  |
| Current\tliability | $7 | $10 | $109 | $117 |
| Noncurrent\tliability\t(2) | 6,643 | 6,559 | 767 | 963 |
|  | $6,650 | $6,569 | $876 | $1,080 |
| Amounts\trecognized\tin\tother\tcomprehensive\tincome: |  |  |  |  |
| Net\tactuarial\tloss\t(gain) | $5,036 | $4,949 | $(339) | $(199) |
| Prior\tservice\tcost\t(benefit)\t(2) | 216 | 245 | (1,084) | (1,326) |
|  | $5,252 | $5,194 | $(1,423) | $(1,525) |

|  | Pension	Benefits<br>								2015 | 2014 | Retiree	Medical	and	Other<br>Postretirement	Benefits<br>								2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| For\tplans\twith\taccumulated\tbenefit\tobligations\texceeding\tthe\tfair\tvalue\tof\tplan |  |  |  |  |
| assets: |  |  |  |  |
| Projected\tbenefit\tobligation\t(PBO) | $16,283 | $17,471 | $— | $— |
| Accumulated\tbenefit\tobligation\t(ABO) | 16,272 | 17,461 | — | — |
| Accumulated\tpostretirement\tbenefit\tobligation\t(APBO) | — | — | 1,129 | 1,324 |
| Fair\tvalue\tof\tplan\tassets | 9,630 | 10,899 | 253 | 244 |
| ABO\tless\tfair\tvalue\tof\tplan\tassets | 6,642 | 6,562 | — | — |

|  | Pension	Benefits<br>								2015 | 2014 | Retiree	Medical	and	Other<br>Postretirement	Benefits<br>								2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| Weighted-average\tassumptions\tused\tto\tdetermine\tnet\tperiodic\tbenefit |  |  |  |  |
| cost\tfor\tthe\tyears\tended\tDecember\t31: |  |  |  |  |
| Discount\trate\t1/1\t–\t12/31 | 4.30% | 5.10% | 4.00% | 4.74% |
| Expected\treturn\ton\tplan\tassets | 8.00% | 8.00% | 8.00% | 8.00% |

As	of	December	31,	2015,	American's	estimate	of	the	long-term	rate	of	return	on	plan	assets	was	8%	based	on	the	target	asset	allocation.	Expected	returns	on	longer duration	bonds	are	based	on	yields	to	maturity	of	the	bonds	held	at	year-end.	Expected	returns	on	other	assets	are	based	on	a	combination	of	long-term	historical	returns, actual	returns	on	plan	assets	achieved	over	the	last	ten	years,	current	and	expected	market	conditions,	and	expected	value	to	be	generated	through	active	management, currency	overlay	and	securities	lending	programs.

The	objectives	of	American's	investment	policies	are	to:	maintain	sufficient	income	and	liquidity	to	pay	retirement	benefits;	produce	a	long-term	rate	of	return	that meets	or	exceeds	the	assumed	rate	of	return	for	plan	assets;	limit	the	volatility	of	asset	performance	and	funded	status;	and	diversify	assets	among	asset	classes	and investment	managers.

Investments	in	securities	traded	on	recognized	securities	exchanges	are	valued	at	the	last	reported	sales	price	on	the	last	business	day	of	the	year.	Securities	traded	in the	over-the-counter	market	are	valued	at	the	last	bid

price.	The	money	market	fund	is	valued	at	fair	value	which	represents	the	net	asset	value	of	the	shares	of	such	fund	as	of	the	close	of	business	at	the	end	of	the	period. Investments	in	limited	partnerships	are	carried	at	estimated	net	asset	value	as	determined	by	and	reported	by	the	general	partners	of	the	partnerships	and	represent	the proportionate	share	of	the	estimated	fair	value	of	the	underlying	assets	of	the	limited	partnerships.	Common/collective	trusts	are	valued	at	net	asset	value	based	on	the fair	values	of	the	underlying	investments	of	the	trusts	as	determined	by	the	sponsor	of	the	trusts.	The	pension	plan's	master	trust	also	invests	in	a	103-12	investment entity	(the	103-12	Investment	Trust)	which	is	designed	to	invest	plan	assets	of	more	than	one	unrelated	employer.	The	103-12	Investment	Trust	is	valued	at	net	asset value	which	is	determined	by	the	issuer	at	the	end	of	each	month	and	is	based	on	the	aggregate	fair	value	of	trust	assets	less	liabilities,	divided	by	the	number	of	units outstanding.	No	changes	in	valuation	techniques	or	inputs	occurred	during	the	year.

The	fair	value	of	American's	pension	plan	assets	at	December	31,	2015	and	2014,	by	asset	category	are	as	follows	(in	millions):

|  |  | Fair	Value	Measurements	as	of	December	31,	2015 | Fair	Value	Measurements	as	of	December	31,	2015 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Quoted\tPrices\t\tin | Significant | Significant |  |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Cash\tand\tcash\tequivalents | $287 | $— | $— | $287 |
| Equity\tsecurities: |  |  |  |  |
| International\tmarkets\t(a),\t(b) | 2,873 | — | — | \t 2,873 |
| Large-cap\tcompanies\t(b) | 1,999 | — | — | \t 1,999 |
| Mid-cap\tcompanies\t(b) | 361 | — | — | 361 |
| Small-cap\tcompanies\t(b) | 18 | — | — | 18 |
| Fixed\tincome: |  |  |  |  |
| Corporate\tbonds\t(c) | — | 2,204 | — | \t 2,204 |
| Government\tSecurities\t(d) | — | 917 | — | 917 |
| U.S.\tmunicipal\tsecurities | — | 48 | — | 48 |
| Alternative\tinstruments: |  |  |  |  |
| Private\tequity\tpartnerships\t(e) | — | — | 722 | 722 |
| Common/collective\ttrusts\tand\t103-12\tInvestment\tTrust\t(f) | — | 219 | — | 219 |
| Insurance\tgroup\tannuity\tcontracts | — | — | 2 | 2 |
| Dividend\tand\tinterest\treceivable | 50 | — | — | 50 |
| Due\tto/from\tbrokers\tfor\tsale\tof\tsecurities\t–\tnet | 23 | — | — | 23 |
| Other\tassets\t–\tnet | 8 | — | — | 8 |
| Other\tliabilities\t–\tnet | (71) | — | — | (71) |
| Total | $5,548 | $3,388 | $724 | $9,660 |

c) Includes	approximately	74%	investments	in	corporate	debt	with	a	Standard	and	Poor's	(S&P)	rating	lower	than	A	and	26%	investments	in	corporate	debt	with	an S&P	rating	A	or	higher.	Holdings	include	82%	U.S.	companies,	16%	international	companies	and	2%	emerging	market	companies.

d) Includes	approximately	75%	investments	in	U.S.	domestic	government	securities	and	25%	in	emerging	market	government	securities.	There	are	no	significant foreign	currency	risks	within	this	classification.

e) Includes	limited	partnerships	that	invest	primarily	in	U.S.	(89%)	and	European	(11%)	buyout	opportunities	of	a	range	of	privately	held	companies.	The	pension plan's	master	trust	does	not	have	the	right	to	redeem	its	limited	partnership	investment	at	its	net	asset	value,	but	rather	receives	distributions	as	the	underlying assets	are	liquidated.	It	is	estimated	that	the	underlying	assets	of	these	funds	will	be	gradually	liquidated	over	the	next	one	to	ten	years.	Additionally,	the	pension plan's	master	trust	has	future	funding	commitments	of	approximately	$428	million	over	the	next	ten	years.

f) Investment	includes	73%	in	an	emerging	market	103-12	Investment	Trust	with	investments	in	emerging	country	equity	securities,	14%	in	Canadian	segregated balanced	value,	income	growth	and	diversified	pooled	funds	and	13%	in	a	common/collective	trust	investing	in	securities	of	smaller	companies	located	outside the	U.S.,	including	developing	markets.	Requests	for	withdrawals	must	meet	specific	requirements	with	advance	notice	of	redemption	preferred.

|  |  | Fair	Value	Measurements	as	of	December	31,	2014 | Fair	Value	Measurements	as	of	December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Quoted\tPrices\tin | Significant | Significant |  |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Cash\tand\tcash\tequivalents | $332 | $— | $— | $332 |
| Equity\tsecurities: |  |  |  |  |
| International\tmarkets\t(a),\t(b) | 2,943 | — | — | 2,943 |
| Large-cap\tcompanies\t(b) | 2,488 | — | — | 2,488 |
| Mid-cap\tcompanies\t(b) | 362 | — | — | 362 |
| Small-cap\tcompanies\t(b) | 21 | — | — | 21 |
| Fixed\tincome: |  |  |  |  |
| Corporate\tbonds\t(c) | — | 2,384 | — | 2,384 |
| Government\tSecurities\t(d) | — | 1,184 | — | 1,184 |
| U.S.\tmunicipal\tsecurities | — | 65 | — | 65 |
| Alternative\tinstruments: |  |  |  |  |
| Private\tequity\tpartnerships\t(e) | — | — | 818 | 818 |
| Common/collective\ttrusts\tand\t103-12\tInvestment\tTrust\t(f) | — | 240 | — | 240 |
| Insurance\tgroup\tannuity\tcontracts | — | — | 2 | 2 |
| Dividend\tand\tinterest\treceivable | 52 | — | — | 52 |
| Due\tto/from\tbrokers\tfor\tsale\tof\tsecurities\t–\tnet | 39 | — | — | 39 |
| Other\tassets\t–\tnet | 5 | — | — | 5 |
| Total | $6,242 | $3,873 | $820 | $10,935 |

c) Includes	approximately	74%	investments	in	corporate	debt	with	an	S&P	rating	lower	than	A	and	26%	investments	in	corporate	debt	with	an	S&P	rating	A	or higher.	Holdings	include	81%	U.S.	companies,	16%	international	companies	and	3%	emerging	market	companies.

