Retirement Benefits

3 Months Ended

Mar. 31, 2015

Retirement Benefits

10. Retirement Benefits

The following tables provide the components of net periodic benefit cost (in millions):

	Pension Benefits						Retiree Medical and Other Benefits
Three Months Ended March 31,
	2015			2014			2015			2014
Service cost	$	1		$	—		$	1		$	—
Interest cost		184			186			13			15
Expected return on assets		(213	)		(196	)		(5	)		(5	)
Settlements		—			2			—			—
Amortization of:
Prior service cost (benefit) (1)		7			7			(61	)		(61	)
Unrecognized net loss (gain)		28			11			(2	)		(2	)
Net periodic benefit cost	$	7		$	10		$	(54	)	$	(53	)

⁽¹⁾  The 2015 first quarter prior service cost does not include amortization of less than $1 million related to other post-employment benefits.

Effective November 1, 2012, the Company’s defined benefit pension plans were frozen.

The Company is required to make minimum contributions to its defined benefit pension plans under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (ERISA), the Pension Funding Equity Act of 2004, the Pension Protection Act of 2006, the Pension Relief Act of 2010 and the Moving Ahead for Progress in the 21st Century Act of 2012. Based on current funding assumptions, the Company has no minimum required contributions until 2019. Currently, American’s minimum funding obligation for its pension plans is subject to temporary favorable rules that are scheduled to expire at the end of 2017. Upon expiration of these rules, American’s funding obligations are likely to increase materially. The amount of these obligations will depend on the performance of the Company’s investments held in trust by the pension plans, interest rates for determining liabilities and the Company’s actuarial experience.

American Airlines, Inc. [Member]

Retirement Benefits

8. Retirement Benefits

The following tables provide the components of net periodic benefit cost (in millions):

	Pension Benefits						Retiree Medical and Other Benefits
Three Months Ended March 31,	2015			2014			2015			2014
Interest cost	$	184		$	185		$	11		$	14
Expected return on assets		(212	)		(195	)		(5	)		(5	)
Settlements		—			2			—			—
Amortization of:
Prior service cost (benefit) (1)		7			7			(59	)		(60	)
Unrecognized net loss (gain)		28			11			(2	)		(2	)
Net periodic benefit cost	$	7		$	10		$	(55	)	$	(53	)

⁽¹⁾  The 2015 first quarter prior service cost does not include amortization of less than $1 million related to other post-employment benefits.

Effective November 1, 2012, American’s defined benefit pension plans were frozen.

American is required to make minimum contributions to its defined benefit pension plans under the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (ERISA), the Pension Funding Equity Act of 2004, the Pension Protection Act of 2006, the Pension Relief Act of 2010 and the Moving Ahead for Progress in the 21st Century Act of 2012. Based on current funding assumptions, American has no minimum required contributions until 2019. Currently, American’s minimum funding obligation for its pension plans is subject to temporary favorable rules that are scheduled to expire at the end of 2017. Upon expiration of these rules, American’s funding obligations are likely to increase materially. The amount of these obligations will depend on the performance of American’s investments held in trust by the pension plans, interest rates for determining liabilities and American’s actuarial experience.