SEC Info - American Airlines Group Inc. - ‘10-K’ for 12/31/10

SEC Info℠

Home

Help

Please Sign In

American Airlines Group Inc. – ‘10-K’ for 12/31/10 – ‘XML.R14’

On: Wednesday, 2/16/11, at 4:29pm ET · For: 12/31/10 · Accession #: 950123-11-14726 · File #: 1-08400

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/16/11  American Airlines Group Inc.      10-K       12/31/10   70:6.2M                                   Donnelley … Solutions/FA

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   1.15M 
 2: EX-10.13    Material Contract                                   HTML     22K 
 7: EX-10.130   Material Contract                                   HTML     89K 
 8: EX-10.159.A  Material Contract                                  HTML     46K 
 9: EX-10.159.B  Material Contract                                  HTML     43K 
10: EX-10.159.C  Material Contract                                  HTML     26K 
11: EX-10.159.D  Material Contract                                  HTML     17K 
12: EX-10.159.E  Material Contract                                  HTML     19K 
13: EX-10.159.F  Material Contract                                  HTML     29K 
14: EX-10.159.G  Material Contract                                  HTML     35K 
15: EX-10.159.H  Material Contract                                  HTML     25K 
16: EX-10.159.I  Material Contract                                  HTML     30K 
17: EX-10.159.J  Material Contract                                  HTML     23K 
18: EX-10.159.K  Material Contract                                  HTML     19K 
19: EX-10.159.L  Material Contract                                  HTML    105K 
20: EX-10.159.M  Material Contract                                  HTML     24K 
21: EX-10.159.N  Material Contract                                  HTML     55K 
22: EX-10.159.O  Material Contract                                  HTML     25K 
23: EX-10.159.P  Material Contract                                  HTML     18K 
24: EX-10.159.Q  Material Contract                                  HTML     19K 
25: EX-10.159.R  Material Contract                                  HTML     24K 
26: EX-10.159.S  Material Contract                                  HTML     89K 
27: EX-10.159.T  Material Contract                                  HTML     50K 
28: EX-10.159.U  Material Contract                                  HTML     35K 
29: EX-10.159.V  Material Contract                                  HTML     28K 
30: EX-10.159.W  Material Contract                                  HTML     52K 
31: EX-10.166   Material Contract                                   HTML     30K 
 3: EX-10.35    Material Contract                                   HTML     22K 
 4: EX-10.77    Material Contract                                   HTML     23K 
 5: EX-10.94    Material Contract                                   HTML     22K 
 6: EX-10.98    Material Contract                                   HTML     22K 
33: EX-21       Subsidiaries List                                   HTML     24K 
34: EX-23       Consent of Experts or Counsel                       HTML     19K 
32: EX-12       Statement re: Computation of Ratios                 HTML     28K 
35: EX-31.1     Certification -- §302 - SOA'02                      HTML     23K 
36: EX-31.2     Certification -- §302 - SOA'02                      HTML     23K 
37: EX-32       Certification -- §906 - SOA'02                      HTML     20K 
62: XML         IDEA XML File -- Definitions and References          XML    105K 
67: XML         IDEA XML File -- Filing Summary                      XML     69K 
65: XML.R1      Document and Entity Information                      XML    209K 
66: XML.R2      Consolidated Statements of Operations                XML    401K 
51: XML.R3      Consolidated Balance Sheets                          XML    573K 
55: XML.R4      Consolidated Balance Sheets (Parenthetical)          XML    142K 
60: XML.R5      Consolidated Statements of Cash Flows                XML    486K 
59: XML.R6      Consolidated Statements of Stockholders' Equity      XML    571K 
                (Deficit)                                                        
69: XML.R7      Consolidated Statements of Stockholders' Equity      XML     79K 
                (Deficit) (Parenthetical)                                        
47: XML.R8      Summary of Accounting Policies                       XML     63K 
58: XML.R9      Special Charges and Restructuring Activities         XML     85K 
46: XML.R10     Investments and Fair Value Measurements              XML     87K 
45: XML.R11     Commitments, Contingencies and Guarantees            XML     57K 
50: XML.R12     Leases                                               XML     61K 
64: XML.R13     Indebtedness                                         XML     68K 
52: XML.R14     Financial Instruments and Risk Management            XML     89K 
53: XML.R15     Income Taxes                                         XML    100K 
56: XML.R16     Share Based Compensation                             XML    120K 
70: XML.R17     Retirement Benefits                                  XML    317K 
49: XML.R18     Intangible Assets                                    XML     67K 
44: XML.R19     Accumulated Other Comprehensive Income (Loss)        XML     87K 
54: XML.R20     Earnings (Loss) Per Share                            XML     64K 
63: XML.R21     Segment Reporting                                    XML     57K 
48: XML.R22     Quarterly Financial Data (Unaudited)                 XML     70K 
61: XML.R23     Valuation and Qualifying Accounts and Reserves       XML     75K 
68: EXCEL       IDEA Workbook of Financial Reports (.xls)            XLS    810K 
38: EX-101.INS  XBRL Instance -- amr-20101231                        XML   1.02M 
40: EX-101.CAL  XBRL Calculations -- amr-20101231_cal                XML    157K 
43: EX-101.DEF  XBRL Definitions -- amr-20101231_def                 XML     42K 
41: EX-101.LAB  XBRL Labels -- amr-20101231_lab                      XML    486K 
42: EX-101.PRE  XBRL Presentations -- amr-20101231_pre               XML    267K 
39: EX-101.SCH  XBRL Schema -- amr-20101231                          XSD     76K 
57: ZIP         XBRL Zipped Folder -- 0000950123-11-014726-xbrl      Zip     94K

