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American Airlines Reports Second-Quarter 2023 Financial Results

American Airlines, Inc.
American Airlines, Inc.

FORT WORTH, Texas, July 20, 2023 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its second-quarter 2023 financial results, including:

  • Record quarterly revenue of $14.1 billion, a 4.7% increase year over year.

  • Second-quarter net income of $1.3 billion, or $1.88 per diluted share. Excluding net special items1, second-quarter net income of $1.4 billion, or $1.92 per diluted share.

  • Generated operating cash flow of $1.8 billion and free cash flow of $1.2 billion in the second quarter.

  • Ended the quarter with $14.9 billion of total available liquidity.

  • Raising full-year adjusted EPS2 guidance to between $3.00 and $3.75 per diluted share.

  • Credit rating upgraded two notches to B+ by Fitch.

“It was another fantastic quarter for American, driven by the hard work of our team to deliver a reliable operation for our customers and the continued strong demand for our product,” said American’s CEO Robert Isom. “Our operation is performing at historically strong levels, and we have worked to refresh our fleet and build a comprehensive global network, all of which helped to produce record revenues in the second quarter. We will build on this momentum the rest of the year and continue to prioritize reliability, profitability, accountability and strengthening our balance sheet.”

ANNUNCIO PUBBLICITARIO

Running a reliable operation
The American Airlines team delivered a strong operational performance during the quarter, achieving its best-ever second-quarter completion factor and controllable completion factor3. American and its regional partners operated nearly 500,000 flights in the second quarter, with an average load factor of approximately 86%.

American delivered a record Memorial Day weekend mainline completion factor and controllable completion factor, while operating its largest-ever mainline Memorial Day weekend schedule. The momentum continued into June, with the American team delivering a record June completion factor and controllable completion factor, despite weather and air traffic control challenges. In the second quarter, American achieved its best-ever April, May and June controllable completion factors3 and delivered 11 more combined zero-cancellation days versus the same period last year.

Returning to profitability
American produced record quarterly revenues of $14.1 billion in the second quarter. The strong revenue performance was driven by continued broad-based demand strength and American’s completion factor performance in the quarter. Demand was particularly strong in the month of June driven by an increase in close-in bookings. Domestic and short-haul international revenue continue to perform well, and the airline has seen noticeable strength in long-haul international demand and yield performance.

In the second quarter, the company produced an operating margin of 15.4% and net income of $1.3 billion on a GAAP basis. Excluding net special items1, American produced net income of $1.4 billion in the second quarter.

Liquidity and balance sheet
American generated operating cash flow and free cash flow of nearly $1.8 billion and $1.2 billion, respectively, in the second quarter. The company reduced total debt4 by $387 million in the quarter. Strengthening the balance sheet continues to be a top priority, and American is nearly two-thirds of the way to its goal of reducing total debt by $15 billion by the end of 2025. As of June 30, 2023, American had reduced its total debt by approximately $9.4 billion from peak levels in mid-2021. The company’s commitment to strengthening its balance sheet is being recognized, as evidenced by Fitch upgrading the company’s rating two notches, to B+. The company ended the quarter with approximately $14.9 billion of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.

Guidance and investor update
Based on demand trends and the current fuel price forecast and excluding the impact of special items, the company expects its third-quarter 2023 adjusted earnings per diluted share2 to be between $0.85 and $0.95. American now expects its full-year 2023 adjusted earnings per diluted share2 to be between $3.00 and $3.75. The company’s forecasts include the estimated impact of anticipated new labor agreements.

For additional financial forecasting detail, please refer to the company’s investor update, furnished with this press release with the SEC on Form 8-K. This filing will also be available at aa.com/investorrelations.

Conference call and webcast details
The company will conduct a live audio webcast of its financial results conference call at 7:30 a.m. CT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Aug. 20.

Notes
See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information, including the calculation of free cash flow.

  1. The company recognized $33 million of net special items after the effect of taxes in the second quarter, which principally included charges associated with debt extinguishments and mark-to-market adjustments on equity investments.

  2. Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time.

  3. Excludes second-quarter 2020 and second-quarter 2021, which were impacted by significantly reduced capacity due to COVID-19.

