Annual Report of DELTA AIR LINES, INC\.  for year 2019

Other Information

The table below presents supplemental cash flow information related to leases\.

|                                                                        |                                                                        |                                                                        |                         |                         |  |  |  |
|:---------------------------------------------------------------------- |:---------------------------------------------------------------------- |:---------------------------------------------------------------------- | -----------------------:| -----------------------:|:- |:- |:- |
|                                                                        |                                                                        |                                                                        | Year Ended December 31, | Year Ended December 31, |  |  |  |
| (in millions)                                                          | (in millions)                                                          | (in millions)                                                          |                    2019 |                    2018 |
| Cash paid for amounts included in the measurement of lease liabilities | Cash paid for amounts included in the measurement of lease liabilities | Cash paid for amounts included in the measurement of lease liabilities |                         |                         |
| Operating cash flows for operating leases                              | Operating cash flows for operating leases                              | Operating cash flows for operating leases                              |                 $ 1,166 |                 $ 1,271 |
| Operating cash flows for finance leases                                | Operating cash flows for finance leases                                | Operating cash flows for finance leases                                |                      27 |                      22 |
| Financing cash flows for finance leases                                | Financing cash flows for finance leases                                | Financing cash flows for finance leases                                |                     192 |                     108 |

Undiscounted Cash Flows

The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities recorded on the balance sheet\.

|                                                      |                                                      |                                                      |                  |                |
|:---------------------------------------------------- |:---------------------------------------------------- |:---------------------------------------------------- | ----------------:| --------------:|
| (in millions)                                        | (in millions)                                        | (in millions)                                        | Operating Leases | Finance Leases |
| 2020                                                 | 2020                                                 | 2020                                                 |          $ 1,003 |          $ 264 |
| 2021                                                 | 2021                                                 | 2021                                                 |              836 |            239 |
| 2022                                                 | 2022                                                 | 2022                                                 |              729 |            174 |
| 2023                                                 | 2023                                                 | 2023                                                 |              698 |            124 |
| 2024                                                 | 2024                                                 | 2024                                                 |              628 |            180 |
| Thereafter                                           | Thereafter                                           | Thereafter                                           |            3,821 |            179 |
| Total minimum lease payments                         | Total minimum lease payments                         | Total minimum lease payments                         |            7,715 |          1,160 |
| Less: amount of lease payments representing interest | Less: amount of lease payments representing interest | Less: amount of lease payments representing interest |          (1,620) |          (106) |
| Present value of future minimum lease payments       | Present value of future minimum lease payments       | Present value of future minimum lease payments       |            6,095 |          1,054 |
| Less: current obligations under leases               | Less: current obligations under leases               | Less: current obligations under leases               |            (801) |          (233) |
| Long\-term lease obligations                         | Long\-term lease obligations                         | Long\-term lease obligations                         |          $ 5,294 |          $ 821 |

As of December 31, 2019, we had additional leases that had not yet commenced of $888 million\. These leases will commence in 2020 to 2024 with lease terms of 5 to 12 years\.

78


Annual Report of Southwest Airlines Co\. for year 2017

**PART II**

**Item 5\.*****Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities***

The Company’s common stock is listed on the New York Stock Exchange ("NYSE") and is traded under the symbol "LUV\." The following table shows the high and low prices per share of the Company’s common stock, as reported on the NYSE Composite Tape, and the cash dividends per share declared on the Company’s common stock\.

|             |               |           |          |
| ----------- | ------------- | --------- | -------- |
| **Period**  | **Dividend**  | **High**  | **Low**  |
| **2017**    |               |           |          |
| 1st Quarter | $0\.10000     | $59\.68   | $48\.75  |
| 2nd Quarter | 0\.12500      | 62\.74    | 52\.89   |
| 3rd Quarter | 0\.12500      | 64\.39    | 49\.76   |
| 4th Quarter | 0\.12500      | 66\.99    | 52\.78   |
| **2016**    |               |           |          |
| 1st Quarter | $0\.07500     | $45\.39   | $33\.96  |
| 2nd Quarter | 0\.10000      | 48\.00    | 36\.48   |
| 3rd Quarter | 0\.10000      | 45\.00    | 35\.42   |
| 4th Quarter | 0\.10000      | 51\.31    | 36\.91   |

The Company currently intends to continue declaring dividends on a quarterly basis for the foreseeable future; however, the Company’s Board of Directors may elect to alter the timing, amount, and payment of dividends on the basis of operational results, financial condition, cash requirements, future prospects, and other factors deemed relevant by the Board\. As of February 5, 2018, there were approximately 12,531 holders of record of the Company’s common stock\.

34


Annual Report of American Airlines Group Inc\. for year 2019

![chart\-1c872d9df3e2591c88d\.jpg](https://americanairlines.gcs-web.com/email-alerts/chart-1c872d9df3e2591c88d.jpg)

|                                     |                |                |                |                |                |                |
| ----------------------------------- | -------------- | -------------- | -------------- | -------------- | -------------- | -------------- |
|                                     | **12/31/2014** | **12/31/2015** | **12/31/2016** | **12/31/2017** | **12/31/2018** | **12/31/2019** |
| American Airlines Group Inc\. (AAL) | $100           | $80            | $89            | $100           | $62            | $56            |
| NYSE ARCA Airline Index (XAL)       | 100            | 83             | 106            | 112            | 87             | 106            |
| S&P 500 Index (GSPC)                | 100            | 99             | 109            | 130            | 122            | 157            |

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In April 2018, we announced that our Board of Directors authorized a  $2\.0 billion  share repurchase program that will expire on December 31, 2020\. Since July 2014, our Board of Directors has approved  seven  share repurchase programs aggregating  $13\.0 billion  of authority\.

In  2019 , we repurchased  33\.8 million  shares of AAG common stock for  $1\.1 billion  at a weighted average cost per share of  $32\.09 \. In  2018 , we repurchased  16\.6 million  shares of AAG common stock for  $800 million  at a weighted average cost per share of  $48\.15 \.  Since the inception of our share repurchase programs in July 2014 through December 31, 2019, we have repurchased  312\.7 million  shares of AAG common stock for  $12\.4 billion  at a weighted average cost per share of  $39\.76 \.

The following table displays information with respect to our purchases of shares of AAG common stock during the three months ended  December 31, 2019 \.

|               |                                                 |                                             |                                                                                |                                                                                |
| ------------- | ----------------------------------------------- | ------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- |
| **Period**    | **Total number of**

**shares purchased** | **Average price**

**paid per share** | **Total number of shares**

**purchased as part of**

**publicly announced**

**plan or program** | **Maximum dollar value of shares**

**that may be purchased under**

**the plan or program**

**(in millions)** |
| October 2019  | 710,556                                         | $30\.65                                     | 710,556                                                                                | $828                                                                                |
| November 2019 | 4,181,541                                       | $29\.42                                     | 4,181,541                                                                                | $705                                                                                |
| December 2019 | 4,975,466                                       | $28\.12                                     | 4,975,466                                                                                | $565                                                                                |

Share repurchases under our repurchase programs may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions\. Any such repurchases that may be made from time to time will be subject to market and economic conditions, applicable legal requirements and other relevant factors\. We are not obligated to repurchase any specific number of shares and our repurchase of AAG common stock may be limited, suspended or discontinued at any time at our discretion and without prior notice\.

