American Airlines Group Inc. (NASDAQ: AAL) today reported its
first-quarter 2020 financial results, including:
- First-quarter net loss of $2.2 billion, or ($5.26) per
share. Excluding net special items1, first-quarter net loss of $1.1
billion, or ($2.65) per share.
- Ended first quarter with $6.8 billion of available
liquidity and expects to end second quarter with approximately $11
billion of liquidity.
“Never before has our airline, or our industry, faced such a
significant challenge,” said American Airlines Chairman and CEO
Doug Parker. “True to fashion, the American Airlines team has done
a phenomenal job taking care of our customers and each other during
such difficult and often heartbreaking times. We are incredibly
proud of their selflessness and dedication to others.
“We have moved quickly and aggressively to reduce our costs and
bolster our liquidity,” Parker continued. “We are particularly
grateful for the $5.8 billion in financial assistance American will
receive through the Payroll Support Program, and we appreciate the
bipartisan congressional and U.S. Department of the Treasury and
Department of Transportation support to protect airline jobs and
ensure a strong and competitive U.S. airline industry.
“We have a lot of difficult work ahead of us. And while there is
still uncertainty in what’s to come, we are confident that through
the dedication of the American Airlines team and our swift actions,
we will get through this for our team, our customers and our
shareholders.”
COVID-19 responseIn response to the precipitous
drop-off in demand, American has acted quickly to take care of its
team members, customers and communities; reduce costs; and improve
its liquidity position.
Taking care of team members, customers and
communitiesCaring for team members, customers and the
communities American serves remains at the heart of the airline’s
actions in the first quarter.
To ensure the safety of team members and customers,
American:
- Enhanced its cleaning procedures through expanded fogging and
the use of an EPA-approved disinfectant in high-touch areas.
- Purchased face masks for frontline team members and made them
required for flight attendants starting May 1.
- Began distributing sanitizing wipes or gels and face masks to
customers. This will expand to all flights as supplies and
operational conditions allow.
- Temporarily relaxed its seating policies and adjusted airport
procedures to encourage social distancing.
- Reduced onboard food and beverage service to limit
contact.
To provide customers additional peace of mind, American:
- Extended waivers for travel occurring through the end of
September 2020, enabling customers to change plans and travel
through December 2021, and waived change fees for customers who
purchase new tickets by May 31, 2020, for future travel.
- Introduced flexible travel waivers and name changes for
corporate customers.
- Made it easier for top-tier customers to earn AAdvantage® elite
status this year.
- Extended 2020 AAdvantage status into early 2022 for all
members.
- Extended all paid Admirals Club memberships by six months.
To support the communities it serves, American:
- Launched the company’s first cargo-only flights since 1984 to
transport critical goods between the U.S. and Europe, Asia and
Latin America. American is currently able to transport more than
6.5 million pounds of critical goods weekly on its cargo-only
flights.
- Donated more than 100 tons of food to food banks in the
company’s hub cities.
- Raised, with customer participation, approximately $3 million
for the American Red Cross to support workers on the front lines of
the COVID-19 pandemic.
- Donated thousands of supply kits to patients and healthcare
workers and care packages to U.S. military members in
quarantine.
Rightsizing the airline and its cost
structureAmerican estimates a reduction of more than $12
billion in its 2020 operating and capital expenditures, achieved
through lower fuel expense and a series of actions. The
company:
- Reduced system capacity by approximately 80% in both April and
May, and 70% in June, including schedule changes announced
today.
- Accelerated the retirement of four aircraft types, consisting
of 20 Embraer 190s, 34 Boeing 757s, 17 Boeing 767s and nine Airbus
A330-300s, along with a number of older regional aircraft. These
changes remove operating complexity and bring forward cost savings
and efficiencies associated with operating fewer aircraft
types.
- Suspended all nonessential hiring, paused noncontractual pay
increases, reduced executive and board compensation, and
implemented voluntary leave and early retirement programs to reduce
labor costs. In total, nearly 39,000 team members have opted for an
early retirement, a reduced work schedule or a partially paid
leave.
- Deferred marketing expenditures and reduced contractor, event
and training expenses.
- Consolidated its footprint at its airport facilities.
