UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 21, 2022
(Exact name of registrant as specified in its charter)
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code:
(682 ) 278-9000
(682 ) 278-9000
N/A | ||||||||
| (Former name or former address if changed since last report.) | ||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| 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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
— | (1) | |||||||||||||
(1) Attached to the Common Stock
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. | ||||
On April 21, 2022, American Airlines Group Inc. (the Company, we, us and our) issued a press release reporting financial results for the three months ended March 31, 2022. The press release is furnished as Exhibit 99.1 to this report.
| ITEM 7.01. | REGULATION FD DISCLOSURE. | ||||
On April 21, 2022, the Company provided a presentation to investors. This investor presentation is located on the Company’s website at www.aa.com under “Investor Relations” and is furnished as Exhibit 99.2 to this report.
Also on April 21, 2022, the Company provided an update for investors presenting information relating to its financial and operational outlook for the second quarter of 2022. This investor update is located on the Company’s website at www.aa.com under “Investor Relations” and is furnished as Exhibit 99.3 to this report.
The information in Items 2.02 and 7.01 of this Current Report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. | ||||
| (d) Exhibits. | ||||||||
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 99.3 | ||||||||
| 104.1 | Cover page interactive data file (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines Group Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN AIRLINES GROUP INC. | |||||||||||
| Date: April 21, 2022 | By: | /s/ Derek J. Kerr | |||||||||
| Derek J. Kerr | |||||||||||
Vice Chair, Chief Financial Officer and President, American Eagle | |||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
AMERICAN AIRLINES, INC. | |||||||||||
| Date: April 21, 2022 | By: | /s/ Derek J. Kerr | |||||||||
| Derek J. Kerr | |||||||||||
Vice Chair, Chief Financial Officer and President, American Eagle | |||||||||||
Exhibit 99.1
 | Corporate Communications | |||||||
| mediarelations@aa.com | ||||||||
| Investor Relations | ||||||||
| investor.relations@aa.com | ||||||||
FOR RELEASE: Thursday, April 21, 2022
AMERICAN AIRLINES REPORTS FIRST-QUARTER 2022 FINANCIAL RESULTS
FORT WORTH, Texas –– American Airlines Group Inc. (NASDAQ: AAL) today reported its first-quarter 2022 financial results, including:
•First-quarter revenue of $8.9 billion, representing a recovery to 84% of comparable period revenue in 2019.
•First-quarter net loss of $1.6 billion, or ($2.52) per share. Excluding net special items1, first-quarter net loss of $1.5 billion, or ($2.32) per share.
•Company was profitable excluding net special items in March and expects to be profitable in the second quarter based on the current demand trends and fuel price forecast.
•Ended the first quarter with $15.5 billion of total available liquidity.
•Company continues to execute on its plan to pay down approximately $15 billion of debt by the end of 2025.
“Our priorities for this year are clear: Run a reliable operation and return to profitability,” said American’s CEO Robert Isom. “The outstanding progress we’ve made is only possible because of the amazing efforts of the American Airlines team and we’re optimistic about the continued recovery in the second quarter and beyond. The demand environment is very strong, and as a result, we expect to be profitable in the second quarter based on our current fuel price assumptions. The work we have accomplished over the past two years — simplifying our fleet, modernizing our facilities, fine-tuning our network, developing new partnerships, rolling out new tools for customers and team members, and hiring thousands of new team members — has us very well-positioned as the industry continues to rebound.”
Running a reliable operation
In the first quarter, American led major U.S. airlines in on-time departures and finished a close second in on-time arrivals while flying a schedule that was considerably larger than its closest competitor as measured by available seat miles. Additionally, American delivered its best-ever combined mainline and regional completion factor for the month of March.
The airline has taken steps to ensure it is prepared to deliver for customers during the busy summer travel season. The airline’s summer preparations began last year as demand returned and American has 12,000 more team members in place to support the operation this summer than the summer of 2021.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 2
Returning to profitability
American produced revenues of $8.9 billion in the first quarter, including industry-leading passenger revenues of $7.8 billion, and cargo revenues of $364 million. The airline also produced record sales in March, and it was the first month since the onset of the pandemic that total revenue was above 2019 levels.
Demand for domestic business travel has steadily improved as offices have reopened and travel restrictions have been lifted. Revenue from small- to medium-size businesses and customers traveling for a mix of business and leisure remains very strong and is approaching a full recovery, and corporate bookings are the highest they have been since the start of the pandemic. Demand for international travel has also picked up considerably as travel restrictions have been lifted in certain parts of the world.
American’s continued progress on the path to profitability is driven by the strength of its global network and creating value for customers through consistency, simplicity and transparency. American is proud to offer customers the largest network of any U.S. airline this summer, with an average of more than 5,800 peak daily departures.
Liquidity and balance sheet
American ended the first quarter with $15.5 billion of total available liquidity. Deleveraging its balance sheet remains a top priority for American, and the company is committed to significant debt reduction in the years ahead. The company remains on track to reduce overall debt levels by $15 billion by the end of 2025. In the first quarter, the Company completed $317 million of open market repurchases of its $750 million unsecured senior notes maturing in June. To date, American has reduced its overall debt by $4.1 billion from peak levels in the second quarter of 2021. Additionally, the airline has cost-effective financing in place for all aircraft deliveries through the third quarter of 2022 and is beginning to evaluate financing options for the fourth quarter of 2022 and first half of 2023.