43


Annual Report of American Airlines Group Inc\. for year 2017

|                               |                                                                                |
| ----------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Exhibit**

**Number** | **Description**                                                                                |
| 10\.37                        | [Supplemental Agreement No\. 1, dated as of April 15, 2013, to Purchase Agreement No\. 03735 between American Airlines, Inc\. and The Boeing Company (incorporated by reference to Exhibit 10\.1 to AMR’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2013 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/6201/000000620113000067/d567093dex101.htm) \*                                                                                |
| 10\.38                        | [Supplemental Agreement No\. 2, dated as of March 6, 2015, to Purchase Agreement No\. 03735 between American Airlines, Inc\. and The Boeing Company, dated as of February 1, 2013\. Relating to Boeing Model 737 MAX Aircraft, as amended, restated, amended and restated, supplemented or otherwise modified (incorporated by reference to Exhibit 10\.1 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2015 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312515145178/d900175dex101.htm) \*                                                                                |
| 10\.39                        | [Supplemental Agreement No\. 3, dated as of May 22, 2015, to Purchase Agreement No\. 03735 between American Airlines, Inc\. and The Boeing Company, dated as of February 1, 2013\. Relating to Boeing Model 737 MAX Aircraft, as amended, restated, amended and restated, supplemented or otherwise modified (incorporated by reference to Exhibit 10\.3 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2015 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312515261937/d945812dex103.htm) \*                                                                                |
| 10\.40                        | [Letter Agreement, dated as of January 14, 2016, to Purchase Agreement No\. 03735 between American Airlines, Inc\. and The Boeing Company, dated as of February 1, 2013\. Relating to Boeing Model 737 MAX Aircraft, as amended, restated, amended and restated, supplemented or otherwise modified (incorporated by reference to Exhibit 10\.2 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2016 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312516551225/d164093dex102.htm) \*                                                                                |
| 10\.41                        | [Supplemental Agreement No\. 4, dated as of June 6, 2016, to Purchase Agreement No\. 03735 dated as of February 1, 2016, between American Airlines, Inc\. and The Boeing Company (incorporated by reference to Exhibit 10\.3 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2016 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312516654354/d204187dex103.htm) \*                                                                                |
| 10\.42                        | [Supplemental Agreement No\. 5, dated as of August 8, 2016, to Purchase Agreement No\. 03735 dated as of February 1, 2013, between American Airlines, Inc\. and The Boeing Company (incorporated by reference to Exhibit 10\.2 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2016 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312516742263/d247546dex102.htm) \*                                                                                |
| 10\.43                        | [Supplemental Agreement No\. 6, dated as of November 15, 2016, to Purchase Agreement No\. 03735 dated as of February 1, 2013, between American Airlines, Inc\. and The Boeing Company (incorporated by reference to Exhibit 10\.33 to AAG’s Annual Report on Form 10\-K for the year ended December 31, 2016 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517051216/d286458dex1033.htm) \*                                                                                |
| 10\.44                        | [Supplemental Agreement No\. 7, dated as of March 2, 2017, to Purchase Agreement No\. 03735 dated as of February 1, 2013, between American Airlines, Inc\. and The Boeing Company (incorporated by reference to Exhibit 10\.1 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2017 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517140927/d358913dex101.htm) \*                                                                                |
| 10\.45                        | [Supplemental Agreement No\. 8, dated as of December 7, 2017, to Purchase Agreement No\. 03735 dated as of February 1, 2013, between American Airlines, Inc\. and The Boeing Company\.](https://americanairlines.gcs-web.com/email-alerts/ex104510k2017.htm) \*\*                                                                                |
| 10\.46                        | [Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007, among AVSA, S\.A\.R\.L\. and American Airlines, Inc\. (as successor in interest to US Airways, Inc \.), AWA and American Airlines Group Inc\. (as successor in interest to US Airways Group, Inc \.) (incorporated by reference to Exhibit 10\.19 to US Airways Group’s Annual Report on Form 10\-K for the year ended December 31, 2007 (Commission File No\. 1\-8444))\.](http://www.sec.gov/Archives/edgar/data/701345/000095015308000353/p75006exv10w19.htm) \*                                                                                |
| 10\.47                        | [Amendment No\. 1, dated as of October 20, 2008, to the Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007, between American Airlines, Inc\. (as successor in interest to US Airways, Inc \.) and Airbus S\.A\.S\., including Amended and Restated Letter Agreement No\. 3, Amended and Restated Letter Agreement No\. 5, and Amended and Restated Letter Agreement No\. 9 to the Purchase Agreement (incorporated by reference to Exhibit 10\.23 to US Airways Group’s Annual Report on Form 10\-K for the year ended December 31, 2008 (Commission File No\. 1\-8444))\.](http://www.sec.gov/Archives/edgar/data/701345/000095013409003177/p14077exv10w23.htm) \* |
| 10\.48                        | [Amendment No\. 2, dated as of January 16, 2009, to the Amended and Restated Airbus A350 XWB Purchase Agreement, dated as of October 2, 2007, among AVSA, S\.A\.R\.L\. and American Airlines, Inc, (as successor in interest to US Airways, Inc\.), AWA and American Airlines Group Inc\. (as successor in interest to US Airways Group, Inc \.) (incorporated by reference to Exhibit 10\.3 to US Airways Group’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2009 (Commission File No\. 1\-8444))\.](http://www.sec.gov/Archives/edgar/data/701345/000136231009005707/c84102exv10w3.htm) \*                                                                                |
| 10\.49                        | [Amendment No\. 3, dated as of July 23, 2009, to the Amended and Restated Airbus A350 XWB Purchase Agreement dated as of October 2, 2007 between Airbus S\.A\.S\. and American Airlines, Inc\. (as successor in interest to US Airways, Inc\.) (incorporated by reference to Exhibit 10\.3 to US Airways Group’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2009 (Commission File No\. 1\-8444))\.](http://www.sec.gov/Archives/edgar/data/701345/000095012309052134/c91298exv10w3.htm) \*                                                                                |
| 10\.50                        | [Amendment No\. 4, dated as of November 20, 2009, to the Amended and Restated Airbus A350 XWB Purchase Agreement dated as of October 2, 2007 between Airbus S\.A\.S\. and American Airlines, Inc\. (as successor in interest to US Airways, Inc\.) (incorporated by reference to Exhibit 10\.96 to US Airways Group’s Annual Report on Form 10\-K for the year ended December 31, 2009 (Commission File No\. 1\-8444))\.](http://www.sec.gov/Archives/edgar/data/701345/000095012310013709/p16852exv10w96.htm) \*                                                                                |

