American Airlines Group Inc. (NASDAQ: AAL) today reported its
first-quarter 2021 financial results, including:
- First-quarter revenue of $4.0 billion, down 53% year
over year on a 39% year-over-year reduction in total available seat
miles (ASMs).
- First-quarter net loss of $1.3 billion, or ($1.97) per
share. Excluding net special
items1, first-quarter net loss
was $2.7 billion, or ($4.32) per share.
- Raised $10 billion through debt offering backed by the
AAdvantage program and used a portion of the proceeds to prepay in
full the secured loan from the U.S. Department of the
Treasury.
- Ended the first quarter with approximately $17.3
billion of total available liquidity. Company expects to end the
second quarter with approximately $19.5 billion in total available
liquidity.
“We are incredibly proud of the American Airlines team for their
continued care of our customers and each other,” said American’s
Chairman and CEO Doug Parker. “Our team has shown up every day
throughout the pandemic and served more customers than any other
airline. That focus has served as our inspiration and positions us
well as even more customers return to the skies.
“Looking forward, with the momentum underway from the first
quarter, we see signs of continued recovery in demand. We
remain confident the network enhancements, customer-focused
improvements and efficiency measures we’ve put into place will
ensure American is well-positioned for the recovery.”
American continues to take steps to strengthen its business and
respond to the pandemic, with an emphasis on supporting its
customers, team members and communities; reducing costs; and
improving its liquidity position and balance sheet.
To support its customers, team members and communities,
American:
- Enhanced its travel planning tool to help customers make
informed decisions on where to travel and what to expect upon
arrival. With one click, customers can view quarantine, document or
testing requirements, as well as book flights.
- Expanded acceptance of VeriFLY, the mobile health wallet that
simplifies and verifies travel requirements, to include all
international flights to the U.S. and flights from the U.S. to 11
countries. American’s partners Aer Lingus, British Airways, Iberia
and Japan Airlines also began accepting VeriFLY during the first
quarter.
- Expanded its touchless technology trial to allow customers to
use biometric scanners to check their bags prior to departure at
Dallas-Fort Worth International Airport (DFW). American will
utilize the same technology to allow customers to gain entrance to
an Admirals Club lounge at DFW later this year and will consider
additional airport solutions going forward.
- Updated its mask requirement to align with directives from the
Centers for Disease Control and Prevention and the Transportation
Security Administration.
- Expanded preflight COVID-19 testing options to give customers
access to in-person testing at more than 150 local urgent care
facilities and hospitals through GoHealth Urgent Care. American
also now allows customers to redeem AAdvantage® miles for at-home
COVID-19 testing kits through LetsGetChecked.
- Canceled the 13,000 WARN notices sent to team members in
February following the passage of the COVID-19 relief package that
includes an extension of the Payroll Support Program (PSP).
- Introduced an incentive program to encourage team members to
get the COVID-19 vaccine. American’s U.S.-based mainline and wholly
owned team members who get vaccinated will receive an extra
vacation day in 2022 as well as $50 in recognition points.
- Partnered with health care providers and airports to establish
on-site team member vaccination locations in Chicago, Charlotte,
Dallas-Fort Worth and Tulsa.
- Continued to transport critical goods, including the COVID-19
vaccine, through strategic cargo-only flights. American helped
customers move 230 million pounds of goods around the world in the
first quarter, including 98 million pounds on its nearly 2,700
cargo-only flights.
- Reached agreements with Deloitte and Kuehne+Nagel to help
stimulate more production of sustainable aviation fuel and help our
customers reduce their emissions from travel.
To reduce costs and conserve cash,
American:
- Incorporated more than $1.3 billion of permanent non-volume
cost reductions into its 2021 plans. This includes approximately
$500 million in management reductions, $600 million in labor
productivity enhancements, and $200 million in other permanent cost
reductions.
- Reached an agreement with Boeing to defer and convert five
787-8 aircraft to 787-9 aircraft. These deliveries are now expected
to occur in 2023 and will retain their existing financing.
American’s remaining 14 787-8 aircraft will now be delivered by the
end of the first quarter of 2022.
- Exercised its remaining deferral rights on the Boeing 737 MAX
aircraft that were previously scheduled to be delivered in 2021 and
2022. With this adjustment, the delivery of these 18 MAX aircraft
is now expected to occur in 2023 and 2024.
- Accelerated its cabin-standardization program by a year with
all Boeing 737s expected to be completed by the second quarter of
2021 and all Airbus A321s expected to be completed by the end of
2021.
