(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
N/A | ||
(Former name or former address if changed since last report.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Emerging growth company |
ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) Exhibits. | ||
Exhibit No. | Description | |
99.1 | ||
104.1 | Cover page interactive data file (embedded within the Inline XBRL document). |
AMERICAN AIRLINES GROUP INC. | |||
Date: July 23, 2020 | By: | /s/ Derek J. Kerr | |
Derek J. Kerr | |||
Executive Vice President and Chief Financial Officer |
AMERICAN AIRLINES, INC. | |||
Date: July 23, 2020 | By: | /s/ Derek J. Kerr | |
Derek J. Kerr | |||
Executive Vice President and Chief Financial Officer |
Corporate Communications | ||
mediarelations@aa.com | ||
Investor Relations | ||
investor.relations@aa.com |
• | Second-quarter pretax loss of $2.7 billion. Excluding net special items1, second-quarter pretax loss of $4.3 billion. |
• | Second-quarter net loss of $2.1 billion, or ($4.82) per share. Excluding net special items1, second-quarter net loss of $3.4 billion, or ($7.82) per share. |
• | Boosted available liquidity by a net $3.6 billion in the quarter through offerings of common stock, convertible bonds and secured bonds. |
• | Ended second quarter with approximately $10.2 billion of available liquidity. Additionally, signed term sheet with the U.S. Department of the Treasury for $4.75 billion secured loan, which is expected to close in the third quarter, and announced two senior secured note transactions totaling $1.2 billion. The company’s second-quarter pro forma liquidity balance including these transactions would be approximately $16.2 billion. |
• | Updated its policies to make face coverings mandatory throughout the customer journey and for team members while at work. |
• | Instituted temperature checks for team members across the system and began asking customers to certify they are symptom-free before traveling. |
• | Created a Travel Health Advisory Panel, comprising internal leaders and outside experts in the field of infectious disease prevention, to advise on health and cleaning matters. |
• | Started working with the Global Biorisk Advisory Council on GBAC STARTM Accreditation for cleaning and disinfection practices for its aircraft and lounges. |
• | Further enhanced its cleaning and disinfection procedures throughout the operation, including the use of an electrostatic spray inside each aircraft every seven days, which kills 99.9999% of viruses and bacteria within 10 minutes. |
• | Waived change fees for customers who book new tickets for future travel by July 31, 2020. |
• | Extended its change fee waiver for customers who have existing tickets for travel through Sept. 30, 2020. |
• | Began notifying customers whose flights may be full, allowing them to move to more open flights when available at no cost. |
• | Expanded flexible travel waivers and name changes for corporate customers. |
• | Eliminated the reinstatement fee for AAdvantage® award ticket changes made more than 60 days prior to travel. |
• | Provided eligible AAdvantage elite members with a credit of up to $400 to use toward an American Airlines Vacations package. |
• | Expanded its cargo service to transport critical goods between the United States and Europe, Asia and Latin America. American currently operates more than 310 weekly widebody and cargo-only flights and transported more than 100 million pounds of mail, goods and supplies critical to the global economy in the second quarter. |
