American Airlines reports fourth-quarter and full-year 2023 financial results
- Record full-year revenue of approximately $53 billion
- GAAP fourth-quarter and full-year net income of $19 million and $822 million
- Reduced total debt by $3.2 billion in 2023
- Best-ever fourth-quarter and full-year completion factor
- GAAP operating cash flow of $3.8 billion
- Best-ever completion factor and on-time departures during the holiday travel period
- Expects a first-quarter 2024 adjusted loss per diluted share to be between ($0.15) and ($0.35)
- Expects full-year 2024 adjusted earnings per diluted share to be between $2.25 and $3.25
Insights
The reported financial results from American Airlines Group Inc. indicate a strong performance for the year 2023, with a record full-year revenue of approximately $53 billion and a significant reduction in total debt. The reduction of $3.2 billion in debt and the achievement of the airline's highest full-year free cash flow of $1.8 billion are positive indicators of the company's financial health and operational efficiency. These factors are particularly relevant to investors as they reflect the company's ability to generate cash and manage liabilities effectively, which is crucial for long-term sustainability and potential return on investment.
However, it is important to note the guidance for the first quarter of 2024, which projects an adjusted loss per diluted share. This forecast suggests potential challenges ahead and may impact investor sentiment. The projected full-year 2024 adjusted earnings per diluted share of between $2.25 and $3.25 offer a broader perspective on the company's expectations for profitability, which will be an area of focus for investors monitoring the company's performance against industry trends and economic conditions.
From a market perspective, American Airlines' operational achievements, such as the best-ever fourth-quarter and full-year completion factor and the lowest annual number of cancellations since the merger in 2013, demonstrate the company's commitment to improving customer experience and reliability. These operational improvements, coupled with the strong demand for American's product and record revenue from its travel rewards program, are likely to enhance the company's competitive position in the airline industry.
Understanding the industry's dynamics, such as the impact of fuel prices, consumer travel behavior and geopolitical factors, will be essential in evaluating how American Airlines can maintain its momentum and manage external pressures. The company's ability to exceed its operating margin guidance in the fourth quarter, even by a slim margin, is a testament to its effective cost control measures and may influence market perceptions positively.
Looking at the broader economic implications, the airline industry is often seen as a barometer for economic activity, given its sensitivity to business and consumer travel trends. American Airlines' record revenue and operational achievements in 2023 suggest a robust travel demand, reflecting broader economic recovery post-pandemic. However, the anticipated adjusted loss for the first quarter of 2024 could be indicative of cyclical economic headwinds or possibly company-specific challenges.
The aggressive debt reduction strategy, aiming to reduce total debt by $15 billion by the end of 2025, aligns with prudent financial management practices, especially in a historically volatile industry like aviation. This strategy could serve as a buffer against potential economic downturns, providing the company with greater financial flexibility and resilience. The company's progress in this area, being over 75% towards its debt reduction goal, is a significant milestone that could affect stakeholder confidence in the company's fiscal responsibility and strategic planning.
FORT WORTH, Texas, Jan. 25, 2024 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2023 financial results, including:
- Record full-year revenue of approximately
$53 billion . - GAAP fourth-quarter and full-year net income of
$19 million and$822 million , or$0.03 and$1.21 per diluted share, respectively. - Excluding net special items1, fourth-quarter and full-year net income of
$192 million and$1.9 billion , or$0.29 and$2.65 per diluted share, respectively. - Achieved best-ever fourth-quarter and full-year completion factor.
- Generated GAAP operating cash flow of
$3.8 billion and the airline’s highest full-year free cash flow2 of$1.8 billion . - Reduced total debt3 by
$3.2 billion in 2023. The company is more than75% of the way to its 2025 total debt reduction goal.
“The American Airlines team produced an exceptionally strong performance in 2023,” said American’s CEO Robert Isom. “We are delivering on our commitments and remain well-positioned for the future, supported by the strength of our network and travel rewards program, our young and simplified fleet, our operational reliability, and our outstanding team. As we look forward, we remain focused on delivering a reliable operation for our customers and reengineering the business to build an even more efficient airline.”
Operational reliability
American and its regional partners operated nearly 2 million flights in 2023, with an average load factor of
The airline’s strong operational momentum continued through the holiday travel period. American achieved its best-ever completion factor and on-time departures as well as its lowest mishandled baggage rate over the holidays.