193


Annual Report of Southwest Airlines Co\. for year 2018

|                                                                                |
| ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| [Supplemental Agreement No\. 11 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2000](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/sa111810redacted.txt) , including [Letter Agreement 6\-1162\-RLL\-932R1](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/rll932r1redlined.txt)  and [Table of Contents](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/tableofcontents11.txt)  (File No\. 1\-7259)); [Supplemental Agreement No\. 12 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2000](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/sa121810redacted.txt) , including [Purchase Agreement Amendments](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/pasa12redacted.txt)  (File No\. 1\-7259)); [Supplemental Agreement No\. 13 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2000](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/sa13redacted.txt) , including [Purchase Agreement Amendments](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/pasa13.txt) , [Letter Agreement No\. 6\-1162\-RLL\-932R2](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/rll932r2.txt) , [Letter Agreement No\. 6\-1162\-RLL\-933R9](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/rll933r9redacted.txt) , [Letter Agreement No\. 6\-1162\-RLL\-934R1](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/rll934r2redlined.txt) , [Letter Agreement No\. 6\-1162\-RLL\-941R1](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/rll941r2redlined.txt) , [Letter Agreement No\. 6\-1162\-KJJ\-054](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/kjj054busmatters.txt) , [Letter Agreement No\. 6\-1162\-KJJ\-055](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/kjj055strucmatters.txt) , [Letter Agreement No\. 6\-1162\-KJJ\-056](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/kjj056noiseemission.txt) , [Letter Agreement No\. 6\-1162\-KJJ\-057](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/kjj057productdev.txt) , [Letter Agreement No\. 6\-1162\-KJJ\-058](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/kjj058submatters.txt) , and [Price Adjustment](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/exhibitd1.txt)  (File No\. 1\-7259)); [Supplemental Agreement No\. 14 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2000](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/sa141810redacted.txt) , including [Purchase Agreement Amendments](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/pa1810sa14redacted.txt) , [Letter Agreement No\. 6\-1162\-RLL\-934R2](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/rll934r3redlined.txt) , and [Letter Agreement No\. 6\-1162\-KJJ\-150](http://www.sec.gov/Archives/edgar/data/92380/000009238000500006/kjj150fccmode.txt)  (File No\. 1\-7259)); [Supplemental Agreements Nos\. 15, 16, 17, 18, and 19 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2001 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000095013401508530/d91871ex10-1.txt) ; [Supplemental Agreements Nos\. 20, 21, 22, 23, and 24 (incorporated by reference to Exhibit 10\.3 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2002 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238002000019/ex10_3.txt) ; [Supplemental Agreements Nos\. 25, 26, 27, 28, and 29 (incorporated by reference to Exhibit 10\.8 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2003 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238003000013/ex10_8.txt) ; [Supplemental Agreements Nos\. 30, 31, 32, and 33 (incorporated by reference to Exhibit 10\.1 to the Company’s Annual Report on Form 10\-K for the year ended December 31, 2003 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000095013404000842/d11818exv10w1.txt) ;[ Supplemental Agreements Nos\. 34, 35, 36, 37, and 38 (incorporated by reference to Exhibit 10\.3 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2004 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238004000016/ex10-3.txt) ; [Supplemental Agreements Nos\. 39 and 40 (incorporated by reference to Exhibit 10\.6 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2004 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238004000028/ex10-6.txt) ; [Supplemental Agreement No\. 41 (incorporated by reference to Exhibit 10\.1 to the Company’s Annual Report on Form 10\-K for the year ended December 31, 2004 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000095013405002093/d21965exv10w1.htm) ; [Supplemental Agreements Nos\. 42, 43, and 44 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2005 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238005000006/ex10-1.txt) ; [Supplemental Agreement No\. 45 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2005 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238005000012/ex10-1.txt) ; [Supplemental Agreements Nos\. 46 and 47 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2006 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000095013406007697/d35241exv10w1.htm) ; [Supplemental Agreement No\. 48 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2006 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238006000009/exhibit_10-1.htm) ; [Supplemental Agreements Nos\. 49 and 50 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2006 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238006000020/ex10-1.htm) ; [Supplemental Agreement No\. 51 (incorporated by reference to Exhibit 10\.1 to the Company’s Annual Report on Form 10\-K for the year ended December 31, 2006 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000095013407001724/d42975exv10w1.htm) ; [Supplemental Agreement No\. 52 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2007 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238007000014/ex10-1.htm) ; [Supplemental Agreement No\. 53 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2007 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238007000024/ex10_1.htm) ; [Supplemental Agreement No\. 54 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2007 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238007000034/ex10_1.htm) ;[ Supplemental Agreement No\. 55 (incorporated by reference to Exhibit 10\.2 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2007 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238007000034/ex10_2.htm) ; [Supplemental Agreement No\. 56 (incorporated by reference to Exhibit 10\.1 to Southwest’s Annual Report on Form 10\-K for the year ended December 31, 2007 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000095013408001572/d53331exv10w1.htm) ; [Supplemental Agreement No\. 57 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2008 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238008000009/ex10_1.htm) ; [Supplemental Agreement No\. 58 (incorporated by reference to Exhibit 10\.2 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2008 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238008000009/ex10_2.htm) ; [Supplemental Agreement No\. 59 (incorporated by reference to Exhibit 10\.3 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2008 (File No\. 1\-7259)); ](http://www.sec.gov/Archives/edgar/data/92380/000009238008000009/ex10_3.htm)[Supplemental Agreement No\. 60 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended June 30, 2008 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238008000014/ex10_1.htm) ; [Supplemental Agreement No\. 61 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended September 30, 2008 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238008000018/ex10_1.htm) ; [Supplemental Agreement No\. 62 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2009 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238009000016/ex10_1.htm) ; [Supplemental Agreement No\. 63 (incorporated by reference to Exhibit 10\.2 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2009 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238009000016/ex10_2.htm) ; [Supplemental Agreement No\. 64 (incorporated by reference to Exhibit 10\.1 to the Company’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2010 (File No\. 1\-7259))](http://www.sec.gov/Archives/edgar/data/92380/000009238010000032/ex10_1.htm) ;<br><br>  <br><br>  <br> |

124


Annual Report of American Airlines Group Inc\. for year 2017

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES, INC\.**

**15\. Transactions with Related Parties**

The following represents the net receivables (payables) to related parties (in millions):

|                                         |                  |                  |
| --------------------------------------- | ---------------- | ---------------- |
|                                         | **December 31,** | **December 31,** |
|                                         | **2017**         | **2016**         |
| AAG  ^(1)^                              | $10,968          | $8,981           |
| AAG’s wholly\-owned subsidiaries  ^(2)^ | (2,146)          | (2,171)          |
| Total                                   | $8,822           | $6,810           |

|       |                                                                                |
| ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| ^(1)^ | The increase in American’s net related party receivable from AAG is primarily due to American providing the cash funding for AAG’s share repurchase and dividend programs\. |

|       |                                                                                |
| ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| ^(2)^ | The net payable to AAG’s wholly\-owned subsidiaries consists primarily of amounts due under regional capacity purchase agreements with AAG’s wholly\-owned regional airlines operating under the brand name of American Eagle\. |

Pursuant to a capacity purchase agreement between American and AAG’s wholly\-owned regional airlines operating as American Eagle, American purchases all of the capacity from these carriers and recognizes passenger revenue from flights operated by American Eagle\. In 2017, 2016 and 2015, American recognized expense of approximately $1\.7 billion, $1\.5 billion and $1\.2 billion, respectively, related to wholly\-owned regional airline capacity purchase agreements\.