  4. All references to total debt include debt, finance leases, operating lease liabilities and pension obligations.

About American Airlines Group
To Care for People on Life’s Journey®. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL and the company’s stock is included in the S&P 500. Learn more about what’s happening at American by visiting news.aa.com and connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.

Cautionary statement regarding forward-looking statements and information
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, 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 the company’s plans, objectives, expectations, intentions, estimates and strategies for the future, 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, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. Additionally, 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. 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 these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.

Corporate Communications
mediarelations@aa.com

Investor Relations
investor.relations@aa.com


American Airlines Group Inc.

Condensed Consolidated Statements of Operations

(In millions, except share and per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Months Ended
June 30,

 

Percent
Increase

 

6 Months Ended
June 30,

 

Percent
Increase

 

 

 

 

2023

 

 

 

2022

 

 

(Decrease)

 

 

2023

 

 

 

2022

 

 

(Decrease)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Passenger

 

$

12,978

 

 

$

12,223

 

 

6.2

 

 

$

24,081

 

 

$

20,041

 

 

20.2

 

 

Cargo

 

 

197

 

 

 

328

 

 

(39.8

)

 

 

420

 

 

 

692

 

 

(39.2

)

 

Other

 

 

880

 

 

 

871

 

 

1.1

 

 

 

1,743

 

 

 

1,588

 

 

9.8

 

 

Total operating revenues

 

 

14,055

 

 

 

13,422

 

 

4.7

 

 

 

26,244

 

 

 

22,321

 

 

17.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel and related taxes

 

 

2,723

 

 

 

4,020

 

 

(32.3

)

 

 

5,890

 

 

 

6,522

 

 

(9.7

)

 

Salaries, wages and benefits

 

 

3,635

 

 

 

3,235

 

 

12.4

 

 

 

6,917

 

 

 

6,389

 

 

8.3

 

 

Regional expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Regional operating expenses

 

 

1,073

 

 

 

992

 

 

8.3

 

 

 

2,135

 

 

 

1,964

 

 

8.8

 

 

Regional depreciation and amortization

 

 

80

 

 

 

80

 

 

(0.6

)

 

 

160

 

 

 

160

 

 

-

 

 

Maintenance, materials and repairs

 

 

808

 

 

 

647

 

 

24.9

 

 

 

1,520

 

 

 

1,264

 

 

20.3

 

 

Other rent and landing fees

 

 

762

 

 

 

694

 

 

9.8

 

 

 

1,470

 

 

 

1,372

 

 

7.1

 

 

Aircraft rent

 

 

344

 

 

 

345

 

 

(0.4

)

 

 

688

 

 

 

698

 

 

(1.4

)

 

Selling expenses

 

 

489

 

 

 

504

 

 

(3.0

)

 

 

927

 

 

 

836

 

 

10.8

 

 

Depreciation and amortization

 

 

483

 

 

 

504

 

 

(4.0

)

 

 

969

 

 

 

995

 

 

(2.6

)

 

Special items, net

 

 

-

 

 

 

(5

)

 

(99.4

)

 

 

13

 

 

 

152

 

 

(91.2

)

 

Other

 

 

1,495

 

 

 

1,389

 

 

7.6

 

 

 

2,955

 

 

 

2,675

 

 

10.5

 

 

Total operating expenses

 

 

11,892

 

 

 

12,405

 

 

(4.1

)

 

 

23,644

 

 

 

23,027

 

 

2.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

2,163

 

 

 

1,017

 

 

nm

(1)

 

 

2,600

 

 

 

(706

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonoperating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

162

 

 

 

29

 

 

nm

 

 

 

288

 

 

 

37

 

 

nm

 

 

Interest expense, net

 

 

(548

)

 

 

(468

)

 

17.1

 

 

 

(1,088

)

 

 

(932

)

 

16.8

 

 

Other income (expense), net

 

 

(14

)

 

 

25

 

 

nm

 

 

 

(21

)

 

 

118

 

 

nm

 

 

Total nonoperating expense, net

 

 

(400

)

 

 

(414

)

 

(3.4

)

 

 

(821

)

 

 

(777

)

 

5.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

1,763

 