Financial performance
For the full year, American produced record revenue of nearly
Liquidity and balance sheet
Strengthening the balance sheet remains a top priority for the company. American reduced total debt3 by more than
The company ended the year with approximately
Guidance and investor update
Based on present demand trends and the current fuel price forecast and excluding the impact of special items4, the company expects its first-quarter 2024 adjusted loss per diluted share4 to be between (
For additional financial forecasting detail, please refer to the company’s investor update, furnished with this press release with the SEC on Form 8-K. This filing will also be available at aa.com/investorrelations.
Conference call and webcast details
The company will conduct a live audio webcast of its financial results conference call at 7:30 a.m. CT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Feb. 25.
Notes
See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information, including the calculation of free cash flow.
- The company recognized
$173 million of net special items in the fourth quarter after the effect of taxes, which principally included$216 million of nonoperating net special items for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments. The company recognized$1.0 billion of net special items in 2023 after the effect of taxes, which included operating net special items of$979 million principally related to one-time charges resulting from the ratification of a new collective bargaining agreement with American’s mainline pilots, as well as nonoperating net special items of$362 million for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments. - Please see the accompanying notes for the company’s definition of free cash flow, a non-GAAP measure.
- All references to total debt include debt, finance and operating lease liabilities and pension obligations.
- Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking information to GAAP as the nature or amount of net special items cannot be determined at this time.
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 @AmericanAir and at Facebook.com/AmericanAirlines.
Cautionary statement regarding forward-looking statements and information
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the company’s plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. Additionally, there may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.
| American Airlines Group Inc. | |||||||||||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||||||||||
| (In millions, except share and per share amounts) | |||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| 3 Months Ended December 31, | Percent Increase | 12 Months Ended December 31, | Percent Increase | ||||||||||||||||||
| 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | ||||||||||||||||
| Operating revenues: | |||||||||||||||||||||
| Passenger | $ | 12,010 | $ | 12,131 | (1.0 | ) | $ | 48,512 | $ | 44,568 | 8.8 | ||||||||||
| Cargo | 199 | 263 | (24.2 | ) | 812 | 1,233 | (34.1 | ) | |||||||||||||
| Other | 853 | 795 | 7.2 | 3,464 | 3,170 | 9.3 | |||||||||||||||
| Total operating revenues | 13,062 | 13,189 | (1.0 | ) | 52,788 | 48,971 | 7.8 | ||||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Aircraft fuel and related taxes | 3,159 | 3,421 | (7.7 | ) | 12,257 | 13,791 | (11.1 | ) | |||||||||||||
| Salaries, wages and benefits | 3,689 | 3,199 | 15.3 | 14,580 | 12,972 | 12.4 | |||||||||||||||
| Regional expenses: | |||||||||||||||||||||
| Regional operating expenses | 1,101 | 1,006 | 9.3 | 4,325 | 4,064 | 6.4 | |||||||||||||||
| Regional depreciation and amortization | 79 | 81 | (1.8 | ) | 318 | 321 | (0.8 | ) | |||||||||||||
| Maintenance, materials and repairs | 875 | 735 | 19.1 | 3,265 | 2,684 | 21.6 | |||||||||||||||
