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FORT WORTH, Texas, Oct. 22, 2020 (GLOBE NEWSWIRE) — American Airlines Group Inc. (NASDAQ: AAL) today reported its third-quarter 2020 financial results, including:

  • Third-quarter revenue of $3.2 billion, down 73% year-over-year on a 59% year-over-year reduction in total available seat miles (ASMs).
  • Third-quarter pretax loss of $3.1 billion. Excluding net special items1, third-quarter pretax loss of $3.6 billion.
  • Third-quarter net loss of $2.4 billion, or ($4.71) per share. Excluding net special items1, third-quarter net loss of $2.8 billion, or ($5.54) per share.
  • Ended third quarter with approximately $13.6 billion of total available liquidity. In addition, in October, the company increased its loan capacity by $2 billion through the CARES Act loan program to $7.5 billion. With this increase, the company’s third-quarter pro forma liquidity balance is approximately $15.6 billion.
  • Announced authorization to issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.

“During the third quarter, we took action to reduce our costs, strengthen our financial position, and ensure our customers return to travel with confidence,” said American Airlines Chairman and CEO Doug Parker. “The American Airlines team is doing a remarkable job taking care of our customers and each other during the most challenging time in our industry’s history.

“We have a long road ahead and our team remains fully engaged and focused not just on managing through the pandemic, but on making sure we are prepared for when demand returns. We are confident that the continued efforts of our team and the actions we have taken will drive customer confidence and strengthen our company for the future.”

Supporting team members, customers and communities
To ensure the safety and well-being of its team members and customers, American:

  • Upgraded its Clean Commitment by adding the electrostatic spraying solution SurfaceWise®2 to its cleaning and safety program. SurfaceWise2 is approved by the EPA as the first-ever long-lasting product to help fight the spread of the novel coronavirus and it will be applied to American’s entire fleet in the coming months.
  • Announced a preflight COVID-19 testing program to help reopen markets to travel. Testing options are now available to customers traveling to Hawaii and Costa Rica, with Jamaica and the Bahamas soon to follow.
  • Launched a new travel tool to help customers quickly see the current COVID-19 travel guidelines for domestic and international destinations.
  • Continues to work with the Global Biorisk Advisory Council for GBAC STAR® Accreditation for its aircraft and lounges. American is the first airline to seek the accreditation and expects to receive the designation by the end of 2020.

To provide its customers additional flexibility, American:

  • Eliminated change fees for most domestic and short-haul international flying. American will also allow customers to keep the full value of their original tickets if they change their plans prior to scheduled travel.
  • Is giving customers the option to stand by on flights on the same day at no charge.
  • Enhanced its Basic Economy product to give customers the ability to tailor their travel experience, including upgrades, Preferred and Main Cabin Extra seats, priority boarding, and same-day flight changes.
  • Is allowing AAdvantage® elite members to apply their current travel benefits when purchasing a Basic Economy fare.
  • Reopened additional Admirals Club lounges with enhanced cleaning and safety protocols as customers begin planning holiday travel.

To support the communities it serves, American:

  • More than doubled its cargo-only flying from August to September and operated more than 1,900 flights serving 32 destinations during the third quarter. To date, these cargo flights have helped the airline’s customers move more than 85 million pounds of critical goods around the world amidst the COVID-19 outbreak. Through these efforts, the company’s cargo revenue was $207 million in the third quarter, effectively flat year-over-year on a 59% reduction in total ASMs.
  • Donated more than 1 million pounds of food to fight hunger in communities around the world since the start of the pandemic. Through its partnership with Feeding America®, and other charitable organizations, American has contributed its surplus food to help provide meals to families in need throughout the U.S., Europe, Asia and Latin America.

Conserving cash
American continues to take aggressive action to reduce costs and preserve cash. The airline estimates that it has removed approximately $17 billion from its operating and capital budgets for 2020. This has been achieved primarily through cost savings resulting from reduced flying. The company also:

