|
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|
FORM
|
10-Q
|
|
|
☒
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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.)
|
|
||||||||
1 Skyview Drive,
|
Fort Worth,
|
Texas
|
76155
|
|
|
|
(817)
|
963-1234
|
|
|
||
(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
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|
4333 Amon Carter Blvd.,
|
Fort Worth,
|
Texas
|
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|
76155
|
(Former name or former address if changed since last report.)
|
|
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American Airlines, Inc.
|
||
(Exact name of registrant as specified in its charter)
|
||
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Delaware
|
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13-1502798
|
|
||||||||
(State or other jurisdiction of incorporation or organization)
|
|
|
(I.R.S. Employer Identification No.)
|
|
||||||||
1 Skyview Drive,
|
Fort Worth,
|
Texas
|
76155
|
|
|
|
(817)
|
963-1234
|
|
|
||
(Address of principal executive offices, including zip code)
|
|
|
(Registrant’s telephone number, including area code)
|
|
4333 Amon Carter Blvd.,
|
Fort Worth,
|
Texas
|
|
|
76155
|
(Former name or former address if changed since last report.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value per share
|
|
AAL
|
|
The Nasdaq Global Select Market
|
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
|
|
|
|
Page
|
PART I: FINANCIAL INFORMATION
|
||
Item 1A.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 1B.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
PART II: OTHER INFORMATION
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating revenues:
|
|
|
|
||||||||||||
Passenger
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
31,663
|
|
|
$
|
30,714
|
|
Cargo
|
208
|
|
|
260
|
|
|
647
|
|
|
748
|
|
||||
Other
|
708
|
|
|
738
|
|
|
2,145
|
|
|
2,141
|
|
||||
Total operating revenues
|
11,911
|
|
|
11,559
|
|
|
34,455
|
|
|
33,603
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
1,989
|
|
|
2,234
|
|
|
5,710
|
|
|
6,100
|
|
||||
Salaries, wages and benefits
|
3,219
|
|
|
3,131
|
|
|
9,509
|
|
|
9,243
|
|
||||
Regional expenses
|
1,933
|
|
|
1,833
|
|
|
5,582
|
|
|
5,323
|
|
||||
Maintenance, materials and repairs
|
610
|
|
|
526
|
|
|
1,745
|
|
|
1,499
|
|
||||
Other rent and landing fees
|
530
|
|
|
502
|
|
|
1,568
|
|
|
1,463
|
|
||||
Aircraft rent
|
335
|
|
|
318
|
|
|
996
|
|
|
939
|
|
||||
Selling expenses
|
424
|
|
|
395
|
|
|
1,194
|
|
|
1,136
|
|
||||
Depreciation and amortization
|
499
|
|
|
468
|
|
|
1,469
|
|
|
1,366
|
|
||||
Special items, net
|
228
|
|
|
207
|
|
|
487
|
|
|
615
|
|
||||
Other
|
1,336
|
|
|
1,260
|
|
|
3,859
|
|
|
3,834
|
|
||||
Total operating expenses
|
11,103
|
|
|
10,874
|
|
|
32,119
|
|
|
31,518
|
|
||||
Operating income
|
808
|
|
|
685
|
|
|
2,336
|
|
|
2,085
|
|
||||
Nonoperating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
34
|
|
|
29
|
|
|
103
|
|
|
84
|
|
||||
Interest expense, net
|
(284
|
)
|
|
(262
|
)
|
|
(830
|
)
|
|
(788
|
)
|
||||
Other income (expense), net
|
(1
|
)
|
|
44
|
|
|
76
|
|
|
108
|
|
||||
Total nonoperating expense, net
|
(251
|
)
|
|
(189
|
)
|
|
(651
|
)
|
|
(596
|
)
|
||||
Income before income taxes
|
557
|
|
|
496
|
|
|
1,685
|
|
|
1,489
|
|
||||
Income tax provision
|
132
|
|
|
124
|
|
|
413
|
|
|
401
|
|
||||
Net income
|
$
|
425
|
|
|
$
|
372
|
|
|
$
|
1,272
|
|
|
$
|
1,088
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.96
|
|
|
$
|
0.81
|
|
|
$
|
2.85
|
|
|
$
|
2.34
|
|
Diluted
|
$
|
0.96
|
|
|
$
|
0.81
|
|
|
