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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2022
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period From                     to
Commission file number 1-8400
American Airlines Group Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
75-1825172
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1 Skyview Drive,
Fort Worth,
Texas
76155
(682)278-9000
(Address of principal executive offices, including zip code)(Registrant’s telephone number, including area code)
Commission file number 1-2691
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
13-1502798
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1 Skyview Drive,
Fort Worth,Texas76155(682)278-9000
(Address of principal executive offices, including zip code)(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share
 
AAL
 
The Nasdaq Global Select Market
Preferred Stock Purchase Rights
(1)
(1) Attached to the Common Stock
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
American Airlines Group Inc.
Yes
 No
American Airlines, Inc.
Yes
 No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
American Airlines Group Inc.
Yes
 No
American Airlines, Inc.
Yes
 No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
American Airlines Group Inc.
Large accelerated filer
Accelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
American Airlines, Inc.Large accelerated filerAccelerated filer

Non-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
American Airlines Group Inc.
American Airlines, Inc.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
American Airlines Group Inc.Yes No
American Airlines, Inc.YesNo
As of April 14, 2022, there were 649,514,848 shares of American Airlines Group Inc. common stock outstanding.
As of April 14, 2022, there were 1,000 shares of American Airlines, Inc. common stock outstanding, all of which were held by American Airlines Group Inc.



American Airlines Group Inc.
American Airlines, Inc.
Form 10-Q
Quarterly Period Ended March 31, 2022
Table of Contents
  Page
PART I: FINANCIAL INFORMATION
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II: OTHER INFORMATION
Item 1.
Item 1A.
Item 6.

1


General
This report is filed by American Airlines Group Inc. (AAG) and its wholly-owned subsidiary American Airlines, Inc. (American). References in this report to “we,” “us,” “our,” the “Company” and similar terms refer to AAG and its consolidated subsidiaries. References in this report to “mainline” refer to the operations of American only and exclude regional operations.
Glossary of Terms
For the convenience of the reader, the definitions of certain capitalized industry and other terms used in this report have been consolidated into a glossary beginning on page 5.
Note Concerning Forward-Looking Statements
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended (the Securities Act), the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about our plans, objectives, expectations, intentions, estimates and strategies for the future, the continuing availability of borrowings under revolving lines of credit, and other statements that are not historical facts. These forward-looking statements are based on our current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those described below under Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Part II, Item 1A. Risk Factors and other risks and uncertainties listed from time to time in our filings with the Securities and Exchange Commission (the SEC).
All of the forward-looking statements are qualified in their entirety by reference to the factors discussed in Part II, Item 1A. Risk Factors and elsewhere in this report. There may be other factors of which we are not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. In particular, the consequences of the coronavirus (COVID-19) outbreak to economic conditions and the travel industry in general and our financial position and operating results in particular have been material, are changing rapidly, and cannot be predicted. We do not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such statements other than as required by law. Any forward-looking statements speak only as of the date of this report or as of the dates indicated in the statements.
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Summary of Risk Factors
Our business is subject to a number of risks and uncertainties that may affect our business, results of operations and financial condition, or the trading price of our common stock or other securities. We caution the reader that these risk factors may not be exhaustive. We operate in a continually changing business environment, and new risks and uncertainties emerge from time to time. Management cannot predict such new risks and uncertainties, nor can it assess the extent to which any of the risk factors below or any such new risks and uncertainties, or any combination thereof, may impact our business. These risks are more fully described in Part II, Item 1A. Risk Factors. These risks include, among others, the following:
Risks Related to our Business
The outbreak and global spread of COVID-19 has resulted in a severe decline in demand for air travel which has and will continue to adversely impact our business, operating results, financial condition and liquidity.
Downturns in economic conditions could adversely affect our business.
We will need to obtain sufficient financing or other capital to operate successfully.
Our high level of debt and other obligations may limit our ability to fund general corporate requirements and obtain additional financing, may limit our flexibility in responding to competitive developments and cause our business to be vulnerable to adverse economic and industry conditions.
We have significant pension and other postretirement benefit funding obligations, which may adversely affect our liquidity, results of operations and financial condition.
If our financial condition worsens, provisions in our credit card processing and other commercial agreements may adversely affect our liquidity.
The loss of key personnel upon whom we depend to operate our business or the inability to attract and develop additional qualified personnel could adversely affect our business.
Our business has been and will continue to be affected by many changing economic and other conditions beyond our control, including global events that affect travel behavior, and our results of operations could be volatile and fluctuate due to seasonality.
Union disputes, employee strikes and other labor-related disruptions, or our inability to otherwise maintain labor costs at competitive levels may adversely affect our operations and financial performance.
If we encounter problems with any of our third-party regional operators or third-party service providers, our operations could be adversely affected by a resulting decline in revenue or negative public perception about our services.
Any damage to our reputation or brand image could adversely affect our business or financial results.
Changes to our business model that are designed to increase revenues may not be successful and may cause operational difficulties or decreased demand.
Our intellectual property rights, particularly our branding rights, are valuable, and any inability to protect them may adversely affect our business and financial results.
We may be a party to litigation in the normal course of business or otherwise, which could affect our financial position and liquidity.
Our ability to utilize our NOLs and other carryforwards may be limited.
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We have a significant amount of goodwill, which is assessed for impairment at least annually. In addition, we may never realize the full value of our intangible assets or long-lived assets, causing us to record material impairment charges.
Risks Related to the Airline Industry
The airline industry is intensely competitive and dynamic.