  • Removed more than 150 aircraft from its fleet through early retirements or by placing aircraft into temporary storage. In addition to the previously announced retirements of the Boeing 757, Boeing 767, Embraer E190, Airbus A330-300, Bombardier CRJ-200 and certain other regional aircraft, the company recently decided to permanently retire all 15 of its Airbus A330-200 aircraft.
  • Reached an agreement with Boeing to secure rights to defer deliveries of 18 737 MAX aircraft scheduled to be delivered in 2021 and 2022 to 2023 and 2024. The company also finalized a series of sale-leaseback transactions to finance its remaining Airbus A321 aircraft deliveries in 2021. As a result, the company now has financing secured for all of its planned deliveries through 2021.
  • Made the difficult decision to proceed with furloughs to reduce headcount absent an extension of the CARES Act Payroll Support Program (PSP). In total, more than 20,000 team members have opted for an early out or long-term leave, and 19,000 team members were furloughed beginning Oct. 1. The company, along with its union partners, continues to aggressively fight for an extension of the PSP that would allow the airline to bring back those furloughed employees and reinstate service to small- and medium-sized markets that have suffered without the extension of funds.
  • Reduced its non-aircraft capital expense — by $700 million in 2020 and another $300 million in 2021 — through reductions in fleet modification work, the elimination of all new ground service equipment purchases, and pausing all noncritical facility investments and IT projects.

Bolstering liquidity
In addition to reducing its operating and capital expenditures, American continues to strengthen its liquidity position. The company:

  • Finalized a $5.5 billion loan agreement with the U.S. Department of the Treasury through the CARES Act loan program. In October, the company increased its loan capacity through the program to $7.5 billion.
  • Closed $1.2 billion of financing with Goldman Sachs Merchant Bank through two senior secured note transactions. American does not have any large non-aircraft debt maturities until its $750 million unsecured bonds mature in June 2022.
  • Received the final payments of allotted PSP funds, including an incremental $168 million of previously unallocated funds identified by the Treasury Department.
  • Announced authorization to issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.
  • Reduced its daily cash burn rate2 to approximately $44 million per day in the third quarter from approximately $58 million per day in the second quarter. The company presently expects its fourth-quarter cash burn rate to be approximately $25 to $30 million per day.
  • The company’s third-quarter pro forma liquidity balance is approximately $15.6 billion and it expects to end the fourth quarter with more than $13 billion in total available liquidity, which excludes any proceeds from the $1 billion at-the-market equity offering.

Demand and capacity outlook
American saw improvements in passenger demand and load factors during the third quarter, but both continue to be significantly below 2019 levels. The company will continue to match its forward capacity with observed bookings trends and currently expects its fourth-quarter system capacity to be down more than 50% year over year, with long-haul international capacity down approximately 75% year over year.

Conference call and webcast details
The company will conduct a live audio webcast of its financial results 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 Nov. 22.

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.

  1. The company recognized $519 million of operating net special items during the third quarter 2020. Mainline operating special items, net principally included $1.9 billion of Payroll Support Program (PSP) financial assistance, offset in part by $871 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs or who were involuntarily furloughed starting Oct. 1, 2020, as a result of reductions to the company’s operation due to COVID-19 and $742 million of fleet impairment charges. Regional operating special items, net totaled $224 million and principally includes the PSP financial assistance.

    Third quarter 2020 nonoperating special items, net totaled $21 million and principally included net unrealized gains associated with certain equity investments.

  2. A reconciliation of this calculation can be found in the tables that follow.

About American Airlines Group
American’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 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 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 in the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 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 the company’s other filings with the Securities and Exchange Commission. 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. 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 the company in particular have been material, are changing rapidly, and cannot be predicted. 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. 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 September 30, Percent 9 Months Ended September 30, Percent
   2020   2019  Change  2020   2019  Change
             
Operating revenues:            
Passenger $2,540  $10,995  (76.9) $11,328  $31,663  (64.2)
Cargo  207   208  (0.4)  484   647  (25.1)
Other  426   708  (39.9)  1,497   2,145  (30.2)
Total operating revenues  3,173   11,911  (73.4)  13,309   34,455  (61.4)
             
Operating expenses:            
Aircraft fuel and related taxes  453   1,989  (77.2)  2,065   5,710  (63.8)
Salaries, wages and benefits  2,705   3,219  (16.0)  8,384   9,509  (11.8)
Regional expenses:            
Fuel  158   485  (67.4)  638   1,395  (54.2)
Depreciation and amortization  79   84  (6.4)  247   246  0.3 
Other  677   1,364  (50.3)  2,753   3,941  (30.1)
Maintenance, materials and repairs  337   610  (44.7)  1,253   1,745  (28.2)
Other rent and landing fees  367   530  (30.8)  1,149   1,568  (26.7)
Aircraft rent  336   335  0.2   1,004   996  0.8 
Selling expenses  70   424  (83.5)  418   1,194  (65.0)
Depreciation and amortization  498   499  (0.3)  1,557   1,469  6.0 
Special items, net  (295)  228  nm (1) (657)  487  nm 
Other  659   1,336  (50.7)  2,404   3,859  (37.7)
Total operating expenses  6,044   11,103  (45.6)  21,215   32,119  (33.9)
             