- Enhanced its technology capabilities through a virtual
assistant for customers in the American Airlines mobile app;
ConnectMe, a real-time chat tool for airport team members; and an
automated crew recovery program.
- Opened a new voluntary early out program in February, which
approximately 1,600 team members opted into.
To improve its liquidity position and balance sheet,
American:
- Reduced its average cash burn rate2 to approximately $27
million per day in the first quarter. This includes approximately
$9 million per day in regular debt principal and cash severance
payments. For the month of March, the Company’s estimated average
daily cash burn rate was approximately $4 million. Excluding
approximately $8 million per day of regular debt principal and cash
severance payments, the Company’s cash burn rate turned positive in
March.
- Obtained the right to access an additional $3.3 billion in
financial assistance through the COVID-19 relief package passed and
signed into law in early March. In addition to extending the PSP,
the legislation will allow the Company to defer approximately $2
billion in pension funding over the next five years.
- Issued $6.5 billion of bonds and entered into a new $3.5
billion term loan facility, using the AAdvantage program as
collateral for both.
- Used a portion of the proceeds from the AAdvantage financing to
prepay its secured loan from the U.S. Department of the Treasury.
In doing so, American has terminated its loan commitments under the
secured loan agreement authorized by the CARES Act.
- Repaid in full $2.8 billion under three separate revolving
credit facilities, reducing the Company’s outstanding debt by $2.8
billion without changing its total available liquidity. American is
able to draw upon the revolving commitments again or leave them
undrawn, per the terms of the underlying credit agreements until
such commitments expire, which is currently scheduled to occur in
October 2024 for substantially all of the commitments.
- Related to the aforementioned deferral of Boeing 737 MAX
aircraft, in April the Company elected to prepay $248 million of
outstanding loans under its pre-delivery payment 737 MAX credit
facility with the related pre-delivery deposits to be returned to
the Company from the resulting deferral.
- Expects to end the second quarter with approximately $19.5
billion in total available liquidity.
Network and partnershipsAmerican advanced its
newly formed partnerships with Alaska Airlines and JetBlue Airways
in the first quarter. Alaska officially joined
oneworld as a full member, giving customers more
choices and benefits and a seamless travel experience not only on
the West Coast but throughout the world. American also expanded its
codeshare with Alaska and launched new service between Seattle and
London. Additionally, American and JetBlue together will introduce
57 new domestic and international routes for customers in New York
and Boston beginning in June. The airlines are also significantly
expanding their codeshare to include more than 100 new flights. The
Alaska and JetBlue partnerships will continue to deliver
significant benefits for consumers and allow for efficient growth,
with new service launching later this year between Seattle and
Shanghai and Bangalore, and between New York and Tel Aviv, Athens,
Santiago and New Delhi.
Forward outlook The Company will continue to
match its forward capacity with observed bookings trends. Based on
current trends, American expects its second-quarter capacity to be
down 20 to 25% compared to the second quarter of 2019. The Company
expects its second-quarter total revenue to be down approximately
40% versus the second quarter 2019. The Company also expects its
second quarter pre-tax margin excluding net special items3 will be
between negative 27% and negative 30%.
For additional financial forecasting detail, please refer to the
Company’s investor update, filed with this press release with the
SEC on Form 8-K. This filing will be available at
aa.com/investorrelations.
Conference call and webcast detailsThe
Company will conduct a live audio webcast of its financial
results conference call at 7:30 a.m. CDT 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 May 22.
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.
- The Company recognized $1.95
billion of net special credits before the effect of taxes in the
first quarter. Net special credits principally include a credit of
$2.1 billion related to the financial assistance received pursuant
to Payroll Support Program Extension Agreement offset in part by
severance charges related to voluntary early retirement programs
offered to team members during the first quarter.
- A reconciliation of this
calculation can be found in the tables that follow.
- American 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.
