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TableofContents
Wemadeprofitsharingpaymentsof$756million,$821millionand$372millionin2015,2014and2013,respectively,inrecognitionofouremployees'
contributionstowardmeetingourfinancialgoals.DuringtheyearendedDecember2015,werecorded$1.5billioninprofitsharingexpensebasedon2015pre-tax
profit,whichwillbepaidtoemployeesinFebruary2016.
Beginningwith2016pre-taxprofit(tobepaidoutin2017),theprofitsharingformulawillbeadjustedtopay10%ofannualpre-taxprofit(asdefinedbythe
termsoftheprogram)and,ifweexceedourprior-yearresults,theprogramwillpay20%oftheyear-over-yearincreaseinpre-taxprofittoeligibleemployees.The
profitsharingprogramforpilotsremainsunchangedandwillcontinuein2016underitsterms.
InvestingActivities
CapitalExpenditures.Ourcapitalexpenditureswere$2.9billionin2015,$2.2billionin2014and$2.5billionin2013.Ourcapitalexpendituresduring2015
wereprimarilyrelatedtothepurchaseofB-737-900ERaircrafttoreplaceaportionofourolderB-757-200aircraft,purchasesofA330-300aircraft,advance
depositpaymentsonA321-200aircraftandseatdensityprojectsforourdomesticfleet.Ourcapitalexpendituresduring2014and2013wereprimarilyforthe
purchaseofaircraftandmodificationstoupgradeaircraftinteriorsthatenhanceourproductoffering.
Wehavecommittedtofutureaircraftpurchasesthatwillrequiresignificantcapitalinvestmentandhaveobtainedlong-termfinancingcommitmentsfora
substantialportionofthepurchasepriceoftheseaircraft.Weexpectthatwewillinvestapproximately$3billionin2016primarilyfor(1)aircraft,including
deliveriesofB-737-900ERs,A321-200sandA330-300s,alongwithadvancedepositpaymentsfortheseandournewA330-900neoandA350-900ordersandused
E190-100orders,aswellasfor(2)aircraftmodifications,themajorityofwhichrelatetoincreasingtheseatdensityandenhancingthecabinsonourdomesticfleet.
Weexpectthatthe2016investmentswillbefundedprimarilythroughcashflowsfromoperations.
EquityInvestments.Ourequityinvestmentsduring2015werecomprisedof$450millionforChinaEasternsharesand$50millionforpreferredsharesinGOL's
parentcompany.Foradditionalinformationregardingtheseinvestments,seeNote3oftheNotestotheConsolidatedFinancialStatements.
DuringtheDecember2015quarter,weannouncedaplantoacquireadditionalcapitalstockofGrupoAeroméxicothroughacashtenderoffer.Followingthe
completionofthetenderoffer,whencombinedwithourexistingshareownership,weexpecttoownupto49%ofGrupoAeroméxico'soutstandingshares.This
approximately$750millioncapitalinvestmentissubjecttoregulatoryapprovalsandthetenderofferwouldlikelycommenceintheJune2016quarter.
FinancingActivities
DebtandCapitalLeases.Theprincipalamountofdebtandcapitalleaseshasdeclinedfrom$13.2billionatthebeginningof2013to$8.5billionat
December31,2015.SinceDecember31,2009,wehavereducedourprincipalamountofdebtandcapitalleasesby$9.8billion.Thesedebtreductionsalsoserve
toreduceourtotalfutureinterestexpense.Wehavefocusedonreducingourtotaldebtinrecentyearsaspartofourstrategytostrengthenourbalancesheet.Asa
result,wereceivedupgradestoourcreditratingbyallthreemajorratingagenciesduring2015,tothefollowingratings:
RatingAgency CurrentRating Outlook
Standard&Poor's BB+ Stable
Moody's Ba2 Positive
Fitch BB+ Positive
Continuedimprovementinourcreditratingstoinvestmentgradewouldlikelyresultinlowercostsofborrowing,amongotherthings.
Inconnectionwiththeretirementandterminationoftheoutstandingloansunderourexisting$2.5billionSeniorSecuredCreditFinancingFacilities(dueApril
2016andApril2017),wecompletedrefinancingtransactionsinAugust2015withnewdebtconsistingoftheSeniorSecuredCreditFacilities($2.0billion)andthe
2015-1EETC($500million).TheSeniorSecuredCreditFacilitiesconsistofa$1.5billionRevolvingCreditFacilityanda$500millionTermLoanFacility.
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