Maximizing LiquidityTo bolster liquidity, the
company:
- Ended the first quarter with $6.8 billion of available
liquidity, including approximately $2 billion raised during the
quarter.
- Obtained the right to access $10.6 billion in financial
assistance through the Coronavirus Aid, Relief, and Economic
Security (CARES) Act.
- Recently had its unencumbered assets appraised and believes the
value of those assets is in excess of $10 billion, excluding the
value of the AAdvantage program. The company expects to pledge a
portion of its assets as collateral for future financings,
including the approximately $4.75 billion secured loan American has
applied for under the CARES Act.
- Suspended its capital return program, including share
repurchases and the payment of future dividends, in accordance with
the CARES Act.
- Does not have any large non-aircraft debt maturities for more
than 24 months, outside of the recently arranged $1 billion,
364-day delayed draw term loan facility.
American’s average estimated second-quarter 2020 cash burn rate
is expected to be approximately $70 million per day. As the
company’s cost initiatives gain traction, its estimated daily cash
burn rate is expected to decline over time to approximately $50
million per day for the month of June. Based on its current
forecast, the company expects to have approximately $11 billion of
liquidity at the end of the second quarter.
Conference call and webcast detailsThe
company will conduct a live audio webcast of its earnings call
today at 7:30 a.m. CDT, which 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 May
31.
NotesSee 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.
1. In the
first quarter of 2020, the company recognized $1.4 billion in net
special items before the effect of income taxes. The 2020 first
quarter mainline operating special items, net principally included
$744 million of fleet impairment charges, which consisted of a $676
million non-cash write-down of aircraft and spare parts and $68
million in write-offs of right-of-use assets and lease return costs
associated with the company’s mainline fleet, principally Boeing
757, Boeing 767, Airbus A330-300, and Embraer 190 aircraft, which
are being retired earlier than previously planned as a result of
the decline in demand for travel due to COVID-19. The company also
recognized $218 million of one-time labor contract expenses
resulting from the ratification of a new contract with its
maintenance and fleet service team members, including signing
bonuses and adjustments to vacation accruals resulting from pay
rate increases, and $205 million of salary and medical costs
associated with certain team members who opted in to a voluntary
early retirement program.
First quarter 2020 regional operating special items, net
included an $88 million non-cash write-down of regional aircraft,
principally certain Embraer 140 and Bombardier CRJ200 aircraft,
which are being retired earlier than previously planned as a result
of the decline in demand for travel due to COVID-19.
In addition, the company recognized $217 million in nonoperating
net special items in the first quarter of 2020, which principally
included mark-to-market net unrealized losses associated with
certain equity investments and treasury rate lock derivative
instruments.
About American Airlines GroupAmerican’s purpose
is 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 InformationCertain 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 Act), the Securities Exchange Act of 1934,
as amended (the Exchange Act), 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 our 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 our 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 in
our Quarterly Report on Form 10-Q for the quarter ended March 31,
2020 (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 our other filings with the Securities
and Exchange Commission. There may be other factors of which we are
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. In particular, the
consequences of the COVID-19 outbreak to economic conditions and
the travel industry in general and the financial position and
operating results of our company in particular have been material,
are changing rapidly, and cannot be predicted. We do 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.