• | Announced a program to provide up to 1 million Business Extra® points to small businesses and nonprofit organizations in need of travel support. |
• | Worked with Deloitte to deliver more than 40,000 medical gowns to first responders at Mount Sinai Hospital in New York. |
• | Partnered with Hyatt Hotels Corporation to give free vacations to thousands of employees at NYC Health + Hospitals/Elmhurst Hospital. |
• | Donated more than 600,000 pounds of food to food banks, nonprofit organizations, schools and other groups fighting food insecurity. |
• | Retired four aircraft types, consisting of 20 Embraer 190s, 34 Boeing 757s, 17 Boeing 767s and nine Airbus A330-300s, along with a number of older regional aircraft. In addition, the company placed its Airbus A330-200s and certain older Boeing 737s into a temporary storage program. In aggregate, these changes remove more than 150 aircraft from the fleet and bring forward the cost savings and efficiencies associated with operating fewer aircraft types. |
• | Introduced additional voluntary leave of absence and early-out programs to help right-size its frontline team. American anticipates having over 20,000 more team members on payroll than needed to operate its fall schedule. In total, more than 41,000 team members have opted for an early retirement, a reduced work schedule or a partially paid leave. |
• | Consistent with the CARES Act, reduced its management and support staff team, including officers, by approximately 5,100 positions, or 30%. |
• | Announced changes to its international schedule for 2021. American expects its summer 2021 long-haul international capacity to be down 25% versus 2019 and also plans to exit 19 international routes from six hubs. These changes will allow the airline to reset its international network for future growth as demand returns. |
• | Reduced 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. |
• | Ended the second quarter with $10.2 billion of available liquidity, including a net $3.6 billion raised in the quarter through offerings of common stock, convertible bonds and secured bonds. The company also raised $360 million through municipal facility bonds, the net proceeds from which are included in its restricted cash and short-term investments. |
• | Refinanced the delayed draw term loan credit facility the company entered into in March 2020, which was set to mature in March 2021. By refinancing this loan, American does not have any large non-aircraft debt maturities until its $750 million unsecured bonds mature in June 2022. |
• | Signed a term sheet with the U.S. Department of the Treasury for a $4.75 billion secured loan under the CARES Act. The company expects the loan to be finalized in the third quarter. |
• | Announced $1.2 billion of committed financing subject to final documentation and other closing conditions in the form of two senior secured note transactions to be collateralized by intellectual property and other assets with Goldman Sachs Merchant Bank. The company expects these notes to be issued in the third quarter. |
• | Reduced its daily cash burn rate from nearly $100 million in April to approximately $30 million in June. This improvement was driven by higher than forecast revenue and larger savings resulting from the company’s cost-reduction initiatives. The company’s second-quarter cash burn rate2 was approximately $55 million per day vs. its previous forecast of $70 million per day. |