Operating income (loss)  (2,871)  808  nm   (7,906)  2,336  nm 
             
Nonoperating income (expense):            
Interest income  5   34  (84.9)  36   103  (64.9)
Interest expense, net  (340)  (284) 19.6   (851)  (830) 2.6 
Other income (expense), net  111   (1) nm   77   76  1.2 
Total nonoperating expense, net  (224)  (251) (10.8)  (738)  (651) 13.4 
             
Income (loss) before income taxes  (3,095)  557  nm   (8,644)  1,685  nm 
              
Income tax provision (benefit)  (696)  132  nm   (1,937)  413  nm 
              
Net income (loss) $(2,399) $425  nm  $(6,707) $1,272  nm 
             
             
Earnings (loss) per common share:            
Basic $(4.71) $0.96    $(14.76) $2.85   
Diluted $(4.71) $0.96    $(14.76) $2.84   
             
Weighted average shares outstanding (in thousands):            
Basic  509,049   441,915     454,523   446,291   
Diluted  509,049   442,401     454,523   447,139   
             
             
             
Note: Percent change may not recalculate due to rounding.          
             
(1) Not meaningful or greater than 100% change.     
             
American Airlines Group Inc.
Consolidated Operating Statistics
(Unaudited)
               
  3 Months Ended September 30,    9 Months Ended September 30,   
  2020 2019 Change  2020 2019 Change 
               
Mainline              
Revenue passenger miles (millions) 14,789 57,426 (74.2)% 59,844 161,184 (62.9)%
Available seat miles (ASM) (millions) 25,562 66,330 (61.5)% 92,398 187,848 (50.8)%
Passenger load factor (percent) 57.9 86.6 (28.7)pts 64.8 85.8 (21.0)pts
               
Passenger enplanements (thousands) 14,217 40,511 (64.9)% 50,030 117,065 (57.3)%
Departures (thousands) 144 287 (49.6)% 478 837 (42.9)%
Aircraft at end of period (1) 848 940 (9.8)% 848 940 (9.8)%
               
Block hours (thousands) 406 898 (54.7)% 1,385 2,610 (46.9)%
Average stage length (miles) 1,094 1,234 (11.4)% 1,121 1,211 (7.5)%
Fuel consumption (gallons in millions) 377 981 (61.5)% 1,338 2,772 (51.7)%
Average aircraft fuel price including related taxes (dollars per gallon) 1.20 2.03 (40.7)% 1.54 2.06 (25.1)%
Full-time equivalent employees at end of period 87,700 103,800 (15.5)% 87,700 103,800 (15.5)%
               
Regional (2)              
Revenue passenger miles (millions) 3,332 7,448 (55.3)% 10,679 21,150 (49.5)%
Available seat miles (millions) 5,206 9,490 (45.1)% 17,550 26,968 (34.9)%
Passenger load factor (percent) 64.0 78.5 (14.5)pts 60.8 78.4 (17.6)pts
               
Passenger enplanements (thousands) 6,897 15,420 (55.3)% 21,656 44,265 (51.1)%
Aircraft at end of period (3) 533 612 (12.9)% 533 612 (12.9)%
Fuel consumption (gallons in millions) 122 228 (46.6)% 407 648 (37.2)%
Average aircraft fuel price including related taxes (dollars per gallon) 1.30 2.13 (38.9)% 1.57 2.15 (27.1)%
Full-time equivalent employees at end of period (4) 22,800 28,100 (18.9)% 22,800 28,100 (18.9)%
               
Total Mainline & Regional              
Revenue passenger miles (millions) 18,121 64,874 (72.1)% 70,523 182,334 (61.3)%
Available seat miles (millions) 30,768 75,820 (59.4)% 109,948 214,816 (48.8)%
Passenger load factor (percent) 58.9 85.6 (26.7)pts 64.1 84.9 (20.8)pts
Yield (cents) 14.01 16.95 (17.3)% 16.06 17.37 (7.5)%
Passenger revenue per ASM (cents) 8.25 14.50 (43.1)% 10.30 14.74 (30.1)%
Total revenue per ASM (cents) 10.31 15.71 (34.4)% 12.11 16.04 (24.5)%
Cargo ton miles (millions) 337 621 (45.8)% 949 1,889 (49.8)%
Cargo yield per ton mile (cents) 61.61 33.57 83.6 % 51.05 34.24 49.1 %
               