e) Includes	limited	partnerships	that	invest	primarily	in	U.S.	(91%)	and	European	(9%)	buyout	opportunities	of	a	range	of	privately	held	companies.	The	pension plan's	master	trust	does	not	have	the	right	to	redeem	its

limited	partnership	investment	at	its	net	asset	value,	but	rather	receives	distributions	as	the	underlying	assets	are	liquidated.	It	is	estimated	that	the	underlying assets	of	these	funds	will	be	gradually	liquidated	over	the	next	one	to	ten	years.	Additionally,	the	pension	plan's	master	trust	has	future	funding	commitments	of approximately	$403	million	over	the	next	ten	years.

|  | Private		Equity<br>Partnerships | Insurance	Group<br>Annuity	Contracts |
| :--- | :--- | :--- |
| Beginning\tbalance\tat\tDecember\t31,\t2013 | $848 | $2 |
| Actual\treturn\ton\tplan\tassets: |  |  |
| Relating\tto\tassets\tstill\theld\tat\tthe\treporting\tdate | (38) | — |
| Relating\tto\tassets\tsold\tduring\tthe\tperiod | 158 | — |
| Purchases | 148 | — |
| Sales | (298) | — |
| Ending\tbalance\tat\tDecember\t31,\t2014 | $818 | $2 |

The	fair	value	of	American's	other	postretirement	benefit	plan	assets	at	December	31,	2015	by	asset	category,	were	as	follows	(in	millions):

|  |  | Fair	Value	Measurements	as	of	December	31,	2015 | Fair	Value	Measurements	as	of	December	31,	2015 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Quoted\tPrices\t\tin | Significant | Significant |  |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Money\tmarket\tfund | $4 | $— | $— | $4 |
| Mutual\tfunds\t–\tInstitutional\tClass | 19 | — | — | 19 |
| Mutual\tfunds\t–\tAMR\tClass | — | 230 | — | \t 230 |
| Total | $23 | $230 | $— | $253 |

|  | Quoted	Prices	in | Significant | Significant |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Active\tMarkets\tfor | Observable | Unobservable |  |
| Asset\tCategory | Identical\tAssets\n(Level\t1) | Inputs\n(Level\t2) | Inputs\n(Level\t3) | Total |
| Money\tmarket\tfund | $2 | $— | $— | $2 |
| Mutual\tfunds\t–\tAMR\tClass | — | 242 | — | \t 242 |
| Total | $2 | $242 | $— | $244 |

Investments	in	the	other	postretirement	benefit	plan's	mutual	funds	are	valued	by	quoted	prices	on	the	active	market,	which	is	fair	value	and	represents	the	net	asset value	of	the	shares	of	such	funds	as	of	the	close	of	business	at	the	end	of	the	period.	AMR	Class	shares	are	offered	without	a	sales	charge	to	participants.	Purchases	are restricted	to	certain	retirement	benefit	plans,	including	American's	other	postretirement	benefit	plan,	resulting	in	a	fair	value	classification	of	Level	2.	Investments include	approximately	27%	and	28%	of	investments	in	non-U.S.	common	stocks	in	2015	and	2014,	respectively.	Net	asset	value	is	based	on	the	fair	market	value	of	the funds'	underlying	assets	and	liabilities	at	the	date	of	determination.

American	is	required	to	make	minimum	contributions	to	its	defined	benefit	pension	plans	under	the	minimum	funding	requirements	of	the	Employee	Retirement Income	Security	Act	of	1974	and	various	other	laws.	Based	on	current	funding	assumptions,	American	has	no	minimum	required	contributions	until	2018.	Currently, American's	minimum	funding	obligation	for	its	pension	plans	is	subject	to	temporary	favorable	rules	that	are	scheduled	to	expire	at	the	end	of	2017.	American's pension	funding	obligations	are	likely	to	increase	materially	following	expiration	of	the	temporary	funding	rules,	when	American	will	be	required	to	make	contributions relating	to	the	2018	fiscal	year.	The	amount	of	these	obligations	will	depend	on	the	performance	of	American's	investments	held	in	trust	by	the	pension	plans,	interest rates	for	determining	liabilities	and	American's	actuarial	experience.

|  | 2016 | 2017 | 2018 | 2019 | 2020 | 2021-2025 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Pension | $660 | $687 | $722 | $761 | $802 | $4,621 |
| Retiree\tmedical\tand\tother\tpostretirement\tbenefits | \t 109 | \t 104 | 98 | 90 | 84 | 353 |

# 12.	Accumulated	Other	Comprehensive	Income	(Loss)

The	components	of	accumulated	other	comprehensive	income	(loss)	are	as	follows	(in	millions):

|  |  |  | Unrealized | Income |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Pension\tand | Derivative | Gain/(Loss) | Tax |  |
|  | Retiree\t\tMedical | Financial | on | Benefit |  |
|  | Liability | Instruments | Investments | (Provision) | Total |
| Balance\tat\tDecember\t31,\t2013 | $(887) | $65 | $1 | $(1,319) | $(2,140) |
| Other\tcomprehensive\tloss\tbefore\treclassifications | (2,621) | (52) | — | — | (2,673) |
| Amounts\treclassified\tfrom\taccumulated\tother\tcomprehensive |  |  |  |  |  |
| income\t(loss) | (163) | (4) | (4) | 328 | 157 |
| Net\tcurrent-period\tother\tcomprehensive\tincome\t(loss) | (2,784) | (56) | (4) | 328 | (2,516) |
| Balance\tat\tDecember\t31,\t2014 | (3,671) | 9 | (3) | (991) | (4,656) |
| Other\tcomprehensive\tloss\tbefore\treclassifications | (51) | — | (7) | — | (58) |
| Amounts\treclassified\tfrom\taccumulated\tother\tcomprehensive |  |  |  |  |  |
| income\t(loss) | (109) | (9) | 1 | — | (117) |
| Net\tcurrent-period\tother\tcomprehensive\tloss | (160) | (9) | (6) | — | (175) |
| Balance\tat\tDecember\t31,\t2015 | $(3,831) | $— | $(9) | $(991) | $(4,831) |

| Details	about	accumulated	other	comprehensive<br>income	(loss)	components | Year	Ended	December	31,<br>2015 | 2014 | Affected	line	item	in	the	statement<br>where	net	income	(loss)	is		presented |
| :--- | :--- | :--- | :--- |
| Amortization\tof\tpension\tand\tretiree\tmedical\tliability: |  |  |  |
| Prior\tservice\tcost | $(212) | $(202) | Salaries,\twages\tand\tbenefits |
| Actuarial\tloss | 103 | 39 | Salaries,\twages\tand\tbenefits |
| Derivative\tfinancial\tinstruments: |  |  |  |
| Cash\tflow\thedges | (9) | (4) | Aircraft\tfuel\tand\trelated\ttaxes |
| Net\tunrealized\tchange\ton\tinvestments: |  |  |  |
| Net\tchange\tin\tvalue | 1 | (4) | Other\tnonoperating,\tnet |
| Income\ttax\tbenefit\t(provision): |  |  |  |
| Reversal\tof\tnon-cash\ttax\tprovision | — | 328 | Income\ttax\tprovision\t(benefit) |
| Total\treclassifications\tfor\tthe\tperiod | $(117) | $157 |  |

During	2014,	American	sold	its	portfolio	of	fuel	hedging	contracts	that	were	scheduled	to	settle	on	or	after	June	30,	2014.	In	connection	with	this	sale,	American recorded	a	special	non-cash	tax	provision	of	$328	million	in	the	statement	of	operations	for	the	second	quarter	of	2014	that	reversed	the	non-cash	tax	provision	which was	recorded	in	OCI,	a	subset	of	stockholder's	equity,	principally	in	2009.	This	provision	represented	the	tax	effect	associated	with	gains	recorded	in	OCI	principally	in 2009	due	to	a	net	increase	in	the	fair	value	of	American's	fuel	hedging	contracts.	In	accordance	with	GAAP,	American	retained	the	$328	million	tax	provision	in	OCI until	the	last	contract	was	settled	or	terminated.

Amounts	allocated	to	OCI	for	income	taxes	as	further	described	in	Note	8	will	remain	in	accumulated	other	comprehensive	income	(loss)	until	American	ceases	all related	activities,	such	as	termination	of	the	pension	plan.

Under	 all	 of	 American's	 aircraft	 and	 engine	 purchase	 agreements, its total future	 commitments	 as	 of	 December	 31,	 2015	 are	 expected to	 be	 as follows (approximately,	in	millions):

(1) These	amounts	are	net	of	purchase	deposits	currently	held	by	the	manufacturers	and	include	all	commitments	for	wholly-owned	regional	aircraft.	American	has granted	Boeing	a	security	interest	in	its	purchase	deposits	with	Boeing.	American's	purchase	deposits	totaled	$1.1	billion	as	of	December	31,	2015.