‘XML.R14’ — Financial Instruments and Risk Management

This Financial Report is an XBRL XML File.

<?xml version="1.0" encoding="windows-1252"?>

<hasSegments> false </hasSegments>

<hasScenarios> false </hasScenarios>

<ReportLongName> 0207 - Disclosure - Financial Instruments and Risk Management </ReportLongName>

<ShowElementNames> false </ShowElementNames>

<HasEmbeddedReports> false </HasEmbeddedReports>

<IsAbstractGroupTitle> false </IsAbstractGroupTitle>

<LabelColumn> false </LabelColumn>

<hasSegments> false </hasSegments>

<hasScenarios> false </hasScenarios>

<MCU>

<KeyName> 1/1/2010 - 12/31/2010 USD ($) USD ($) / shares </KeyName>

<PeriodType> duration </PeriodType>

</contextRef>

<UPS>

<UnitType> Standard </UnitType>

</StandardMeasure>

</UnitProperty>

<UnitID> USDEPS </UnitID>

<UnitType> Divide </UnitType>

</NumeratorMeasure>

<MeasureSchema> http://www.xbrl.org/2003/instance </MeasureSchema>

<MeasureValue> shares </MeasureValue>

<MeasureNamespace> xbrli </MeasureNamespace>

</DenominatorMeasure>

</UnitProperty>

<UnitID> Shares </UnitID>

<UnitType> Standard </UnitType>

<MeasureSchema> http://www.xbrl.org/2003/instance </MeasureSchema>

<MeasureValue> shares </MeasureValue>

<MeasureNamespace> xbrli </MeasureNamespace>

</StandardMeasure>

</UnitProperty>

</UPS>

</MCU>

</Labels>

</Column>

</Columns>

<Rows>

<Row>

<ElementName> us-gaap_DerivativeInstrumentsAndHedgesAbstract </ElementName>

<PeriodType> duration </PeriodType>

<ShortDefinition> No definition available. </ShortDefinition>

<IsReportTitle> false </IsReportTitle>

<IsSegmentTitle> false </IsSegmentTitle>

<IsSubReportEnd> false </IsSubReportEnd>

<IsCalendarTitle> false </IsCalendarTitle>

<IsTuple> false </IsTuple>

<IsEquityPrevioslyReportedAsRow> false </IsEquityPrevioslyReportedAsRow>

<IsEquityAdjustmentRow> false </IsEquityAdjustmentRow>

<IsBeginningBalance> false </IsBeginningBalance>

<IsEndingBalance> false </IsEndingBalance>

<IsReverseSign> false </IsReverseSign>

<Cells>

<Cell>

<IsNumeric> false </IsNumeric>

<IsRatio> false </IsRatio>

<DisplayZeroAsNone> false </DisplayZeroAsNone>

<IsIndependantCurrency> false </IsIndependantCurrency>

<ShowCurrencySymbol> false </ShowCurrencySymbol>

<DisplayDateInUSFormat> false </DisplayDateInUSFormat>

<hasSegments> false </hasSegments>

<hasScenarios> false </hasScenarios>

</Cell>

</Cells>

<Unit> Other </Unit>

<ElementDataType> xbrli:stringItemType </ElementDataType>

<SimpleDataType> string </SimpleDataType>

<ElementDefenition> No definition available. </ElementDefenition>

<IsTotalLabel> false </IsTotalLabel>

<IsEPS> false </IsEPS>

<Label> Financial Instruments and Risk Management [Abstract] </Label>

</Row>

<Row>

<IsAbstractGroupTitle> false </IsAbstractGroupTitle>

<ElementName> us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock </ElementName>