| Other rent and landing fees | 714 | 649 | 10.0 | 2,928 | 2,730 | 7.3 | |||||||||||||||
| Aircraft rent | 338 | 350 | (3.2 | ) | 1,369 | 1,395 | (1.9 | ) | |||||||||||||
| Selling expenses | 443 | 484 | (8.5 | ) | 1,799 | 1,815 | (0.9 | ) | |||||||||||||
| Depreciation and amortization | 480 | 492 | (2.3 | ) | 1,936 | 1,977 | (2.1 | ) | |||||||||||||
| Special items, net | 9 | 4 | nm | (1) | 971 | 193 | nm | ||||||||||||||
| Other | 1,519 | 1,385 | 9.7 | 6,006 | 5,422 | 10.8 | |||||||||||||||
| Total operating expenses | 12,406 | 11,806 | 5.1 | 49,754 | 47,364 | 5.0 | |||||||||||||||
| Operating income | 656 | 1,383 | (52.5 | ) | 3,034 | 1,607 | 88.8 | ||||||||||||||
| Nonoperating income (expense): | |||||||||||||||||||||
| Interest income | 136 | 110 | 24.1 | 591 | 216 | nm | |||||||||||||||
| Interest expense, net | (519 | ) | (532 | ) | (2.3 | ) | (2,145 | ) | (1,962 | ) | 9.3 | ||||||||||
| Other income (expense), net | (241 | ) | 50 | nm | (359 | ) | 325 | nm | |||||||||||||
| Total nonoperating expense, net | (624 | ) | (372 | ) | 67.9 | (1,913 | ) | (1,421 | ) | 34.6 | |||||||||||
| Income before income taxes | 32 | 1,011 | (96.8 | ) | 1,121 | 186 | nm | ||||||||||||||
| Income tax provision | 13 | 208 | (93.6 | ) | 299 | 59 | nm | ||||||||||||||
| Net income | $ | 19 | $ | 803 | (97.6 | ) | $ | 822 | $ | 127 | nm | ||||||||||
| Earnings per common share: | |||||||||||||||||||||
| Basic | $ | 0.03 | $ | 1.23 | $ | 1.26 | $ | 0.20 | |||||||||||||
| Diluted | $ | 0.03 | $ | 1.14 | $ | 1.21 | $ | 0.19 | |||||||||||||
| Weighted average shares outstanding (in thousands): | |||||||||||||||||||||
| Basic | 654,725 | 650,944 | 653,612 | 650,345 | |||||||||||||||||
| Diluted | 657,079 | 716,070 | 719,669 | 655,122 | |||||||||||||||||
| Note: Percent change may not recalculate due to rounding. | |||||||||||||||||||||
| (1) Not meaningful or greater than | |||||||||||||||||||||
| American Airlines Group Inc. | |||||||||||||
| Consolidated Operating Statistics (1) | |||||||||||||
| (Unaudited) | |||||||||||||
| 3 Months Ended December 31, | Increase | 12 Months Ended December 31, | Increase | ||||||||||
| 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | ||||||||
| Revenue passenger miles (millions) | 58,331 | 55,320 | 5.4 | % | 231,926 | 215,624 | 7.6 | % | |||||
| Available seat miles (ASM) (millions) | 69,773 | 65,962 | 5.8 | % | 277,723 | 260,226 | 6.7 | % | |||||
| Passenger load factor (percent) | 83.6 | 83.9 | (0.3 | ) pts | 83.5 | 82.9 | 0.6 | pts | |||||
| Yield (cents) | 20.59 | 21.93 | (6.1 | )% | 20.92 | 20.67 | 1.2 | % | |||||
| Passenger revenue per ASM (cents) | 17.21 | 18.39 | (6.4 | )% | 17.47 | 17.13 | 2.0 | % | |||||
| Total revenue per ASM (cents) | 18.72 | 19.99 | (6.4 | )% | 19.01 | 18.82 | 1.0 | % | |||||
| Cargo ton miles (millions) | 501 | 458 | 9.5 | % | 1,840 | 1,972 | (6.7 | )% | |||||
| Cargo yield per ton mile (cents) | 39.74 | 57.39 | (30.8 | )% | 44.13 | 62.52 | (29.4 | )% | |||||
| Fuel consumption (gallons in millions) | 1,033 | 979 | 5.5 | % | 4,140 | 3,901 | 6.1 | % | |||||
| Average aircraft fuel price including related taxes (dollars per gallon) | 3.06 | 3.50 | (12.5 | )% | 2.96 | 3.54 | (16.3 | )% | |||||
| Operating cost per ASM (cents) | 17.78 | 17.90 | (0.7 | )% | 17.92 | 18.20 | (1.6 | )% | |||||
| Operating cost per ASM excluding net special items (cents) | 17.77 | 17.89 | (0.7 | )% | 17.56 | 18.13 | (3.1 | )% | |||||
| Operating cost per ASM excluding net special items and fuel (cents) | 13.24 | 12.70 | 4.2 | % | 13.15 | 12.83 | 2.5 | % | |||||
| Passenger enplanements (thousands) | 53,567 | 50,934 | 5.2 | % | 210,692 | 199,288 | 5.7 | % | |||||
| Departures (thousands): | |||||||||||||
| Mainline | 285 | 277 | 2.9 | % | 1,145 | 1,052 | 8.9 | % | |||||
| Regional | 222 | 201 | 10.3 | % | 855 | 903 | (5.3 | )% | |||||
