American Airlines Group Inc. Adopts Tax Benefit Preservation Plan for Net Operating Losses

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[{"type":"text","content":"FORT WORTH, Texas, Dec. 22, 2021 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (the “Company” or “American Airlines”) (NASDAQ: AAL) announced today that its Board of Directors has adopted a tax benefit preservation plan to help preserve the value of its net operating losses and other tax attributes. The Company estimates that its cumulative U.S. federal net operating loss carryforwards exceed $16.5 billion, which can be utilized in certain circumstances to reduce future U.S. corporate income tax liabilities. The tax benefit preservation plan was adopted to protect an important asset of American Airlines that may have meaningful value to all American Airlines stockholders. These tax benefits can include the offset of tax liability arising from future taxable earnings or gains. The value of these tax benefits would be substantially limited if American Airlines were to experience an “ownership change” as defined under Section 382 of the Internal Revenue Code. In general, an ownership change would occur if stockholders that own (or are deemed to own) at least 5 percent or more of the outstanding American Airlines common stock increased their cumulative ownership in American Airlines by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. The tax benefit preservation plan reduces the likelihood that changes in the American Airlines investor base would limit future use of its tax benefits, which would significantly impair the value of the benefits to all stockholders. American Airlines believes that no ownership change as defined in Section 382 has occurred as of the date of this press release. The Board of Directors adopted the tax benefit preservation plan after considering, among other matters, the estimated value of the tax benefits, the potential for diminution upon an ownership change and the risk of an ownership change occurring. As part of the plan, the American Airlines Board of Directors declared a dividend of one preferred stock purchase right, which are referred to as “rights,” for each outstanding share of American Airlines common stock. The dividend will be payable to holders of record as of the close of business on January 5, 2022. Any shares of American Airlines common stock issued after the record date will be issued together with the rights. The rights will be e...

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