1. | The 2020 second quarter mainline operating special items, net principally included $1.8 billion of Payroll Support Program (PSP) financial assistance, offset in part by $332 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs. Second quarter 2020 regional special items, net primarily included $216 million of PSP financial assistance, offset in part by $24 million of fleet impairment charges and $14 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs. |
2. | The company defines cash burn as the sum of all net cash receipts less all cash disbursements, but excluding the effect of new financings and new aircraft purchases. |
3 Months Ended June 30, | Percent Change | 6 Months Ended June 30, | Percent Change | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Operating revenues: | |||||||||||||||||||||
Passenger | $ | 1,108 | $ | 11,011 | (89.9 | ) | $ | 8,788 | $ | 20,669 | (57.5 | ) | |||||||||
Cargo | 130 | 221 | (41.0 | ) | 277 | 439 | (36.9 | ) | |||||||||||||
Other | 384 | 728 | (47.2 | ) | 1,072 | 1,436 | (25.4 | ) | |||||||||||||
Total operating revenues | 1,622 | 11,960 | (86.4 | ) | 10,137 | 22,544 | (55.0 | ) | |||||||||||||
Operating expenses: | |||||||||||||||||||||
Aircraft fuel and related taxes | 217 | 1,995 | (89.1 | ) | 1,612 | 3,722 | (56.7 | ) | |||||||||||||
Salaries, wages and benefits | 2,538 | 3,200 | (20.7 | ) | 5,679 | 6,290 | (9.7 | ) | |||||||||||||
Regional expenses: | |||||||||||||||||||||
Fuel | 92 | 487 | (81.1 | ) | 480 | 909 | (47.2 | ) | |||||||||||||
Depreciation and amortization | 84 | 83 | 1.9 | 168 | 162 | 3.7 | |||||||||||||||
Other | 625 | 1,316 | (52.6 | ) | 2,076 | 2,577 | (19.4 | ) | |||||||||||||
Maintenance, materials and repairs | 287 | 575 | (50.1 | ) | 915 | 1,136 | (19.4 | ) | |||||||||||||
Other rent and landing fees | 315 | 535 | (41.2 | ) | 783 | 1,039 | (24.6 | ) | |||||||||||||
Aircraft rent | 334 | 334 | — | 669 | 661 | 1.2 | |||||||||||||||
Selling expenses | 43 | 401 | (89.1 | ) | 348 | 771 | (54.8 | ) | |||||||||||||
Depreciation and amortization | 499 | 489 | 1.9 | 1,059 | 969 | 9.2 | |||||||||||||||
Special items, net | (1,494 | ) | 121 | nm | (1) | (362 | ) | 259 | nm | ||||||||||||
Other | 568 | 1,271 | (55.3 | ) | 1,744 | 2,521 | (30.8 | ) | |||||||||||||
Total operating expenses | 4,108 | 10,807 | (62.0 | ) | 15,171 | 21,016 | (27.8 | ) | |||||||||||||
Operating income (loss) | (2,486 | ) | 1,153 | nm | (5,034 | ) | 1,528 | nm | |||||||||||||
Nonoperating income (expense): | |||||||||||||||||||||
Interest income | 10 | 35 | (72.5 | ) | 31 | 68 | (54.7 | ) | |||||||||||||
Interest expense, net | (254 | ) | (275 | ) | (7.5 | ) | (512 | ) | (546 | ) | (6.2 | ) | |||||||||
Other income (expense), net | 71 | (31 | ) | nm | (34 | ) | 78 | nm | |||||||||||||
Total nonoperating expense, net | (173 | ) | (271 | ) | (36.1 | ) | (515 | ) | (400 | ) | 28.6 | ||||||||||
Income (loss) before income taxes | (2,659 | ) | 882 | nm | (5,549 | ) | 1,128 | nm | |||||||||||||
Income tax provision (benefit) | (592 | ) | 220 | nm | (1,241 | ) | 281 | nm | |||||||||||||
Net income (loss) | $ | (2,067 | ) | $ | 662 | nm | $ | (4,308 | ) | $ | 847 | nm | |||||||||
Earnings (loss) per common share: | |||||||||||||||||||||
Basic | $ | (4.82 | ) | $ | 1.49 | $ | (10.08 | ) | $ | 1.89 | |||||||||||
Diluted | $ | (4.82 | ) | $ | 1.49 | $ | (10.08 | ) | $ | 1.88 | |||||||||||
Weighted average shares outstanding (in thousands): | |||||||||||||||||||||
Basic | 428,807 | 445,008 | 427,260 | 448,479 | |||||||||||||||||
Diluted | 428,807 | 445,587 | 427,260 | 449,508 |
(1) | Not meaningful or greater than 100% change. |