| Total | 507 | 478 | 6.0 | % | 2,000 | 1,955 | 2.3 | % | |||||
| Average stage length (miles): | |||||||||||||
| Mainline | 1,157 | 1,132 | 2.3 | 1,147 | 1,161 | (1.2 | )% | ||||||
| Regional | 458 | 469 | (2.3 | )% | 463 | 477 | (3.0 | )% | |||||
| Total | 851 | 853 | (0.2 | )% | 855 | 845 | 1.1 | % | |||||
| Aircraft at end of period: | |||||||||||||
| Mainline | 965 | 925 | 4.3 | % | 965 | 925 | 4.3 | % | |||||
| Regional (2) | 556 | 536 | 3.7 | % | 556 | 536 | 3.7 | % | |||||
| Total | 1,521 | 1,461 | 4.1 | % | 1,521 | 1,461 | 4.1 | % | |||||
| Full-time equivalent employees at end of period: | |||||||||||||
| Mainline | 103,200 | 102,000 | 1.2 | % | 103,200 | 102,000 | 1.2 | % | |||||
| Regional (3) | 28,900 | 27,700 | 4.3 | % | 28,900 | 27,700 | 4.3 | % | |||||
| Total | 132,100 | 129,700 | 1.9 | % | 132,100 | 129,700 | 1.9 | % | |||||
| 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) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 77 regional aircraft that were in temporary storage as of December 31, 2023 as follows: 57 Embraer 145, 11 Bombardier CRJ 700, six Bombardier CRJ 900, and three Embraer 170. | |||||||||||||
| (3) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries. | |||||||||||||
| American Airlines Group Inc. | |||||||||||||
| Consolidated Revenue Statistics by Region | |||||||||||||
| (Unaudited) | |||||||||||||
| 3 Months Ended December 31, | Increase | 12 Months Ended December 31, | Increase | ||||||||||
| 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | ||||||||
| Domestic (1) | |||||||||||||
| Revenue passenger miles (millions) | 39,610 | 38,065 | 4.1 | % | 155,374 | 149,410 | 4.0 | % | |||||
| Available seat miles (ASM) (millions) | 46,805 | 44,939 | 4.2 | % | 185,206 | 176,447 | 5.0 | % | |||||
| Passenger load factor (percent) | 84.6 | 84.7 | (0.1 | ) pts | 83.9 | 84.7 | (0.8 | ) pts | |||||
| Passenger revenue (dollars in millions) | 8,744 | 8,945 | (2.2 | )% | 34,592 | 32,911 | 5.1 | % | |||||
| Yield (cents) | 22.08 | 23.50 | (6.1 | )% | 22.26 | 22.03 | 1.1 | % | |||||
| Passenger revenue per ASM (cents) | 18.68 | 19.90 | (6.1 | )% | 18.68 | 18.65 | 0.1 | % | |||||
| Latin America (2) | |||||||||||||
| Revenue passenger miles (millions) | 8,570 | 8,379 | 2.3 | % | 33,337 | 32,467 | 2.7 | % | |||||
| Available seat miles (millions) | 9,950 | 9,853 | 1.0 | % | 38,531 | 39,131 | (1.5 | )% | |||||
| Passenger load factor (percent) | 86.1 | 85.0 | 1.1 | pts | 86.5 | 83.0 | 3.5 | pts | |||||
| Passenger revenue (dollars in millions) | 1,674 | 1,793 | (6.6 | )% | 6,719 | 6,150 | 9.2 | % | |||||
| Yield (cents) | 19.53 | 21.40 | (8.7 | )% | 20.16 | 18.94 | 6.4 | % | |||||
| Passenger revenue per ASM (cents) | 16.82 | 18.20 | (7.6 | )% | 17.44 | 15.72 | 10.9 | % | |||||
| Atlantic | |||||||||||||
| Revenue passenger miles (millions) | 8,307 | 7,676 | 8.2 | % | 36,581 | 30,949 | 18.2 | % | |||||
| Available seat miles (millions) | 10,728 | 9,725 | 10.3 | % | 46,056 | 40,679 | 13.2 | % | |||||
| Passenger load factor (percent) | 77.4 | 78.9 | (1.5 | ) pts | 79.4 | 76.1 | 3.3 | pts | |||||
| Passenger revenue (dollars in millions) | 1,330 | 1,222 | 8.9 | % | 6,205 | 5,070 | 22.4 | % | |||||
| Yield (cents) | 16.02 | 15.92 | 0.6 | % | 16.96 | 16.38 | 3.5 | % | |||||
| Passenger revenue per ASM (cents) | 12.40 | 12.57 | (1.3 | )% | 13.47 | 12.46 | 8.1 | % | |||||
| Pacific | |||||||||||||
| Revenue passenger miles (millions) | 1,844 | 1,200 | 53.6 | % | 6,634 | 2,798 | nm | ||||||
| Available seat miles (millions) | 2,290 | 1,445 | 58.5 | % | 7,930 | 3,969 | 99.8 | % | |||||
| Passenger load factor (percent) | 80.5 | 83.1 | (2.6 | ) pts | 83.7 | 70.5 | 13.2 | pts | |||||
| Passenger revenue (dollars in millions) | 262 | 171 | 53.1 | % | 996 | 437 | nm | ||||||
| Yield (cents) | 14.19 | 14.23 | (0.3 | )% | 15.00 | 15.62 | (3.9 | )% | |||||