The commercial relationships that we have with other companies, including any related equity investments, may not produce the returns or results we expect.
Our business is very dependent on the price and availability of aircraft fuel and continued periods of high volatility in fuel costs, increased fuel prices or significant disruptions in the supply of aircraft fuel could have a significant negative impact on consumer demand, our operating results and liquidity.
Our business is subject to extensive government regulation, which may result in increases in our costs, disruptions to our operations, limits on our operating flexibility, reductions in the demand for air travel, and competitive disadvantages.
We operate a global business with international operations that are subject to economic and political instability and have been, and in the future may continue to be, adversely affected by numerous events, circumstances or government actions beyond our control.
We may be adversely affected by conflicts overseas or terrorist attacks; the travel industry continues to face ongoing security concerns.
We are subject to risks associated with climate change, including increased regulation of our CO2 emissions, changing consumer preferences and the potential increased impacts of severe weather events on our operations and infrastructure.
A shortage of pilots or other personnel could materially adversely affect our business.
We depend on a limited number of suppliers for aircraft, aircraft engines and parts.
Delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity, and failure of new aircraft to perform as expected, may adversely impact our business, results of operations and financial condition.
We rely heavily on technology and automated systems to operate our business, and any failure of these technologies or systems could harm our business, results of operations and financial condition.
Evolving data security and privacy requirements could increase our costs, and any significant data security or privacy incident could disrupt our operations, harm our reputation, expose us to legal risks and otherwise materially adversely affect our business, results of operations and financial condition.
We rely on third-party distribution channels and must manage effectively the costs, rights and functionality of these channels.
If we are unable to obtain and maintain adequate facilities and infrastructure throughout our system and, at some airports, adequate slots, we may be unable to operate our existing flight schedule and to expand or change our route network in the future, which may have a material adverse impact on our operations.
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GLOSSARY OF TERMS
“2013 Credit Agreement” means the Amended and Restated Credit and Guaranty Agreement dated as of May 21, 2015, among American, AAG, the lenders from time to time party thereto, Deutsche Bank AG New York Branch, as administrative agent, and certain other parties thereto, as amended.
“2013 Revolving Facility” means the revolving credit facility provided for by the 2013 Credit Agreement.
“2013 Term Loan Facility” means the term loan facility provided for under the 2013 Credit Agreement.
“2014 Credit Agreement” means the Amended and Restated Credit and Guaranty Agreement, dated as of April 20, 2015, among American, AAG, the lenders from time to time party thereto, Citibank N.A., as administrative agent, and certain other parties thereto, as amended.
“2014 Revolving Facility” means the revolving credit facility provided for by the 2014 Credit Agreement.
“2014 Term Loan Facility” means the term loan facility provided for by the 2014 Credit Agreement.
“2021 Form 10-K” means AAG’s and American’s Annual Report on Form 10-K for the year ended December 31, 2021.
“2021-1 Aircraft” means the 26 aircraft financed or to be financed by American under the 2021-1 Aircraft EETCs.
“2021-1 Aircraft EETCs” means the two pass-through trusts created by American in November 2021 that have issued approximately $960 million aggregate face amount of Series 2021-1 Class A and Class B EETCs.
“2026 Notes” means the AAdvantage Issuers' 5.50% senior secured notes due 2026.
“2029 Notes” means the AAdvantage Issuers' 5.75% senior secured notes due 2029.
“AAdvantage” means the AAdvantage® frequent flyer program.
“AAdvantage Agreements” means the AAdvantage program agreements provided as collateral under the AAdvantage Financing.
“AAdvantage Financing” means the 2026 Notes, the 2029 Notes and the AAdvantage Term Loan Facility.
“AAdvantage Term Loan Facility” means the $3.5 billion term loan facility provided pursuant to the term loan credit and guaranty agreement, dated as of March 24, 2021, with Barclays Bank PLC, as administrative agent, Wilmington Trust, National Association, as collateral administrator, and the lenders party thereto.
“AAG”, “we”, “us”, “our” and similar terms means American Airlines Group Inc. and its consolidated subsidiaries.
“American” means American Airlines, Inc., a wholly-owned subsidiary of AAG.
“American Eagle” means our regional carriers, including our wholly-owned regional carriers Envoy, PSA and Piedmont, as well as third-party regional carriers including Mesa, Republic and SkyWest.
“AMR” or “AMR Corporation” means AMR Corporation and is used to reference AAG during the period of time prior to its emergence from Chapter 11 and the Merger.
“AOCI” means accumulated other comprehensive income (loss).
“April 2016 Credit Agreement” means the Credit and Guaranty Agreement, dated as of April 29, 2016, among American, AAG, the lenders from time to time party thereto, Barclays Bank PLC, as administrative agent, and certain other parties thereto, as amended.
“April 2016 Revolving Facility” means the revolving credit facility provided for by the April 2016 Credit Agreement.
“ARP” means the American Rescue Plan Act of 2021.
“ASM” means available seat mile and is a basic measure of production. One ASM represents one seat flown one mile.
“ATC system” means the U.S. National Airspace System.
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“Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of New York.
“Boeing” means The Boeing Company.
“Bylaws” means AAG’s Amended and Restated Bylaws, as amended.
“CARES Act” means the Coronavirus Aid, Relief, and Economic Security Act.
“CASM” means total operating cost per available seat mile and is equal to total operating expenses divided by ASMs.
“CBAs” means collective bargaining agreements.
“CEO” means Chief Executive Officer.
