American Airlines Reports Second-Quarter 2023 Financial Results

July 20, 2023

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

  • Record quarterly revenue of $14.1 billion, a 4.7% increase year over year.
  • Second-quarter net income of $1.3 billion, or $1.88 per diluted share. Excluding net special items1, second-quarter net income of $1.4 billion, or $1.92 per diluted share.
  • Generated operating cash flow of $1.8 billion and free cash flow of $1.2 billion in the second quarter.
  • Ended the quarter with $14.9 billion of total available liquidity.
  • Raising full-year adjusted EPS2 guidance to between $3.00 and $3.75 per diluted share.
  • Credit rating upgraded two notches to B+ by Fitch.

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

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

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

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

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

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

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

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

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

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

  1. The company recognized $33 million of net special items after the effect of taxes in the second quarter, which principally included charges associated with debt extinguishments and mark-to-market adjustments on equity investments.
  2. Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time.
  3. Excludes second-quarter 2020 and second-quarter 2021, which were impacted by significantly reduced capacity due to COVID-19.
  4. All references to total debt include debt, finance leases, operating lease liabilities and pension obligations.

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

Cautionary statement regarding forward-looking statements and information
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the company’s plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. Additionally, there may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.

Corporate Communications
mediarelations@aa.com

Investor Relations
investor.relations@aa.com


American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
                           
    3 Months Ended
June 30,		   Percent
Increase		   6 Months Ended
June 30,		   Percent
Increase		  
      2023       2022     (Decrease)     2023       2022     (Decrease)  
                           
Operating revenues:                          
Passenger   $ 12,978     $ 12,223     6.2     $ 24,081     $ 20,041     20.2    
Cargo     197       328     (39.8 )     420       692     (39.2 )  
Other     880       871     1.1       1,743       1,588     9.8    
Total operating revenues     14,055       13,422     4.7       26,244       22,321     17.6    
                           
Operating expenses:                          
Aircraft fuel and related taxes     2,723       4,020     (32.3 )     5,890       6,522     (9.7 )  
Salaries, wages and benefits     3,635       3,235     12.4       6,917       6,389     8.3    
Regional expenses:                          
Regional operating expenses     1,073       992     8.3       2,135       1,964     8.8    
Regional depreciation and amortization     80       80     (0.6 )     160       160     -    
Maintenance, materials and repairs     808       647     24.9       1,520       1,264     20.3    
Other rent and landing fees     762       694     9.8       1,470       1,372     7.1    
Aircraft rent     344       345     (0.4 )     688       698     (1.4 )  
Selling expenses     489       504     (3.0 )     927       836     10.8    
Depreciation and amortization     483       504     (4.0 )     969       995     (2.6 )  
Special items, net     -       (5 )   (99.4 )     13       152     (91.2 )  
Other     1,495       1,389     7.6       2,955       2,675     10.5    
Total operating expenses     11,892       12,405     (4.1 )     23,644       23,027     2.7    
                           
Operating income (loss)     2,163       1,017     nm (1)     2,600       (706 )   nm    
                           
Nonoperating income (expense):                          
Interest income     162       29     nm       288       37     nm    
Interest expense, net     (548 )     (468 )   17.1       (1,088 )     (932 )   16.8    
Other income (expense), net     (14 )     25     nm       (21 )     118     nm    
Total nonoperating expense, net     (400 )     (414 )   (3.4 )     (821 )     (777 )   5.7    
                           
Income (loss) before income taxes     1,763       603     nm       1,779       (1,483 )   nm    
                           
Income tax provision (benefit)     425       127     nm       431       (324 )   nm    
                           
Net income (loss)   $ 1,338     $ 476     nm     $ 1,348     $ (1,159 )   nm    
                           
                           
Earnings (loss) per common share:                          
Basic   $ 2.05     $ 0.73         $ 2.06     $ (1.78 )      
Diluted   $ 1.88     $ 0.68         $ 1.91     $ (1.78 )      
                           
Weighted average shares outstanding (in thousands):                          
Basic     653,602       650,346           652,801       649,925        
Diluted     719,345       718,532           718,890       649,925        
                           
                           
                           
Note: Percent change may not recalculate due to rounding.                      
                           
(1)Not meaningful or greater than 100% change.                          
                           



American Airlines Group Inc.
Consolidated Operating Statistics(1)
(Unaudited)
                             