169


Annual Report of United Continental Holdings, Inc\. and United Airlines, Inc\. for year 2018

[Table of Contents](https://www.example.com#sCFFD9DA26B5659A3A528A4B51B718F87)

could be required to indemnify and advance expenses to them in connection with their involvement in certain actions, suits, investigations and other proceedings\. There can be no assurance that any of these payments will not be material\.

***Our significant investments in other airlines, including in other parts of the world, and the commercial relationships that we have with those carriers may not produce the returns or results we expect\.***

An important part of our strategy to expand our global network includes making significant investments in airlines in other parts of the world and expanding our commercial relationships with these carriers\. For example, in November 2018, United entered into a revenue\-sharing joint business agreement with Avianca, Copa and several of their respective affiliates, subject to regulatory approval\. Concurrently with this transaction, United advanced a loan of $456 million to affiliates of Synergy Aerospace Corporation ("Synergy"), the majority shareholder of Avianca Holdings S\.A\. ("AVH"), the parent company of Avianca, and entered into certain other related agreements, including a put arrangement with Avianca's significant minority shareholder, Kingsland Holdings Limited ("Kingsland")\. The loan is secured by a pledge of Synergy's equity and Synergy's shares of AVH stock, and the loan and other agreements contain several provisions whereby the Company may acquire AVH stock\. We also have an equity investment in Azul\. See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information regarding our investments in Avianca and Azul\.

We also have investments in several domestic regional airlines\. In January 2019, we completed the acquisition of a 49\.9% interest in ManaAir LLC, which, as of immediately following the closing of that investment, owns 100% of the equity interests in ExpressJet Airlines, Inc\., a domestic regional airline\. We also have minority equity interests in CommutAir and Republic Airways Holdings, Inc\. See Note 9 to the financial statements included in Part II, Item 8 of this report for additional information regarding our investments in regional airlines\.

We expect to continue exploring similar non\-controlling investments in, and entering into JBAs, commercial agreements, loan transactions and strategic alliances with, other carriers as part of our regional and global business strategy\. These transactions and relationships involve significant challenges and risks\. We are dependent on these other carriers for significant aspects of our network in the regions in which they operate\. While we work closely with these carriers, each is a separately certificated commercial air carrier and we do not have control over their operations, strategy, management or business methods\. These airlines also are subject to a number of the same risks as our business, which are described in this Item 1A\., Risk Factors, including competitive pressures on pricing, demand and capacity; changes in aircraft fuel pricing; and the impact of global and local political and economic conditions on operations and customer travel patterns, among others\.

As a result of these and other factors, we may not realize a satisfactory return on our investment, and we may not receive repayment of any invested or loaned funds\. Further, these investments may not generate the revenue or operational synergies we expect, and they may distract management focus from our operations or other strategic options\. Finally, our reliance on these other carriers in the regions in which they operate may negatively impact our regional and global operations and results if those carriers are impacted by general business risks or perform below our expectations or needs\. Any one or more of these events could have a material adverse effect on our operating results or financial condition\.

We may also be subject to consequences from any improper behavior of JBA partners, including for failure to comply with anti\-corruption laws such as the U\.S\. Foreign Corrupt Practices Act\. Furthermore, our relationships with these carriers may be subject to the laws and regulations of non\-U\.S\. jurisdictions in which these carriers are located or conduct business\. Any political or regulatory change in these jurisdictions that negatively impact or prohibit our arrangements with these carriers could have an adverse effect on our operating results or financial condition\. To the extent that the operations of any of these carriers are disrupted over an extended period of time or their actions subject us to the consequences of failure to comply with laws and regulations, our operating results may be adversely affected\.

***The airline industry may undergo further change with respect to alliances and JBAs or due to consolidations, any of which could have a material adverse effect on the Company\.***

The Company faces and may continue to face strong competition from other carriers due to the modification of alliances and formation of new JBAs\. Carriers may improve their competitive positions through airline alliances, slot swaps and/or JBAs\. Certain types of airline JBAs further competition by allowing multiple airlines to coordinate routes, pool revenues and costs, and enjoy other mutual benefits, achieving many of the benefits of consolidation\. Open Skies agreements, including the longstanding agreements between the United States and each of the EU, Canada, Japan, Korea, New Zealand, Australia, Colombia and Panama, as well as the more recent agreements between the United States and each of Mexico and Brazil, may also give rise to better integration opportunities among international carriers\. Movement of airlines between current global airline alliances could reduce joint network coverage for members of such alliances while also creating opportunities for JBAs and bilateral alliances that did not exist before such realignment\. Further airline and airline alliance consolidations or reorganizations could occur in the future\. The Company routinely engages in analyses and discussions regarding its own strategic position, including current and potential alliances, asset acquisitions and divestitures and may have future discussions

13


Annual Report of United Continental Holdings, Inc\. and United Airlines, Inc\. for year 2019

[Table of Contents](https://www.example.com#s1B306C2BC5705F95B83EC9EC687675EF)

United Airlines Holdings, Inc\. Management Report on Internal Control Over Financial Reporting

February 24, 2020

To the Stockholders of United Airlines Holdings, Inc\.

Chicago, Illinois

The management of United Airlines Holdings, Inc\. ("UAL") is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a\-15(f)\. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles\. Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements\. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate\.

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the design and operating effectiveness of our internal control over financial reporting as of December 31, 2019\. In making this assessment, management used the framework set forth in Internal Control—Integrated Framework (2013 Framework)  issued by the Committee of the Sponsoring Organizations of the Treadway Commission\. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our internal control over financial reporting was effective as of December 31, 2019\.

Our independent registered public accounting firm, Ernst & Young LLP, who audited UAL's consolidated financial statements included in this Form 10\-K, has issued a report on UAL's internal control over financial reporting, which is included herein\.

United Airlines, Inc\. Management Report on Internal Control Over Financial Reporting

February 24, 2020

To the Stockholder of United Airlines, Inc\.

Chicago, Illinois

The management of United Airlines, Inc\. ("United") is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a\-15(f)\. United's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles\. Because of its inherent limitations, United's internal control over financial reporting may not prevent or detect misstatements\. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate\.

Under the supervision and with the participation of management, including United's Chief Executive Officer and Chief Financial Officer, United conducted an evaluation of the design and operating effectiveness of its internal control over financial reporting as of December 31, 2019\. In making this assessment, management used the framework set forth in Internal Control—Integrated Framework (2013 Framework) issued by the Committee of the Sponsoring Organizations of the Treadway Commission\. Based on this evaluation, United's Chief Executive Officer and Chief Financial Officer concluded that its internal control over financial reporting was effective as of December 31, 2019\.

