FORM
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
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(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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American Airlines Group Inc.
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☒
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☐
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No
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American Airlines, Inc.
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☒
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☐
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No
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American Airlines Group Inc.
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☒
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☐
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No
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American Airlines, Inc.
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☒
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☐
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No
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American Airlines Group Inc.
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☒
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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American Airlines, Inc.
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☐
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Large accelerated filer
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☐
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Accelerated filer
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☒
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Smaller reporting company
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Emerging growth company
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American Airlines Group Inc.
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☐
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American Airlines, Inc.
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☐
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American Airlines Group Inc.
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Yes
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☒
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No
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American Airlines, Inc.
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Yes
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☒
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No
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Page
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PART I: FINANCIAL INFORMATION
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II: OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 6.
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Three Months Ended March 31,
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2020
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2019
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Operating revenues:
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Passenger
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$
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$
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Cargo
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Other
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Total operating revenues
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Operating expenses:
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Aircraft fuel and related taxes
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Salaries, wages and benefits
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Regional expenses
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Maintenance, materials and repairs
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Other rent and landing fees
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Aircraft rent
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Selling expenses
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Depreciation and amortization
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Special items, net
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Other
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Total operating expenses
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Operating income (loss)
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(
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)
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Nonoperating income (expense):
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Interest income
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Interest expense, net
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(
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)
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(
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)
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Other income (expense), net
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(
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)
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Total nonoperating expense, net
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(
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)
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(
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)
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Income (loss) before income taxes
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(
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)
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Income tax provision (benefit)
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(
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)
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Net income (loss)
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$
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(
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)
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$
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Earnings (loss) per common share:
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Basic
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$
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(
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)
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$
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Diluted
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$
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(
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)
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$
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Weighted average shares outstanding (in thousands):
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|||||||
Basic
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|
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Diluted
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Cash dividends declared per common share
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$
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$
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|
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Three Months Ended March 31,
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2020
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2019
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Net income (loss)
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$
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(
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)
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$
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|
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Other comprehensive income (loss), net of tax:
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|||||||
Pension, retiree medical and other postretirement benefits
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(
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)
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(
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)
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Investments
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(
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)
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Total other comprehensive loss, net of tax
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(
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)
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(
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)
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Total comprehensive income (loss)
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$
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(
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)
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$
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March 31, 2020
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December 31, 2019
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(Unaudited)
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ASSETS
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Current assets
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|||||||
Cash
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$
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$
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Short-term investments
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Restricted cash and short-term investments
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Accounts receivable, net
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Aircraft fuel, spare parts and supplies, net
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Prepaid expenses and other
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Total current assets
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Operating property and equipment
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Flight equipment
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Ground property and equipment
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Equipment purchase deposits
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Total property and equipment, at cost
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Less accumulated depreciation and amortization
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(
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)
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(
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)
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Total property and equipment, net
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Operating lease right-of-use assets
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Other assets
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Goodwill
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Intangibles, net of accumulated amortization of $714 and $704, respectively
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Deferred tax asset
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Other assets
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Total other assets