As	of	December	31,	2015,	American	did	not	have	financing	commitments	for	the	following	aircraft	currently	on	order	and	scheduled	to	be	delivered	through	2017: 25	Airbus	A320	family	aircraft	in	2016	and	20	Airbus	A320	family	aircraft	in	2017,	8	Boeing	787	family	aircraft	in	2016	and	13	Boeing	787	family	aircraft	in	2017,	15 Boeing	737-800	aircraft	in	2016,	three	Boeing	737	MAX	family	aircraft	in	2017	and	two	Boeing	777-300ER	aircraft	in	2016.	In	addition,	American	did	not	have financing	commitments	in	place	for	substantially	all	aircraft	currently	on	order	and	scheduled	to	be	delivered	in	2018	and	beyond.	See	Part	I,	Item	1A.	Risk	Factors	– "We	will	need	to	obtain	sufficient	financing	or	other	capital	to	operate	successfully"	for	unaudited	additional	discussion.

American	has	contracts	related	to	facility	construction	or	improvement	projects,	primarily	at	airport	locations,	as	well	as	information	technology	support.	The contractual	obligations	related	to	these	contracts	are	presented	in	the	table	below	(in	millions):

|  | 2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Facility\tconstruction\tor\timprovement\tcontracts | $211 | $2 | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $ —\t\t\t\t $—\t\t\t\t $—\t\t\t\t $— | $213 |
| Information\ttechnology\tcontracts | \t 160 | \t 136 | \t 107 | \t 88 | 6 | — | \t 497 |

As	of	December	31,	2015,	American's	capacity	purchase	agreements	with	third-party	regional	carriers	had	expiration	dates	ranging	from	2017	to	2027,	with	rights	of American	to	extend	the	respective	terms	of	each	agreement.	See	Part	I,	Item	2.	Properties	for	unaudited	information	on	the	aircraft	contractually	obligated	to	American under	such	capacity	purchase	agreements	with	third-party	regional	carriers.

American	has	entered	into	agreements	with	the	third-party	regional	carriers	that	operate	certain	of	their	aircraft	using	American's	flight	designator	codes.	American controls	the	scheduling,	pricing,	reservations,	ticketing	and	seat	inventories	of	those	aircraft	and	retains	all	revenues	associated	with	flights	by	those	aircraft.	American pays	the	third-party	regional	carriers	an	amount,	as	defined	in	the	applicable	agreement,	based	on	the	airlines'	costs	of	operating	those	flights.	In	addition,	these agreements	provide	that	certain	variable	costs,	such	as	airport	landing

fees,	fuel	and	passenger	liability	insurance,	will	be	100%	paid	for	or	reimbursed	by	American.	As	of	December	31,	2015,	American's	minimum	fixed	obligations	under its	capacity	purchase	agreements	with	third-party	regional	carriers	were	as	follows	(approximately,	in	millions):

(1) Represents	minimum	payments	under	capacity	purchase	agreements	with	 third-party	regional	carriers.	These	commitments	are	estimates	of	costs	based	on assumed	minimum	levels	of	flying	under	the	capacity	purchase	agreements	and	American's	actual	payments	could	differ	materially.	These	obligations	also include	the	portion	of	American's	future	obligations	related	to	aircraft	deemed	to	be	leased	in	the	amount	of	approximately	$469	million	in	2016,	$414	million	in 2017,	$334	million	in	2018,	$292	million	in	2019,	$235	million	in	2020	and	$704	million	in	2021	and	thereafter.

American	leases	certain	aircraft,	engines	and	ground	equipment,	in	addition	to	the	majority	of	its	ground	facilities	and	terminal	space.	As	of	December	31,	2015, American	had	427	aircraft	under	operating	leases,	with	remaining	terms	ranging	from	one	month	to	approximately	12	years.	Airports	are	utilized	for	flight	operations under	lease	arrangements	with	the	municipalities	or	agencies	owning	or	controlling	such	airports.	Substantially	all	leases	provide	that	the	lessee	must	pay	taxes, maintenance,	insurance	and	certain	other	operating	expenses	applicable	to	the	leased	property.	Some	leases	also	include	renewal	and	purchase	options.

American	currently	operates	263	owned	aircraft	and	138	leased	aircraft	which	were	financed	with	enhanced	equipment	trust	certificates,	or	EETCs,	issued	by	pass- through	trusts.	These	trusts	are	off-balance	sheet	entities,	the	primary	purpose	of	which	is	to	finance	the	acquisition	of	flight	equipment.	Rather	than	finance	each	aircraft separately	when	such	aircraft	was	purchased,	delivered	or	refinanced,	these	trusts	allowed	American	to	raise	the	financing	for	several	aircraft	at	one	time	and	place	such funds	in	escrow	pending	the	purchase,	delivery	or	refinancing	of	the	relevant	aircraft.	The	trusts	were	also	structured	to	provide	for	certain	credit	enhancements,	such	as liquidity	facilities	to	cover	certain	interest	payments,	that	reduce	the	risks	to	the	purchasers	of	the	trust	certificates	and,	as	a	result,	reduce	the	cost	of	aircraft	financing	to American.

American	guarantees	the	payment	of	principal	and	interest	of	certain	special	facility	revenue	bonds	issued	by	municipalities	primarily	to	build	or	improve	airport facilities	and	purchase	equipment	which	is	leased	to	American.	Under	such	leases,	American	is	required	to	make	rental	payments	through	2035,	sufficient	to	pay maturing	principal	and	interest	payments	on	the	related	bonds.	As	of	December	31,	2015,	the	remaining	lease	payments	guaranteeing	the	principal	and	interest	on	these bonds	are	$617	million,	which	are	accounted	for	as	operating	leases.

Pursuant	to	rulings	of	the	Bankruptcy	Court,	the	Plan	established	the	Disputed	Claims	Reserve	to	hold	shares	of	AAG	Common	Stock	reserved	for	issuance	to disputed	claimholders	at	the	Effective	Date	that	ultimately

become	holders	of	allowed	Single-Dip	Unsecured	Claims.	The	shares	provided	for	under	the	Plan	were	determined	based	upon	a	Disputed	Claims	Reserve	amount	of claims	of	approximately	$755	million,	representing	the	maximum	amount	of	additional	distributions	to	subsequently	allowed	Single-Dip	Unsecured	Claims	under	the Plan.	As	of	December	31,	2015,	there	were	approximately	25.3	million	shares	of	AAG	Common	Stock	remaining	in	the	Disputed	Claims	Reserve.	As	disputed	claims are	resolved,	the	claimants	will	receive	distributions	of	shares	from	the	Disputed	Claims	Reserve	on	the	same	basis	as	if	such	distributions	had	been	made	on	or	about	the Effective	Date.	However,	American	is	not	required	to	distribute	additional	shares	above	the	limits	contemplated	by	the	Plan,	even	if	the	shares	remaining	for	distribution are	not	sufficient	to	fully	pay	any	additional	allowed	unsecured	claims.	To	the	extent	that	any	of	the	reserved	shares	remain	undistributed	upon	resolution	of	all remaining	disputed	claims,	such	shares	will	not	be	returned	to	AAG	but	rather	will	be	distributed	to	former	AMR	stockholders	as	of	the	Effective	Date.	However, resolution	of	disputed	claims	could	have	a	material	effect	on	recoveries	by	holders	of	additional	allowed	Single-Dip	Unsecured	Claims	under	the	Plan	and	the	amount	of additional	share	distributions,	if	any,	that	are	made	to	former	AMR	stockholders	as	the	total	number	of	shares	of	AAG	Common	Stock	that	remain	available	for distribution	upon	resolution	of	disputed	claims	is	limited	pursuant	to	the	Plan.

There	is	also	pending	in	the	Bankruptcy	Court	an	adversary	proceeding	relating	to	an	action	brought	by	American	to	seek	a	determination	that	certain	non-pension, post-employment	benefits	(OPEB)	are	not	vested	benefits	and	thus	may	be	modified	or	terminated	without	liability	to	American.	On	April	18,	2014,	the	Bankruptcy Court	granted	American's	motion	for	summary	judgment	with	respect	to	certain	non-union	employees,	concluding	that	their	benefits	were	not	vested	and	could	be terminated.	The	summary	judgment	motion	was	denied	with	respect	to	all	other	retirees.	The	Bankruptcy	Court	has	not	yet	scheduled	a	trial	on	the	merits	concerning whether	those	retirees'	benefits	are	vested,	and	American	cannot	predict	whether	it	will	receive	relief	from	obligations	to	provide	benefits	to	any	of	those	retirees. American's	financial	statements	presently	reflect	these	retirement	programs	without	giving	effect	to	any	modification	or	termination	of	benefits	that	may	ultimately	be implemented	based	upon	the	outcome	of	this	proceeding.	Separately,	both	the	APFA	and	TWU	have	filed	grievances	asserting	that	American	was	"successful"	in	its Chapter	11	with	respect	to	matters	related	to	OPEB	and,	accordingly,	by	operation	of	the	underlying	collective	bargaining	agreements,	American's	prior	contributions	to certain	OPEB	prefunding	trusts	attributable	to	active	employees	should	be	returned	to	those	active	employees.	These	amounts	aggregate	approximately	$212	million. American	has	denied	both	grievances	and	intends	to	defend	these	matters	vigorously.