<PeriodType> duration </PeriodType>

<ShortDefinition> No definition available. </ShortDefinition>

<IsReportTitle> false </IsReportTitle>

<IsSegmentTitle> false </IsSegmentTitle>

<IsSubReportEnd> false </IsSubReportEnd>

<IsCalendarTitle> false </IsCalendarTitle>

<IsTuple> false </IsTuple>

<IsEquityPrevioslyReportedAsRow> false </IsEquityPrevioslyReportedAsRow>

<IsEquityAdjustmentRow> false </IsEquityAdjustmentRow>

<IsBeginningBalance> false </IsBeginningBalance>

<IsEndingBalance> false </IsEndingBalance>

<IsReverseSign> false </IsReverseSign>

<PreferredLabelRole> verboselabel </PreferredLabelRole>

<Cells>

<Cell>

<IsNumeric> false </IsNumeric>

<IsRatio> false </IsRatio>

<DisplayZeroAsNone> false </DisplayZeroAsNone>

<div style="margin-left: 0%"> <div style="margin-top: 12pt; font-size: 1pt"> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent; text-align: left"> <tr> <td width="3%"></td> <td width="97%"></td> </tr> <tr valign="top"> <td> <b><u><font style="font-family: 'Times New Roman', Times">7. </font></u></b> </td> <td> <b><u><font style="font-family: 'Times New Roman', Times">Financial Instruments and Risk Management</font></u></b> </td> </tr> </table> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> <i>Fuel Price Risk Management</i> As part of the Company’s risk management program, it uses a variety of financial instruments, primarily heating oil option and collar contracts, as cash flow hedges to mitigate commodity price risk. The Company does not hold or issue derivative financial instruments for trading purposes. As of December 31, 2010, the Company had fuel derivative contracts outstanding covering 31 million barrels of jet fuel that will be settled over the next 24 months. A deterioration of the Company’s liquidity position may negatively affect the Company’s ability to hedge fuel in the future. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> In accordance with U.S. GAAP, the Company assesses, both at the inception of each hedge and on an ongoing basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Derivatives that meet the requirements are granted special hedge accounting treatment, and the Company’s hedges generally meet these requirements. Accordingly, the Company’s fuel derivative contracts are accounted for as cash flow hedges, and the fair value of the Company’s hedging contracts is recorded in Current Assets or Current Liabilities in the accompanying consolidated balance sheets until the underlying jet fuel is purchased. The Company determines the ineffective portion of its fuel hedge contracts by comparing the cumulative change in the total value of the fuel hedge contract, or group of fuel hedge contracts, to the cumulative change in a hypothetical jet fuel hedge. If the total cumulative change in value of the fuel hedge contract more than offsets the total cumulative change in a hypothetical jet fuel hedge, the difference is considered ineffective and is immediately recognized as a component of Aircraft fuel expense. Effective gains or losses on fuel hedging contracts are deferred in Accumulated other comprehensive income (loss) and are recognized in earnings as a component of Aircraft fuel expense when the underlying jet fuel being hedged is used. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> Ineffectiveness is inherent in hedging jet fuel with derivative positions based in crude oil or other crude oil related commodities. In assessing effectiveness, the Company uses a regression model to determine the correlation of the change in prices of the commodities used to hedge jet fuel (e.g., NYMEX Heating oil) to the change in the price of jet fuel. The Company also monitors the actual dollar offset of the hedges’ market values as compared to hypothetical jet fuel hedges. The fuel hedge contracts are generally deemed to be “highly effective” if the R-squared is greater than 80 percent and dollar offset correlation is within 80 percent to 125 percent. The Company discontinues hedge accounting prospectively if it determines that a derivative is no longer expected to be highly effective as a hedge or if it decides to discontinue the hedging relationship. Subsequently, any changes in the fair value of these derivatives are marked to market through earnings in the period of change. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> For the years ended December 31, 2010, 2009 and 2008, the Company recognized net gains (losses) of approximately ($142) million, ($651) million and $380 million, respectively, as a component of Aircraft fuel expense on the accompanying consolidated statements of operations related to its fuel hedging agreements, including the ineffective portion of the hedges. The fair value of the Company’s fuel hedging agreements at December 31, 2010 and 2009, representing the amount the Company would receive upon termination of the agreements, totaled $257 million and $57 million, respectively, which excludes a payable for both years related to contracts that settled in December of each year. As of December 31, 2010, the Company estimates that during the next twelve months it will reclassify from Accumulated other comprehensive loss into earnings approximately $121 million in net gains (based on prices as of December 31, 2010) related to its fuel derivative hedges. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> The impact of cash flow hedges on the Company’s consolidated financial statements for the years ending December 31, 2010 and 2009, respectively, is depicted below (in millions): </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> Fair Value of Aircraft Fuel Derivative Instruments (all cash flow hedges) </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">  <tr style="font-size: 1pt" valign="bottom"> <td width="19%"> </td> <td width="5%"> </td> <td width="4%"> </td> <td width="5%"> </td> <td width="10%"> </td> <td width="5%"> </td> <td width="4%"> </td> <td width="5%"> </td> <td width="10%"> </td> <td width="5%"> </td> <td width="4%"> </td> <td width="5%"> </td> <td width="10%"> </td> <td width="5%"> </td> <td width="4%"> </td> </tr>   <tr style="font-size: 8pt" valign="bottom" align="center"> <td colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Asset Derivatives as of December 31,</b> </td> <td> </td> <td colspan="7" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Liability Derivatives as of December 31,</b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td colspan="3" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td> </td> <td