$
|
2.84
|
|
|
$
|
2.33
|
|
Weighted average shares outstanding (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic
|
441,915
|
|
|
460,526
|
|
|
446,291
|
|
|
465,452
|
|
||||
Diluted
|
442,401
|
|
|
461,507
|
|
|
447,139
|
|
|
466,908
|
|
||||
Cash dividends declared per common share
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
425
|
|
|
$
|
372
|
|
|
$
|
1,272
|
|
|
$
|
1,088
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Pension, retiree medical and other postretirement benefits
|
(19
|
)
|
|
(17
|
)
|
|
(53
|
)
|
|
(49
|
)
|
||||
Investments
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total other comprehensive loss, net of tax
|
(19
|
)
|
|
(17
|
)
|
|
(50
|
)
|
|
(49
|
)
|
||||
Total comprehensive income
|
$
|
406
|
|
|
$
|
355
|
|
|
$
|
1,222
|
|
|
$
|
1,039
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
||||||
Current assets
|
|
|
|
||||
Cash
|
$
|
312
|
|
|
$
|
275
|
|
Short-term investments
|
4,856
|
|
|
4,485
|
|
||
Restricted cash and short-term investments
|
158
|
|
|
154
|
|
||
Accounts receivable, net
|
1,850
|
|
|
1,706
|
|
||
Aircraft fuel, spare parts and supplies, net
|
1,800
|
|
|
1,522
|
|
||
Prepaid expenses and other
|
596
|
|
|
495
|
|
||
Total current assets
|
9,572
|
|
|
8,637
|
|
||
Operating property and equipment
|
|
|
|
||||
Flight equipment
|
42,320
|
|
|
41,499
|
|
||
Ground property and equipment
|
9,232
|
|
|
8,764
|
|
||
Equipment purchase deposits
|
1,567
|
|
|
1,278
|
|
||
Total property and equipment, at cost
|
53,119
|
|
|
51,541
|
|
||
Less accumulated depreciation and amortization
|
(18,500
|
)
|
|
(17,443
|
)
|
||
Total property and equipment, net
|
34,619
|
|
|
34,098
|
|
||
Operating lease right-of-use assets
|
8,842
|
|
|
9,151
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
4,091
|
|
|
4,091
|
|
||
Intangibles, net of accumulated amortization of $694 and $663, respectively
|
2,095
|
|
|
2,137
|
|
||
Deferred tax asset
|
666
|
|
|
1,145
|
|
||
Other assets
|
1,290
|
|
|
1,321
|
|
||
Total other assets
|
8,142
|
|
|
8,694
|
|
||
Total assets
|
$
|
61,175
|
|
|
$
|
60,580
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current maturities of long-term debt and finance leases
|
$
|
3,608
|
|
|
$
|
3,294
|
|
Accounts payable
|
1,932
|
|
|
1,773
|
|
||
Accrued salaries and wages
|
1,413
|
|
|
1,427
|
|
||
Air traffic liability
|
5,569
|
|
|
4,339
|
|
||
Loyalty program liability
|
3,197
|
|
|
3,267
|
|
||
Operating lease liabilities
|
1,672
|
|
|
1,654
|
|
||
Other accrued liabilities
|
2,169
|
|
|
2,342
|
|
||
Total current liabilities
|
19,560
|
|
|
18,096
|
|
||
Noncurrent liabilities
|
|
|
|
||||
Long-term debt and finance leases, net of current maturities
|
21,625
|
|
|
21,179
|
|
||
Pension and postretirement benefits
|
5,609
|
|
|
6,907
|
|
||
Loyalty program liability
|
5,325
|
|
|
5,272
|
|
||
Operating lease liabilities
|
7,535
|
|
|
7,902
|
|
||
Other liabilities
|
1,361
|
|
|
1,393
|
|
||
Total noncurrent liabilities
|
41,455
|
|
|
42,653
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity (deficit)
|
|
|
|
||||
Common stock, $0.01 par value; 1,750,000,000 shares authorized, 438,035,288 shares issued and outstanding at September 30, 2019; 460,610,870 shares issued and outstanding at December 31, 2018
|
4
|
|
|
5
|
|
||
Additional paid-in capital
|
4,208
|
|
|
4,964
|
|
||
Accumulated other comprehensive loss
|
(5,946
|
)
|
|
(5,896
|
)
|
||
Retained earnings
|
1,894
|
|
|
758
|
|
||
Total stockholders’ equity (deficit)
|
160
|
|
|
(169
|
)
|
||
Total liabilities and stockholders’ equity (deficit)
|
$
|
61,175
|
|
|
$
|
60,580