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 Information
Certain of the statements contained in this
report should be considered forward-looking statements within the
meaning of the Securities Act, 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 the Company’s
plans, objectives, expectations, intentions, estimates and
strategies for the future, the continuing availability of
borrowings under revolving lines of credit, 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 March 31, 2021 (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. In particular, the consequences of the coronavirus
outbreak to economic conditions and the travel industry in general
and the financial position and operating results of the Company in
particular have been material, are changing rapidly, and cannot be
predicted. 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
Communicationsmediarelations@aa.com
Investor
Relationsinvestor.relations@aa.com
American Airlines Group Inc. |
Condensed Consolidated Statements of
Operations |
(In millions, except share and per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
3 Months Ended March 31, |
|
Percent Increase |
|
|
|
2021 |
|
|
2020 (1) |
|
(Decrease) |
|
|
|
|
|
|
|
|
Operating revenues: |
|
|
|
|
|
|
Passenger |
$ |
3,179 |
|
|
$ |
7,681 |
|
|
(58.6 |
) |
|
Cargo |
|
315 |
|
|
|
147 |
|
|
nm |
|
(2) |
Other |
|
514 |
|
|
|
687 |
|
|
(25.3 |
) |
|
Total operating revenues |
|
4,008 |
|
|
|
8,515 |
|
|
(52.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Aircraft fuel and related taxes |
|
1,034 |
|
|
|
1,784 |
|
|
(42.0 |
) |
|
Salaries, wages and benefits |
|
2,730 |
|
|
|
3,219 |
|
|
(15.2 |
) |
|
Regional expenses: |
|
|
|
|
|
|
|
|
|
|
|
Regional operating expenses |
|
544 |
|
|
|
1,057 |
|
|
(48.6 |
) |
|
Regional depreciation and amortization |
|
81 |
|
|
|
83 |
|
|
(2.7 |
) |
|
Maintenance, materials and repairs |
|
376 |
|
|
|
629 |
|
|
(40.2 |
) |
|
Other rent and landing fees |
|
570 |
|
|
|
611 |
|
|
(6.6 |
) |
|
Aircraft rent |
|
351 |
|
|
|
334 |
|
|
4.9 |
|
|
Selling expenses |
|
151 |
|
|
|
385 |
|
|
(60.8 |
) |
|
Depreciation and amortization |
|
478 |
|
|
|
560 |
|
|
(14.6 |
) |
|
Special items, net |
|
(1,708 |
) |
|
|
1,132 |
|
|
nm |
|
|
Other |
|
716 |
|
|
|
1,270 |
|
|
(43.6 |
) |
|
Total operating expenses |
|
5,323 |
|
|
|
11,064 |
|
|
(51.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(1,315 |
) |
|
|
(2,549 |
) |
|
(48.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
4 |
|
|
|
21 |
|
|
(83.3 |
) |
|
Interest expense, net |
|
(371 |
) |
|
|
(257 |
) |
|
43.9 |
|
|
Other income (expense), net |
|
109 |
|
|
|
(105 |
) |
|
nm |
|
|
Total nonoperating expense, net |
|
(258 |
) |
|
|
(341 |
) |
|
(24.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(1,573 |
) |
|
|
(2,890 |
) |
|
(45.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
(323 |
) |
|
|
(649 |
) |
|
(50.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(1,250 |
) |
|
$ |
(2,241 |
) |
|
(44.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(1.97 |
) |
|
$ |
(5.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
634,609 |
|
|
|
425,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Percent change may not recalculate due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Beginning in the first quarter of 2021, aircraft fuel and
related taxes as well as certain salaries, wages and benefits,
other rent and landing fees, selling and other expenses are no
longer allocated to regional expenses on the Company's condensed
consolidated statements of operations. The first quarter of 2020
condensed consolidated statement of operations has been recast to
conform to the 2021 presentation. This statement of operations
presentation change has no impact on total operating expenses or
net loss. |
|
|
|
|
|
|
|
(2) Not meaningful or greater than 100% change. |
American Airlines Group Inc. |
Consolidated Operating Statistics
(1) |
(Unaudited) |
|
|
|
|
|
|
|
|
3 Months Ended March 31, |
|
Increase |
|
|
2021 |
|
2020 |
|