This annual report does not include an attestation report of United's registered public accounting firm regarding internal control over financial reporting\. Management's report was not subject to attestation by United's registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit United to provide only management's report in this annual report\.

92


Annual Report of ALASKA AIR GROUP, INC\. for year 2017

**CONSOLIDATED BALANCE SHEETS**

|                                                               |             |          |
| ------------------------------------------------------------- | ----------- | -------- |
| **As of December 31**  ***(in millions)***                    | **2017**    | **2016** |
| **ASSETS**                                                    |             |          |
| **Current Assets**                                            |             |          |
| Cash and cash equivalents                                     | **$194**    | $328     |
| Marketable securities                                         | **1,427**   | 1,252    |
| Total cash and marketable securities                          | **1,621**   | 1,580    |
| Receivables—less allowance for doubtful accounts of $1 and $1 | **341**     | 302      |
| Inventories and supplies—net                                  | **57**      | 47       |
| Prepaid expenses and other current assets                     | **127**     | 121      |
| **Total Current Assets**                                      | **2,146**   | 2,050    |
| **Property and Equipment**                                    |             |          |
| Aircraft and other flight equipment                           | **7,559**   | 6,947    |
| Other property and equipment                                  | **1,222**   | 1,103    |
| Deposits for future flight equipment                          | **494**     | 545      |
|                                                               | **9,275**   | 8,595    |
| Less accumulated depreciation and amortization                | **2,991**   | 2,929    |
| **Total Property and Equipment—Net**                          | **6,284**   | 5,666    |
| **Other Assets**                                              |             |          |
| Goodwill                                                      | **1,943**   | 1,934    |
| Intangible assets—net                                         | **133**     | 143      |
| Other noncurrent assets                                       | **234**     | 169      |
| **Total Other Assets**                                        | **2,310**   | 2,246    |
| **Total Assets**                                              | **$10,740** | $9,962   |

See accompanying notes to consolidated financial statements\.

 62


Annual Report of Southwest Airlines Co\. for year 2017

The following table aggregates the Company’s material expected contractual obligations and commitments as of December 31, 2017:

|                                          |                                         |                                         |                                         |                                         |                                         |
| ---------------------------------------- | --------------------------------------- | --------------------------------------- | --------------------------------------- | --------------------------------------- | --------------------------------------- |
|                                          | **Obligations by period (in millions)** | **Obligations by period (in millions)** | **Obligations by period (in millions)** | **Obligations by period (in millions)** | **Obligations by period (in millions)** |
| **Contractual obligations**              | **2018**                                | **2019 \- 2020**                        | **2021 \- 2022**                        | **Thereafter**                          | **Total**                               |
| Long\-term debt (a)                      | $256                                    | $1,239                                  | $481                                    | $818                                    | $2,794                                  |
| Interest commitments \- fixed (b)        | 77                                      | 116                                     | 83                                      | 121                                     | 397                                     |
| Interest commitments \- floating (c)     | 31                                      | 56                                      | 10                                      | 12                                      | 109                                     |
| Facility construction commitments (d)    | 65                                      | 130                                     | 130                                     | 232                                     | 557                                     |
| Facility operating lease commitments     | 34                                      | 64                                      | 45                                      | 89                                      | 232                                     |
| Aircraft operating lease commitments (e) | 223                                     | 355                                     | 137                                     | 80                                      | 795                                     |
| Aircraft capital lease commitments (f)   | 107                                     | 211                                     | 196                                     | 416                                     | 930                                     |
| Aircraft purchase commitments (g)        | 874                                     | 1,717                                   | 2,174                                   | 5,191                                   | 9,956                                   |
| Other commitments                        | 171                                     | 229                                     | 84                                      | 322                                     | 806                                     |
| Total contractual obligations            | $1,838                                  | $4,117                                  | $3,340                                  | $7,281                                  | $16,576                                 |

|     |                                                                                |
| --- | --------------------------------------------------------------------------------- |
| (a) | Includes principal only\. See Note  6  to the Consolidated Financial Statements\. |

|     |                                                                          |
| --- | ------------------------------------------------------------------------ |
| (b) | Related to fixed\-rate debt (either at issuance or through swaps) only\. |

|     |                                                                                |
| --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (c) | Interest obligations associated with floating\-rate debt (either at issuance or through swaps) is estimated utilizing forward interest rate curves as of  December 31, 2017 , and can be subject to significant fluctuation\. |

|     |                                                                                |
| --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (d) | Includes some lease payments that are considered variable which have a related construction obligation\. See Note  4  to the Consolidated Financial Statements\.  |

|     |                                                                                |
| --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| (e) | Includes the impact of the B717 lease/sublease transaction entered into in  2012 \. Also includes 15 remaining Classic aircraft on operating leases, which net remaining lease payments were included in the $63 million grounding charge recorded during 2017\. See Note  7  to the Consolidated Financial Statements\. |

|     |                                                     |
| --- | --------------------------------------------------- |
| (f) | Includes principal and interest on capital leases\. |

|     |                           |
| --- | ------------------------- |
| (g) | Firm orders from Boeing\. |

**Airport Projects**

The Company has commitments associated with various airport improvement projects that will impact its future liquidity needs in differing ways\. These projects include the construction of new facilities and the rebuilding or modernization of existing facilities and are discussed in more detail in Note 4 to the Consolidated Financial Statements\.

**Dallas Love Field**

For the rebuilding of the facilities at Dallas Love Field, the Company guaranteed principal, premium, and interest on $456 million in bonds issued by the Love Field Airport Modernization Corporation ("LFAMC") that were utilized to fund the majority of the project\. The amount of bonds outstanding as of December 31, 2017, was $424 million\. Repayment of the bonds is through the "Facilities Payments" described below\. Reimbursement of the Company for its payment of Facilities Payments is made through recurring ground rents, fees, and other revenues collected at the airport\.

Prior to the issuance of the bonds by the LFAMC, the Company entered into two separate funding agreements: (i) a "Facilities Agreement" pursuant to which the Company is obligated to make debt service payments on the principal and interest amounts associated with the bonds ("Facilities Payments"), less other sources of funds the City of Dallas may apply to the repayment of the bonds (including but not limited to passenger facility charges collected from passengers originating from the airport); and (ii) a "Revenue Credit Agreement" pursuant to which the City of Dallas reimburses the Company for the Facilities Payments made by the Company\.

