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Interest expense, net increased $81 million, or 7.8%, in 2019 as compared to 2018, primarily due to higher-interest bearing related party payables to other AAG subsidiaries and lower capitalized interest. 

In 2019, other nonoperating income, net principally included $183 million of non-service related pension and other postretirement benefit plan income. This income was offset in part by $32 million of net foreign currency losses principally associated with losses from Latin American currencies. 

In 2018, other nonoperating income, net principally included $309 million of non-service related pension and other postretirement benefit plan income. This income was offset in part by a $104 million net special charge for mark-to-market unrealized losses primarily associated with American’s equity investment in China Southern Airlines and $54 million of net foreign currency losses from Latin American currencies. 

The decrease in non-service related pension and other postretirement benefit plan income in 2019 as compared to 2018 is principally due to a decrease in the expected return on pension plan assets. 

## Income Taxes 

American is part of the AAG consolidated income tax return. 

In 2019, American recorded an income tax provision of $633 million at an effective rate of approximately 24%, which was substantially non-cash due to utilization of its NOLs. Substantially all of American’s income before income taxes is attributable to the United States. At December 31, 2019, American had approximately $9.2 billion of federal NOLs and $2.9 billion of state NOLs, substantially all of which American expects to be available in 2020 to reduce future federal and state taxable income. 

In 2018, American recorded an income tax provision of $534 million at an effective rate of approximately 24%, which was substantially non-cash. This provision included an $18 million special income tax charge related to an international income tax matter. 

See Note 5 to American’s Consolidated Financial Statements in Part II, Item 8B for additional information on income taxes. 

## Liquidity and Capital Resources 

## Liquidity 

As of December 31, 2019, AAG had approximately $7.0 billion in total available liquidity and $158 million in restricted cash and short-term investments. Additional detail regarding our available liquidity is provided in the table below (in millions): 

<img src='content_image/1027324.jpg'>

(1) For 2019, this amount includes $400 million in borrowing capacity under a short-term revolving line of credit we arranged in December 2019 due to uncertainty surrounding the timing of the Boeing 737 MAX aircraft return to service. We have no present intention to borrow any amounts under this facility, which matures in September 2020 with an optional extension to December 2020. For additional discussion of this facility see Note 5 to AAG’s Consolidated Financial Statements in Part II, Item 8A and Note 3 to American’s Consolidated Financial Statements in Part II, Item 8B. 