DOJ	Antitrust	Civil	Investigative	Demand.	In	June	2015,	American	received	a	Civil	Investigative	Demand	(CID)	from	the	DOJ	as	part	of	an	investigation	into whether	there	have	been	illegal	agreements	or	coordination	of	air	passenger	capacity.	The	CID	seeks	documents	and	other	information	from	American,	and	other	airlines have	announced	that	they	have	received	similar	requests.	American	is	cooperating	fully	with	the	DOJ	investigation.	In	addition,	subsequent	to	announcement	of	the delivery	of	CIDs	by	the	DOJ,	American,	along	with	Delta	Air	Lines,	Inc.,	Southwest	Airlines	Co.,	United	Airlines,	Inc.	and,	in	the	case	of	litigation	filed	in	Canada,	Air Canada,	have	been	named	as	defendants	in	approximately	100	putative	class	action	lawsuits	alleging	unlawful	agreements	with	respect	to	air	passenger	capacity.	The U.S.	lawsuits	were	the	subject	of	multiple	motions	to	consolidate	them	in	a	single	forum,	and	they	have	now	been	consolidated	in	the	Federal	District	Court	for	the District	of	Columbia.	Both	the	DOJ	investigation	and	these	lawsuits	are	in	their	very	early	stages	and	American	intends	to	defend	the	lawsuits	vigorously.

Private	Party	Antitrust	Action.	On	July	2,	2013,	a	lawsuit	captioned	Carolyn	Fjord,	et	al.,	v.	US	Airways	Group,	Inc.,	et	al.,	was	filed	in	the	United	States	District Court	for	the	Northern	District	of	California.	The	complaint	named	as	defendants	US	Airways	Group	and	US	Airways,	and	alleged	that	the	effect	of	the	Merger	may	be to	substantially	lessen	competition	or	tend	to	create	a	monopoly	in	violation	of	Section	7	of	the	Clayton	Antitrust	Act.	The	relief	sought	in	the	complaint	included	an injunction	against	the	Merger,	or	divestiture.	On	August	6,	2013,	the	plaintiffs	re-filed	their	complaint	in	the	Bankruptcy	Court,	adding	AMR	and	American	as

defendants,	and	on	October	2,	2013,	dismissed	the	initial	California	action.	On	November	27,	2013,	the	Bankruptcy	Court	denied	plaintiffs'	motion	to	preliminarily enjoin	the	Merger.	On	August	19,	2015,	after	three	previous	largely	unsuccessful	attempts	to	amend	their	complaint,	plaintiffs	filed	a	fourth	motion	for	leave	to	file	an amended	and	supplemental	complaint	to	add	a	claim	for	damages	and	demand	for	jury	trial,	as	well	as	claims	similar	to	those	in	the	putative	class	action	lawsuits regarding	air	passenger	capacity.	Thereafter,	plaintiffs	filed	a	request	with	the	Judicial	Panel	on	Multidistrict	Litigation	(JPML)	to	consolidate	the	Fjord	matter	with	the putative	class	action	lawsuits.	The	JPML	denied	that	request	on	October	15,	2015	and	plaintiffs'	request	for	further	relief	from	the	JPML	was	denied	on	February	4, 2016.	Accordingly,	the	parties	will	continue	to	litigate	the	matter	in	Bankruptcy	Court.	American	believes	this	lawsuit	is	without	merit	and	intends	to	vigorously	defend against	the	allegations.

DOJ	Civil	Investigative	Demand	Related	to	the	United	States	Postal	Service.	In	April	2015,	the	DOJ	informed	American	of	an	inquiry	regarding	American's	2009 and	2011	contracts	with	the	United	States	Postal	Service	for	the	international	transportation	of	mail	by	air.	In	October	2015,	American	received	a	CID	from	DOJ	seeking certain	information	relating	to	these	contracts.	The	DOJ	has	indicated	it	is	investigating	potential	violations	of	the	False	Claims	Act.	American	is	cooperating	fully	with the	DOJ	investigation.

General.	In	addition	to	the	specifically	identified	legal	proceedings,	American	and	its	subsidiaries	are	also	engaged	in	other	legal	proceedings	from	time	to	time. Legal	proceedings	can	be	complex	and	take	many	months,	or	even	years,	to	reach	resolution,	with	the	final	outcome	depending	on	a	number	of	variables,	some	of	which are	not	within	American's	control.	Therefore,	although	American	will	vigorously	defend	itself	in	each	of	the	actions	described	above	and	such	other	legal	proceedings, their	ultimate	resolution	and	potential	financial	and	other	impacts	on	American	are	uncertain	but	could	be	material.	See	Part	I,	Item	1A.	Risk	Factors	–	"We	may	be	a party	to	litigation	in	the	normal	course	of	business	or	otherwise,	which	could	affect	our	financial	position	and	liquidity"	for	unaudited	additional	discussion.

American	is	a	party	to	many	routine	contracts	in	which	it	provides	general	indemnities	in	the	normal	course	of	business	to	third	parties	for	various	risks.	American	is not	able	to	estimate	the	potential	amount	of	any	liability	resulting	from	the	indemnities.	These	indemnities	are	discussed	in	the	following	paragraphs.

In	its	aircraft	financing	agreements,	American	generally	indemnifies	the	financing	parties,	trustees	acting	on	their	behalf	and	other	relevant	parties	against	liabilities (including	certain	taxes)	resulting	from	the	financing,	manufacture,	design,	ownership,	operation	and	maintenance	of	the	aircraft	regardless	of	whether	these	liabilities (or	taxes)	relate	to	the	negligence	of	the	indemnified	parties.

American's	loan	agreements	and	other	LIBOR-based	financing	transactions	(including	certain	leveraged	aircraft	leases)	generally	obligate	American	to	reimburse	the applicable	lender	for	incremental	costs	due	to	a	change	in	law	that	imposes	(i)	any	reserve	or	special	deposit	requirement	against	assets	of,	deposits	with	or	credit extended	by	such	lender	related	to	the	loan,	(ii)	any	tax,	duty	or	other	charge	with	respect	to	the	loan	(except	standard	income	tax)	or	(iii)	capital	adequacy	requirements. In	addition,	American's	loan	agreements	and	other	financing	arrangements	typically	contain	a	withholding	tax	provision	that	requires	American	to	pay	additional amounts	to	the	applicable	lender	or	other	financing	party,	generally	if	withholding	taxes	are	imposed	on	such	lender	or	other	financing	party	as	a	result	of	a	change	in	the applicable	tax	law.

These	increased	cost	and	withholding	tax	provisions	continue	for	the	entire	term	of	the	applicable	transaction,	and	there	is	no	limitation	on	the	maximum	additional amounts	American	could	be	obligated	to	pay	under	such	provisions.	Any	failure	to	pay	amounts	due	under	such	provisions	generally	would	trigger	an	event	of	default and,	in	a	secured	financing	transaction,	would	entitle	the	lender	to	foreclose	on	the	collateral	to	realize	the	amount	due.

In	certain	transactions,	including	certain	aircraft	financing	leases	and	loans,	the	lessors,	lenders	and/or	other	parties	have	rights	to	terminate	the	transaction	based	on changes	in	foreign	tax	law,	illegality	or	certain	other	events	or	circumstances.	In	such	a	case,	American	may	be	required	to	make	a	lump	sum	payment	to	terminate	the relevant	transaction.

American	has	general	indemnity	clauses	in	many	of	its	airport	and	other	real	estate	leases	where	American	as	lessee	indemnifies	the	lessor	(and	related	parties) against	liabilities	related	to	American's	use	of	the	leased	property.	Generally,	these	indemnifications	cover	liabilities	resulting	from	the	negligence	of	the	indemnified parties,	but	not	liabilities	resulting	from	the	gross	negligence	or	willful	misconduct	of	the	indemnified	parties.	In	addition,	American	provides	environmental	indemnities in	many	of	these	leases	for	contamination	related	to	American's	use	of	the	leased	property.

Under	certain	contracts	with	third	parties,	American	indemnifies	the	third-party	against	legal	liability	arising	out	of	an	action	by	the	third-party,	or	certain	other parties.	The	 terms	of	 these	contracts	vary	and	 the	potential	exposure	under	 these	 indemnities	cannot	be	determined.	American	has	 liability	 insurance	protecting American	for	some	of	the	obligations	it	has	undertaken	under	these	indemnities.

American	is	involved	in	certain	claims	and	litigation	related	to	its	operations.	American	is	also	subject	to	regulatory	assessments	in	the	ordinary	course	of	business. American	establishes	reserves	for	litigation	and	regulatory	matters	when	those	matters	present	loss	contingencies	that	are	both	probable	and	can	be	reasonably	estimated. In	the	opinion	of	management,	liabilities,	if	any,	arising	from	these	regulatory	matters,	claims	and	litigation	will	not	have	a	material	adverse	effect	on	American's consolidated	financial	position,	results	of	operations,	or	cash	flows,	after	consideration	of	available	insurance.