    3 Months Ended
June 30,		   Increase     6 Months Ended
June 30,		   Increase  
    2023   2022   (Decrease)     2023   2022   (Decrease)  
                             
Revenue passenger miles (millions)   60,020   57,516   4.4%       112,034   101,806   10.0%    
Available seat miles (ASM) (millions)   69,658   66,163   5.3%       134,665   125,697   7.1%    
Passenger load factor (percent)   86.2   86.9   (0.7)   pts   83.2   81.0   2.2   pts
Yield (cents)   21.62   21.25   1.7%       21.49   19.69   9.2%    
Passenger revenue per ASM (cents)   18.63   18.47   0.8%       17.88   15.94   12.2%    
Total revenue per ASM (cents)   20.18   20.29   (0.5)%       19.49   17.76   9.7%    
Cargo ton miles (millions)   427   500   (14.7)%       849   1,036   (18.1)%    
Cargo yield per ton mile (cents)   46.31   65.58   (29.4)%       49.51   66.74   (25.8)%    
                             
Fuel consumption (gallons in millions)   1,041   997   4.4%       2,006   1,891   6.0%    
Average aircraft fuel price including related taxes (dollars per gallon)   2.62   4.03   (35.1)%       2.94   3.45   (14.8)%    
                             
Operating cost per ASM (cents)   17.07   18.75   (8.9)%       17.56   18.32   (4.2)%    
Operating cost per ASM excluding net special items (cents)   17.06   18.76   (9.0)%       17.54   18.20   (3.6)%    
Operating cost per ASM excluding net special items and fuel (cents)   13.16   12.68   3.7%       13.17   13.01   1.2%    
                             
Passenger enplanements (thousands)   54,285   53,068   2.3%       102,517   95,790   7.0%    
Departures (thousands):                            
Mainline   289   260   11.3%       564   501   12.5%    
Regional   209   243   (13.9)%       411   474   (13.4)%    
Total   498   503   (0.9)%       975   975   - %  
Average stage length (miles):                            
Mainline   1,141   1,181   (3.4)%       1,132   1,170   (3.2)%    
Regional   463   478   (3.1)%       466   481   (3.2)%    
Total   856   841   1.8 %       851   835   2.0%    
Aircraft at end of period:                            
Mainline(2)   944   895   5.5%       944   895   5.5%    
Regional(3)   526   576   (8.7)%       526   576   (8.7)%    
Total   1,470   1,471   (0.1)%       1,470   1,471   (0.1)%    
Full-time equivalent employees at end of period:                            
Mainline   104,400   102,100   2.3%       104,400   102,100   2.3%    
Regional(4)   28,100   27,100   3.7%       28,100   27,100   3.7%    
Total   132,500   129,200   2.6%       132,500   129,200   2.6%    
                             
                             
Note: Amounts may not recalculate due to rounding.                            
                             
(1)Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.
(2)Excludes three Boeing 737-800 mainline aircraft that were in temporary storage as of June 30, 2023.
(3)Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 74 regional aircraft that were in temporary storage as of June 30, 2023 as follows: 53 Embraer 145, 12 Bombardier CRJ 700, six Embraer 170, and three Bombardier CRJ 900.
(4)Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.
                             



American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
                                 
      3 Months Ended
June 30,		   Increase     6 Months Ended
June 30,		   Increase    
      2023   2022   (Decrease)     2023   2022   (Decrease)    
                                 
Domestic(1)                              
Revenue passenger miles (millions)   39,758   39,488   0.7%       75,509   72,120   4.7%      
Available seat miles (ASM) (millions)   45,700   43,948   4.0 %       90,255   85,821   5.2%      
Passenger load factor (percent)   87.0   89.9   (2.9)   pts   83.7   84.0   (0.3)   pts  
Passenger revenue (dollars in millions)   9,195   9,120   0.8 %       17,232   15,180   13.5%      
Yield (cents)   23.13   23.10   0.1 %       22.82   21.05   8.4%      
Passenger revenue per ASM (cents)   20.12   20.75   (3.0)%       19.09   17.69   7.9%      
                                 