 

 

603

 

 

nm

 

 

 

1,779

 

 

 

(1,483

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax provision (benefit)

 

 

425

 

 

 

127

 

 

nm

 

 

 

431

 

 

 

(324

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,338

 

 

$

476

 

 

nm

 

 

$

1,348

 

 

$

(1,159

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.05

 

 

$

0.73

 

 

 

 

$

2.06

 

 

$

(1.78

)

 

 

 

Diluted

 

$

1.88

 

 

$

0.68

 

 

 

 

$

1.91

 

 

$

(1.78

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

653,602

 

 

 

650,346

 

 

 

 

 

652,801

 

 

 

649,925

 

 

 

 

Diluted

 

 

719,345

 

 

 

718,532

 

 

 

 

 

718,890

 

 

 

649,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Percent change may not recalculate due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Not meaningful or greater than 100% change.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



American Airlines Group Inc.

Consolidated Operating Statistics(1)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Months Ended
June 30,

 

Increase

 

 

6 Months Ended
June 30,

 

Increase

 

 

 

2023

 

2022

 

(Decrease)

 

 

2023

 

2022

 

(Decrease)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (millions)

 

60,020

 

57,516

 

4.4%

 

 

 

112,034

 

101,806

 

10.0%

 

 

Available seat miles (ASM) (millions)

 

69,658

 

66,163

 

5.3%

 

 

 

134,665

 

125,697

 

7.1%

 

 

Passenger load factor (percent)

 

86.2

 

86.9

 

(0.7)

 

pts

 

83.2

 

81.0

 

2.2

 

pts

Yield (cents)

 

21.62

 

21.25

 

1.7%

 

 

 

21.49

 

19.69

 

9.2%

 

 

Passenger revenue per ASM (cents)

 

18.63

 

18.47

 

0.8%

 

 

 

17.88

 

15.94

 

12.2%

 

 

Total revenue per ASM (cents)

 

20.18

 

20.29

 

(0.5)%

 

 

 

19.49

 

17.76

 

9.7%

 

 

Cargo ton miles (millions)

 

427

 

500

 

(14.7)%

 

 

 

849

 

1,036

 

(18.1)%

 

 

Cargo yield per ton mile (cents)

 

46.31

 

65.58

 

(29.4)%

 

 

 

49.51

 

66.74

 

(25.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fuel consumption (gallons in millions)

 

1,041

 

997

 

4.4%

 

 

 

2,006

 

1,891

 

6.0%

 

 

Average aircraft fuel price including related taxes (dollars per gallon)

 

2.62

 

4.03

 

(35.1)%

 

 

 

2.94

 

3.45

 

(14.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating cost per ASM (cents)

 

17.07

 

18.75

 

(8.9)%

 

 

 

17.56

 

18.32

 

(4.2)%

 

 

Operating cost per ASM excluding net special items (cents)

 

17.06

 

18.76

 

(9.0)%

 

 

 

17.54

 

18.20

 

(3.6)%

 

 

Operating cost per ASM excluding net special items and fuel (cents)

 

13.16

 

12.68

 

3.7%

 

 

 

13.17

 

13.01

 

1.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Passenger enplanements (thousands)

 

54,285

 

53,068

 

2.3%

 

 

 

102,517

 

95,790

 

7.0%

 

 

Departures (thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline

 

289

 

260

 

11.3%

 

 

 

564

 

501

 

12.5%

 

 

Regional

 

209

 

243

 

(13.9)%

 

 

 

411

 

474

 

(13.4)%

 

 

Total

 

498

 

503

 

(0.9)%

 

 

 

975

 

975

 

-

%

 

Average stage length (miles):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline

 

1,141

 

1,181

 

(3.4)%

 

 

 

1,132

 

1,170

 

(3.2)%

 

 

Regional

 

463

 

478

 

(3.1)%

 

 

 

466

 

481

 

(3.2)%

 

 

Total

 

856

 

841

 

1.8 %

 

 

 

851

 

835

 

2.0%

 

 

Aircraft at end of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline(2)

 

944

 

895

 

5.5%

 

 

 

944

 

895

 

5.5%

 

 

Regional(3)

 

526

 