“CFO” means Chief Financial Officer.
“China Southern Airlines” means China Southern Airlines Company Limited.
“CMA” means the United Kingdom Competition and Markets Authority.
“CO2” means carbon dioxide.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” means AAG and its consolidated subsidiaries.
“Convertible Notes” means AAG’s 6.50% convertible senior notes due 2025.
“Convertible Notes Indenture” means the indenture, dated as of June 25, 2020, between AAG and the Convertible Notes Trustee, as supplemented by the first supplemental indenture, dated as of June 25, 2020, among AAG, American and the Convertible Notes Trustee.
“Convertible Notes Trustee” means Wilmington Trust, National Association, as trustee with respect to the Convertible Notes.
“CORSIA” means the Carbon Offsetting and Reduction Scheme for International Aviation.
“COVID-19” refers to a respiratory illness first detected in 2019 and the ensuing global pandemic that remains ongoing as of the date of this report.
“DCA” means Ronald Reagan Washington National Airport.
“DC Court” means the Federal District Court for the District of Columbia.
“December 2016 Credit Agreement” means the Credit and Guaranty Agreement dated as of December 15, 2016, among American, AAG, the lenders from time to time party thereto, Citibank N.A., as administrative agent, and certain other parties thereto, as amended.
“December 2016 Credit Facilities” means, collectively, the December 2016 Term Loan Facility and the revolving credit facility that may be established under the December 2016 Credit Agreement.
“December 2016 Term Loan Facility” means the term loan facility provided for under the December 2016 Credit Agreement.
“DOJ” means the United States Department of Justice.
“DOT” means the United States Department of Transportation.
“DOT Agreement” means the agreement that had been reached between the DOT, American and JetBlue in January 2021.
“EC” means the European Commission.
“EETC” means enhanced equipment trust certificate.
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“Envoy” means Envoy Air Inc.
“EPA” means the U.S. Environmental Protection Agency.
“EPS” means earnings (loss) per common share.
“EU” means European Union.
"EU-UK Trade and Cooperation Agreement" means the trade and cooperation agreement between the EU and United Kingdom.
“Exchange Act” means Securities Exchange Act of 1934, as amended.
“FAA” means Federal Aviation Administration.
“GAAP” means generally accepted accounting principles in the U.S.
“GDSs” means global distribution systems.
“GHG” means greenhouse gas.
“GOL” means GOL Linhas Aéreas Inteligentes S.A.
“holdback” means an amount of cash held by our credit card processors in certain circumstances (including, with respect to certain agreements, our failure to maintain certain levels of liquidity).
“IAM” means International Association of Machinists & Aerospace Workers.
“IAM Pension Fund” means the IAM National Pension Fund.
“ICAO” means International Civil Aviation Organization.
“IP Notes” means American’s $1.0 billion in initial principal amount of 10.75% senior secured IP notes.
“JetBlue” means JetBlue Airways Corporation.
“JFK” means John F. Kennedy International Airport.
“LAX” means Los Angeles International Airport.
“LGA/DCA Notes” means American’s $200 million in initial principal amount of 10.75% senior secured LGA/DCA notes.
“LGA” means LaGuardia Airport.
“LGW” or “London Gatwick” means London Gatwick Airport.
“LHR” or “London Heathrow” means London Heathrow Airport.
“LIBOR” means the London interbank offered rate for deposits of U.S. dollars.
“LTV” means loan to value ratio.
“Mainline” means the operations of American and excludes regional operations.
“Merger” means the merger of US Airways Group and AMR Corporation on December 9, 2013.
“Mesa” means Mesa Airlines, Inc.
"NEA" means Northeast Alliance arrangement between American and JetBlue.
“NMB” means National Mediation Board.
“NOLs” means net operating losses.
“ORD” means Chicago O’Hare International Airport.
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“OSHA” means Occupational Health and Safety Administration.
“OTAs” means online travel agents.
“Passenger load factor” means the percentage of available seats that are filled with revenue passengers.
“PEB” means Presidential Emergency Board.
“PFAS” means per- and polyfluoroalkyl substances.
“Piedmont” means Piedmont Airlines, Inc.
“PRASM” means passenger revenue per available seat mile and is equal to passenger revenues divided by ASMs.
“PSA” means PSA Airlines, Inc.
“PSP1” means the payroll support program established under the CARES Act.
“PSP1 Agreement” means the Payroll Support Program Agreement entered into by the Subsidiaries with Treasury on April 20, 2020.
“PSP1 Promissory Note” means the promissory note issued to Treasury in connection with PSP1.
“PSP1 Warrant Agreement” means the agreement entered into between AAG and Treasury in connection with the PSP1 Agreement, pursuant to which AAG issued PSP1 Warrants to Treasury to purchase up to an aggregate of approximately 14.1 million shares of AAG common stock.
“PSP1 Warrants” means the warrants issued or to be issued to Treasury pursuant to the PSP1 Warrant Agreement.
“PSP2” means the payroll support program established under the PSP Extension Law.
“PSP2 Agreement” means the Payroll Support Program Extension Agreement entered into by the Subsidiaries with Treasury on January 15, 2021.
“PSP2 Promissory Note” means the promissory note issued to Treasury in connection with PSP2.
“PSP2 Warrant Agreement” means the agreement entered into between AAG and Treasury in connection with the PSP2 Agreement, pursuant to which AAG issued PSP2 Warrants to Treasury to purchase the PSP2 Warrant Shares.
