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TableofContents
Weseektominimizetheimpactofgreenhousegasemissionsfromouroperationsthroughreductionsinourfuelconsumptionandothereffortsandhave
realizedreductionsinourgreenhousegasemissionlevelssince2005.Wehavereducedthefuelneedsofouraircraftfleetthroughtheretirementofolder,lessfuel
efficientaircraftandreplacementwithnewer,morefuelefficientaircraft.Inaddition,wehaveimplementedfuelsavingproceduresinourflightandgroundsupport
operationsthatfurtherreducecarbonemissions.Wearealsosupportingeffortstodevelopalternativefuelsandeffortstomodernizetheairtrafficcontrolsystemin
theU.S.,aspartofoureffortstoreduceouremissionsandminimizeourimpactontheenvironment.
Noise.TheAirportNoiseandCapacityActof1990recognizestherightsofoperatorsofairportswithnoiseproblemstoimplementlocalnoiseabatement
programssolongassuchprogramsdonotinterfereunreasonablywithinterstateorforeigncommerceorthenationalairtransportationsystem.Thisstatute
generallyprovidesthatlocalnoiserestrictionsonStage3aircraftfirsteffectiveafterOctober1,1990,requireFAAapproval.Whilewehavehadsufficient
schedulingflexibilitytoaccommodatelocalnoiserestrictionsinthepast,ouroperationscouldbeadverselyimpactediflocally-imposedregulationsbecomemore
restrictiveorwidespread.Inaddition,foreigngovernmentsmayallowairportstoenactsimilarrestrictions,whichcouldadverselyimpactourinternational
operationsorrequiresignificantexpenditureinorderforouraircrafttocomplywiththerestrictions.
RefineryMatters.Monroe'soperationoftheTrainerrefineryissubjecttonumerousenvironmentallawsandextensiveregulations,includingthoserelatingto
thedischargeofmaterialsintotheenvironment,wastemanagement,pollutionpreventionmeasuresandgreenhousegasemissions.
UndertheEnergyIndependenceandSecurityActof2007,theEPAhasadoptedRenewableFuelStandards(“RFS”)thatmandatetheblendingofrenewable
fuelsintogasolineandon-roaddiesel(“TransportationFuels”).RenewableIdentificationNumbers(“RINs”)areassignedtorenewablefuelsproducedorimported
intotheU.S.thatareblendedintoTransportationFuelstodemonstratecompliancewiththisobligation.ArefinerymaymeetitsobligationunderRFSbyblending
thenecessaryvolumesofrenewablefuelswithTransportationFuelsorbypurchasingRINsintheopenmarketorthroughacombinationofblendingand
purchasingRINs.BecausetherefineryoperatedbyMonroedoesnotblendrenewablefuels,itmustpurchaseitsentireRINsrequirementinthesecondarymarketor
obtainawaiverfromtheEPA.
OtherEnvironmentalMatters.Wearesubjecttovariousotherfederal,stateandlocallawsgoverningenvironmentalmatters,includingthemanagementand
disposalofchemicals,wasteandhazardousmaterials,protectionofsurfaceandsubsurfacewatersandregulationofairemissionsandaircraftdrinkingwater.We
arespecificallyawareofsoiland/orgroundwatercontaminationpresentonourcurrentorformerleaseholdsatseveraldomesticairports.Toaddressthis
contamination,wehaveaprograminplacetoinvestigateand,ifappropriate,remediatethesesites.Althoughtheultimateoutcomeofthesematterscannotbe
predictedwithcertainty,webelievethattheresolutionofthesematterswillnothaveamaterialadverseeffectonourConsolidatedFinancialStatements.
Civil Reserve Air Fleet Program
WeparticipateintheCivilReserveAirFleetprogram(the“CRAFProgram”),whichpermitstheU.S.militarytousetheaircraftandcrewresourcesof
participatingU.S.airlinesduringairliftemergencies,nationalemergenciesortimesofwar.WehaveagreedtomakeavailableundertheCRAFProgramaportion
ofourinternationalaircraftduringthecontractperiodendingSeptember30,2016.TheCRAFProgramhasonlybeenactivatedtwicesinceitwascreatedin1951.
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