576

 

(8.7)%

 

 

 

526

 

576

 

(8.7)%

 

 

Total

 

1,470

 

1,471

 

(0.1)%

 

 

 

1,470

 

1,471

 

(0.1)%

 

 

Full-time equivalent employees at end of period:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline

 

104,400

 

102,100

 

2.3%

 

 

 

104,400

 

102,100

 

2.3%

 

 

Regional(4)

 

28,100

 

27,100

 

3.7%

 

 

 

28,100

 

27,100

 

3.7%

 

 

Total

 

132,500

 

129,200

 

2.6%

 

 

 

132,500

 

129,200

 

2.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Amounts may not recalculate due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.

(2)Excludes three Boeing 737-800 mainline aircraft that were in temporary storage as of June 30, 2023.

(3)Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 74 regional aircraft that were in temporary storage as of June 30, 2023 as follows: 53 Embraer 145, 12 Bombardier CRJ 700, six Embraer 170, and three Bombardier CRJ 900.

(4)Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



American Airlines Group Inc.

Consolidated Revenue Statistics by Region

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Months Ended
June 30,

 

Increase

 

 

6 Months Ended
June 30,

 

Increase

 

 

 

 

 

2023

 

2022

 

(Decrease)

 

 

2023

 

2022

 

(Decrease)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Domestic(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (millions)

 

39,758

 

39,488

 

0.7%

 

 

 

75,509

 

72,120

 

4.7%

 

 

 

Available seat miles (ASM) (millions)

 

45,700

 

43,948

 

4.0 %

 

 

 

90,255

 

85,821

 

5.2%

 

 

 

Passenger load factor (percent)

 

87.0

 

89.9

 

(2.9)

 

pts

 

83.7

 

84.0

 

(0.3)

 

pts

 

Passenger revenue (dollars in millions)

 

9,195

 

9,120

 

0.8 %

 

 

 

17,232

 

15,180

 

13.5%

 

 

 

Yield (cents)

 

23.13

 

23.10

 

0.1 %

 

 

 

22.82

 

21.05

 

8.4%

 

 

 

Passenger revenue per ASM (cents)

 

20.12

 

20.75

 

(3.0)%

 

 

 

19.09

 

17.69

 

7.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (millions)

 

7,926

 

8,424

 

(5.9)%

 

 

 

16,934

 

16,077

 

5.3%

 

 

 

Available seat miles (millions)

 

9,200

 

9,801

 

(6.1)%

 

 

 

19,710

 

20,112

 

(2.0)%

 

 

 

Passenger load factor (percent)

 

86.2

 

86.0

 

0.2

 

pts

 

85.9

 

79.9

 

6.0

 

pts

 

Passenger revenue (dollars in millions)

 

1,640

 

1,534

 

6.9 %

 

 

 

3,555

 

2,761

 

28.8%

 

 

 

Yield (cents)

 

20.69

 

18.21

 

13.6 %

 

 

 

20.99

 

17.17

 

22.2%

 

 

 

Passenger revenue per ASM (cents)

 

17.82

 

15.65

 

13.9 %

 

 

 

18.04

 

13.73

 

31.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Atlantic

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (millions)

 

10,689

 

9,045

 

18.2%

 

 

 

16,510

 

12,649

 

30.5%

 

 

 

Available seat miles (millions)

 

12,823

 

11,630

 

10.3%

 

 

 

21,065

 

18,010

 

17.0%

 

 

 

Passenger load factor (percent)

 

83.4

 

77.8

 

5.6

 

pts

 

78.4

 

70.2

 

8.2

 

pts

 

Passenger revenue (dollars in millions)

 

1,888

 

1,481

 

27.5%

 

 

 

2,819

 

1,947

 

44.8%

 

 

 

Yield (cents)

 

17.66

 

16.37

 

7.9%

 

 

 

17.07

 

15.39

 

10.9%

 

 

 

Passenger revenue per ASM (cents)

 

14.72

 

12.73

 

15.6%

 

 

 

13.38

 

10.81

 

23.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pacific

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (millions)

 

1,647

 

559

 

nm

 

 

 

3,081

 

960

 

nm

 

 

 