(Decrease) |
|
|
|
|
|
|
|
|
Revenue passenger miles (millions) |
22,464 |
|
45,171 |
|
(50.3 |
) |
% |
Available seat miles (ASM) (millions) |
37,764 |
|
62,099 |
|
(39.2 |
) |
% |
Passenger load factor (percent) |
59.5 |
|
72.7 |
|
(13.2 |
) |
pts |
Yield (cents) |
14.15 |
|
17.00 |
|
(16.8 |
) |
% |
Passenger revenue per ASM (cents) |
8.42 |
|
12.37 |
|
(31.9 |
) |
% |
Total revenue per ASM (cents) |
10.61 |
|
13.71 |
|
(22.6 |
) |
% |
Cargo ton miles (millions) |
532 |
|
436 |
|
22.1 |
|
% |
Cargo yield per ton mile (cents) |
59.18 |
|
33.62 |
|
76.0 |
|
% |
|
|
|
|
|
|
|
Fuel consumption (gallons in millions) |
608 |
|
972 |
|
(37.4 |
) |
% |
Average aircraft fuel price including related taxes (dollars per
gallon) |
1.70 |
|
1.83 |
|
(7.4 |
) |
% |
|
|
|
|
|
|
|
Operating cost per ASM (cents) |
14.09 |
|
17.82 |
|
(20.9 |
) |
% |
Operating cost per ASM excluding net special items (cents) |
19.19 |
|
15.84 |
|
21.1 |
|
% |
Operating cost per ASM excluding net special items and fuel
(cents) |
16.45 |
|
12.97 |
|
26.8 |
|
% |
|
|
|
|
|
|
|
Passenger enplanements (thousands) |
24,238 |
|
42,201 |
|
(42.6 |
) |
% |
Departures (thousands): |
|
|
|
|
|
|
Mainline |
153 |
|
253 |
|
(39.5 |
) |
% |
Regional |
186 |
|
279 |
|
(33.5 |
) |
% |
Total |
339 |
|
532 |
|
(36.4 |
) |
% |
Average stage length (miles): |
|
|
|
|
|
|
Mainline |
1,205 |
|
1,153 |
|
4.5 |
|
% |
Regional |
505 |
|
469 |
|
7.7 |
|
% |
Total |
821 |
|
794 |
|
3.4 |
|
% |
Aircraft at end of period: |
|
|
|
|
|
|
Mainline (2) |
851 |
|
942 |
|
(9.7 |
) |
% |
Regional (3) |
548 |
|
542 |
|
1.1 |
|
% |
Total |
1,399 |
|
1,484 |
|
(5.7 |
) |
% |
Full-time equivalent employees at end of period: |
|
|
|
|
|
|
Mainline |
88,500 |
|
104,400 |
|
(15.2 |
) |
% |
Regional (4) |
24,700 |
|
27,100 |
|
(8.9 |
) |
% |
Total |
113,200 |
|
131,500 |
|
(13.9 |
) |
% |
|
|
|
|
|
|
|
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 35 Boeing 737-800 mainline aircraft that are in
temporary storage at March 31, 2021. |
(3) Includes aircraft owned and leased by American as well as
aircraft operated by third-party regional carriers under capacity
purchase agreements. Excludes two Embraer 145 regional aircraft
that are in temporary storage at March 31, 2021. |
(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 March 31, |
|
Increase |
|
|
2021 |
|
2020 |
|
(Decrease) |
|
|
|
|
|
|
|
|
Domestic (1) |
|
|
|
|
|
|
Revenue passenger miles (millions) |
18,538 |
|
31,856 |
|
(41.8 |
) |
% |
Available seat miles (ASM) (millions) |
27,952 |
|
44,238 |
|
(36.8 |
) |
% |
Passenger load factor (percent) |
66.3 |
|
72.0 |
|
(5.7 |
) |
pts |
Passenger revenue (dollars in millions) |
2,655 |
|
5,780 |
|
(54.1 |
) |
% |
Yield (cents) |
14.32 |
|
18.14 |
|
(21.1 |
) |
% |
Passenger revenue per ASM (cents) |
9.50 |
|
13.07 |
|
(27.3 |
) |
% |
|
|
|
|
|
|
|
Latin America (2) |
|
|
|
|
|
|
Revenue passenger miles (millions) |
3,576 |
|
7,116 |
|
(49.7 |
) |
% |
Available seat miles (millions) |
7,865 |
|
9,068 |
|
(13.3 |
) |
% |
Passenger load factor (percent) |
45.5 |
|
78.5 |
|
(33.0 |
) |
pts |
Passenger revenue (dollars in millions) |
482 |
|
1,180 |
|
(59.2 |
) |
% |
Yield (cents) |
13.47 |
|
16.57 |
|
(18.8 |
) |
% |
Passenger revenue per ASM (cents) |
6.12 |
|
13.01 |
|
(52.9 |
) |
% |
|
|
|
|
|
|
|
Atlantic |
|
|
|
|
|
|
Revenue passenger miles (millions) |
199 |
|
4,185 |
|
(95.2 |
) |
% |
Available seat miles (millions) |
1,151 |
|
6,239 |
|
(81.5 |
) |
% |
Passenger load factor (percent) |
17.4 |
|
67.1 |
|
(49.7 |
) |
pts |
Passenger revenue (dollars in millions) |
22 |
|
523 |
|
(95.8 |
) |
% |
Yield (cents) |
11.10 |
|
12.50 |
|
(11.2 |
) |
% |
Passenger revenue per ASM (cents) |
1.93 |
|
8.39 |
|
(77.0 |
) |
% |
|
|
|
|
|
|
|
Pacific |
|
|
|
|
|
|
Revenue passenger miles (millions) |
151 |
|
2,014 |
|
(92.5 |
) |
% |
Available seat miles (millions) |
796 |
|
2,554 |
|
(68.8 |
) |
% |
Passenger load factor (percent) |
18.9 |
|
78.8 |
|
(59.9 |
) |
pts |
Passenger revenue (dollars in millions) |
20 |
|
198 |
|
(89.7 |