“PSP2 Warrants” means the warrants issued or to be issued to Treasury pursuant to the PSP2 Warrant Agreement.
“PSP3” means the payroll support program established under the ARP.
“PSP3 Agreement” means the Payroll Support Program Agreement entered into by the Subsidiaries with Treasury on April 23, 2021.
“PSP3 Promissory Note” means the promissory note issued to Treasury in connection with PSP3.
“PSP Extension Law” means Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021.
“Rehabilitation Plan” means the rehabilitation plan adopted by the IAM Pension Fund on April 17, 2019.
“Republic” means Republic Airways Inc.
“RLA” means Railway Labor Act.
“ROU” means right-of-use.
“RPM” or “RPMs” means revenue passenger mile or miles and is a basic measure of sales volume. One RPM represents one passenger flown one mile.
“SAF” means sustainable aviation fuel.
“SAIB” means special airworthiness information bulletin.
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“SEC” means Securities and Exchange Commission.
“Section 382” means Section 382 of the Internal Revenue Code.
“Securities Act” means Securities Act of 1933, as amended.
“SkyWest” means SkyWest Airlines, Inc.
“slots” means landing and take-off rights and authorizations, as required by certain airports.
“SOFR” means the Secured Overnight Financing Rate.
“Subsidiaries” means American, Envoy, PSA and Piedmont, each a wholly-owned subsidiary of AAG.
“Tax Benefits Preservation Plan” means the tax benefits preservation plan adopted by the Board of Directors of AAG in December 2021 in order to preserve the Company's ability to use its NOLs and certain other tax attributes to reduce potential future income tax obligations.
“Terminal” means the passenger terminal facility used by American at JFK.
“TRASM” means the total revenue per available seat mile and is equal to the total revenues divided by total mainline and third-party regional carrier ASMs.
“Treasury” means the U.S. Department of the Treasury.
“Treasury Loan Agreement” means the Loan and Guarantee Agreement, dated as of September 25, 2020, between AAG, American and Treasury which provides for the Treasury Term Loan Facility.
“Treasury Loan Warrants” means the warrants issued to Treasury pursuant to the Treasury Loan Warrant Agreement.
“Treasury Term Loan Facility” means the term loan facility provided for under the Treasury Loan Agreement.
“US Airways Group” means US Airways Group, Inc. and its consolidated subsidiaries.
“USTR” means the Office of the U.S. Trade Representative.
“Vertical” means Vertical Aerospace Ltd.
“WTO” means World Trade Organization.
“Yield” means a measure of airline revenue derived by dividing passenger revenue by RPMs.
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PART I: FINANCIAL INFORMATION
This report on Form 10-Q is filed by both AAG and American and includes the Condensed Consolidated Financial Statements of each company in Item 1A and Item 1B, respectively.
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ITEM 1A. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
AMERICAN AIRLINES GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share and per share amounts)(Unaudited)
 Three Months Ended March 31,
 20222021
Operating revenues:
Passenger$7,818 $3,179 
Cargo364 315 
Other717 514 
Total operating revenues8,899 4,008 
Operating expenses:
Aircraft fuel and related taxes2,502 1,034 
Salaries, wages and benefits3,154 2,730 
Regional expenses1,052 625 
Maintenance, materials and repairs617 376 
Other rent and landing fees678 570 
Aircraft rent353 351 
Selling expenses332 151 
Depreciation and amortization492 478 
Special items, net157 (1,708)
Other1,285 716 
Total operating expenses10,622 5,323 
Operating loss(1,723)(1,315)
Nonoperating income (expense):
Interest income8 4 
Interest expense, net(463)(371)
Other income, net92 109 
Total nonoperating expense, net(363)(258)
Loss before income taxes(2,086)(1,573)
Income tax benefit(451)(323)
Net loss$(1,635)$(1,250)
Loss per common share:
Basic and diluted$(2.52)$(1.97)
Weighted average shares outstanding (in thousands):
Basic and diluted649,503 634,609 
See accompanying notes to condensed consolidated financial statements.
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AMERICAN AIRLINES GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In millions)(Unaudited)
 Three Months Ended March 31,
 20222021
Net loss$(1,635)$(1,250)
Other comprehensive income (loss), net of tax:
Pension, retiree medical and other postretirement benefits28 67 
Investments(2) 
Total other comprehensive income, net of tax26 67 
Total comprehensive loss$(1,609)$(1,183)
See accompanying notes to condensed consolidated financial statements.