Available seat miles (millions)

 

1,935

 

784

 

nm

 

 

 

3,635

 

1,754

 

nm

 

 

 

Passenger load factor (percent)

 

85.1

 

71.2

 

13.9

 

pts

 

84.8

 

54.7

 

30.1

 

pts

 

Passenger revenue (dollars in millions)

 

255

 

88

 

nm

 

 

 

475

 

153

 

nm

 

 

 

Yield (cents)

 

15.50

 

15.81

 

(2.0)%

 

 

 

15.40

 

15.94

 

(3.4)%

 

 

 

Passenger revenue per ASM (cents)

 

13.19

 

11.26

 

17.1 %

 

 

 

13.06

 

8.72

 

49.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total International

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue passenger miles (millions)

 

20,262

 

18,028

 

12.4 %

 

 

 

36,525

 

29,686

 

23.0%

 

 

 

Available seat miles (millions)

 

23,958

 

22,215

 

7.8 %

 

 

 

44,410

 

39,876

 

11.4%

 

 

 

Passenger load factor (percent)

 

84.6

 

81.2

 

3.4

 

pts

 

82.2

 

74.4

 

7.8

 

pts

 

Passenger revenue (dollars in millions)

 

3,783

 

3,103

 

21.9 %

 

 

 

6,849

 

4,861

 

40.9%

 

 

 

Yield (cents)

 

18.67

 

17.21

 

8.5 %

 

 

 

18.75

 

16.38

 

14.5%

 

 

 

Passenger revenue per ASM (cents)

 

15.79

 

13.97

 

13.0 %

 

 

 

15.42

 

12.19

 

26.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Amounts may not recalculate due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.

 

 

 

 

 

 

 

 

 

(2)Latin America results include the Caribbean.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Reconciliation of GAAP Financial Information to Non-GAAP Financial Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.

The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures:

- Operating Income (Loss) (GAAP measure) to Operating Income (Loss) Excluding Net Special Items (non-GAAP measure)
- Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure)
- Pre-Tax Income (Loss) (GAAP measure) to Pre-Tax Income (Loss) Excluding Net Special Items (non-GAAP measure)
- Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure)
- Net Income (Loss) (GAAP measure) to Net Income (Loss) Excluding Net Special Items (non-GAAP measure)
- Basic and Diluted Earnings (Loss) Per Share (GAAP measure) to Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items (non-GAAP measure)

Management uses these non-GAAP financial measures to evaluate the Company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance.

Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs excluding net special items and fuel and CASM excluding net special items and fuel to evaluate the Company's current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude fuel and net special items allows management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Operating Income (Loss) Excluding Net Special Items

 

3 Months Ended
June 30,

 

Percent Increase

 

6 Months Ended
June 30,

Percent Increase

 

 

 

 

2023

 

 

 

2022

 

 

(Decrease)

 

 

2023

 

 

 

2022

 

 

(Decrease)

 

 

 

 

(in millions)

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as reported

 

$

2,163

 

 

$

1,017

 

 

 

 

$

2,600

 

 

$

(706

)

 

 

 

 

Operating net special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline operating special items, net(1)

 

 

-

 

 

 

(5

)

 

 

 

 

13

 

 

 

152

 

 

 

 

 

Regional operating special items, net

 

 

6

 

 

 

-

 

 

 

 

 

6

 

 

 

-

 

 

 

 

 

Operating income (loss) excluding net special items

 

$

2,169

 

 

$

1,012

 

 

nm

 

$

2,619

 

 

$

(554

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Operating Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) as reported

 

$

2,163

 

 

$

1,017

 

 

 

 

$

2,600

 

 

$

(706

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues as reported

 

$

14,055

 

 

$

13,422

 

 

 

 

$

26,244

 

 

$

22,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

 

15.4

%

 

 

7.6

%

 

 

 

 

9.9

%

 

 

(3.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Operating Margin Excluding Net Special Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss) excluding net special items

 

$

2,169

 

 

$

1,012

 

 

 

 

$

2,619

 

 

$

(554

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues as reported

 

$

14,055

 

 

$

13,422

 

 

 

 

$

26,244

 

 

$

22,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin excluding net special items