| Passenger revenue per ASM (cents) | 11.43 | 11.82 | (3.4 | )% | 12.55 | 11.01 | 14.0 | % | |||||
| Total International | |||||||||||||
| Revenue passenger miles (millions) | 18,721 | 17,255 | 8.5 | % | 76,552 | 66,214 | 15.6 | % | |||||
| Available seat miles (millions) | 22,968 | 21,023 | 9.3 | % | 92,517 | 83,779 | 10.4 | % | |||||
| Passenger load factor (percent) | 81.5 | 82.1 | (0.6 | ) pts | 82.7 | 79.0 | 3.7 | pts | |||||
| Passenger revenue (dollars in millions) | 3,266 | 3,186 | 2.5 | % | 13,920 | 11,657 | 19.4 | % | |||||
| Yield (cents) | 17.45 | 18.46 | (5.5 | )% | 18.18 | 17.61 | 3.3 | % | |||||
| Passenger revenue per ASM (cents) | 14.22 | 15.15 | (6.2 | )% | 15.05 | 13.91 | 8.1 | % | |||||
| Note: Amounts may not recalculate due to rounding. | |||||||||||||
| (1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands. | |||||||||||||
| (2) Latin America results include the Caribbean. | |||||||||||||
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.
The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures:
- Operating Income (GAAP measure) to Operating Income Excluding Net Special Items (non-GAAP measure)
- Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure)
- Pre-Tax Income (GAAP measure) to Pre-Tax Income 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 (GAAP measure) to Net Income Excluding Net Special Items (non-GAAP measure)
- Basic and Diluted Earnings Per Share (GAAP measure) to Basic and Diluted Earnings Per Share Excluding Net Special Items (non-GAAP measure)
Management uses these non-GAAP financial measures to evaluate the Company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance.
Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs excluding net special items and fuel and CASM excluding net special items and fuel to evaluate the Company's current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude fuel and net special items allows management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.
| Reconciliation of Operating Income Excluding Net Special Items | 3 Months Ended December 31, | Percent Increase | 12 Months Ended December 31, | Percent Increase | ||||||||||||||||||
| 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | |||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||
| Operating income as reported | $ | 656 | $ | 1,383 | $ | 3,034 | $ | 1,607 | ||||||||||||||
| Operating net special items: | ||||||||||||||||||||||
| Mainline operating special items, net (1) | 9 | 4 | 971 | 193 | ||||||||||||||||||
| Regional operating special items, net | - | 2 | 8 | 5 | ||||||||||||||||||
| Operating income excluding net special items | $ | 665 | $ | 1,389 | ( | $ | 4,013 | $ | 1,805 | nm | ||||||||||||
| Calculation of Operating Margin | ||||||||||||||||||||||
| Operating income as reported | $ | 656 | $ | 1,383 | $ | 3,034 | $ | 1,607 | ||||||||||||||
| Total operating revenues as reported | $ | 13,062 | $ | 13,189 | $ | 52,788 | $ | 48,971 | ||||||||||||||
| Operating margin | 5.0 | % | 10.5 | % | 5.7 | % | 3.3 | % | ||||||||||||||
| Calculation of Operating Margin Excluding Net Special Items | ||||||||||||||||||||||
| Operating income excluding net special items | $ | 665 | $ | 1,389 | $ | 4,013 | $ | 1,805 | ||||||||||||||
| Total operating revenues as reported | $ | 13,062 | $ | 13,189 | $ | 52,788 | $ | 48,971 | ||||||||||||||
| Operating margin excluding net special items | 5.1 | % | 10.5 | % | 7.6 | % | 3.7 | % | ||||||||||||||
| Reconciliation of Pre-Tax Income Excluding Net Special Items | ||||||||||||||||||||||
| Pre-tax income as reported | $ | 32 | $ | 1,011 | $ | 1,121 | $ | 186 | ||||||||||||||
| Pre-tax net special items: | ||||||||||||||||||||||
| Mainline operating special items, net (1) | 9 | 4 | 971 | 193 | ||||||||||||||||||