) |
% |
Yield (cents) |
13.53 |
|
9.84 |
|
37.4 |
|
% |
Passenger revenue per ASM (cents) |
2.56 |
|
7.76 |
|
(67.0 |
) |
% |
|
|
|
|
|
|
|
Total International |
|
|
|
|
|
|
Revenue passenger miles (millions) |
3,926 |
|
13,315 |
|
(70.5 |
) |
% |
Available seat miles (millions) |
9,812 |
|
17,861 |
|
(45.1 |
) |
% |
Passenger load factor (percent) |
40.0 |
|
74.5 |
|
(34.5 |
) |
pts |
Passenger revenue (dollars in millions) |
524 |
|
1,901 |
|
(72.4 |
) |
% |
Yield (cents) |
13.35 |
|
14.28 |
|
(6.5 |
) |
% |
Passenger revenue per ASM (cents) |
5.34 |
|
10.64 |
|
(49.8 |
) |
% |
|
|
|
|
|
|
|
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:
- Pre-Tax Loss (GAAP measure) to Pre-Tax 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
Loss (GAAP measure) to Net Loss Excluding Net Special Items
(non-GAAP measure) - Basic and Diluted Loss Per Share (GAAP
measure) to Basic and Diluted Loss Per Share Excluding Net Special
Items (non-GAAP measure) - Operating Loss (GAAP measure) to
Operating 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 aircraft
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, |
|
Reconciliation of Pre-Tax Loss Excluding Net Special
Items |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except share and per share amounts) |
|
|
|
|
|
|
|
|
Pre-tax loss as reported |
|
|
$ |
(1,573 |
) |
|
$ |
(2,890 |
) |
|
Pre-tax net special items: |
|
|
|
|
|
|
|
|
|
|
Mainline operating special items, net (1) |
|
|
|
(1,708 |
) |
|
|
1,132 |
|
|
Regional operating special items, net (2) |
|
|
|
(215 |
) |
|
|
93 |
|
|
Nonoperating special items, net (3) |
|
|
|
(23 |
) |
|
|
217 |
|
|
Total pre-tax net special items |
|
|
|
(1,946 |
) |
|
|
1,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax loss excluding net special items |
|
|
$ |
(3,519 |
) |
|
$ |
(1,448 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Pre-Tax Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax loss as reported |
|
|
$ |
(1,573 |
) |
|
$ |
(2,890 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues as reported |
|
|
$ |
4,008 |
|
|
$ |
8,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin |
|
|
|
-39.3 |
% |
|
|
-33.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Pre-Tax Margin Excluding Net Special
Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax loss excluding net special items |
|
|
$ |
(3,519 |
) |
|
$ |
(1,448 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues as reported |
|
|
$ |
4,008 |
|
|
$ |
8,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax margin excluding net special items |
|
|
|
-87.8 |
% |
|
|
-17.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Loss Excluding Net Special
Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss as reported |
|
|
$ |
(1,250 |
) |
|
$ |
(2,241 |
) |
|
Net special items: |
|
|
|
|
|
|
|
|
|
|
Total pre-tax net special items (1), (2), (3) |
|
|
|
(1,946 |
) |
|
|
1,442 |
|
|
Net tax effect of net special items |
|
|
|
453 |
|
|
|
(330 |
) |
|
Net loss excluding net special items |
|
|
$ |
(2,743 |
) |
|
$ |
(1,129 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Basic and Diluted Loss Per Share
Excluding Net Special Items |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss excluding net special items |
|
|
$ |
(2,743 |
) |
|
$ |
(1,129 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Shares used for computation (in thousands): |
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
|
634,609 |
|
|
|
425,713 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share excluding net special items: |
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
$ |
(4.32 |
) |
|
$ |
(2.65 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March 31, |
|
Reconciliation of Operating Loss Excluding Net Special
Items |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss as reported |
|
|
$ |
(1,315 |
) |
|
$ |
(2,549 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Operating net special items: |
|
|
|
|
|
|
|
|
|
|
Mainline operating special items, net (1) |
|
|
|