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AMERICAN AIRLINES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share and par value)
March 31, 2022December 31, 2021
 (Unaudited) 
ASSETS
Current assets
Cash$376 $273 
Short-term investments12,108 12,158 
Restricted cash and short-term investments952 990 
Accounts receivable, net1,537 1,505 
Aircraft fuel, spare parts and supplies, net2,002 1,795 
Prepaid expenses and other787 615 
Total current assets17,762 17,336 
Operating property and equipment
Flight equipment38,359 37,856 
Ground property and equipment9,418 9,335 
Equipment purchase deposits545 517 
Total property and equipment, at cost48,322 47,708 
Less accumulated depreciation and amortization(18,464)(18,171)
Total property and equipment, net29,858 29,537 
Operating lease right-of-use assets7,745 7,850 
Other assets
Goodwill4,091 4,091 
Intangibles, net of accumulated amortization of $795 and $786, respectively
1,970 1,988 
Deferred tax asset4,000 3,556 
Other assets1,975 2,109 
Total other assets12,036 11,744 
Total assets$67,401 $66,467 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Current maturities of long-term debt and finance leases$2,382 $2,489 
Accounts payable2,546 1,772 
Accrued salaries and wages1,369 1,489 
Air traffic liability8,346 6,087 
Loyalty program liability3,110 2,896 
Operating lease liabilities1,490 1,507 
Other accrued liabilities2,623 2,766 
Total current liabilities21,866 19,006 
Noncurrent liabilities
Long-term debt and finance leases, net of current maturities35,461 35,571 
Pension and postretirement benefits4,913 5,053 
Loyalty program liability6,194 6,239 
Operating lease liabilities6,529 6,610 
Other liabilities1,378 1,328 
Total noncurrent liabilities54,475 54,801 
Commitments and contingencies
Stockholders’ equity (deficit)
Common stock, $0.01 par value; 1,750,000,000 shares authorized, 649,497,768 shares issued and outstanding at March 31, 2022; 647,727,595 shares issued and outstanding at December 31, 2021
6 6 
Additional paid-in capital7,243 7,234 
Accumulated other comprehensive loss(5,916)(5,942)
Retained deficit(10,273)(8,638)
Total stockholders’ deficit(8,940)(7,340)
Total liabilities and stockholders’ equity (deficit)$67,401 $66,467 
See accompanying notes to condensed consolidated financial statements.
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AMERICAN AIRLINES GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)(Unaudited)
 Three Months Ended March 31,
 20222021
Net cash provided by operating activities$1,185 $174 
Cash flows from investing activities:
Capital expenditures, net of aircraft purchase deposit returns(807)19 
Airport construction projects, net of reimbursements(62)(42)
Proceeds from sale of property and equipment8 108 
Proceeds from sale-leaseback transactions 99 
Sales of short-term investments7,089 1,415 
Purchases of short-term investments(7,035)(8,557)
Decrease (increase) in restricted short-term investments36 (194)
Net cash used in investing activities(771)(7,152)
Cash flows from financing activities:
Payments on long-term debt and finance leases(661)(4,054)
Proceeds from issuance of long-term debt367 10,861 
Shares withheld for taxes pursuant to employee stock plans(14)(13)
Proceeds from issuance of equity 316 
Deferred financing costs (162)
Other financing activities(2)65 
Net cash provided by (used in) financing activities(310)7,013 
Net increase in cash and restricted cash104 35 
Cash and restricted cash at beginning of period408 399 
Cash and restricted cash at end of period (1)
$512 $434 
Non-cash transactions:
Right-of-use (ROU) assets acquired through operating leases$313 $359 
Property and equipment acquired through finance leases58 22 
Supplemental information:
Interest paid, net566 479 
(1)The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
Cash$376 $277 
Restricted cash included in restricted cash and short-term investments136 157 
Total cash and restricted cash$512 $434 
See accompanying notes to condensed consolidated financial statements.
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AMERICAN AIRLINES GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
(In millions, except share amounts)(Unaudited)
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Deficit
Total
Balance at December 31, 2021$6 $7,234 $(5,942)$(8,638)$(7,340)
Net loss— — — (1,635)(1,635)
Other comprehensive income, net— — 26 — 26 
Issuance of 1,770,173 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
— (14)— — (14)
Share-based compensation expense
— 23 — — 23 
Balance at March 31, 2022$6 $7,243 $(5,916)$(10,273)$(8,940)

Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Deficit
Total
Balance at December 31, 2020$6 $6,894 $(7,103)$(6,664)$(6,867)
Net loss— — — (1,250)(1,250)
Other comprehensive income, net— — 67 — 67 
Impact of adoption of Accounting Standards Update 2020-06 related to convertible instruments — (320)— 19 (301)
Issuance of 18,194,573 shares of AAG common stock pursuant to an at-the-market offering, net of offering costs
— 316 — — 316 
Issuance of PSP2 Warrants— 65 — — 65 
Issuance of 1,700,380 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
— (13)— — (13)
Share-based compensation expense
— 38 — — 38 
Balance at March 31, 2021$6 $6,980 $(7,036)$(7,895)$(7,945)
See accompanying notes to condensed consolidated financial statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
1. Basis of Presentation
(a) Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of American Airlines Group Inc. (we, us, our and similar terms, or AAG) should be read in conjunction with the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021. The accompanying unaudited condensed consolidated financial statements include the accounts of AAG and its wholly-owned subsidiaries. AAG’s principal subsidiary is American Airlines, Inc. (American). All significant intercompany transactions have been eliminated.
Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited condensed consolidated financial statements for the interim periods presented. The preparation of financial statements in accordance with accounting principles generally accepted in the United States (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. The most significant areas of judgment relate to passenger revenue recognition, the loyalty program, deferred tax assets, as well as pension and retiree medical and other postretirement benefits.
(b) Impact of Coronavirus (COVID-19)
COVID-19 has been declared a global health pandemic by the World Health Organization. COVID-19 has surfaced in nearly all regions of the world, which has driven the implementation of significant, government-imposed measures to prevent or reduce its spread. Ongoing global vaccination efforts and the corresponding lifting of government restrictions in and between many markets resulted in a significant recovery in demand for air travel, with $8.9 billion of total revenue in the first quarter of 2022, a recovery of 84% as compared to the first quarter of 2019. The continued impact of the COVID-19 pandemic, including any increases in infection rates, new variants and renewed governmental action to slow the spread of COVID-19 cannot be estimated.