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Total assets
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$
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$
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
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Current liabilities
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Current maturities of long-term debt and finance leases
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$
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$
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Accounts payable
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Accrued salaries and wages
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Air traffic liability
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Loyalty program liability
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Operating lease liabilities
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Other accrued liabilities
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Total current liabilities
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Noncurrent liabilities
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Long-term debt and finance leases, net of current maturities
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Pension and postretirement benefits
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Loyalty program liability
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Operating lease liabilities
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Other liabilities
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Total noncurrent liabilities
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Commitments and contingencies
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Stockholders’ equity (deficit)
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Common stock, $0.01 par value; 1,750,000,000 shares authorized, 422,886,533 shares issued and outstanding at March 31, 2020; 428,202,506 shares issued and outstanding at December 31, 2019
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Additional paid-in capital
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Accumulated other comprehensive loss
|
(
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)
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(
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)
|
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Retained earnings (deficit)
|
(
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)
|
|
|
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Total stockholders’ deficit
|
(
|
)
|
(
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)
|
|||
Total liabilities and stockholders’ equity (deficit)
|
$
|
|
|
$
|
|
|
|
Three Months Ended March 31,
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||||||
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2020
|
2019
|
|||||
Net cash provided by (used in) operating activities
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$
|
(
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)
|
$
|
|
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|
Cash flows from investing activities:
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|||||||
Capital expenditures and aircraft purchase deposits
|
(
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)
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(
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)
|
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Proceeds from sale-leaseback transactions
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|
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Proceeds from sale of property and equipment
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Purchases of short-term investments
|
(
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)
|
(
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)
|
|||
Sales of short-term investments
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|
|
|||
Other investing activities
|
(
|
)
|
(
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)
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Net cash used in investing activities
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(
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)
|
(
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)
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|||
Cash flows from financing activities:
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|||||||
Proceeds from issuance of long-term debt
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Payments on long-term debt and finance leases
|
(
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)
|
(
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)
|
|||
Deferred financing costs
|
(
|
)
|
(
|
)
|
|||
Treasury stock repurchases
|
(
|
)
|
(
|
)
|
|||
Dividend payments
|
(
|
)
|
(
|
)
|
|||
Other financing activities
|
(
|
)
|
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|
|||
Net cash provided by (used in) financ
ing activities
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|
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(
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)
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|||
Net increase in cash and restricted cash
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Cash and restricted cash at beginning of period
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Cash and restricted cash at end of period
(1)
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$
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|
|
$
|
|
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|
Non-cash transactions:
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|||||||
Right-of-use (ROU) assets acquired through operating leases
|
$
|
|
|
$
|
|
|
|
Settlement of bankruptcy obligations
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|
|
|
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|||
Deferred financing costs paid through issuance of debt
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Property and equipment acquired through finance leases
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Supplemental information:
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|||||||
Interest paid, net
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Income taxes paid
|
|
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(1)
|
The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
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Cash
|
$
|
|
|
$
|
|
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|
Restricted cash included in restricted cash and short-term investments
|
|
|
|
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|||
Total cash and restricted cash
|
$
|
|
|
$
|
|
|
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
(Deficit)
|
Total
|
|||||||||||||||
Balance at December 31, 2019
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
||||
Net loss
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
|||||||||
Other comprehensive loss, net
|
—
|
|
—
|
|
(
|
)
|
—
|
|
(
|
)
|
|||||||||
Purchase and retirement of 6,378,025 shares of AAG common stock
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
|||||||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
|||||||||
Issuance of 1,062,052 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
|||||||||
Settlement of single-dip unsecured claims held in Disputed Claims Reserve
|
—
|
|
|
|
—
|
|
—
|
|
|
|
|||||||||
Share-based compensation expense
|
—
|
|
|
|
—
|
|
—
|
|
|
|
|||||||||
Balance at March 31, 2020
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
|
Total
|
|||||||||||||||
Balance at December 31, 2018
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
||||
Net income
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|||||||||
Other comprehensive loss, net
|
—
|
|
—
|
|
(
|
)
|
—
|
|
(
|
)
|
|||||||||
Purchase and retirement of 16,947,393 shares of AAG common stock
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
|||||||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
—
|
|
—
|
|
(
|
)
|
(
|
)
|
|||||||||
Issuance of 552,752 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
(
|
)
|
—
|
|
—
|
|
(
|
)
|
|||||||||
Share-based compensation expense
|
—
|
|
|
|
—
|
|
—
|
|
|
|
|||||||||
Balance at March 31, 2019
|
$
|
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
|
$
|
(
|
)
|
•
|
refinanced the
$
|
•
|
raised
$
|
•
|
issued
$
|
•
|
raised
$
|
•
|
raised
$
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
2019
|
|||||
Fleet impairment
(1)
|
$
|
|
|
$
|
|
|
|
Labor contract expenses
(2)
|
|
|
|
|
|||
Severance expenses
(3)
|
|
|
|
|
|||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
(
|
)
|
|
|
|||
Fleet restructuring expenses
(5)
|
|
|
|
|
|||
Merger integration expenses
|
|
|
|
|
|||
Other operating charges, net
|
|
|
|
|
|||
Mainline operating special items, net
|
|
|
|
|
|||
Regional operating special items, net
(6)
|
|
|
|
|
|||
Operating special items, net
|
|
|
|
|
|||
Mark-to-market adjustments on equity and other investments, net
(7)
|
|
|
(
|
)
|
|||
Debt refinancing, extinguishment and other charges
|
|
|
|
|
|||
Nonoperating special items, net
|
|
|
(
|
)
|
|
(1)
|
Fleet impairment primarily includes a
$
|
(2)
|
Labor contract expenses primarily relate to one-time charges resulting from the ratification of a new contract with the Transport Workers Union and International Association of Machinists & Aerospace Workers for our maintenance and fleet service team members, including signing bonuses and adjustments to vacation accruals resulting from pay rate increases.
|
(3)
|
Severance expenses principally include salary and medical costs associated with certain team members who opted in to a voluntary early retirement program offered as a result of reductions to our operation due to COVID-19.
|
(4)
|
Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.
|
(5)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment expected to be retired earlier than planned.
|
(6)
|
Regional operating special items, net primarily includes an
$
|
(7)
|
Mark-to-market adjustments on equity and other investments, net primarily relates to net unrealized gains and losses associated with our equity investment in China Southern Airlines Company Limited (China Southern Airlines) and certain treasury rate lock derivative instruments.
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
2019
|
|||||
Basic EPS:
|
|||||||
Net income (loss)
|
$
|
(
|
)
|
$
|
|
|
|
Weighted average common shares outstanding (in thousands)
|
|
|
|
|
|||
Basic EPS
|
$
|
(
|
)
|
$
|
|
|
|
Diluted EPS:
|
|||||||
Net income (loss) for purposes of computing diluted EPS
|
$
|
(
|
)
|
$
|
|
|
|
Share computation for diluted EPS (in thousands):
|
|||||||
Basic weighted average common shares outstanding
|
|
|
|
|
|||
Dilutive effect of stock awards
|
|
|
|
|
|||
Diluted weighted average common shares outstanding
|
|
|
|
|
|||
Diluted EPS
|
$
|
(
|
)
|
$
|
|
|
|
Restricted stock unit awards excluded from the calculation of
diluted EPS because inclusion would be antidilutive (in
thousands)
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
2019
|
|||||
Passenger revenue:
|
|||||||
Passenger travel
|
$
|
|
|
$
|
|
|
|
Loyalty revenue - travel
(1)
|
|
|
|
|
|||
Total passenger revenue
|
|
|
|
|
|||
Cargo
|
|
|
|
|
|||
Other:
|
|||||||
Loyalty revenue - marketing services
|
|
|
|
|
|||
Other revenue
|
|
|
|
|
|||
Total other revenue
|
|
|
|