American
Airlines Group Inc. |
Condensed
Consolidated Statements of Operations |
(In
millions, except share and per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
3 Months Ended March
31, |
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
|
PercentChange |
|
|
|
|
|
|
|
|
|
Operating
revenues: |
|
|
|
|
|
|
|
Passenger |
|
$ |
7,681 |
|
|
$ |
9,658 |
|
|
(20.5 |
) |
|
Cargo |
|
|
147 |
|
|
|
218 |
|
|
(32.7 |
) |
|
Other |
|
|
687 |
|
|
|
708 |
|
|
(2.9 |
) |
|
Total operating revenues |
|
|
8,515 |
|
|
|
10,584 |
|
|
(19.6 |
) |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Aircraft fuel and related taxes |
|
|
1,395 |
|
|
|
1,726 |
|
|
(19.2 |
) |
|
Salaries, wages and benefits |
|
|
3,140 |
|
|
|
3,090 |
|
|
1.6 |
|
|
Regional expenses: |
|
|
|
|
|
|
|
Fuel |
|
|
389 |
|
|
|
423 |
|
|
(8.1 |
) |
|
Depreciation and amortization |
|
|
83 |
|
|
|
79 |
|
|
5.7 |
|
|
Other |
|
|
1,452 |
|
|
|
1,261 |
|
|
15.2 |
|
|
Maintenance, materials and repairs |
|
|
629 |
|
|
|
561 |
|
|
12.1 |
|
|
Other rent and landing fees |
|
|
468 |
|
|
|
503 |
|
|
(7.1 |
) |
|
Aircraft rent |
|
|
334 |
|
|
|
327 |
|
|
2.4 |
|
|
Selling expenses |
|
|
305 |
|
|
|
370 |
|
|
(17.7 |
) |
|
Depreciation and amortization |
|
|
560 |
|
|
|
480 |
|
|
16.7 |
|
|
Special items, net |
|
|
1,132 |
|
|
|
138 |
|
|
nm |
(1) |
Other |
|
|
1,177 |
|
|
|
1,251 |
|
|
(5.9 |
) |
|
Total operating expenses |
|
|
11,064 |
|
|
|
10,209 |
|
|
8.4 |
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
(2,549 |
) |
|
|
375 |
|
|
nm |
|
|
|
|
|
|
|
|
|
Nonoperating
income (expense): |
|
|
|
|
|
|
|
Interest income |
|
|
21 |
|
|
|
33 |
|
|
(35.8 |
) |
|
Interest expense, net |
|
|
(257 |
) |
|
|
(271 |
) |
|
(5.0 |
) |
|
Other income (expense), net |
|
|
(105 |
) |
|
|
108 |
|
|
nm |
|
Total nonoperating expense, net |
|
|
(341 |
) |
|
|
(130 |
) |
|
nm |
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
|
(2,890 |
) |
|
|
245 |
|
|
nm |
|
|
|
|
|
|
|
|
|
Income tax
provision (benefit) |
|
|
(649 |
) |
|
|
60 |
|
|
nm |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(2,241 |
) |
|
$ |
185 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share: |
|
|
|
|
|
|
|
Basic |
|
$ |
(5.26 |
) |
|
$ |
0.41 |
|
|
|
|
Diluted |
|
$ |
(5.26 |
) |
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding (in thousands): |
|
|
|
|
|
|
|
Basic |
|
|
425,713 |
|
|
|
451,951 |
|
|
|
|
Diluted |
|
|
425,713 |
|
|
|
453,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Percent change may not recalculate due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Not
meaningful. |
|
|
|
|
|
|
|
|
American
Airlines Group Inc. |
Consolidated
Operating Statistics |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March
31, |
|
|
|
|
|
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
Mainline |
|
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
|
39,313 |
|
48,481 |
|
(18.9 |
) |
% |
|
Available
seat miles (ASM) (millions) |
|
53,189 |
|
58,323 |
|
(8.8 |
) |
% |
|
Passenger
load factor (percent) |
|
73.9 |
|
83.1 |
|
(9.2 |
) |
pts |
|
|
|
|
|
|
|
|
|
|
Passenger
enplanements (thousands) |
|
30,353 |
|
36,546 |
|
(16.9 |