A majority of the monies transferred from the City of Dallas to the Company under the Revenue Credit Agreement originate from a reimbursement account created in the "Use and Lease Agreement" between the City of Dallas and the Company\. The Use and Lease Agreement is a 20\-year agreement providing for, among other things, the Company’s lease of space at the Airport from the City of Dallas\. The remainder of such monies transferred from the City of Dallas

58


Annual Report of American Airlines Group Inc\. for year 2019

|                               |                                                                                |
| ----------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Exhibit**

**Number** | **Description**                                                                                |
| 4\.124                        | [Form of Indenture and Security Agreement (Indenture and Security Agreement between American Airlines, Inc\., and Wilmington Trust Company, as Loan Trustee) (incorporated by reference to Exhibit C to Exhibit 4\.12 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex412.htm)                                                                                |
| 4\.125                        | [Form of Pass Through Trust Certificate, Series 2017\-1AA (incorporated by reference to Exhibit A to Exhibit 4\.2 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex42.htm)                                                                                |
| 4\.126                        | [Form of Pass Through Trust Certificate, Series 2017\-1A (incorporated by reference to Exhibit A to Exhibit 4\.3 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex43.htm)                                                                                |
| 4\.127                        | [Form of Pass Through Trust Certificate, Series 2017\-1B (incorporated by reference to Exhibit A to Exhibit 4\.4 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex44.htm)                                                                                |
| 4\.128                        | [Revolving Credit Agreement (2017\-1AA), dated as of January 13, 2017, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the trustee of the American Airlines Pass Through Trust 2017\-1AA, as Borrower, and Citibank N\.A\., as Liquidity Provider (incorporated by reference to Exhibit 4\.18 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex418.htm)                                                                                |
| 4\.129                        | [Revolving Credit Agreement (2017\-1A), dated as of January 13, 2017, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the trustee of the American Airlines Pass Through Trust 2017\-1A, as Borrower, and Citibank N\.A\., as Liquidity Provider (incorporated by reference to Exhibit 4\.19 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex419.htm)                                                                                |
| 4\.130                        | [Revolving Credit Agreement (2017\-1B), dated as of January 13, 2017, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the trustee of the American Airlines Pass Through Trust 2017\-1B, as Borrower, and Citibank N\.A\., as Liquidity Provider (incorporated by reference to Exhibit 4\.20 to American’s Current Report on Form 8\-K filed on January 17, 2017 (Commission File No\. 1\-02691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517011067/d319419dex420.htm)                                                                                |
| 4\.131                        | [Acknowledgment and Agreement (2017\-1), dated as of March 31, 2017, by and among American Airlines Inc\., Citibank, N\.A\., as initial Liquidity Provider, National Australia Bank Limited, as Replacement Liquidity Provider, and Wilmington Trust Company, as Subordination Agent and trustee (incorporated by reference to Exhibit 4\.20 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2017 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517140927/d358913dex420.htm)                                                                                |
| 4\.132                        | [Revolving Credit Agreement (2017\-1AA), dated as of March 31, 2017, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the trustee of the American Airlines Pass Through Trust 2017\-1AA, as Borrower, and National Australia Bank Limited, as Liquidity Provider (incorporated by reference to Exhibit 4\.21 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2017 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517140927/d358913dex421.htm)                                                                              |
| 4\.133                        | [Revolving Credit Agreement (2017\-1A), dated as of March 31, 2017, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the trustee of the American Airlines Pass Through Trust 2017\-1A, as Borrower, and National Australia Bank Limited, as Liquidity Provider (incorporated by reference to Exhibit 4\.22 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2017 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517140927/d358913dex422.htm)                                                                                |
| 4\.134                        | [Revolving Credit Agreement (2017\-1B), dated as of March 31, 2017, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the trustee of the American Airlines Pass Through Trust 2017\-1B, as Borrower, and National Australia Bank Limited, as Liquidity Provider (incorporated by reference to Exhibit 4\.23 to AAG’s Quarterly Report on Form 10\-Q for the quarter ended March 31, 2017 (Commission File No\. 1\-8400))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517140927/d358913dex423.htm)                                                                                |
| 4\.135                        | [Form of American Airlines Group Inc\. Indenture for Debt Securities (incorporated by reference to Exhibit 4\.1 to AAG’s Registration Statement on Form S\-3ASR filed on February 22, 2017 (Commission File No\. 333\-216167)\. ](http://www.sec.gov/Archives/edgar/data/4515/000119312517052055/d366751dex41.htm)                                                                                |
| 4\.136                        | [Form of American Airlines, Inc\. Indenture for Debt Securities (incorporated by reference to Exhibit 4\.2 to AAG’s Registration Statement on Form S\-3ASR filed on February 22, 2017 (Commission File No\. 333\-216167)\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517052055/d366751dex42.htm)                                                                                |
| 4\.137                        | [Trust Supplement No\. 2017\-2AA, dated as of August 14, 2017, between American Airlines, Inc\. and Wilmington Trust Company, as Trustee, to the Pass Through Trust Agreement, dated as of September 16, 2014 (incorporated by reference to Exhibit 4\.2 to American’s Current Report on Form 8\-K filed on August 14, 2017 (Commission File No\. 1\-2691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517257245/d376721dex42.htm)                                                                                |
| 4\.138                        | [Trust Supplement No\. 2017\-2A, dated as of August 14, 2017, between American Airlines, Inc\. and Wilmington Trust Company, as Trustee, to the Pass Through Trust Agreement, dated as of September 16, 2014 (incorporated by reference to Exhibit 4\.3 to American’s Current Report on Form 8\-K filed on August 14, 2017 (Commission File No\. 1\-2691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517257245/d376721dex43.htm)                                                                                |
| 4\.139                        | [Intercreditor Agreement (2017\-2), dated as of August 14, 2017, among Wilmington Trust Company, as Trustee of the American Airlines Pass Through Trust 2017\-2AA and as Trustee of the American Airlines Pass Through Trust 2017\-2A, National Australia Bank Limited, as Class AA Liquidity Provider and Class A Liquidity Provider, and Wilmington Trust Company, as Subordination Agent (incorporated by reference to Exhibit 4\.4 to American’s Current Report on Form 8\-K filed on August 14, 2017 (Commission File No\. 1\-2691))\.](http://www.sec.gov/Archives/edgar/data/4515/000119312517257245/d376721dex44.htm) |

