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): July 24, 2014
AMERICAN AIRLINES GROUP INC.
AMERICAN AIRLINES, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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1-8400 |
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75-1825172 |
Delaware |
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1-2691 |
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13-1502798 |
(State or other Jurisdiction
of Incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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4333 Amon Carter Blvd., Fort Worth, Texas |
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76155 |
4333 Amon Carter Blvd., Fort Worth, Texas |
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76155 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code:
(817) 963-1234
(817)
963-1234
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)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 7.01. |
REGULATION FD DISCLOSURE. |
On July 24, 2014, American Airlines
Group Inc. (the Company) provided an update for investors presenting information relating to its financial and operational outlook for 2014. This investor presentation is located on the Companys website at www.aa.com under
Investor Relations. The update is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 9.01. |
FINANCIAL STATEMENTS AND EXHIBITS. |
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Exhibit No. |
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Description |
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99.1 |
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Investor Update |
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.
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AMERICAN AIRLINES GROUP INC. |
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Date: July 24, 2014 |
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By: |
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/s/ Derek J. Kerr |
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Derek J. Kerr |
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Executive Vice President and |
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Chief Financial Officer |
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.
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AMERICAN AIRLINES, INC. |
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Date: July 24, 2014 |
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By: |
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/s/ Derek J. Kerr |
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Derek J. Kerr |
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Executive Vice President and |
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Chief Financial Officer |
EXHIBIT INDEX
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Exhibit No. |
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Description |
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99.1 |
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Investor Update |
Exhibit 99.1
Investor Relations Update
July 24, 2014
On
December 9, 2013, the Plan of Reorganization of AMR Corporation became effective and the related merger transaction was completed. As a result, US Airways Group became a wholly-owned subsidiary of the reorganized AMR Corporation (renamed
American Airlines Group Inc., or AAG). AAG is providing guidance on a combined basis for 2014. In addition, this guidance reflects certain reclassifications to conform to the new American Airlines Group Inc. financial statement presentation and
excludes special items.
General Overview
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Pre-tax Margin The Company expects its third quarter pre-tax margin (excluding special items) to be approximately 10.5 percent to
12.5 percent. |
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Capacity 2014 total system capacity is expected to be up approximately 2.5 percent vs. 2013 primarily due to more active aircraft and
larger gauge aircraft replacing smaller gauge legacy aircraft. Full year mainline capacity is also expected to be up approximately 2.5 percent year-over-year, of which international capacity is expected to be up approximately 5 percent and domestic
capacity is expected to be up approximately 1 percent vs. 2013. |
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Cash As of June 30, 2014, the Company had approximately $10.3 billion in total cash and short-term investments, of
which $882 million was restricted. The Company also has an undrawn revolving credit facility of $1.0 billion. Approximately $791 million of the Companys unrestricted cash balance was held in Venezuelan bolivars, valued at the weighted
average applicable exchange rate of 6.53 bolivars to the dollar. This includes approximately $94 million valued at 4.3 bolivars, approximately $611 million valued at 6.3 bolivars and approximately $86 million valued at 10.6 bolivars, with the
rate depending on the date the Company submitted its repatriation request to the Venezuelan government. In the first quarter of 2014, the Venezuelan government announced that a newly-implemented system (SICAD I) will determine the exchange rate
(which fluctuates as determined by weekly auctions and at June 30, 2014 was 10.6 bolivars to the dollar) for repatriation of cash proceeds from ticket sales after January 1, 2014, and introduced new procedures for approval of repatriation
of local currency. The Company is continuing to work with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. However, pending further repatriation of funds, and due to the
significant decrease in demand for air travel resulting from the effective devaluation of the bolivar, the Company recently significantly reduced capacity in this market. The Company is monitoring this situation closely and continues to evaluate its
holdings of Venezuelan bolivars for potential impairment. |
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Fuel For the third quarter 2014, AAG expects to pay an average of between $2.93 and $2.98 per gallon of mainline jet fuel (including
taxes & hedges). Forecasted volume and fuel prices are provided in the tables below. |
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Cargo / Other Revenue Includes cargo revenue, frequent flyer revenue, ticket change fees, excess/overweight baggage fees, first and
second bag fees, contract services, simulator rental, airport clubs and inflight service revenues. |
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Taxes / NOL As of Dec. 31, 2013, AAG had approximately $10.6 billion of net operating losses (NOLs) available to reduce future
federal taxable income, the majority of which are expected to be available for use in 2014. The Company also had approximately $4.7 billion of NOLs to reduce future state taxable income, all of which are expected to be available for use in 2014. The