| Regional operating special items, net | - | 2 | 8 | 5 | ||||||||||||||||||
| Nonoperating special items, net (2) | 216 | 40 | 362 | 74 | ||||||||||||||||||
| Total pre-tax net special items | 225 | 46 | 1,341 | 272 | ||||||||||||||||||
| Pre-tax income excluding net special items | $ | 257 | $ | 1,057 | ( | $ | 2,462 | $ | 458 | nm | ||||||||||||
| Calculation of Pre-Tax Margin | ||||||||||||||||||||||
| Pre-tax income as reported | $ | 32 | $ | 1,011 | $ | 1,121 | $ | 186 | ||||||||||||||
| Total operating revenues as reported | $ | 13,062 | $ | 13,189 | $ | 52,788 | $ | 48,971 | ||||||||||||||
| Pre-tax margin | 0.2 | % | 7.7 | % | 2.1 | % | 0.4 | % | ||||||||||||||
| Calculation of Pre-Tax Margin Excluding Net Special Items | ||||||||||||||||||||||
| Pre-tax income excluding net special items | $ | 257 | $ | 1,057 | $ | 2,462 | $ | 458 | ||||||||||||||
| Total operating revenues as reported | $ | 13,062 | $ | 13,189 | $ | 52,788 | $ | 48,971 | ||||||||||||||
| Pre-tax margin excluding net special items | 2.0 | % | 8.0 | % | 4.7 | % | 0.9 | % | ||||||||||||||
| 3 Months Ended December 31, | Percent Increase | 12 Months Ended December 31, | Percent Increase | |||||||||||||||||||
| Reconciliation of Net Income Excluding Net Special Items | 2023 | 2022 | (Decrease) | 2023 | 2022 | (Decrease) | ||||||||||||||||
| (in millions, except share and per share amounts) | (in millions, except share and per share amounts) | |||||||||||||||||||||
| Net income as reported | $ | 19 | $ | 803 | $ | 822 | $ | 127 | ||||||||||||||
| Net special items: | ||||||||||||||||||||||
| Total pre-tax net special items (1), (2) | 225 | 46 | 1,341 | 272 | ||||||||||||||||||
| Income tax special items, net | - | - | - | (9 | ) | |||||||||||||||||
| Net tax effect of net special items | (52 | ) | (22 | ) | (304 | ) | (62 | ) | ||||||||||||||
| Net income excluding net special items | $ | 192 | $ | 827 | ( | $ | 1,859 | $ | 328 | nm | ||||||||||||
| Reconciliation of Basic and Diluted Earnings Per Share Excluding Net Special Items | ||||||||||||||||||||||
| Net income excluding net special items | $ | 192 | $ | 827 | $ | 1,859 | $ | 328 | ||||||||||||||
| Shares used for computation (in thousands): | ||||||||||||||||||||||
| Basic | 654,725 | 650,944 | 653,612 | 650,345 | ||||||||||||||||||
| Diluted | 718,807 | 716,070 | 719,669 | 655,122 | ||||||||||||||||||
| Earnings per share excluding net special items: | ||||||||||||||||||||||
| Basic | $ | 0.29 | $ | 1.27 | $ | 2.84 | $ | 0.50 | ||||||||||||||
| Diluted (3) | $ | 0.29 | $ | 1.17 | $ | 2.65 | $ | 0.50 | ||||||||||||||
| Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel | ||||||||||||||||||||||
| Total operating expenses as reported | $ | 12,406 | $ | 11,806 | $ | 49,754 | $ | 47,364 | ||||||||||||||
| Operating net special items: | ||||||||||||||||||||||
| Mainline operating special items, net (1) | (9 | ) | (4 | ) | (971 | ) | (193 | ) | ||||||||||||||
| Regional operating special items, net | - | (2 | ) | (8 | ) | (5 | ) | |||||||||||||||
| Total operating expenses excluding net special items | 12,397 | 11,800 | 48,775 | 47,166 | ||||||||||||||||||
| Aircraft fuel and related taxes | (3,159 | ) | (3,421 | ) | (12,257 | ) | (13,791 | ) | ||||||||||||||
| Total operating expenses excluding net special items and fuel | $ | 9,238 | $ | 8,379 | $ | 36,518 | $ | 33,375 | ||||||||||||||
| (in cents) | (in cents) | |||||||||||||||||||||
| Total operating expenses per ASM as reported | 17.78 | 17.90 | 17.92 | 18.20 | ||||||||||||||||||
| Operating net special items per ASM: | ||||||||||||||||||||||
| Mainline operating special items, net (1) | (0.01 | ) | (0.01 | ) | (0.35 | ) | (0.07 | ) | ||||||||||||||
| Regional operating special items, net | - | - | - | - | ||||||||||||||||||
