Financial Information for Subsidiary Guarantors and Non-guarantor Subsidiaries

There are various cross-guarantees among the Company, American, US Airways Group and US Airways with respect to publicly held debt securities. In connection with the Merger, the Company and American entered into a second supplemental indenture under which they jointly and severally guaranteed the payment of obligations associated with US Airways Group's 6.125% senior notes. The Company also entered into a second supplemental indenture under which the Company guaranteed the payment of obligations of US Airways Group's 7.25% convertible notes and which also provides for the conversion of the 7.25% convertible notes into AAG Common Stock rather than into US Airways Group common stock. In addition, in March 2014, the Company, US Airways Group and US Airways entered into amended and restated guarantees of the payment obligations of US Airways under the equipment notes relating to each of its Series 2010-1, 2011-1, 2012-1, 2012-2 and 2013-1 Pass Through Certificates the result of which was to add AAG as a guarantor of such equipment notes on a joint and several basis with US Airways Group.

In connection with the issuance of these guarantees, in accordance with Rule 3-10 of Regulation S-X and Rule 12h-5 under the Securities Exchange Act of 1934, as amended, US Airways Group and US Airways discontinued filing separate periodic and current reports with the SEC. As a result, in accordance with Rule 3-10, the Company is required to present the following condensed consolidating financial information for the periods after Merger close for American Airlines Group Parent, American, US Airways Group Parent, US Airways and all other non-guarantor subsidiaries, together with the consolidating adjustments necessary to present the Company’s results on a consolidated basis.

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In millions)

(unaudited)



	Three Months Ended March 31, 2014
	American Airlines Group (Parent Company Only)			American			US Airways Group (Parent Company Only)			US Airways			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			American Airlines Group Inc. Consolidated
Operating revenues
Mainline passenger	$	—		$	4,906		$	—		$	2,352		$	—		$	—		$	7,258
Regional passenger	—			669			—			738			—			—			1,407
Cargo	—			168			—			38			—			—			206
Other	—			726			—			418			744			(764		)	1,124
Total operating revenues	—			6,469			—			3,546			744			(764		)	9,995
Operating expenses
Aircraft fuel and related taxes	—			1,871			—			840			—			—			2,711
Salaries, wages and benefits	—			1,398			—			719			197			(195		)	2,119
Regional expenses	—			758			—			828			—			8			1,594
Maintenance, materials and repairs	—			332			—			153			85			(85		)	485
Other rent and landing fees	—			285			—			139			7			(7		)	424
Aircraft rent	—			216			—			104			21			(21		)	320
Selling expenses	—			284			—			117			—			—			401
Depreciation and amortization	—			214			—			95			10			(12		)	307
Special items, net	24			(216		)	—			55			3			(3		)	(137		)
Other	2			749			—			308			431			(449		)	1,041
Total operating expenses	26			5,891			—			3,358			754			(764		)	9,265
Operating income (loss)	(26		)	578			—			188			(10		)	—			730
Nonoperating income (expense)
Interest income	2			7			—			1			1			(4		)	7
Interest expense, net	(4		)	(168		)	(10		)	(65		)	—			4			(243		)
Equity in earnings of subsidiaries	453			—			118			—			—			(571		)	—
Other, net	—			(5		)	(56		)	3			1			56			(1		)
Total nonoperating income (expense), net	451			(166		)	52			(61		)	2			(515		)	(237		)
Income (loss) before income taxes	425			412			52			127			(8		)	(515		)	493
Income tax provision	1			11			—			1			—			—			13
Net income (loss)	$	424		$	401		$	52		$	126		$	(8	)	$	(515	)	$	480

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(In millions)

(unaudited)



	Three Months Ended March 31, 2014
	American Airlines Group (Parent Company Only)		American			US Airways Group (Parent Company Only)		US Airways			Non-Guarantor Subsidiaries			Eliminations and Reclassifications			American Airlines Group Inc. Consolidated
Net income (loss)	$	424	$	401		$	52	$	126		$	(8	)	$	(515	)	$	480
Other comprehensive loss before tax:
Defined benefit pension plans and retiree medical:
Amortization of actuarial gain and prior service cost	—		(44		)	—		(1		)	—			—			(45		)
Derivative financial instruments:
Change in fair value	—		(67		)	—		—			—			—			(67		)
Reclassification into earnings	—		7			—		—			—			—			7
Unrealized gain (loss) on investments:
Net change in value	—		2			—		—			—			—			2
Other comprehensive loss before tax	—		(102		)	—		(1		)	—			—			(103		)
Non-cash tax provision	—		—			—		—			—			—			—
Comprehensive income (loss)	$	424	$	299		$	52	$	125		$	(8	)	$	(515	)	$	377