As	a	result	of	the	terrorist	attacks	of	September	11,	2001	(the	Terrorist	Attacks)	and	the	subsequent	liability	protections	provided	for	by	the	Air	Transportation	Safety and	System	Stabilization	Act	(the	Stabilization	Act),	American	recorded	a	liability	for	the	Terrorist	Attacks	claims	equal	to	the	related	insurance	receivable	due	to American.	The	Stabilization	Act	provides	that,	notwithstanding	any	other	provision	of	law,	liability	for	all	claims,	whether	compensatory	or	punitive,	arising	from	the Terrorist	Attacks,	against	any	air	carrier	shall	not	exceed	the	liability	coverage	maintained	by	the	air	carrier.	As	of	December	31,	2015,	the	remaining	liability	and	the amount	of	the	offsetting	receivable	were	each	$974	million.

|  | 2015 | Year	Ended	December	31,<br>2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Non-cash\tinvesting\tand\tfinancing\tactivities: |  |  |  |
| Settlement\tof\tbankruptcy\tobligations | $63 | $5,131 | $833 |
| Acquisition\tof\tUS\tAirways,\tnet | — | — | \t 5,231 |
| Capital\tlease\tobligations | 5 | 747 | — |
| Supplemental\tinformation: |  |  |  |
| Interest\tpaid,\tnet\tof\tamounts\tcapitalized | \t 787 | 780 | 712 |
| Income\ttaxes\tpaid | 19 | 4 | 7 |

American	is	managed	as	a	single	business	unit	that	provides	air	transportation	for	passengers	and	cargo.	This	allows	it	to	benefit	from	an	integrated	revenue	pricing and	 route	 network	 that	 includes	American	 and	AAG's	 wholly-owned	 and	 third-party	 regional	 carriers	 that	 fly	 under	 capacity	 purchase	 agreements	 operating	 as American	Eagle.	The	flight	equipment	of	all	these	carriers	is	combined	to	form	one	fleet	that	is	deployed	through	a	single	route	scheduling	system.	When	making resource	allocation	decisions,	the	chief	operating	decision	maker	evaluates	flight	profitability	data,	which	considers	aircraft	type	and	route	economics,	but	gives	no weight	to	the	financial	impact	of	the	resource	allocation	decision	on	an	individual	carrier	basis.	The	objective	in	making	resource	allocation	decisions	is	to	maximize consolidated	financial	results,	not	the	individual	results	of	American	or	American	Eagle.

American's	operating	revenues	by	geographic	region	as	defined	by	the	U.S.	Department	of	Transportation	(DOT)	are	summarized	below	(in	millions):

|  |  | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2013 |
| DOT\tDomestic | $28,855 | $28,671 | $15,392 |
| DOT\tLatin\tAmerica | 5,539 | 6,974 | 6,267 |
| DOT\tAtlantic | 5,146 | 5,652 | 3,720 |
| DOT\tPacific | 1,544 | 1,466 | 1,322 |
| Total\tconsolidated\trevenues | $41,084 | $42,763 | $26,701 |

American	attributes	operating	revenues	by	geographic	region	based	upon	the	origin	and	destination	of	each	flight	segment.	American's	tangible	assets	consist primarily	of	flight	equipment,	which	are	mobile	across	geographic	markets	and,	therefore,	have	not	been	allocated.

In	December	2013,	the	Board	of	Directors	of	AAG	approved	the	2013	AAG	Incentive	Award	Plan	(the	2013	Plan).	Awards	may	be	in	the	form	of	an	option, restricted	stock	award,	restricted	stock	unit	award,	performance	award,	dividend	equivalent	award,	deferred	stock	award,	deferred	stock	unit	award,	stock	payment award	or	stock	appreciation	right.	The	2013	Plan	authorizes	the	grant	of	awards	for	the	issuance	of	40	million	shares	plus	any	shares	underlying	awards	granted	under the	2013	Plan,	or	any	pre-existing	US	Airways	Group	plan,	that	are	forfeited,	terminate	or	are	cash	settled	(in	whole	or	in	part)	without	a	payment	being	made	in	the form	of	shares.	In	addition,	any	shares	that	were	available	for	issuance	under	the	US	Airways	Group	2011	Incentive	Award	Plan	(the	2011	Plan)	as	of	the	effective	date of	the	Merger	may	be	used	for	awards	under	the	2013	Plan;	provided,	that	awards	using	such	available	shares	under	the	2011	Plan	shall	not	be	made	after	the	date awards	or	grants	could	have	been	made	under	the	2011	Plan	and	shall	only	be	made	to	individuals	who	were	not	providing	services	to	AAG	prior	to	the	Merger.	Awards granted	under	the	2013	Plan	upon	the	assumption	of,	or	in	substitution	for,	outstanding	awards	in	connection	with	a	corporate	transaction,	such	as	a	merger,	will	not reduce	the	shares	authorized	for	issuance	under	the	2013	Plan.

American's	net	income	for	the	years	ended	December	31,	2015,	2014	and	2013	included	$274	million,	$381	million	and	$84	million,	respectively,	of	share-based compensation	costs.	Of	the	2015,	2014	and	2013	amounts,	$198	million,	$224	million	and	$44	million,	respectively,	were	related	to	the	Merger	and	recorded	in	special items,	net	on	the	accompanying	consolidated	statements	of	operations.

During	2015,	AAG	withheld	approximately	7.0	million	shares	of	AAG	common	stock	and	paid	approximately	$306	million	in	satisfaction	of	certain	tax	withholding obligations	associated	with	employee	equity	awards.

AAG	has	granted	RSUs	with	service	conditions	(time	vested)	and	performance	conditions.	The	grant-date	fair	value	of	RSUs	is	equal	to	the	market	price	of	the underlying	shares	of	common	stock	on	the	date	of	grant.	For	time	vested	awards,	the	expense	is	recognized	on	a	straight-line	basis	over	the	vesting	period	for	the	entire award.	For	awards	with	performance	conditions,	 the	expense	 is	recognized	based	on	 the	expected	achievement	at	each	reporting	period.	Stock-settled	RSUs	are classified	as	equity	awards	as	the	vesting	results	in	the	issuance	of	shares	of	AAG	Common	Stock.	Cash-settled	restricted	stock	unit	awards	(CRSUs)	are	classified	as liability	awards	as	the	vesting	results	in	payment	of	cash	by	AAG.	AAG	granted	certain	RSU	awards	in	connection	with	the	Merger	as	follows:

On	December	9,	2013,	alignment	awards	were	granted	in	the	form	of	RSUs.	The	awards	were	provided	to	legacy	AMR	employees	in	order	to	align	interests	and create	parity	with	peers	at	US	Airways	Group,	and	one-third	of	the	awards	vested	on	AAG's	emergence	from	bankruptcy.	The	remaining	awards	vested	equally	on	the one	and	two	year	anniversary	of	emergence.	The	awards	of	employees	terminated	in	connection	with	the	Merger	became	fully	vested	on	the	date	of	termination. Compensation	expenses	for	these	awards	were	recorded	in	special	items,	net	on	the	consolidated	statements	of	operations.

The	Merger	Equity	Grant	was	granted	on	the	Effective	Date	to	certain	officers	and	directors	and	employees	in	the	form	of	RSUs	and	settled	in	equity	for	domestic employees	and	in	cash	for	international	employees.	Subject	to	the	executive's	continued	employment,	each	RSU	vested	on	December	16,	2015	with	respect	to	(i)	50%	of the	RSUs	which	were	time	vested;	(ii)	25%	of	the	RSUs	as	AAG	was	issued	a	Single	Operating	Certificate	in	April	2015;	and	(iii)	25%	of	the	RSUs	as	the	compensation committee	of	the	Board	of	Directors	determined	that	AAG	had	achieved	at	least	$1.0	billion	in	net	synergies	with	respect	to	fiscal	year	2015.	Compensation	expenses	for these	awards	were	recorded	in	special	items,	net	on	the	consolidated	statements	of	operations.

As	of	December	31,	2015,	AAG	had	a	nominal	amount	of	CRSUs	outstanding.	The	total	cash	paid	for	CRSUs	vested	during	the	years	ended	December	31,	2015, 2014	and	2013	was	$10	million,	$12	million	and	less	than	$1	million,	respectively.