3 Months Ended June 30, | Change | 6 Months Ended June 30, | Change | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Mainline | |||||||||||||||||
Revenue passenger miles (millions) | 5,742 | 55,277 | (89.6 | )% | 45,055 | 103,758 | (56.6 | )% | |||||||||
Available seat miles (ASM) (millions) | 13,647 | 63,195 | (78.4 | )% | 66,836 | 121,518 | (45.0 | )% | |||||||||
Passenger load factor (percent) | 42.1 | 87.5 | (45.4 | )pts | 67.4 | 85.4 | (18.0 | )pts | |||||||||
Passenger enplanements (thousands) | 5,460 | 40,007 | (86.4 | )% | 35,813 | 76,553 | (53.2 | )% | |||||||||
Departures (thousands) | 81 | 279 | (71.1 | )% | 333 | 550 | (39.4 | )% | |||||||||
Aircraft at end of period (1) | 849 | 966 | (12.1 | )% | 849 | 966 | (12.1 | )% | |||||||||
Block hours (thousands) | 220 | 877 | (74.9 | )% | 979 | 1,712 | (42.8 | )% | |||||||||
Average stage length (miles) | 1,068 | 1,219 | (12.4 | )% | 1,132 | 1,199 | (5.6 | )% | |||||||||
Fuel consumption (gallons in millions) | 198 | 938 | (78.9 | )% | 961 | 1,791 | (46.4 | )% | |||||||||
Average aircraft fuel price including related taxes (dollars per gallon) | 1.10 | 2.13 | (48.4 | )% | 1.68 | 2.08 | (19.3 | )% | |||||||||
Full-time equivalent employees at end of period | 86,000 | 106,100 | (18.9 | )% | 86,000 | 106,100 | (18.9 | )% | |||||||||
Regional (2) | |||||||||||||||||
Revenue passenger miles (millions) | 1,489 | 7,381 | (79.8 | )% | 7,347 | 13,702 | (46.4 | )% | |||||||||
Available seat miles (millions) | 3,434 | 9,127 | (62.4 | )% | 12,344 | 17,478 | (29.4 | )% | |||||||||
Passenger load factor (percent) | 43.4 | 80.9 | (37.5 | )pts | 59.5 | 78.4 | (18.9 | )pts | |||||||||
Passenger enplanements (thousands) | 2,911 | 15,457 | (81.2 | )% | 14,760 | 28,845 | (48.8 | )% | |||||||||
Aircraft at end of period (3) | 545 | 613 | (11.1 | )% | 545 | 613 | (11.1 | )% | |||||||||
Fuel consumption (gallons in millions) | 77 | 220 | (65.3 | )% | 285 | 420 | (32.1 | )% | |||||||||
Average aircraft fuel price including related taxes (dollars per gallon) | 1.20 | 2.21 | (45.7 | )% | 1.68 | 2.17 | (22.2 | )% | |||||||||
Full-time equivalent employees at end of period (4) | 21,400 | 27,700 | (22.7 | )% | 21,400 | 27,700 | (22.7 | )% | |||||||||
Total Mainline & Regional | |||||||||||||||||
Revenue passenger miles (millions) | 7,231 | 62,658 | (88.5 | )% | 52,402 | 117,460 | (55.4 | )% | |||||||||
Available seat miles (millions) | 17,081 | 72,322 | (76.4 | )% | 79,180 | 138,996 | (43.0 | )% | |||||||||
Passenger load factor (percent) | 42.3 | 86.6 | (44.3 | )pts | 66.2 | 84.5 | (18.3 | )pts | |||||||||
Yield (cents) | 15.32 | 17.57 | (12.8 | )% | 16.77 | 17.60 | (4.7 | )% | |||||||||
Passenger revenue per ASM (cents) | 6.48 | 15.22 | (57.4 | )% | 11.10 | 14.87 | (25.4 | )% | |||||||||
Total revenue per ASM (cents) | 9.50 | 16.54 | (42.6 | )% | 12.80 | 16.22 | (21.1 | )% | |||||||||
Cargo ton miles (millions) | 176 | 644 | (72.6 | )% | 612 | 1,269 | (51.8 | )% | |||||||||
Cargo yield per ton mile (cents) | 73.98 | 34.29 | nm | 45.24 | 34.57 | 30.9 | % | ||||||||||
Passenger enplanements (thousands) | 8,371 | 55,464 | (84.9 | )% | 50,573 | 105,398 | (52.0 | )% | |||||||||
Aircraft at end of period (1) (3) | 1,394 | 1,579 | (11.7 | )% | 1,394 | 1,579 | (11.7 | )% | |||||||||
Fuel consumption (gallons in millions) | 275 | 1,158 | (76.3 | )% | 1,246 | 2,211 | (43.6 | )% | |||||||||
Average aircraft fuel price including related taxes (dollars per gallon) | 1.13 | 2.14 | (47.5 | )% | 1.68 | 2.09 | (19.8 | )% | |||||||||
Full-time equivalent employees at end of period | 107,400 | 133,800 | (19.7 | )% | 107,400 | 133,800 | (19.7 | )% | |||||||||