) |
% |
|
Departures
(thousands) |
|
253 |
|
271 |
|
(6.7 |
) |
% |
|
Aircraft at
end of period |
|
942 |
|
962 |
|
(2.1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
Block hours
(thousands) |
|
759 |
|
835 |
|
(9.2 |
) |
% |
|
Average
stage length (miles) |
|
1,153 |
|
1,178 |
|
(2.2 |
) |
% |
|
Fuel
consumption (gallons in millions) |
|
763 |
|
853 |
|
(10.5 |
) |
% |
|
Average
aircraft fuel price including related taxes (dollars per
gallon) |
|
1.83 |
|
2.02 |
|
(9.7 |
) |
% |
|
Full-time
equivalent employees at end of period |
|
104,400 |
|
103,500 |
|
0.9 |
|
% |
|
|
|
|
|
|
|
|
|
|
Regional (1) |
|
|
|
|
|
|
|
|
Revenue
passenger miles (millions) |
|
5,858 |
|
6,321 |
|
(7.3 |
) |
% |
|
Available
seat miles (millions) |
|
8,910 |
|
8,351 |
|
6.7 |
|
% |
|
Passenger
load factor (percent) |
|
65.7 |
|
75.7 |
|
(10.0 |
) |
pts |
|
|
|
|
|
|
|
|
|
|
Passenger
enplanements (thousands) |
|
11,848 |
|
13,389 |
|
(11.5 |
) |
% |
|
Aircraft at
end of period |
|
542 |
|
602 |
|
(10.0 |
) |
% |
|
Fuel
consumption (gallons in millions) |
|
209 |
|
200 |
|
4.5 |
|
% |
|
Average
aircraft fuel price including related taxes (dollars per
gallon) |
|
1.86 |
|
2.12 |
|
(12.1 |
) |
% |
|
Full-time
equivalent employees at end of period (2) |
|
27,100 |
|
26,300 |
|
3.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
Total Mainline & Regional |
|
|
|
|
|
|
|
|
Revenue
passenger miles (millions) |
|
45,171 |
|
54,802 |
|
(17.6 |
) |
% |
|
Available
seat miles (millions) |
|
62,099 |
|
66,674 |
|
(6.9 |
) |
% |
|
Passenger
load factor (percent) |
|
72.7 |
|
82.2 |
|
(9.5 |
) |
pts |
|
Yield
(cents) |
|
17.00 |
|
17.62 |
|
(3.5 |
) |
% |
|
Passenger
revenue per ASM (cents) |
|
12.37 |
|
14.49 |
|
(14.6 |
) |
% |
|
Total
revenue per ASM (cents) |
|
13.71 |
|
15.87 |
|
(13.6 |
) |
% |
|
Cargo ton
miles (millions) |
|
436 |
|
624 |
|
(30.2 |
) |
% |
|
Cargo yield
per ton mile (cents) |
|
33.62 |
|
34.86 |
|
(3.5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
Passenger
enplanements (thousands) |
|
42,201 |
|
49,935 |
|
(15.5 |
) |
% |
|
Aircraft at
end of period (3) |
|
1,484 |
|
1,564 |
|
(5.1 |
) |
% |
|
Fuel
consumption (gallons in millions) |
|
972 |
|
1,053 |
|
(7.6 |
) |
% |
|
Average
aircraft fuel price including related taxes (dollars per
gallon) |
|
1.83 |
|
2.04 |
|
(10.1 |
) |
% |
|
Full-time
equivalent employees at end of period |
|
131,500 |
|
129,800 |
|
1.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
Operating
cost per ASM (cents) |
|
17.82 |
|
15.31 |
|
16.3 |
|
% |
|
Operating
cost per ASM excluding net special items (cents) |
|
15.84 |
|
15.11 |
|
4.9 |
|
% |
|
Operating
cost per ASM excluding net special items and fuel (cents) |
|
12.97 |
|
11.88 |
|
9.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Regional includes wholly-owned regional airline subsidiaries
and operating results from capacity purchase carriers. |
|
(2) Regional full-time
equivalent employees only include our wholly-owned regional airline
subsidiaries. |
(3) Includes aircraft
owned and leased by American as well as aircraft operated by
third-party regional carriers under capacity purchase agreements.