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
$
|
3,215
|
|
|
$
|
2,817
|
|
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures and aircraft purchase deposits
|
(3,129
|
)
|
|
(2,736
|
)
|
||
Proceeds from sale of property and equipment and sale-leaseback transactions
|
671
|
|
|
860
|
|
||
Purchases of short-term investments
|
(2,878
|
)
|
|
(2,590
|
)
|
||
Sales of short-term investments
|
2,524
|
|
|
2,816
|
|
||
Decrease (increase) in restricted short-term investments
|
(2
|
)
|
|
72
|
|
||
Other investing activities
|
(68
|
)
|
|
(5
|
)
|
||
Net cash used in investing activities
|
(2,882
|
)
|
|
(1,583
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
3,550
|
|
|
2,149
|
|
||
Payments on long-term debt and finance leases
|
(2,835
|
)
|
|
(2,440
|
)
|
||
Deferred financing costs
|
(50
|
)
|
|
(48
|
)
|
||
Treasury stock repurchases
|
(825
|
)
|
|
(837
|
)
|
||
Dividend payments
|
(135
|
)
|
|
(140
|
)
|
||
Other financing activities
|
(1
|
)
|
|
(2
|
)
|
||
Net cash used in financing activities
|
(296
|
)
|
|
(1,318
|
)
|
||
Net increase (decrease) in cash and restricted cash
|
37
|
|
|
(84
|
)
|
||
Cash and restricted cash at beginning of period
|
286
|
|
|
398
|
|
||
Cash and restricted cash at end of period (1)
|
$
|
323
|
|
|
$
|
314
|
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease liabilities:
|
|
|
|
||||
Operating leases
|
$
|
854
|
|
|
$
|
761
|
|
Finance leases
|
46
|
|
|
—
|
|
||
Settlement of bankruptcy obligations
|
7
|
|
|
—
|
|
||
Supplemental information:
|
|
|
|
||||
Interest paid, net
|
817
|
|
|
801
|
|
||
Income taxes paid
|
5
|
|
|
16
|
|
|
(1)
|
The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
|
Cash
|
$
|
312
|
|
|
$
|
303
|
|
Restricted cash included in restricted cash and short-term investments
|
11
|
|
|
11
|
|
||
Total cash and restricted cash
|
$
|
323
|
|
|
$
|
314
|
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
(Deficit)
|
|
Total
|
||||||||||
Balance at December 31, 2018
|
$
|
5
|
|
|
$
|
4,964
|
|
|
$
|
(5,896
|
)
|
|
$
|
758
|
|
|
$
|
(169
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
185
|
|
|
185
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Purchase and retirement of 16,947,393 shares of AAG common stock
|
—
|
|
|
(610
|
)
|
|
—
|
|
|
—
|
|
|
(610
|
)
|
|||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|||||
Issuance of 552,752 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Balance at March 31, 2019
|
5
|
|
|
4,371
|
|
|
(5,909
|
)
|
|
897
|
|
|
(636
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
662
|
|
|
662
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
(45
|
)
|
|||||
Issuance of 1,046,122 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||||
Settlement of single-dip unsecured claims held in Disputed Claims Reserve
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Share-based compensation expense
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Balance at June 30, 2019
|
5
|
|
|
4,386
|
|
|
(5,927
|
)
|
|
1,514
|
|
|
(22
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
425
|
|
|
425
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Purchase and retirement of 7,275,610 shares of AAG common stock
|
(1
|
)
|
|
(200
|
)
|
|
—
|
|
|
—
|
|
|
(201
|
)
|
|||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|
(45
|
)
|
|||||
Issuance of 48,547 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Balance at September 30, 2019
|
$
|
4
|
|
|
$
|
4,208
|
|
|
$
|
(5,946
|
)
|
|
$
|
1,894
|
|
|
$
|
160
|
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
(Deficit)
|
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
5
|
|
|
$
|
