|
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|
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FORM 10-Q
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☒
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐
|
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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|
American Airlines Group Inc.
(Exact name of registrant as specified in its charter)
|
||
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Delaware
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75-1825172
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
|
4333 Amon Carter Blvd., Fort Worth, Texas 76155
|
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(817) 963-1234
|
(Address of principal executive offices, including zip code)
|
|
(Registrant’s telephone number, including area code)
|
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|
American Airlines, Inc.
(Exact name of registrant as specified in its charter)
|
||
|
|
|
Delaware
|
|
13-1502798
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
4333 Amon Carter Blvd., Fort Worth, Texas 76155
|
|
(817) 963-1234
|
(Address of principal executive offices, including zip code)
|
|
(Registrant’s telephone number, including area code)
|
American Airlines Group Inc.
|
☒
|
Yes
|
|
☐
|
No
|
American Airlines, Inc.
|
☒
|
Yes
|
|
☐
|
No
|
American Airlines Group Inc.
|
☒
|
Yes
|
|
☐
|
No
|
American Airlines, Inc.
|
☒
|
Yes
|
|
☐
|
No
|
American Airlines Group Inc.
|
☒ Large Accelerated Filer
|
☐ Accelerated Filer
|
☐ Non-accelerated Filer
|
☐ Smaller Reporting Company
|
☐ Emerging Growth Company
|
American Airlines, Inc.
|
☐ Large Accelerated Filer
|
☐ Accelerated Filer
|
☒ Non-accelerated Filer
|
☐ Smaller Reporting Company
|
☐ Emerging Growth Company
|
American Airlines Group Inc.
|
☐
|
|
American Airlines, Inc.
|
☐
|
|
American Airlines Group Inc.
|
☐
|
Yes
|
|
☒
|
No
|
American Airlines, Inc.
|
☐
|
Yes
|
|
☒
|
No
|
American Airlines Group Inc.
|
☒
|
Yes
|
|
☐
|
No
|
American Airlines, Inc.
|
☒
|
Yes
|
|
☐
|
No
|
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|
Page
|
PART I: FINANCIAL INFORMATION
|
||
Item 1A.
|
||
|
||
|
||
|
||
|
||
|
||
Item 1B.
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II: OTHER INFORMATION
|
||
Item 1.
|
||
Item 1A.
|
||
Item 6.
|
||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating revenues:
|
|
|
|
||||||||||||
Passenger
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
30,714
|
|
|
$
|
29,447
|
|
Cargo
|
260
|
|
|
223
|
|
|
748
|
|
|
633
|
|
||||
Other
|
738
|
|
|
646
|
|
|
2,141
|
|
|
1,931
|
|
||||
Total operating revenues
|
11,559
|
|
|
10,965
|
|
|
33,603
|
|
|
32,011
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
2,234
|
|
|
1,570
|
|
|
6,100
|
|
|
4,481
|
|
||||
Salaries, wages and benefits
|
3,129
|
|
|
3,030
|
|
|
9,240
|
|
|
8,928
|
|
||||
Regional expenses
|
1,833
|
|
|
1,654
|
|
|
5,323
|
|
|
4,848
|
|
||||
Maintenance, materials and repairs
|
526
|
|
|
487
|
|
|
1,499
|
|
|
1,474
|
|
||||
Other rent and landing fees
|
497
|
|
|
471
|
|
|
1,448
|
|
|
1,363
|
|
||||
Aircraft rent
|
312
|
|
|
304
|
|
|
921
|
|
|
892
|
|
||||
Selling expenses
|
395
|
|
|
400
|
|
|
1,136
|
|
|
1,094
|
|
||||
Depreciation and amortization
|
473
|
|
|
433
|
|
|
1,382
|
|
|
1,255
|
|
||||
Special items, net
|
215
|
|
|
112
|
|
|
563
|
|
|
432
|
|
||||
Other
|
1,296
|
|
|
1,248
|
|
|
3,883
|
|
|
3,652
|
|
||||
Total operating expenses
|
10,910
|
|
|
9,709
|
|
|
31,495
|
|
|
28,419
|
|
||||
Operating income
|
649
|
|
|
1,256
|
|
|
2,108
|
|
|
3,592
|
|
||||
Nonoperating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
29
|
|
|
25
|
|
|
84
|
|
|
70
|
|
||||
Interest expense, net
|
(265
|
)
|
|
(266
|
)
|
|
(795
|
)
|
|
(787
|
)
|
||||
Other income, net
|
43
|
|
|
48
|
|
|
101
|
|
|
112
|
|
||||
Total nonoperating expense, net
|
(193
|
)
|
|
(193
|
)
|
|
(610
|
)
|
|
(605
|
)
|
||||
Income before income taxes
|
456
|
|
|
1,063
|
|
|
1,498
|
|
|
2,987
|
|
||||
Income tax provision
|
115
|
|
|
402
|
|
|
404
|
|
|
1,122
|
|
||||
Net income
|
$
|
341
|
|
|
$
|
661
|
|
|
$
|
1,094
|
|
|
$
|
1,865
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.74
|
|
|
$
|
1.36
|
|
|
$
|
2.35
|
|
|
$
|
3.78
|
|
Diluted
|
$
|
0.74
|
|
|
$
|
1.36
|
|
|
$
|
2.34
|
|
|
$
|
3.76
|
|
Weighted average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic
|
460,526
|
|
|
484,772
|
|
|
465,452
|
|
|
493,164
|
|
||||
Diluted
|
461,507
|
|
|
486,625
|
|
|
466,908
|
|
|
495,796
|
|
||||
Cash dividends declared per common share
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
341
|
|
|
$
|
661
|
|
|
$
|
1,094
|
|
|
$
|
1,865
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
||||||||
Pension, retiree medical and other postretirement benefits
|
(17
|
)
|
|
(15
|
)
|
|
(49
|
)
|
|
(44
|
)
|
||||
Total comprehensive income
|
$
|
324
|
|
|
$
|
646
|
|
|
$
|
1,045
|
|
|
$
|
1,821
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
||||||
Current assets
|
|
|
|
||||
Cash
|
$
|
303
|
|
|
$
|
295
|
|
Short-term investments
|
4,552
|
|
|
4,771
|
|
||
Restricted cash and short-term investments
|
154
|
|
|
318
|
|
||
Accounts receivable, net
|
2,170
|
|
|
1,752
|
|
||
Aircraft fuel, spare parts and supplies, net
|
1,576
|
|
|
1,359
|
|
||
Prepaid expenses and other
|
743
|
|
|
651
|
|
||
Total current assets
|
9,498
|
|
|
9,146
|
|
||
Operating property and equipment
|
|
|
|
||||
Flight equipment
|
40,983
|
|
|
40,318
|
|
||
Ground property and equipment
|
9,187
|
|
|
8,267
|
|
||
Equipment purchase deposits
|
1,330
|
|
|
1,217
|
|
||
Total property and equipment, at cost
|
51,500
|
|
|
49,802
|
|
||
Less accumulated depreciation and amortization
|
(17,277
|
)
|
|
(15,646
|
)
|
||
Total property and equipment, net
|
34,223
|
|
|
34,156
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
4,091
|
|
|
4,091
|
|
||
Intangibles, net of accumulated amortization of $653 and $622, respectively
|
2,147
|
|
|
2,203
|
|
||
Deferred tax asset
|
1,293
|
|
|
1,816
|
|
||
Other assets
|
1,383
|
|
|
1,373
|
|
||
Total other assets
|
8,914
|
|
|
9,483
|
|
||
Total assets
|
$
|
52,635
|
|
|
$
|
52,785
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current maturities of long-term debt and capital leases
|
$
|
2,493
|
|
|
$
|
2,554
|
|
Accounts payable
|
1,886
|
|
|
1,688
|
|
||
Accrued salaries and wages
|
1,386
|
|
|
1,672
|
|
||
Air traffic liability
|
5,040
|
|
|
4,042
|
|
||
Loyalty program liability
|
3,242
|
|
|
3,121
|
|
||
Other accrued liabilities
|
2,301
|
|
|
2,281
|
|
||
Total current liabilities
|
16,348
|
|
|
15,358
|
|
||
Noncurrent liabilities
|
|
|
|
||||
Long-term debt and capital leases, net of current maturities
|
22,274
|
|
|
22,511
|
|
||
Pension and postretirement benefits
|
6,898
|
|
|
7,497
|
|
||
Loyalty program liability
|
5,317
|
|
|
5,701
|
|
||
Other liabilities
|
2,366
|
|
|
2,498
|
|
||
Total noncurrent liabilities
|
36,855
|
|
|
38,207
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity (deficit)
|
|
|
|
||||
Common stock, $0.01 par value; 1,750,000,000 shares authorized, 460,559,470 shares issued and outstanding at September 30, 2018; 475,507,887 shares issued and outstanding at December 31, 2017
|
5
|
|
|
5
|
|
||
Additional paid-in capital
|
4,946
|
|
|
5,714
|
|
||
Accumulated other comprehensive loss
|
(5,203
|
)
|
|
(5,154
|
)
|
||
Accumulated deficit
|
(316
|
)
|
|
(1,345
|
)
|
||
Total stockholders’ deficit
|
(568
|
)
|
|
(780
|
)
|
||
Total liabilities and stockholders’ equity (deficit)
|
$
|
52,635
|
|
|
$
|
52,785
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
2,804
|
|
|
$
|
4,307
|
|
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures and aircraft purchase deposits
|
(2,736
|
)
|
|
(4,563
|
)
|
||
Proceeds from sale of property and equipment and sale-leaseback transactions
|
860
|
|
|
831
|
|
||
Purchases of short-term investments
|
(2,590
|
)
|
|
(4,093
|
)
|
||
Sales of short-term investments
|
2,816
|
|
|
4,714
|
|
||
Decrease in restricted short-term investments
|
72
|
|
|
235
|
|
||
Purchase of equity investment
|
—
|
|
|
(203
|
)
|
||
Other investing activities
|
(5
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(1,583
|
)
|
|
(3,079
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
2,149
|
|
|
2,160
|
|
||
Payments on long-term debt and capital leases
|
(2,442
|
)
|
|
(1,813
|
)
|
||
Deferred financing costs
|
(48
|
)
|
|
(66
|
)
|
||
Treasury stock repurchases
|
(837
|
)
|
|
(1,372
|
)
|
||
Dividend payments
|
(140
|
)
|
|
(150
|
)
|
||
Other financing activities
|
13
|
|
|
21
|
|
||
Net cash used in financing activities
|
(1,305
|
)
|
|
(1,220
|
)
|
||
Net increase (decrea
se) in cash and restricted cash
|
(84
|
)
|
|
8
|
|
||
Cash and restricted cash at beginning of period
|
398
|
|
|
436
|
|
||
Cash and restricted cash at end of period
(a)
|
$
|
314
|
|
|
$
|
444
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
||||
Interest paid, net
|
801
|
|
|
778
|
|
||
Income taxes paid
|
16
|
|
|
15
|
|
|
Cash
|
$
|
303
|
|
|
$
|
340
|
|
Restricted cash included in restricted cash and short-term investments
|
11
|
|
|
104
|
|
||
Total cash and restricted cash
|
$
|
314
|
|
|
$
|
444
|
|
|
|
|
|
New Revenue Standard
|
|
New Retirement Standard
|
|
|
||||||||||||||||
Three Months Ended
September 30, 2017 |
|
As Reported
|
|
Deferred Revenue Method
|
|
Ancillary Revenue Reclassifications
|
|
Gross Versus Net Presentation
|
|
Reclassifications
|
|
As Recast
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
|
$
|
9,377
|
|
|
$
|
59
|
|
|
$
|
651
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
10,096
|
|
Cargo
|
|
200
|
|
|
—
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
223
|
|
||||||
Other
|
|
1,301
|
|
|
—
|
|
|
(661
|
)
|
|
6
|
|
|
—
|
|
|
646
|
|
||||||
Total operating revenues
|
|
10,878
|
|
|
59
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
10,965
|
|
||||||
Total operating expenses
|
|
9,646
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
35
|
|
|
9,709
|
|
||||||
Operating income
|
|
1,232
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
1,256
|
|
||||||
Total nonoperating expense, net
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
(193
|
)
|
||||||
Income before income taxes
|
|
1,004
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,063
|
|
||||||
Income tax provision
|
|
380
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
402
|
|
||||||
Net income
|
|
$
|
624
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
661
|
|
Diluted earnings per common share
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.36
|
|
|
|
|
|
New Revenue Standard
|
|
New Retirement Standard
|
|
|
||||||||||||||||
Nine Months Ended
September 30, 2017 |
|
As Reported
|
|
Deferred Revenue Method
|
|
Ancillary Revenue Reclassifications
|
|
Gross Versus Net Presentation
|
|
Reclassifications
|
|
As Recast
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
|
$
|
27,114
|
|
|
$
|
328
|
|
|
$
|
1,976
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
29,447
|
|
Cargo
|
|
568
|
|
|
—
|
|
|
31
|
|
|
34
|
|
|
—
|
|
|
633
|
|
||||||
Other
|
|
3,924
|
|
|
—
|
|
|
(2,007
|
)
|
|
14
|
|
|
—
|
|
|
1,931
|
|
||||||
Total operating revenues
|
|
31,606
|
|
|
328
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
32,011
|
|
||||||
Total operating expenses
|
|
28,238
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
104
|
|
|
28,419
|
|
||||||
Operating income
|
|
3,368
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
3,592
|
|
||||||
Total nonoperating expense, net
|
|
(709
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
(605
|
)
|
||||||
Income before income taxes
|
|
2,659
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,987
|
|
||||||
Income tax provision
|
|
998
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,122
|
|
||||||
Net income
|
|
$
|
1,661
|
|
|
$
|
204
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,865
|
|
Diluted earnings per common share
|
|
$
|
3.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.76
|
|
|
As Reported
|
|
New Revenue Standard
|
|
As Recast
|
||||||
Deferred tax asset
|
$
|
427
|
|
|
$
|
1,389
|
|
|
$
|
1,816
|
|
Air traffic liability
|
3,978
|
|
|
64
|
|
|
4,042
|
|
|||
Current loyalty program liability
|
2,791
|
|
|
330
|
|
|
3,121
|
|
|||
Noncurrent loyalty program liability
|
—
|
|
|
5,701
|
|
|
5,701
|
|
|||
Total stockholders' equity (deficit)
|
3,926
|
|
|
(4,706
|
)
|
|
(780
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Fleet restructuring expenses
(1)
|
$
|
109
|
|
|
$
|
62
|
|
|
$
|
275
|
|
|
$
|
174
|
|
Merger integration expenses
(2)
|
68
|
|
|
62
|
|
|
188
|
|
|
192
|
|
||||
Severance expenses
(3)
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
||||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
17
|
|
|
(12
|
)
|
|
(39
|
)
|
|
7
|
|
||||
Litigation settlement
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
||||
Intangible asset impairment
(5)
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||
Labor contract expenses
|
—
|
|
|
—
|
|
|
13
|
|
|
45
|
|
||||
Other operating charges, net
|
1
|
|
|
—
|
|
|
35
|
|
|
14
|
|
||||
Mainline operating special items, net
|
215
|
|
|
112
|
|
|
563
|
|
|
432
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Regional operating special items, net
|
2
|
|
|
(5
|
)
|
|
1
|
|
|
(1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Mark-to-market adjustments on equity investments, net
(6)
|
15
|
|
|
—
|
|
|
82
|
|
|
—
|
|
||||
Debt refinancing and extinguishment charges
|
—
|
|
|
3
|
|
|
13
|
|
|
12
|
|
||||
Nonoperating special items, net
|
15
|
|
|
3
|
|
|
95
|
|
|
12
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax special items, net
(7)
|
—
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
(1)
|
Fleet restructuring expenses principally included accelerated depreciation and remaining lease payments for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(2)
|
Merger integration expenses included costs associated with our integration projects, principally our flight attendant, human resources and payroll, and technical operations integrations.