colspan="3" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> <td> </td> <td colspan="3" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td> </td> <td colspan="3" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> <b>Balance<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Balance<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Balance<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Balance<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> <b>Sheet<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Fair<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Sheet<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Fair<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Sheet<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Fair<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Sheet<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Fair<br /> </b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Location</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Location</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Location</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Location</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> </tr> <tr style="line-height: 3pt; font-size: 1pt"> <td> </td> </tr>  <tr valign="bottom"> <td nowrap="nowrap" align="center" valign="top"> Fuel derivative<br /> contracts </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $269 </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> Fuel derivative<br /> contracts </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $126 </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> Fuel derivative<br /> liability </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $— </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> Fuel derivative<br /> liability </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $71 </td> </tr> </table> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> Effect of Aircraft Fuel Derivative Instruments on Statements of Operations (all cash flow hedges) </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">  <tr style="font-size: 1pt" valign="bottom"> <td width="10%"> </td> <td width="6%"> </td> <td width="3%"> </td> <td width="6%"> </td> <td width="18%"> </td> <td width="6%"> </td> <td width="4%"> </td> <td width="6%"> </td> <td width="4%"> </td> <td width="6%"> </td> <td width="13%"> </td> <td width="6%"> </td> <td width="3%"> </td> <td width="6%"> </td> <td width="3%"> </td> </tr>   <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>Amount of Gain<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>Amount of Gain<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>(Loss)<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>(Loss)<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Location of Gain<br /> </b> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>Reclassified<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Location of Gain<br /> </b> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>Amount of Gain (Loss)<br /> </b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>Recognized in<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>(Loss) Reclassified from<br /> </b> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>from Accumulated<br /> </b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>(Loss) Recognized<br /> </b> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom"> <b>Recognized in Income on<br /> </b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>OCI on Derivative(1)</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>Accumulated OCI<br /> </b> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>OCI into Income(1)</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom"> <b>in Income on<br /> </b> </td> <td> </td> <td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Derivative(2)</b> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>into Income(1)</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Derivative(2)</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td> </td> <td nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> </tr> <tr style="line-height: 3pt; font-size: 1pt"> <td> </td> </tr>  <tr valign="bottom"> <td nowrap="nowrap" align="center" valign="top"> <div style="text-indent: -8pt; margin-left: 8pt"> $72 </div> </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $151 </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> Aircraft Fuel </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $(144) </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $(662) </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> Aircraft Fuel </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $2 </td> <td> </td> <td nowrap="nowrap" align="center" valign="top"> $11 </td> </tr> </table> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"> </div> <div style="margin-top: 3pt; font-size: 1pt"> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left"> <tr> <td width="2%"></td> <td width="1%"></td> <td width="97%"></td> </tr> <tr> <td valign="top"> (1) </td> <td></td> <td valign="bottom"> Effective portion of gain (loss)</td> </tr> <tr style="line-height: 3pt; font-size: 1pt"> <td> </td> </tr> <tr> <td valign="top"> (2) </td> <td></td> <td valign="bottom"> Ineffective portion of gain (loss)</td> </tr> </table> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> The Company is also exposed to credit losses in the event of non-performance by counterparties to these financial instruments, and although no assurances can be given, the Company does not expect any of the counterparties to fail to meet its obligations. The credit exposure related to these financial instruments is represented by the fair value of contracts with a positive fair value at the reporting date, reduced by the effects of master netting agreements. To manage credit risks, the Company selects counterparties based on credit ratings, limits its exposure to a single counterparty under defined guidelines, and monitors the market position of the program and its relative market position with each counterparty. The Company also maintains industry-standard security agreements with a number of its counterparties which may require the Company or the counterparty to post collateral if the value of selected instruments exceed specified <font style="white-space: nowrap">mark-to-market</font> thresholds or upon certain changes in credit ratings. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> As of December 31, 2010, the Company had received collateral of $73 million which is included in short-term investments. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> In addition to the Company’s qualifying cash flow hedges, American has hedges that were effectively unwound in 2009 that were recorded as assets and liabilities on the balance sheet. Fair value of these offsetting positions not designated as hedges as of December 31, 2009 was a $9 million asset recorded in Fuel derivative contracts and a $9 million liability recorded in Fuel derivative liability. In January 2010, all of these contracts were settled with a net zero impact to the Company’s financial statements. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> <i>Fair Values of Financial Instruments</i> The fair values of the Company’s long-term debt were estimated using quoted market prices where available. For long-term debt not actively traded, fair values were estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> The carrying value and estimated fair values of the Company’s long-term debt, including current maturities, were (in millions): </div> <div style="margin-top: 6pt; font-size: 1pt"> </div> <table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">  <tr style="font-size: 1pt" valign="bottom"> <td width="62%"> </td> <td width="2%"> </td> <td width="1%" align="right"> </td> <td width="5%" align="right"> </td> <td width="1%" align="left"> </td> <td width="3%"> </td> <td width="1%" align="right"> </td> <td width="5%" align="right"> </td> <td width="1%" align="left"> </td> <td width="3%"> </td> <td width="1%" align="right"> </td> <td width="5%" align="right"> </td> <td width="1%" align="left"> </td> <td width="3%"> </td> <td width="1%" align="right"> </td> <td width="4%" align="right"> </td> <td width="1%" align="left"> </td> </tr>   <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>December 31,</b> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2010</b> </td> <td> </td> <td> </td> <td colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>2009</b> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom"> <b>Carrying<br /> </b> </td> <td> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom"> <b>Fair<br /> </b> </td> <td> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom"> <b>Carrying<br /> </b> </td> <td> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom"> <b>Fair<br /> </b> </td> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom" align="center"> <td nowrap="nowrap" align="center" valign="bottom"> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> <td> </td> <td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000"> <b>Value</b> </td> <td> </td> </tr> <tr style="line-height: 3pt; font-size: 1pt"> <td> </td> </tr>  <tr valign="bottom" style="background: #cceeff"> <td align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> Secured variable and fixed rate indebtedness </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 5,114 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 4,562 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 5,553 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 4,310 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom"> <td align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> Enhanced equipment trust certificates </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 2,002 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 2,127 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 2,022 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 1,999 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> 6.00% — 8.50% special facility revenue bonds </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 1,641 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 1,657 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 1,658 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 1,600 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom"> <td align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> AAdvantage Miles advance purchase </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 890 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 903 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 890 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 893 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> 4.50% — 6.25% senior convertible notes </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 460 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 526 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 460 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 476 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom"> <td nowrap="nowrap" align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> 9.00% — 10.20% debentures </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 214 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 207 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 214 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 158 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td nowrap="nowrap" align="left" valign="bottom"> <div style="text-indent: -10pt; margin-left: 10pt"> 7.88% — 10.55% notes </div> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 211 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 209 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 211 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td nowrap="nowrap" align="right" valign="bottom"> 181 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom" style="font-size: 1pt"> <td> </td> <td> </td> <td style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td style="border-top: 1px solid #000000"> </td> <td style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 10,532 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 10,191 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 11,008 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> $ </td> <td nowrap="nowrap" align="right" valign="bottom"> 9,617 </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> </tr> <tr valign="bottom" style="font-size: 1pt"> <td> </td> <td> </td> <td style="border-top: 3px double #000000"> </td> <td style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td style="border-top: 3px double #000000"> </td> <td style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td style="border-top: 3px double #000000"> </td> <td style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td style="border-top: 3px double #000000"> </td> <td style="border-top: 3px double #000000"> </td> <td> </td> </tr> </table> <div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent"> </div> </div>

