Issuer Free Writing Prospectus
Filed pursuant to Rule 433(d)
Registration No. 333-194685-01
September 19, 2016
American Airlines, Inc.
Series 2016-3 EETC Investor Presentation
September 2016
Cautionary Statement Regarding Forward-Looking Statements and Information
This document includes 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 future financial and operating results, the Company’s plans, objectives, estimates, expectations and intentions, and other statements that are not historical facts. These forward-looking statements are based on the Company’s 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 the following: significant operating losses in the future; downturns in economic conditions that adversely affect the Company’s business; the impact of continued periods of high volatility in fuel costs, increased fuel prices and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of low cost carriers, airline alliances and industry consolidation; the challenges and costs of integrating operations and realizing anticipated synergies and other benefits of the merger transaction with US Airways Group, Inc.; costs of ongoing data security compliance requirements and the impact of any significant data security breach; the Company’s substantial indebtedness and other obligations and the effect they could have on the Company’s business and liquidity; an inability to obtain sufficient financing or other capital to operate successfully and in accordance with the Company’s current business plan; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the effect the Company’s high level of fixed obligations may have on its ability to fund general corporate requirements, obtain additional financing and respond to competitive developments and adverse economic and industry conditions; the Company’s significant pension and other postretirement benefit funding obligations; the impact of any failure to comply with the covenants contained in financing arrangements; provisions in credit card processing and other commercial agreements that may materially reduce the Company’s liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; any inability to maintain labor costs at competitive levels; interruptions or disruptions in service at one or more of the Company’s hub airports; any inability to obtain and maintain adequate facilities, infrastructure and slots to operate the Company’s flight schedule and expand or change its route network; the Company’s reliance on third-party regional operators or third-party service providers that have the ability to affect the Company’s revenue and the public’s perception about its services; any inability to effectively manage the costs, rights and functionality of third-party distribution channels on which the Company relies; extensive government regulation, which may result in increases in the Company’s costs, disruptions to the Company’s operations, limits on the Company’s operating flexibility, reductions in the demand for air travel, and competitive disadvantages; the impact of the heavy taxation on the airline industry; changes to the Company’s business model that may not successfully increase revenues and may cause operational difficulties or decreased demand; the loss of key personnel or inability to attract and retain additional qualified personnel; the impact of conflicts overseas, terrorist attacks and ongoing security concerns; the global scope of the Company’s business and any associated economic and political instability or adverse effects of events, circumstances or government actions beyond its control, including the impact of foreign currency exchange rate fluctuations and limitations on the repatriation of cash held in foreign countries; the impact of environmental and noise regulation; the impact associated with climate change, including increased regulation to reduce emissions of greenhouse gases; the Company’s reliance on technology and automated systems and the impact of any failure of these technologies or systems; challenges in integrating the Company’s computer, communications and other technology systems; losses and adverse publicity stemming from any accident involving any of the Company’s aircraft or the aircraft of its regional or codeshare operators; delays in scheduled aircraft deliveries, or other loss of anticipated fleet capacity, and failure of new aircraft to perform as expected; the Company’s dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the impact of changing economic and other conditions beyond the Company’s control, including global events that affect travel behavior such as an outbreak of a contagious disease, and volatility and fluctuations in the Company’s results of operations due to seasonality; the effect of a higher than normal number of pilot retirements, more stringent duty time regulations, increased flight hour requirements for commercial airline pilots and other factors that have caused a shortage of pilots; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the effect on our financial position and liquidity of being party to or involved in litigation; an inability to use net operating losses carried over from prior taxable years (NOL Carryforwards); any impairment in the amount of the Company’s goodwill and an inability to realize the full value of the Company’s and American Airlines’ respective intangible or long-lived assets and any material impairment charges that would be recorded as a result; price volatility of the Company’s common stock; the effects of the Company’s capital deployment program and the limitation, suspension or discontinuation of the Company’s share repurchase program or dividend payments thereunder; delay or prevention of stockholders’ ability to change the composition of the Company’s board of directors and the effect this may have on takeover attempts that some of the Company’s stockholders might consider beneficial; the effect of provisions of the Company’s Restated Certificate of Incorporation and Amended and Restated Bylaws that limit ownership and voting of its equity interests, including its common stock; the effect of limitations in the Company’s Restated Certificate of Incorporation on acquisitions and dispositions of its common stock designed to protect its NOL Carryforwards and certain other tax attributes, which may limit the liquidity of its common stock; the limitations of our historical consolidated financial information, which is not directly comparable to our financial information for prior or future periods; and other economic, business, competitive, and/or regulatory factors affecting the Company’s business, including those set forth in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (especially in Part II, Item 1A, Risk Factors and Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations) and other risks and uncertainties listed from time to time in the Company’s other filings with the SEC. There may be other factors of which the Company is 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. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. The Company does 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 forward-looking statements other than as required by law.