Latin America(2)                              
Revenue passenger miles (millions)   7,926   8,424   (5.9)%       16,934   16,077   5.3%      
Available seat miles (millions)   9,200   9,801   (6.1)%       19,710   20,112   (2.0)%      
Passenger load factor (percent)   86.2   86.0   0.2   pts   85.9   79.9   6.0   pts  
Passenger revenue (dollars in millions)   1,640   1,534   6.9 %       3,555   2,761   28.8%      
Yield (cents)   20.69   18.21   13.6 %       20.99   17.17   22.2%      
Passenger revenue per ASM (cents)   17.82   15.65   13.9 %       18.04   13.73   31.4%      
                                 
Atlantic                                
Revenue passenger miles (millions)   10,689   9,045   18.2%       16,510   12,649   30.5%      
Available seat miles (millions)   12,823   11,630   10.3%       21,065   18,010   17.0%      
Passenger load factor (percent)   83.4   77.8   5.6   pts   78.4   70.2   8.2   pts  
Passenger revenue (dollars in millions)   1,888   1,481   27.5%       2,819   1,947   44.8%      
Yield (cents)   17.66   16.37   7.9%       17.07   15.39   10.9%      
Passenger revenue per ASM (cents)   14.72   12.73   15.6%       13.38   10.81   23.8%      
                                 
Pacific                                
Revenue passenger miles (millions)   1,647   559   nm       3,081   960   nm      
Available seat miles (millions)   1,935   784   nm       3,635   1,754   nm      
Passenger load factor (percent)   85.1   71.2   13.9   pts   84.8   54.7   30.1   pts  
Passenger revenue (dollars in millions)   255   88   nm       475   153   nm      
Yield (cents)   15.50   15.81   (2.0)%       15.40   15.94   (3.4)%      
Passenger revenue per ASM (cents)   13.19   11.26   17.1 %       13.06   8.72   49.7%      
                                 
Total International                              
Revenue passenger miles (millions)   20,262   18,028   12.4 %       36,525   29,686   23.0%      
Available seat miles (millions)   23,958   22,215   7.8 %       44,410   39,876   11.4%      
Passenger load factor (percent)   84.6   81.2   3.4   pts   82.2   74.4   7.8   pts  
Passenger revenue (dollars in millions)   3,783   3,103   21.9 %       6,849   4,861   40.9%      
Yield (cents)   18.67   17.21   8.5 %       18.75   16.38   14.5%      
Passenger revenue per ASM (cents)   15.79   13.97   13.0 %       15.42   12.19   26.5%      
                                 
Note: Amounts may not recalculate due to rounding.                          
                                 
(1)Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.                  
(2)Latin America results include the Caribbean.                          
                                 



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

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

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

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

Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs excluding net special items and fuel and CASM excluding net special items and fuel to evaluate the Company's current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude fuel and net special items allows management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.		  
                             
  Reconciliation of Operating Income (Loss) Excluding Net Special Items   3 Months Ended
June 30,		   Percent Increase   6 Months Ended
June 30,		 Percent Increase  
      2023       2022     (Decrease)     2023       2022     (Decrease)  
      (in millions)       (in millions)      
                             
  Operating income (loss) as reported   $ 2,163     $ 1,017         $ 2,600     $ (706 )      
  Operating net special items:                          
  Mainline operating special items, net(1)     -       (5 )         13       152        
  Regional operating special items, net     6       -           6       -        
  Operating income (loss) excluding net special items   $ 2,169     $ 1,012     nm   $ 2,619     $ (554 )   nm  
                             
  Calculation of Operating Margin                          
                             
  Operating income (loss) as reported   $ 2,163     $ 1,017         $ 2,600     $ (706 )      
                             
  Total operating revenues as reported   $ 14,055     $ 13,422         $ 26,244     $ 22,321        
                             
  Operating margin     15.4 %     7.6 %         9.9 %     (3.2 %)      
                             
  Calculation of Operating Margin Excluding Net Special Items                          
                             
  Operating income (loss) excluding net special items   $ 2,169     $ 1,012         $ 2,619     $ (554 )      
                             
  Total operating revenues as reported   $ 14,055     $ 13,422         $ 26,244     $ 22,321        
                             
  Operating margin excluding net special items     15.4 %     7.5 %         10.0
 %     (2.5 %)      
                             
  Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items                          
                             
  Pre-tax income (loss) as reported   $ 1,763     $ 603         $ 1,779     $ (1,483 )      
  Pre-tax net special items:                          
  Mainline operating special items, net(1)     -       (5 )         13       152        
  Regional operating special items, net     6       -           6       -        
  Nonoperating special items, net(2)     28       89           45       92        
  Total pre-tax net special items     34       84           64       244        
                             