 

 

15.4

%

 

 

7.5

%

 

 

 

 

10.0

%

 

 

(2.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income (loss) as reported

 

$

1,763

 

 

$

603

 

 

 

 

$

1,779

 

 

$

(1,483

)

 

 

 

 

Pre-tax net special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline operating special items, net(1)

 

 

-

 

 

 

(5

)

 

 

 

 

13

 

 

 

152

 

 

 

 

 

Regional operating special items, net

 

 

6

 

 

 

-

 

 

 

 

 

6

 

 

 

-

 

 

 

 

 

Nonoperating special items, net(2)

 

 

28

 

 

 

89

 

 

 

 

 

45

 

 

 

92

 

 

 

 

 

Total pre-tax net special items

 

 

34

 

 

 

84

 

 

 

 

 

64

 

 

 

244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income (loss) excluding net special items

 

$

1,797

 

 

$

687

 

 

nm

 

$

1,843

 

 

$

(1,239

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Pre-Tax Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income (loss) as reported

 

$

1,763

 

 

$

603

 

 

 

 

$

1,779

 

 

$

(1,483

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues as reported

 

$

14,055

 

 

$

13,422

 

 

 

 

$

26,244

 

 

$

22,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax margin

 

 

12.5

%

 

 

4.5

%

 

 

 

 

6.8

%

 

 

(6.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculation of Pre-Tax Margin Excluding Net Special Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax income (loss) excluding net special items

 

$

1,797

 

 

$

687

 

 

 

 

$

1,843

 

 

$

(1,239

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating revenues as reported

 

$

14,055

 

 

$

13,422

 

 

 

 

$

26,244

 

 

$

22,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax margin excluding net special items

 

 

12.8

%

 

 

5.1

%

 

 

 

 

7.0

%

 

 

(5.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3 Months Ended
June 30,

 

Percent Increase

 

6 Months Ended
June 30,

Percent Increase

 

 

Reconciliation of Net Income (Loss) Excluding Net Special Items

 

 

2023

 

 

 

2022

 

 

(Decrease)

 

 

2023

 

 

 

2022

 

 

(Decrease)

 

 

 

 

(in millions, except share and per share amounts)

 

 

 

(in millions, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) as reported

 

$

1,338

 

 

$

476

 

 

 

 

$

1,348

 

 

$

(1,159

)

 

 

 

 

Net special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total pre-tax net special items(1), (2)

 

 

34

 

 

 

84

 

 

 

 

 

64

 

 

 

244

 

 

 

 

 

Income tax special items, net

 

 

-

 

 

 

(9

)

 

 

 

 

-

 

 

 

(9

)

 

 

 

 

Net tax effect of net special items

 

 

(1

)

 

 

(18

)

 

 

 

 

(8

)

 

 

(53

)

 

 

 

 

Net income (loss) excluding net special items

 

$

1,371

 

 

$

533

 

 

nm

 

$

1,404

 

 

$

(977

)

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) excluding net special items

 

$

1,371

 

 

$

533

 

 

 

 

$

1,404

 

 

$

(977

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used for computation (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

653,602

 

 

 

650,346

 

 

 

 

 

652,801

 

 

 

649,925

 

 

 

 

 

Diluted

 

 

719,345

 

 

 

718,532

 

 

 

 

 

718,890

 

 

 

649,925

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share excluding net special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.10

 

 

$

0.82

 

 

 

 

$

2.15

 

 

$

(1.50

)

 

 

 

 

Diluted

 

$

1.92

 

 

$

0.76

 

 

 

 

$

1.98

 

 

$

(1.50

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses as reported

 

$

11,892

 

 

$

12,405

 

 

 

 

$

23,644

 

 

$

23,027

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline operating special items, net(1)

 

 

-

 

 

 

5

 

 

 

 

 

(13

)

 

 

(152

)

 

 

 

 

Regional operating special items, net

 

 

(6

)

 

 

-

 

 

 

 

 

(6

)

 

 

-

 

 

 

 

 

Total operating expenses excluding net special items

 

 

11,886

 

 

 

12,410

 

 

 

 

 

23,625

 

 

 

22,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel and related taxes

 