| Total operating expenses per ASM excluding net special items | 17.77 | 17.89 | 17.56 | 18.13 | ||||||||||||||||||
| Aircraft fuel and related taxes per ASM | (4.53 | ) | (5.19 | ) | (4.41 | ) | (5.30 | ) | ||||||||||||||
| Total operating expenses per ASM excluding net special items and fuel | 13.24 | 12.70 | 13.15 | 12.83 | ||||||||||||||||||
| Note: Amounts may not recalculate due to rounding. | ||||||||||||||||||||||
| FOOTNOTES: | ||||||||||||||||||||||
| (1) | The 2023 twelve month period mainline operating special items, net principally included The 2022 twelve month period mainline operating special items, net principally included a non-cash impairment charge to write down the carrying value of the Company's retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. The Company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic. | |||||||||||||||||||||
| (2) | Principally included charges associated with debt refinancings and extinguishments as well as mark-to-market net unrealized gains and losses associated with certain equity investments. | |||||||||||||||||||||
| (3) | The 2023 three and twelve month period diluted earnings per share gives effect to, among other things, the Company's outstanding The 2022 three month period diluted earnings per share gives effect to, among other things, the Company's outstanding | |||||||||||||||||||||
| American Airlines Group Inc. | |||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||
| (In millions) (Unaudited) | |||||||||
| Year Ended December 31, | |||||||||
| 2023 | 2022 | ||||||||
| Net cash provided by operating activities | $ | 3,803 | $ | 2,173 | |||||
| Cash flows from investing activities: | |||||||||
| Capital expenditures, net of aircraft purchase deposit returns | (2,596 | ) | (2,546 | ) | |||||
| Proceeds from sale of property and equipment and sale-leaseback transactions | 230 | 147 | |||||||
| Sales of short-term investments | 8,861 | 14,972 | |||||||
| Purchases of short-term investments | (7,323 | ) | (11,257 | ) | |||||
| Decrease in restricted short-term investments | 51 | 1 | |||||||
| Purchase of equity investments | - | (321 | ) | ||||||
| Other investing activities | 275 | (360 | ) | ||||||
| Net cash provided by (used in) investing activities | (502 | ) | 636 | ||||||
| Cash flows from financing activities: | |||||||||
| Payments on long-term debt and finance leases | (7,718 | ) | (3,752 | ) | |||||
| Proceeds from issuance of long-term debt | 4,822 | 1,069 | |||||||
| Other financing activities | (310 | ) | 52 | ||||||
| Net cash used in financing activities | (3,206 | ) | (2,631 | ) | |||||
| Net increase in cash and restricted cash | 95 | 178 | |||||||
| Cash and restricted cash at beginning of year | 586 | 408 | |||||||
| (1) | Cash and restricted cash at end of year | $ | 681 | $ | 586 | ||||
| (1) | The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets: | ||||||||
| Cash | $ | 578 | $ | 440 | |||||
| Restricted cash included in restricted cash and short-term investments | 103 | 146 | |||||||
| Total cash and restricted cash | $ | 681 | $ | 586 | |||||
Free Cash Flow
The Company's free cash flow summary is presented in the table below, which is a non-GAAP measure that management believes is useful information to investors and others in evaluating the Company's ability to generate cash from its core operating performance that is available for use to reinvest in the business or to reduce debt. The Company defines free cash flows as net cash provided by operating activities less net cash used in investing activities, adjusted for (1) net sales of short-term investments and (2) change in restricted cash. We believe that calculating free cash flow as adjusted for these items is more useful for investors because short-term investment activity and restricted cash are not representative of activity core to our operations.