Excludes 49 regional aircraft that are in temporary storage as
follows: 17 Embraer 145, 15 Embraer 175, nine Embraer 140 and eight
Bombardier CRJ200 aircraft. |
|
|
|
|
|
|
|
|
|
Note: Amounts may not recalculate due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American
Airlines Group Inc. |
Consolidated
Revenue Statistics by Region |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March
31, |
|
|
|
|
|
|
2020 |
|
2019 |
|
Change |
|
|
|
|
|
|
|
|
|
|
Domestic (1) |
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
|
31,856 |
|
37,717 |
|
(15.5 |
) |
% |
Available seat miles (ASM) (millions) |
|
44,238 |
|
45,282 |
|
(2.3 |
) |
% |
Passenger load factor (percent) |
|
72.0 |
|
83.3 |
|
(11.3 |
) |
pts |
Passenger revenue (dollars in millions) |
|
5,780 |
|
7,226 |
|
(20.0 |
) |
% |
Yield (cents) |
|
18.14 |
|
19.16 |
|
(5.3 |
) |
% |
Passenger revenue per ASM (cents) |
|
13.07 |
|
15.96 |
|
(18.1 |
) |
% |
|
|
|
|
|
|
|
|
|
Latin America (2) |
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
|
7,116 |
|
8,351 |
|
(14.8 |
) |
% |
Available seat miles (millions) |
|
9,068 |
|
10,208 |
|
(11.2 |
) |
% |
Passenger load factor (percent) |
|
78.5 |
|
81.8 |
|
(3.3 |
) |
pts |
Passenger revenue (dollars in millions) |
|
1,180 |
|
1,371 |
|
(14.0 |
) |
% |
Yield (cents) |
|
16.57 |
|
16.42 |
|
0.9 |
|
% |
Passenger revenue per ASM (cents) |
|
13.01 |
|
13.43 |
|
(3.2 |
) |
% |
|
|
|
|
|
|
|
|
|
Atlantic |
|
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
|
4,185 |
|
5,042 |
|
(17.0 |
) |
% |
Available seat miles (millions) |
|
6,239 |
|
6,825 |
|
(8.6 |
) |
% |
Passenger load factor (percent) |
|
67.1 |
|
73.9 |
|
(6.8 |
) |
pts |
Passenger revenue (dollars in millions) |
|
523 |
|
673 |
|
(22.3 |
) |
% |
Yield (cents) |
|
12.50 |
|
13.35 |
|
(6.4 |
) |
% |
Passenger revenue per ASM (cents) |
|
8.39 |
|
9.86 |
|
(15.0 |
) |
% |
|
|
|
|
|
|
|
|
|
Pacific |
|
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
|
2,014 |
|
3,692 |
|
(45.5 |
) |
% |
Available seat miles (millions) |
|
2,554 |
|
4,359 |
|
(41.4 |
) |
% |
Passenger load factor (percent) |
|
78.8 |
|
84.7 |
|
(5.9 |
) |
pts |
Passenger revenue (dollars in millions) |
|
198 |
|
388 |
|
(48.9 |
) |
% |
Yield (cents) |
|
9.84 |
|
10.50 |
|
(6.3 |
) |
% |
Passenger revenue per ASM (cents) |
|
7.76 |
|
8.90 |
|
(12.8 |
) |
% |
|
|
|
|
|
|
|
|
|
Total International |
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
|
13,315 |
|
17,085 |
|
(22.1 |
) |
% |
Available seat miles (millions) |
|
17,861 |
|
21,392 |
|
(16.5 |
) |
% |
Passenger load factor (percent) |
|
74.5 |
|
79.9 |
|
(5.4 |
) |
pts |
Passenger revenue (dollars in millions) |
|
1,901 |
|
2,432 |
|
(21.9 |
) |
% |
Yield (cents) |
|
14.28 |
|
14.24 |
|
0.3 |
|
% |
Passenger revenue per ASM (cents) |
|
10.64 |
|
11.37 |
|
(6.4 |
) |
% |
|
|
|
|
|
|
|
|
|
(1) Domestic results
include Canada, Puerto Rico and U.S. Virgin Islands. |
(2) Latin America
results include the Caribbean. |
|
|
|
|
|
|
|
|
|
Note: Amounts may not recalculate due to
rounding. |
|
|
|
|
|
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: - 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) - Operating Income (Loss)
(GAAP measure) to Operating Income (Loss) 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). Management uses
total operating costs 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
aircraft fuel and net special items allows management an additional
tool to understand and analyze the company’s non-fuel costs and
core operating performance. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March
31, |
|
Percent Change |
|
|
|
Reconciliation of Pre-Tax Income (Loss) Excluding Net
Special Items |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
(in millions, except