Operating cost per ASM (cents) | 24.05 | 14.94 | 61.0 | % | 19.16 | 15.12 | 26.7 | % | |||||||||
Operating cost per ASM excluding net special items (cents) | 33.84 | 14.78 | nm | 19.73 | 14.93 | 32.1 | % | ||||||||||
Operating cost per ASM excluding net special items and fuel (cents) | 32.04 | 11.34 | nm | 17.08 | 11.60 | 47.2 | % |
(1) | Excludes 22 mainline aircraft that are in temporary storage as follows: 15 Airbus A330-200 and seven Boeing 737-800 aircraft. |
(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 20 regional aircraft that are in temporary storage as follows: 13 Embraer 175, four Embraer 145 and three Bombardier CRJ700 aircraft. |
(4) | Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries. |
3 Months Ended June 30, | 6 Months Ended June 30, | ||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||
Domestic (1) | |||||||||||||
Revenue passenger miles (millions) | 6,804 | 41,477 | (83.6 | )% | 38,661 | 79,194 | (51.2 | )% | |||||
Available seat miles (ASM) (millions) | 15,434 | 47,050 | (67.2 | )% | 59,672 | 92,332 | (35.4 | )% | |||||
Passenger load factor (percent) | 44.1 | 88.2 | (44.1 | )pts | 64.8 | 85.8 | (21.0 | )pts | |||||
Passenger revenue (dollars in millions) | 1,027 | 8,009 | (87.2 | )% | 6,806 | 15,235 | (55.3 | )% | |||||
Yield (cents) | 15.09 | 19.31 | (21.9 | )% | 17.60 | 19.24 | (8.5 | )% | |||||
Passenger revenue per ASM (cents) | 6.65 | 17.02 | (60.9 | )% | 11.41 | 16.50 | (30.9 | )% | |||||
Latin America (2) | |||||||||||||
Revenue passenger miles (millions) | 200 | 7,829 | (97.4 | )% | 7,316 | 16,179 | (54.8 | )% | |||||
Available seat miles (millions) | 700 | 9,157 | (92.4 | )% | 9,768 | 19,364 | (49.6 | )% | |||||
Passenger load factor (percent) | 28.6 | 85.5 | (56.9 | )pts | 74.9 | 83.6 | (8.7 | )pts | |||||
Passenger revenue (dollars in millions) | 34 | 1,241 | (97.2 | )% | 1,214 | 2,612 | (53.5 | )% | |||||
Yield (cents) | 17.07 | 15.85 | 7.7 | % | 16.59 | 16.14 | 2.8 | % | |||||
Passenger revenue per ASM (cents) | 4.88 | 13.55 | (64.0 | )% | 12.42 | 13.49 | (7.9 | )% | |||||
Atlantic | |||||||||||||
Revenue passenger miles (millions) | 189 | 9,763 | (98.1 | )% | 4,374 | 14,806 | (70.5 | )% | |||||
Available seat miles (millions) | 817 | 11,898 | (93.1 | )% | 7,056 | 18,724 | (62.3 | )% | |||||
Passenger load factor (percent) | 23.1 | 82.1 | (59.0 | )pts | 62.0 | 79.1 | (17.1 | )pts | |||||
Passenger revenue (dollars in millions) | 42 | 1,407 | (97.0 | )% | 565 | 2,080 | (72.8 | )% | |||||
Yield (cents) | 22.28 | 14.41 | 54.6 | % | 12.92 | 14.05 | (8.0 | )% | |||||
Passenger revenue per ASM (cents) | 5.16 | 11.83 | (56.4 | )% | 8.01 | 11.11 | (27.9 | )% | |||||
Pacific | |||||||||||||
Revenue passenger miles (millions) | 38 | 3,589 | (98.9 | )% | 2,051 | 7,281 | (71.8 | )% | |||||
Available seat miles (millions) | 130 | 4,217 | (96.9 | )% | 2,684 | 8,576 | (68.7 | )% | |||||
Passenger load factor (percent) | 29.0 | 85.1 | (56.1 | )pts | 76.4 | 84.9 | (8.5 | )pts | |||||
Passenger revenue (dollars in millions) | 5 | 354 | (98.7 | )% | 203 | 742 | (72.6 | )% | |||||
Yield (cents) | 12.61 | 9.86 | 27.9 | % | 9.89 | 10.18 | (2.9 | )% | |||||
Passenger revenue per ASM (cents) | 3.65 | 8.39 | (56.5 | )% | 7.56 | 8.65 | (12.5 | )% | |||||
Total International | |||||||||||||
Revenue passenger miles (millions) | 427 | 21,181 | (98.0 | )% | 13,741 | 38,266 | (64.1 | )% | |||||
Available seat miles (millions) | 1,647 | 25,272 | (93.5 | )% | 19,508 | 46,664 | (58.2 | )% | |||||
Passenger load factor (percent) | 25.9 | 83.8 | (57.9 | )pts | 70.4 | 82.0 | (11.6 | )pts | |||||