Guidance and investor update
American will continue to match its forward capacity with observed bookings trends. Based on current trends, the company expects its second-quarter capacity to be approximately 92% to 94% of what it was in the second quarter of 2019. American expects its second-quarter total revenue to be 6% to 8% higher than the second quarter of 2019.
For additional financial forecasting detail, please refer to the company’s investor update, filed with this press release with the SEC on Form 8-K. This filing will 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. CDT today. The call will be available to the public on a listen-only basis at
aa.com/investorrelations. An archive of the webcast will be available on the website through May 21.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 3
Notes
See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information.
1.The company recognized $160 million of pre-tax net special items in the first quarter of 2022, which 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 current 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.
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, the continuing availability of borrowings under revolving lines of credit, and other statements that are not historical facts. These forward-looking statements are based on the company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. In particular, the consequences of the coronavirus outbreak to economic conditions and the travel industry in general and the financial position and operating results of the company in particular have been material, are changing rapidly, and cannot be predicted. Additionally, there may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 4
American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
| 3 Months Ended March 31, | Percent Increase (Decrease) | |||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| Operating revenues: | ||||||||||||||||||||
| Passenger | $ | 7,818 | $ | 3,179 | nm | (1) | ||||||||||||||
| Cargo | 364 | 315 | 15.4 | |||||||||||||||||
| Other | 717 | 514 | 39.6 | |||||||||||||||||
| Total operating revenues | 8,899 | 4,008 | nm | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Aircraft fuel and related taxes | 2,502 | 1,034 | nm | |||||||||||||||||
| Salaries, wages and benefits | 3,154 | 2,730 | 15.5 | |||||||||||||||||
| Regional expenses: | ||||||||||||||||||||
| Regional operating expenses | 972 | 544 | 78.8 | |||||||||||||||||
| Regional depreciation and amortization | 80 | 81 | (1.9) | |||||||||||||||||
| Maintenance, materials and repairs | 617 | 376 | 64.0 | |||||||||||||||||
| Other rent and landing fees | 678 | 570 | 18.9 | |||||||||||||||||
| Aircraft rent | 353 | 351 | 0.7 | |||||||||||||||||
| Selling expenses | 332 | 151 | nm | |||||||||||||||||
| Depreciation and amortization | 492 | 478 | 2.8 | |||||||||||||||||
| Special items, net | 157 | (1,708) | nm | |||||||||||||||||
| Other | 1,285 | 716 | 79.5 | |||||||||||||||||
| Total operating expenses | 10,622 | 5,323 | 99.6 | |||||||||||||||||
| Operating loss | (1,723) | (1,315) | 31.0 | |||||||||||||||||
| Nonoperating income (expense): | ||||||||||||||||||||
| Interest income | 8 | 4 | nm | |||||||||||||||||
| Interest expense, net | (463) | (371) | 25.1 | |||||||||||||||||
| Other income, net | 92 | 109 | (14.5) | |||||||||||||||||
| Total nonoperating expense, net | (363) | (258) | 40.5 | |||||||||||||||||
| Loss before income taxes | (2,086) | (1,573) | 32.6 | |||||||||||||||||
| Income tax benefit | (451) | (323) | 39.6 | |||||||||||||||||
| Net loss | $ | (1,635) | $ | (1,250) | 30.8 | |||||||||||||||
| Loss per common share: | ||||||||||||||||||||
| Basic and diluted | $ | (2.52) | $ | (1.97) | ||||||||||||||||
| Weighted average shares outstanding (in thousands): | ||||||||||||||||||||
| Basic and diluted | 649,503 | 634,609 | ||||||||||||||||||
Note: Percent change may not recalculate due to rounding.
(1)Not meaningful or greater than 100% change.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 5
American Airlines Group Inc.
Consolidated Operating Statistics (1)
(Unaudited)
| 3 Months Ended March 31, | Increase (Decrease) | ||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Revenue passenger miles (millions) | 44,290 | 22,464 | 97.2 % | ||||||||||||||
| Available seat miles (ASM) (millions) | 59,533 | 37,764 | 57.6 % | ||||||||||||||
| Passenger load factor (percent) | 74.4 | 59.5 | 14.9 pts | ||||||||||||||
| Yield (cents) | 17.65 | 14.15 | 24.7 % | ||||||||||||||
| Passenger revenue per ASM (cents) | 13.13 | 8.42 | 56.0 % | ||||||||||||||
| Total revenue per ASM (cents) | 14.95 | 10.61 | 40.8 % | ||||||||||||||
| Cargo ton miles (millions) | 536 | 532 | 0.7 % | ||||||||||||||
| Cargo yield per ton mile (cents) | 67.81 | 59.18 | 14.6 % | ||||||||||||||
| Fuel consumption (gallons in millions) | 894 | 608 | 47.0 % | ||||||||||||||
| Average aircraft fuel price including related taxes (dollars per gallon) | 2.80 | 1.70 | 64.7 % | ||||||||||||||
| Operating cost per ASM (cents) | 17.84 | 14.09 | 26.6 % | ||||||||||||||
| Operating cost per ASM excluding net special items (cents) | 17.58 | 19.19 | (8.4) % | ||||||||||||||
| Operating cost per ASM excluding net special items and fuel (cents) | 13.38 | 16.45 | (18.7) % | ||||||||||||||
| Passenger enplanements (thousands) | 42,722 | 24,238 | 76.3 % | ||||||||||||||
| Departures (thousands): | |||||||||||||||||
| Mainline | 241 | 153 | 58.1 % | ||||||||||||||
| Regional | 231 | 186 | 24.1 % | ||||||||||||||
| Total | 472 | 339 | 39.4 % | ||||||||||||||
| Average stage length (miles): | |||||||||||||||||
| Mainline | 1,158 | 1,205 | (3.9) % | ||||||||||||||
| Regional | 484 | 505 | (4.2) % | ||||||||||||||
| Total | 828 | 821 | 0.9 % | ||||||||||||||
| Aircraft at end of period: | |||||||||||||||||
Mainline (2) | 881 | 851 | 3.5 % | ||||||||||||||
Regional (3) | 572 | 548 | 4.4 % | ||||||||||||||
| Total | 1,453 | 1,399 | 3.9 % | ||||||||||||||
| Full-time equivalent employees at end of period: | |||||||||||||||||
| Mainline | 100,500 | 88,500 | 13.6 % | ||||||||||||||
Regional (4) | 26,500 | 24,700 | 7.3 % | ||||||||||||||
| Total | 127,000 | 113,200 | 12.2 % | ||||||||||||||
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 29 Boeing 737-800 mainline aircraft that are in temporary storage at March 31, 2022.