Companys net deferred tax asset, which includes the NOL, is subject to a full valuation allowance. As of Dec. 31, 2013, the tax affected valuation allowances associated with federal and state NOLs approximate $4.6 billion and $0.4 billion,
respectively. In accordance with generally accepted accounting principles, utilization of NOLs to offset book taxable income reduces the net deferred tax asset and results in the release of corresponding valuation allowances, which offset the tax
provision on our income statement dollar for dollar. The Company may be obligated to record and pay income tax related to certain states and foreign jurisdictions where NOLs may be limited or not available to be used. The Company currently expects
this expense to be approximately $5 million or less per quarter in 2014. |
Please refer to the footnotes and the
forward looking statements page of this document for additional information
Mainline Update
July 24, 2014
Mainline
Comments
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Combined mainline data includes American Airlines and US Airways operated flights, and all operating expenses are for mainline operated flights
only. Please refer to the following page for information pertaining to regional data. |
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CASM in the fourth quarter and full year 2014 increased from previous guidance due to a 1.5 percent reduction in fourth quarter capacity.
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Third quarter net aircraft CAPEX and PDP outflows are $1.6 billion higher than previous guidance primarily due to a shift in assumed aircraft
financing from the third quarter to the fourth quarter. Full year net aircraft CAPEX and PDP outflows remain unchanged. |
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1Q14A |
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2Q14A |
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3Q14E |
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4Q14E |
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FY14E |
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Mainline Guidance |
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Available Seat Miles (ASMs) (bil) |
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56.8 |
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61.0 |
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~61.8 |
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~58.2 |
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~237.8 |
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CASM ex fuel and special items (YOY % change)1 |
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8.97 |
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8.55 |
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+1% to +3 |
% |
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+1% to +3 |
% |
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+2% to +4 |
% |
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Cargo Revenues ($ mil) |
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206 |
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221 |
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~210 |
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~225 |
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~862 |
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Other Revenues ($ mil) |
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1,124 |
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1,214 |
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~1,155 |
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~1,123 |
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~4,616 |
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Average Fuel Price (incl. taxes & hedges) ($/gal) (as of 7/21/14) |
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3.10 |
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3.02 |
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~2.93 to 2.98 |
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~2.92 to 2.97 |
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2.98 to 3.03 |
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Fuel Gallons Consumed (mil) |
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874 |
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937 |
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~944 |
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~882 |
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~3,637 |
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Interest Income ($ mil) |
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(7 |
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(8 |
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~(8) |
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~(7) |
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~(30) |
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Interest Expense ($ mil)2 |
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212 |
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212 |
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~210 |
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~221 |
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~855 |
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Other Non-Operating (Income)/Expense ($ mil)2,3 |
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(15 |
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(11 |
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~5 |
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~4 |
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~(17) |
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CAPEX Guidance ($ mil) Inflow/(Outflow) |
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Non-Aircraft CAPEX |
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(133 |
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(128 |
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~(309) |
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~(309) |
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~(880) |
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Net Aircraft CAPEX & PDPs |
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(483 |
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(1,007 |
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~(821) |
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~1,074 |
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~(1,237) |
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Notes:
1. |
CASM ex fuel and special items is a non-GAAP financial measure. Please see the GAAP to non-GAAP reconciliation at the end of this document.