Passenger revenue (dollars in millions) | 81 | 3,002 | (97.3 | )% | 1,982 | 5,434 | (63.5 | )% | |||||
Yield (cents) | 18.98 | 14.17 | 34.0 | % | 14.42 | 14.20 | 1.6 | % | |||||
Passenger revenue per ASM (cents) | 4.92 | 11.88 | (58.6 | )% | 10.16 | 11.64 | (12.8 | )% |
(1) | Domestic results include Canada, Puerto Rico and U.S. Virgin Islands. |
(2) | Latin America results include the Caribbean. |
• | 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) |
Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items | 3 Months Ended June 30, | Percent Change | 6 Months Ended June 30, | Percent Change | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||
(in millions, except per share amounts) | (in millions, except per share amounts) | |||||||||||||||||||
Pre-tax income (loss) as reported | $ | (2,659 | ) | $ | 882 | $ | (5,549 | ) | $ | 1,128 | ||||||||||
Pre-tax net special items: | ||||||||||||||||||||
Mainline operating special items, net (1) | (1,494 | ) | 121 | (362 | ) | 259 | ||||||||||||||
Regional operating special items, net (2) | (178 | ) | — | (85 | ) | — | ||||||||||||||
Nonoperating special items, net (3) | 11 | 69 | 228 | (1 | ) | |||||||||||||||
Total pre-tax net special items | (1,661 | ) | 190 | (219 | ) | 258 | ||||||||||||||
Pre-tax income (loss) excluding net special items | $ | (4,320 | ) | $ | 1,072 | nm | $ | (5,768 | ) | $ | 1,386 | nm | ||||||||
Calculation of Pre-Tax Margin | ||||||||||||||||||||
Pre-tax income (loss) as reported | $ | (2,659 | ) | $ | 882 | $ | (5,549 | ) | $ | 1,128 | ||||||||||
Total operating revenues as reported | $ | 1,622 | $ | 11,960 | $ | 10,137 | $ | 22,544 | ||||||||||||
Pre-tax margin | -163.9 | % | 7.4 | % | -54.7 | % | 5.0 | % | ||||||||||||
Calculation of Pre-Tax Margin Excluding Net Special Items | ||||||||||||||||||||
Pre-tax income (loss) excluding net special items | $ | (4,320 | ) | $ | 1,072 | $ | (5,768 | ) | $ | 1,386 | ||||||||||
Total operating revenues as reported | $ | 1,622 | $ | 11,960 | $ | 10,137 | $ | 22,544 | ||||||||||||
Pre-tax margin excluding net special items | -266.3 | % | 9.0 | % | -56.9 | % | 6.1 | % | ||||||||||||
Reconciliation of Net Income (Loss) Excluding Net Special Items | ||||||||||||||||||||
Net income (loss) as reported | $ | (2,067 | ) | $ | 662 | $ | (4,308 | ) | $ | 847 | ||||||||||
Net special items: | ||||||||||||||||||||
Total pre-tax net special items (1), (2), (3) | (1,661 | ) | 190 | (219 | ) | 258 | ||||||||||||||
Net tax effect of net special items | 374 | (42 | ) | 44 | (58 | ) | ||||||||||||||
Net income (loss) excluding net special items | $ | (3,354 | ) | $ | 810 | nm | $ | (4,483 | ) | $ | 1,047 | nm | ||||||||
Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items | ||||||||||||||||||||
Net income (loss) excluding net special items | $ | (3,354 | ) | $ | 810 | $ | (4,483 | ) | $ | 1,047 | ||||||||||
Shares used for computation (in thousands): | ||||||||||||||||||||
Basic | 428,807 | 445,008 | 427,260 | 448,479 | ||||||||||||||||
Diluted | 428,807 | 445,587 | 427,260 | 449,508 | ||||||||||||||||
Earnings (loss) per share excluding net special items: | ||||||||||||||||||||
Basic | $ | (7.82 | ) | $ | 1.82 | $ | (10.49 | ) | $ | 2.33 | ||||||||||
Diluted | $ | (7.82 | ) | $ | 1.82 | $ | (10.49 | ) | $ | 2.33 |
Reconciliation of Operating Income (Loss) Excluding Net Special Items | 3 Months Ended June 30, | 6 Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Operating income (loss) as reported | $ | (2,486 | ) | $ | 1,153 | $ | (5,034 | ) | $ | 1,528 | ||||||
