Special Items, Net

12 Months Ended

Dec. 31, 2019

Restructuring Cost and Reserve [Line Items]

Special items, net on our consolidated statements of operations consisted of the following (in millions):



	Year Ended December 31,
	2019			2018			2017
Fleet restructuring expenses ⁽¹⁾	$	271		$	422		$	232
Fleet impairment ⁽²⁾	213			—			—
Merger integration expenses ⁽³⁾	191			268			273
Litigation reserve adjustments	(53		)	45			—
Mark-to-market adjustments on bankruptcy obligations, net ⁽⁴⁾	(11		)	(76		)	27
Severance expenses ⁽⁵⁾	11			58			—
Intangible asset impairment ⁽⁶⁾	—			26			—
Labor contract expenses	—			13			46
Employee 2017 Tax Act bonus expense ⁽⁷⁾	—			—			123
Other operating charges, net	13			31			11
Mainline operating special items, net	635			787			712
Regional operating special items, net	6			6			22
Operating special items, net	641			793			734

Debt refinancing and extinguishment charges	16			13			22
Mark-to-market adjustments on equity and other investments, net ⁽⁸⁾	(5		)	104			—
Other nonoperating income, net	(8		)	(4		)	—
Nonoperating special items, net	3			113			22

Income tax special items ⁽⁹⁾	—			18			—
Impact of the 2017 Tax Act ⁽¹⁰⁾	—			—			823
Income tax special items, net	—			18			823


⁽¹⁾	Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.


⁽²⁾	Fleet impairment principally includes a non-cash write-down of aircraft related to the planned retirement of our Embraer E190 fleet.


⁽³⁾	Merger integration expenses included costs associated with integration projects, principally our technical operations, flight attendant, human resources and payroll systems.


⁽⁴⁾	Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.


⁽⁵⁾	Severance expenses primarily included costs associated with reductions of management and support staff team members.


⁽⁶⁾	Intangible asset impairment includes a non-cash charge to write-off our Brazil route authority as a result of the U.S.-Brazil open skies agreement.


⁽⁷⁾	Employee bonus expense included costs related to the $1,000 cash bonus and associated payroll taxes granted to mainline employees in recognition of the 2017 Tax Act.


⁽⁸⁾	Mark-to-market adjustments on equity and other investments, net primarily relates to net unrealized gains and losses associated with our equity investment in China Southern Airlines Company Limited (China Southern Airlines).


⁽⁹⁾	Income tax special items for 2018 included an $18 million charge related to an international income tax matter.

⁽¹⁰⁾

Impact of the 2017 Tax Act includes an $823 million non-cash charge to income tax expense to reflect the impact of lower corporate income tax rates on our deferred tax asset and liabilities resulting from the 2017 Tax Act, which reduced the federal corporate income tax rate from 35% to 21%.

American Airlines, Inc. [Member]

Restructuring Cost and Reserve [Line Items]

Special Items, Net

Special items, net on American’s consolidated statements of operations consisted of the following (in millions):



	Year Ended December 31,
	2019			2018			2017
Fleet restructuring expenses ⁽¹⁾	$	271		$	422		$	232
Fleet impairment ⁽²⁾	213			—			—
Merger integration expenses ⁽³⁾	191			268			273
Litigation reserve adjustments	(53		)	45			—
Mark-to-market adjustments on bankruptcy obligations, net ⁽⁴⁾	(11		)	(76		)	27
Severance expenses ⁽⁵⁾	11			58			—
Intangible asset impairment ⁽⁶⁾	—			26			—
Labor contract expenses	—			13			46
Employee 2017 Tax Act bonus expense ⁽⁷⁾	—			—			123
Other operating charges, net	13			31			11
Mainline operating special items, net	635			787			712
Regional operating special items, net	—			—			3
Operating special items, net	635			787			715

Debt refinancing and extinguishment charges	16			13			22
Mark-to-market adjustments on equity and other investments, net ⁽⁸⁾	(5		)	104			—
Other nonoperating income, net	—			(4		)	—
Nonoperating special items, net	11			113			22

Income tax special items ⁽⁹⁾	—			18			—
Impact of the 2017 Tax Act ⁽¹⁰⁾	—			—			924
Income tax special items, net	—			18			924


⁽¹⁾	Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.


⁽²⁾	Fleet impairment principally includes a non-cash write-down of aircraft related to the planned retirement of American’s Embraer E190 fleet.


⁽³⁾	Merger integration expenses included costs associated with integration projects, principally American's technical operations, flight attendant, human resources and payroll systems.


⁽⁴⁾	Bankruptcy obligations that will be settled in shares of AAG common stock are marked-to-market based on AAG’s stock price.


⁽⁵⁾	Severance expenses primarily included costs associated with reductions of management and support staff team members.


⁽⁶⁾	Intangible asset impairment includes a non-cash charge to write-off American’s Brazil route authority as a result of the U.S.-Brazil open skies agreement.


⁽⁷⁾	Employee bonus expense included costs related to the $1,000 cash bonus and associated payroll taxes granted to mainline employees in recognition of the 2017 Tax Act.


⁽⁸⁾	Mark-to-market adjustments on equity and other investments, net primarily relates to net unrealized gains and losses associated with American’s equity investment in China Southern Airlines Company Limited (China Southern Airlines).


⁽⁹⁾	Income tax special items for 2018 included an $18 million charge related to an international income tax matter.

⁽¹⁰⁾

Impact of the 2017 Tax Act includes a $924 million non-cash charge to income tax expense to reflect the impact of lower corporate income tax rates on the Company’s deferred tax asset and liabilities resulting from the 2017 Tax Act, which reduced the federal corporate income tax rate from 35% to 21%.