Our capacity (as measured by available seat miles) continues to be reduced compared to pre-COVID-19 pandemic levels, with total capacity in the first quarter of 2022 down 10.7% as compared to the first quarter of 2019. Domestic capacity in the first quarter of 2022 was down 7.5% while international capacity was down 17.4% as compared to the first quarter of 2019.
While demand for domestic and short-haul international markets has largely recovered to 2019 levels, uncertainty remains regarding the timing of a full recovery. We will continue to match our forward capacity with observed booking trends for future travel and make further adjustments to our capacity as needed.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
2. Special Items, Net
Special items, net in the condensed consolidated statements of operations consisted of the following (in millions):
 Three Months Ended March 31,
 20222021
Fleet impairment (1)
$149 $ 
PSP Financial Assistance (2)
 (1,882)
Severance expenses (3)
 168 
Mark-to-market adjustments on bankruptcy obligations, net 6 
Other operating special items, net8  
Mainline operating special items, net157 (1,708)
PSP Financial Assistance (2)
 (244)
Fleet impairment (1)
 27 
Severance expenses (3)
 2 
Regional operating special items, net (215)
Operating special items, net157 (1,923)
Debt refinancing, extinguishment and other, net2 26 
Mark-to-market adjustments on equity and other investments, net (4)
1 (49)
Nonoperating special items, net3 (23)
(1)Fleet impairment in the first quarter of 2022 included a non-cash impairment charge to write down the carrying value of our retired Airbus A330 fleet to the estimated fair value due to current market conditions for certain used aircraft. We retired our Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic and these aircraft are classified as long-lived nonoperating assets within other assets on the condensed consolidated balance sheets.
Fleet impairment in the first quarter of 2021 included a non-cash impairment charge to write down regional aircraft resulting from the retirement of the remaining Embraer 140 fleet earlier than planned.
(2)The PSP Financial Assistance represents recognition of a portion of the financial assistance received from the U.S. Department of Treasury (Treasury) pursuant to the payroll support program established under the PSP Extension Law (PSP2).
(3)Severance expenses include salary and medical costs primarily associated with certain team members who opted into voluntary early retirement programs offered as a result of reductions to our operation due to the COVID-19 pandemic. Cash payments primarily associated with our voluntary early retirement programs were approximately $90 million and $170 million for the first quarter of 2022 and 2021, respectively.
(4)Mark-to-market adjustments on equity and other investments, net principally included net unrealized gains and losses associated with our equity investment in China Southern Airlines Company Limited (China Southern Airlines) and in the first quarter of 2022, also included our equity investment in Vertical Aerospace Ltd. (Vertical).
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
3. Loss Per Common Share
The following table sets forth the computation of basic and diluted loss per common share (EPS) (in millions, except share and per share amounts):
 Three Months Ended March 31,
 20222021
Basic and diluted EPS:
Net loss$(1,635)$(1,250)
Weighted average common shares outstanding (in thousands)649,503 634,609 
Basic and diluted EPS$(2.52)$(1.97)
Securities that could potentially dilute EPS in the future, and which were excluded from the calculation of diluted EPS because inclusion of such shares would be antidilutive, are as follows (in thousands):
Three Months Ended March 31,
20222021
6.50% convertible senior notes61,728 61,728 
Restricted stock unit awards3,933 3,255 
PSP1 Warrants (1)
3,724 4,957 
Treasury Loan Warrants (2)
1,161 1,545 
PSP2 Warrants (3)
520 520 
(1)Pursuant to the payroll support program established under the CARES Act (PSP1), AAG issued to Treasury warrants (PSP1 Warrants) to purchase up to an aggregate of approximately 14.1 million shares of AAG common stock for an exercise price of $12.51 per share, subject to adjustment.
(2)Pursuant to the Loan and Guarantee Agreement with Treasury (the Treasury Loan Agreement), AAG issued to Treasury warrants (Treasury Loan Warrants) to purchase up to an aggregate of approximately 4.4 million shares of AAG common stock for an exercise price of $12.51 per share, subject to adjustment.
(3)Pursuant to PSP2, AAG issued to Treasury warrants (PSP2 Warrants) to purchase up to an aggregate of approximately 6.6 million shares of AAG common stock for an exercise price of $15.66 per share, subject to adjustment.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
4. Revenue Recognition
Revenue
The following are the significant categories comprising our reported operating revenues (in millions):
 Three Months Ended March 31,
 20222021
Passenger revenue:
Passenger travel$7,213 $2,893 
Loyalty revenue - travel (1)
605 286 
Total passenger revenue7,818 3,179 
Cargo364 315 
Other:
Loyalty revenue - marketing services (2)
596 457 
Other revenue121 57 
Total other revenue717 514 
Total operating revenues$8,899 $4,008 
(1)Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions, which were earned from travel or co-branded credit card and other partners.
(2)During the three months ended March 31, 2022 and 2021, cash payments from co-branded credit card and other partners were $1.4 billion and $1.0 billion, respectively.
The following is our total passenger revenue by geographic region (in millions):
 Three Months Ended March 31,
 20222021
Domestic$6,060 $2,655 
Latin America1,227 482 
Atlantic
466 22 
Pacific65 20 
Total passenger revenue$7,818 $3,179 
We attribute passenger revenue by geographic region based upon the origin and destination of each flight segment.
Contract Balances
Our significant contract liabilities are comprised of (1) outstanding loyalty program mileage credits that may be redeemed for future travel and other non-air travel awards, reported as loyalty program liability on the condensed consolidated balance sheets and (2) ticket sales for transportation that has not yet been provided, reported as air traffic liability on the condensed consolidated balance sheets.