|
(3)
|
Severance expenses primarily included costs associated with reductions in headcount of management and support staff team members.
|
(4)
|
Bankruptcy obligations will ultimately be settled in shares of our common stock. Accordingly, fluctuations in our stock price result in mark-to-market adjustments to these obligations.
|
(5)
|
Intangible asset impairment includes a non-cash charge to write-off our Brazil route authority as a result of ratification of the U.S.-Brazil open skies agreement.
|
(6)
|
Mark-to-market adjustments on equity investments relate to net unrealized losses resulting from the change in market value primarily associated with our equity investments in China Southern Airlines and Mesa Air Group, Inc.
|
(7)
|
Income tax special items for the
nine months ended September 30, 2018
included a
$22 million
charge to income tax expense to establish a required valuation allowance related to our estimated refund for Alternative Minimum Tax (AMT) credits and an
$18 million
charge related to an international income tax matter.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Basic EPS:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
341
|
|
|
$
|
661
|
|
|
$
|
1,094
|
|
|
$
|
1,865
|
|
Weighted average common shares outstanding (in thousands)
|
460,526
|
|
|
484,772
|
|
|
465,452
|
|
|
493,164
|
|
||||
Basic EPS
|
$
|
0.74
|
|
|
$
|
1.36
|
|
|
$
|
2.35
|
|
|
$
|
3.78
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS:
|
|
|
|
|
|
|
|
||||||||
Net income for purposes of computing diluted EPS
|
$
|
341
|
|
|
$
|
661
|
|
|
$
|
1,094
|
|
|
$
|
1,865
|
|
Share computation for diluted EPS (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
460,526
|
|
|
484,772
|
|
|
465,452
|
|
|
493,164
|
|
||||
Dilutive effect of stock awards
|
981
|
|
|
1,853
|
|
|
1,456
|
|
|
2,632
|
|
||||
Diluted weighted average common shares outstanding
|
461,507
|
|
|
486,625
|
|
|
466,908
|
|
|
495,796
|
|
||||
Diluted EPS
|
$
|
0.74
|
|
|
$
|
1.36
|
|
|
$
|
2.34
|
|
|
$
|
3.76
|
|
|
|
|
|
|
|
|
|
||||||||
Restricted stock unit awards excluded from the calculation of diluted EPS because inclusion would be antidilutive (in thousands)
|
1,694
|
|
|
66
|
|
|
1,128
|
|
|
432
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Passenger revenue:
|
|
|
|
|
|
|
|
||||||||
Passenger travel
|
$
|
9,790
|
|
|
$
|
9,400
|
|
|
$
|
28,278
|
|
|
$
|
27,179
|
|
Loyalty revenue - travel
(1)
|
771
|
|
|
696
|
|
|
2,436
|
|
|
2,268
|
|
||||
Total passenger revenue
|
10,561
|
|
|
10,096
|
|
|
30,714
|
|
|
29,447
|
|
||||
Cargo
|
260
|
|
|
223
|
|
|
748
|
|
|
633
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Loyalty revenue - marketing services
|
613
|
|
|
527
|
|
|
1,765
|
|
|
1,574
|
|
||||
Other revenue
|
125
|
|
|
119
|
|
|
376
|
|
|
357
|
|
||||
Total other revenue
|
738
|
|
|
646
|
|
|
2,141
|
|
|
1,931
|
|
||||
Total operating revenues
|
$
|
11,559
|
|
|
$
|
10,965
|
|
|
$
|
33,603
|
|
|
$
|
32,011
|
|
|
(1)
|
Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions for air travel awards from mileage credits earned through travel and mileage credits sold to co-branded card and other partners. See discussion of Loyalty Revenue below.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Domestic
|
$
|
7,424
|
|
|
$
|
7,162
|
|
|
$
|
22,071
|
|
|
$
|
21,522
|
|
Latin America
|
1,210
|
|
|
1,183
|
|
|
3,939
|
|
|
3,622
|
|
||||
Atlantic
|
1,504
|
|
|
1,363
|
|
|
3,471
|
|
|
3,170
|
|
||||
Pacific
|
423
|
|
|
388
|
|
|
1,233
|
|
|
1,133
|
|
||||
Total passenger revenue
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
30,714
|
|
|
$
|
29,447
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Loyalty program liability
|
$
|
8,559
|
|
|
$
|
8,822
|
|
Air traffic liability
|
5,040
|
|
|
4,042
|
|
||
Total
|
$
|
13,599
|
|
|
$
|
12,864
|
|
Balance at December 31, 2017
|
$
|
8,822
|
|
Deferral of revenue
|
2,302
|
|
|
Recognition of revenue
(1)
|
(2,565
|
)
|
|
Balance at September 30, 2018
(2)
|
$
|
8,559
|
|
|
(1)
|
Principally relates to revenue recognized from the redemption of mileage credits for both air and non-air travel awards. Mileage credits are combined in one homogenous pool and are not separately identifiable. As such, the revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period.
|
(2)
|
Mileage credits can be redeemed at any time and do not expire as long as that AAdvantage member has any type of qualifying activity at least every
18
months. As of
September 30, 2018
, our current loyalty program liability was
$3.2 billion
and represents our current estimate of revenue expected to be recognized in the next twelve months based on historical trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Secured
|
|
|
|
||||
2013 Credit Facilities, variable interest rate of 3.98%, installments through 2025
|
$
|
1,825
|
|
|
$
|
1,825
|
|
2014 Credit Facilities, variable interest rate of 4.13%, installments through 2021
|
1,228
|
|
|
728
|
|
||
April 2016 Credit Facilities, variable interest rate of 4.24%, installments through 2023
|
980
|
|
|
990
|
|
||
December 2016 Credit Facilities, variable interest rate of 4.16%, installments through 2023
|
1,238
|
|
|
1,238
|
|
||
Aircraft enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 3.00% to 9.75%, averaging 4.24%, maturing from 2018 to 2029
|
11,884
|
|
|
11,881
|
|
||
Equipment loans and other notes payable, fixed and variable interest rates ranging from 2.18% to 8.48%, averaging 4.00%, maturing from 2018 to 2029
|
5,078
|
|
|
5,259
|
|
||
Special facility revenue bonds, fixed interest rates ranging from 5.00% to 8.00%, maturing from 2019 to 2035
|
815
|
|
|
857
|
|
||
Other secured obligations, fixed interest rates ranging from 3.81% to 12.24%, maturing from 2021 to 2028
|
711
|
|
|
773
|
|
||
|
23,759
|
|
|
23,551
|
|
||
Unsecured
|
|
|
|
||||
5.50% senior notes, interest only payments until due in 2019
|
750
|
|
|
750
|
|
||
4.625% senior notes, interest only payments until due in 2020
|
500
|
|
|
500
|
|
||
6.125% senior notes, interest only payments until due in 2018
|
—
|
|
|
500
|
|
||
|
1,250
|
|
|
1,750
|
|
||
Total long-term debt and capital lease obligations
|
25,009
|
|
|
25,301
|
|
||
Less: Total unamortized debt discount, premium and issuance costs
|
242
|
|
|
236
|
|
||
Less: Current maturities
|
2,493
|
|
|
2,554
|
|
||
Long-term debt and capital lease obligations, net of current maturities
|
$
|
22,274
|
|
|
$
|
22,511
|
|
2013 Revolving Facility
|
$
|
1,200
|
|
2014 Revolving Facility
|
1,000
|
|
|
April 2016 Revolving Facility
|
300
|
|
|
Total
|
$
|
2,500
|
|
|
2017-2 EETCs
|
||||
|
Series AA
|
|
Series A
|
|
Series B
|
Aggregate principal issued
|
$545 million
|
|
$252 million
|
|
$221 million
|
Fixed interest rate per annum
|
3.35%
|
|
3.60%
|
|
3.70%
|
Maturity date
|
October 2029
|
|
October 2029
|
|
October 2025
|
|
2012-2C(R) EETCs
|
|
Series C(R)
|
Aggregate principal issued
|
$100 million
|
Fixed interest rate per annum
|
4.70%
|
Maturity date
|
June 2021
|
|
Fair Value Measurements as of September 30, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Short-term investments
(1) (2)
:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
68
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate obligations
|
1,443
|
|
|
—
|
|
|
1,443
|
|
|
—
|
|
||||
Bank notes/certificates of deposit/time deposits
|
2,801
|
|
|
—
|
|
|
2,801
|
|
|
—
|
|
||||
Repurchase agreements
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
|
4,552
|
|
|
68
|
|
|
4,484
|
|
|
—
|
|
||||
Restricted cash and short-term investments
(1)
|
154
|
|
|
12
|
|
|
142
|
|
|
—
|
|
||||
Long-term investments
(3)
|
211
|
|
|
211
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
4,917
|
|
|
$
|
291
|
|
|
$
|
4,626
|
|
|
$
|
—
|
|
|
(1)
|
Unrealized gains or losses on short-term investments are recorded in accumulated other comprehensive loss at each measurement date.
|
(2)
|
All short-term investments are classified as available-for-sale and stated at fair value. Our short-term investments mature in one year or less except for
$942 million
of bank notes/certificates of deposit/time deposits and
$150 million
of corporate obligations.
|
(3)
|
Long-term investments primarily include our equity investment in China Southern Airlines and are classified in other assets on our condensed consolidated balance sheets.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Value |
|
Fair
Value |
|
Carrying
Value |
|
Fair
Value |
||||||||
Long-term debt, including current maturities
|
$
|
24,767
|
|
|
$
|
24,932
|
|
|
$
|
25,065
|
|
|
$
|
25,848
|
|
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Three Months Ended September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
|
169
|
|
|
180
|
|
|
9
|
|
|
10
|
|
||||
Expected return on assets
|
|
(226
|
)
|
|
(198
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
7
|
|
|
7
|
|
|
(59
|
)
|
|
(59
|
)
|
||||
Unrecognized net loss (gain)
|
|
36
|
|
|
36
|
|
|
(5
|
)
|
|
(6
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
(13
|
)
|
|
$
|
26
|
|
|
$
|
(60
|
)
|
|
$
|
(59
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Nine Months Ended September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
|
507
|
|
|
541
|
|
|
26
|
|
|
29
|
|
||||
Expected return on assets
|
|
(678
|
)
|
|
(592
|
)
|
|
(17
|
)
|
|
(16
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
21
|
|
|
21
|
|
|
(178
|
)
|
|
(178
|
)
|
||||
Unrecognized net loss (gain)
|
|
108
|
|
|
108
|
|
|
(15
|
)
|
|
(17
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
(40
|
)
|
|
$
|
80
|
|
|
$
|
(181
|
)
|
|
$
|
(179
|
)
|
|
Pension, Retiree
Medical and Other Postretirement Benefits |
|
Unrealized Loss on Investments
|
|
Income Tax
Benefit (Provision) (1) |
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
(4,523
|
)
|
|
$
|
(1
|
)
|
|
$
|
(630
|
)
|
|
$
|
(5,154
|
)
|
Amounts reclassified from AOCI
|
(64
|
)
|
|
—
|
|
|
15
|
|
(2)
|
(49
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(64
|
)
|
|
—
|
|
|
15
|
|
|
(49
|
)
|
||||
Balance at September 30, 2018
|
$
|
(4,587
|
)
|
|
$
|
(1
|
)
|
|
$
|
(615
|
)
|
|
$
|
(5,203
|
)
|
|
(1)
|
Relates principally to pension, retiree medical and other postretirement benefits obligations that will not be recognized in net income until the obligations are fully extinguished.