173


Annual Report of Southwest Airlines Co\. for year 2017

**Item 3\.** ***Legal Proceedings***

A complaint alleging violations of federal antitrust laws and seeking certification as a class action was filed against Delta Air Lines, Inc\. and AirTran Holdings, Inc\. and its subsidiary AirTran Airways, Inc\. (collectively with AirTran Holdings, Inc\., "AirTran") in the United States District Court for the Northern District of Georgia in Atlanta on May 22, 2009\. The complaint alleged, among other things, that AirTran attempted to monopolize air travel in violation of Section 2 of the Sherman Act, and conspired with Delta in imposing $15\-per\-bag fees for the first item of checked luggage in violation of Section 1 of the Sherman Act\. The initial complaint sought treble damages on behalf of a putative class of persons or entities in the United States who directly paid Delta and/or AirTran such fees on domestic flights beginning December 5, 2008\. After the filing of the May 2009 complaint, various other nearly identical complaints also seeking certification as class actions were filed in federal district courts in Atlanta, Georgia; Orlando, Florida; and Las Vegas, Nevada\. All of the cases were consolidated before a single federal district court judge in Atlanta\. A Consolidated Amended Complaint was filed in the consolidated action on February 1, 2010, which broadened the allegations to add claims that Delta and AirTran conspired to reduce capacity on competitive routes and to raise prices in violation of Section 1 of the Sherman Act\. In addition to treble damages for the amount of first baggage fees paid to AirTran and to Delta, the Consolidated Amended Complaint sought injunctive relief against a broad range of alleged anticompetitive activities, as well as attorneys' fees\. On August 2, 2010, the Court dismissed plaintiffs' claims that AirTran and Delta had violated Section 2 of the Sherman Act; the Court let stand the claims of a conspiracy with respect to the imposition of a first bag fee and the airlines' capacity and pricing decisions\. On June 30, 2010, the plaintiffs filed a motion to certify a class, which AirTran and Delta opposed\. On June 18, 2012, the parties filed a Stipulation and Order that plaintiffs abandoned their claim that AirTran and Delta conspired to reduce capacity\. On August 31, 2012, AirTran and Delta moved for summary judgment on all of plaintiffs' remaining claims\. On July 12, 2016, the Court granted plaintiffs' motion to certify a class of all persons who paid first bag fees to AirTran or Delta from December 8, 2008 to November 1, 2014 (the date on which AirTran stopped charging first bag fees)\. Defendants have appealed that decision\. On March 29, 2017, the Court granted defendants’ motion for summary judgment and dismissed all claims against AirTran\. On April 13, 2017, the plaintiffs filed a notice of appeal from the district court's judgment, and on April 24, 2017, AirTran filed a conditional notice of cross\-appeal to appeal the Court's order certifying a class\. The appeals of the class certification and summary judgment orders have been consolidated\. The Court has scheduled oral argument for the appeals on March 7, 2018\. AirTran denies all allegations of wrongdoing, including those in the Consolidated Amended Complaint, and intends to defend vigorously any and all such allegations\.

Also, on June 30, 2015, the U\.S\. Department of Justice ("DOJ") issued a Civil Investigative Demand ("CID") to the Company\. The CID seeks information and documents about the Company’s capacity from January 2010 to the date of the CID including public statements and communications with third parties about capacity\. In June 2015, the Company also received a letter from the Connecticut Attorney General requesting information about capacity; and on August 21, 2015, the Attorney General of the State of Ohio issued an investigative demand seeking information and documents about the Company’s capacity from December 2013 to the date of the CID\. The Company is cooperating fully with the DOJ CID and these two state inquiries\.

Further, on July 1, 2015, a complaint was filed in the United States District Court for the Southern District of New York on behalf of putative classes of consumers alleging collusion among the Company, American Airlines, Delta Air Lines, and United Airlines to limit capacity and maintain higher fares in violation of Section 1 of the Sherman Act\. Since then, a number of similar class action complaints were filed in the United States District Courts for the Central District of California, the Northern District of California, the District of Columbia, the Middle District of Florida, the Southern District of Florida, the Northern District of Georgia, the Northern District of Illinois, the Southern District of Indiana, the Eastern District of Louisiana, the District of Minnesota, the District of New Jersey, the Eastern District of New York, the Southern District of New York, the Middle District of North Carolina, the District of Oklahoma, the Eastern District of Pennsylvania, the Northern District of Texas, the District of Vermont, and the Eastern District of Wisconsin\. On October 13, 2015, the Judicial Panel on Multi\-District Litigation centralized the cases to the United States District Court in the District of Columbia\. On March 25, 2016, the plaintiffs filed a Consolidated Amended Complaint in the consolidated cases alleging that the defendants conspired to restrict capacity from 2009 to present\. The plaintiffs seek to bring their claims on behalf of a class of persons who purchased tickets for domestic airline travel on the defendants' airlines from July 1, 2011 to present\. They seek treble damages, injunctive relief, and attorneys' fees and expenses\. On May 11, 2016, the defendants moved to dismiss the Consolidated Amended Complaint, and on October 28, 2016, the Court denied this motion\. On December 20, 2017, the Company reached an agreement to settle

30


Annual Report of United Continental Holdings, Inc\. and United Airlines, Inc\. for year 2017

##### [Table of Contents](https://www.example.com#toc) #####

|                                                 |           |
| ----------------------------------------------- | --------- |
| Signature                                       | Capacity  |
|  /s/ James A\.C\. Kennedy  James A\.C\. Kennedy | Director  |
|  /s/ Robert A\. Milton  Robert A\. Milton       | Director  |
|  /s/ William R\. Nuti  William R\. Nuti         | Director  |
|  /s/ Sito Pantoja  Sito Pantoja                 | Director  |
|  /s/ Edward M\. Philip  Edward M\. Philip       | Director  |
|  /s/ Edward L\. Shapiro  Edward L\. Shapiro     | Director  |
|  /s/ Laurence E\. Simmons  Laurence E\. Simmons | Director  |
|  /s/ David J\. Vitale  David J\. Vitale         | Director  |
|  /s/ James M\. Whitehurst  James M\. Whitehurst | Director  |

Date: February 22, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of United Airlines, Inc\. and in the capacities and on the date indicated\.

|                                         |                                                                                |
| --------------------------------------- | -------------------------------------------------------------------------------------------- |
| Signature                               | Capacity                                                                                |
|  /s/ Oscar Munoz  Oscar Munoz           | Chief Executive Officer, Director (Principal Executive Officer)                              |
|  /s/ Andrew C\. Levy  Andrew C\. Levy   | Executive Vice President and Chief Financial Officer, Director (Principal Financial Officer) |
|  /s/ Chris Kenny  Chris Kenny           | Vice President and Controller (Principal Accounting Officer)                                 |
|  /s/ Gregory L\. Hart  Gregory L\. Hart | Director                                                                                |
|  /s/ J\. Scott Kirby  J\. Scott Kirby   | Director                                                                                |

Date: February 22, 2018

134


Annual Report of Southwest Airlines Co\. for year 2018

associated with the grounding of the Company's remaining Classic aircraft\. These charges included a $63 million aircraft grounding charge related to the leased portion of the Classic fleet and $33 million of lease termination expenses associated with eight Classic aircraft that were acquired during 2017 prior to their grounding\. During first quarter 2018, the Company also recognized $25 million of gains from the sale of 39 owned Classic aircraft and a number of spare engines to a third party which reduced Other operating expenses\. The charges related to the grounding of the Classic fleet, as well as the gain on sale of grounded aircraft, were considered special items and thus excluded from the Company's non\-GAAP results\. See Note Regarding Use of Non\-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non\-GAAP Financial Measures for additional detail regarding non\-GAAP financial measures\. Excluding these items, approximately 50 percent of the year\-over\-year dollar increase was due to technology\-related expenses associated with various projects, 30 percent due to revenue related costs as a result of the 3\.6 percent increase in Revenue Passengers carried, and the remainder was due to higher property taxes assessed in 2018\. The Company currently expects Other operating expenses per ASM for first quarter 2019 to increase, compared with first quarter 2018\.

**Other**

Other expenses (income) include interest expense, capitalized interest, interest income, and other gains and losses\.

Interest expense for 2018increased by $17 million, or 14\.9 percent, compared with 2017, primarily due to the issuance of two debt facilities in November 2017, including $300 million of 2\.75% senior unsecured notes and $300 million of 3\.45% senior unsecured notes\.