5,714
|
|
|
$
|
(5,776
|
)
|
|
$
|
(723
|
)
|
|
$
|
(780
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
159
|
|
|
159
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Purchase and retirement of 8,431,150 shares of AAG common stock
|
—
|
|
|
(449
|
)
|
|
—
|
|
|
—
|
|
|
(449
|
)
|
|||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
(48
|
)
|
|||||
Issuance of 313,744 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Impact of adoption of Accounting Standards Update (ASU) 2016-01 related to financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
|||||
Impact of adoption of ASU 2016-02 related to leases
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
197
|
|
|||||
Balance at March 31, 2018
|
5
|
|
|
5,279
|
|
|
(5,794
|
)
|
|
(355
|
)
|
|
(865
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
556
|
|
|
556
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Purchase and retirement of 8,175,007 shares of AAG common stock
|
—
|
|
|
(350
|
)
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
(47
|
)
|
|||||
Issuance of 1,286,622 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Balance at June 30, 2018
|
5
|
|
|
4,923
|
|
|
(5,809
|
)
|
|
154
|
|
|
(727
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
372
|
|
|
372
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Dividends declared on AAG common stock ($0.10 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
|||||
Issuance of 57,374 shares of AAG common stock pursuant to employee stock plans net of shares withheld for cash taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Balance at September 30, 2018
|
$
|
5
|
|
|
$
|
4,946
|
|
|
$
|
(5,826
|
)
|
|
$
|
480
|
|
|
$
|
(395
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fleet impairment (1)
|
$
|
201
|
|
|
$
|
—
|
|
|
$
|
201
|
|
|
$
|
—
|
|
Fleet restructuring expenses (2)
|
72
|
|
|
101
|
|
|
232
|
|
|
327
|
|
||||
Litigation reserve adjustments
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
|
45
|
|
||||
Merger integration expenses (3)
|
29
|
|
|
68
|
|
|
106
|
|
|
188
|
|
||||
Mark-to-market adjustments on bankruptcy obligations, net (4)
|
(22
|
)
|
|
17
|
|
|
(18
|
)
|
|
(39
|
)
|
||||
Severance expenses (5)
|
—
|
|
|
20
|
|
|
7
|
|
|
20
|
|
||||
Intangible asset impairment (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Labor contract expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Other operating charges, net
|
1
|
|
|
1
|
|
|
12
|
|
|
35
|
|
||||
Mainline operating special items, net
|
228
|
|
|
207
|
|
|
487
|
|
|
615
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Regional operating special items, net
|
6
|
|
|
2
|
|
|
6
|
|
|
1
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Mark-to-market adjustments on equity and other investments,
net (7) |
45
|
|
|
15
|
|
|
37
|
|
|
82
|
|
||||
Debt refinancing and extinguishment charges
|
7
|
|
|
—
|
|
|
14
|
|
|
13
|
|
||||
Other nonoperating income, net
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Nonoperating special items, net
|
44
|
|
|
15
|
|
|
43
|
|
|
95
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax special items, net (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
(1)
|
Fleet impairment includes a non-cash write-down of aircraft related to the planned retirement of our Embraer E190 fleet.
|
(2)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(3)
|
Merger integration expenses included costs associated with integration projects, principally our technical operations, flight attendant, human resources and payroll systems.
|
(4)
|
Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.