2
This Investor Presentation highlights basic information about the issuer and this offering. Because it is a summary, it does not contain all of the information that you should consider before investing.
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Morgan Stanley toll-free at 1-866-718-1649 or Goldman, Sachs & Co. toll-free at 1-866-471-2526.
3
Transaction Overview
• American Airlines, Inc. (“American”) intends to issue $813,797,000 in aggregate face amount of Pass Through Certificates, Series 2016-3 (“American 2016-3”) in two classes: Class AA Certificates and Class A Certificates, collectively, the “Certificates”
– Class AA Certificates: $557,654,000
– Class A Certificates: $256,143,000
• The Equipment Notes underlying the Certificates will have the benefit of a security interest in 25 aircraft that were delivered new or are scheduled to be delivered to American between March 2016 and January 2017:
– 5x Airbus A321-200S aircraft
– 8x Boeing 737-800 aircraft
– 4x Boeing 787-9 aircraft
– 8x Embraer ERJ 175LR aircraft
• The Certificates offered in the American 2016-3 transaction will consist of two credit-ranked tranches of debt:
– Class AA senior tranche amortizing over 12.0 years, with a 38.7% initial/max1 Loan-to-Value ratio (“LTV”)
– Class A subordinated tranche amortizing over 12.0 years, with a 56.4% initial/max1 LTV
– American will retain the option to issue additional subordinated classes of Certificates, including Class B Certificates, at any time
• The transaction’s legal structure will be largely consistent with American’s Series 2016-2 EETC
– Standard cross-collateralization, cross-default and buy-out rights
– Two tranches of cross-subordinated and cross-defaulted debt
– 18-month Liquidity Facility on the Class AA and Class A Certificates
– Waterfall with preferred junior interest
• Depositary: Citibank, N.A.
• Liquidity Facility Provider: KfW IPEX-Bank GmbH
• Joint Structuring Agents and Lead Bookrunners: Morgan Stanley and Goldman Sachs
• Active Bookrunners: Citigroup, Credit Suisse, and Deutsche Bank
1 Calculated as of the first regular distribution date following the date on which all aircraft are expected to have been financed pursuant to the offering, assumed to be April 15, 2017.
4
American 2016-3 EETC Structural Summary
Class AA
Class A
Face Amount $557,654,000 $256,143,000
Expected Ratings (Moody’s / S&P) Aa3 / AA+ A2 / A+
Initial LTV / Maximum LTV1 38.7% 56.4%
Initial Average Life 8.8 years 8.8 years
Regular Distribution Dates April 15 & October 15 April 15 & October 15
Final Expected Distribution Date2 October 15, 2028 October 15, 2028
Final Legal Distribution Date3 April 15, 2030 April 15, 2030
Section 1110 Protection Yes Yes
Liquidity Facility 18 months 18 months
Depositary Proceeds from the issuance will be held in escrow with the Depositary and withdrawn to purchase Equipment Notes as the aircraft are financed
1 Calculated as of the first regular distribution date following the date on which all aircraft are expected to have been financed pursuant to the offering, assumed to be April 15, 2017.