March 31, 2022December 31, 2021
(In millions)
Loyalty program liability$9,304 $9,135 
Air traffic liability8,346 6,087 
Total$17,650 $15,222 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
The balance of the loyalty program liability fluctuates based on seasonal patterns, which impact the volume of mileage credits issued through travel or sold to co-branded credit card and other partners (deferral of revenue) and mileage credits redeemed (recognition of revenue). Changes in loyalty program liability are as follows (in millions):
Balance at December 31, 2021$9,135 
Deferral of revenue791 
Recognition of revenue (1)
(622)
Balance at March 31, 2022 (2)
$9,304 
(1)Principally relates to revenue recognized from the redemption of mileage credits for both air and non-air travel awards. Mileage credits are combined in one homogenous pool and are not separately identifiable. As such, the revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period, as well as miles that were issued during the period.
(2)Mileage credits can be redeemed at any time and generally do not expire as long as that AAdvantage member has any type of qualifying activity at least every 24 months or if the AAdvantage member is the primary holder of a co-brand credit card. As of March 31, 2022, our current loyalty program liability was $3.1 billion and represents our current estimate of revenue expected to be recognized in the next 12 months based on historical as well as projected trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter. Given the inherent uncertainty of the current operating environment due to the COVID-19 pandemic, we will continue to monitor redemption patterns and may adjust our estimates in the future.
The air traffic liability principally represents tickets sold for future travel on American and partner airlines, as well as estimated future refunds and exchanges of tickets sold for past travel. The balance in our air traffic liability also fluctuates with seasonal travel patterns. The contract duration of passenger tickets is generally one year. Accordingly, any revenue associated with tickets sold for future travel will be recognized within 12 months. For the three months ended March 31, 2022, $2.6 billion of revenue was recognized in passenger revenue that was included in our air traffic liability at December 31, 2021. In response to the COVID-19 pandemic, we extended the contract duration for certain tickets to September 30, 2022, principally those tickets which were issued in 2020 and 2021. Additionally, tickets to certain international destinations have extended contract duration to December 31, 2022. We also have eliminated change fees for most domestic and international tickets providing more flexibility for customers to change travel plans. Given these changes and the uncertainty surrounding the future demand for air travel, our estimates of revenue that will be recognized from the air traffic liability for future flown or unused tickets as well as our estimates of refunds may be subject to variability and differ from historical experience.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
5. Debt
Long-term debt included in the condensed consolidated balance sheets consisted of (in millions):
March 31, 2022December 31, 2021
Secured
2013 Term Loan Facility, variable interest rate of 2.20%, installments through 2025
$1,770 $1,770 
2014 Term Loan Facility, variable interest rate of 2.20%, installments through 2027
1,196 1,208 
December 2016 Term Loan Facility, variable interest rate of 2.84%, installments through 2023
1,188 1,188 
11.75% senior secured notes, interest only payments until due in July 2025
2,500 2,500 
10.75% senior secured IP notes, interest only payments until due in February 2026
1,000 1,000 
10.75% senior secured LGA/DCA notes, interest only payments until due in February 2026
200 200 
5.50% senior secured notes, installments beginning in July 2023 until due in April 2026 (1)
3,500 3,500 
5.75% senior secured notes, installments beginning in July 2026 until due in April 2029 (1)
3,000 3,000 
AAdvantage Term Loan Facility, variable interest rate of 5.50%, installments beginning in July 2023 through April 2028 (1)
3,500 3,500 
Enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 2.88% to 7.13%, averaging 3.81%, maturing from 2022 to 2034
9,564 9,357 
Equipment loans and other notes payable, fixed and variable interest rates ranging from 1.42% to 4.64%, averaging 2.12%, maturing from 2022 to 2032
3,306 3,433 
Special facility revenue bonds, fixed interest rates ranging from 2.25% to 5.38%, maturing from 2026 to 2036
1,129 1,129 
31,853 31,785 
Unsecured
PSP1 Promissory Note, interest only payments until due in April 20301,765 1,765 
PSP2 Promissory Note, interest only payments until due in January 20311,035 1,035 
PSP3 Promissory Note, interest only payments until due in April 2031946 946 
6.50% convertible senior notes, interest only payments until due in July 2025
1,000 1,000 
5.000% senior notes, interest only payments until due in June 2022
433 750 
3.75% senior notes, interest only payments until due in March 2025
500 500 
5,679 5,996 
Total long-term debt37,532 37,781 
Less: Total unamortized debt discount, premium and issuance costs439 458 
Less: Current maturities2,208 2,315 
Long-term debt, net of current maturities$34,885 $35,008 
(1)Collectively referred to as the AAdvantage Financing.
As of March 31, 2022, the maximum availability under our revolving credit and other facilities is as follows (in millions):
2013 Revolving Facility$750 
2014 Revolving Facility1,643 
April 2016 Revolving Facility450 
Short-term Revolving and Other Facilities220 
Total$3,063 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
American has an undrawn $150 million short-term revolving credit facility, which was set to expire at the beginning of January 2022 but which has been extended through the beginning of January 2023. American also currently has approximately $70 million of available borrowing base under a cargo receivables facility that was entered into in December 2020 and is set to expire in December 2022. The December 2016 Credit Facilities provide for a revolving credit facility that may be established thereunder in the future.