No	stock	options	or	stock	appreciation	rights	have	been	granted	subsequent	to	the	Merger	closing	date.	AAG	assumed	US	Airways	Group's	outstanding	stock options	and	stock	appreciation	rights	in	connection	with	the	Merger.	These	stock	options	and	stock	appreciation	rights	were	granted	with	an	exercise	price	equal	to	the underlying	common	stock's	fair	value	at	the	date	of	each	grant,	have	service	conditions,	become	exercisable	over	a	three-year	vesting	period	and	expire	if	unexercised	at the	end	of	their	term,	which	ranges	from	seven	to	ten	years.	Stock	options	and	stock-settled	stock	appreciation	rights	(SARs)	are	classified	as	equity	awards	as	the exercise	results	in	the	issuance	of	shares	of	AAG	Common	Stock.	Cash-settled	stock	appreciation	rights	(CSARs)	are	classified	as	liability	awards	as	the	exercise	results in	payment	of	cash	by	AAG.	Stock	appreciation	rights	are	expensed	on	a	straight-line	basis	over	the	vesting	period	for	the	entire	award.	There	are	no	unrecognized compensation	costs	for	stock	options.

|  |  | Weighted | Weighted	Average |  |
| :--- | :--- | :--- | :--- | :--- |
|  | CSARs | Average\nExercise\t\tPrice | Remaining\nContractual\tTerm | Aggregate\nIntrinsic\t\tValue |
|  | (In\tthousands) |  | (In\tyears) | (In\tmillions) |
| Assumed\tUS\tAirways\tGroup\tawards\tat\tDecember\t9,\t2013 | 2,888 | $6.25 |  |  |
| Granted | — | — |  |  |
| Exercised | (23) | 5.10 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2013 | 2,865 | $6.26 |  |  |
| Granted | — | — |  |  |
| Exercised | (1,254) | 6.18 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2014 | 1,611 | $6.33 |  |  |
| Granted | — | — |  |  |
| Exercised | (760) | 6.31 |  |  |
| Forfeited | — | — |  |  |
| Expired | — | — |  |  |
| Balance\tat\tDecember\t31,\t2015 | 851 | $6.35 | 1.4 | $31 |
| Vested\tor\texpected\tto\tvest\tat\tDecember\t31,\t2015 | 851 | $6.35 | 1.4 | $31 |
| Exercisable\tat\tDecember\t31,\t2015 | 851 | $6.35 | 1.4 | $31 |

As	of	December	31,	2015,	there	were	less	than	a	million	of	total	unrecognized	compensation	costs	related	to	SARs	which	are	expected	to	be	recognized	in	2016.	The total	intrinsic	value	of	stock	options	and	SARs	exercised	during	the	years	ended	December	31,	2015	and	2014	and	the	23	day	period	ended	December	31,	2013	was	$102 million,	$105	million	and	less	than	$1	million,	respectively.

As	of	December	31,	2015,	the	weighted	average	fair	value	of	outstanding	CSARs	was	$35.76	per	share	and	the	related	liability	was	$31	million.	These	CSARs	are fully	vested	and	will	continue	to	be	remeasured	at	fair	value	at	each	reporting	date	until	all	awards	are	settled.	Total	cash	paid	for	CSARs	exercised	during	the	years ended	December	31,	2015	and	2014	and	the	23	day	period	ended	December	31,	2013	was	$31	million,	$42	million	and	less	than	$1	million,	respectively.

|  | Balance	at<br>Beginning<br>of	Year | Changes	Charged	to<br>Statement	of<br>Operations<br>Accounts | Payments | Write-offs<br>(Net	of<br>Recoveries) | Sales,<br>Retirements<br>and<br>Transfers | Balance	at<br>End	of	Year |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance\tfor\tobsolescence\tof\tinventories |  |  |  |  |  |  |
| Year\tended\tDecember\t31,\t2015 | $638 | $42 | $— | $— | $9 | $689 |
| Year\tended\tDecember\t31,\t2014 | 504 | 135 | — | (2) | 1 | 638 |
| Year\tended\tDecember\t31,\t2013 | 607 | 22 | — | (125) | — | 504 |
| Allowance\tfor\tuncollectible\taccounts |  |  |  |  |  |  |
| Year\tended\tDecember\t31,\t2015 | $14 | $45 | $— | $(22) | $— | $37 |
| Year\tended\tDecember\t31,\t2014 | 40 | 3 | — | (29) | — | 14 |
| Year\tended\tDecember\t31,\t2013 | 49 | 2 | — | (11) | — | 40 |
| Reserves\tfor\tenvironmental\tremediation\tcosts |  |  |  |  |  |  |
| Year\tended\tDecember\t31,\t2015 | $10 | $— | $(1) | $— | $— | $9 |
| Year\tended\tDecember\t31,\t2014 | 11 | — | (1) | — | — | 10 |
| Year\tended\tDecember\t31,\t2013 | 13 | 2 | (1) | (3) | — | 11 |

# 18.		Quarterly	Financial	Data	(Unaudited)

Unaudited	summarized	financial	data	by	quarter	for	2015	and	2014	(in	millions):

|  | First	Quarter | Second	Quarter | Third	Quarter | Fourth	Quarter |
| :--- | :--- | :--- | :--- | :--- |
| 2015 |  |  |  |  |
| Operating\trevenues | $9,842 | $10,849 | $10,733 | $9,660 |
| Operating\texpenses | 8,641 | 8,928 | 8,730 | 8,596 |
| Operating\tincome | 1,201 | 1,921 | 2,003 | 1,064 |
| Net\tincome | 808 | 1,465 | 1,450 | 4,397 |
| 2014 |  |  |  |  |
| Operating\trevenues | $10,015 | $11,382 | $11,169 | $10,197 |
| Operating\texpenses | 9,249 | 9,986 | 9,905 | 9,357 |
| Operating\tincome | 766 | 1,396 | 1,264 | 840 |
| Net\tincome | 527 | 870 | 954 | 597 |

American's	fourth	quarter	2015	results	include	$2.5	billion	of	total	net	special	credits	consisting	principally	of	a	$3.5	billion	non-cash	tax	benefit	recorded	in connection	with	the	reversal	of	American's	tax	valuation

allowance,	offset	in	part	by	a	nonoperating	net	special	charge	of	$592	million	to	write	off	all	of	the	value	of	Venezuelan	bolivars	held	by	American	due	to	continued	lack of	repatriations	and	deterioration	of	economic	conditions	in	Venezuela	and	$447	million	in	total	operating	special	charges	primarily	consisting	of	merger	integration expenses.

American's	fourth	quarter	2014	results	include	$495	million	of	total	net	special	charges	consisting	principally	of	$284	million	of	merger	integration	expenses,	a	net $116	million	charge	for	bankruptcy	related	items	principally	consisting	of	fair	value	adjustments	for	bankruptcy	settlement	obligations	and	a	$70	million	charge	related primarily	to	certain	spare	parts	asset	impairments.

# 19.		Transactions	with	Related	Parties

The	following	represents	the	net	receivables	(payables)	to	related	parties	(in	millions):

|  | December	31, |  |
| :--- | :--- | :--- |
|  | 2015 | 2014 |
| American\tAirlines\tGroup\tParent\t(1) | $4,489 | $653 |
| American\tAirlines\tGroup's\twholly-owned\tsubsidiaries\t(2) | (2,508) | (2,356) |
| Total | $1,981 | $(1,703) |

(1) The	increase	in	net	related	party	receivables	between	American	and	American	Airlines	Group	Parent	is	primarily	due	to	American	providing	the	funding	for	share repurchases	performed	by	the	AAG	parent	company.

(2) The	net	payable	to	AAG's	wholly-owned	subsidiaries	consists	primarily	of	amounts	due	under	regional	capacity	purchase	agreements	with	AAG's	wholly-owned regional	airlines	operating	under	the	brand	name	of	American	Eagle.

Pursuant	to	a	capacity	purchase	agreement	between	American	and	AAG's	wholly-owned	regional	airlines	operating	as	American	Eagle,	American	purchases	all	of	the capacity	from	these	carriers	and	recognizes	passenger	revenue	from	flights	operated	by	American	Eagle.	In	2015,	2014	and	2013,	American	recognized	expense	of approximately	$1.2	billion,	$1.2	billion	and	$1.0	billion,	respectively,	related	to	wholly-owned	regional	airline	capacity	purchase	agreements.

# 20.		Subsequent	Events

# ITEM	9.		CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL	DISCLOSURE

None.

# ITEM	9A.		CONTROLS	AND	PROCEDURES

# Management's	Evaluation	of	Disclosure	Controls	and	Procedures

The	term	"disclosure	controls	and	procedures"	is	defined	in	Rules	13a-15(e)	and	15d-15(e)	of	the	Exchange	Act.	This	term	refers	to	the	controls	and	procedures	of	a company	that	are	designed	to	ensure	that	information	required	to	be	disclosed	by	a	company	in	the	reports	that	it	files	under	the	Exchange	Act	is	recorded,	processed, summarized	and	reported	within	the	time	periods	specified	by	the	SEC.	An	evaluation	of	the	effectiveness	of	AAG's	and	American's	disclosure	controls	and	procedures as	of	December	31,	2015	was	performed	under	the	supervision	and	with	the	participation	of	AAG's	and	American's	management,	including	AAG's	and	American's Chief	Executive	Officer	(CEO)	and	Chief	Financial	Officer	(CFO).	Based	on	that	evaluation,	AAG's	and	American's	management,	including	AAG's	and	American's CEO	and	CFO,	concluded	that	AAG's	and	American's	disclosure	controls	and	procedures	were	effective	as	of	December	31,	2015.

# Changes	in	Internal	Control	over	Financial	Reporting

On	December	9,	2013,	AAG	acquired	US	Airways	Group	and	its	subsidiaries.	We	are	in	the	process	of	integrating	policies,	processes,	people,	technology	and operations	for	the	post-Merger	combined	company,	and	we	will	continue	to	evaluate	the	impact	of	any	related	changes	to	our	internal	control	over	financial	reporting. Except	for	any	changes	in	internal	controls	related	to	the	integration	of	US	Airways	Group	and	its	subsidiaries	into	the	post-Merger	combined	company,	including	the related	adoption	of	common	financial	reporting	and	internal	control	practices	for	the	combined	company	and	associated	updates	and	improvements	to	the	combined control	environment,	during	the	year	ended	December	31,	2015,	there	has	been	no	change	in	AAG's	or	American's	internal	control	over	financial	reporting	that	has materially	affected,	or	is	reasonably	likely	to	materially	affect,	AAG's	and	American's	internal	control	over	financial	reporting.