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Excludes special items; please see the GAAP to non-GAAP reconciliation at the end of this document. |
3. |
Other Non-Operating (Income)/Expense includes primarily gains and losses from foreign currency. |
Please refer to the
footnotes and the forward looking statements page of this document for additional information
Regional Update
July 24, 2014
Regional
Comments
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AAG receives feed from 10 regional airlines, including wholly owned subsidiaries Envoy, PSA Airlines and Piedmont Airlines. |
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All operating expenses (including capacity purchase agreements) associated with regional operations are included within the regional non-fuel
operating expense line item on the income statement. |
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1Q14A |
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2Q14A |
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3Q14E |
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4Q14E |
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FY14E |
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Regional Guidance |
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Available Seat Miles (ASMs) (bil) |
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6.56 |
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7.09 |
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~7.33 |
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~7.31 |
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~28.29 |
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CASM ex fuel and special items (YOY % change)1 |
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16.62 |
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15.80 |
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+4% to +6 |
% |
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0% to +2 |
% |
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+3% to +5 |
% |
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Average Fuel Price (incl. taxes & hedges) ($/gal) (as of 7/21/14) |
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3.10 |
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3.07 |
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2.98 to 3.03 |
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2.97 to 3.02 |
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3.02 to 3.07 |
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Fuel Gallons Consumed (mil) |
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161 |
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174 |
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~178 |
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~175 |
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~688 |
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Regional Airlines
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Envoy2 |
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Air Wisconsin Airlines Corporation |
SkyWest Airlines, Inc. |
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Mesa Airlines, Inc. |
ExpressJet Airlines, Inc. |
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Piedmont Airlines, Inc.2 |
Republic Airline Inc. |
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PSA Airlines, Inc.2 |
Chautauqua Airlines, Inc. |
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Trans States Airlines, Inc.3 |
Notes:
1. |
CASM ex fuel expense and special items is a non-GAAP financial measure. Please see the GAAP to non-GAAP reconciliation at the end of this
document. |
2. |
Wholly owned subsidiary of American Airlines Group Inc. |
Please refer to the
footnotes and the forward looking statements page of this document for additional information
Fleet Update
July 24, 2014
Fleet Comments
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The Company expects to take delivery of 83 mainline aircraft during 2014, consisting of 10 A319s, 43 A321s, 3 A332s, 19 B738s, 2 B788s and 6 B773s.
In addition, the company expects to retire 6 A320s, 14 B734s, 19 B757s, 14 B762s and 27 MD80s by the end of 2014 (all B734 aircraft are expected to exit the fleet by the end of Q3 2014). |
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In 2014, the Company expects to take delivery of 15 CRJ900 aircraft at its wholly owned subsidiary PSA Airlines. In addition, the Companys
partner airlines are expected to take delivery of 10 CRJ900 aircraft and 24 E175 aircraft. The Company expects to retire 40 ERJ140 aircraft and 2 Dash 8-100 aircraft. |
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In April 2014, the Company exercised its option to purchase (and thus terminated its existing lease financing arrangements for) 62 Airbus A320
family aircraft scheduled to be delivered between first quarter 2015 and third quarter 2017. In connection with this decision, the Company also exercised its right to convert firm orders for 30 Airbus A320 family NEO aircraft (scheduled to be
delivered in 2021 and 2022) to options to acquire such aircraft. |
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Mainline Ending Fleet Count 1 |
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2013A |
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1Q14A |
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2Q14A |
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3Q14E |
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4Q14E |
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A319 |
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108 |
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108 |
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112 |
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114 |
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118 |
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A320 |
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70 |
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68 |
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67 |
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66 |
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64 |
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A321 |
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96 |
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108 |
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116 |
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132 |
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139 |
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A332 |
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12 |
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13 |
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15 |
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15 |
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15 |
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A333 |
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9 |
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9 |
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9 |
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9 |
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9 |
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B734 |