(3)Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes 11 Embraer 145 and one Embraer 170 regional aircraft that are in temporary storage at March 31, 2022.
(4)Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 6
American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
| 3 Months Ended March 31, | Increase (Decrease) | ||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
Domestic (1) | |||||||||||||||||
| Revenue passenger miles (millions) | 32,632 | 18,538 | 76.0 % | ||||||||||||||
| Available seat miles (ASM) (millions) | 41,873 | 27,952 | 49.8 % | ||||||||||||||
| Passenger load factor (percent) | 77.9 | 66.3 | 11.6 pts | ||||||||||||||
| Passenger revenue (dollars in millions) | 6,060 | 2,655 | nm % | ||||||||||||||
| Yield (cents) | 18.57 | 14.32 | 29.7 % | ||||||||||||||
| Passenger revenue per ASM (cents) | 14.47 | 9.50 | 52.3 % | ||||||||||||||
Latin America (2) | |||||||||||||||||
| Revenue passenger miles (millions) | 7,652 | 3,576 | nm % | ||||||||||||||
| Available seat miles (millions) | 10,310 | 7,865 | 31.1 % | ||||||||||||||
| Passenger load factor (percent) | 74.2 | 45.5 | 28.7 pts | ||||||||||||||
| Passenger revenue (dollars in millions) | 1,227 | 482 | nm % | ||||||||||||||
| Yield (cents) | 16.04 | 13.47 | 19.1 % | ||||||||||||||
| Passenger revenue per ASM (cents) | 11.90 | 6.12 | 94.4 % | ||||||||||||||
| Atlantic | |||||||||||||||||
| Revenue passenger miles (millions) | 3,605 | 199 | nm % | ||||||||||||||
| Available seat miles (millions) | 6,380 | 1,151 | nm % | ||||||||||||||
| Passenger load factor (percent) | 56.5 | 17.4 | 39.1 pts | ||||||||||||||
| Passenger revenue (dollars in millions) | 466 | 22 | nm % | ||||||||||||||
| Yield (cents) | 12.94 | 11.10 | 16.6 % | ||||||||||||||
| Passenger revenue per ASM (cents) | 7.31 | 1.93 | nm % | ||||||||||||||
| Pacific | |||||||||||||||||
| Revenue passenger miles (millions) | 401 | 151 | nm % | ||||||||||||||
| Available seat miles (millions) | 970 | 796 | 21.9 % | ||||||||||||||
| Passenger load factor (percent) | 41.4 | 18.9 | 22.5 pts | ||||||||||||||
| Passenger revenue (dollars in millions) | 65 | 20 | nm % | ||||||||||||||
| Yield (cents) | 16.13 | 13.53 | 19.2 % | ||||||||||||||
| Passenger revenue per ASM (cents) | 6.67 | 2.56 | nm % | ||||||||||||||
| Total International | |||||||||||||||||
| Revenue passenger miles (millions) | 11,658 | 3,926 | nm % | ||||||||||||||
| Available seat miles (millions) | 17,660 | 9,812 | 80.0 % | ||||||||||||||
| Passenger load factor (percent) | 66.0 | 40.0 | 26.0 pts | ||||||||||||||
| Passenger revenue (dollars in millions) | 1,758 | 524 | nm % | ||||||||||||||
| Yield (cents) | 15.08 | 13.35 | 13.0 % | ||||||||||||||
| Passenger revenue per ASM (cents) | 9.96 | 5.34 | 86.4 % | ||||||||||||||
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.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 7
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.
The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures:
–Pre-Tax Loss (GAAP measure) to Pre-Tax Loss Excluding Net Special Items (non-GAAP measure)
–Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure)
–Net Loss (GAAP measure) to Net Loss Excluding Net Special Items (non-GAAP measure)
–Basic and Diluted Loss Per Share (GAAP measure) to Basic and Diluted Loss Per Share Excluding Net Special Items (non-GAAP measure)
–Operating Loss (GAAP measure) to Operating Loss Excluding Net Special Items (non-GAAP measure)
Management uses these non-GAAP financial measures to evaluate the Company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance.
Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) 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 Pre-Tax Loss Excluding Net Special Items | 3 Months Ended March 31, | Percent Increase (Decrease) | ||||||||||||||||||
| 2022 | 2021 | |||||||||||||||||||
| (in millions, except share and per share amounts) | ||||||||||||||||||||
| Pre-tax loss as reported | $ | (2,086) | $ | (1,573) | ||||||||||||||||
| Pre-tax net special items: | ||||||||||||||||||||
Mainline operating special items, net (1) | 157 | (1,708) | ||||||||||||||||||
Regional operating special items, net (2) | — | (215) | ||||||||||||||||||
Nonoperating special items, net (3) | 3 | (23) | ||||||||||||||||||
| Total pre-tax net special items | 160 | (1,946) | ||||||||||||||||||
| Pre-tax loss excluding net special items | $ | (1,926) | $ | (3,519) | (45.3%) | |||||||||||||||
| Calculation of Pre-Tax Margin | ||||||||||||||||||||
| Pre-tax loss as reported | $ | (2,086) | $ | (1,573) | ||||||||||||||||
| Total operating revenues as reported | $ | 8,899 | $ | 4,008 | ||||||||||||||||
| Pre-tax margin | (23.4%) | (39.3%) | ||||||||||||||||||
| Calculation of Pre-Tax Margin Excluding Net Special Items | ||||||||||||||||||||
| Pre-tax loss excluding net special items | $ | (1,926) | $ | (3,519) | ||||||||||||||||
| Total operating revenues as reported | $ | 8,899 | $ | 4,008 | ||||||||||||||||
| Pre-tax margin excluding net special items | (21.6%) | (87.8%) | ||||||||||||||||||
| Reconciliation of Net Loss Excluding Net Special Items | ||||||||||||||||||||
| Net loss as reported | $ | (1,635) | $ | (1,250) | ||||||||||||||||
| Net special items: | ||||||||||||||||||||
Total pre-tax net special items (1), (2), (3) | 160 | (1,946) | ||||||||||||||||||
| Net tax effect of net special items | (35) | 453 | ||||||||||||||||||
| Net loss excluding net special items | $ | (1,510) | $ | (2,743) | (45.0%) | |||||||||||||||
| Reconciliation of Basic and Diluted Loss Per Share Excluding Net Special Items | ||||||||||||||||||||
| Net loss excluding net special items | $ | (1,510) | $ | (2,743) | ||||||||||||||||
| Shares used for computation (in thousands): | ||||||||||||||||||||
| Basic and diluted | 649,503 | 634,609 | ||||||||||||||||||
| Loss per share excluding net special items: | ||||||||||||||||||||
| Basic and diluted | $ | (2.32) | $ | (4.32) | ||||||||||||||||
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 8
| Reconciliation of Operating Loss Excluding Net Special Items | 3 Months Ended March 31, | |||||||||||||
| 2022 | 2021 | |||||||||||||
| (in millions) | ||||||||||||||
| Operating loss as reported | $ | (1,723) | $ | (1,315) | ||||||||||
| Operating net special items: | ||||||||||||||
Mainline operating special items, net (1) | 157 | (1,708) | ||||||||||||
Regional operating special items, net (2) | — | (215) | ||||||||||||
| Operating loss excluding net special items | $ | (1,566) | $ | (3,238) | ||||||||||
| Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel | ||||||||||||||
| Total operating expenses as reported | $ | 10,622 | $ | 5,323 | ||||||||||
| Operating net special items: | ||||||||||||||
Mainline operating special items, net (1) | (157) | 1,708 | ||||||||||||
Regional operating special items, net (2) | — | 215 | ||||||||||||
| Total operating expenses, excluding net special items | 10,465 | 7,246 | ||||||||||||
| Aircraft fuel and related taxes | (2,502) | (1,034) | ||||||||||||
| Total operating expenses, excluding net special items and fuel | $ | 7,963 | $ | 6,212 | ||||||||||
| (in cents) | ||||||||||||||
| Total operating expenses per ASM as reported | 17.84 | 14.09 | ||||||||||||
| Operating net special items per ASM: | ||||||||||||||
Mainline operating special items, net (1) | (0.26) | 4.52 | ||||||||||||
Regional operating special items, net (2) | — | 0.57 | ||||||||||||
| Total operating expenses per ASM, excluding net special items | 17.58 | 19.19 | ||||||||||||
| Aircraft fuel and related taxes per ASM | (4.20) | (2.74) | ||||||||||||
| Total operating expenses per ASM, excluding net special items and fuel | 13.38 | 16.45 | ||||||||||||
Note: Amounts may not recalculate due to rounding.
FOOTNOTES:
(1)The 2022 first quarter 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 current 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.
The 2021 first quarter mainline operating special items, net principally included $1.9 billion of Payroll Support Program (PSP) financial assistance, offset in part by $168 million of salary and medical costs associated with certain team members who opted into voluntary early retirement programs offered as a result of reductions to the Company's operation due to the COVID-19 pandemic.
Cash payments for salary and medical costs associated with the Company's voluntary early retirement programs were approximately $90 million and $170 million for the 2022 first quarter and 2021 first quarter, respectively.
(2)The 2021 first quarter regional operating special items, net principally included $244 million of PSP financial assistance, offset in part by a $27 million non-cash impairment charge to write down regional aircraft resulting from the retirement of the remaining Embraer 140 fleet earlier than planned.