2 Each series of Equipment Notes will mature on the Final Expected Distribution Date for the related class of Certificates.
3 The Final Legal Distribution date for each of the Class AA Certificates and Class A Certificates is the date that is 18 months after the final expected Regular Distribution Date for that class of Certificates, which represents the period corresponding to the applicable Liquidity Facility coverage of three successive semiannual interest payments.
5
Key Structural Elements
Two Classes of Certificates Offered
• Two tranches of amortizing debt, each of which will benefit from a liquidity facility covering three semi-annual interest payments
Waterfall
• Interest on Eligible Pool Balance of the Class A Certificates is paid ahead of principal on the Class AA Certificates
Buyout Rights
• After a Certificate Buyout Event, subordinate Certificate holders have the right to purchase all (but not less than all) of the senior Certificates at par plus accrued and unpaid interest
No buyout right during the 60-day Section 1110 period
• No Equipment Note buyout rights
Cross-Collateralization and Cross-Default
• The equipment notes will be cross-collateralized by all aircraft
• All indentures will include cross-default provisions
Threshold Rating Criteria for Liquidity Provider and Depositary
• Downgrade drawing mechanics consistent with recent EETCs issued by American
Collateral
• Strategically core aircraft types representative of American’s go-forward, long-haul and short-haul fleet strategy
• Two recently delivered aircraft, with the remainder scheduled to be delivered to American between September 2016 and January 2017
• Weighted average aircraft age of 0.0 years1
Additional Certificates
• American has the right to issue additional subordinated classes of Certificates at any time
1 As of October 3, 2016.
6
Comparing American 2016-3 to Precedents
American Airlines 2016-1 EETC1 American Airlines 2016-2 EETC2 American Airlines 2016-3 EETC
Class AA Initial Principal Amount $584,374,000 $567,360,000 $557,654,000
Equipment Note Advance 39.0% 38.0% 38.1%
Initial / Max LTV 39.0%3 / 39.5% 38.6%4 / 38.6% 38.7%5 / 38.7%
Maturity / Average Life (yrs) 12.0 / 9.0 12.1 / 9.1 12.0 / 8.8
Initial / Requested Rating Aa3/AA Aa3/AA Aa3/AA+
Notches above CCR +9/+10 +9/+10 +9/+11
Current Rating6 Aa3/AA+ Aa3/AA+ Aa3/AA+
Class A
Initial Principal Amount $262,218,000 $261,284,000 $256,143,000
Equipment Note Advance 56.5% 55.5% 55.6%
Initial / Max LTV 56.5%3 / 57.2% 56.4%4 / 56.4% 56.4%5 / 56.4%
Maturity / Average Life (yrs) 12.0 / 9.0 12.1 / 9.1 12.0 / 8.8
Initial / Requested Rating A2/A A2/A A2/A+
Notches above CCR +7/+8 +7/+7 +7/+8
Current Rating6 A2/A A2/A A2/A+
Collateral 22x 2014-2015 vintage aircraft: 22x 2015-2016 vintage aircraft: 25x 2016-2017 vintage aircraft:
• 11x A321-200 • 11x A321-200S • 5x A321-200S
• 6x 737-800 • 7x 737-800 • 8x 737-800
• 1x 777-300ER • 2x 777-300ER • 4x 787-9
• 4x 787-8 • 2x 787-8 • 8x ERJ 175LR
Body Type Mix 56.7% N / 43.3% W 62.7% N / 37.3% W 45.3% N / 38.5% W / 16.2% R
New / In-service Mix 100% in-service 68.5% New / 31.5% in-service 93.5% New / 6.5% in-service
Initial Weighted Average Pool Age 0.5 years 0.1 years 0.0 years
1 American Airlines 2016-1 Prospectus Supplement.
2 American Airlines 2016-2 Prospectus Supplement and 2016-2B Offering Memorandum.
3 2016-1 initial LTV measured as of the closing date, as only in-service aircraft were financed.