Operating net special items: | ||||||||||||||||
Mainline operating special items, net (1) | (1,494 | ) | 121 | (362 | ) | 259 | ||||||||||
Regional operating special items, net (2) | (178 | ) | — | (85 | ) | — | ||||||||||
Operating income (loss) excluding net special items | $ | (4,158 | ) | $ | 1,274 | $ | (5,481 | ) | $ | 1,787 | ||||||
Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel | ||||||||||||||||
Total operating expenses as reported | $ | 4,108 | $ | 10,807 | $ | 15,171 | $ | 21,016 | ||||||||
Operating net special items: | ||||||||||||||||
Mainline operating special items, net (1) | 1,494 | (121 | ) | 362 | (259 | ) | ||||||||||
Regional operating special items, net (2) | 178 | — | 85 | — | ||||||||||||
Total operating expenses, excluding net special items | 5,780 | 10,686 | 15,618 | 20,757 | ||||||||||||
Fuel: | ||||||||||||||||
Aircraft fuel and related taxes - mainline | (217 | ) | (1,995 | ) | (1,612 | ) | (3,722 | ) | ||||||||
Aircraft fuel and related taxes - regional | (92 | ) | (487 | ) | (480 | ) | (909 | ) | ||||||||
Total operating expenses, excluding net special items and fuel | $ | 5,471 | $ | 8,204 | $ | 13,526 | $ | 16,126 | ||||||||
(in cents) | (in cents) | |||||||||||||||
Total operating expenses per ASM as reported | 24.05 | 14.94 | 19.16 | 15.12 | ||||||||||||
Operating net special items per ASM: | ||||||||||||||||
Mainline operating special items, net (1) | 8.75 | (0.17 | ) | 0.46 | (0.19 | ) | ||||||||||
Regional operating special items, net (2) | 1.04 | — | 0.11 | — | ||||||||||||
Total operating expenses per ASM, excluding net special items | 33.84 | 14.78 | 19.73 | 14.93 | ||||||||||||
Fuel per ASM: | ||||||||||||||||
Aircraft fuel and related taxes - mainline | (1.27 | ) | (2.76 | ) | (2.04 | ) | (2.68 | ) | ||||||||
Aircraft fuel and related taxes - regional | (0.54 | ) | (0.67 | ) | (0.61 | ) | (0.65 | ) | ||||||||
Total operating expenses per ASM, excluding net special items and fuel | 32.04 | 11.34 | 17.08 | 11.60 |
(1) | The 2020 second quarter mainline operating special items, net principally included $1.8 billion of Payroll Support Program (PSP) financial assistance, offset in part by $332 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs. The 2020 six month period mainline operating special items, net principally included $1.8 billion of PSP financial assistance, offset in part by $743 million of fleet impairment charges, $537 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs 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. |
(2) | The 2020 second quarter regional operating special items, net primarily included $216 million of PSP financial assistance, offset in part by $24 million of fleet impairment charges and $14 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs. The 2020 six month period regional operating special items, net included $216 million of PSP financial assistance, offset in part by $117 million of fleet impairment charges and $14 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs. |
(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. |
June 30, 2020 | December 31, 2019 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets | |||||||
Cash | $ | 462 | $ | 280 | |||
Short-term investments | 9,351 | 3,546 | |||||
Restricted cash and short-term investments | 539 | 158 | |||||
Accounts receivable, net | 879 | 1,750 | |||||
Aircraft fuel, spare parts and supplies, net | 1,653 | 1,851 | |||||
Prepaid expenses and other | 905 | 621 | |||||
Total current assets | 13,789 | 8,206 | |||||