|
(5)
|
Severance expenses primarily included costs associated with reductions of management and support staff team members.
|
(6)
|
Intangible asset impairment includes a non-cash charge to write-off our Brazil route authority as a result of the U.S.-Brazil open skies agreement.
|
(7)
|
Mark-to-market adjustments on equity and other investments, net primarily relates to net unrealized losses associated with our equity investment in China Southern Airlines Company Limited (China Southern Airlines).
|
(8)
|
Income tax special items, net 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,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Basic EPS:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
425
|
|
|
$
|
372
|
|
|
$
|
1,272
|
|
|
$
|
1,088
|
|
Weighted average common shares outstanding (in thousands)
|
441,915
|
|
|
460,526
|
|
|
446,291
|
|
|
465,452
|
|
||||
Basic EPS
|
$
|
0.96
|
|
|
$
|
0.81
|
|
|
$
|
2.85
|
|
|
$
|
2.34
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS:
|
|
|
|
|
|
|
|
||||||||
Net income for purposes of computing diluted EPS
|
$
|
425
|
|
|
$
|
372
|
|
|
$
|
1,272
|
|
|
$
|
1,088
|
|
Share computation for diluted EPS (in thousands):
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares outstanding
|
441,915
|
|
|
460,526
|
|
|
446,291
|
|
|
465,452
|
|
||||
Dilutive effect of stock awards
|
486
|
|
|
981
|
|
|
848
|
|
|
1,456
|
|
||||
Diluted weighted average common shares outstanding
|
442,401
|
|
|
461,507
|
|
|
447,139
|
|
|
466,908
|
|
||||
Diluted EPS
|
$
|
0.96
|
|
|
$
|
0.81
|
|
|
$
|
2.84
|
|
|
$
|
2.33
|
|
|
|
|
|
|
|
|
|
||||||||
Restricted stock unit awards excluded from the calculation of
diluted EPS because inclusion would be antidilutive (in
thousands)
|
2,590
|
|
|
1,694
|
|
|
2,648
|
|
|
1,128
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Passenger revenue:
|
|
|
|
|
|
|
|
||||||||
Passenger travel
|
$
|
10,226
|
|
|
$
|
9,790
|
|
|
$
|
29,215
|
|
|
$
|
28,278
|
|
Loyalty revenue - travel (1)
|
769
|
|
|
771
|
|
|
2,448
|
|
|
2,436
|
|
||||
Total passenger revenue
|
10,995
|
|
|
10,561
|
|
|
31,663
|
|
|
30,714
|
|
||||
Cargo
|
208
|
|
|
260
|
|
|
647
|
|
|
748
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Loyalty revenue - marketing services
|
570
|
|
|
613
|
|
|
1,742
|
|
|
1,765
|
|
||||
Other revenue
|
138
|
|
|
125
|
|
|
403
|
|
|
376
|
|
||||
Total other revenue
|
708
|
|
|
738
|
|
|
2,145
|
|
|
2,141
|
|
||||
Total operating revenues
|
$
|
11,911
|
|
|
$
|
11,559
|
|
|
$
|
34,455
|
|
|
$
|
33,603
|
|
|
(1)
|
Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions earned through travel and mileage credits sold to co-branded credit card and other partners.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Domestic
|
$
|
7,814
|
|
|
$
|
7,424
|
|
|
$
|
23,048
|
|
|
$
|
22,071
|
|
Latin America
|
1,218
|
|
|
1,210
|
|
|
3,829
|
|
|
3,939
|
|
||||
Atlantic
|
1,596
|
|
|
1,504
|
|
|
3,677
|
|
|
3,471
|
|
||||
Pacific
|
367
|
|
|
423
|
|
|
1,109
|
|
|
1,233
|
|
||||
Total passenger revenue
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
31,663
|
|
|
$
|
30,714
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Loyalty program liability
|
$
|
8,522
|
|
|
$
|
8,539
|
|
Air traffic liability
|
5,569
|
|
|
4,339
|
|
||
Total
|
$
|
14,091
|
|
|
$
|
12,878
|
|
Balance at December 31, 2018
|
$
|
8,539
|
|
Deferral of revenue
|
2,587
|
|
|
