Special Items, Net

6 Months Ended

Jun. 30, 2019

Restructuring Cost and Reserve [Line Items]

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



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Fleet restructuring expenses ⁽¹⁾	$	77	$	113		$	160		$	226
Merger integration expenses ⁽²⁾	39		60			76			120
Mark-to-market adjustments on bankruptcy obligations, net ⁽³⁾	5		(57		)	5			(56		)
Intangible asset impairment ⁽⁴⁾	—		26			—			26
Litigation settlement ⁽⁵⁾	—		5			—			45
Labor contract expenses	—		—			—			13
Other operating charges, net	—		35			18			33
Mainline operating special items, net	121		182			259			407

Mark-to-market adjustments on equity investments, net ⁽⁶⁾	52		66			(25		)	66
Debt refinancing and extinguishment charges	8		14			8			14
Other nonoperating charges, net	9		—			16			—
Nonoperating special items, net	69		80			(1		)	80

Income tax special items, net ⁽⁷⁾	—		18			—			40


⁽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 technical operations, flight attendant, human resources and payroll systems.


⁽³⁾	Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.


⁽⁴⁾	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.


⁽⁵⁾	Settlement of a private party antitrust lawsuit. See Note 12 - “Private Party Antitrust Action Related to Passenger Capacity” for further discussion.


⁽⁶⁾	Mark-to-market adjustments on equity investments relate to net unrealized gains and losses primarily associated with our equity investment in China Southern Airlines Company Limited (China Southern Airlines).

⁽⁷⁾

Income tax special items for the three months ended June 30, 2018 included an $18 million charge related to an international income tax matter. Additionally, the six months ended June 30, 2018 included a $22 million charge to income tax expense to establish a required valuation allowance related to our estimated refund for Alternative Minimum Tax (AMT) credits.

American Airlines, Inc. [Member]

Restructuring Cost and Reserve [Line Items]

Special Items, Net

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



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Fleet restructuring expenses ⁽¹⁾	$	77	$	113		$	160		$	226
Merger integration expenses ⁽²⁾	39		60			76			120
Mark-to-market adjustments on bankruptcy obligations, net ⁽³⁾	5		(57		)	5			(56		)
Intangible asset impairment ⁽⁴⁾	—		26			—			26
Litigation settlement ⁽⁵⁾	—		5			—			45
Labor contract expenses	—		—			—			13
Other operating charges, net	—		35			18			33
Mainline operating special items, net	121		182			259			407

Mark-to-market adjustments on equity investments, net ⁽⁶⁾	52		66			(25		)	66
Debt refinancing and extinguishment charges	8		14			8			14
Other nonoperating charges, net	9		—			16			—
Nonoperating special items, net	69		80			(1		)	80

Income tax special items, net ⁽⁷⁾	—		18			—			48


⁽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 technical operations, flight attendant, human resources and payroll systems.


⁽³⁾	Bankruptcy obligations that will be settled in shares of AAG common stock are marked-to-market based on AAG's stock price.


⁽⁴⁾	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.


⁽⁵⁾	Settlement of a private party antitrust lawsuit. See Note 11 - “Private Party Antitrust Action Related to Passenger Capacity” for further discussion.


⁽⁶⁾	Mark-to-market adjustments on equity investments relate to net unrealized gains and losses primarily associated with American's equity investment in China Southern Airlines Company Limited (China Southern Airlines).

⁽⁷⁾

Income tax special items for the three months ended June 30, 2018 included an $18 million charge related to an international income tax matter. Additionally, the six months ended June 30, 2018 included a $30 million charge to income tax expense to establish a required valuation allowance related to American's estimated refund for Alternative Minimum Tax (AMT) credits.