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. In addition, on March 31, 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 June 30, 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	$	—		$	5,352		$	—		$	2,861		$	—		$	—		$	8,213
Regional passenger	—			786			—			921			—			—			1,707
Cargo	—			178			—			43			—			—			221
Other	—			837			—			408			744			(775		)	1,214
Total operating revenues	—			7,153			—			4,233			744			(775		)	11,355
Operating expenses
Aircraft fuel and related taxes	—			1,897			—			933			—			—			2,830
Salaries, wages and benefits	—			1,441			—			720			195			(193		)	2,163
Regional expenses	—			804			—			867			—			(14		)	1,657
Maintenance, materials and repairs	—			346			—			168			80			(80		)	514
Other rent and landing fees	—			289			—			152			7			(7		)	441
Aircraft rent	—			214			—			102			22			(26		)	312
Selling expenses	—			282			—			120			—			—			402
Depreciation and amortization	—			220			—			100			10			(11		)	319
Special items, net	(2		)	179			—			74			—			—			251
Other	2			763			—			319			427			(444		)	1,067
Total operating expenses	—			6,435			—			3,555			741			(775		)	9,956
Operating income	—			718			—			678			3			—			1,399
Nonoperating income (expense)
Interest income	2			6			1			3			—			(4		)	8
Interest expense, net	—			(139		)	(10		)	(69		)	—			4			(214		)
Equity in earnings of subsidiaries	863			—			595			—			—			(1,458		)	—
Other, net	—			16			3			(6		)	1			(3		)	11
Total nonoperating income (expense), net	865			(117		)	589			(72		)	1			(1,461		)	(195		)
Income before income taxes	865			601			589			606			4			(1,461		)	1,204
Income tax provision (benefit)	(3		)	336			—			1			6			—			340
Net income (loss)	$	868		$	265		$	589		$	605		$	(2	)	$	(1,461	)	$	864

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In millions)(Unaudited)



	Six Months Ended June 30, 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	$	—		$	10,258		$	—		$	5,213		$	—		$	—		$	15,471
Regional passenger	—			1,455			—			1,659			—			—			3,114
Cargo	—			346			—			82			—			—			428
Other	—			1,563			—			826			1,488			(1,539		)	2,338
Total operating revenues	—			13,622			—			7,780			1,488			(1,539		)	21,351
Operating expenses
Aircraft fuel and related taxes	—			3,768			—			1,773			—			—			5,541
Salaries, wages and benefits	—			2,839			—			1,439			392			(388		)	4,282
Regional expenses	—			1,562			—			1,696			—			(7		)	3,251
Maintenance, materials and repairs	—			678			—			321			165			(165		)	999
Other rent and landing fees	—			574			—			292			15			(15		)	866
Aircraft rent	—			430			—			205			43			(47		)	631
Selling expenses	—			566			—			238			—			—			804
Depreciation and amortization	—			434			—			195			20			(23		)	626
Special items, net	22			(37		)	—			129			3			(3		)	114
Other	4			1,512			—			626			857			(891		)	2,108
Total operating expenses	26			12,326			—			6,914			1,495			(1,539		)	19,222
Operating income (loss)	(26		)	1,296			—			866			(7		)	—			2,129
Nonoperating income (expense)
Interest income	4			13			1			4			1			(8		)	15
Interest expense, net	(4		)	(307		)	(20		)	(134		)	—			8			(457		)
Equity in earnings of subsidiaries	1,314			—			712			—			—			(2,026		)	—
Other, net	—			11			(53		)	(3		)	1			53			9
Total nonoperating income (expense), net	1,314			(283		)	640			(133		)	2			(1,973		)	(433		)
Income (loss) before income taxes	1,288			1,013			640			733			(5		)	(1,973		)	1,696
Income tax provision (benefit)	(2		)	347			—			2			6			—			353
Net income (loss)	$	1,290		$	666		$	640		$	731		$	(11	)	$	(1,973	)	$	1,343

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(In millions)(Unaudited)



	Three Months Ended June 30, 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)	$	868		$	265		$	589	$	605		$	(2	)	$	(1,461	)	$	864
Other comprehensive loss before tax:
Defined benefit pension plans and retiree medical	—			(58		)	—		(1		)	—			—			(59		)
Derivative financial instruments:
Change in fair value	(2		)	15			—		—			—			—			13
Reclassification into earnings	—			5			—		—			—			—			5
Net unrealized gain (loss) on investments:
Net change in value	2			(2		)	—		—			—			—			—
Other comprehensive loss before tax	—			(40		)	—		(1		)	—			—			(41		)
Reversal of non-cash tax provision	2			328			—		—			—			—			330
Comprehensive income (loss)	$	870		$	553		$	589	$	604		$	(2	)	$	(1,461	)	$	1,153



	Six Months Ended June 30, 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)	$	1,290		$	666		$	640	$	731		$	(11	)	$	(1,973	)	$	1,343
Other comprehensive loss before tax:
Defined benefit pension plans and retiree medical	—			(102		)	—		(2		)	—			—			(104		)
Derivative financial instruments:
Change in fair value	(2		)	(52		)	—		—			—			—			(54		)
Reclassification into earnings	—			12			—		—			—			—			12
Net unrealized loss on investments:
Net change in value	2			—			—		—			—			—			2
Other comprehensive loss before tax	—			(142		)	—		(2		)	—			—			(144		)
Reversal of non-cash tax provision	2			328			—		—			—			—			330
Comprehensive income (loss)	$	1,292		$	852		$	640	$	729		$	(11	)	$	(1,973	)	$	1,529

AMERICAN AIRLINES GROUP INC.

