Impacts to 2016 Results The effects of the adoption of the New Revenue Standard and New Retirement Standard to our consolidated statement of operations for the twelve months ended December 31, 2016 were as follows (in millions): This ASU provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income to retained earnings due to the U.S. federal corporate income tax rate change as a result of the 2017 Tax Act. The amount of the reclassification is the difference between the amount initially charged or credited directly to other comprehensive income at the previously enacted U.S. federal corporate income tax rate that remains in accumulated other comprehensive income and the amount that would have been charged or credited directly to other comprehensive income using the newly enacted U.S. federal corporate income tax rate, excluding the effect of any valuation allowance previously charged to income from continuing operations. This standard is effective for interim and annual reporting periods beginning after December 15, 2018, and early adoption is permitted. We will adopt this standard effective January 1, 2019. The adoption of the standard may impact tax amounts stranded in accumulated other comprehensive income related to our pension and retiree medical and other postretirement benefit plans. Standards Effective for 2019 Reporting Periods ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Aircraft Fuel The risk inherent in our market risk sensitive instruments and positions is the potential loss arising from adverse changes in the price of fuel, foreign currency exchange rates and interest rates as discussed below. The sensitivity analyses presented do not consider the effects that such adverse changes may have on overall economic activity, nor do they consider additional actions we may take to mitigate our exposure to such changes. Therefore, actual results may differ. See Note 8 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 6 to American’s Consolidated Financial Statements in Part II, Item 8B for additional discussion regarding risk management matters. Our operating results are materially impacted by changes in the availability, price volatility and cost of aircraft fuel, which represents one of the largest single cost items in our business. Because of the amount of fuel needed to operate our airlines, even a relatively small increase or decrease in the price of fuel can have a material effect on our costs and liquidity. Market prices for jet fuel have fluctuated substantially over the past several years with market spot prices ranging from a low of approximately $0.80 per gallon to a high of approximately $2.35 per gallon during the period from January 1, 2016 to December 31, 2018. 78 New Revenue Standard New Retirement Standard Year Ended December 31, 2016 As Reported Deferred Revenue Method Ancillary Revenue Reclassifications Gross Versus Net Presentation Reclassifications As Recast Operating revenues: Passenger $ 34,579 $ (147) $ 2,571 $ 42 $ — $ 37,045 Cargo 700 — 36 49 — 785 Other 4,901 — (2,607) 18 — 2,312 Total operating revenues 40,180 (147 ) — 109 — 40,142 Total operating expenses 34,896 — — 109 77 35,082 Operating income 5,284 (147 ) — — (77 ) 5,060 Total nonoperating expense, net (985) — — — 77 (908) Income before income taxes 4,299 (147 ) — — — 4,152 Income tax provision 1,623 (55) — — — 1,568 Net income $ 2,676 $ (92 ) $ — $ — $ — $ 2,584 Diluted earnings per common share $ 4.81 $ 4.65 ASU 2018-02: Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income