Operating property and equipment | |||||||
Flight equipment | 38,672 | 42,537 | |||||
Ground property and equipment | 9,386 | 9,443 | |||||
Equipment purchase deposits | 1,786 | 1,674 | |||||
Total property and equipment, at cost | 49,844 | 53,654 | |||||
Less accumulated depreciation and amortization | (16,493 | ) | (18,659 | ) | |||
Total property and equipment, net | 33,351 | 34,995 | |||||
Operating lease right-of-use assets | 8,323 | 8,737 | |||||
Other assets | |||||||
Goodwill | 4,091 | 4,091 | |||||
Intangibles, net | 2,049 | 2,084 | |||||
Deferred tax asset | 1,725 | 645 | |||||
Other assets | 1,216 | 1,237 | |||||
Total other assets | 9,081 | 8,057 | |||||
Total assets | $ | 64,544 | $ | 59,995 | |||
Liabilities and Stockholders’ Equity (Deficit) | |||||||
Current liabilities | |||||||
Current maturities of long-term debt and finance leases | $ | 2,575 | $ | 2,861 | |||
Accounts payable | 1,175 | 2,062 | |||||
Accrued salaries and wages | 1,518 | 1,541 | |||||
Air traffic liability | 5,119 | 4,808 | |||||
Loyalty program liability | 2,354 | 3,193 | |||||
Operating lease liabilities | 1,804 | 1,708 | |||||
Other accrued liabilities | 3,455 | 2,138 | |||||
Total current liabilities | 18,000 | 18,311 | |||||
Noncurrent liabilities | |||||||
Long-term debt and finance leases, net of current maturities | 28,698 | 21,454 | |||||
Pension and postretirement benefits | 6,019 | 6,052 | |||||
Loyalty program liability | 6,608 | 5,422 | |||||
Operating lease liabilities | 6,972 | 7,421 | |||||
Other liabilities | 1,416 | 1,453 | |||||
Total noncurrent liabilities | 49,713 | 41,802 | |||||
Stockholders' equity (deficit) | |||||||
Common stock | 5 | 4 | |||||
Additional paid-in capital | 5,377 | 3,945 | |||||
Accumulated other comprehensive loss | (6,463 | ) | (6,331 | ) | |||
Retained earnings (deficit) | (2,088 | ) | 2,264 | ||||
Total stockholders' deficit | (3,169 | ) | (118 | ) | |||
Total liabilities and stockholders’ equity (deficit) | $ | 64,544 | $ | 59,995 |
6 Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Net cash provided by (used in) operating activities | $ | (1,076 | ) | $ | 2,387 | ||
Cash flows from investing activities: | |||||||
Capital expenditures and aircraft purchase deposits | (1,233 | ) | (2,323 | ) | |||
Proceeds from sale-leaseback transactions | 376 | 518 | |||||
Proceeds from sale of property and equipment | 148 | 19 | |||||
Purchases of short-term investments | (7,936 | ) | (2,201 | ) | |||
Sales of short-term investments | 2,131 | 1,611 | |||||
Increase in restricted short-term investments | (386 | ) | (2 | ) | |||
Other investing activities | (61 | ) | (35 | ) | |||
Net cash used in investing activities | (6,961 | ) | (2,413 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | 9,464 | 2,589 | |||||
Payments on long-term debt and finance leases | (2,477 | ) | (1,781 | ) | |||
Proceeds from issuance of equity | 1,527 | — | |||||
Deferred financing costs | (84 | ) | (23 | ) | |||
Treasury stock repurchases | (173 | ) | (625 | ) | |||
Dividend payments | (43 | ) | (90 | ) | |||
Net cash provided by financing activities | 8,214 | 70 | |||||
Net increase in cash and restricted cash | 177 | 44 | |||||
Cash and restricted cash at beginning of period | 290 | 286 | |||||
Cash and restricted cash at end of period (1) | $ | 467 | $ | 330 | |||
(1) | The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets: |
Cash | $ | 462 | $ | 319 | |||
Restricted cash included in restricted cash and short-term investments | 5 | 11 | |||||
Total cash and restricted cash | $ | 467 | $ | 330 |