|
(2)
|
Relates to pension, retiree medical and other postretirement benefits obligations and is recognized within the income tax provision on the condensed consolidated statement of operations.
|
|
|
Amounts reclassified from AOCI
|
|
Affected line items on the
condensed consolidated statements of operations |
||||||||||||||
AOCI Components
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||||
Amortization of pension, retiree medical and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
|
$
|
(40
|
)
|
|
$
|
(33
|
)
|
|
$
|
(121
|
)
|
|
$
|
(100
|
)
|
|
Nonoperating other income, net
|
Actuarial loss
|
|
23
|
|
|
19
|
|
|
72
|
|
|
57
|
|
|
Nonoperating other income, net
|
||||
Total reclassifications for the period, net of tax
|
|
$
|
(17
|
)
|
|
$
|
(14
|
)
|
|
$
|
(49
|
)
|
|
$
|
(43
|
)
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Aircraft fuel and related taxes
|
$
|
506
|
|
|
$
|
352
|
|
|
$
|
1,369
|
|
|
$
|
999
|
|
Salaries, wages and benefits
|
403
|
|
|
369
|
|
|
1,175
|
|
|
1,074
|
|
||||
Capacity purchases from third-party regional carriers
|
363
|
|
|
404
|
|
|
1,081
|
|
|
1,210
|
|
||||
Maintenance, materials and repairs
|
83
|
|
|
74
|
|
|
251
|
|
|
209
|
|
||||
Other rent and landing fees
|
155
|
|
|
159
|
|
|
455
|
|
|
466
|
|
||||
Aircraft rent
|
8
|
|
|
9
|
|
|
25
|
|
|
26
|
|
||||
Selling expenses
|
94
|
|
|
95
|
|
|
276
|
|
|
269
|
|
||||
Depreciation and amortization
|
76
|
|
|
79
|
|
|
241
|
|
|
235
|
|
||||
Special items, net
|
2
|
|
|
(5
|
)
|
|
1
|
|
|
(1
|
)
|
||||
Other
|
143
|
|
|
118
|
|
|
449
|
|
|
361
|
|
||||
Total regional expenses
|
$
|
1,833
|
|
|
$
|
1,654
|
|
|
$
|
5,323
|
|
|
$
|
4,848
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating revenues:
|
|
|
|
|
|
||||||||||
Passenger
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
30,714
|
|
|
$
|
29,447
|
|
Cargo
|
260
|
|
|
223
|
|
|
748
|
|
|
633
|
|
||||
Other
|
735
|
|
|
643
|
|
|
2,132
|
|
|
1,923
|
|
||||
Total operating revenues
|
11,556
|
|
|
10,962
|
|
|
33,594
|
|
|
32,003
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
2,234
|
|
|
1,570
|
|
|
6,100
|
|
|
4,481
|
|
||||
Salaries, wages and benefits
|
3,127
|
|
|
3,027
|
|
|
9,231
|
|
|
8,920
|
|
||||
Regional expenses
|
1,810
|
|
|
1,662
|
|
|
5,275
|
|
|
4,860
|
|
||||
Maintenance, materials and repairs
|
526
|
|
|
487
|
|
|
1,499
|
|
|
1,474
|
|
||||
Other rent and landing fees
|
497
|
|
|
471
|
|
|
1,448
|
|
|
1,363
|
|
||||
Aircraft rent
|
312
|
|
|
304
|
|
|
921
|
|
|
892
|
|
||||
Selling expenses
|
395
|
|
|
400
|
|
|
1,136
|
|
|
1,094
|
|
||||
Depreciation and amortization
|
473
|
|
|
433
|
|
|
1,382
|
|
|
1,255
|
|
||||
Special items, net
|
215
|
|
|
112
|
|
|
563
|
|
|
432
|
|
||||
Other
|
1,298
|
|
|
1,247
|
|
|
3,885
|
|
|
3,652
|
|
||||
Total operating expenses
|
10,887
|
|
|
9,713
|
|
|
31,440
|
|
|
28,423
|
|
||||
Operating income
|
669
|
|
|
1,249
|
|
|
2,154
|
|
|
3,580
|
|
||||
Nonoperating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
85
|
|
|
56
|
|
|
240
|
|
|
158
|
|
||||
Interest expense, net
|
(262
|
)
|
|
(250
|
)
|
|
(771
|
)
|
|
(738
|
)
|
||||
Other income, net
|
44
|
|
|
48
|
|
|
102
|
|
|
112
|
|
||||
Total nonoperating expense, net
|
(133
|
)
|
|
(146
|
)
|
|
(429
|
)
|
|
(468
|
)
|
||||
Income before income taxes
|
536
|
|
|
1,103
|
|
|
1,725
|
|
|
3,112
|
|
||||
Income tax provision
|
133
|
|
|
417
|
|
|
467
|
|
|
1,170
|
|
||||
Net income
|
$
|
403
|
|
|
$
|
686
|
|
|
$
|
1,258
|
|
|
$
|
1,942
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
403
|
|
|
$
|
686
|
|
|
$
|
1,258
|
|
|
$
|
1,942
|
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
||||||||
Pension, retiree medical and other postretirement benefits
|
(17
|
)
|
|
(15
|
)
|
|
(50
|
)
|
|
(44
|
)
|
||||
Total comprehensive income
|
$
|
386
|
|
|
$
|
671
|
|
|
$
|
1,208
|
|
|
$
|
1,898
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash
|
$
|
294
|
|
|
$
|
287
|
|
Short-term investments
|
4,542
|
|
|
4,768
|
|
||
Restricted cash and short-term investments
|
154
|
|
|
318
|
|
||
Accounts receivable, net
|
2,222
|
|
|
1,755
|
|
||
Receivables from related parties, net
|
10,525
|
|
|
8,822
|
|
||
Aircraft fuel, spare parts and supplies, net
|
1,506
|
|
|
1,294
|
|
||
Prepaid expenses and other
|
739
|
|
|
647
|
|
||
Total current assets
|
19,982
|
|
|
17,891
|
|
||
Operating property and equipment
|
|
|
|
||||
Flight equipment
|
40,669
|
|
|
39,993
|
|
||
Ground property and equipment
|
8,906
|
|
|
8,006
|
|
||
Equipment purchase deposits
|
1,330
|
|
|
1,217
|
|
||
Total property and equipment, at cost
|
50,905
|
|
|
49,216
|
|
||
Less accumulated depreciation and amortization
|
(16,964
|
)
|
|
(15,354
|
)
|
||
Total property and equipment, net
|
33,941
|
|
|
33,862
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
4,091
|
|
|
4,091
|
|
||
Intangibles, net of accumulated amortization of $653 and $622, respectively
|
2,147
|
|
|
2,203
|
|
||
Deferred tax asset
|
1,429
|
|
|
2,071
|
|
||
Other assets
|
1,280
|
|
|
1,283
|
|
||
Total other assets
|
8,947
|
|
|
9,648
|
|
||
Total assets
|
$
|
62,870
|
|
|
$
|
61,401
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current maturities of long-term debt and capital leases
|
$
|
2,497
|
|
|
$
|
2,058
|
|
Accounts payable
|
1,822
|
|
|
1,625
|
|
||
Accrued salaries and wages
|
1,332
|
|
|
1,613
|
|
||
Air traffic liability
|
5,040
|
|
|
4,042
|
|
||
Loyalty program liability
|
3,242
|
|
|
3,121
|
|
||
Other accrued liabilities
|
2,213
|
|
|
2,209
|
|
||
Total current liabilities
|
16,146
|
|
|
14,668
|
|
||
Noncurrent liabilities
|
|
|
|
||||
Long-term debt and capital leases, net of current maturities
|
20,995
|
|
|
21,236
|
|
||
Pension and postretirement benefits
|
6,855
|
|
|
7,452
|
|
||
Loyalty program liability
|
5,317
|
|
|
5,701
|
|
||
Other liabilities
|
2,317
|
|
|
2,456
|
|
||
Total noncurrent liabilities
|
35,484
|
|
|
36,845
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholder’s equity
|
|
|
|
||||
Common stock, $1.00 par value; 1,000 shares authorized, issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
16,783
|
|
|
16,716
|
|
||
Accumulated other comprehensive loss
|
(5,301
|
)
|
|
(5,251
|
)
|
||
Accumulated deficit
|
(242
|
)
|
|
(1,577
|
)
|
||
Total stockholder’s equity
|
11,240
|
|
|
9,888
|
|
||
Total liabilities and stockholder’s equity
|
$
|
62,870
|
|
|
$
|
61,401
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by operating activities
|
$
|
1,282
|
|
|
$
|
2,738
|
|
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures and aircraft purchase deposits
|
(2,697
|
)
|
|
(4,501
|
)
|
||
Proceeds from sale of property and equipment and sale-leaseback transactions
|
855
|
|
|
816
|
|
||
Purchases of short-term investments
|
(2,582
|
)
|
|
(4,093
|
)
|
||
Sales of short-term investments
|
2,816
|
|
|
4,714
|
|
||
Decrease in restricted short-term investments
|
72
|
|
|
235
|
|
||
Purchase of equity investment
|
—
|
|
|
(203
|
)
|
||
Other investing activities
|
(5
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(1,541
|
)
|
|
(3,032
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
2,149
|
|
|
2,160
|
|
||
Payments on long-term debt and capital leases
|
(1,942
|
)
|
|
(1,813
|
)
|
||
Deferred financing costs
|
(48
|
)
|
|
(66
|
)
|
||
Other financing activities
|
15
|
|
|
21
|
|
||
Net cash provided by financing activities
|
174
|
|
|
302
|
|
||
Net increase (decrea
se) in cash and restricted cash
|
(85
|
)
|
|
8
|
|
||
Cash and restricted cash at beginning of period
|
390
|
|
|
424
|
|
||
Cash and restricted cash at end of period
(a)
|
$
|
305
|
|
|
$
|
432
|
|
|
|
|
|
||||
Supplemental information:
|
|
|
|
||||
Interest paid, net
|
741
|
|
|
718
|
|
||
Income taxes paid
|
14
|
|
|
13
|
|
|
Cash
|
$
|
294
|
|
|
$
|
328
|
|
Restricted cash included in restricted cash and short-term investments
|
11
|
|
|
104
|
|
||
Total cash and restricted cash
|
$
|
305
|
|
|
$
|
432
|
|
|
|
|
|
New Revenue Standard
|
|
New Retirement Standard
|
|
|
||||||||||||||||
Three Months Ended
September 30, 2017 |
|
As Reported
|
|
Deferred Revenue Method
|
|
Ancillary Revenue Reclassifications
|
|
Gross Versus Net Presentation
|
|
Reclassifications
|
|
As Recast
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
|
$
|
9,377
|
|
|
$
|
59
|
|
|
$
|
651
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
10,096
|
|
Cargo
|
|
200
|
|
|
—
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
223
|
|
||||||
Other
|
|
1,298
|
|
|
—
|
|
|
(661
|
)
|
|
6
|
|
|
—
|
|
|
643
|
|
||||||
Total operating revenues
|
|
10,875
|
|
|
59
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
10,962
|
|
||||||
Total operating expenses
|
|
9,650
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
35
|
|
|
9,713
|
|
||||||
Operating income
|
|
1,225
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
1,249
|
|
||||||
Total nonoperating expense, net
|
|
(181
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
(146
|
)
|
||||||
Income before income taxes
|
|
1,044
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,103
|
|
||||||
Income tax provision
|
|
395
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
417
|
|
||||||
Net income
|
|
$
|
649
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
686
|
|
|
|
|
|
New Revenue Standard
|
|
New Retirement Standard
|
|
|
||||||||||||||||
Nine Months Ended
September 30, 2017 |
|
As Reported
|
|
Deferred Revenue Method
|
|
Ancillary Revenue Reclassifications
|
|
Gross Versus Net Presentation
|
|
Reclassifications
|
|
As Recast
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
|
$
|
27,114
|
|
|
$
|
328
|
|
|
$
|
1,976
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
29,447
|
|
Cargo
|
|
568
|
|
|
—
|
|
|
31
|
|
|
34
|
|
|
—
|
|
|
633
|
|
||||||
Other
|
|
3,916
|
|
|
—
|
|
|
(2,007
|
)
|
|
14
|
|
|
—
|
|
|
1,923
|
|
||||||
Total operating revenues
|
|
31,598
|
|
|
328
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
32,003
|
|
||||||
Total operating expenses
|
|
28,242
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
104
|
|
|
28,423
|
|
||||||
Operating income
|
|
3,356
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
3,580
|
|
||||||
Total nonoperating expense, net
|
|
(572
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
(468
|
)
|
||||||
Income before income taxes
|
|
2,784
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,112
|
|
||||||
Income tax provision
|
|
1,046
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,170
|
|
||||||
Net income
|
|
$
|
1,738
|
|
|
$
|
204
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,942
|
|
|
As Reported
|
|
New Revenue Standard
|
|
As Recast
|
||||||
Deferred tax asset
|
$
|
682
|
|
|
$
|
1,389
|
|
|
$
|
2,071
|
|
Air traffic liability
|
3,978
|
|
|
64
|
|
|
4,042
|
|
|||
Current loyalty program liability
|
2,791
|
|
|
330
|
|
|
3,121
|
|
|||
Noncurrent loyalty program liability
|
—
|
|
|
5,701
|
|
|
5,701
|
|
|||
Total stockholder’s equity (deficit)
|
14,594
|
|
|
(4,706
|
)
|
|
9,888
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Fleet restructuring expenses
(1)
|
$
|
109
|
|
|
$
|
62
|
|
|
$
|
275
|
|
|
$
|
174
|
|
Merger integration expenses
(2)
|
68
|
|
|
62
|
|
|
188
|
|
|
192
|
|
||||
Severance expenses
(3)
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
||||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
17
|
|
|
(12
|
)
|
|
(39
|
)
|
|
7
|
|
||||
Litigation settlement
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
||||
Intangible asset impairment
(5)
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||
Labor contract expenses
|
—
|
|
|
—
|
|
|
13
|
|
|
45
|
|
||||
Other operating charges, net
|
1
|
|
|
—
|
|
|
35
|
|
|
14
|
|
||||
Mainline operating special items, net
|
215
|
|
|
112
|
|
|
563
|
|
|
432
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Regional operating special items, net
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Mark-to-market adjustments on equity investments, net
(6)
|
15
|
|
|
—
|
|
|
82
|
|
|
—
|
|
||||
Debt refinancing and extinguishment charges
|
—
|
|
|
3
|
|
|
13
|
|
|
12
|
|
||||
Nonoperating special items, net
|
15
|
|
|
3
|
|
|
95
|
|
|
12
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax special items, net
(7)
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
(1)
|
Fleet restructuring expenses principally included accelerated depreciation and remaining lease payments for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(2)
|
Merger integration expenses included costs associated with American's integration projects, principally its flight attendant, human resources and payroll, and technical operations integrations.