Passenger enplanements (thousands) 21,114 55,931 (62.3)% 71,686 161,330 (55.6)%
Aircraft at end of period (1) (3) 1,381 1,552 (11.0)% 1,381 1,552 (11.0)%
Fuel consumption (gallons in millions) 499 1,209 (58.7)% 1,745 3,420 (49.0)%
Average aircraft fuel price including related taxes (dollars per gallon) 1.23 2.05 (40.1)% 1.55 2.08 (25.4)%
Full-time equivalent employees at end of period 110,500 131,900 (16.2)% 110,500 131,900 (16.2)%
               
Operating cost per ASM (cents) 19.64 14.64 34.2 % 19.30 14.95 29.1 %
Operating cost per ASM excluding net special items (cents) 21.33 14.33 48.8 % 20.17 14.72 37.0 %
Operating cost per ASM excluding net special items and fuel (cents) 19.34 11.07 74.7 % 17.72 11.41 55.2 %
               
               
(1) Excludes 12 Boeing 737-800 mainline aircraft that are in temporary storage.     
(2) Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.       
(3) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes 29 regional aircraft that are in temporary storage as follows: 13 Embraer 175, seven Embraer 140, six Embraer 145 and three Bombardier CRJ900 aircraft.
(4) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.
               
Note: Amounts may not recalculate due to rounding.              
               
American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
                
   3 Months Ended September 30,    9 Months Ended September 30,   
   2020 2019 Change  2020 2019 Change 
                
Domestic (1)              
Revenue passenger miles (millions) 16,508 41,951 (60.6)% 55,168 121,144 (54.5)%
Available seat miles (ASM) (millions) 26,284 48,821 (46.2)% 85,956 141,153 (39.1)%
Passenger load factor (percent) 62.8 85.9 (23.1)pts 64.2 85.8 (21.6)pts
Passenger revenue (dollars in millions) 2,296 7,814 (70.6)% 9,102 23,048 (60.5)%
Yield (cents) 13.91 18.63 (25.3)% 16.50 19.03 (13.3)%
Passenger revenue per ASM (cents) 8.74 16.00 (45.4)% 10.59 16.33 (35.1)%
                
Latin America (2)              
Revenue passenger miles (millions) 1,133 7,615 (85.1)% 8,450 23,795 (64.5)%
Available seat miles (millions) 1,773 8,813 (79.9)% 11,541 28,177 (59.0)%
Passenger load factor (percent) 63.9 86.4 (22.5)pts 73.2 84.4 (11.2)pts
Passenger revenue (dollars in millions) 172 1,218 (85.8)% 1,386 3,829 (63.8)%
Yield (cents) 15.23 15.99 (4.8)% 16.41 16.09 1.9 %
Passenger revenue per ASM (cents) 9.73 13.82 (29.6)% 12.01 13.59 (11.6)%
                
Atlantic               
Revenue passenger miles (millions) 342 11,707 (97.1)% 4,716 26,513 (82.2)%
Available seat miles (millions) 1,827 13,914 (86.9)% 8,883 32,638 (72.8)%
Passenger load factor (percent) 18.7 84.1 (65.4)pts 53.1 81.2 (28.1)pts
Passenger revenue (dollars in millions) 56 1,596 (96.5)% 621 3,677 (83.1)%
Yield (cents) 16.22 13.64 19.0 % 13.16 13.87 (5.1)%
Passenger revenue per ASM (cents) 3.04 11.47 (73.5)% 6.99 11.27 (38.0)%
                
Pacific               
Revenue passenger miles (millions) 138 3,601 (96.2)% 2,189 10,882 (79.9)%
Available seat miles (millions) 884 4,272 (79.3)% 3,568 12,848 (72.2)%
Passenger load factor (percent) 15.6 84.3 (68.7)pts 61.4 84.7 (23.3)pts
Passenger revenue (dollars in millions) 16 367 (95.8)% 219 1,109 (80.3)%
Yield (cents) 11.28 10.20 10.6 % 9.98 10.19 (2.0)%
Passenger revenue per ASM (cents) 1.76 8.59 (79.6)% 6.12 8.63 (29.0)%
                