per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income (loss) as reported |
|
$ |
(2,890 |
) |
|
$ |
245 |
|
|
|
|
|
|
Pre-tax net
special items: |
|
|
|
|
|
|
|
|
|
Mainline
operating special items, net (1) |
|
|
1,132 |
|
|
|
138 |
|
|
|
|
|
|
Regional
operating special items, net (2) |
|
|
93 |
|
|
|
- |
|
|
|
|
|
|
Nonoperating
special items, net (3) |
|
|
217 |
|
|
|
(69 |
) |
|
|
|
|
|
Total
pre-tax net special items |
|
|
1,442 |
|
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income (loss) excluding net special items |
|
$ |
(1,448 |
) |
|
$ |
314 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Pre-Tax Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income (loss) as reported |
|
$ |
(2,890 |
) |
|
$ |
245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating revenues as reported |
|
$ |
8,515 |
|
|
$ |
10,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin |
|
|
-33.9 |
% |
|
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Pre-Tax Margin Excluding Net Special
Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
income (loss) excluding net special items |
|
$ |
(1,448 |
) |
|
$ |
314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating revenues as reported |
|
$ |
8,515 |
|
|
$ |
10,584 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax
margin excluding net special items |
|
|
-17.0 |
% |
|
|
3.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) Excluding Net Special
Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) as reported |
|
$ |
(2,241 |
) |
|
$ |
185 |
|
|
|
|
|
|
Net special
items: |
|
|
|
|
|
|
|
|
|
Total
pre-tax net special items (1), (2), (3) |
|
|
1,442 |
|
|
|
69 |
|
|
|
|
|
|
Net
tax effect of net special items |
|
|
(330 |
) |
|
|
(17 |
) |
|
|
|
|
|
Net income
(loss) excluding net special items |
|
$ |
(1,129 |
) |
|
$ |
237 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Basic and Diluted Earnings (Loss) Per
Share Excluding Net Special Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) excluding net special items |
|
$ |
(1,129 |
) |
|
$ |
237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used
for computation (in thousands): |
|
|
|
|
|
|
|
|
|
Basic |
|
|
425,713 |
|
|
|
451,951 |
|
|
|
|
|
|
Diluted |
|
|
425,713 |
|
|
|
453,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share excluding net special items: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.65 |
) |
|
$ |
0.53 |
|
|
|
|
|
|
Diluted |
|
$ |
(2.65 |
) |
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March
31, |
|
|
|
|
|
Reconciliation of Operating Income (Loss) Excluding Net
Special Items |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss) as reported |
|
$ |
(2,549 |
) |
|
$ |
375 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
net special items: |
|
|
|
|
|
|
|
|
|
Mainline
operating special items, net (1) |
|
|
1,132 |
|
|
|
138 |
|
|
|
|
|
|
Regional
operating special items, net (2) |
|
|
93 |
|
|
|
- |
|
|
|
|
|
|
Operating
income (loss) excluding net special items |
|
$ |
(1,324 |
) |
|
$ |
513 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Total Operating Cost per ASM Excluding
Net Special Items and Fuel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses as reported |
|
$ |
11,064 |
|
|
$ |
10,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
net special items: |
|
|
|
|
|
|
|
|
|
Mainline
operating special items, net (1) |
|
|
(1,132 |
) |
|
|
(138 |
) |
|
|
|
|
|
Regional
operating special items, net (2) |
|
|
(93 |
) |
|
|
- |
|
|
|
|
|
|
Total
operating expenses, excluding net special items |
|
|
9,839 |
|
|
|
10,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel: |
|
|
|
|
|
|
|
|
|
Aircraft fuel and related taxes - mainline |
|
|
(1,395 |
) |
|
|
(1,726 |
) |
|
|
|
|
|
Aircraft fuel and related taxes - regional |
|
|
(389 |
) |
|
|
(423 |