(1,708 |
) |
|
|
1,132 |
|
|
Regional operating special items, net (2) |
|
|
|
(215 |
) |
|
|
93 |
|
|
Operating loss excluding net special items |
|
|
$ |
(3,238 |
) |
|
$ |
(1,324 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Total Operating Cost per ASM Excluding
Net Special Items and Fuel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses as reported |
|
|
$ |
5,323 |
|
|
$ |
11,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating net special items: |
|
|
|
|
|
|
|
|
|
|
Mainline operating special items, net (1) |
|
|
|
1,708 |
|
|
|
(1,132 |
) |
|
Regional operating special items, net (2) |
|
|
|
215 |
|
|
|
(93 |
) |
|
Total operating expenses, excluding net special items |
|
|
|
7,246 |
|
|
|
9,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft fuel and related taxes |
|
|
|
(1,034 |
) |
|
|
(1,784 |
) |
|
Total operating expenses, excluding net special items and fuel |
|
|
$ |
6,212 |
|
|
$ |
8,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in cents) |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses per ASM as reported |
|
|
|
14.09 |
|
|
|
17.82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating net special items per ASM: |
|
|
|
|
|
|
|
|
|
|
Mainline operating special items, net (1) |
|
|
|
4.52 |
|
|
|
(1.82 |
) |
|
Regional operating special items, net (2) |
|
|
|
0.57 |
|
|
|
(0.15 |
) |
|
Total operating expenses per ASM, excluding net special items |
|
|
|
19.19 |
|
|
|
15.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft fuel and related taxes per ASM |
|
|
|
(2.74 |
) |
|
|
(2.87 |
) |
|
Total operating expenses per ASM, excluding net special items and
fuel |
|
|
|
16.45 |
|
|
|
12.97 |
|
|
|
|
|
|
|
|
|
Note: Amounts may not recalculate due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
FOOTNOTES: |
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
The 2021 first
quarter mainline operating special items, net principally included
$1.9 billion of Payroll Support Program (PSP) financial assistance,
offset in part by $168 million of salary and medical costs
primarily associated with certain team members who opted in to
voluntary early retirement programs offered as a result of
reductions to the Company's operation due to the COVID-19 pandemic.
Cash payments for salary and medical costs associated with our
voluntary early retirement programs were approximately $170 million
for the 2021 first quarter. 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 the
Company's 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
primarily associated with certain team members who opted in to a
voluntary early retirement program. Fleet impairment charges in the
2020 first quarter 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 fleets, which were retired as a result of the
decline in demand for air travel due to the COVID-19 pandemic. |
|
|
|
|
|
|
|
(2) |
The 2021 first
quarter regional operating special items, net included $244 million
of PSP financial assistance, offset in part by $27 million of fleet
impairment charges. The fleet impairment charges principally
included a non-cash write-down of regional aircraft resulting from
the Company’s decision to retire its remaining fleet of Embraer 140
aircraft earlier than planned. The 2020 first quarter regional
operating special items, net primarily included an $88 million
non-cash write-down of regional aircraft, principally related to
the retirement of certain Embraer 140 and Bombardier CRJ200
aircraft as a result of the decline in demand for air travel due to
the COVID-19 pandemic. |
|
|
|
|
|
|
|
(3) |
Principally
included mark-to-market net unrealized gains and losses associated
with certain equity investments and treasury rate lock derivative
instruments as well as non-cash charges associated with debt
refinancings and extinguishments. |
|
Average Daily Cash Burn |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company's average daily cash burn 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 liquidity position and cash flows from its core operating