|
(3)
|
Severance expenses primarily included costs associated with reductions in headcount of management and support staff team members.
|
(4)
|
Bankruptcy obligations will ultimately be settled in shares of AAG common stock. Accordingly, fluctuations in AAG's stock price result in mark-to-market adjustments to these obligations.
|
(5)
|
Intangible asset impairment includes a non-cash charge to write-off American's Brazil route authority as a result of ratification of the U.S.-Brazil open skies agreement.
|
(6)
|
Mark-to-market adjustments on equity investments relate to net unrealized losses resulting from the change in market value primarily associated with our equity investments in China Southern Airlines and Mesa Air Group, Inc.
|
(7)
|
Income tax special items for the
nine months ended September 30, 2018
included a
$30 million
charge to income tax expense to establish a required valuation allowance related to American's estimated refund for Alternative Minimum Tax (AMT) credits and an
$18 million
charge related to an international income tax matter.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Passenger revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Passenger travel
|
$
|
9,790
|
|
|
$
|
9,400
|
|
|
$
|
28,278
|
|
|
$
|
27,179
|
|
Loyalty revenue - travel
(1)
|
771
|
|
|
696
|
|
|
2,436
|
|
|
2,268
|
|
||||
Total passenger revenue
|
10,561
|
|
|
10,096
|
|
|
30,714
|
|
|
29,447
|
|
||||
Cargo
|
260
|
|
|
223
|
|
|
748
|
|
|
633
|
|
||||
Other:
|
|
|
|
|
|
|
|
|
|
||||||
Loyalty revenue - marketing services
|
613
|
|
|
527
|
|
|
1,765
|
|
|
1,574
|
|
||||
Other revenue
|
122
|
|
|
116
|
|
|
367
|
|
|
349
|
|
||||
Total other revenue
|
735
|
|
|
643
|
|
|
2,132
|
|
|
1,923
|
|
||||
Total operating revenues
|
$
|
11,556
|
|
|
$
|
10,962
|
|
|
$
|
33,594
|
|
|
$
|
32,003
|
|
|
(1)
|
Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions for air travel awards from mileage credits earned through travel and mileage credits sold to co-branded card and other partners. See discussion of Loyalty Revenue below.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Domestic
|
$
|
7,424
|
|
|
$
|
7,162
|
|
|
$
|
22,071
|
|
|
$
|
21,522
|
|
Latin America
|
1,210
|
|
|
1,183
|
|
|
3,939
|
|
|
3,622
|
|
||||
Atlantic
|
1,504
|
|
|
1,363
|
|
|
3,471
|
|
|
3,170
|
|
||||
Pacific
|
423
|
|
|
388
|
|
|
1,233
|
|
|
1,133
|
|
||||
Total passenger revenue
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
30,714
|
|
|
$
|
29,447
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In millions)
|
||||||
Loyalty program liability
|
$
|
8,559
|
|
|
$
|
8,822
|
|
Air traffic liability
|
5,040
|
|
|
4,042
|
|
||
Total
|
$
|
13,599
|
|
|
$
|
12,864
|
|
Balance at December 31, 2017
|
$
|
8,822
|
|
Deferral of revenue
|
2,302
|
|
|
Recognition of revenue
(1)
|
(2,565
|
)
|
|
Balance at September 30, 2018
(2)
|
$
|
8,559
|
|
|
(1)
|
Principally relates to revenue recognized from the redemption of mileage credits for both air and non-air travel awards. Mileage credits are combined in one homogenous pool and are not separately identifiable. As such, the revenue is comprised of miles that were part of the loyalty program deferred revenue balance at the beginning of the period as well as miles that were issued during the period.
|
(2)
|
Mileage credits can be redeemed at any time and do not expire as long as that AAdvantage member has any type of qualifying activity at least every
18
months. As of
September 30, 2018
, American's current loyalty program liability was
$3.2 billion
and represents American's current estimate of revenue expected to be recognized in the next twelve months based on historical trends, with the balance reflected in long-term loyalty program liability expected to be recognized as revenue in periods thereafter.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Secured
|
|
|
|
||||
2013 Credit Facilities, variable interest rate of 3.98%, installments through 2025
|
$
|
1,825
|
|
|
$
|
1,825
|
|
2014 Credit Facilities, variable interest rate of 4.13%, installments through 2021
|
1,228
|
|
|
728
|
|
||
April 2016 Credit Facilities, variable interest rate of 4.24%, installments through 2023
|
980
|
|
|
990
|
|
||
December 2016 Credit Facilities, variable interest rate of 4.16%, installments through 2023
|
1,238
|
|
|
1,238
|
|
||
Aircraft enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 3.00% to 9.75%, averaging 4.24%, maturing from 2018 to 2029
|
11,884
|
|
|
11,881
|
|
||
Equipment loans and other notes payable, fixed and variable interest rates ranging from 2.18% to 8.48%, averaging 4.00%, maturing from 2018 to 2029
|
5,078
|
|
|
5,259
|
|
||
Special facility revenue bonds, fixed interest rates ranging from 5.00% to 5.50%, maturing from 2019 to 2035
|
786
|
|
|
828
|
|
||
Other secured obligations, fixed interest rates ranging from 3.81% to 12.24%, maturing from 2021 to 2028
|
711
|
|
|
772
|
|
||
Total long-term debt and capital lease obligations
|
23,730
|
|
|
23,521
|
|
||
Less: Total unamortized debt discount, premium and issuance costs
|
238
|
|
|
227
|
|
||
Less: Current maturities
|
2,497
|
|
|
2,058
|
|
||
Long-term debt and capital lease obligations, net of current maturities
|
$
|
20,995
|
|
|
$
|
21,236
|
|
2013 Revolving Facility
|
$
|
1,200
|
|
2014 Revolving Facility
|
1,000
|
|
|
April 2016 Revolving Facility
|
300
|
|
|
Total
|
$
|
2,500
|
|
|
2017-2 EETCs
|
||||
|
Series AA
|
|
Series A
|
|
Series B
|
Aggregate principal issued
|
$545 million
|
|
$252 million
|
|
$221 million
|
Fixed interest rate per annum
|
3.35%
|
|
3.60%
|
|
3.70%
|
Maturity date
|
October 2029
|
|
October 2029
|
|
October 2025
|
|
2012-2C(R) EETCs
|
|
Series C(R)
|
Aggregate principal issued
|
$100 million
|
Fixed interest rate per annum
|
4.70%
|
Maturity date
|
June 2021
|
|
Fair Value Measurements as of September 30, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Short-term investments
(1) (2)
:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
59
|
|
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate obligations
|
1,443
|
|
|
—
|
|
|
1,443
|
|
|
—
|
|
||||
Bank notes/certificates of deposit/time deposits
|
2,800
|
|
|
—
|
|
|
2,800
|
|
|
—
|
|
||||
Repurchase agreements
|
240
|
|
|
—
|
|
|
240
|
|
|
—
|
|
||||
|
4,542
|
|
|
59
|
|
|
4,483
|
|
|
—
|
|
||||
Restricted cash and short-term investments
(1)
|
154
|
|
|
12
|
|
|
142
|
|
|
—
|
|
||||
Long-term investments
(3)
|
211
|
|
|
211
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
4,907
|
|
|
$
|
282
|
|
|
$
|
4,625
|
|
|
$
|
—
|
|
|
(1)
|
Unrealized gains or losses on short-term investments are recorded in accumulated other comprehensive loss at each measurement date.
|
(2)
|
All short-term investments are classified as available-for-sale and stated at fair value. American’s short-term investments mature in one year or less except for
$942 million
of bank notes/certificates of deposit/time deposits and
$150 million
of corporate obligations.
|
(3)
|
Long-term investments primarily include American's equity investment in China Southern Airlines and are classified in other assets on its condensed consolidated balance sheets.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Value |
|
Fair
Value |
|
Carrying
Value |
|
Fair
Value |
||||||||
Long-term debt, including current maturities
|
$
|
23,492
|
|
|
$
|
23,640
|
|
|
$
|
23,294
|
|
|
$
|
24,029
|
|
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Three Months Ended September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
|
168
|
|
|
179
|
|
|
9
|
|
|
10
|
|
||||
Expected return on assets
|
|
(225
|
)
|
|
(197
|
)
|
|
(6
|
)
|
|
(5
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
7
|
|
|
7
|
|
|
(59
|
)
|
|
(59
|
)
|
||||
Unrecognized net loss (gain)
|
|
35
|
|
|
36
|
|
|
(5
|
)
|
|
(6
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
(14
|
)
|
|
$
|
25
|
|
|
$
|
(60
|
)
|
|
$
|
(59
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Nine Months Ended September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Service cost
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
|
504
|
|
|
538
|
|
|
26
|
|
|
29
|
|
||||
Expected return on assets
|
|
(675
|
)
|
|
(589
|
)
|
|
(17
|
)
|
|
(16
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
21
|
|
|
21
|
|
|
(178
|
)
|
|
(178
|
)
|
||||
Unrecognized net loss (gain)
|
|
107
|
|
|
108
|
|
|
(15
|
)
|
|
(17
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
(41
|
)
|
|
$
|
79
|
|
|
$
|
(181
|
)
|
|
$
|
(179
|
)
|
|
Pension, Retiree
Medical and Other Postretirement Benefits |
|
Unrealized Loss on Investments
|
|
Income Tax
Benefit (Provision) (1) |
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
(4,508
|
)
|
|
$
|
(1
|
)
|
|
$
|
(742
|
)
|
|
$
|
(5,251
|
)
|
Amounts reclassified from AOCI
|
(65
|
)
|
|
—
|
|
|
15
|
|
(2)
|
(50
|
)
|
||||
Net current-period other comprehensive income (loss)
|
(65
|
)
|
|
—
|
|
|
15
|
|
|
(50
|
)
|
||||
Balance at September 30, 2018
|
$
|
(4,573
|
)
|
|
$
|
(1
|
)
|
|
$
|
(727
|
)
|
|
$
|
(5,301
|
)
|
|
(1)
|
Relates principally to pension, retiree medical and other postretirement benefits obligations that will not be recognized in net income until the obligations are fully extinguished.
|
(2)
|
Relates to pension, retiree medical and other postretirement benefits obligations and is recognized within the income tax provision on the condensed consolidated statement of operations.
|
|
|
Amounts reclassified from AOCI
|
|
Affected line items on the condensed consolidated statements of operations
|
||||||||||||||
AOCI Components
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||||
Amortization of pension, retiree medical and other postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
|
$
|
(40
|
)
|
|
$
|
(33
|
)
|
|
$
|
(121
|
)
|
|
$
|
(100
|
)
|
|
Nonoperating other income, net
|
Actuarial loss
|
|
23
|
|
|
19
|
|
|
71
|
|
|
57
|
|
|
Nonoperating other income, net
|
||||
Total reclassifications for the period, net of tax
|
|
$
|
(17
|
)
|
|
$
|
(14
|
)
|
|
$
|
(50
|
)
|
|
$
|
(43
|
)
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Aircraft fuel and related taxes
|
$
|
506
|
|
|
$
|
352
|
|
|
$
|
1,369
|
|
|
$
|
999
|
|
Salaries, wages and benefits
|
86
|
|
|
85
|
|
|
254
|
|
|
246
|
|
||||
Capacity purchases from third-party regional carriers
|
817
|
|
|
832
|
|
|
2,440
|
|
|
2,460
|
|
||||
Maintenance, materials and repairs
|
1
|
|
|
2
|
|
|
6
|
|
|
5
|
|
||||
Other rent and landing fees
|
148
|
|
|
152
|
|
|
436
|
|
|
449
|
|
||||
Aircraft rent
|
7
|
|
|
7
|
|
|
20
|
|
|
20
|
|
||||
Selling expenses
|
94
|
|
|
95
|
|
|
275
|
|
|
269
|
|
||||
Depreciation and amortization
|
65
|
|
|
66
|
|
|
200
|
|
|
194
|
|
||||
Special items, net
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
||||
Other
|
86
|
|
|
72
|
|
|
275
|
|
|
215
|
|
||||
Total regional expenses
|
$
|
1,810
|
|
|
$
|
1,662
|
|
|
$
|
5,275
|
|
|
$
|
4,860
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
AAG
(1)
|
$
|
12,655
|
|
|
$
|
10,968
|
|
AAG’s wholly-owned subsidiaries
(2)
|
(2,130
|
)
|
|
(2,146
|
)
|
||
Total
|
$
|
10,525
|
|
|
$
|
8,822
|
|
|
(1)
|
The increase in American’s net related party receivable from AAG is primarily due to American providing the cash funding for AAG’s dividend and share repurchase programs as well as the repayment of AAG's
6.125%
senior notes.