Recognition of revenue (1)
|
(2,604
|
)
|
|
Balance at September 30, 2019 (2)
|
$
|
8,522
|
|
|
(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, 2019, 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, 2019
|
|
December 31, 2018
|
||||
Secured
|
|
|
|
||||
2013 Credit Facilities, variable interest rate of 3.80%, installments through 2025
|
$
|
1,807
|
|
|
$
|
1,825
|
|
2014 Credit Facilities, variable interest rate of 4.05%, installments through 2021
|
1,215
|
|
|
1,215
|
|
||
April 2016 Credit Facilities, variable interest rate of 4.04%, installments through 2023
|
970
|
|
|
980
|
|
||
December 2016 Credit Facilities, variable interest rate of 4.03%, installments through 2023
|
1,225
|
|
|
1,225
|
|
||
Enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 3.00% to 8.39%, averaging 4.07%, maturing from 2020 to 2032
|
11,929
|
|
|
11,648
|
|
||
Equipment loans and other notes payable, fixed and variable interest rates ranging from 3.16% to 7.31%, averaging 3.74%, maturing from 2019 to 2031
|
4,882
|
|
|
5,060
|
|
||
Special facility revenue bonds, fixed interest rates ranging from 5.00% to 8.00%, maturing from 2020 to 2031
|
754
|
|
|
798
|
|
||
|
22,782
|
|
|
22,751
|
|
||
Unsecured
|
|
|
|
||||
5.50% senior notes, interest only payments until due in October 2019
|
750
|
|
|
750
|
|
||
4.625% senior notes, interest only payments until due in March 2020
|
500
|
|
|
500
|
|
||
5.000% senior notes, interest only payments until due in June 2022
|
750
|
|
|
—
|
|
||
|
2,000
|
|
|
1,250
|
|
||
Total long-term debt
|
24,782
|
|
|
24,001
|
|
||
Less: Total unamortized debt discount, premium and issuance costs
|
223
|
|
|
222
|
|
||
Less: Current maturities
|
3,504
|
|
|
3,213
|
|
||
Long-term debt, net of current maturities
|
$
|
21,055
|
|
|
$
|
20,566
|
|
2013 Revolving Facility
|
$
|
1,000
|
|
2014 Revolving Facility
|
1,543
|
|
|
April 2016 Revolving Facility
|
300
|
|
|
Total
|
$
|
2,843
|
|
|
2019-1 Aircraft EETCs
|
||||
|
Series AA
|
|
Series A
|
|
Series B
|
Aggregate principal issued
|
$579 million
|
|
$289 million
|
|
$229 million
|
Remaining escrowed proceeds
|
$308 million
|
|
$154 million
|
|
$122 million
|
Fixed interest rate per annum
|
3.15%
|
|
3.50%
|
|
3.85%
|
Maturity date
|
February 2032
|
|
February 2032
|
|
February 2028
|
|
Fair Value Measurements as of September 30, 2019
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Short-term investments (1), (2):
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
671
|
|
|
$
|
671
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank notes/certificates of deposit/time deposits
|
3,047
|
|
|
—
|
|
|
3,047
|
|
|
—
|
|
||||
Corporate obligations
|
888
|
|
|
—
|
|
|
888
|
|
|
—
|
|
||||
Repurchase agreements
|
250
|
|
|
—
|
|
|
250
|
|
|
—
|
|
||||
|
4,856
|
|
|
671
|
|
|
4,185
|
|
|
—
|
|
||||
Restricted cash and short-term investments (1)
|
158
|
|
|
15
|
|
|
143
|
|
|
—
|
|
||||
Long-term investments (3)
|
183
|
|
|
183
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
5,197
|
|
|
$
|
869
|
|
|
$
|
4,328
|
|
|
$
|
—
|
|
|
(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 $1.0 billion of bank notes/certificates of deposit/time deposits and $125 million of corporate obligations.
|
(3)
|
Long-term investments primarily include our equity investment in China Southern Airlines and are classified in other assets on the condensed consolidated balance sheets.