performance. The Company defines cash burn as net cash provided by
(used in) operating activities, net cash provided by (used in)
investing activities and net cash provided by (used in) financing
activities, adjusted for (1) Payroll Support Program financial
assistance, (2) net purchases (proceeds from sale) of short-term
investments and restricted short-term investments, (3) proceeds
from issuance of long-term debt, net of deferred financing costs,
but excluding aircraft financing, (4) proceeds from issuance of
equity, (5) prepayments of long-term debt and (6) other cash flows
that are not representative of the Company's core operating
performance. 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. |
|
|
|
|
|
|
|
|
|
|
|
3 Months Ended March 31, 2021 |
|
3 Months Ended December 31, 2020 |
|
3 Months Ended September 30, 2020 |
|
3 Months Ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
(in millions, except days in period) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
$ |
174 |
|
|
$ |
(2,800 |
) |
|
$ |
(2,612 |
) |
|
$ |
(963 |
) |
|
Net cash provided by (used in) investing activities |
|
(7,152 |
) |
|
|
1,696 |
|
|
|
923 |
|
|
|
(6,799 |
) |
|
Net cash provided by financing activities |
|
7,013 |
|
|
|
1,206 |
|
|
|
1,519 |
|
|
|
7,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payroll Support Program financial assistance |
|
(2,191 |
) |
|
|
- |
|
|
|
(525 |
) |
|
|
(3,693 |
) |
|
Net purchases (proceeds from sale) of short-term investments and
restricted short-term investments |
|
7,336 |
|
|
|
(1,422 |
) |
|
|
(1,391 |
) |
|
|
6,608 |
|
|
Proceeds from issuance of non-aircraft long-term debt, net of
deferred financing costs |
|
(10,699 |
) |
|
|
- |
|
|
|
(1,926 |
) |
|
|
(7,714 |
) |
|
Proceeds from issuance of equity |
|
(316 |
) |
|
|
(1,443 |
) |
|
|
- |
|
|
|
(1,525 |
) |
|
Prepayments of long-term debt |
|
3,393 |
|
|
|
- |
|
|
|
- |
|
|
|
1,047 |
|
|
Other |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash burn (1) |
$ |
(2,442 |
) |
|
$ |
(2,763 |
) |
|
$ |
(4,012 |
) |
|
$ |
(5,296 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days in period |
|
90 |
|
|
|
92 |
|
|
|
92 |
|
|
|
91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily cash burn |
$ |
(27 |
) |
|
$ |
(30 |
) |
|
$ |
(44 |
) |
|
$ |
(58 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Amounts may not recalculate due to
rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Of the total cash
burn for each of the three months ended March 31, 2021, December
31, 2020, September 30, 2020 and June 30, 2020, approximately $660
million, $515 million, $540 million and $505 million were cash
payments for debt amortization, respectively, and approximately
$170 million, $195 million, $120 million and $50 million were cash
payments for salary and medical costs principally for the Company's
voluntary early retirement programs, respectively, totaling an
equivalent of approximately $9 million, $8 million, $8 million and
$6 million per day, respectively. |
American Airlines Group Inc. |
Condensed Consolidated Statements of Cash
Flows |
(In millions)(Unaudited) |
|
|
|
|
|
|
|
3 Months Ended March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities |
$ |
174 |
|
|
$ |
(168 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
Capital expenditures, net of aircraft purchase deposit returns |
|
19 |
|
|
|
(845 |
) |
Proceeds from sale of property and equipment |
|
108 |
|
|
|
35 |
|
Proceeds from sale-leaseback transactions |
|
99 |
|
|
|
280 |
|
Purchases of short-term investments |
|
(8,557 |
) |
|
|
(820 |
) |
Sales of short-term investments |
|
1,415 |
|
|
|
1,237 |
|
Increase in restricted short-term investments |
|
(194 |
) |
|
|
- |
|
Other investing activities |
|
(42 |
) |
|
|
(49 |
) |
Net cash used in investing activities |
|
(7,152 |
) |
|
|
(162 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
10,861 |
|
|
|
1,698 |
|
Payments on long-term debt and finance leases |
|
(4,054 |
) |
|
|
(926 |
) |
Proceeds from issuance of equity |