 

(2,723

)

 

 

(4,020

)

 

 

 

 

(5,890

)

 

 

(6,522

)

 

 

 

 

Total operating expenses excluding net special items and fuel

 

$

9,163

 

 

$

8,390

 

 

 

 

$

17,735

 

 

$

16,353

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in cents)

 

 

 

(in cents)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses per ASM as reported

 

 

17.07

 

 

 

18.75

 

 

 

 

 

17.56

 

 

 

18.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating net special items per ASM:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mainline operating special items, net(1)

 

 

-

 

 

 

0.01

 

 

 

 

 

(0.01

)

 

 

(0.12

)

 

 

 

 

Regional operating special items, net

 

 

(0.01

)

 

 

-

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

Total operating expenses per ASM excluding net special items

 

 

17.06

 

 

 

18.76

 

 

 

 

 

17.54

 

 

 

18.20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aircraft fuel and related taxes per ASM

 

 

(3.91

)

 

 

(6.08

)

 

 

 

 

(4.37

)

 

 

(5.19

)

 

 

 

 

Total operating expenses per ASM excluding net special items and fuel

 

 

13.16

 

 

 

12.68

 

 

 

 

 

13.17

 

 

 

13.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Amounts may not recalculate due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOOTNOTES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The 2022 six month period mainline operating special items, net principally included a non-cash impairment charge to write down the carrying value of the Company's retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. The Company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2)

Principally included charges associated with debt refinancings and extinguishments as well as mark-to-market net unrealized gains and losses associated with certain equity investments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



American Airlines Group Inc.

Condensed Consolidated Statements of Cash Flows

(In millions)(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

6 Months Ended
June 30,

 

 

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

5,096

 

 

$

2,924

 

 

Cash flows from investing activities:

 

 

 

 

Capital expenditures, net of aircraft purchase deposit returns

 

(1,244

)

 

 

(1,405

)

 

Proceeds from sale-leaseback transactions

 

111

 

 

 

-

 

 

Proceeds from sale of property and equipment

 

72

 

 

 

19

 

 

Purchases of short-term investments

 

(7,587

)

 

 

 

(10,083

)

 

Sales of short-term investments

 

4,656

 

 

 

 

10,135

 

 

Decrease (increase) in restricted short-term investments

 

33

 

 

 

(10

)

 

Purchase of equity investment

 

-

 

 

 

(200

)

 

Other investing activities

 

214

 

 

 

(156

)

 

Net cash used in investing activities

 

(3,745

)

 

 

(1,700

)

 

Cash flows from financing activities:

 

 

 

 

Payments on long-term debt and finance leases

 

(3,246

)

 

 

(1,659

)

 

Proceeds from issuance of long-term debt

 

2,143

 

 

 

574

 

 

Other financing activities

 

(55

)

 

 

(10

)

 

Net cash used in financing activities

 

(1,158

)

 

 

(1,095

)

 

Net increase in cash and restricted cash

 

193

 

 

 

129

 

 

Cash and restricted cash at beginning of period

 

586

 

 

 

408

 

(1)

Cash and restricted cash at end of period

$

779

 

 

$

537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:

 

 

 

 

 

 

 

 

Cash

 

$

614

 

 

$

401

 

 

Restricted cash included in restricted cash and short-term investments

 

165

 

 

 

136

 

 

Total cash and restricted cash

$

779

 

 

$

537

 

 

 

 

 

 

 

 



Free Cash Flow

 

 

 

 

 

 

 

 

The Company's free cash flow summary is presented in the table below, which is a non-GAAP measure that management believes is useful information to investors and others in evaluating the Company's ability to generate cash from its core operating performance that is available for use to reinvest in the business or to reduce debt. The Company defines free cash flows as net cash provided by operating activities less net cash used in investing activities, adjusted for (1) net purchases of short-term investments and (2) change in restricted cash. We believe that calculating free cash flow as adjusted for these items is more useful for investors because short-term investment activity and restricted cash are not representative of activity core to our operations.

This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. Our calculation of free cash flow is not intended, and should not be used, to measure the residual cash flow available for discretionary expenditures because, among other things, it excludes mandatory debt service requirements and certain other non-discretionary expenditures.