4 2016-2 initial LTV measured as of December 15, 2016, the first payment date following the expected delivery of all aircraft into the transaction.
5 2016-3 initial LTV measured as of April 15, 2017, the first payment date following the expected delivery of all aircraft into the transaction.
6 As of September 14, 2016.
7
II. The Aircraft
8
Attractive Aircraft Pool
American has obtained maintenance adjusted Base Value Desktop Appraisals from three appraisers (AISI, BK, and mba)
Aggregate aircraft appraised value of approximately $1,464 million
Appraisals indicate collateral cushions as of the first regular distribution date of 61.3% and 43.6% on the Class AA and A Certificates, respectively, which are expected to increase over time
Aircraft Number Aircraft Type Registration Number MSN Body Type Delivery Date Appraised Value1 ($MM)
1 A321-200S N993AN 7188 Narrow November-16 54.91
2 A321-200S N994AN 7418 Narrow December-16 55.00
3 A321-200S N995AN 7301 Narrow December-16 55.00
4 A321-200S N996AN 7310 Narrow December-16 55.00
5 A321-200S N928AM 7515 Narrow January-17 55.09
6 B737-800 N988NN 31237 Narrow March-16 47.14
7 B737-800 N997NN 33250 Narrow September-16 48.48
8 B737-800 N998NN 31250 Narrow September-16 48.48
9 B737-800 N200NV 33341 Narrow October-16 48.61
10 B737-800 N301NW 31253 Narrow November-16 48.65
11 B737-800 N301PA 31255 Narrow November-16 48.65
12 B737-800 N305NX 33342 Narrow December-16 48.69
13 B737-800 N306NY 33343 Narrow December-16 48.69
14 B787-9 N821AN 40640 Wide October-16 140.72
15 B787-9 N822AN 40642 Wide October-16 140.72
16 B787-9 N823AN 40641 Wide December-16 140.95
17 B787-9 N824AN 40643 Wide January-17 141.22
18 ERJ 175LR N240NN 17000594 Regional September-16 29.64
19 ERJ 175LR N241NN 17000595 Regional September-16 29.64
20 ERJ 175LR N242NN 17000601 Regional October-16 29.70
21 ERJ 175LR N243NN 17000604 Regional October-16 29.70
22 ERJ 175LR N244NN 17000609 Regional November-16 29.73
23 ERJ 175LR N245NN 17000614 Regional November-16 29.73
24 ERJ 175LR N246NN 17000618 Regional December-16 29.75
25 ERJ 175LR N247NN 17000619 Regional December-16 29.75
Total 1,463.66
1 Appraised Value equals the lesser of the mean and median (“LMM”) of the base values of the aircraft as appraised by Aircraft Information Services, Inc. (“AISI”) as of August 2016 and by BK Associates, Inc. (“BK”) and Morten Beyer & Agnew, Inc. (“mba”) as of September 2016. For the aircraft in service as of the date of the AISI appraisal, AISI adjusted the value of such aircraft based on its maintenance schedule.
9
2016-3 EETC Collateral Observations
Newer collateral than in American’s 2016-2 transaction
Only around 7% of 2016-3 collateral would be in-service at issuance vs. 32% of the collateral in 2016-2
All other aircraft are new deliveries
Collateral pool is representative of American’s go-forward, long-haul and short-haul fleet strategy
Body Type1
Regional
16%
Narrow
45%
Wide
39%
Aircraft Type1
ERJ 175LR
16%
B787-9
39%
B737-800
26%
A321-200S
19%
New/In-service1
In-service
7%
New
93%
1 Based on the LMM of the base values of the aircraft as appraised by AISI as of August 2016 and by BK and mba as of September 2016. For the aircraft in service as of the date of the AISI appraisal, AISI adjusted the value of such aircraft based on its maintenance schedule.