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14 |
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13 |
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10 |
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0 |
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0 |
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B738 |
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226 |
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231 |
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236 |
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239 |
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245 |
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B757 |
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117 |
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116 |
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114 |
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110 |
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98 |
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B762 |
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20 |
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15 |
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8 |
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7 |
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6 |
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B763 |
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58 |
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58 |
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58 |
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58 |
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58 |
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B772 |
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47 |
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47 |
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47 |
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47 |
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47 |
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B773 |
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10 |
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11 |
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13 |
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14 |
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16 |
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B788 |
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0 |
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0 |
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0 |
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0 |
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2 |
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E190 |
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20 |
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20 |
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20 |
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20 |
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20 |
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MD80 |
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163 |
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160 |
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159 |
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148 |
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136 |
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970 |
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977 |
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984 |
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979 |
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973 |
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Regional Ending Fleet Count 1 |
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2013A |
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1Q14A |
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2Q14A |
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3Q14E |
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4Q14E |
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CRJ200 |
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138 |
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138 |
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138 |
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138 |
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138 |
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CRJ700 |
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61 |
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61 |
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61 |
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61 |
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61 |
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CRJ900 |
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51 |
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51 |
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56 |
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66 |
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76 |
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DASH 8-100 |
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29 |
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28 |
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27 |
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27 |
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27 |
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DASH 8-300 |
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11 |
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11 |
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11 |
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11 |
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11 |
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E170 |
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20 |
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20 |
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20 |
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20 |
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20 |
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E175 |
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56 |
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62 |
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68 |
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74 |
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80 |
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ERJ140 |
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74 |
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71 |
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58 |
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46 |
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34 |
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ERJ145 |
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118 |
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118 |
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118 |
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118 |
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118 |
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558 |
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560 |
