Special Items, Net (Tables)

12 Months Ended

Dec. 31, 2018

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



	Year Ended December 31,
	2018			2017		2016
Fleet restructuring expenses ⁽¹⁾	$	422		$	232	$	177
Merger integration expenses ⁽²⁾	268			273		514
Severance expenses ⁽³⁾	58			—		—
Litigation settlement ⁽⁴⁾	45			—		—
Intangible asset impairment ⁽⁵⁾	26			—		—
Labor contract expenses	13			46		—
Mark-to-market adjustments on bankruptcy obligations, net ⁽⁶⁾	(76		)	27		25
Employee 2017 Tax Act bonus expense ⁽⁷⁾	—			123		—
Other operating charges (credits), net	31			11		(7		)
Mainline operating special items, net	787			712		709
Regional operating special items, net	6			22		14
Operating special items, net	793			734		723

Mark-to-market adjustments on equity investments, net ⁽⁸⁾	104			—		—
Debt refinancing and extinguishment charges	13			22		49
Other nonoperating credits, net	(4		)	—		—
Nonoperating special items, net	113			22		49

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


⁽³⁾	Severance expenses primarily included costs associated with reductions of management and support staff team members.


⁽⁴⁾	Settlement of a private party antitrust lawsuit. See Note 12(e) - “Private Party Antitrust Action Related to Passenger Capacity” for further discussion.


⁽⁵⁾	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.


⁽⁶⁾	Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.


⁽⁷⁾	Employee bonus expense included costs related to the $1,000 cash bonus and associated payroll taxes granted to mainline employees as of December 31, 2017 in recognition of the 2017 Tax Act.


⁽⁸⁾	Mark-to-market adjustments on equity investments relate to net unrealized losses primarily associated with our equity investments in China Southern Airlines and Mesa Air Group, Inc.


⁽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%.

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



	Year Ended December 31,
	2018			2017		2016
Fleet restructuring expenses ⁽¹⁾	$	422		$	232	$	177
Merger integration expenses ⁽²⁾	268			273		514
Severance expenses ⁽³⁾	58			—		—
Litigation settlement ⁽⁴⁾	45			—		—
Intangible asset impairment ⁽⁵⁾	26			—		—
Labor contract expenses	13			46		—
Mark-to-market adjustments on bankruptcy obligations, net ⁽⁶⁾	(76		)	27		25
Employee 2017 Tax Act bonus expense ⁽⁷⁾	—			123		—
Other operating charges (credits), net	31			11		(7		)
Mainline operating special items, net	787			712		709
Regional operating special items, net	—			3		13
Operating special items, net	787			715		722

Mark-to-market adjustments on equity investments, net ⁽⁸⁾	104			—		—
Debt refinancing and extinguishment charges	13			22		49
Other nonoperating credits, net	(4		)	—		—
Nonoperating special items, net	113			22		49

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


⁽³⁾	Severance expenses primarily included costs associated with reductions of management and support staff team members.


⁽⁴⁾	Settlement of a private party antitrust lawsuit. See Note 10(e) - “Private Party Antitrust Action Related to Passenger Capacity” for further discussion.


⁽⁵⁾	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.


⁽⁶⁾	Bankruptcy obligations that will be settled in shares of AAG common stock are marked-to-market based on AAG’s stock price.


⁽⁷⁾	Employee bonus expense included costs related to the $1,000 cash bonus and associated payroll taxes granted to mainline employees as of December 31, 2017 in recognition of the 2017 Tax Act.


⁽⁸⁾	Mark-to-market adjustments on equity investments relate to net unrealized losses primarily associated with American’s equity investments in China Southern Airlines and Mesa Air Group, Inc.


⁽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