10
Airbus A321-200
The Airbus A321 has wide market appeal
The Airbus A321 (ceo and neo) is the best-selling aircraft in its class with 3,009 net orders and 1,351 deliveries
Increasingly popular aircraft in the 180- to 230-seat category
Benefits from airlines up-gauging as it has lower seat-mile costs than 150-seaters
Provides more capacity at slot-constrained airports
Large single-aisle aircraft with deep and well established base of 99 operators, outperforming the Boeing competitor (737- 900ER) in terms of fleet size, order growth and total backlog
The Airbus A321-200 aircraft included in the collateral feature sharklets, which are a valuable addition
Most aircraft equipped with sharklets have a higher MTOW and higher spec engine
Sharklets increase payload / range, allowing for US transcontinental capability, and making it a better B757 replacement
Sharklets wingtip upgrade improves fuel burn
Top 5 Operators & Lessors (In Service / On Order)
Operators # of Aircraft
1 American Airlines 220
2 Delta Air Lines 82
3 China Southern Airlines 81
4 Turkish Airlines (THY) 68
5 Lufthansa 64
Total 515
Lessors # of Aircraft
1 AerCap 100
2 GECAS 43
3 BOC Aviation 41
4 CIT Aerospace 39
5 Air Lease 33
Total 256
A321-ceo Key Characteristics
Firm Orders 1,715
# Delivered 1,351
# Backlog 364
# In Service 1,334
# of Current Operators 99
Sources: Airbus as of August 31, 2016, Ascend Market Commentary Q3 2016.
11
Boeing 737-800
Considered the most liquid narrowbody to date, the Boeing 737-800 is very popular with a broad mix of airlines, as well as a favorite with the leasing community
The 737-800 is a proven airframe with newer technology than first generation 737 models
Today, the 737-800 is the workhorse of the American fleet, accounting for over 30% of domestic available seat miles (“ASMs”)
In the combined American network, the 737-800 accounts for more domestic ASMs than the MD-80 and regional fleet combined
Over the last decade, the 737-800 has replaced the MD-80 as the backbone of the American fleet
The 737-800 operates out of every legacy American hub to most major spokes and also accounts for a significant portion of hub-to-hub flying
In addition, this aircraft type is used for flights to Central America, the Caribbean, and the northern rim of South America
Range of Boeing 737-800
787-8
227,930-kg (502,500-lb) MTOW
242 three-class passengers
737-800
70,010-kg (158,500-lb) MTOW
162 three-class passengers
Mumbai
Dubai
Hong Kong
Shanghai
Tokyo
Moscow
London
Addis Ababa
Anchorage
Los Angeles
New York
DFW
Mexico City
Lagos
Panama City
Lima
Sydney
Auckland
Buenos Aires
Rio De Janeiro
Cape town
Growth of 737-800 aircraft in American’s fleet1
152 169 195 226 246 264 284 304 304
2010 2011 2012 2013 2014 2015 2016 2017 2018
Sources: American Airlines 10-K, Ascend Market Commentary Q3 2016.
1 Data shown for 2016, 2017 and 2018 are projections.
12
Boeing 787
The Boeing 787 is the new benchmark in the long-haul widebody market
With a predicted demand of over 5,300 widebody jetliners over the next 20 years, the Boeing 787 is well positioned to become the benchmark product in a growing sector of the industry
The Boeing 787 family has amassed 1,100+ sales with a robust backlog of over 740 across the Boeing 787 family from 50+ customers
The Boeing 787-9 and -10 are expected to be the most popular variants over time
With its new all-composite fuselage, the Boeing 787 delivers up to 20% better fuel burn than the Boeing 767
Enables American to serve city pairs previously not accessible with the Boeing 767-300ER aircraft
Recent widebody market weakness has been concentrated in specific types / variants (e.g. Rolls-powered A340s, 747s and certain A330s); high quality in-demand widebodies have shown resilience
Ascend market values for new Boeing 787-9 aircraft are up 2% since the end of 2015
Top 5 Operators & Lessors (In Service / On Order)
Operators # of Aircraft
1 ANA - All Nippon Airways 83
2 Etihad Airways 71
3 United Airlines 49
4 Japan Airlines 45
5 American Airlines 42
Total 290
Lessors # of Aircraft
1 AerCap 78
2 Air Lease 46
3 CIT Aerospace 20
4 BBAM 16
5 GECAS 14
Total 174
Boeing 787-9 Key Characteristics
Firm Orders 577
# Delivered 142
# Backlog 435
Sources: American Airlines, Boeing, as of August 31, 2016, Ascend Market Commentary Q3 2016.