(3)Principally included mark-to-market net unrealized gains and losses associated with certain equity and other investments as well as non-cash charges associated with debt refinancings and extinguishments.
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 9
American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
| 3 Months Ended March 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net cash provided by operating activities | $ | 1,185 | $ | 174 | |||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures, net of aircraft purchase deposit returns | (807) | 19 | |||||||||
| Airport construction projects, net of reimbursements | (62) | (42) | |||||||||
| Proceeds from sale of property and equipment | 8 | 108 | |||||||||
| Proceeds from sale-leaseback transactions | — | 99 | |||||||||
| Sales of short-term investments | 7,089 | 1,415 | |||||||||
| Purchases of short-term investments | (7,035) | (8,557) | |||||||||
| Decrease (increase) in restricted short-term investments | 36 | (194) | |||||||||
| Net cash used in investing activities | (771) | (7,152) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Payments on long-term debt and finance leases | (661) | (4,054) | |||||||||
| Proceeds from issuance of long-term debt | 367 | 10,861 | |||||||||
| Shares withheld for taxes pursuant to employee stock plans | (14) | (13) | |||||||||
| Proceeds from issuance of equity | — | 316 | |||||||||
| Deferred financing costs | — | (162) | |||||||||
| Other financing activities | (2) | 65 | |||||||||
| Net cash provided by (used in) financing activities | (310) | 7,013 | |||||||||
| Net increase in cash and restricted cash | 104 | 35 | |||||||||
| Cash and restricted cash at beginning of period | 408 | 399 | |||||||||
Cash and restricted cash at end of period (1) | $ | 512 | $ | 434 | |||||||
(1)The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
| Cash | $ | 376 | $ | 277 | |||||||
| Restricted cash included in restricted cash and short-term investments | 136 | 157 | |||||||||
| Total cash and restricted cash | $ | 512 | $ | 434 | |||||||
American Airlines Reports First-Quarter 2022 Financial Results
April 21, 2022
Page 10
American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions, except shares)
| March 31, 2022 | December 31, 2021 | ||||||||||
| (unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash | $ | 376 | $ | 273 | |||||||
| Short-term investments | 12,108 | 12,158 | |||||||||
| Restricted cash and short-term investments | 952 | 990 | |||||||||
| Accounts receivable, net | 1,537 | 1,505 | |||||||||
| Aircraft fuel, spare parts and supplies, net | 2,002 | 1,795 | |||||||||
| Prepaid expenses and other | 787 | 615 | |||||||||
| Total current assets | 17,762 | 17,336 | |||||||||
| Operating property and equipment | |||||||||||
| Flight equipment | 38,359 | 37,856 | |||||||||
| Ground property and equipment | 9,418 | 9,335 | |||||||||
| Equipment purchase deposits | 545 | 517 | |||||||||
| Total property and equipment, at cost | 48,322 | 47,708 | |||||||||
| Less accumulated depreciation and amortization | (18,464) | (18,171) | |||||||||
| Total property and equipment, net | 29,858 | 29,537 | |||||||||
| Operating lease right-of-use assets | 7,745 | 7,850 | |||||||||
| Other assets | |||||||||||
| Goodwill | 4,091 | 4,091 | |||||||||
| Intangibles, net | 1,970 | 1,988 | |||||||||
| Deferred tax asset | 4,000 | 3,556 | |||||||||
| Other assets | 1,975 | 2,109 | |||||||||
| Total other assets | 12,036 | 11,744 | |||||||||
| Total assets | $ | 67,401 | $ | 66,467 | |||||||
| Liabilities and Stockholders’ Equity (Deficit) | |||||||||||
| Current liabilities | |||||||||||
| Current maturities of long-term debt and finance leases | $ | 2,382 | $ | 2,489 | |||||||
| Accounts payable | 2,546 | 1,772 | |||||||||
| Accrued salaries and wages | 1,369 | 1,489 | |||||||||
| Air traffic liability | 8,346 | 6,087 | |||||||||
| Loyalty program liability | 3,110 | 2,896 | |||||||||
| Operating lease liabilities | 1,490 | 1,507 | |||||||||
| Other accrued liabilities | 2,623 | 2,766 | |||||||||
| Total current liabilities | 21,866 | 19,006 | |||||||||
| Noncurrent liabilities | |||||||||||
| Long-term debt and finance leases, net of current maturities | 35,461 | 35,571 | |||||||||
| Pension and postretirement benefits | 4,913 | 5,053 | |||||||||
| Loyalty program liability | 6,194 | 6,239 | |||||||||
| Operating lease liabilities | 6,529 | 6,610 | |||||||||
| Other liabilities | 1,378 | 1,328 | |||||||||
| Total noncurrent liabilities | 54,475 | 54,801 | |||||||||
| Stockholders' equity (deficit) | |||||||||||
Common stock, 649,497,768 shares outstanding at March 31, 2022 | 6 | 6 | |||||||||
| Additional paid-in capital | 7,243 | 7,234 | |||||||||
| Accumulated other comprehensive loss | (5,916) | (5,942) | |||||||||
| Retained deficit | (10,273) | (8,638) | |||||||||
| Total stockholders' deficit | (8,940) | (7,340) | |||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 67,401 | $ | 66,467 | |||||||
American Airlines Group Inc. First-Quarter 2022 Financial Results Exhibit 99.2
Certain of the statements contained in this presentation 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, the continuing availability of borrowings under revolving lines of credit, and other statements that are not historical facts. These forward-looking statements are based on the company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. In particular, the consequences of the coronavirus outbreak to economic conditions and the travel industry in general and the financial position and operating results of the company in particular have been material, are changing rapidly, and cannot be predicted. Additionally, there may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement. 2 Forward-looking statements