|
(2)
|
The net payable to AAG’s wholly-owned subsidiaries consists primarily of amounts due under regional capacity purchase agreements with AAG’s wholly-owned regional airlines operating under the brand name of American Eagle.
|
|
Three Months Ended September 30,
|
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Passenger revenue
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
465
|
|
|
4.6
|
|
Cargo revenue
|
260
|
|
|
223
|
|
|
37
|
|
|
16.4
|
|
|||
Other operating revenue
|
738
|
|
|
646
|
|
|
92
|
|
|
14.5
|
|
|||
Total operating revenues
|
11,559
|
|
|
10,965
|
|
|
594
|
|
|
5.4
|
|
|||
Mainline and regional aircraft fuel and related taxes
|
2,740
|
|
|
1,922
|
|
|
818
|
|
|
42.6
|
|
|||
Salaries, wages and benefits
|
3,129
|
|
|
3,030
|
|
|
99
|
|
|
3.3
|
|
|||
Total operating expenses
|
10,910
|
|
|
9,709
|
|
|
1,201
|
|
|
12.4
|
|
|||
Operating income
|
649
|
|
|
1,256
|
|
|
(607
|
)
|
|
(48.4
|
)
|
|||
Pre-tax income
|
456
|
|
|
1,063
|
|
|
(607
|
)
|
|
(57.2
|
)
|
|||
Income tax provision
|
115
|
|
|
402
|
|
|
(287
|
)
|
|
(71.6
|
)
|
|||
Net income
|
341
|
|
|
661
|
|
|
(320
|
)
|
|
(48.4
|
)
|
|||
|
|
|
|
|
|
|
|
|||||||
Pre-tax income
|
$
|
456
|
|
|
$
|
1,063
|
|
|
$
|
(607
|
)
|
|
(57.2
|
)
|
Adjusted for: Total pre-tax net special items
(1)
|
232
|
|
|
110
|
|
|
122
|
|
|
nm
(2)
|
|
|||
Pre-tax income excluding special items
|
$
|
688
|
|
|
$
|
1,173
|
|
|
$
|
(485
|
)
|
|
(41.4
|
)
|
|
(1)
|
See below
“Reconciliation of GAAP to Non-GAAP Financial Measures”
and Note 2 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for details on the components of special items.
|
(2)
|
Not meaningful.
|
•
|
$756 million from aircraft and pre-delivery purchase deposit debt financing
|
•
|
$588 million from aircraft sale-leaseback transactions
|
•
|
$500 million from incremental term loans under our 2014 Credit Facilities
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions)
|
||||||||||||||
Reconciliation of Pre-Tax Income Excluding Special Items:
|
|
|
|
|
|
|
|
||||||||
Pre-tax income - GAAP
|
$
|
456
|
|
|
$
|
1,063
|
|
|
$
|
1,498
|
|
|
$
|
2,987
|
|
Pre-tax special items
(1)
:
|
|
|
|
|
|
|
|
||||||||
Operating special items, net
|
217
|
|
|
107
|
|
|
564
|
|
|
431
|
|
||||
Nonoperating special items, net
|
15
|
|
|
3
|
|
|
95
|
|
|
12
|
|
||||
Total pre-tax special items, net
|
232
|
|
|
110
|
|
|
659
|
|
|
443
|
|
||||
Pre-tax income excluding special items
|
$
|
688
|
|
|
$
|
1,173
|
|
|
$
|
2,157
|
|
|
$
|
3,430
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Reconciliation of Total Operating Costs per Available Seat
Mile (CASM) Excluding Special Items and Fuel:
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Total operating expenses - GAAP
|
$
|
10,910
|
|
|
$
|
9,709
|
|
|
$
|
31,495
|
|
|
$
|
28,419
|
|
Special items
(1)
:
|
|
|
|
|
|
|
|
||||||||
Special items, net
|
(215
|
)
|
|
(112
|
)
|
|
(563
|
)
|
|
(432
|
)
|
||||
Regional operating special items, net
|
(2
|
)
|
|
5
|
|
|
(1
|
)
|
|
1
|
|
||||
Fuel:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes - mainline
|
(2,234
|
)
|
|
(1,570
|
)
|
|
(6,100
|
)
|
|
(4,481
|
)
|
||||
Aircraft fuel and related taxes - regional
|
(506
|
)
|
|
(352
|
)
|
|
(1,369
|
)
|
|
(999
|
)
|
||||
Total operating expenses, excluding special items and fuel
|
$
|
7,953
|
|
|
$
|
7,680
|
|
|
$
|
23,462
|
|
|
$
|
22,508
|
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
Total Available Seat Miles (ASM)
|
75,039
|
|
|
73,053
|
|
|
213,756
|
|
|
209,136
|
|
||||
(In cents)
|
|
|
|
|
|
|
|
||||||||
Total operating CASM
|
14.54
|
|
|
13.29
|
|
|
14.73
|
|
|
13.59
|
|
||||
Special items per ASM:
|
|
|
|
|
|
|
|
||||||||
Special items, net
(1)
|
(0.29
|
)
|
|
(0.15
|
)
|
|
(0.26
|
)
|
|
(0.21
|
)
|
||||
Regional operating special items, net
|
—
|
|
|
0.01
|
|
|
—
|
|
|
—
|
|
||||
Fuel per ASM:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes - mainline
|
(2.98
|
)
|
|
(2.15
|
)
|
|
(2.85
|
)
|
|
(2.14
|
)
|
||||
Aircraft fuel and related taxes - regional
|
(0.67
|
)
|
|
(0.48
|
)
|
|
(0.64
|
)
|
|
(0.48
|
)
|
||||
Total CASM, excluding special items and fuel
|
10.60
|
|
|
10.51
|
|
|
10.98
|
|
|
10.76
|
|
|
(1)
|
See Note 2 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information on special items.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|||||||||
Revenue passenger miles (millions)
(a)
|
61,865
|
|
|
60,471
|
|
|
2.3
|
%
|
|
175,589
|
|
|
171,019
|
|
|
2.7
|
%
|
Available seat miles (millions)
(b)
|
75,039
|
|
|
73,053
|
|
|
2.7
|
%
|
|
213,756
|
|
|
209,136
|
|
|
2.2
|
%
|
Passenger load factor (percent)
(c)
|
82.4
|
|
|
82.8
|
|
|
(0.4
|
)pts
|
|
82.1
|
|
|
81.8
|
|
|
0.3
|
pts
|
Yield (cents)
(d)
|
17.07
|
|
|
16.70
|
|
|
2.2
|
%
|
|
17.49
|
|
|
17.22
|
|
|
1.6
|
%
|
Passenger revenue per available seat mile (cents)
(e)
|
14.07
|
|
|
13.82
|
|
|
1.8
|
%
|
|
14.37
|
|
|
14.08
|
|
|
2.1
|
%
|
Total revenue per available seat mile (cents)
(f)
|
15.40
|
|
|
15.01
|
|
|
2.6
|
%
|
|
15.72
|
|
|
15.31
|
|
|
2.7
|
%
|
Aircraft at end of period
|
1,541
|
|
|
1,558
|
|
|
(1.1
|
)%
|
|
1,541
|
|
|
1,558
|
|
|
(1.1
|
)%
|
Fuel consumption (gallons in millions)
|
1,190
|
|
|
1,148
|
|
|
3.6
|
%
|
|
3,367
|
|
|
3,291
|
|
|
2.3
|
%
|
Average aircraft fuel price including related taxes (dollars per gallon)
|
2.30
|
|
|
1.67
|
|
|
37.6
|
%
|
|
2.22
|
|
|
1.67
|
|
|
33.2
|
%
|
Full-time equivalent employees at end of period
|
130,500
|
|
|
127,600
|
|
|
2.3
|
%
|
|
130,500
|
|
|
127,600
|
|
|
2.3
|
%
|
Operating cost per available seat mile (cents)
(g)
|
14.54
|
|
|
13.29
|
|
|
9.4
|
%
|
|
14.73
|
|
|
13.59
|
|
|
8.4
|
%
|
|
(a)
|
Revenue passenger mile (RPM) – A basic measure of sales volume. One RPM represents one passenger flown one mile.
|
(b)
|
Available seat mile (ASM) – A basic measure of production. One ASM represents one seat flown one mile.
|
(c)
|
Passenger load factor – The percentage of available seats that are filled with revenue passengers.
|
(d)
|
Yield – A measure of airline revenue derived by dividing passenger revenue by RPMs.
|
(e)
|
Passenger revenue per available seat mile (PRASM) – Passenger revenue divided by ASMs.
|
(f)
|
Total revenue per available seat mile (TRASM) – Total revenues divided by total ASMs.
|
(g)
|
Operating cost per available seat mile (CASM) – Operating expenses divided by ASMs.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Passenger
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
465
|
|
|
4.6
|
Cargo
|
260
|
|
|
223
|
|
|
37
|
|
|
16.4
|
|||
Other
|
738
|
|
|
646
|
|
|
92
|
|
|
14.5
|
|||
Total operating revenues
|
$
|
11,559
|
|
|
$
|
10,965
|
|
|
$
|
594
|
|
|
5.4
|
|
|
|
Increase (Decrease)
vs. Three Months Ended September 30, 2017 |
|||||||||||||
|
Three Months Ended
September 30, 2018 |
|
RPMs
|
|
ASMs
|
|
Load
Factor
|
|
Passenger
Yield
|
|
PRASM
|
|||||
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|||||
Passenger revenue
|
$
|
10,561
|
|
|
2.3%
|
|
2.7%
|
|
(0.4
|
)pts
|
|
2.2
|
%
|
|
1.8
|
%
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Aircraft fuel and related taxes
|
$
|
2,234
|
|
|
$
|
1,570
|
|
|
$
|
664
|
|
|
42.3
|
|
Salaries, wages and benefits
|
3,129
|
|
|
3,030
|
|
|
99
|
|
|
3.3
|
|
|||
Maintenance, materials and repairs
|
526
|
|
|
487
|
|
|
39
|
|
|
7.9
|
|
|||
Other rent and landing fees
|
497
|
|
|
471
|
|
|
26
|
|
|
5.5
|
|
|||
Aircraft rent
|
312
|
|
|
304
|
|
|
8
|
|
|
2.8
|
|
|||
Selling expenses
|
395
|
|
|
400
|
|
|
(5
|
)
|
|
(1.2
|
)
|
|||
Depreciation and amortization
|
473
|
|
|
433
|
|
|
40
|
|
|
9.3
|
|
|||
Special items, net
|
215
|
|
|
112
|
|
|
103
|
|
|
91.8
|
|
|||
Other
|
1,296
|
|
|
1,248
|
|
|
48
|
|
|
3.9
|
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
|||||||
Aircraft fuel and related taxes
|
506
|
|
|
352
|
|
|
154
|
|
|
44.0
|
|
|||
Other
|
1,327
|
|
|
1,302
|
|
|
25
|
|
|
1.9
|
|
|||
Total operating expenses
|
$
|
10,910
|
|
|
$
|
9,709
|
|
|
$
|
1,201
|
|
|
12.4
|
|
|
Three Months Ended
September 30, |
|
Percent
Increase
(Decrease)
|
|||||
|
2018
|
|
2017
|
|
||||
|
(In cents, except percentage changes)
|
|||||||
Total CASM:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
2.98
|
|
|
2.15
|
|
|
38.5
|
|
Salaries, wages and benefits
|
4.17
|
|
|
4.15
|
|
|
0.5
|
|
Maintenance, materials and repairs
|
0.70
|
|
|
0.67
|
|
|
5.1
|
|
Other rent and landing fees
|
0.66
|
|
|
0.64
|
|
|
2.7
|
|
Aircraft rent
|
0.42
|
|
|
0.42
|
|
|
—
|
|
Selling expenses
|
0.53
|
|
|
0.55
|
|
|
(3.9
|
)
|
Depreciation and amortization
|
0.63
|
|
|
0.59
|
|
|
6.4
|
|
Special items, net
|
0.29
|
|
|
0.15
|
|
|
86.7
|
|
Other
|
1.73
|
|
|
1.71
|
|
|
1.2
|
|
Regional expenses:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
0.67
|
|
|
0.48
|
|
|
40.2
|
|
Other
|
1.77
|
|
|
1.78
|
|
|
(0.8
|
)
|
Total CASM
|
14.54
|
|
|
13.29
|
|
|
9.4
|
|
Special items, net:
|
|
|
|
|
|
|||
Special items, net
|
(0.29
|
)
|
|
(0.15
|
)
|
|
86.7
|
|
Regional operating special items, net
|
—
|
|
|
0.01
|
|
|
nm
|
|
Aircraft fuel and related taxes:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes - mainline
|
(2.98
|
)
|
|
(2.15
|
)
|
|
38.5
|
|
Aircraft fuel and related taxes - regional
|
(0.67
|
)
|
|
(0.48
|
)
|
|
40.2
|
|
Total CASM, excluding special items and fuel
|
10.60
|
|
|
10.51
|
|
|
0.8
|
|
•
|
Aircraft fuel and related taxes per ASM
increase
d
38.5%
primarily due to a
37.8
%
increase
in the average price per gallon of fuel to
$2.28
in the
third
quarter of
2018
from
$1.66
in the
2017
period as well as a
3.3
% increase in gallons of fuel consumed.