13
Embraer ERJ 175
The Embraer ERJ 175 demand is strong
• In-service fleet of over 500 aircraft, backlog of over 270 aircraft
• Demand for Embraer E175 aircraft has been strong as major U.S. airlines placed significant new orders and contracts for
76-seaters to replace 50-seaters, as a result of new scope clause agreements
• The Embraer E175 offers mainline jet comfort, because of its “double bubble” design
Most cabin volume per seat
Large eye-level windows are 30% larger than those on similar aircraft
Widest aisle and seat in its category
Four-abreast seating, allowing easy access to seats and overhead bins, no middle seats, and fast boarding and deplaning
Generous headroom
Overhead bins accommodate roll-on bags up to 24”x16”x10”
Superior ground service access and baggage handling
Expanded width of the lower oval boosts checked baggage and revenue-generating cargo capacity
Top 5 Operators & Lessors (In Service / On Order) 1
Operators # of Aircraft
1 SkyWest Airlines 198
2 Republic Airlines 123
3 Shuttle America 71
4 Compass Airlines 62
5 Mesa Airlines 48
Total 502
Lessors # of Aircraft
1 Nordic Aviation Capital 35
2 GECAS 10
3 Air Lease 6
4 Castlelake 6
5 CIT Aerospace 4
Total 61
Range of Embraer ERJ 175
Edmonton
Calgary
Vancouver
Seattle
San Francisco
Los Angeles
Las Vegas
Phoenix
Salt Lake City
Denver
Fargo
Minneapolis
Kansas City
Oklahoma City
DALLAS
Houston
Chicago
St. Louis
Memphis
Montreal
Toronto
Detroit
Pittsburg
Washington
Cincinnati
Charlotte
Atlanta
Jacksonville
Miami
Havana
New York
Halifax
Kingston
Santo Domingo
San Juan
Mexico City
Guatemala City
Managua
San Jose
Panama City
Sources: Embraer, American, Ascend Market Commentary Q3 2016
1 Embraer ERJ 170/175 aircraft.
14
Fleet Replacement Plan
American recently announced a deferral of its A350 deliveries, reducing capital expenditures in 2017 and 2018
2016 2017 2018 Beyond 2018 Total
A320 Family / Neo 25 20 - 100 145
A350-900 - - 2 20 22
B737-800 / Max 20 24 16 80 140
B777-300ER 2 - - - 2
B787 Family 8 13 8 - 29
Mainline Total 55 57 26 200 338
CRJ-700 7 - - - 7
CRJ-900 18 - - - 18
E175 24 12 - - 36
Regional Total 49 12 - - 61
Note: Guidance from July 22, 2016 investor relations update. New aircraft deliveries by type. Regional inductions include aircraft owned by third party operators
15
Fleet Replacement Plan
• The Company has one of the youngest fleets in the industry
Average Fleet Age
Years
18
13
8
16.8 yrs 14.0 yrs
13.3 yrs 10.4 yrs
16.2 yrs 14.2 yrs
10.5 yrs 9.6 yrs
2012 2013 2014 2015 2016E 2017E
Source: SEC Form 10-K and Ascend Fleets data base; projected data based on internal Industry fleet plan outlook estimates
16