Day 120 Equity Distribution Communications

Heads Up to Legacy American

To: U.S.-Based Legacy American Managers

Subject: Certain U.S.-Based Legacy American Employees to Receive Day 120 Equity Distribution

Summary:

As previously communicated, the majority of U.S.-based legacy American employees are eligible to receive 23.6 percent of the shares of common stock in the new company (AAL) distributed to holders of allowed unsecured claims. As of March 9, American has distributed approximately 27.5 million AAL shares to eligible U.S.-based legacy American employees.

With respect to day 120 (Day 120 distribution), there will be a fifth distribution of approximately 7.2 million net shares to certain U.S.-based legacy American employees. Eligible employees will receive and be able to sell or transfer shares beginning April 10. As a reminder, these shares will be available to eligible employees in their Computershare accounts, which is available by first logging into their retireonline.com account with J.P. Morgan.

In preparation for the distribution, the “Employee Grants and Awards” section of Computershare accounts will be unavailable beginning April 8, though existing shares under the “Employee Plan Stock” section may continue to be sold and transferred until April 9 at 3 p.m. CDT. After that time, both sections and the call center’s ability to transact via phone will be unavailable. Both sections will be available again on April 10 at 8:30 a.m. CDT.

Key Points

• In total, eligible U.S.-based legacy American employees will receive new American common stock equal to 23.6 percent of the shares distributed to holders of allowed unsecured claims.

• We expect the fifth distribution to eligible employees to total approximately 7.2 million net shares of new common stock, roughly 25 percent of the Day 1 distribution.

• The approximately 7.2 million net shares of common stock is an estimate as we will not know the final total number of shares until after the shares are distributed to eligible employees.

• As with all previous distributions, each person’s individual allocation of shares will be based on the eligibility requirements and allocation methodology established for their employee group. For union-represented groups, the unions determined the eligibility criteria and allocation method and calculated each employee’s allocation. For non-union employees, the company established the eligibility requirements and allocation methodology.

• Do keep in mind that these shares are considered wages for purposes of federal and state income taxes and FICA, and are subject to required withholding of taxes. With that in mind, American will withhold enough shares to cover necessary taxes and will distribute the remainder to eligible employees. It’s important that eligible employees complete their W-9, if they have not already done so, prior to selling their shares. For more information on W-9 certification, please visit the W-9 section of the Equity Hub.

• With tax season closing soon, our employees may be wondering how the equity distribution fits in. Any equity distributed to an employee in 2013 was included as wages in that employee’s 2013 Form W-2 issued this year, while 2014 distributions will be reported on the 2014 W-2. Also, any employee-initiated sales that occurred in 2013 will be reported on a 1099-B form, and will be mailed to you by your broker. If you made your sale with Computershare, you should have received a 1099-B form from them by now. If you transferred your shares to another broker and subsequently made a sale, you will receive the form from that broker. For more information, visit the Taxes and Fees section of the Equity Hub.

• In addition to the Day 120 distribution, there could be small distributions of new common stock post-Day 120 depending upon the resolution of the Disputed Claims Reserve. Should additional small distributions occur, we will share information in advance.

• Visit the Equity Hub on Jetnet to ensure you and your employees have the information and tools you need related to these shares.

Subject Matter Experts: The Equity Team, equity.hub@aa.com

Email to all U.S.-based American employees

Subject: Certain U.S.-Based Legacy American Employees to Receive Day 120 Equity Distribution

Body:

We’ve shared before that the majority of U.S.-based legacy American employees are eligible to receive 23.6 percent of the shares of common stock in the new company (AAL) distributed to holders of allowed unsecured claims. As of March 9, American has distributed approximately 27.5 million AAL shares to eligible U.S.-based legacy American employees.  

With respect to day 120 (Day 120 distribution), there will be a fifth distribution of approximately 7.2 million net shares to certain U.S.-based legacy American employees, representing roughly 25 percent of the Day 1 distribution. Eligible employees will receive and be able to sell or transfer shares beginning April 10. As a reminder, these shares will be available to eligible employees in their Computershare accounts, which is available by first logging into their retireonline.com account with J.P. Morgan.

In preparation for the distribution, the “Employee Grants and Awards” section of Computershare accounts will be unavailable beginning April 8, though existing shares under the “Employee Plan Stock” section may continue to be sold and transferred until April 9 at 3 p.m. CDT. After that time, both sections and the call center’s ability to transact via phone will be unavailable. Both sections will be available again on April 10 at 8:30 a.m. CDT.

Do keep in mind that these shares are considered wages for purposes of federal and state income taxes and FICA, and are subject to required withholding of taxes. With that in mind, American will withhold enough shares to cover necessary taxes and will distribute the remainder to eligible employees. It’s important that eligible employees complete a W-9, if you have not already done so, prior to selling shares. For more information on W-9 certification, please visit the W-9 section of the Equity Hub.

With tax season closing soon, you may be wondering how the equity distribution fits in. Any equity distributed to an employee in 2013 was included as wages in that employee’s 2013 Form W-2 issued this year, while 2014 distributions will be reported on the 2014 W-2. Also, any employee-initiated sales that occurred in 2013 will be reported on a 1099-B form, and will be mailed to you by your broker. If you made your sale with Computershare, you should have received a1099-B form from them by now. If you transferred your shares to another broker and subsequently made a sale, you will receive the form from that broker. For more information, visit the Taxes and Fees section of the Equity Hub.