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING BALANCE SHEET

(In millions)(unaudited)



	March 31, 2014
	American Airlines Group (Parent Company Only)			American			US Airways Group (Parent Company Only)			US Airways			Non-Guarantor Subsidiaries		Eliminations and Reclassifications			American Airlines Group Inc. Consolidated
ASSETS
Current assets
Cash	$	1		$	983		$	1		$	269		$	5	$	—		$	1,259
Short-term investments	—			4,979			—			3,423			3		—			8,405
Restricted cash and short-term investments	—			699			—			248			—		—			947
Accounts receivable, net	(7		)	1,521			—			473			21		—			2,008
Receivables from related parties,net	2,474			—			155			444			499		(3,572		)	—
Aircraft fuel, spare parts and supplies, net	—			664			—			330			58		—			1,052
Prepaid expenses and other	—			606			—			989			22		(95		)	1,522
Total current assets	2,468			9,452			156			6,176			608		(3,667		)	15,193
Operating property and equipment	—			13,928			—			5,736			280		—			19,944
Other assets
Investment in subsidiaries	—			—			5,461			—			—		(5,461		)	—
Goodwill	—			—			—			4,089			—		—			4,089
Intangibles, net of accumulated amortization	—			844			—			1,475			—		—			2,319
Other assets	42			2,016			—			136			32		(34		)	2,192
Total other assets	42			2,860			5,461			5,700			32		(5,495		)	8,600
Total assets	$	2,510		$	26,240		$	5,617		$	17,612		$	920	$	(9,162	)	$	43,737

LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt and capital leases	$	—		$	951		$	22		$	468		$	—	$	—		$	1,441
Accounts payable	—			1,230			—			374			42		—			1,646
Payables to related parties, net	—			2,843			421			84			224		(3,572		)	—
Air traffic liability	—			3,808			—			1,878			—		—			5,686
Frequent flyer liability	—			1,761			—			1,190			—		—			2,951
Other accrued liabilities	(12		)	1,972			168			1,076			151		—			3,355
Total current liabilities	(12		)	12,565			611			5,070			417		(3,572		)	15,079
Noncurrent liabilities
Long-term debt and capital leases, net of current maturities	7			9,590			523			5,158			—		(34		)	15,244
Pensions and postretirement benefits	—			5,631			—			108			27		—			5,766
Mandatorily convertible preferred stock and other bankruptcy settlement obligations	74			2,242			—			—			6		—			2,322
Negative investment in subsidiaries	1,345			—			—			—			—		(1,345		)	—
Other liabilities	1			2,453			—			1,861			272		(356		)	4,231
Total noncurrent liabilities	1,427			19,916			523			7,127			305		(1,735		)	27,563
Stockholders’ equity (deficit)
Common stock	6			—			—			—			—		—			6
Additional paid-in capital	14,040			8,481			4,629			5,468			192		(18,770		)	14,040
Accumulated other comprehensive income (loss)	(2,135		)	(2,254		)	11			11			—		2,232			(2,135		)
Retained earnings (deficit)	(10,816		)	(12,468		)	(157		)	(64		)	6		12,683			(10,816		)
Total stockholders’ equity (deficit)	1,095			(6,241		)	4,483			5,415			198		(3,855		)	1,095
Total liabilities and stockholders’ equity (deficit)	$	2,510		$	26,240		$	5,617		$	17,612		$	920	$	(9,162	)	$	43,737

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING BALANCE SHEET

(In millions)(unaudited)



	December 31, 2013
	American Airlines Group (Parent Company Only)			American			US Airways Group (Parent Company Only)			US Airways			Non-Guarantor Subsidiaries		Eliminations and Reclassifications			American Airlines Group Inc. Consolidated
ASSETS
Current assets
Cash	$	1		$	829		$	1		$	303		$	6	$	—		$	1,140
Short-term investments	—			5,162			—			2,947			2		—			8,111
Restricted cash and short-term investments	—			702			—			333			—		—			1,035
Accounts receivable, net	—			1,186			—			357			17		—			1,560
Receivables from related parties, net	2,468			—			144			407			459		(3,478		)	—
Aircraft fuel, spare parts and supplies, net	—			620			—			296			96		—			1,012
Prepaid expenses and other	—			702			—			857			20		(114		)	1,465
Total current assets	2,469			9,201			145			5,500			600		(3,592		)	14,323
Operating property and equipment	—			13,469			—			5,506			284		—			19,259
Other assets
Investment in subsidiaries	—			—			5,317			—			—		(5,317		)	—
Goodwill	—			—			—			4,086			—		—			4,086
Intangibles, net of accumulated amortization	—			812			—			1,496			3		—			2,311
Other assets	42			2,130			—			131			30		(34		)	2,299
Total other assets	42			2,942			5,317			5,713			33		(5,351		)	8,696
Total assets	$	2,511		$	25,612		$	5,462		$	16,719		$	917	$	(8,943	)	$	42,278

LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt and capital leases	$	—		$	957		$	22		$	467		$	—	$	—		$	1,446
Accounts payable	—			1,013			—			304			51		—			1,368
Payables to related parties, net	—			2,807			408			50			213		(3,478		)	—
Air traffic liability	—			3,145			—			1,235			—		—			4,380
Frequent flyer liability	—			1,760			—			1,245			—		—			3,005
Other accrued liabilities	(9		)	2,237			103			1,137			139		—			3,607
Total current liabilities	(9		)	11,919			533			4,438			403		(3,478		)	13,806
Noncurrent liabilities
Long-term debt and capital leases, net of current maturities	7			9,852			523			5,005			—		(34		)	15,353
Pensions and postretirement benefits	—			5,693			—			109			26		—			5,828
Mandatorily convertible preferred stock and other bankruptcy settlement obligations	435			5,424			—			—			69		—			5,928
Negative investment in subsidiaries	4,808			—			—			—			—		(4,808		)	—
Other liabilities	1			2,384			—			1,905			277		(473		)	4,094
Total noncurrent liabilities	5,251			23,353			523			7,019			372		(5,315		)	31,203
Stockholders’ equity (deficit)
Common stock	5			—			—			—			—		—			5
Additional paid-in capital	10,592			5,361			4,602			5,441			126		(15,530		)	10,592
Accumulated other comprehensive income (loss)	(2,032		)	(2,152		)	12			12			—		2,128			(2,032		)
Retained earnings (deficit)	(11,296		)	(12,869		)	(208		)	(191		)	16		13,252			(11,296		)
Total stockholders’ equity (deficit)	(2,731		)	(9,660		)	4,406			5,262			142		(150		)	(2,731		)
Total liabilities and stockholders’ equity (deficit)	$	2,511		$	25,612		$	5,462		$	16,719		$	917	$	(8,943	)	$	42,278

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(unaudited)(In millions)



	Three Months Ended March 31, 2014
	American Airlines Group (Parent Company Only)			American			US Airways Group (Parent Company Only)		US Airways			Non-Guarantor Subsidiaries			Eliminations and Reclassifications		American Airlines Group Inc. Consolidated
Net cash provided by (used in) operating activities	$	(9	)	$	742		$	—	$	515		$	8		$	—	$	1,256
Cash flows from investing activities:
Capital expenditures and aircraft purchase deposits	—			(722		)	—		(316		)	(9		)	—		(1,047		)
Decrease (increase) in investments	—			183			—		(477		)	—			—		(294		)
Decrease in restricted cash and short-term investments	—			3			—		85			—			—		88
Net proceeds from slot transaction	—			299			—		8			—			—		307
Proceeds from sale of property and equipment	—			3			—		—			—			—		3
Net cash used in investing activities	—			(234		)	—		(700		)	(9		)	—		(943		)
Cash flows from financing activities:
Payments on long-term debt and capital leases	—			(430		)	—		(71		)	—			—		(501		)
Proceeds from issuance of long-term debt	—			—			—		224			—			—		224
Payments of employee withholding taxes on net share issuances	(84		)	—			—		—			—			—		(84		)
Funds transferred from (to) affiliates	84			(84		)	—		—			—			—		—
Exercise of stock options	9			—			—		—			—			—		9
Deferred financing costs	—			(5		)	—		(2		)	—			—		(7		)
Sale-leaseback transactions	—			165			—		—			—			—		165
Net cash provided by (used in) financing activities	9			(354		)	—		151			—			—		(194		)
Net increase (decrease) in cash	—			154			—		(34		)	(1		)	—		119
Cash at beginning of period	1			829			1		303			6			—		1,140
Cash at end of period	$	1		$	983		$	1	$	269		$	5		$	—	$	1,259