Total International              
Revenue passenger miles (millions) 1,613 22,923 (93.0)% 15,355 61,190 (74.9)%
Available seat miles (millions) 4,484 26,999 (83.4)% 23,992 73,663 (67.4)%
Passenger load factor (percent) 36.0 84.9 (48.9)pts 64.0 83.1 (19.1)pts
Passenger revenue (dollars in millions) 244 3,181 (92.3)% 2,226 8,615 (74.2)%
Yield (cents) 15.10 13.88 8.8 % 14.49 14.08 2.9 %
Passenger revenue per ASM (cents) 5.43 11.78 (53.9)% 9.28 11.70 (20.7)%
                
(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 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 September 30, Percent Change 9 Months Ended September 30, Percent Change
 Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items  2020   2019    2020   2019  
                    
   (in millions, except per share amounts)   (in millions, except per share amounts)  
              
 Pre-tax income (loss) as reported $(3,095) $557    $(8,644) $1,685   
 Pre-tax net special items:            
 Mainline operating special items, net (1)  (295)  228     (657)  487   
 Regional operating special items, net (2)  (224)  6     (309)  6   
 Nonoperating special items, net (3)  (21)  44     207   43   
 Total pre-tax net special items  (540)  278     (759)  536   
              
 Pre-tax income (loss) excluding net special items $(3,635) $835  nm $(9,403) $2,221  nm
              
              
 Calculation of Pre-Tax Margin            
              
 Pre-tax income (loss) as reported $(3,095) $557    $(8,644) $1,685   
              
 Total operating revenues as reported $3,173  $11,911    $13,309  $34,455   
              
 Pre-tax margin  -97.6%  4.7%    -64.9%  4.9%  
              
              
 Calculation of Pre-Tax Margin Excluding Net Special Items            
              
 Pre-tax income (loss) excluding net special items $(3,635) $835    $(9,403) $2,221   
              
 Total operating revenues as reported $3,173  $11,911    $13,309  $34,455   
              
 Pre-tax margin excluding net special items  -114.6%  7.0%    -70.7%  6.4%  
              
              
 Reconciliation of Net Income (Loss) Excluding Net Special Items            
              
 Net income (loss) as reported $(2,399) $425    $(6,707) $1,272   
 Net special items:            
 Total pre-tax net special items (1), (2), (3)  (540)  278     (759)  536   
 Net tax effect of net special items  121   (73)    165   (131)  
 Net income (loss) excluding net special items $(2,818) $630  nm $(7,301) $1,677  nm
              
              
 Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items              
              
 Net income (loss) excluding net special items $(2,818) $630    $(7,301) $1,677   
              
 Shares used for computation (in thousands):            
 Basic  509,049   441,915     454,523   446,291   
 Diluted  509,049   442,401     454,523   447,139   
              
 Earnings (loss) per share excluding net special items:            
 Basic $(5.54) $1.43    $(16.06) $3.76   
 Diluted $(5.54) $1.42    $(16.06) $3.75   
              
   3 Months Ended September 30,   9 Months Ended September 30,  
 Reconciliation of Operating Income (Loss) Excluding Net Special Items  2020   2019     2020   2019   
                      
   (in millions)   (in millions)  
              
 Operating income (loss) as reported $(2,871) $808    $(7,906) $2,336   
              
 Operating net special items:            
 Mainline operating special items, net (1)  (295)  228     (657)  487   
 Regional operating special items, net (2)  (224)  6     (309)  6   
 Operating income (loss) excluding net special items $(3,390) $1,042    $(8,872) $2,829   
              
              
 Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel            
              
 Total operating expenses as reported $6,044  $11,103    $21,215  $32,119   
              
 Operating net special items:            
 Mainline operating special items, net (1)  295   (228)    657   (487)  
 Regional operating special items, net (2)  224   (6)    309   (6)  
 Total operating expenses, excluding net special items  6,563   10,869     22,181   31,626   
              
 Fuel:            
 Aircraft fuel and related taxes – mainline  (453)  (1,989)    (2,065)  (5,710)  
 Aircraft fuel and related taxes – regional  (158)  (485)    (638)  (1,395)  
 Total operating expenses, excluding net special items and fuel $5,952  $8,395    $19,478  $24,521   
              