  Pre-tax income (loss) excluding net special items   $ 1,797     $ 687     nm   $ 1,843     $ (1,239 )   nm  
                             
  Calculation of Pre-Tax Margin                          
                             
  Pre-tax income (loss) as reported   $ 1,763     $ 603         $ 1,779     $ (1,483 )      
                             
  Total operating revenues as reported   $ 14,055     $ 13,422         $ 26,244     $ 22,321        
                             
  Pre-tax margin     12.5 %     4.5 %         6.8 %     (6.6 %)      
                             
  Calculation of Pre-Tax Margin Excluding Net Special Items                          
                             
  Pre-tax income (loss) excluding net special items   $ 1,797     $ 687         $ 1,843     $ (1,239 )      
                             
  Total operating revenues as reported   $ 14,055     $ 13,422         $ 26,244     $ 22,321        
                             
  Pre-tax margin excluding net special items     12.8 %     5.1 %         7.0 %     (5.6 %)      
                             
                             
      3 Months Ended
June 30,		   Percent Increase   6 Months Ended
June 30,		 Percent Increase  
  Reconciliation of Net Income (Loss) Excluding Net Special Items     2023       2022     (Decrease)     2023       2022     (Decrease)  
      (in millions, except share and per share amounts)       (in millions, except share and per share amounts)      
                             
  Net income (loss) as reported   $ 1,338     $ 476         $ 1,348     $ (1,159 )      
  Net special items:                          
  Total pre-tax net special items(1), (2)     34       84           64       244        
  Income tax special items, net     -       (9 )         -       (9 )      
  Net tax effect of net special items     (1 )     (18 )         (8 )     (53 )      
  Net income (loss) excluding net special items   $ 1,371     $ 533     nm   $ 1,404     $ (977 )   nm  
                             
  Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items                          
                             
  Net income (loss) excluding net special items   $ 1,371     $ 533         $ 1,404     $ (977 )      
                             
  Shares used for computation (in thousands):                          
  Basic     653,602       650,346           652,801       649,925        
  Diluted     719,345       718,532           718,890       649,925        
                             
  Earnings (loss) per share excluding net special items:                          
  Basic   $ 2.10     $ 0.82         $ 2.15     $ (1.50 )      
  Diluted   $ 1.92     $ 0.76         $ 1.98     $ (1.50 )      
                             
  Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel                          
                             
  Total operating expenses as reported   $ 11,892     $ 12,405         $ 23,644     $ 23,027        
                             
  Operating net special items:                          
  Mainline operating special items, net(1)     -       5           (13 )     (152 )      
  Regional operating special items, net     (6 )     -           (6 )     -        
  Total operating expenses excluding net special items     11,886       12,410           23,625       22,875        
                             
  Aircraft fuel and related taxes     (2,723 )     (4,020 )         (5,890 )     (6,522 )      
  Total operating expenses excluding net special items and fuel   $ 9,163     $ 8,390         $ 17,735     $ 16,353        
                             
      (in cents)       (in cents)    
                             
  Total operating expenses per ASM as reported     17.07       18.75           17.56       18.32        
                             
  Operating net special items per ASM:                          
  Mainline operating special items, net(1)     -       0.01           (0.01 )     (0.12 )      
  Regional operating special items, net     (0.01 )     -           -       -        
  Total operating expenses per ASM excluding net special items     17.06       18.76           17.54       18.20        
                             
  Aircraft fuel and related taxes per ASM     (3.91 )     (6.08 )         (4.37 )     (5.19 )      
  Total operating expenses per ASM excluding net special items and fuel     13.16       12.68           13.17       13.01        
                             
  Note: Amounts may not recalculate due to rounding.                          
                             
  FOOTNOTES:                          
                             
(1) The 2022 six month period mainline operating special items, net principally included a non-cash impairment charge to write down the carrying value of the Company's retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. The Company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.  
                             
(2) Principally included charges associated with debt refinancings and extinguishments as well as mark-to-market net unrealized gains and losses associated with certain equity investments.  
                             