|
•
|
Maintenance, materials and repairs per ASM increased
5.1
% driven by an increase in expenses under flight hour-based engine contracts (commonly referred to as "power by the hour") where expense is incurred and recognized based on hours. The increased expense was driven by an increase in flight hours due to a higher mix of aircraft operating under these agreements.
|
•
|
Depreciation and amortization per ASM
increase
d
6.4%
due in part to our fleet renewal program as subsequent to the
third
quarter of
2017
, we took delivery of
15
owned mainline aircraft. Information technology and software development projects associated with our merger integration also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes per ASM
increase
d
40.2%
primarily due to a
36.6
%
increase
in the average price per gallon of fuel to
$2.39
in the
third
quarter of
2018
from
$1.75
in the
2017
period as well as a
5.4
%
increase
in gallons of fuel consumed.
|
|
Three Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Fleet restructuring expenses
(1)
|
$
|
109
|
|
|
$
|
62
|
|
Merger integration expenses
(2)
|
68
|
|
|
62
|
|
||
Severance expenses
(3)
|
20
|
|
|
—
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
17
|
|
|
(12
|
)
|
||
Other operating charges, net
|
1
|
|
|
—
|
|
||
Total mainline operating special items, net
|
215
|
|
|
112
|
|
||
Regional operating special items, net
|
2
|
|
|
(5
|
)
|
||
Total operating special items, net
|
$
|
217
|
|
|
$
|
107
|
|
|
(1)
|
Fleet restructuring expenses principally included accelerated depreciation and remaining lease payments for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(2)
|
Merger integration expenses included costs associated with our integration projects, principally our flight attendant, human resources and payroll, and technical operations integrations.
|
(3)
|
Severance expenses primarily included costs associated with reductions in headcount of management and support staff team members.
|
(4)
|
Bankruptcy obligations will ultimately be settled in shares of our common stock. Accordingly, fluctuations in our stock price result in mark-to-market adjustments to these obligations.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
29
|
|
|
$
|
25
|
|
|
$
|
4
|
|
|
16.8
|
|
Interest expense, net
|
(265
|
)
|
|
(266
|
)
|
|
1
|
|
|
(0.5
|
)
|
|||
Other income, net
|
43
|
|
|
48
|
|
|
(5
|
)
|
|
(11.0
|
)
|
|||
Total nonoperating expense, net
|
$
|
(193
|
)
|
|
$
|
(193
|
)
|
|
$
|
—
|
|
|
(0.2
|
)
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Passenger
|
$
|
30,714
|
|
|
$
|
29,447
|
|
|
$
|
1,267
|
|
|
4.3
|
Cargo
|
748
|
|
|
633
|
|
|
115
|
|
|
18.1
|
|||
Other
|
2,141
|
|
|
1,931
|
|
|
210
|
|
|
10.8
|
|||
Total operating revenues
|
$
|
33,603
|
|
|
$
|
32,011
|
|
|
$
|
1,592
|
|
|
5.0
|
|
|
|
Increase (Decrease)
vs. Nine Months Ended September 30, 2017 |
||||||||||||
|
Nine Months Ended
September 30, 2018 |
|
RPMs
|
|
ASMs
|
|
Load
Factor
|
|
Passenger
Yield
|
|
PRASM
|
||||
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
||||
Passenger revenue
|
$
|
30,714
|
|
|
2.7%
|
|
2.2%
|
|
0.3
|
pts
|
|
1.6%
|
|
2.1
|
%
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Aircraft fuel and related taxes
|
$
|
6,100
|
|
|
$
|
4,481
|
|
|
$
|
1,619
|
|
|
36.1
|
Salaries, wages and benefits
|
9,240
|
|
|
8,928
|
|
|
312
|
|
|
3.5
|
|||
Maintenance, materials and repairs
|
1,499
|
|
|
1,474
|
|
|
25
|
|
|
1.7
|
|||
Other rent and landing fees
|
1,448
|
|
|
1,363
|
|
|
85
|
|
|
6.2
|
|||
Aircraft rent
|
921
|
|
|
892
|
|
|
29
|
|
|
3.2
|
|||
Selling expenses
|
1,136
|
|
|
1,094
|
|
|
42
|
|
|
3.9
|
|||
Depreciation and amortization
|
1,382
|
|
|
1,255
|
|
|
127
|
|
|
10.1
|
|||
Special items, net
|
563
|
|
|
432
|
|
|
131
|
|
|
30.1
|
|||
Other
|
3,883
|
|
|
3,652
|
|
|
231
|
|
|
6.4
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
||||||
Aircraft fuel and related taxes
|
1,369
|
|
|
999
|
|
|
370
|
|
|
37.0
|
|||
Other
|
3,954
|
|
|
3,849
|
|
|
105
|
|
|
2.8
|
|||
Total operating expenses
|
$
|
31,495
|
|
|
$
|
28,419
|
|
|
$
|
3,076
|
|
|
10.8
|
|
Nine Months Ended
September 30, |
|
Percent
Increase
(Decrease)
|
|||||
|
2018
|
|
2017
|
|
||||
|
(In cents, except percentage changes)
|
|||||||
Total CASM:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
2.85
|
|
|
2.14
|
|
|
33.2
|
|
Salaries, wages and benefits
|
4.32
|
|
|
4.27
|
|
|
1.3
|
|
Maintenance, materials and repairs
|
0.70
|
|
|
0.70
|
|
|
(0.5
|
)
|
Other rent and landing fees
|
0.68
|
|
|
0.65
|
|
|
3.9
|
|
Aircraft rent
|
0.43
|
|
|
0.43
|
|
|
1.0
|
|
Selling expenses
|
0.53
|
|
|
0.52
|
|
|
1.7
|
|
Depreciation and amortization
|
0.65
|
|
|
0.60
|
|
|
7.7
|
|
Special items, net
|
0.26
|
|
|
0.21
|
|
|
27.3
|
|
Other
|
1.82
|
|
|
1.75
|
|
|
4.1
|
|
Regional expenses:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
0.64
|
|
|
0.48
|
|
|
34.0
|
|
Other
|
1.85
|
|
|
1.84
|
|
|
0.5
|
|
Total CASM
|
14.73
|
|
|
13.59
|
|
|
8.4
|
|
Special items, net:
|
|
|
|
|
|
|||
Special items, net
|
(0.26
|
)
|
|
(0.21
|
)
|
|
27.3
|
|
Aircraft fuel and related taxes:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes - mainline
|
(2.85
|
)
|
|
(2.14
|
)
|
|
33.2
|
|
Aircraft fuel and related taxes - regional
|
(0.64
|
)
|
|
(0.48
|
)
|
|
34.0
|
|
Total CASM, excluding special items and fuel
|
10.98
|
|
|
10.76
|
|
|
2.0
|
|
•
|
Aircraft fuel and related taxes per ASM
increase
d
33.2%
primarily due to a
33.5
%
increase
in the average price per gallon of fuel to
$2.20
in the first
nine
months of
2018
from
$1.65
in the
2017
period as well as a 2.0% increase in gallons of fuel consumed.
|
•
|
Depreciation and amortization per ASM
increase
d
7.7%
due in part to our fleet renewal program as subsequent to the
third
quarter of
2017
, we took delivery of
15
owned mainline aircraft. Information technology and software development projects associated with our merger integration also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes per ASM
increase
d
34.0
% primarily due to a
32.0
%
increase
in the average price per gallon of fuel to
$2.28
in the first
nine
months of
2018
from
$1.73
in the
2017
period as well as a 3.8% increase in gallons of fuel consumed.
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Fleet restructuring expenses
(1)
|
$
|
275
|
|
|
$
|
174
|
|
Merger integration expenses
(2)
|
188
|
|
|
192
|
|
||
Severance expenses
(3)
|
20
|
|
|
—
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
(39
|
)
|
|
7
|
|
||
Litigation settlement
|
45
|
|
|
—
|
|
||
Intangible asset impairment
(5)
|
26
|
|
|
—
|
|
||
Labor contract expenses
|
13
|
|
|
45
|
|
||
Other operating charges, net
|
35
|
|
|
14
|
|
||
Total mainline operating special items, net
|
563
|
|
|
432
|
|
||
Regional operating special items, net
|
1
|
|
|
(1
|
)
|
||
Total operating special items, net
|
$
|
564
|
|
|
$
|
431
|
|
|
(1)
|
Fleet restructuring expenses principally included accelerated depreciation and remaining lease payments for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(2)
|
Merger integration expenses included costs associated with our integration projects, principally our flight attendant, human resources and payroll, and technical operations integrations.
|
(3)
|
Severance expenses primarily included costs associated with reductions in headcount of management and support staff team members.
|
(4)
|
Bankruptcy obligations will ultimately be settled in shares of our common stock. Accordingly, fluctuations in our stock price result in mark-to-market adjustments to these obligations.
|
(5)
|
Intangible asset impairment includes a non-cash charge to write-off our Brazil route authority as a result of ratification of the U.S.-Brazil open skies agreement.
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
84
|
|
|
$
|
70
|
|
|
$
|
14
|
|
|
20.6
|
|
Interest expense, net
|
(795
|
)
|
|
(787
|
)
|
|
(8
|
)
|
|
1.1
|
|
|||
Other income, net
|
101
|
|
|
112
|
|
|
(11
|
)
|
|
(9.1
|
)
|
|||
Total nonoperating expense, net
|
$
|
(610
|
)
|
|
$
|
(605
|
)
|
|
$
|
(5
|
)
|
|
0.8
|
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Passenger
|
$
|
10,561
|
|
|
$
|
10,096
|
|
|
$
|
465
|
|
|
4.6
|
Cargo
|
260
|
|
|
223
|
|
|
37
|
|
|
16.4
|
|||
Other
|
735
|
|
|
643
|
|
|
92
|
|
|
14.5
|
|||
Total operating revenues
|
$
|
11,556
|
|
|
$
|
10,962
|
|
|
$
|
594
|
|
|
5.4
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Aircraft fuel and related taxes
|
$
|
2,234
|
|
|
$
|
1,570
|
|
|
$
|
664
|
|
|
42.3
|
|
Salaries, wages and benefits
|
3,127
|
|
|
3,027
|
|
|
100
|
|
|
3.3
|
|
|||
Maintenance, materials and repairs
|
526
|
|
|
487
|
|
|
39
|
|
|
7.9
|
|
|||
Other rent and landing fees
|
497
|
|
|
471
|
|
|
26
|
|
|
5.5
|
|
|||
Aircraft rent
|
312
|
|
|
304
|
|
|
8
|
|
|
2.8
|
|
|||
Selling expenses
|
395
|
|
|
400
|
|
|
(5
|
)
|
|
(1.2
|
)
|
|||
Depreciation and amortization
|
473
|
|
|
433
|
|
|
40
|
|
|
9.3
|
|
|||
Special items, net
|
215
|
|
|
112
|
|
|
103
|
|
|
91.8
|
|
|||
Other
|
1,298
|
|
|
1,247
|
|
|
51
|
|
|
4.0
|
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
|||||||
Aircraft fuel and related taxes
|
506
|
|
|
352
|
|
|
154
|
|
|
44.0
|
|
|||
Other
|
1,304
|
|
|
1,310
|
|
|
(6
|
)
|
|
(0.5
|
)
|
|||
Total operating expenses
|
$
|
10,887
|
|
|
$
|
9,713
|
|
|
$
|
1,174
|
|
|
12.1
|
|
•
|
Aircraft fuel and related taxes
increase
d
42.3%
primarily due to a
37.8
%
increase
in the average price per gallon of fuel to
$2.28
in the
third
quarter of
2018
from
$1.66
in the
2017
period as well as a
3.3
% increase in gallons of fuel consumed.
|
•
|
Maintenance, materials and repairs increased
7.9
% driven by an increase in expenses under flight hour-based engine contracts (commonly referred to as "power by the hour") where expense is incurred and recognized based on hours. The increased expense was driven by an increase in flight hours due to a higher mix of aircraft operating under these agreements.
|
•
|
Depreciation and amortization
increase
d
9.3
% due in part to American's fleet renewal program as subsequent to the
third
quarter of
2017
, American took delivery of
15
owned mainline aircraft. Information technology and software development projects associated with American's merger integration also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes increased
44.0
% primarily due to a
36.6
% increase in the average price per gallon of fuel to
$2.39
in the
third
quarter of 2018 from
$1.75
in the 2017 period as well as a
5.4
%
increase
in gallons of fuel consumed.