3 Introductory remarks and commercial update Robert Isom Chief Executive Officer
First-quarter results 4 First-quarter results show strong momentum • Total revenue beat initial expectations by more than $500 million • Revenue recovered to 84% vs. Q1 2019 • Highest absolute daily bookings and cash intake in company history in the month of March • Profitable in the month of March excluding net special items • First-quarter net loss of $1.6 billion. Excluding net special items1, net loss of $1.5 billion • Strong operating performance and served approximately 43 million passengers 1/ See GAAP to non-GAAP reconciliation at the end of this presentation
Recovery timeline 5 Recovery timeline Domestic leisure Revenue • No real constraints • Demand is robust Current status Basis of early recovery path • Countries reopening • International travel restrictions being removed • Countries dropping testing requirements Short-haul international • Similar trends as domestic leisure Long-haul international Domestic business • Small- and medium- size business demand resilient • Large corporates returning to office • In-person events returning ~40% of 2019 pax revenue composition ~10% of 2019 pax revenue composition ~30% of 2019 pax revenue composition ~20% of 2019 pax revenue composition • Domestic leisure and short-haul international revenue is exceeding 2019 levels • Domestic business revenue recovered to ~85% of 2019 levels in the month of March • Removal of international testing restrictions is unlocking long-haul international demand
Revenue recovery 6 1/ Source- company monthly domestic coupon revenue results • The revenue recovery paused in January due to the omicron variant, but rapidly accelerated beginning in mid-February • Second-quarter revenue is expected to recover further, driven by strong domestic yields 31% 29% 41% 54% 61% 77% 87% 78% 72% 75% 92% 83% 71% 76% 98% 47% 40% 53% 73% 82% 97% 102% 93% 94% 94% 112% 90% 91% 96% 108% 13% 19% 27% 35% 40% 52% 64% 58% 51% 58% 68% 69% 51% 61% 85% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Domestic revenue recovery (% of 2019) Total Leisure Business 2021 2022
Partnership and loyalty update 7 Update on airline partnerships • Completed agreement with GOL to form exclusive partnership and to give customers the broadest and most rewarding network in the Americas • Delivering enhanced customer experience, including reciprocal loyalty recognition and benefits, with partners including Alaska and JetBlue Update on loyalty program • Introduced reimagined AAdvantage® program, including new status qualification structure • New program enrollments at record levels, with March 2022 enrollments more than 80% higher than March 2019
8 Financial update Derek Kerr Chief Financial Officer
First-quarter results 9Note: May not recalculate due to rounding. See GAAP to non-GAAP reconciliation at the end of this presentation 1Q22 1Q21 1Q22 1Q21 Operating Loss (1,723)$ (1,315)$ (1,566)$ (3,238)$ Loss Before Income Taxes (2,086)$ (1,573)$ (1,926)$ (3,519)$ Net Loss (1,635)$ (1,250)$ (1,510)$ (2,743)$ Loss per common share: Basic and diluted (2.52)$ (1.97)$ (2.32)$ (4.32)$ Weighted average shares outstanding (in thousands): Basic and diluted 649,503 634,609 649,503 634,609 GAAP Non-GAAP (in millions except share and per share amounts)
$7 $10 $14 $14 $17 $21 $18 $16 $16 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Total available liquidity1 (in billions) Strong liquidity position 10 • Continue to maintain elevated total liquidity balance, ending the first quarter with $15.5 billion in total liquidity 1/ Total available liquidity is defined as unrestricted cash and marketable securities plus available undrawn revolver capacity and other undrawn facilities.
Balance sheet repair 11 Continued focus on deleveraging • In the first quarter, completed $317 million of open market repurchases of $750 million unsecured senior notes maturing in June 2022 • Continue to target $15 billion in total debt1 reduction by end of 2025 • Total debt down by $4.1 billion since peaking in Q2 2021 Future priorities for excess liquidity • Address short end of maturity curve • Free up high-quality collateral • Pay down prepayable debt (~$11 billion opportunity) Strong liquidity and confidence in recovery facilitates deleveraging 1/ Total debt includes debt, finance leases, operating lease liability and pension obligations.
Passionately pursuing efficiencies Younger fleet drives lower capex 1/ Company filings and Cirium Fleets Analyzer Database. All data as of December 31, 2021 2/ Source: Company filings, 2021 includes net inflows from return of PDPs 12 Youngest fleet among peers $5.2 $2.0 $0.2 $2.6 $3.0 2014-2019 Average 2020 Actual 2021 Actual 2022 2023 Total capex forecast2 (in billions) Last Induction in 1Q • Completed narrowbody fleet harmonization project on over 500 aircraft, ensuring a consistent product and better experience for our customers 55% 19% 26% 45% 15% 40% 30% 22% 48% 0-10 Years 10-20 Years 20 Years+ Mainline fleet age1 American Delta United
Second-quarter outlook 13 2022 vs 2019 Total capacity (ASMs) 2Q22: Down ~6% to 8% FY22: Down ~6% to 8% Total revenue 2Q22: Up ~6% to 8% CASM excluding fuel and net special items1 2Q22: Up ~8% to 10% FY22: Up ~8% to 10% Pre-tax margin excluding net special items1 2Q22: ~3% to 5% 2Q22 comments Fuel 2Q22: ~$3.59 to $3.64 Consumption of ~1,013 million gallons and based on April 19, 2022 forward fuel curve. 1/ CASM excluding fuel and net special items and pre-tax margin excluding net special items are non-GAAP financial measures. The Company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time.