   (in cents)   (in cents)  
              
 Total operating expenses per ASM as reported  19.64   14.64     19.30   14.95   
              
 Operating net special items per ASM:            
 Mainline operating special items, net (1)  0.96   (0.30)    0.60   (0.23)  
 Regional operating special items, net (2)  0.73   (0.01)    0.28      
 Total operating expenses per ASM, excluding net special items  21.33   14.33     20.17   14.72   
              
 Fuel per ASM:            
 Aircraft fuel and related taxes – mainline  (1.47)  (2.62)    (1.88)  (2.66)  
 Aircraft fuel and related taxes – regional  (0.51)  (0.64)    (0.58)  (0.65)  
 Total operating expenses per ASM, excluding net special items and fuel  19.34   11.07     17.72   11.41   
              
 Note: Amounts may not recalculate due to rounding.            
              
 FOOTNOTES:            
              
(1)The 2020 third quarter mainline operating special items, net principally included $1.9 billion of Payroll Support Program (PSP) financial assistance, offset in part by $871 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs or who were notified in the third quarter of 2020 they were being involuntarily furloughed starting October 1, 2020, subsequent to the expiration of the PSP requirement against involuntary furloughs, as a result of reductions to the company’s operation due to COVID-19 and $742 million of fleet impairment charges. The 2020 nine month period mainline operating special items, net principally included $3.7 billion of PSP financial assistance, offset in part by $1.5 billion of fleet impairment charges, $1.4 billion of salary and medical costs associated with the voluntary early retirement programs and involuntary furlough notifications discussed above and $228 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.

Cash payments related to the special charges for salary and medical costs associated with the voluntary early retirement programs and involuntary furlough notifications discussed above were approximately $120 million and $170 million for the 2020 third quarter and nine month period, respectively.

Fleet impairment charges resulted from the company’s decision to retire certain aircraft earlier than planned driven by the decline in air travel due to COVID-19. Aircraft retired include Airbus A330-200, Boeing 757, Boeing 767, Airbus A330-300 and Embraer 190 aircraft. The 2020 third quarter fleet impairment charges included a $709 million non-cash write-down of Airbus A330-200 aircraft and spare parts and $33 million in cash charges primarily for lease return and other costs. The 2020 nine month period fleet impairment charges included a $1.4 billion non-cash write-down of mainline aircraft and spare parts and $102 million in cash charges primarily for impairment of right-of-use assets and lease return costs.

The 2019 third quarter mainline operating special items, net principally included a $201 million non-cash impairment charge related to the retirement of the company’s Embraer 190 fleet, $72 million of fleet restructuring expenses and $29 million of merger integration expenses, offset in part by a $53 million credit to reduce certain litigation reserves. The 2019 nine month period mainline operating special items, net principally included $232 million of fleet restructuring expenses, the $201 million non-cash fleet impairment charge discussed above and $106 million of merger integration expenses, offset in part by the $53 million credit to reduce certain litigation reserves.

              
(2)The 2020 third quarter regional operating special items, net primarily included $228 million of PSP financial assistance. The 2020 nine month period regional operating special items, net included $444 million of PSP financial assistance, offset in part by $117 million of fleet impairment charges and $18 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs or who were involuntarily furloughed starting October 1, 2020 as a result of reductions to the company’s operation due to COVID-19.

The fleet impairment charges principally included a non-cash write-down of regional aircraft and spare parts resulting from the company’s decision to retire certain aircraft earlier than planned driven by the decline in air travel due to COVID-19. Aircraft retired include certain Embraer 140 and Bombardier CRJ200 aircraft.

              
(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 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) CARES Act Payroll Support Program grant proceeds, (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 our 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
September 30, 2020
 3 Months Ended
June 30, 2020
      
   (in millions, except days in period)
      
 Net cash used in operating activities $(2,604) $(908)
 Net cash provided by (used in) investing activities  923   (6,799)
 Net cash provided by financing activities  1,511   7,688 
      
 Adjustments:    
 CARES Act Payroll Support Program grant proceeds  (525)  (3,693)
 Net purchases (proceeds from sale) of short-term investments and restricted short-term investments  (1,391)  6,608 
 Proceeds from issuance of non-aircraft long-term debt, net of deferred financing costs  (1,926)  (7,714)
 Proceeds from issuance of equity     (1,525)
 Prepayments of long-term debt     1,047 
 Other      
      
 Total cash burn (1) $(4,012) $(5,296)
      
 Days in period  92   91 
      
 Average daily cash burn $(44) $(58)
      
      
 Note: Amounts may not recalculate due to rounding.    
      