Visit the Equity Hub on Jetnet to ensure you have the information and tools you need related to these shares.

Thanks for all you do,

The Equity Team

Questions & Answers

Legacy American

1. Why are we receiving an equity distribution for Day 120?

As we’ve shared before, eligible employees had the potential to receive a Day 120 distribution depending on how the AAL share price performed (moved up or down) over the entire 120-day period. The Day 120 distribution to the American employee groups is to ensure they receive 23.6 percent of all of the shares distributed to holders of allowed unsecured claims.

2. I thought the Day 120 distribution was going to be comparable to the Day 1 distribution. Why isn’t that the case?

American’s employee groups are entitled to receive 23.6 percent of all shares of common stock distributed to unsecured creditors to satisfy their claims. Since the price of AAL common stock has increased significantly since the close of the merger, it has taken considerably fewer shares of common stock to satisfy allowed claims of unsecured creditors.

As American’s employee groups’ total distribution is based on the amount of shares distributed to unsecured creditors, this has the effect of reducing the total number of shares that are distributed to American’s employee groups. Because American’s employee groups already received a large number of shares on the Effective Date (Day 1 distribution), the number of remaining shares for American’s employee groups for the Day 120 distribution decreased. 

3. Will there be any additional distributions?

There could be small distributions post-Day 120 depending upon the resolution of the Disputed Claims Reserve.

4. What is the timing for resolution of the Disputed Claims Reserve?

Unfortunately, there is no definitive deadline for the resolution of the disputed claims process. However, the earliest the first distribution can take place is Day 180.

5. When will we receive and be able to sell or transfer our Day 120 shares?

In preparation for the distribution, the “Employee Grants and Awards” section of Computershare accounts will be unavailable beginning April 8, though existing shares under the “Employee Plan Stock” section may continue to be sold and transferred until April 9 at 3 p.m. CDT. After that time, both sections and the call center’s ability to transact via phone will be unavailable. Both sections will be available again on April 10 at 8:30 a.m. CDT.

6. In connection with distributions in respect of prior Mandatory Conversion Dates, we were able to view, but not transact on, our shares as of the Mandatory Conversion Date, why is this distribution different?

The actual processing of distributions in respect of the 120-day Mandatory Conversion Date is the same as that for prior distributions with respect to the 30-day, 60-day and 90-day Mandatory Conversions Dates. 

Under the Plan of Reorganization, all distributions relating to a Mandatory Conversion Date are required to occur on, or as soon as administratively practical after, such date. Given the complex nature of each distribution, the administrative processing begins on the Mandatory Conversion Date, but the shares are not actually distributed and available to each recipient until two days later.

The only difference in this case is that the shares to be distributed will not be seen in advance of the date the shares are actually distributed and available (April 10). This is similar to the initial distribution on the Effective Date. As on the Effective Date, distributions with respect to the 120-day Mandatory Conversion Date are also being made to holders of Single-Dip General Unsecured Claims. As such, there is greater coordination required and significantly more shares to be distributed with respect to the 120-day Mandatory Conversion Date. All distributions with respect to Union Claims, Single-Dip General Unsecured Claims and AMR Equity Interests are being made on April 10.

7. How can I access my shares?

As was the case with all previous distributions, your shares will be distributed into your Computershare account, which is accessible by first logging into your retireonline.com account with J.P. Morgan.

8. How will the Day 120 distribution be taxed?

These shares are considered wages for purposes of federal and state income taxes and FICA in the year in which they are distributed to you, and are subject to required withholding of taxes. With that in mind, American will withhold enough shares to cover necessary taxes and distribute the remainder to eligible employees.

With tax season closing soon, you may be wondering how the equity distribution fits in. Any equity distributed to an employee in 2013 was included as wages in that employee’s 2013 Form W-2 issued this year, while 2014 distributions will be reported on the 2014 W-2. Also, any employee-initiated sales that occurred in 2013 will be reported on a 1099-B form, and will be mailed to you by your broker. If you made your sale with Computershare, you should have received a 1099-B form from them by now. If you transferred your shares to another broker and subsequently made a sale, you will receive the form from that broker. For more information, visit the Taxes and Fees section of the Equity Hub.

9. Why was FICA withheld from my Day 120 distribution if I already reached the FICA maximum for 2014 before or with the Day 120 distribution?

You may have experienced unnecessary FICA withholding as a result of the timing of the Day 120 distribution. If you already reached the FICA max prior to or as part of the Day 120 distribution, additional FICA withholding will be refunded on future payroll checks as part of the true-up process that occurs in Payroll. We expect these corrections to be made by April 30 as part of the next payroll cycle.

10. When will I be able to see the value of my shares and tax withholding information in ePays?

You will be able to view this information by end of day on Sunday, April 13.

11. Are legacy US Airways employees eligible for the equity distribution now that the merger has closed?

No. The equity distribution applies only to eligible U.S.-based legacy American employees.