Thanks to an amazing team
GAAP to non-GAAP reconciliation 15 Reconciliation of GAAP Financial Information to Non-GAAP Financial Information Percent Increase Reconciliation of Pre-Tax Loss Excluding Net Special Items 2022 2021 (Decrease) Pre-tax loss as reported (2,086)$ (1,573)$ Pre-tax net special items: Mainline operating special items, net (1) 157 (1,708) Regional operating special items, net (2) - (215) Nonoperating special items, net (3) 3 (23) Total pre-tax net special items 160 (1,946) Pre-tax loss excluding net special items (1,926)$ (3,519)$ (45.3%) Calculation of Pre-Tax Margin Pre-tax loss as reported $ (2,086) $ (1,573) Total operating revenues as reported $ 8,899 $ 4,008 Pre-tax margin (23.4%) (39.3%) Calculation of Pre-Tax Margin Excluding Net Special Items Pre-tax loss excluding net special items $ (1,926) $ (3,519) Total operating revenues as reported $ 8,899 $ 4,008 Pre-tax margin excluding net special items (21.6%) (87.8%) Reconciliation of Net Loss Excluding Net Special Items Net loss as reported (1,635)$ (1,250)$ Net special items: Total pre-tax net special items (1), (2), (3) 160 (1,946) Net tax effect of net special items (35) 453 Net loss excluding net special items (1,510)$ (2,743)$ (45.0%) Reconciliation of Basic and Diluted Loss Per Share Excluding Net Special Items Net loss excluding net special items (1,510)$ (2,743)$ Shares used for computation (in thousands): Basic and diluted 649,503 634,609 Loss per share excluding net special items: Basic and diluted (2.32)$ (4.32)$ American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures: - Pre-Tax Loss (GAAP measure) to Pre-Tax Loss Excluding Net Special Items (non-GAAP measure) - Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure) - Net Loss (GAAP measure) to Net Loss Excluding Net Special Items (non-GAAP measure) - Basic and Diluted Loss Per Share (GAAP measure) to Basic and Diluted Loss Per Share Excluding Net Special Items (non-GAAP measure) - Operating Loss (GAAP measure) to Operating Loss Excluding Net Special Items (non-GAAP measure) Management uses these non-GAAP financial measures to evaluate the Company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance. Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) 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. 3 Months Ended March 31, (in millions, except share and per share amounts)
GAAP to non-GAAP reconciliation Reconciliation of Operating Loss Excluding Net Special Items 2022 2021 Operating loss as reported (1,723)$ (1,315)$ Operating net special items: Mainline operating special items, net (1) 157 (1,708) Regional operating special items, net (2) - (215) Operating loss excluding net special items (1,566)$ (3,238)$ Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel Total operating expenses as reported 10,622$ 5,323$ Operating net special items: Mainline operating special items, net (1) (157) 1,708 Regional operating special items, net (2) - 215 Total operating expenses, excluding net special items 10,465 7,246 Aircraft fuel and related taxes (2,502) (1,034) Total operating expenses, excluding net special items and fuel 7,963$ 6,212$ Total operating expenses per ASM as reported 17.84 14.09 Operating net special items per ASM: Mainline operating special items, net (1) (0.26) 4.52 Regional operating special items, net (2) - 0.57 Total operating expenses per ASM, excluding net special items 17.58 19.19 Aircraft fuel and related taxes per ASM (4.20) (2.74) Total operating expenses per ASM, excluding net special items and fuel 13.38 16.45 Note: Amounts may not recalculate due to rounding. FOOTNOTES: (1) (2) (3) (in millions) (in cents) The 2022 first quarter 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 current 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. The 2021 first quarter mainline operating special items, net principally included $1.9 billion of Payroll Support Program (PSP) financial assistance, offset in part by $168 million of salary and medical costs associated with certain team members who opted into voluntary early retirement programs offered as a result of reductions to the Company's operation due to the COVID-19 pandemic. Cash payments for salary and medical costs associated with the Company's voluntary early retirement programs were approximately $90 million and $170 million for the 2022 first quarter and 2021 first quarter, respectively. 3 Months Ended March 31, Principally included mark-to-market net unrealized gains and losses associated with certain equity and other investments as well as non-cash charges associated with debt refinancings and extinguishments. The 2021 first quarter regional operating special items, net principally included $244 million of PSP financial assistance, offset in part by a $27 million non-cash impairment charge to write down regional aircraft resulting from the retirement of the remaining Embraer 140 fleet earlier than planned.