Capitalized interest for 2018decreased by $11 million, or 22\.4 percent, compared with 2017, primarily due to timing of aircraft deliveries and progress payments associated with future orders\.

Interest income for 2018increased by $34 million, or 97\.1 percent, compared with 2017, primarily due to higher interest rates\.

Other (gains) losses, net, primarily includes amounts recorded as a result of the Company's hedging activities\. With the adoption of the New Hedging Standard, the elimination of the requirement to separately measure and record ineffectiveness for all future cash flow hedges in a hedging relationship, as well as a change in classification of premium expense associated with option contracts from Other (gains) losses, net, in the Consolidated Statement of Income, to Fuel and oil expense, has significantly reduced amounts reflected for hedging activities in Other (gains) losses, net\. With the adoption of the New Retirement Standard, the Company is required to include all components of its net periodic benefit cost (income), with the exception of service cost, in Other (gains) losses, net, versus previously having been classified and reported as operating expenses in Salaries, wages, and benefits\. For 2018, this periodic benefit cost was $12 million\. See Note 2 to the Consolidated Financial Statements for further information on both new standards\. Also, see Note 10 to the Consolidated Financial Statements for further information on the Company's hedging activities\. The following table displays the components of Other (gains) losses, net, for the years ended December 31, 2018, and 2017:

|                                                                        |                             |                             |                             |
| ---------------------------------------------------------------------- | --------------------------- | --------------------------- | --------------------------- |
|                                                                        | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
| (in millions)                                                          | **2018**                    | **2017**                    |                             |
|                                                                        |                             | **As Recast**               |                             |
| Mark\-to\-market impact from fuel contracts settling in future periods | $—                          | $69                         |                             |
| Ineffectiveness from fuel hedges settling in future periods (a)        | —                           | 31                          |                             |
| Realized ineffectiveness and mark\-to\-market (gains) or losses (a)    | —                           | 6                           |                             |
| Other                                                                  | 18                          | 6                           | (b)                         |
|                                                                        | $18                         | $112                        |                             |

(a) With the adoption of the New Hedging Standard, the separate measurement and recording of ineffectiveness has been eliminated for all cash flow hedges in a hedging relationship effective January 1, 2018\. See Note 2 to the Consolidated Financial Statements for further information\.

45


Annual Report of United Continental Holdings, Inc\. and United Airlines, Inc\. for year 2019

[Table of Contents](https://www.example.com#s1B306C2BC5705F95B83EC9EC687675EF)

UNITED AIRLINES, INC\.

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS)

(In millions)

|                                                     |                             |                             |                             |
| --------------------------------------------------- | --------------------------- | --------------------------- | --------------------------- |
|                                                     | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|                                                     | **2019**                    | **2018 (a)**                | **2017 (a)**                |
| Net income                                          | $3,011                      | $2,123                      | $2,161                      |
| Other comprehensive income (loss), net of tax:      |                             |                             |                             |
| Employee benefit plans                              | 80                          | 342                         | (195

)               |
| Investments and other                               | 5                           | (4

)                 | (5

)                 |
| Total other comprehensive income (loss), net of tax | 85                          | 338                         | (200

)               |
| Total comprehensive income, net                     | $3,096                      | $2,461                      | $1,961                      |

(a) Amounts adjusted due to the adoption of Accounting Standards Update No\. 2016\-02,  Leases (Topic 842) \. See Note 1 to the financial statements contained in Part II, Item 8 of this report for additional information\.

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements\.

50


Annual Report of United Continental Holdings, Inc\. and United Airlines, Inc\. for year 2017

##### [Table of Contents](https://www.example.com#toc) #####

In 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 842, *Leases* (“Topic 842”)\. The guidance requires lessees to recognize a right\-of\-use asset and a lease liability for all leases (with the exception of short\-term leases) at the commencement date and recognize expenses on their income statements similar to the current Topic 840, *Leases*\. It is effective for fiscal years and interim periods beginning after December 15, 2018, and early adoption is permitted\. Lessees and lessors are required to adopt Topic 842 using a modified retrospective approach for all leases existing at or commencing after the date of initial application with an option to use certain practical expedients\. We have not completed our evaluation of the impact of the new standard, but believe that it will have a significant impact on our consolidated balance sheets\. The new standard is not expected to have a material impact on the Company’s results of operations or cash flows\. The primary effect of adopting the new standard will be to record assets and obligations for its operating leases\.

In 2016, the FASB issued Accounting Standards Update No\. 2016\-01,*Financial Instruments—Overall* (Subtopic 825\-10) (“ASU 2016\-01”)\. This standard makes several changes, including the elimination of the available\-for\-sale classification of equity investments, and requires equity investments with readily determinable fair values to be measured at fair value with changes in fair value recognized in net income\. It is effective for interim and annual periods beginning after December 15, 2017\. Based on its portfolio of investments as of December 31, 2017, the Company does not expect the adoption of ASU 2016\-01 to have a material impact on its consolidated financial statements\.

In 2017, the FASB issued Accounting Standards Update No\. 2017\-07,*Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost* (“ASU 2017\-07”)\. The update requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period\. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to be presented outside of any subtotal of operating income\. Employers will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement*\.* ASU 2017\-07 is effective for fiscal years and interim periods beginning after December 15, 2017, and early adoption is permitted\. The Company does not expect the adoption of ASU 2017\-07 to have a material impact on its consolidated financial statements\. Early adoption of ASU 2017\-07 would have impacted the statement of consolidated operations as shown in the table below:

**Statements of Consolidated Operations for the Years Ended December 31,**

|                                |                 |                 |                |                |                                                                 |                                                                 |
|:------------------------------ | ---------------:| ---------------:| --------------:| --------------:| ---------------------------------------------------------------:| ---------------------------------------------------------------:|
|                                | **As Reported** | **As Reported** | **Adjustment** | **Adjustment** | **As Adjusted for**
**Adoption of**
**ASU  2017\-07** | **As Adjusted for**
**Adoption of**
**ASU  2017\-07** |
|                                |        **2017** |        **2016** |       **2017** |       **2016** |                                                        **2017** |                                                        **2016** |
| Operating expense:             |                 |                 |                |                |                                                                 |                                                                 |
| Salaries and related costs     |        $11,045  |        $10,275  |         $(104) |           $(99 |                                                        $10,941  |                                                        $10,176  |
| Special charges                |            176  |            638  |             —  |            107 |                                                            176  |                                                            745  |
| Nonoperating income (expense): |                 |                 |                |                |                                                                 |                                                                 |
| Miscellaneous, net             |              3  |            (19) |          (104) |              8 |                                                           (101) |                                                            (11) |

In February 2018, the FASB issued Accounting Standards Update No\. 2018\-02, *Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income* (“ASU 2018\-02”)\. This standard focuses on a targeted improvement to reclassify stranded tax effects resulting from the Tax Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017 from accumulated other comprehensive income (“AOCI”) to retained earnings (“RE”)\. The amount of the reclassification would be the difference between the amount initially charged

68