) |
|
|
|
|
|
Total
operating expenses, excluding net special items and fuel |
|
$ |
8,055 |
|
|
$ |
7,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in cents) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses per ASM as reported |
|
|
17.82 |
|
|
|
15.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
net special items per ASM: |
|
|
|
|
|
|
|
|
|
Mainline
operating special items, net (1) |
|
|
(1.82 |
) |
|
|
(0.21 |
) |
|
|
|
|
|
Regional
operating special items, net (2) |
|
|
(0.15 |
) |
|
|
- |
|
|
|
|
|
|
Total
operating expenses per ASM, excluding net special items |
|
|
15.84 |
|
|
|
15.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel per
ASM: |
|
|
|
|
|
|
|
|
|
Aircraft fuel and related taxes - mainline |
|
|
(2.25 |
) |
|
|
(2.59 |
) |
|
|
|
|
|
Aircraft fuel and related taxes - regional |
|
|
(0.63 |
) |
|
|
(0.63 |
) |
|
|
|
|
|
Total
operating expenses per ASM, excluding net special items and
fuel |
|
|
12.97 |
|
|
|
11.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not recalculate due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOOTNOTES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The 2020 first
quarter mainline operating special items, net principally included
$744 million of fleet impairment charges, $218 million of one-time
labor contract expenses resulting from the ratification of a new
contract with our maintenance and fleet service team members,
including signing bonuses and adjustments to vacation accruals
resulting from pay rate increases, and $205 million of salary and
medical costs associated with certain team members who opted in to
a voluntary early retirement program. The fleet impairment charges
included a $676 million non-cash write-down of aircraft and spare
parts and $68 million in write-offs of right-of-use assets and
lease return costs associated with our mainline fleet, principally
Boeing 757, Boeing 767, Airbus A330-300 and Embraer 190 aircraft,
which are being retired earlier than previously planned as a result
of the decline in demand for air travel due to COVID-19. The 2019
first quarter mainline operating special items, net principally
included $83 million of fleet restructuring expenses and $37
million of merger integration expenses. |
|
|
|
|
|
|
|
|
|
|
|
(2) |
The 2020 first
quarter regional operating special items, net primarily included an
$88 million non-cash write-down of regional aircraft, principally
certain Embraer 140 and certain Bombardier CRJ200 aircraft, which
are being retired earlier than previously planned as a result of
the decline in demand for air travel due to COVID-19. |
|
|
|
|
|
|
|
|
|
|
|
(3) |
Principally
included mark-to-market net unrealized gains and losses associated
with certain equity investments and treasury rate lock derivative
instruments. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American
Airlines Group Inc. |
Condensed
Consolidated Balance Sheets |
(In
millions) |
|
|
|
|
|
|
March 31, 2020 |
|
December 31, 2019 |
|
(unaudited) |
|
|
Assets |
|
|
|
|
|
|
|
Current
assets |
|
|
|
Cash |
$ |
474 |
|
|
$ |
280 |
|
Short-term investments |
|
3,102 |
|
|
|
3,546 |
|
Restricted cash and short-term investments |
|
157 |
|
|
|
158 |
|
Accounts receivable, net |
|
1,020 |
|
|
|
1,750 |
|
Aircraft fuel, spare parts and supplies, net |
|
1,772 |
|
|
|
1,851 |
|
Prepaid expenses and other |
|
650 |
|
|
|
621 |
|
Total current assets |
|
7,175 |
|
|
|
8,206 |
|
|
|
|
|
Operating
property and equipment |
|
|
|
Flight equipment |
|
39,305 |
|
|
|
42,537 |
|
Ground property and equipment |
|
9,602 |
|
|
|
9,443 |
|
Equipment purchase deposits |
|
1,740 |
|
|
|
1,674 |
|
Total property and equipment, at cost |
|
50,647 |
|
|
|
53,654 |
|
Less accumulated depreciation and amortization |
|
(16,441 |
) |
|
|
(18,659 |