American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
             
        6 Months Ended
June 30,
          2023       2022  
             
  Net cash provided by operating activities $ 5,096     $ 2,924  
  Cash flows from investing activities:      
  Capital expenditures, net of aircraft purchase deposit returns   (1,244 )     (1,405 )
  Proceeds from sale-leaseback transactions   111       -  
  Proceeds from sale of property and equipment   72       19  
  Purchases of short-term investments   (7,587 )       (10,083 )
  Sales of short-term investments   4,656         10,135  
  Decrease (increase) in restricted short-term investments   33       (10 )
  Purchase of equity investment   -       (200 )
  Other investing activities   214       (156 )
  Net cash used in investing activities   (3,745 )     (1,700 )
  Cash flows from financing activities:      
  Payments on long-term debt and finance leases   (3,246 )     (1,659 )
  Proceeds from issuance of long-term debt   2,143       574  
  Other financing activities   (55 )     (10 )
  Net cash used in financing activities   (1,158 )     (1,095 )
  Net increase in cash and restricted cash   193       129  
  Cash and restricted cash at beginning of period   586       408  
(1) Cash and restricted cash at end of period $ 779     $ 537  
             
             
             
(1) The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
             
  Cash   $ 614     $ 401  
  Restricted cash included in restricted cash and short-term investments   165       136  
  Total cash and restricted cash $ 779     $ 537  
             



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

This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. Our calculation of free cash flow is not intended, and should not be used, to measure the residual cash flow available for discretionary expenditures because, among other things, it excludes mandatory debt service requirements and certain other non-discretionary expenditures.		    
             
        6 Months Ended
June 30, 2023		    
           
        (in millions)    
             
  Net cash provided by operating activities $ 5,096      
  Adjusted net cash used in investing activities(1)   (833 )    
  Free cash flow $ 4,263      
             
             
             
(1) The following table provides a reconciliation of adjusted net cash used in investing activities for the six months ended June 30, 2023 (in millions):    
             
  Net cash used in investing activities $ (3,745 )    
  Adjustments:      
  Net purchases of short-term investments   2,931      
  Increase in restricted cash   (19 )    
  Adjusted net cash used in investing activities $ (833 )    
             



       
American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions, except shares)
 
       
  June 30, 2023   December 31, 2022
  (unaudited)    
Assets      
       
Current assets      
Cash $ 614     $ 440  
Short-term investments   11,447       8,525  
Restricted cash and short-term investments   984       995  
Accounts receivable, net   2,073       2,138  
Aircraft fuel, spare parts and supplies, net   2,280       2,279  
Prepaid expenses and other   822       892  
Total current assets   18,220       15,269  
       
Operating property and equipment      
Flight equipment   40,570       39,703  
Ground property and equipment   9,996       9,913  
Equipment purchase deposits   767       613  
Total property and equipment, at cost   51,333       50,229  
Less accumulated depreciation and amortization   (21,062 )     (20,029 )
Total property and equipment, net   30,271       30,200  
       
Operating lease right-of-use assets   8,076       8,094  
       
Other assets      
Goodwill   4,091       4,091  
Intangibles, net   2,055       2,059  
Deferred tax asset   2,660       3,099  
Other assets   1,887       1,904  
Total other assets   10,693       11,153  
       
Total assets $ 67,260     $ 64,716  
       
Liabilities and Stockholders’ Equity (Deficit)      
       
Current liabilities      
Current maturities of long-term debt and finance leases $ 3,874     $ 3,274  
Accounts payable   2,406       2,149  
Accrued salaries and wages   1,723       1,713  
Air traffic liability   8,530       6,745  
Loyalty program liability   3,492       3,169  
Operating lease liabilities   1,431       1,465  
Other accrued liabilities   2,860       2,981  
Total current liabilities   24,316       21,496  
       
Noncurrent liabilities      
Long-term debt and finance leases, net of current maturities   30,772       32,389  
Pension and postretirement benefits   2,694       2,837  
Loyalty program liability   5,884       5,976  
Operating lease liabilities   6,506       6,559  
Other liabilities   1,473       1,258  
Total noncurrent liabilities   47,329       49,019  
       
Stockholders' equity (deficit)      
Common stock, 653,286,761 shares outstanding at June 30, 2023   7       6  
Additional paid-in capital   7,321       7,291  
Accumulated other comprehensive loss   (4,550 )     (4,585 )
Retained deficit   (7,163 )     (8,511 )
Total stockholders' deficit   (4,385 )     (5,799 )
       
Total liabilities and stockholders’ equity (deficit) $ 67,260     $ 64,716  
       

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Source: American Airlines, Inc.