|
|
Three Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Fleet restructuring expenses
(1)
|
$
|
109
|
|
|
$
|
62
|
|
Merger integration expenses
(2)
|
68
|
|
|
62
|
|
||
Severance expenses
(3)
|
20
|
|
|
—
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
17
|
|
|
(12
|
)
|
||
Other operating charges, net
|
1
|
|
|
—
|
|
||
Total mainline operating special items, net
|
215
|
|
|
112
|
|
||
Regional operating special items, net
|
—
|
|
|
(1
|
)
|
||
Total operating special items, net
|
$
|
215
|
|
|
$
|
111
|
|
|
(1)
|
Fleet restructuring expenses principally included accelerated depreciation and remaining lease payments for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(2)
|
Merger integration expenses included costs associated with American's integration projects, principally its flight attendant, human resources and payroll, and technical operations integrations.
|
(3)
|
Severance expenses primarily included costs associated with reductions in headcount of management and support staff team members.
|
(4)
|
Bankruptcy obligations will ultimately be settled in shares of AAG common stock. Accordingly, fluctuations in AAG's stock price result in mark-to-market adjustments to these obligations.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
85
|
|
|
$
|
56
|
|
|
$
|
29
|
|
|
50.5
|
|
Interest expense, net
|
(262
|
)
|
|
(250
|
)
|
|
(12
|
)
|
|
4.5
|
|
|||
Other income, net
|
44
|
|
|
48
|
|
|
(4
|
)
|
|
(9.3
|
)
|
|||
Total nonoperating expense, net
|
$
|
(133
|
)
|
|
$
|
(146
|
)
|
|
$
|
13
|
|
|
(8.7
|
)
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Passenger
|
$
|
30,714
|
|
|
$
|
29,447
|
|
|
$
|
1,267
|
|
|
4.3
|
Cargo
|
748
|
|
|
633
|
|
|
115
|
|
|
18.1
|
|||
Other
|
2,132
|
|
|
1,923
|
|
|
209
|
|
|
10.9
|
|||
Total operating revenues
|
$
|
33,594
|
|
|
$
|
32,003
|
|
|
$
|
1,591
|
|
|
5.0
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Aircraft fuel and related taxes
|
$
|
6,100
|
|
|
$
|
4,481
|
|
|
$
|
1,619
|
|
|
36.1
|
Salaries, wages and benefits
|
9,231
|
|
|
8,920
|
|
|
311
|
|
|
3.5
|
|||
Maintenance, materials and repairs
|
1,499
|
|
|
1,474
|
|
|
25
|
|
|
1.7
|
|||
Other rent and landing fees
|
1,448
|
|
|
1,363
|
|
|
85
|
|
|
6.2
|
|||
Aircraft rent
|
921
|
|
|
892
|
|
|
29
|
|
|
3.2
|
|||
Selling expenses
|
1,136
|
|
|
1,094
|
|
|
42
|
|
|
3.9
|
|||
Depreciation and amortization
|
1,382
|
|
|
1,255
|
|
|
127
|
|
|
10.1
|
|||
Special items, net
|
563
|
|
|
432
|
|
|
131
|
|
|
30.1
|
|||
Other
|
3,885
|
|
|
3,652
|
|
|
233
|
|
|
6.4
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
||||||
Aircraft fuel and related taxes
|
1,369
|
|
|
999
|
|
|
370
|
|
|
37.0
|
|||
Other
|
3,906
|
|
|
3,861
|
|
|
45
|
|
|
1.2
|
|||
Total operating expenses
|
$
|
31,440
|
|
|
$
|
28,423
|
|
|
$
|
3,017
|
|
|
10.6
|
•
|
Aircraft fuel and related taxes
increase
d
36.1
% primarily due to a
33.5
%
increase
in the average price per gallon of fuel to
$2.20
in the first
nine
months of
2018
from
$1.65
in the
2017
period as well as a 2.0% increase in gallons of fuel consumed.
|
•
|
Depreciation and amortization
increase
d
10.1
% due in part to American's fleet renewal program as subsequent to the
third
quarter of
2017
, American took delivery of
15
owned mainline aircraft. Information technology and software development projects associated with American's merger integration also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes
increase
d
37.0
% primarily due to a
32.0
%
increase
in the average price per gallon of fuel to
$2.28
in the first
nine
months of
2018
from
$1.73
in the
2017
period as well as a 3.8% increase in gallons of fuel consumed.
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Fleet restructuring expenses
(1)
|
$
|
275
|
|
|
$
|
174
|
|
Merger integration expenses
(2)
|
188
|
|
|
192
|
|
||
Severance expenses
(3)
|
20
|
|
|
—
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net
(4)
|
(39
|
)
|
|
7
|
|
||
Litigation settlement
|
45
|
|
|
—
|
|
||
Intangible asset impairment
(5)
|
26
|
|
|
—
|
|
||
Labor contract expenses
|
13
|
|
|
45
|
|
||
Other operating charges, net
|
35
|
|
|
14
|
|
||
Total mainline operating special items, net
|
563
|
|
|
432
|
|
||
Regional operating special items, net
|
—
|
|
|
3
|
|
||
Total operating special items, net
|
$
|
563
|
|
|
$
|
435
|
|
|
(1)
|
Fleet restructuring expenses principally included accelerated depreciation and remaining lease payments for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(2)
|
Merger integration expenses included costs associated with American's integration projects, principally its flight attendant, human resources and payroll, and technical operations integrations.
|
(3)
|
Severance expenses primarily included costs associated with reductions in headcount of management and support staff team members.
|
(4)
|
Bankruptcy obligations will ultimately be settled in shares of AAG common stock. Accordingly, fluctuations in AAG's stock price result in mark-to-market adjustments to these obligations.
|
(5)
|
Intangible asset impairment includes a non-cash charge to write-off American's Brazil route authority as a result of ratification of the U.S.-Brazil open skies agreement.
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2018
|
|
2017
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
240
|
|
|
$
|
158
|
|
|
$
|
82
|
|
|
51.6
|
|
Interest expense, net
|
(771
|
)
|
|
(738
|
)
|
|
(33
|
)
|
|
4.5
|
|
|||
Other income, net
|
102
|
|
|
112
|
|
|
(10
|
)
|
|
(8.1
|
)
|
|||
Total nonoperating expense, net
|
$
|
(429
|
)
|
|
$
|
(468
|
)
|
|
$
|
39
|
|
|
(8.4
|
)
|
|
AAG
|
|
American
|
||||||||||||
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||
Cash
|
$
|
303
|
|
|
$
|
295
|
|
|
$
|
294
|
|
|
$
|
287
|
|
Short-term investments
|
4,552
|
|
|
4,771
|
|
|
4,542
|
|
|
4,768
|
|
||||
Undrawn revolving credit facilities
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
||||
Total available liquidity
|
$
|
7,355
|
|
|
$
|
7,566
|
|
|
$
|
7,336
|
|
|
$
|
7,555
|
|
|
Current Rating
|
S&P Local Issuer Credit Rating
|
BB-
|
Fitch Issuer Default Credit Rating
|
BB-
|
Moody’s Corporate Family Rating
(1)
|
Ba3
|
|
(1)
|
This rating is for AAG only. The credit agency does not rate this category for American.
|
|
(1)
|
In July 2018, American and Airbus entered into an agreement to defer the delivery of 22 Airbus A321neo aircraft currently scheduled for delivery in 2019, 2020 and 2021. These aircraft are now scheduled to be delivered in 2024. The table above reflects this revised delivery schedule. In addition, the future payments in the Contractual Obligations table below reflect this transaction.
|
(2)
|
These aircraft may be operated by wholly-owned regional subsidiaries which would operate the aircraft under capacity purchase arrangements.
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
Remainder
of 2018 |
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and Thereafter
|
|
Total
|
||||||||||||||
American
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capital lease obligations
(a) (c)
|
$
|
595
|
|
|
$
|
2,491
|
|
|
$
|
1,847
|
|
|
$
|
3,476
|
|
|
$
|
1,418
|
|
|
$
|
13,903
|
|
|
$
|
23,730
|
|
Interest obligations
(b) (c)
|
259
|
|
|
987
|
|
|
917
|
|
|
810
|
|
|
658
|
|
|
1,725
|
|
|
5,356
|
|
|||||||
Aircraft and engine purchase
commitments
(d)
|
463
|
|
|
2,909
|
|
|
1,246
|
|
|
991
|
|
|
1,374
|
|
|
7,480
|
|
|
14,463
|
|
|||||||
Operating lease commitments
(e)
|
536
|
|
|
2,228
|
|
|
2,062
|
|
|
1,709
|
|
|
1,546
|
|
|
6,473
|
|
|
14,554
|
|
|||||||
Regional capacity purchase agreements
(f)
|
364
|
|
|
1,376
|
|
|
1,171
|
|
|
977
|
|
|
799
|
|
|
1,998
|
|
|
6,685
|
|
|||||||
Minimum pension obligations
(g)
|
—
|
|
|
890
|
|
|
484
|
|
|
495
|
|
|
581
|
|
|
1,476
|
|
|
3,926
|
|
|||||||
Retiree medical and other postretirement benefits
|
24
|
|
|
92
|
|
|
80
|
|
|
75
|
|
|
70
|
|
|
314
|
|
|
655
|
|
|||||||
Other purchase obligations
(h)
|
821
|
|
|
2,064
|
|
|
1,177
|
|
|
1,131
|
|
|
53
|
|
|
16
|
|
|
5,262
|
|
|||||||
Total American Contractual Obligations
|
$
|
3,062
|
|
|
$
|
13,037
|
|
|
$
|
8,984
|
|
|
$
|
9,664
|
|
|
$
|
6,499
|
|
|
$
|
33,385
|
|
|
$
|
74,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
AAG and Other AAG Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capital lease obligations
(a)
|
$
|
—
|
|
|
$
|
750
|
|
|
$
|
505
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
20
|
|
|
$
|
1,279
|
|
Interest obligations
(b)
|
21
|
|
|
67
|
|
|
14
|
|
|
2
|
|
|
2
|
|
|
6
|
|
|
112
|
|
|||||||
Minimum pension obligations
(g)
|
—
|
|
|
7
|
|
|
3
|
|
|
3
|
|
|
4
|
|
|
19
|
|
|
36
|
|
|||||||
Operating lease commitments
|
5
|
|
|
10
|
|
|
10
|
|
|
6
|
|
|
5
|
|
|
14
|
|
|
50
|
|
|||||||
Total AAG Contractual Obligations
|
$
|
3,088
|
|
|
$
|
13,871
|
|
|
$
|
9,516
|
|
|
$
|
9,677
|
|
|
$
|
6,512
|
|
|
$
|
33,444
|
|
|
$
|
76,108
|
|
|
(a)
|
Amounts represent contractual amounts due. Excludes
$238 million
and
$242 million
of unamortized debt discount, premium and issuance costs as of
September 30, 2018
for American and AAG, respectively. For additional information, see Note 6 and Note 4 to AAG’s and American’s Condensed Consolidated Financial Statements in Part I, Items 1A and 1B.
|
(b)
|
For variable-rate debt, future interest obligations are estimated using the current forward rates at
September 30, 2018
.
|
(c)
|
Includes
$11.9 billion
of future principal payments and
$2.6 billion
of future interest payments, as of
September 30, 2018
, related to EETC debt financings of certain aircraft.
|
(d)
|
See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “
Liquidity and Capital Resources”
for additional information about these obligations. Boeing has committed to provide sale-leaseback financing (in the form of operating leases) for 22 787-8 aircraft to be delivered in 2020 and 2021. This financing is reflected in the operating lease commitments line above.
|
(e)
|
Includes
$372 million
of future minimum lease payments related to EETC leveraged lease financings of certain aircraft as of
September 30, 2018
.
|
(f)
|
Represents minimum payments under capacity purchase agreements with third-party regional carriers. These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and our actual payments could differ materially.
|
(g)
|
Includes minimum pension contributions based on actuarially determined estimates and is based on estimated payments through 2027.
|
(h)
|
Includes purchase commitments for jet fuel, facility construction projects and information technology support.