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557 |
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561 |
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565 |
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Notes:
1. |
Fleet counts now include aircraft in temporary storage and aircraft that have yet to be returned to lessors. |
Please refer to the
footnotes and the forward looking statements page of this document for additional information
Shares Outstanding
July 24, 2014
Shares
Outstanding Comments
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The estimated weighted average shares outstanding for the remainder of the year are listed below. |
2014 Shares Outstanding (shares mil)1
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Shares |
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For Q3 |
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Basic |
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Diluted |
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Earnings |
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726 |
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741 |
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Net loss |
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726 |
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726 |
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Shares |
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For Q4 |
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Basic |
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Diluted |
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Earnings |
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727 |
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742 |
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Net loss |
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727 |
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727 |
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Shares |
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For FY 2014 Average |
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Basic |
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Diluted |
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Earnings |
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728 |
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742 |
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Net loss |
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728 |
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728 |
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Notes:
1. |
Shares outstanding are based upon several estimates and assumptions, including average per share stock price and stock award activity and do not
take into consideration any activity under the $1 billion share repurchase program. The number of shares in actual calculations of earnings per share will likely be different from those set forth above. |
Please refer to the
footnotes and the forward looking statements page of this document for additional information
GAAP to Non-GAAP Reconciliation
July 24, 2014
The
Company is providing disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure
financial performance excluding special items, which is more indicative of the Companys ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline CASM
excluding fuel and special items and regional CASM excluding fuel and special items is useful to investors because both the cost and availability of fuel are subject to many economic and political factors beyond the Companys control.
American Airlines Group Inc GAAP to Non-GAAP Reconciliation
($ mil except ASM and CASM data)
|
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|
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|
|
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|
|
|
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|
|
|
1Q14 |
|
|
2Q14 |
|
|
3Q14 Range |
|
|
4Q14 Range |
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|
FY14 Range |
|
|
|
Actual |
|
|
Actual |
|
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
Mainline |
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|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
Mainline operating expenses1 |
|
$ |
7,671 |
|
|
$ |
8,299 |
|
|
$ |
7,940 |
|
|
$ |
8,090 |
|
|
$ |
7,613 |
|
|
|
7,757 |
|
|
$ |
31,519 |
|
|
$ |
32,013 |
|
Less mainline fuel |
|
|
2,711 |
|
|
|
2,830 |
|
|
|
2,766 |
|
|
|
2,813 |
|
|
|
2,575 |
|
|
|
2,620 |
|
|
|
10,882 |
|
|
|
10,974 |
|
Less special items |
|
|
(137 |
) |
|
|
251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
114 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mainline operating expense excluding fuel and special items |
|
|
5,097 |
|
|
|
5,218 |
|
|
|
5,174 |
|
|
|
5,277 |
|
|
|
5,038 |
|
|
|
5,137 |
|
|
|
20,523 |
|
|
|
20,925 |
|
|
|
|
|
|
|
|
|
|
Mainline CASM (cts)1 |
|
|
13.50 |
|
|
|
13.61 |
|
|
|
12.85 |
|
|
|
13.09 |
|
|
|
13.08 |
|
|
|
13.33 |
|
|
|
13.25 |
|
|
|
13.46 |
|
Mainline CASM excluding fuel and special items (Non-GAAP) (cts) |
|
|
8.97 |
|
|
|
8.55 |
|
|
|
8.37 |
|
|
|
8.54 |
|
|
|
8.66 |
|
|
|
8.83 |
|
|
|
8.63 |
|
|
|
8.80 |
|
|
|
|
|
|
|
|
|
|
Mainline ASMs (bil) |
|
|
56.8 |
|
|
|
61.0 |
|
|
|
61.8 |
|
|
|
61.8 |
|
|
|
58.2 |
|
|
|
58.2 |
|
|
|
237.8 |
|
|
|
237.8 |
|
|
|
|
|
|
|
|
|
|
Regional |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional operating expenses |
|
$ |
1,594 |
|
|
$ |
1,657 |
|
|
$ |
1,672 |
|
|
$ |
1,703 |
|
|
$ |
1,669 |
|
|
$ |
1,701 |
|
|
$ |
6,573 |
|
|
$ |
6,678 |
|
Less regional fuel expense |
|
|
500 |
|
|
|
535 |
|
|
|
530 |
|
|
|
539 |
|
|
|
520 |
|
|
|
529 |
|
|
|
2,085 |
|
|
|
2,103 |
|
Less special items |
|
|
4 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regional operating expenses excluding fuel and special items |
|
|
1,090 |
|
|
|
1,120 |
|
|
|
1,142 |
|
|
|
1,164 |
|
|
|
1,149 |
|
|
|
1,172 |
|
|
|
4,482 |
|
|
|
4,569 |
|
|
|
|
|
|
|
|
|
|
Regional CASM (cts) |
|
|
24.30 |
|
|
|
23.37 |
|
|
|
22.82 |
|
|
|
23.24 |
|
|
|
22.83 |
|
|
|
23.26 |
|
|
|
23.23 |
|
|
|
23.60 |
|
|
|
|
|
|
|
|
|
|
Regional CASM excluding fuel and special items (Non-GAAP) (cts) |
|
|
16.62 |
|
|
|
15.80 |
|
|
|
15.58 |
|
|
|
15.88 |
|
|
|
15.72 |
|
|
|
16.03 |
|
|
|
15.84 |
|
|
|
16.15 |
|
|
|
|
|
|
|
|
|
|
Regional ASMs (bil) |
|
|
6.56 |
|
|
|
7.09 |
|
|
|
7.33 |
|
|
|
7.33 |
|
|
|
7.31 |
|
|
|
7.31 |
|
|
|
28.29 |
|
|
|
28.29 |
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
|
243 |
|
|
|
214 |
|
|
|
210 |
|
|
|
210 |
|
|
|
221 |
|
|
|
221 |
|
|
|
888 |
|
|
|
888 |
|
Less special items |
|
|
31 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33 |
|
|
|
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense excluding special items |
|
|
212 |
|
|
|
212 |
|
|
|
210 |
|
|
|
210 |
|
|
|
221 |
|
|
|
221 |
|
|
|
855 |
|
|
|
855 |
|
|
|
|
|
|
|
|
|
|
Other Non-Operating (Income)/Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating (income)/expense |
|
|
1 |
|
|
|
(11 |
) |
|
|
5 |
|
|
|
5 |
|
|
|
4 |
|
|
|
4 |
|
|
|
(1 |
) |
|
|
(1 |
) |
Less special items |
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-operating (income)/expense excluding special items |
|
|
(15 |
) |
|
|
(11 |
) |
|
|
5 |
|
|
|
5 |
|
|
|
4 |
|
|
|
4 |
|
|
|
(17 |
) |
|
|
(17 |
) |
Notes: Amounts may not recalculate due to rounding.