) |
Total property and equipment, net |
|
34,206 |
|
|
|
34,995 |
|
|
|
|
|
Operating
lease right-of-use assets |
|
8,619 |
|
|
|
8,737 |
|
|
|
|
|
Other
assets |
|
|
|
Goodwill |
|
4,091 |
|
|
|
4,091 |
|
Intangibles, net |
|
2,059 |
|
|
|
2,084 |
|
Deferred tax asset |
|
1,237 |
|
|
|
645 |
|
Other assets |
|
1,193 |
|
|
|
1,237 |
|
Total other assets |
|
8,580 |
|
|
|
8,057 |
|
|
|
|
|
Total assets |
$ |
58,580 |
|
|
$ |
59,995 |
|
|
|
|
|
Liabilities
and Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
Current maturities of long-term debt and finance leases |
$ |
3,518 |
|
|
$ |
2,861 |
|
Accounts payable |
|
1,648 |
|
|
|
2,062 |
|
Accrued salaries and wages |
|
1,633 |
|
|
|
1,541 |
|
Air traffic liability |
|
5,473 |
|
|
|
4,808 |
|
Loyalty program liability |
|
3,094 |
|
|
|
3,193 |
|
Operating lease liabilities |
|
1,752 |
|
|
|
1,708 |
|
Other accrued liabilities |
|
2,095 |
|
|
|
2,138 |
|
Total current liabilities |
|
19,213 |
|
|
|
18,311 |
|
|
|
|
|
Noncurrent
liabilities |
|
|
|
Long-term debt and finance leases, net of current maturities |
|
21,564 |
|
|
|
21,454 |
|
Pension and postretirement benefits |
|
6,107 |
|
|
|
6,052 |
|
Loyalty program liability |
|
5,757 |
|
|
|
5,422 |
|
Operating lease liabilities |
|
7,239 |
|
|
|
7,421 |
|
Other liabilities |
|
1,336 |
|
|
|
1,453 |
|
Total noncurrent liabilities |
|
42,003 |
|
|
|
41,802 |
|
|
|
|
|
Stockholders' equity (deficit) |
|
|
|
Common stock |
|
4 |
|
|
|
4 |
|
Additional paid-in capital |
|
3,861 |
|
|
|
3,945 |
|
Accumulated other comprehensive loss |
|
(6,480 |
) |
|
|
(6,331 |
) |
Retained earnings (deficit) |
|
(21 |
) |
|
|
2,264 |
|
Total stockholders' deficit |
|
(2,636 |
) |
|
|
(118 |
) |
|
|
|
|
Total liabilities and stockholders’ equity (deficit) |
$ |
58,580 |
|
|
$ |
59,995 |
|
|
|
|
|
American
Airlines Group Inc. |
Condensed
Consolidated Statements of Cash Flows |
(In
millions)(Unaudited) |
|
|
|
|
|
3 Months Ended March
31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
Net
cash provided by (used in) operating activities |
$ |
(168 |
) |
|
$ |
1,651 |
|
Cash
flows from investing activities: |
|
|
|
Capital expenditures and aircraft purchase deposits |
|
(845 |
) |
|
|
(1,305 |
) |
Proceeds from sale-leaseback transactions |
|
280 |
|
|
|
352 |
|
Proceeds from sale of property and equipment |
|
35 |
|
|
|
7 |
|
Purchases of short-term investments |
|
(820 |
) |
|
|
(570 |
) |
Sales of short-term investments |
|
1,237 |
|
|
|
1,051 |
|
Other investing activities |
|
(49 |
) |
|
|
(15 |
) |
Net cash used in investing activities |
|
(162 |
) |
|
|
(480 |
) |
Cash
flows from financing activities: |
|
|
|
Proceeds from issuance of long-term debt |
|
1,698 |
|
|
|
400 |
|
Payments on long-term debt and finance leases |
|
(926 |
) |
|
|
(849 |
) |
Deferred financing costs |
|
(31 |
) |
|
|
(6 |
) |
Treasury stock repurchases |
|
(171 |
) |
|
|
(608 |
) |
Dividend payments |
|
(43 |
) |
|
|
(46 |
) |
Other financing activities |
|
(1 |
) |
|
|
- |
|
Net cash provided by (used in) financing activities |
|
526 |
|
|
|
(1,109 |
) |
Net increase
in cash and restricted cash |
|
196 |
|
|
|
62 |
|
Cash and
restricted cash at beginning of period |
|
290 |
|
|
|
286 |
|
Cash and
restricted cash at end of period (1) |
$ |
486 |
|
|
$ |
348 |
|
|
|
|
|
|
|
|
|
(1) The following table provides a reconciliation of cash and
restricted cash to amounts reported within the condensed
consolidated balance sheets: |
|
|
|
|
Cash |
$ |
474 |
|
|
$ |
337 |
|
Restricted
cash included in restricted cash and short-term investments |
|
12 |
|
|
|
11 |
|
Total cash and restricted cash |
$ |
486 |
|
|
$ |
348 |
|
|
|
|
|
Corporate Communicationsmediarelations@aa.com
Investor Relationsinvestor.relations@aa.com
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