|
|
|
|
|
New Revenue Standard
|
|
New Retirement Standard
|
|
|
||||||||||||||||
Three Months Ended
September 30, 2017 |
|
As Reported
|
|
Deferred Revenue Method
|
|
Ancillary Revenue Reclassifications
|
|
Gross Versus Net Presentation
|
|
Reclassifications
|
|
As Recast
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
|
$
|
9,377
|
|
|
$
|
59
|
|
|
$
|
651
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
10,096
|
|
Cargo
|
|
200
|
|
|
—
|
|
|
10
|
|
|
13
|
|
|
—
|
|
|
223
|
|
||||||
Other
|
|
1,301
|
|
|
—
|
|
|
(661
|
)
|
|
6
|
|
|
—
|
|
|
646
|
|
||||||
Total operating revenues
|
|
10,878
|
|
|
59
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
10,965
|
|
||||||
Total operating expenses
|
|
9,646
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
35
|
|
|
9,709
|
|
||||||
Operating income
|
|
1,232
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
(35
|
)
|
|
1,256
|
|
||||||
Total nonoperating expense, net
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
(193
|
)
|
||||||
Income before income taxes
|
|
1,004
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,063
|
|
||||||
Income tax provision
|
|
380
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
402
|
|
||||||
Net income
|
|
$
|
624
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
661
|
|
Diluted earnings per common share
|
|
$
|
1.28
|
|
|
|
|
|
|
|
|
|
|
$
|
1.36
|
|
|
|
|
|
New Revenue Standard
|
|
New Retirement Standard
|
|
|
||||||||||||||||
Nine Months Ended
September 30, 2017 |
|
As Reported
|
|
Deferred Revenue Method
|
|
Ancillary Revenue Reclassifications
|
|
Gross Versus Net Presentation
|
|
Reclassifications
|
|
As Recast
|
||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Passenger
|
|
$
|
27,114
|
|
|
$
|
328
|
|
|
$
|
1,976
|
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
29,447
|
|
Cargo
|
|
568
|
|
|
—
|
|
|
31
|
|
|
34
|
|
|
—
|
|
|
633
|
|
||||||
Other
|
|
3,924
|
|
|
—
|
|
|
(2,007
|
)
|
|
14
|
|
|
—
|
|
|
1,931
|
|
||||||
Total operating revenues
|
|
31,606
|
|
|
328
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
32,011
|
|
||||||
Total operating expenses
|
|
28,238
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
104
|
|
|
28,419
|
|
||||||
Operating income
|
|
3,368
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
3,592
|
|
||||||
Total nonoperating expense, net
|
|
(709
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
104
|
|
|
(605
|
)
|
||||||
Income before income taxes
|
|
2,659
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,987
|
|
||||||
Income tax provision
|
|
998
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,122
|
|
||||||
Net income
|
|
$
|
1,661
|
|
|
$
|
204
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,865
|
|
Diluted earnings per common share
|
|
$
|
3.35
|
|
|
|
|
|
|
|
|
|
|
$
|
3.76
|
|
|
As Reported
|
|
New Revenue Standard
|
|
As Recast
|
||||||
Deferred tax asset
|
$
|
427
|
|
|
$
|
1,389
|
|
|
$
|
1,816
|
|
Air traffic liability
|
3,978
|
|
|
64
|
|
|
4,042
|
|
|||
Current loyalty program liability
|
2,791
|
|
|
330
|
|
|
3,121
|
|
|||
Noncurrent loyalty program liability
|
—
|
|
|
5,701
|
|
|
5,701
|
|
|||
Total stockholders' equity (deficit)
|
3,926
|
|
|
(4,706
|
)
|
|
(780
|
)
|
•
|
may make it more difficult for us to satisfy our obligations under our indebtedness;
|
•
|
may limit our ability to obtain additional funding for working capital, capital expenditures, acquisitions, investments, integration costs, and general corporate purposes, and adversely affect the terms on which such funding can be obtained;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and other obligations, thereby reducing the funds available for other purposes;
|
•
|
make us more vulnerable to economic downturns, industry conditions and catastrophic external events, particularly relative to competitors with lower relative levels of financial leverage;
|
•
|
contain covenants requiring us to maintain an aggregate of at least $2.0 billion of unrestricted cash and cash equivalents and amounts available to be drawn under revolving credit facilities;
|
•
|
contain restrictive covenants that could:
|
•
|
limit our ability to merge, consolidate, sell assets, incur additional indebtedness, issue preferred stock, make investments and pay dividends;
|
•
|
significantly constrain our ability to respond, or respond quickly, to unexpected disruptions in our own operations, the U.S. or global economies, or the businesses in which we operate, or to take advantage of opportunities that would improve our business, operations, or competitive position versus other airlines;
|
•
|
limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business and economic conditions; and
|
•
|
result in an event of default under our indebtedness.
|
•
|
changes in law that affect the services that can be offered by airlines in particular markets and at particular airports, or the types of fees that can be charged to passengers;
|
•
|
the granting and timing of certain governmental approvals (including antitrust or foreign government approvals) needed for codesharing alliances, joint businesses and other arrangements with other airlines;
|
•
|
restrictions on competitive practices (for example, court orders, or agency regulations or orders, that would curtail an airline’s ability to respond to a competitor);
|
•
|
the adoption of new passenger security standards or regulations that impact customer service standards;
|
•
|
restrictions on airport operations, such as restrictions on the use of slots at airports or the auction or reallocation of slot rights currently held by us; and
|
•
|
the adoption of more restrictive locally-imposed noise restrictions.
|
•
|
actual or potential changes in international, national, regional and local economic, business and financial conditions, including recession, inflation, higher interest rates, wars, terrorist attacks and political instability;
|
•
|
changes in consumer preferences, perceptions, spending patterns and demographic trends;
|
•
|
changes in the competitive environment due to industry consolidation, changes in airline alliance affiliations, and other factors;
|
•
|
actual or potential disruptions to the ATC systems;
|
•
|
increases in costs of safety, security, and environmental measures;
|
•
|
outbreaks of diseases that affect travel behavior; and
|
•
|
weather and natural disasters.
|
•
|
AAG’s operating and financial results failing to meet the expectations of securities analysts or investors;
|
•
|
changes in financial estimates or recommendations by securities analysts;
|
•
|
material announcements by us or our competitors;
|
•
|
movements in fuel prices;
|
•
|
expectations regarding our capital deployment program, including any existing or potential future share repurchase programs and any future dividend payments that may be declared by our Board of Directors, or any determination to cease repurchasing stock or paying dividends;
|
•
|
new regulatory pronouncements and changes in regulatory guidelines;
|
•
|
general and industry-specific economic conditions;
|
•
|
changes in our key personnel;
|
•
|
distributions of shares of AAG common stock pursuant to the Plan, including distributions from the disputed claims reserve established under the plan of reorganization upon the resolution of the underlying claims;
|
•
|
public sales of a substantial number of shares of AAG common stock or issuances of AAG common stock upon the exercise or conversion of convertible securities, options, warrants, restricted stock unit awards, stock appreciation rights, or similar rights;
|
•
|
increases or decreases in reported holdings by insiders or other significant stockholders;
|
•
|
fluctuations in trading volume; and
|
•
|
changes in market values of airline companies as well as general market conditions.
|
•
|
advance notice procedures for stockholder proposals to be considered at stockholders’ meetings;
|
•
|
the ability of our Board of Directors to fill vacancies on the board;
|
•
|
a prohibition against stockholders taking action by written consent;
|
•
|
holders are restricted from calling a special meeting unless they hold at least 20% of our outstanding shares and follow the procedures provided for in the amended Bylaws;
|
•
|
a requirement that holders of at least 80% of the voting power of the shares entitled to vote in the election of directors approve any amendment of our Bylaws submitted to stockholders for approval; and
|
•
|
super-majority voting requirements to modify or amend specified provisions of our Certificate of Incorporation.
|
Exhibit
Number
|
Description
|
|
|
10.1
|
|
10.2
|
|
12.1
|
|
12.2
|
|
31.1
|
|
31.2
|
|
31.3
|
|
31.4
|
|
32.1
|
|
32.2
|
|
101.1
|
Interactive data files pursuant to Rule 405 of Regulation S-T.
|
|
|
|
|
|
|
|
American Airlines Group Inc.
|
|
|
|
|
Date: October 25, 2018
|
By:
|
|
/s/ Derek J. Kerr
|
|
|
|
Derek J. Kerr
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
|
|
|
|
|
|
|
American Airlines, Inc.
|
|
|
|
|
Date: October 25, 2018
|
By:
|
|
/s/ Derek J. Kerr
|
|
|
|
Derek J. Kerr
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Name of Bank
|
2018 Incremental Term Loan Commitment
|
JPMorgan Chase Bank, N.A.
|
$500,000,000.00
|
Total
|
$500,000,000.00
|
1.
|
NEO AIRCRAFT DEFERRAL
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
1
|
1.1
|
The Seller and the Buyer agree to defer the Scheduled Delivery Month, or Scheduled Delivery Quarter, as applicable, for each of the following Aircraft as follows (each, a “
Deferred Aircraft
”):
|
Aircraft Type
|
CAC ID No.
|
“
Amendment 9 Scheduled Delivery Quarter
”
or
“
Amendment 9 Scheduled Delivery Month
”,
as the case may be
|
“
Amendment 10 Scheduled Delivery Quarter
”
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
1.2
|
In respect of the Predelivery Payments paid by the Buyer to the Seller in respect of Deferred Aircraft [*CTR] will be [*CTR] applied [*CTR].
|
1.3
|
The deferral of the Deferred Aircraft does not have any effect on any guarantee set forth in Amended and Restated Letter Agreement No. 11K, Letter Agreement No. 11K-1, or Amended and Restated Letter Agreement No. 11L.
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
2
|
1.4
|
Clause 7.3.1 of Letter Agreement No. 2 is hereby deleted in its entirety and restated as follows:
|
(i)
|
[*CTR];
|
(ii)
|
[*CTR];
|
(iii)
|
[*CTR]; and
|
(iv)
|
[*CTR]”
|
1.5
|
Clause 7.3.2 of Letter Agreement No. 2 is hereby deleted in its entirety and restated as follows:
|
(i)
|
[*CTR]:
|
(a)
|
[*CTR];
|
(b)
|
[*CTR];
|
(c)
|
[*CTR]; and
|
(d)
|
[*CTR].
|
(ii)
|
[*CTR]:
|
(a)
|
[*CTR];
|
(b)
|
[*CTR]; and
|
(c)
|
[*CTR]”
|
1.6
|
Notwithstanding anything to the contrary in the Agreement, with respect to the [*CTR]. The Seller [*CTR].
|
2.
|
DELIVERY SCHEDULES
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
3
|
3.
|
REFERENCES
|
(i)
|
each reference in Letter Agreement No. 2 to “this Letter Agreement”, “hereunder”, “hereof” or words of like import referring to Letter Agreement No. 2 shall mean and be a reference to Letter Agreement No. 2 as amended by this Amendment; and
|
(ii)
|
each reference in the Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Agreement shall mean and be a reference to the Agreement as amended by this Amendment.
|
4.
|
EFFECT OF AMENDMENT
|
4.1
|
Upon execution, this Amendment will constitute a valid amendment to the Agreement and the Agreement will be deemed to be amended to the extent herein provided and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment supersedes any previous understandings, commitments or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.
|
4.2
|
This Amendment will constitute an integral, nonseverable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Amendment will be governed by the provisions of the Agreement, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
5.
|
ASSIGNMENT
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
4
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
5
|
Aircraft Rank
|
Type
|
Scheduled Delivery Month/Year
or Scheduled Delivery Quarter/Year |
CAC ID No.
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
6
|
Aircraft Rank
|
Type
|
Scheduled Delivery Month/Year
or Scheduled Delivery Quarter/Year |
CAC ID No.
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
7
|
Aircraft Rank
|
Type
|
Scheduled Delivery Month/Year
or Scheduled Delivery Quarter/Year |
CAC ID No.
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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|
[*CTR]
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[*CTR]
|
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|
[*CTR]
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|
[*CTR]
|
[*CTR]
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|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
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|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
8
|
Aircraft Rank
|
Type
|
Scheduled Delivery Month/Year
or Scheduled Delivery Quarter/Year |
CAC ID No.
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
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|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
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[*CTR]
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[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
9
|
Aircraft Rank
|
Type
|
Scheduled Delivery Month/Year
or Scheduled Delivery Quarter/Year |
CAC ID No.
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
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[*CTR]
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[*CTR]
|
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|
[*CTR]
|
[*CTR]
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[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
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[*CTR]
|
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|
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|
[*CTR]
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|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
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|
[*CTR]
|
[*CTR]
|
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|
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|
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|
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|
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|
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|
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|
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|
[*CTR]
|
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|
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|
[*CTR]
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|
[*CTR]
|
[*CTR]
|
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|
[*CTR]
|
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|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
10
|
Aircraft Rank
|
Type
|
Scheduled Delivery Month/Year
or Scheduled Delivery Quarter/Year |
CAC ID No.
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
[*CTR]
|
CT1001520_AMD 10_AAL_A320 PA_EXECUTION
|
11
|
|
|
Nine Months Ended
September 30, 2018 |
||
Income before income taxes
|
|
$
|
1,498
|
|
Add: Total fixed charges (per below)
|
|
1,570
|
|
|
Less: Interest capitalized
|
|
56
|
|
|
Total earnings before income taxes
|
|
$
|
3,012
|
|
Fixed charges:
|
|
|
||
Interest
|
|
$
|
851
|
|
Portion of rental expense representative of the interest factor
|
|
719
|
|
|
Total fixed charges
|
|
$
|
1,570
|
|
Ratio of earnings to fixed charges
|
|
1.9
|
|
|
|
Nine Months Ended
September 30, 2018 |
||
Income before income taxes
|
|
$
|
1,725
|
|
Add: Total fixed charges (per below)
|
|
1,539
|
|
|
Less: Interest capitalized
|
|
56
|
|
|
Total earnings before income taxes
|
|
$
|
3,208
|
|
Fixed charges:
|
|
|
||
Interest
|
|
$
|
827
|
|
Portion of rental expense representative of the interest factor
|
|
712
|
|
|
Total fixed charges
|
|
$
|
1,539
|
|
Ratio of earnings to fixed charges
|
|
2.1
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Airlines Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ W. Douglas Parker
|
|
|
Name: W. Douglas Parker
|
|
|
Title: Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Airlines Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Derek J. Kerr
|
|
|
Name: Derek J. Kerr
|
|
|
Title: Executive Vice President and Chief
|
|
|
Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Airlines, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ W. Douglas Parker
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Name: W. Douglas Parker
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Title: Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of American Airlines, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Derek J. Kerr
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Name: Derek J. Kerr
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Title: Executive Vice President and Chief
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|
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Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ W. Douglas Parker
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Name: W. Douglas Parker
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Title: Chief Executive Officer
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Date: October 25, 2018
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/s/ Derek J. Kerr
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Name: Derek J. Kerr
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Title: Executive Vice President and Chief Financial Officer
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Date: October 25, 2018
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ W. Douglas Parker
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Name: W. Douglas Parker
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Title: Chief Executive Officer
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Date: October 25, 2018
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/s/ Derek J. Kerr
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Name: Derek J. Kerr
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Title: Executive Vice President and Chief Financial Officer
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Date: October 25, 2018
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