This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. Our calculation of free cash flow is not intended, and should not be used, to measure the residual cash flow available for discretionary expenditures because, among other things, it excludes mandatory debt service requirements and certain other non-discretionary expenditures.
| Year Ended December 31, 2023 | |||||
| (in millions) | |||||
| Net cash provided by operating activities | $ | 3,803 | |||
| Adjusted net cash used in investing activities (1) | (1,997 | ) | |||
| Free cash flow | $ | 1,806 | |||
| (1) | The following table provides a reconciliation of adjusted net cash used in investing activities for the year ended December 31, 2023 (in millions): | ||||
| Net cash used in investing activities | $ | (502 | ) | ||
| Adjustments: | |||||
| Net sales of short-term investments | (1,538 | ) | |||
| Decrease in restricted cash | 43 | ||||
| Adjusted net cash used in investing activities | $ | (1,997 | ) | ||
| American Airlines Group Inc. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (In millions, except shares) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| (unaudited) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash | $ | 578 | $ | 440 | |||
| Short-term investments | 7,000 | 8,525 | |||||
| Restricted cash and short-term investments | 910 | 995 | |||||
| Accounts receivable, net | 2,026 | 2,138 | |||||
| Aircraft fuel, spare parts and supplies, net | 2,400 | 2,279 | |||||
| Prepaid expenses and other | 658 | 892 | |||||
| Total current assets | 13,572 | 15,269 | |||||
| Operating property and equipment | |||||||
| Flight equipment | 41,794 | 39,703 | |||||
| Ground property and equipment | 10,307 | 9,913 | |||||
| Equipment purchase deposits | 760 | 613 | |||||
| Total property and equipment, at cost | 52,861 | 50,229 | |||||
| Less accumulated depreciation and amortization | (22,097 | ) | (20,029 | ) | |||
| Total property and equipment, net | 30,764 | 30,200 | |||||
| Operating lease right-of-use assets | 7,939 | 8,094 | |||||
| Other assets | |||||||
| Goodwill | 4,091 | 4,091 | |||||
| Intangibles, net | 2,051 | 2,059 | |||||
| Deferred tax asset | 2,888 | 3,099 | |||||
| Other assets | 1,753 | 1,904 | |||||
| Total other assets | 10,783 | 11,153 | |||||
| Total assets | $ | 63,058 | $ | 64,716 | |||
| Liabilities and Stockholders’ Equity (Deficit) | |||||||
| Current liabilities | |||||||
| Current maturities of long-term debt and finance leases | $ | 3,632 | $ | 3,274 | |||
| Accounts payable | 2,353 | 2,149 | |||||
| Accrued salaries and wages | 2,377 | 1,713 | |||||
| Air traffic liability | 6,200 | 6,745 | |||||
| Loyalty program liability | 3,453 | 3,169 | |||||
| Operating lease liabilities | 1,309 | 1,465 | |||||
| Other accrued liabilities | 2,738 | 2,981 | |||||
| Total current liabilities | 22,062 | 21,496 | |||||
| Noncurrent liabilities | |||||||
| Long-term debt and finance leases, net of current maturities | 29,270 | 32,389 | |||||
| Pension and postretirement benefits | 3,044 | 2,837 | |||||
| Loyalty program liability | 5,874 | 5,976 | |||||
| Operating lease liabilities | 6,452 | 6,559 | |||||
| Other liabilities | 1,558 | 1,258 | |||||
| Total noncurrent liabilities | 46,198 | 49,019 | |||||
| Stockholders' equity (deficit) | |||||||
| Common stock, 654,273,192 shares outstanding at December 31, 2023 | 7 | 6 | |||||
| Additional paid-in capital | 7,374 | 7,291 | |||||
| Accumulated other comprehensive loss | (4,894 | ) | (4,585 | ) | |||
| Retained deficit | (7,689 | ) | (8,511 | ) | |||
| Total stockholders' deficit | (5,202 | ) | (5,799 | ) | |||
| Total liabilities and stockholders’ equity (deficit) | $ | 63,058 | $ | 64,716 | |||
FAQ
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