# Limitation	on	the	Effectiveness	of	Controls

We	believe	that	a	controls	system,	no	matter	how	well	designed	and	operated,	cannot	provide	absolute	assurance	that	the	objectives	of	the	controls	system	are	met, and	no	evaluation	of	controls	can	provide	absolute	assurance	that	all	control	issues	and	instances	of	fraud,	if	any,	within	a	company	have	been	detected.	Our	disclosure controls	and	procedures	are	designed	to	provide	reasonable	assurance	of	achieving	their	objectives,	and	the	CEO	and	CFO	of	AAG	and	American	believe	that	our disclosure	controls	and	procedures	were	effective	at	the	"reasonable	assurance"	level	as	of	December	31,	2015.

# Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting

Management	of	AAG	and	American	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting	as	defined	in	Rules	13a-15(f) and	15d-15(f)	under	the	Exchange	Act.	AAG's	and	American's	internal	control	over	financial	reporting	is	designed	to	provide	reasonable	assurance	regarding	the reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	GAAP.	AAG's	and	American's	internal	control	over financial	reporting	includes	policies	and	procedures	that:

•pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	AAG	or	American, respectively;

•provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	GAAP,	and	that receipts	and	expenditures	of	AAG	or	American	are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	AAG	or	American, respectively;	and

•provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use	or	disposition	of	AAG's	or	American's	assets	that could	have	a	material	effect	on	the	financial	statements.

Because	 of	 its	 inherent	 limitations,	 internal	 control	 over	 financial	 reporting	 may	 not	 prevent	 or	 detect	 misstatements.	Also,	 projections	 of	 any	 evaluation	 of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the policies	or	procedures	may	deteriorate.

Management	assessed	the	effectiveness	of	AAG's	and	American's	internal	control	over	financial	reporting	as	of	December	31,	2015.	In	making	this	assessment, management	used	the	criteria	set	forth	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	in	its	Internal	Control	—	Integrated	Framework (2013	Framework).

Based	on	our	assessment	and	those	criteria,	AAG's	and	American's	management	concludes	that	AAG	and	American,	respectively,	maintained	effective	internal control	over	financial	reporting	as	of	December	31,	2015.

AAG's	and	American's	independent	registered	public	accounting	firm	has	issued	an	attestation	report	on	the	effectiveness	of	AAG's	and	American's	internal	control over	financial	reporting.	That	report	has	been	included	herein.

We	have	audited	American	Airlines	Group	Inc.'s	(the	Company)	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on	criteria	established	in Internal	Control	–	Integrated	Framework	(2013) issued	by	 the	Committee	of	Sponsoring	 Organizations	 of	 the	Treadway	 Commission	 (COSO).	The	 Company's management	is	responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial reporting,	included	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting.	Our	responsibility	is	to	express	an	opinion	on	the Company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan and	perform	the	audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit included	obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and	evaluating	the	design and	operating	effectiveness	of	internal	control	based	on	the	assessed	risk.	Our	audit	also	included	performing	such	other	procedures	as	we	considered	necessary	in	the circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our	opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	 and	 directors	 of	 the	 company;	 and	 (3)	 provide	 reasonable	 assurance	 regarding	 prevention	 or	 timely	 detection	 of	 unauthorized	 acquisition,	 use,	 or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

In	our	opinion,	American	Airlines	Group	Inc.	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2015,	based on	criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of	the Company	as	of	December	31,	2015	and	2014,	and	the	related	consolidated	statements	of	operations,	comprehensive	income	(loss),	cash	flows,	and	stockholders'	equity (deficit)	for	the	years	then	ended,	and	our	report	dated	February	24,	2016	expressed	an	unqualified	opinion	on	those	consolidated	financial	statements.

We	have	audited	American	Airlines,	Inc.'s	(American)	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on	criteria	established	in	Internal Control	–	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).	American's	management	is responsible	for	maintaining	effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting, included	in	the	accompanying	Management's	Annual	Report	on	Internal	Control	over	Financial	Reporting.	Our	responsibility	is	to	express	an	opinion	on	American's internal	control	over	financial	reporting	based	on	our	audit.

In	our	opinion,	American	Airlines,	Inc.	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2015,	based	on criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO).

We	also	have	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	balance	sheets	of American	as	of	December	31,	2015	and	2014,	and	the	related	consolidated	statements	of	operations,	comprehensive	income	(loss),	cash	flows,	and	stockholder's	equity (deficit)	for	the	years	then	ended,	and	our	report	dated	February	24,	2016	expressed	an	unqualified	opinion	on	those	consolidated	financial	statements.

KPMG	LLP

# PART	III

# ITEM	10.		DIRECTORS,EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

Except	as	stated	below,	the	information	required	by	this	Item	will	be	set	forth	under	the	captions	"Proposal	1	–	Election	of	Directors,"	"Executive	Officers,"	"Section 16(a)	Beneficial	Ownership	Reporting	Compliance"	and	"Information	About	Our	Board	of	Directors	and	Corporate	Governance"	 in	 the	Proxy	Statement	and	 is incorporated	by	reference	into	this	Annual	Report	on	Form	10-K.

American	Airlines	Group	and	American	have	adopted	Standards	of	Business	Conduct	(the	Ethics	Standards)	within	the	meaning	of	Item	406(b)	of	Regulation	S-K. The	Ethics	Standards	apply	to	all	officers	and	employees	of	American	Airlines	Group	Inc.	and	its	subsidiaries,	including	American.	The	Ethics	Standards	are	available on	our	website	at	www.aa.com.	If	we	make	substantive	amendments	to	the	Ethics	Standards	or	grant	any	waiver,	including	any	implicit	waiver,	to	our	principal executive	officer,	principal	financial	officer,	principal	accounting	officer	or	controller,	or	persons	performing	similar	functions,	we	will	disclose	the	nature	of	such amendment	or	waiver	on	our	website	or	in	a	Current	Report	on	Form	8-K	in	accordance	with	applicable	rules	and	regulations.

# ITEM	11.		EXECUTIVE	COMPENSATION

Except	as	stated	below,	the	information	required	by	this	Item	will	be	set	forth	in	the	Proxy	Statement	under	the	captions	"Information	About	the	Board	of	Directors and	Corporate	Governance,"	"Director	Compensation,"	"Compensation	Discussion	and	Analysis,"	"Executive	Compensation"	and	"Compensation	Committee	Report" and	is	incorporated	by	reference	into	this	Annual	Report	on	Form	10-K.

During	2015,	the	executive	officers	of	AAG	and	American	were	the	same	persons,	and	the	information	regarding	such	persons	called	for	by	Item	11	with	respect	to American	will	be	set	forth	in	the	Proxy	Statement.

# ITEM	12.		SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	STOCKHOLDER	MATTERS

Except	as	stated	below,	the	information	required	by	this	Item	will	be	set	forth	in	the	Proxy	Statement	under	the	captions	"Security	Ownership	of	Certain	Beneficial Owners	and	Management"	and	"Equity	Compensation	Plan	Information"	and	is	incorporated	by	reference	into	this	Annual	Report	on	Form	10-K.

All	of	the	outstanding	shares	of	common	stock	of	American,	consisting	of	1,000	shares,	par	value	$1.00	per	share,	are	owned	beneficially	and	of	record	by	AAG.

# ITEM	13.		CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

The	information	required	by	this	Item	will	be	set	forth	in	the	Proxy	Statement	under	the	captions	"Certain	Relationships	and	Related	Party	Transactions"	and "Information	About	the	Board	of	Directors	and	Corporate	Governance"	and	is	incorporated	by	reference	into	this	Annual	Report	on	Form	10-K.

# ITEM	14.		PRINCIPAL	ACCOUNTANT	FEES	AND	SERVICES

The	information	required	by	this	Item	will	be	set	forth	in	the	Proxy	Statement	under	the	caption	"Proposal	2	–	Ratification	of	Appointment	of	Independent	Registered Public	Accounting	Firm"	and	is	incorporated	by	reference	into	this	Annual	Report	on	Form	10-K.

# PART	IV

# ITEM	15.		EXHIBITSAND	FINANCIAL	STATEMENT	SCHEDULES

# Consolidated	Financial	Statements

   The	following	consolidated	financial	statements	of	American	Airlines	Group	Inc.	and	Independent	Auditors'	Reports	are	filed	as	part	of	this	report:

   The	following	consolidated	financial	statements	of	American	Airlines,	Inc.	and	Independent	Auditors'	Reports	are	filed	as	part	of	this	report:

| The	following	consolidated	financial	statements	of	American	Airlines,	Inc.	and	Independent	Auditors'	Reports	are	filed	as	part	of	this	report: |  |
| :--- | :--- |
|  | Page |
| Reports\tof\tIndependent\tRegistered\tPublic\tAccounting\tFirm | \t172 |
| Consolidated\tStatements\tof\tOperations\tfor\tthe\tYears\tEnded\tDecember\t31,\t2015,\t2014\tand\t2013 | \t174 |
| Consolidated\tStatements\tof\tComprehensive\tIncome\t(Loss)\tfor\tthe\tYears\tEnded\tDecember\t\t31,\t2015,\t2014\tand\t2013 | \t175 |
| Consolidated\tBalance\tSheets\tat\tDecember\t31,\t2015\tand\t2014 | \t176 |
| Consolidated\tStatements\tof\tCash\tFlows\tfor\tthe\tYears\tEnded\tDecember\t31,\t2015,\t2014\tand\t2013 | \t177 |
| Consolidated\tStatements\tof\tStockholder's\tEquity\t(Deficit)\tfor\tthe\tYears\tEnded\tDecember\t\t31,\t2015,\t2014\tand\t2013 | \t178 |
| Notes\tto\tConsolidated\tFinancial\tStatements | \t179 |

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.

