AMERICAN AIRLINES GROUP INC. ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
In light of the current operating environment during the COVID-19 pandemic,American Airlines Group Inc. ("AAG") andAmerican Airlines, Inc. , a wholly owned subsidiary of AAG ("AAI" and, together with AAG and its other consolidated subsidiaries, the "Company"), are providing updated financial guidance relating to the first quarter of 2021. -------------------------------------------------------------------------------- [[Image Removed: aal-20210413_g1.jpg]] First Quarter Investor Relations UpdateApril 13, 2021
General Overview ? Capacity: During the first quarter of 2021, the Company flew 37.8 billion total
available seat miles, down 43.4% versus the first quarter of 2019.
? Revenue: The Company expects its first-quarter total revenue to be down approximately
62% versus the first quarter of 2019.
? Fuel: The Company paid approximately
approximately 610 million gallons during the first quarter of 2021.
? Net Loss: The Company expects to report a first-quarter 2021 net loss of approximately
between
the Company expects to report a net loss of approximately between
rate of 22%. See "Net Special Credits" and "GAAP to Non-GAAP Reconciliation" below.
? Shares Outstanding: The Company's basic and diluted weighted average shares
outstanding for financial reporting purposes was 634.6 million shares for the first
quarter.
? Liquidity: The Company expects to end the first quarter with approximately
billion in total available liquidity. In addition, the Company now expects its average
daily cash burn1 rate for the first quarter to be approximately
which includes approximately
severance payments. This compares favorably to the Company's previous first-quarter
guidance of approximately
estimated average daily cash burn rate was approximately
approximately
made, the Company's cash burn rate turned positive in March.
? Fleet and Pre-Delivery Payment (PDP) Facility: During the first quarter, the Company
reached an agreement with Boeing related to its remaining 787-8 deliveries. Under the
revised terms of the agreement, the Company has elected to defer and convert five
787-8 aircraft to 787-9 aircraft. These deliveries are now expected to occur in 2023
and will retain their existing financing. The remaining 14 deliveries of 787-8
aircraft have been rescheduled to occur by the end of the first quarter of 2022. In
addition, the Company has exercised its remaining deferral rights on 18 Boeing 737 MAX
aircraft previously scheduled to be delivered in 2021 and 2022. Deliveries of these 18
aircraft are now expected to occur in 2023 and 2024. Related to the deferral of 737
MAX aircraft, in early April the Company elected to prepay
loans under its pre-delivery payment 737 MAX credit facility with the related
pre-delivery deposits to be returned the the Company from the resulting deferral.
? Net Special Credits: The Company expects to report net special credits of
approximately
special credits principally include a credit of
assistance provided under the Payroll Support Program Extension Agreement offset in
part by severance charges related to voluntary early retirement programs offered to
team members during the first quarter.
These results and those reflected in the attached reconciliation tables are preliminary and final results for the first quarter may change. These preliminary results are based upon our estimates and are subject to completion of our financial closing procedures.
1 The Company defines cash burn as net cash provided by (used in) operating activities, net cash provided by (used in) investing activities and net cash provided by (used in) financing activities, adjusted for (1) Payroll Support Program Financial Assistance grant proceeds, (2) net purchases (proceeds from sale) of short-term investments and restricted short-term investments, (3) proceeds from issuance of long-term debt, net of deferred financing costs, but excluding aircraft financing, (4) proceeds from issuance of equity, (5) prepayments of long-term debt and (6) other cash flows that are not representative of our core operating performance. --------------------------------------------------------------------------------
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First Quarter Investor Relations Update
April 13, 2021
1st Quarter 20211
Current Guidance
Previous Guidance 4/13/2021
Total Revenue -60% to -65% (vs 1Q19) ~ -62% (vs 1Q19)
Available Seat Miles (ASMs) (bil) -45% (vs 1Q19) -43.4% (vs 1Q19) to ~37.8
bil ASMs
Average Fuel Price (incl. taxes) ($/gal) - ~$1.70
Fuel Gallons Consumed (mil) - ~610
Net loss per share excluding net special credits
(Basic and Diluted) - ($4.29 ) to ($4.41 )
Notes:1. Includes guidance on certain non-GAAP measures, which exclude net special credits.
Please see the GAAP to non-GAAP reconciliation at the end of this document. 2. Numbers may not recalculate due to rounding.
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GAAP to Non-GAAP Reconciliation
April 13, 2021
The Company sometimes uses financial measures that are derived from the
condensed consolidated financial statements but that are not presented in
accordance with GAAP to understand and evaluate its current operating
performance and to allow for period-to-period comparisons. The Company believes
these non-GAAP financial measures may also provide useful information to
investors and others. These non-GAAP measures may not be comparable to similarly
titled non-GAAP measures of other companies, and should be considered in
addition to, and not as a substitute for or superior to, any measure of
performance, cash flow or liquidity prepared in accordance with GAAP. The
Company is providing a reconciliation of reported non-GAAP financial measures to
their comparable financial measures on a GAAP basis. The tables below present
the reconciliation of net loss (GAAP measure) to net loss excluding net special
credits (non-GAAP measure) as well as average daily cash burn. Management uses
total net loss excluding net special credits to evaluate the Company's current
operating performance and for period-to-period comparisons. Additionally,
special items may vary from period-to-period in nature and amount. These
adjustments to special items allow management an additional tool to understand
and analyze the Company's core operating performance. Management believes
average daily cash burn is useful information to investors and others in
evaluating the Company's liquidity position and cash flows from its core
operating performance.
Net loss and loss per share
1Q21 Range ($ mil)
Low High
Net loss $ (1,300) $ (1,225)
Net special credits, net of tax (1,500) (1,500)
Net loss excluding net special credits $ (2,800)
Shares outstanding (basic and diluted) 634.6
634.6
Net loss per share $ (2.05) $ (1.93) Net loss per share excluding net special credits
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GAAP to Non-GAAP Reconciliation
April 13, 2021 Updated Guidance Regarding Average Daily Cash Burn
Month Ended 3 Months Ended
March 31, 2021 March 31, 2021
(inbillions, except days in period and
average daily cash flow)
Estimated net cash provided by operating activities $ 1.0 $ 0.2 Estimated net cash used in investing activities (7.8) (7.2) Estimated net cash provided by financing activities 6.8 7.0
Estimated adjustments: Payroll Support Program Financial Assistance grant proceeds
(1.1) (2.2)
Net purchases of short-term investments and restricted short-term investments
7.8 7.4
Proceeds from issuance of non-aircraft long-term debt, net of deferred financing costs
(10.2) (10.7)
Proceeds from issuance of equity - (0.3)
Prepayments of long-term debt 3.4 3.4
Other - -
Estimated total cash burn (1) $ (0.1) $ (2.4)
Days in period 31 90
Estimated average daily cash burn (in millions) (4) (27)
Note: Amounts may not recalculate due to rounding.
(1)Of the total cash burn for each of the month and three months ended March 31,
2021 , approximately $0.2 billion and $0.7 billion , were cash payments for debt
amortization, respectively, and approximately $0.1 billion and $0.2 billion ,
were cash payments for salary and medical costs principally for our voluntary
early retirement programs, respectively, totaling an equivalent of approximately
$8 million and $9 million per day, respectively.
The information provided above in this Item 2.02 is being furnished and shall
not be deemed filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities
of such 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 (the "Securities Act"), except as shall be expressly set forth
by specific reference in any such filing.
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April 13, 2021
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 Annual Report on Form 10-K for the
fiscal year ended December 31, 2020 (especially in Part I, Item 1A. Risk Factors
and Part II, Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations), 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.
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