</NonNumbericText>

<IsIndependantCurrency> false </IsIndependantCurrency>

<ShowCurrencySymbol> false </ShowCurrencySymbol>

<DisplayDateInUSFormat> false </DisplayDateInUSFormat>

<hasSegments> false </hasSegments>

<hasScenarios> false </hasScenarios>

</Cell>

</Cells>

<Unit> Other </Unit>

<ElementDataType> us-types:textBlockItemType </ElementDataType>

<SimpleDataType> string </SimpleDataType>

<ElementDefenition> This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. </ElementDefenition>

<ElementReferences> Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 45 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 </ElementReferences>

<IsTotalLabel> false </IsTotalLabel>

<IsEPS> false </IsEPS>

<Label> Financial Instruments and Risk Management </Label>

</Row>

</Rows>

<ReportName> Financial Instruments and Risk Management </ReportName>

<MonetaryRoundingLevel> UnKnown </MonetaryRoundingLevel>

<SharesRoundingLevel> UnKnown </SharesRoundingLevel>

<PerShareRoundingLevel> UnKnown </PerShareRoundingLevel>

<ExchangeRateRoundingLevel> UnKnown </ExchangeRateRoundingLevel>

<HasCustomUnits> false </HasCustomUnits>

</InstanceReport>

3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

11/28/11  SEC                               UPLOAD¶     9/11/17    1:45K  American Airlines Group Inc.
11/15/11  SEC                               UPLOAD¶     9/11/17    1:55K  American Airlines Group Inc.
10/18/11  SEC                               UPLOAD¶     9/11/17    1:57K  American Airlines Group Inc.

↑Top

Filing Submission 0000950123-11-014726 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

American Airlines Group Inc. – ‘10-K’ for 12/31/10 – ‘XML.R14’

On: Wednesday, 2/16/11, at 4:29pm ET · For: 12/31/10 · Accession #: 950123-11-14726 · File #: 1-08400

Previous ‘10-K’: ‘10-K’ on 2/17/10 for 12/31/09 · Next: ‘10-K’ on 2/15/12 for 12/31/11 · Latest: ‘10-K’ on 2/21/24 for 12/31/23 · 3 References: By: SEC – ‘UPLOAD’ on 11/28/11 By: SEC – ‘UPLOAD’ on 11/15/11 By: SEC – ‘UPLOAD’ on 10/18/11

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34Filing Table of Contents

‘XML.R14’ — Financial Instruments and Risk Management

This Financial Report is an XBRL XML File.

3 Subsequent Filings that Reference this Filing

Previous ‘10-K’: ‘10-K’ on 2/17/10 for 12/31/09 · Next: ‘10-K’ on 2/15/12 for 12/31/11 · Latest: ‘10-K’ on 2/21/24 for 12/31/23 · 3 References:

Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34
Filing Table of Contents