|
316 |
|
|
|
- |
|
Deferred financing costs |
|
(162 |
) |
|
|
(31 |
) |
Treasury stock repurchases and shares withheld for taxes pursuant
to employee stock plans |
|
(13 |
) |
|
|
(171 |
) |
Dividend payments |
|
- |
|
|
|
(43 |
) |
Other financing activities |
|
65 |
|
|
|
(1 |
) |
Net cash provided by financing activities |
|
7,013 |
|
|
|
526 |
|
Net increase in cash and restricted cash |
|
35 |
|
|
|
196 |
|
Cash and restricted cash at beginning of period |
|
399 |
|
|
|
290 |
|
Cash and restricted cash at end of period (1) |
$ |
434 |
|
|
$ |
486 |
|
|
|
|
|
|
|
|
|
|
_________________________(1)The following table provides a
reconciliation of cash and restricted cash to amounts reported
within the condensed consolidated balance sheets: |
|
|
|
|
|
Cash |
$ |
277 |
|
|
$ |
474 |
|
Restricted cash included in restricted cash and short-term
investments |
|
157 |
|
|
|
12 |
|
Total cash and restricted cash |
$ |
434 |
|
|
$ |
486 |
|
American Airlines Group Inc. |
Condensed Consolidated Balance Sheets |
(In millions, except shares) |
|
|
|
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
(unaudited) |
|
|
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
Cash |
$ |
277 |
|
|
$ |
245 |
|
Short-term investments |
|
13,762 |
|
|
|
6,619 |
|
Restricted cash and short-term investments |
|
806 |
|
|
|
609 |
|
Accounts receivable, net |
|
971 |
|
|
|
1,342 |
|
Aircraft fuel, spare parts and supplies, net |
|
1,658 |
|
|
|
1,614 |
|
Prepaid expenses and other |
|
615 |
|
|
|
666 |
|
Total current assets |
|
18,089 |
|
|
|
11,095 |
|
|
|
|
|
|
|
|
|
Operating property and equipment |
|
|
|
|
|
|
|
Flight equipment |
|
37,480 |
|
|
|
37,816 |
|
Ground property and equipment |
|
9,108 |
|
|
|
9,194 |
|
Equipment purchase deposits |
|
1,136 |
|
|
|
1,446 |
|
Total property and equipment, at cost |
|
47,724 |
|
|
|
48,456 |
|
Less accumulated depreciation and amortization |
|
(16,827 |
) |
|
|
(16,757 |
) |
Total property and equipment, net |
|
30,897 |
|
|
|
31,699 |
|
|
|
|
|
|
|
|
|
Operating lease right-of-use assets |
|
8,000 |
|
|
|
8,039 |
|
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
Goodwill |
|
4,091 |
|
|
|
4,091 |
|
Intangibles, net |
|
2,019 |
|
|
|
2,029 |
|
Deferred tax asset |
|
3,632 |
|
|
|
3,239 |
|
Other assets |
|
1,921 |
|
|
|
1,816 |
|
Total other assets |
|
11,663 |
|
|
|
11,175 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
68,649 |
|
|
$ |
62,008 |
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Current maturities of long-term debt and finance leases |
$ |
2,444 |
|
|
$ |
2,797 |
|
Accounts payable |
|
1,624 |
|
|
|
1,196 |
|
Accrued salaries and wages |
|
1,576 |
|
|
|
1,716 |
|
Air traffic liability |
|
5,598 |
|
|
|
4,757 |
|
Loyalty program liability |
|
2,323 |
|
|
|
2,033 |
|
Operating lease liabilities |
|
1,595 |
|
|
|
1,651 |
|
Other accrued liabilities |
|
2,173 |
|
|
|
2,419 |
|
Total current liabilities |
|
17,333 |
|
|
|
16,569 |
|
|
|
|
|
|
|
|
|
Noncurrent liabilities |
|
|
|
|
|
|
|
Long-term debt and finance leases, net of current maturities |
|
37,247 |
|
|
|
29,796 |
|
Pension and postretirement benefits |
|
6,765 |
|
|
|
7,069 |
|
Loyalty program liability |
|
7,055 |
|
|
|
7,162 |
|
Operating lease liabilities |
|
6,738 |
|
|
|
6,777 |
|
Other liabilities |
|
1,456 |
|
|
|
1,502 |
|
Total noncurrent liabilities |
|
59,261 |
|
|
|
52,306 |
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit) |
|
|
|
|
|
|
|
Common stock, 641,374,475 shares outstanding at March 31, 2021 |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
6,980 |
|
|
|
6,894 |
|
Accumulated other comprehensive loss |
|
(7,036 |
) |
|
|
(7,103 |
) |
Retained deficit |
|
(7,895 |
) |
|
|
(6,664 |
) |
Total stockholders' deficit |
|
(7,945 |
) |
|
|
(6,867 |
) |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity (deficit) |
$ |
68,649 |
|
|
$ |
62,008 |
|
American Airlines (NASDAQ:AAL)
Historical Stock Chart
From Mar 2024 to Apr 2024
American Airlines (NASDAQ:AAL)
Historical Stock Chart
From Apr 2023 to Apr 2024