(1)Of the total cash burn for each of the three months ended September 30, 2020 and June 30, 2020, approximately $540 million and $505 million were cash payments for debt amortization, respectively, and approximately $120 million and $50 million were cash payments for salary and medical costs for our voluntary early retirement programs, respectively, totaling an equivalent of approximately $8 million per day and $6 million per day, respectively.
  
American Airlines Group Inc. 
Condensed Consolidated Balance Sheets
(In millions)
 
    
 September 30, 2020  December 31, 2019   
      
 (unaudited)  
Assets   
    
Current assets   
Cash$253  $280 
Short-term investments 8,031   3,546 
Restricted cash and short-term investments 508   158 
Accounts receivable, net 1,135   1,750 
Aircraft fuel, spare parts and supplies, net 1,633   1,851 
Prepaid expenses and other 780   621 
Total current assets 12,340   8,206 
    
Operating property and equipment   
Flight equipment 37,576   42,537 
Ground property and equipment 9,451   9,443 
Equipment purchase deposits 1,899   1,674 
Total property and equipment, at cost 48,926   53,654 
Less accumulated depreciation and amortization (16,670)  (18,659)
Total property and equipment, net 32,256   34,995 
    
Operating lease right-of-use assets 7,979   8,737 
    
Other assets   
Goodwill 4,091   4,091 
Intangibles, net 2,039   2,084 
Deferred tax asset 2,425   645 
Other assets 1,643   1,237 
Total other assets 10,198   8,057 
        
    
Total assets$62,773  $59,995 
        
        
    
Liabilities and Stockholders’ Equity (Deficit)   
    
Current liabilities   
Current maturities of long-term debt and finance leases$2,710  $2,861 
Accounts payable 1,077   2,062 
Accrued salaries and wages 1,919   1,541 
Air traffic liability 4,903   4,808 
Loyalty program liability 2,051   3,193 
Operating lease liabilities 1,736   1,708 
Other accrued liabilities 2,188   2,138 
Total current liabilities 16,584   18,311 
    
Noncurrent liabilities   
Long-term debt and finance leases, net of current maturities 30,076   21,454 
Pension and postretirement benefits 6,310   6,052 
Loyalty program liability 7,043   5,422 
Operating lease liabilities 6,683   7,421 
Other liabilities 1,605   1,453 
Total noncurrent liabilities 51,717   41,802 
    
Stockholders’ equity (deficit)   
Common stock 5   4 
Additional paid-in capital 5,430   3,945 
Accumulated other comprehensive loss (6,476)  (6,331)
Retained earnings (deficit) (4,487)  2,264 
Total stockholders’ deficit (5,528)  (118)
        
        
    
Total liabilities and stockholders’ equity (deficit)$62,773  $59,995 
        
        
    
American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
     
  9 Months Ended September 30,
   2020   2019 
     
Net cash provided by (used in) operating activities$(3,680) $3,215 
Cash flows from investing activities:   
Capital expenditures and aircraft purchase deposits (1,810)  (3,129)
Proceeds from sale-leaseback transactions 433   629 
Proceeds from sale of property and equipment 251   42 
Purchases of short-term investments (7,086)  (2,878)
Sales of short-term investments 2,603   2,524 
Increase in restricted short-term investments (317)  (2)
Other investing activities (112)  (68)
Net cash used in investing activities (6,038)  (2,882)
Cash flows from financing activities:   
Proceeds from issuance of long-term debt 11,564   3,550 
Payments on long-term debt and finance leases (3,018)  (2,835)
Proceeds from issuance of equity 1,527    
Deferred financing costs (132)  (51)
Treasury stock repurchases (173)  (825)
Dividend payments  (43)  (135)
Net cash provided by (used in) financing activities 9,725   (296)
Net increase in cash and restricted cash 7   37 
Cash and restricted cash at beginning of period 290   286 
Cash and restricted cash at end of period (1)$297  $323 
        
     
        
     
     
        
     
        
(1) The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
     
Cash $253  $312 
Restricted cash included in restricted cash and short-term investments  44   11 
Total cash and restricted cash$297  $323 
        
     
        
     

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Source: American Airlines, Inc.

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