 

 

 

 

 

 

 

 

 

 

 

 

 

6 Months Ended
June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

5,096

 

 

 

 

Adjusted net cash used in investing activities(1)

 

(833

)

 

 

 

Free cash flow

$

4,263

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The following table provides a reconciliation of adjusted net cash used in investing activities for the six months ended June 30, 2023 (in millions):

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

$

(3,745

)

 

 

 

Adjustments:

 

 

 

 

Net purchases of short-term investments

 

2,931

 

 

 

 

Increase in restricted cash

 

(19

)

 

 

 

Adjusted net cash used in investing activities

$

(833

)

 

 

 

 

 

 

 

 

 



 

 

 

 

American Airlines Group Inc.

Condensed Consolidated Balance Sheets

(In millions, except shares)

 

 

 

 

 

 

June 30, 2023

 

December 31, 2022

 

(unaudited)

 

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

Cash

$

614

 

 

$

440

 

Short-term investments

 

11,447

 

 

 

8,525

 

Restricted cash and short-term investments

 

984

 

 

 

995

 

Accounts receivable, net

 

2,073

 

 

 

2,138

 

Aircraft fuel, spare parts and supplies, net

 

2,280

 

 

 

2,279

 

Prepaid expenses and other

 

822

 

 

 

892

 

Total current assets

 

18,220

 

 

 

15,269

 

 

 

 

 

Operating property and equipment

 

 

 

Flight equipment

 

40,570

 

 

 

39,703

 

Ground property and equipment

 

9,996

 

 

 

9,913

 

Equipment purchase deposits

 

767

 

 

 

613

 

Total property and equipment, at cost

 

51,333

 

 

 

50,229

 

Less accumulated depreciation and amortization

 

(21,062

)

 

 

(20,029

)

Total property and equipment, net

 

30,271

 

 

 

30,200

 

 

 

 

 

Operating lease right-of-use assets

 

8,076

 

 

 

8,094

 

 

 

 

 

Other assets

 

 

 

Goodwill

 

4,091

 

 

 

4,091

 

Intangibles, net

 

2,055

 

 

 

2,059

 

Deferred tax asset

 

2,660

 

 

 

3,099

 

Other assets

 

1,887

 

 

 

1,904

 

Total other assets

 

10,693

 

 

 

11,153

 

 

 

 

 

Total assets

$

67,260

 

 

$

64,716

 

 

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

 

 

 

 

 

 

 

Current liabilities

 

 

 

Current maturities of long-term debt and finance leases

$

3,874

 

 

$

3,274

 

Accounts payable

 

2,406

 

 

 

2,149

 

Accrued salaries and wages

 

1,723

 

 

 

1,713

 

Air traffic liability

 

8,530

 

 

 

6,745

 

Loyalty program liability

 

3,492

 

 

 

3,169

 

Operating lease liabilities

 

1,431

 

 

 

1,465

 

Other accrued liabilities

 

2,860

 

 

 

2,981

 

Total current liabilities

 

24,316

 

 

 

21,496

 

 

 

 

 

Noncurrent liabilities

 

 

 

Long-term debt and finance leases, net of current maturities

 

30,772

 

 

 

32,389

 

Pension and postretirement benefits

 

2,694

 

 

 

2,837

 

Loyalty program liability

 

5,884

 

 

 

5,976

 

Operating lease liabilities

 

6,506

 

 

 

6,559

 

Other liabilities

 

1,473

 

 

 

1,258

 

Total noncurrent liabilities

 

47,329

 

 

 

49,019

 

 

 

 

 

Stockholders' equity (deficit)

 

 

 

Common stock, 653,286,761 shares outstanding at June 30, 2023

 

7

 

 

 

6

 

Additional paid-in capital

 

7,321

 

 

 

7,291

 

Accumulated other comprehensive loss

 

(4,550

)

 

 

(4,585

)

Retained deficit

 

(7,163

)

 

 

(8,511

)

Total stockholders' deficit

 

(4,385

)

 

 

(5,799

)

 

 

 

 

Total liabilities and stockholders’ equity (deficit)

$

67,260

 

 

$

64,716