(1) |
Forecasted mainline operating expenses exclude special items. |
Please refer to the
footnotes and the forward looking statements page of this document for additional information
Forward Looking Statements
July 24, 2014
Cautionary
Statement Regarding Forward-Looking Statements
This document includes forward-looking statements within the meaning of 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 future financial and operating results, our plans, objectives, estimates, expectations and
intentions, and other statements that are not historical facts. These forward-looking statements are based on the current objectives, beliefs and expectations of the Company, 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. The following factors, among others, could cause actual results and financial position and timing of
certain events to differ materially from those described in the forward-looking statements: significant operating losses in the future; downturns in economic conditions that adversely affect the Companys business; the impact of continued
periods of high volatility in fuel costs, increased fuel prices and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of low cost carriers, airline alliances and industry
consolidation; the challenges and costs of integrating operations and realizing anticipated synergies and other benefits of the merger transaction with US Airways Group, Inc.; the Companys substantial indebtedness and other obligations and the
effect they could have on the Companys business and liquidity; an inability to obtain sufficient financing or other capital to operate successfully and in accordance with the Companys current business plan; increased costs of financing,
a reduction in the availability of financing and fluctuations in interest rates; the effect the Companys high level of fixed obligations may have on its ability to fund general corporate requirements, obtain additional financing and respond to
competitive developments and adverse economic and industry conditions; the Companys significant pension and other post-employment benefit funding obligations; the impact of any failure to comply with the covenants contained in financing
arrangements; provisions in credit card processing and other commercial agreements that may materially reduce the Companys liquidity; the limitations of the Companys historical consolidated financial information, which is not directly
comparable to its financial information for prior or future periods; the impact of union disputes, employee strikes and other labor-related disruptions; any inability to maintain labor costs at competitive levels; interruptions or disruptions in
service at one or more of the Companys hub airports; any inability to obtain and maintain adequate facilities, infrastructure and slots to operate the Companys flight schedule and expand or change its route network; the Companys
reliance on third-party regional operators or third-party service providers that have the ability to affect the Companys revenue and the publics perception about its services; any inability to effectively manage the costs, rights and
functionality of third-party distribution channels on which the Company relies; extensive government regulation, which may result in increases in the Companys costs, disruptions to the Companys operations, limits on the Companys
operating flexibility, reductions in the demand for air travel, and competitive disadvantages; the impact of the heavy taxation to which the airline industry is subject; changes to the Companys business model that may not successfully increase
revenues and may cause operational difficulties or decreased demand; the loss of key personnel or inability to attract and retain additional qualified personnel; the impact of conflicts overseas, terrorist attacks and ongoing security concerns; the
global scope of the Companys business and any associated economic and political instability or adverse effects of events, circumstances or government actions beyond its control, including the impact of foreign currency exchange rate
fluctuations and limitations on the repatriation of cash held in foreign countries; the impact of environmental regulation; the Companys reliance on technology and automated systems and the impact of any failure of these technologies or
systems; challenges in integrating the Companys computer, communications and other technology systems; costs of ongoing data security compliance requirements and the impact of any significant data security breach; losses and adverse publicity
stemming from any accident involving any of the Companys aircraft or the aircraft of its regional or codeshare operators; delays in scheduled aircraft deliveries, or other loss of anticipated fleet capacity, and failure of new aircraft to
perform as expected; the Companys dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the impact of changing economic and other conditions beyond the Companys control, including global events that affect
travel behavior such as an outbreak of a contagious disease, and volatility and fluctuations in the Companys results of operations due to seasonality; the effect of a higher than normal number of pilot retirements and a potential shortage of
pilots; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the effect of several lawsuits that were filed in connection with the merger transaction with US Airways Group, Inc. and remain
pending; an inability to use NOL carryforwards; any impairment in the amount of goodwill the Company recorded as a result of the application of the acquisition method of accounting and an inability to realize the full value of the Companys and
American Airlines respective intangible or long-lived assets and any material impairment charges that would be recorded as a result; price volatility of the Companys common stock; delay or prevention of stockholders ability to
change the composition of the Companys board of directors and the effect this may have on takeover attempts that some of the Companys stockholders might consider beneficial; the effect of provisions of the Companys Certificate of
Incorporation and Bylaws that limit ownership and voting of its equity interests, including its common stock, its preferred stock and convertible notes; the effect of limitations in the Companys Certificate of Incorporation on acquisitions and
dispositions of its common stock designed to protect its NOL carryforwards and certain other tax attributes, which may limit the liquidity of its common stock; and other economic, business, competitive, and/or regulatory factors affecting the
Companys business, including those set forth in the Companys quarterly report on form 10-Q for the period ended June 30, 2014 (especially in the Risk Factors and Managements Discussion and Analysis of
Financial Condition and Results of Operations sections) and other risks and uncertainties listed from time to time in our filings with the SEC. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the
statements. 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 except as
required by law.
Please refer to the
footnotes and the forward looking statements page of this document for additional information
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