17
Exhibit 99.3
Investor Relations Update
April 21, 2022
General Overview
| ● | Capacity - The Company expects its second quarter capacity to be down approximately 6% to 8% versus the second quarter of 2019. Based on current assumptions, the Company now expects its full-year capacity to be down approximately 6% to 8% versus 2019. | ||||
| ● | Revenue - The Company expects its second quarter total revenue to be approximately 6% to 8% higher versus the second quarter of 2019. The Company expects total revenue per available seat mile (TRASM) to be 14% to 16% higher versus the second quarter of 2019. | ||||
| ● | CASM1 - The Company expects its second quarter total cost per available seat mile (CASM) excluding fuel and net special items2 to be up between 8% and 10% versus the second quarter of 2019. Based on current capacity plans, the Company expects its full-year CASM excluding fuel and net special items to be up approximately 8% to 10% versus 2019. | ||||
| ● | Fuel - Based on the April 19, 2022 forward fuel curve, the Company expects to pay an average of between $3.59 and $3.64 per gallon of jet fuel (including taxes) in the second quarter. The Company also expects to consume approximately 1,013 million gallons of jet fuel in the second quarter based on its current capacity plans. | ||||
| ● | Liquidity - As of March 31, 2022, the Company had $15.5 billion in total available liquidity. The Company’s total liquidity as of that date was comprised of unrestricted cash and investments of $12.5 billion and $2.8 billion of undrawn capacity under revolving credit facilities. The Company also had $220 million in undrawn short-term revolving and other facilities. | ||||
| ● | Non operating expense - The Company expects its total non operating expense excluding net special items2 to be approximately $345 million in the second quarter. | ||||
| ● | Taxes - The Company expects to recognize a provision for income taxes at an effective rate of approximately 22% in the second quarter, which will be substantially non-cash. | ||||
| ● | Shares outstanding - The Company currently expects its basic and diluted weighted average shares outstanding3 for financial reporting purposes to be approximately 650.3 million and 721.2 million, respectively, for the second quarter. | ||||
| ● | Pre-tax margin - Based on the assumptions outlined above, the Company presently expects its second quarter pre-tax margin excluding net special items2 to be approximately 3% to 5%. | ||||
Notes:
| 1. | All CASM guidance excludes the impact of fuel and net special items. | ||||
| 2. | The Company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time. Please see GAAP to non-GAAP reconciliation at the end of this document. | ||||
| 3. | Shares outstanding assumes no additional shares issued through the Company’s existing at the market share issuance authorization or otherwise. | ||||
Please refer to the footnotes and the forward looking statements page of this document for additional information
Financial Update
April 21, 2022
2Q22 Guidance1,2 | |||||
| Total revenue | ~ +6% to +8% (vs 2Q19) | ||||
| Available seat miles (ASMs) | ~ -6% to -8% (vs 2Q19) | ||||
| CASM excluding fuel and net special items | ~ +8% to +10% (vs 2Q19) | ||||
| Average fuel price (incl. taxes) ($/gal) | ~ $3.59 to $3.64 | ||||
| Fuel gallons consumed (mil) | ~ 1,013 | ||||
Other non operating expense excluding net special items ($ mil) | ~ 345 | ||||
| Pre-tax margin | ~ 3% to 5% | ||||
Notes:
| 1. | Includes guidance on certain non-GAAP measures, which exclude, among other things, 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. Please see the GAAP to non-GAAP reconciliation at the end of this document. | ||||
| 2. | Numbers may not recalculate due to rounding. | ||||
Please refer to the footnotes and the forward looking statements page of this document for additional information
GAAP to Non-GAAP Reconciliation
April 21, 2022
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 table below presents the reconciliation of total operating costs (GAAP measure) to total operating costs excluding fuel and net special items (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding fuel and net special items. Management uses total operating costs and CASM excluding fuel and net special items 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. Additionally, net special items may vary from period-to-period in nature and amount. These adjustments to exclude fuel and net special items allow management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.
American Airlines Group Inc. GAAP to Non-GAAP Reconciliation1 ($ mil except ASM and CASM data) | |||||||||||
| 2Q22 Range | |||||||||||
| Low | High | ||||||||||
| Total operating expenses | $ | 11,874 | $ | 12,077 | |||||||
| Less fuel expense | 3,637 | 3,687 | |||||||||
| Less operating net special items | — | — | |||||||||
| Total operating expense excluding fuel and net special items | 8,237 | 8,390 | |||||||||
| Total CASM (cts) | 17.65 | 17.96 | |||||||||
| Total CASM excluding fuel and net special items (cts) | 12.25 | 12.47 | |||||||||
| Percentage change vs 2Q19 (%) | 8.0% | 10.0% | |||||||||
| Total ASMs (bil) at midpoint of range of down 6% to 8% | 67.3 | 67.3 | |||||||||
| Note: Amounts may not recalculate due to rounding. | |||||
| 1. | Certain of the guidance provided excludes net special items. The Company is unable to fully reconcile such forward-looking guidance to the corresponding GAAP measure because the full nature and amount of net special items cannot be determined at this time. | ||||
Please refer to the footnotes and the forward looking statements page of this document for additional information
Forward Looking Statements
April 21, 2022
Cautionary Statement Regarding Forward-Looking Statements
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act, the Exchange Act and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the Company’s plans, objectives, expectations, intentions, estimates and strategies for the future, the continuing availability of borrowings under revolving lines of credit, and other statements that are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the Company’s other filings with the Securities and Exchange Commission. In particular, the consequences of the coronavirus outbreak to economic conditions and the travel industry in general and the financial position and operating results of the Company in particular have been material, are changing rapidly, and cannot be predicted. Additionally, there may be other factors of which the Company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The Company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.
Please refer to the footnotes and the forward looking statements page of this document for additional information