CONDENSED CONSOLIDATING BALANCE SHEET

(In millions)(Unaudited)



	June 30, 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		$	981		$	1	$	222	$	5	$	—		$	1,210
Short-term investments	—			4,822			—		3,425		2		—			8,249
Restricted cash and short-term investments	—			650			—		232		—		—			882
Accounts receivable, net	—			1,502			—		471		15		(7		)	1,981
Receivables from related parties,net	2,282			116			173		645		521		(3,737		)	—
Aircraft fuel, spare parts and supplies, net	—			633			—		396		64		—			1,093
Prepaid expenses and other	—			581			—		989		21		(40		)	1,551
Total current assets	2,283			9,285			174		6,380		628		(3,784		)	14,966
Operating property and equipment	—			14,789			—		6,167		280		—			21,236
Other assets
Investment in subsidiaries	1,768			—			6,078		—		—		(7,846		)	—
Goodwill	—			—			—		4,089		—		—			4,089
Intangibles, net of accumulated amortization	—			872			—		1,458		—		—			2,330
Other assets	43			2,002			—		145		35		(35		)	2,190
Total other assets	1,811			2,874			6,078		5,692		35		(7,881		)	8,609
Total assets	$	4,094		$	26,948		$	6,252	$	18,239	$	943	$	(11,665	)	$	44,811

LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt and capital leases	$	—		$	1,003		$	—	$	520	$	—	$	—		$	1,523
Accounts payable	—			1,258			—		351		44		—			1,653
Payables to related parties, net	—			2,643			633		221		240		(3,737		)	—
Air traffic liability	—			3,902			—		1,781		—		—			5,683
Frequent flyer liability	—			1,741			—		1,138		—		—			2,879
Other accrued liabilities	—			2,066			2		1,147		149		(14		)	3,350
Total current liabilities	—			12,613			635		5,158		433		(3,751		)	15,088
Noncurrent liabilities
Long-term debt and capital leases, net of current maturities	7			9,585			523		5,125		—		(35		)	15,205
Pensions and postretirement benefits	—			5,568			—		108		28		—			5,704
Mandatorily convertible preferred stock and other bankruptcy settlement obligations	—			415			—		—		—		—			415
Other liabilities	1			2,532			—		1,805		280		(305		)	4,313
Total noncurrent liabilities	8			18,100			523		7,038		308		(340		)	25,637
Stockholders’ equity (deficit)
Common stock	7			—			—		—		—		—			7
Additional paid-in capital	15,879			10,404			4,653		5,492		198		(20,747		)	15,879
Treasury stock	(1		)	—			—		—		—		—			(1		)
Accumulated other comprehensive income (loss)	(1,846		)	(1,966		)	10		10		—		1,946			(1,846		)
Retained earnings (deficit)	(9,953		)	(12,203		)	431		541		4		11,227			(9,953		)
Total stockholders’ equity (deficit)	4,086			(3,765		)	5,094		6,043		202		(7,574		)	4,086
Total liabilities and stockholders’ equity (deficit)	$	4,094		$	26,948		$	6,252	$	18,239	$	943	$	(11,665	)	$	44,811

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	—			2,237			103			1,137			139		(9		)	3,607
Total current liabilities	—			11,919			533			4,438			403		(3,487		)	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	4,799			—			—			—			—		(4,799		)	—
Other liabilities	1			2,384			—			1,905			277		(473		)	4,094
Total noncurrent liabilities	5,242			23,353			523			7,019			372		(5,306		)	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

(In millions)(Unaudited)



	Six Months Ended June 30, 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 operating activities	$	—	$	1,683		$	—	$	931		$	23		$	—		$	2,637
Cash flows from investing activities:
Capital expenditures and aircraft purchase deposits	—		(1,828		)	—		(626		)	(26		)	(198		)	(2,678		)
Decrease (increase) in investments	—		340			—		(478		)	—			—			(138		)
Decrease in restricted cash and short-term investments	—		52			—		101			—			—			153
Net proceeds from slot transaction	—		299			—		8			—			—			307
Funds transferred to affiliates	—		(198		)	—		—			—			198			—
Proceeds from sale of property and equipment	—		7			—		—			2			—			9
Net cash used in investing activities	—		(1,328		)	—		(995		)	(24		)	—			(2,347		)
Cash flows from financing activities:
Payments on long-term debt and capital leases	—		(655		)	—		(314		)	—			(176		)	(1,145		)
Proceeds from issuance of long-term debt	—		53			—		481			—			—			534
Exercise of stock options	—		—			—		9			—			—			9
Deferred financing costs	—		(5		)	—		(2		)	—			—			(7		)
Sale-leaseback transactions	—		411			—		—			—			—			411
Treasury stock repurchases	—		(7		)	—		(21		)	—			—			(28		)
Funds transferred to affiliates	—		—			—		(176		)	—			176			—
Other financing activities	—		—			—		6			—			—			6
Net cash used in financing activities	—		(203		)	—		(17		)	—			—			(220		)
Net increase (decrease) in cash	—		152			—		(81		)	(1		)	—			70
Cash at beginning of period	1		829			1		303			6			—			1,140
Cash at end of period	$	1	$	981		$	1	$	222		$	5		$	—		$	1,210