Secured financings, including revolving credit and other facilities, are collateralized by assets, consisting primarily of aircraft, engines, simulators, aircraft spare parts, airport gate leasehold rights, route authorities, airport slots, certain receivables, certain intellectual property and certain loyalty program assets.
6.50% Convertible Senior Notes
At March 31, 2022, the if-converted value of the 6.50% convertible senior notes due 2025 (the Convertible Notes) exceeded the principal amount by $127 million. The last reported sale price per share of our common stock (as defined in the indenture governing our Convertible Notes, the Convertible Notes Indenture) did not exceed 130% of the conversion price of the Convertible Notes for at least 20 of the 30 consecutive trading days ending on March 31, 2022. Accordingly, pursuant to the terms of the Convertible Notes Indenture, the holders of the Convertible Notes cannot convert at their option at any time during the quarter ending June 30, 2022. Each $1,000 principal amount of Convertible Notes is convertible at a rate of 61.7284 shares of our common stock, subject to adjustment as provided in the Convertible Notes Indenture. We may settle conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.
2022 Financing Activities
2021-1 Aircraft EETCs
In November 2021, American created two pass-through trusts which issued approximately $960 million aggregate face amount of Series 2021-1 Class A and Class B EETCs (the 2021-1 Aircraft EETCs) in connection with the financing of 26 aircraft previously delivered or to be delivered to American through September 2022 (the 2021-1 Aircraft). In 2021, approximately $94 million of the proceeds had been used to purchase equipment notes issued by American in connection with the financing of five aircraft under the 2021-1 Aircraft EETCs, all of which was used to repay existing indebtedness. During the first quarter of 2022, approximately $367 million of proceeds had been used to purchase equipment notes issued by American in connection with the financing of nine aircraft under the 2021-1 Aircraft EETCs. Interest and principal payments on equipment notes issued in connection with the 2021-1 Aircraft EETCs are payable semi-annually in January and July each year, with interest payments scheduled to begin in July 2022 and with principal payments scheduled to begin in January 2023. The remaining proceeds of approximately $499 million as of March 31, 2022 were being held in escrow with a depositary for the benefit of the holders of the 2021-1 Aircraft EETCs until such time as American issues additional equipment notes with respect to the remaining 2021-1 Aircraft to the pass-through trusts, which will purchase such additional equipment notes with the escrowed funds. These escrowed funds are not guaranteed by American and are not reported as debt on its condensed consolidated balance sheets because the proceeds held by the depositary for the benefit of the holders of the 2021-1 Aircraft EETCs are not American’s assets.
Certain information regarding the 2021-1 Aircraft EETC equipment notes, as of March 31, 2022, is set forth in the table below.
2021-1 Aircraft EETCs
Series A
Series B
Aggregate principal issued
$758 million$202 million
Remaining escrowed proceeds
$394 million$105 million
Fixed interest rate per annum
2.875%3.95%
Maturity date
July 2034July 2030
Other Financing Activities
During the first quarter of 2022, we repurchased $317 million of unsecured notes on the open market.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF AMERICAN AIRLINES GROUP INC.
(Unaudited)
6. Income Taxes
At December 31, 2021, we had approximately $17.2 billion of gross federal net operating losses (NOLs) and $3.0 billion of other carryforwards available to reduce future federal taxable income, of which $6.9 billion will expire beginning in 2024 if unused and $13.3 billion can be carried forward indefinitely. We also had approximately $6.0 billion of NOL carryforwards to reduce future state taxable income at December 31, 2021, which will expire in taxable years 2021 through 2041 if unused.
Our ability to use our NOLs and other carryforwards depends on the amount of taxable income generated in future periods. We provide a valuation allowance for our deferred tax assets, which include our NOLs, when it is more likely than not that some portion, or all of our deferred tax assets, will not be realized. We consider all available positive and negative evidence and make certain assumptions in evaluating the realizability of our deferred tax assets. Many factors are considered that impact our assessment of future profitability, including conditions which are beyond our control, such as the health of the economy, the availability and price volatility of aircraft fuel and travel demand. We presently have a $34 million valuation allowance on certain net deferred tax assets related to state NOL carryforwards. There can be no assurance that an additional valuation allowance on our net deferred tax assets will not be required. Such valuation allowance could be material.
During the three months ended March 31, 2022 and 2021, we recorded an income tax benefit of $451 million and $323 million, respectively.
7. Fair Value Measurements and Other Investments
Assets Measured at Fair Value on a Recurring Basis
We utilize the market approach to measure the fair value of our financial assets. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets. Our short-term investments, restricted cash and restricted short-term investments classified as Level 2 primarily utilize broker quotes in a non-active market for valuation of these securities. No changes in valuation techniques or inputs occurred during the three months ended March 31, 2022.
Assets measured at fair value on a recurring basis are summarized below (in millions):
 Fair Value Measurements as of March 31, 2022
 TotalLevel 1Level 2Level 3
Short-term investments (1), (2):
Money market funds$472 $472 $ $ 
Corporate obligations7,727  7,727  
Bank notes/certificates of deposit/time deposits2,569  2,569  
Repurchase agreements1,340  1,340  
12,108 472 11,636  
Restricted cash and short-term investments (1), (3)
952 619 333  
Long-term investments (4)
236 236   
Total$13,296 $1,327 $11,969 $ 
(1)All short-term investments are classified as available-for-sale and stated at fair value. Unrealized gains and losses are recorded in accumulated other comprehensive loss at each reporting period. There were no credit losses.
(2)Our short-term investments mature in one year or less.
(3)Restricted cash and short-term investments primarily inclu