# Exhibits

The	exhibits	listed	in	the	Exhibit	Index	following	the	signature	pages	to	this	report	are	filed	as	part	of,	or	incorporated	by	reference	into,	this	report.

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

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the undersigned,	thereunto	duly	authorized.

W.	Douglas	Parker

Chairman	and	Chief	Executive	Officer

(Principal	Executive	Officer)

W.	Douglas	Parker Chairman	and	Chief	Executive	Officer (Principal	Executive	Officer)

KNOW	ALL	MEN	BY	THESE	PRESENTS,	that	each	individual	whose	signature	appears	below	constitutes	and	appoints	W.	Douglas	Parker	and	Derek	J.	Kerr	and each	or	any	of	them,	his	or	her	true	and	lawful	attorneys	and	agents,	with	full	power	of	substitution	and	resubstitution,	for	him	or	her	and	in	his	or	her	name,	place	and stead,	in	any	and	all	capacities,	to	sign	any	and	all	amendments	to	the	Registrants'	Annual	Report	on	Form	10-K	for	the	fiscal	year	ended	December	31,	2015,	and	to	file the	same	with	all	exhibits	thereto,	and	all	other	documents	in	connection	therewith,	with	the	Securities	and	Exchange	Commission,	granting	unto	said	attorneys	and agents,	and	each	or	any	of	them,	full	power	and	authority	to	do	and	perform	each	and	every	act	and	thing	requisite	and	necessary	to	be	done,	as	fully	to	all	intents	and purposes	as	he	or	she	might	or	could	do	in	person,	hereby	ratifying	and	confirming	all	that	said	attorneys	and	agents,	and	each	of	them,	or	his	substitute	or	substitutes, may	lawfully	do	or	cause	to	be	done	by	virtue	hereof.

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	American	Airlines Group	Inc.	and	in	the	capacities	and	on	the	dates	noted:

/s/				Michael	J.	Embler Michael	J.	Embler,	Director

/s/				Matthew	J.	Hart Matthew	J.	Hart,	Director

/s/				Alberto	Ibargüen Alberto	Ibargüen,	Director

/s/				Richard	C.	Kraemer Richard	C.	Kraemer,	Director

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	American	Airlines,	Inc. and	in	the	capacities	and	on	the	dates	noted:

# EXHIBIT	INDEX

		4.12 Schedule	I	(Pursuant	to	Instruction	2	to	Item	6.01	of	Regulation	S-K,	this	Schedule	I	contains	a	list	of	documents	applicable	to	the	financing	of	the Aircraft	in	connection	with	the	offering	of	the	Class	B	Certificates,	which	documents	are	substantially	identical	to	those	filed	herewith	as	Exhibits	4.12, 4.13,	4.15,	4.16,	4.18	and	4.19.	Schedule	I	sets	forth	the	details	by	which	such	documents	differ	from	the	corresponding	Exhibits)	(incorporated	by reference	to	Exhibit	99.2	to	AMR's	Current	Report	on	Form	8-K	filed	on	November	27,	2013	(Commission	File	No.	1-8400)).

		4.21 Indenture,	dated	as	of	May	24,	2013,	between	US	Airways	Group,	Inc.	and	Wilmington	Trust,	National	Association,	as	Trustee	(incorporated	by reference	to	Exhibit	4.1	to	US	Airways	Group's	Current	Report	on	Form	8-K	filed	on	May	24,	2013	(Commission	File	No.	1-8444)). 		4.22 First	Supplemental	Indenture,	dated	as	of	May	24,	2013,	among	US	Airways	Group,	Inc.,	US	Airways,	Inc.	and	Wilmington	Trust,	National Association,	as	Trustee	(incorporated	by	reference	to	Exhibit	4.2	to	US	Airways	Group's	Current	Report	on	Form	8-K	filed	on	May	24,	2013 (Commission	File	No.	1-8444)).

		4.32 Form	of	Participation	Agreement	(Participation	Agreement	among	American	Airlines,	Inc.,	Wilmington	Trust	Company,	as	Pass	Through	Trustee	under each	of	the	Pass	Through	Trust	Agreements,	Wilmington	Trust	Company,	as	Subordination	Agent,	Wilmington	Trust	Company,	as	Loan	Trustee,	and Wilmington	Trust	Company,	in	its	individual	capacity	as	set	forth	therein)	(Exhibit	B	to	Note	Purchase	Agreement)	(incorporated	by	reference	to Exhibit	4.10	to	American's	Current	Report	on	Form	8-K	filed	on	September	17,	2014	(Commission	File	No.	1-2691)).

		4.63 Revolving	Credit	Agreement	(2015-2A),	dated	as	of	September	24,	2015,	between	Wilmington	Trust	Company,	as	Subordination	Agent,	as	agent	and trustee	for	the	trustee	of	the	American	Airlines	Pass	Through	Trust	2015-2A,	as	Borrower,	and	Crédit	Agricole	Corporate	and	Investment	Bank,	acting through	its	New	York	Branch,	as	Liquidity	Provider	(incorporated	by	reference	to	Exhibit	4.13	to	American's	Current	Report	on	Form	8-K	filed	on September	24,	2015	(Commission	File	No.	1-2691)).

		4.72 Form	of	Participation	Agreement	between	US	Airways,	Inc.,	as	Owner,	and	Wilmington	Trust	Company,	as	Indenture	Trustee,	Subordination	Agent and	Pass	Through	Trustee	(Schedule	I	to	Amendment	No.	1	to	Note	Purchase	Agreement	(2012-2))	(incorporated	by	reference	to	Exhibit	4.10	to	US Airways	Group's	Current	Report	on	Form	8-K	filed	on	June	6,	2013	(Commission	File	No.	1-8444)).

		4.83 Amended	and	Restated	Guarantee,	dated	as	of	March	31,	2014,	from	US	Airways	Group,	Inc.	and	American	Airlines	Group	Inc.,	relating	to	obligations of	US	Airways	under	the	equipment	notes	relating	to	its	Series	2012-1	Pass	Through	Certificates	(incorporated	by	reference	to	Exhibit	10.3	to	AAG's Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	March	31,	2014	(Commission	File	No.	1-8400)).

10.4 Assumption	Agreement,	dated	as	of	December	30,	2015,	by	and	among	American	Airlines	Group	Inc.,	American	Airlines,	Inc.	and	Citicorp	North America,	Inc.,	as	administrative	agent,	to	the	Loan	Agreement,	as	amended,	dated	May	23,	2013	between,	among	others,	US	Airways,	Inc.,	certain affiliates	of	US	Airways,	Inc.	and	certain	lenders	(incorporated	by	reference	to	Exhibit	10.1	to	AAG's	Current	Report	on	Form	8-K	filed	on	December 31,	2015	(Commission	File	No.	1-8400)).

10.7 First	Amendment	and	Restatement	Agreement,	dated	May	21,	2015,	in	relation	to	the	Credit	and	Guaranty	Agreement,	dated	as	of	June	27,	2013	(as amended),	among	American	Airlines,	Inc.,	American	Airlines	Group	Inc.	(formerly	known	as	AMR	Corporation),	US	Airways	Group,	Inc.,	US Airways,	Inc.,	the	Revolving	Lenders	(as	defined	therein)	party	thereto,	the	2015	Term	Loan	Lenders	(as	defined	therein)	party	thereto	and	Deutsche Bank	AG	New	York	Branch,	as	administrative	agent	and	collateral	agent	(incorporated	by	reference	to	Exhibit	10.5	to	AAG's	Quarterly	Report	on Form	10-Q	for	the	quarter	ended	June	30,	2015	(Commission	File	No.	1-8400)).

10.35 Supplemental	Agreement	No.	38,	dated	as	of	Sept.	26,	2014,	to	Purchase	Agreement	No.	1977	by	and	between	American	Airlines,	Inc.	and	The	Boeing Company	(incorporated	by	reference	to	Exhibit	10.1	to	AAG's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2014	(Commission File	No.	1-8400)).*

		# Pursuant	to	Item	601(b)(2)	of	Regulation	S-K	promulgated	by	the	Securities	and	Exchange	Commission,	certain	exhibits	and	schedules	to	this	agreement	have been	omitted.	Such	exhibits	and	schedules	are	described	in	the	referenced	agreement.	AAG	and	American	hereby	agree	to	furnish	to	the	Securities	and	Exchange Commission,	upon	its	request,	any	or	all	of	such	omitted	exhibits	or	schedules.

		* Confidential	treatment	has	been	granted	with	respect	to	certain	portions	of	this	agreement.

		** Confidential	treatment	has	been	requested	with	respect	to	certain	portions	of	this	agreement.

		† Management	contract	or	compensatory	plan	or	arrangement.



Question: what is the percent of the professional fees as part of the total re-organization costs
Answer: 7.5%