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Value |
|
Fair
Value |
|
Carrying
Value |
|
Fair
Value |
||||||||
Long-term debt, including current maturities
|
$
|
24,559
|
|
|
$
|
25,334
|
|
|
$
|
23,779
|
|
|
$
|
23,775
|
|
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Three Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
|
175
|
|
|
169
|
|
|
9
|
|
|
9
|
|
||||
Expected return on assets
|
|
(204
|
)
|
|
(226
|
)
|
|
(4
|
)
|
|
(6
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
7
|
|
|
7
|
|
|
(59
|
)
|
|
(59
|
)
|
||||
Unrecognized net loss (gain)
|
|
37
|
|
|
36
|
|
|
(8
|
)
|
|
(5
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
16
|
|
|
$
|
(13
|
)
|
|
$
|
(61
|
)
|
|
$
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Nine Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
|
527
|
|
|
507
|
|
|
26
|
|
|
26
|
|
||||
Expected return on assets
|
|
(611
|
)
|
|
(678
|
)
|
|
(12
|
)
|
|
(17
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
21
|
|
|
21
|
|
|
(177
|
)
|
|
(178
|
)
|
||||
Unrecognized net loss (gain)
|
|
113
|
|
|
108
|
|
|
(24
|
)
|
|
(15
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
52
|
|
|
$
|
(40
|
)
|
|
$
|
(184
|
)
|
|
$
|
(181
|
)
|
|
Pension, Retiree
Medical and Other Postretirement Benefits |
|
Unrealized Gain (Loss) on Investments
|
|
Income Tax
Benefit (Provision) (1) |
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(4,673
|
)
|
|
$
|
(5
|
)
|
|
$
|
(1,218
|
)
|
|
$
|
(5,896
|
)
|
Other comprehensive income (loss) before
reclassifications |
(1
|
)
|
|
4
|
|
|
(1
|
)
|
|
2
|
|
||||
Amounts reclassified from AOCI
|
(67
|
)
|
|
—
|
|
|
15
|
|
(2)
|
(52
|
)
|
||||
Net current-period other comprehensive income
(loss) |
(68
|
)
|
|
4
|
|
|
14
|
|
|
(50
|
)
|
||||
Balance at September 30, 2019
|
$
|
(4,741
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,204
|
)
|
|
$
|
(5,946
|
)
|
|
(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, |
|
|||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|||||||||||
Amortization of pension, retiree
medical and other postretirement benefits: |
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
|
$
|
(40
|
)
|
|
$
|
(40
|
)
|
|
$
|
(121
|
)
|
|
$
|
(121
|
)
|
|
Nonoperating other income (expense), net
|
Actuarial loss
|
|
22
|
|
|
23
|
|
|
69
|
|
|
72
|
|
|
Nonoperating other income (expense), net
|
||||
Total reclassifications for the period,
net of tax |
|
$
|
(18
|
)
|
|
$
|
(17
|
)
|
|
$
|
(52
|
)
|
|
$
|
(49
|
)
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Aircraft fuel and related taxes
|
$
|
485
|
|
|
$
|
506
|
|
|
$
|
1,395
|
|
|
$
|
1,369
|
|
Salaries, wages and benefits
|
461
|
|
|
403
|
|
|
1,310
|
|
|
1,175
|
|
||||
Capacity purchases from third-party regional carriers (1)
|
354
|
|
|
363
|
|
|
1,046
|
|
|
1,081
|
|
||||
Maintenance, materials and repairs
|
108
|
|
|
83
|
|
|
303
|
|
|
251
|
|
||||
Other rent and landing fees
|
167
|
|
|
155
|
|
|
495
|
|
|
455
|
|
||||
Aircraft rent
|
8
|
|
|
8
|
|
|
23
|
|
|
25
|
|
||||
Selling expenses
|
102
|
|
|
94
|
|
|
299
|
|
|
276
|
|
||||
Depreciation and amortization
|
84
|
|
|
76
|
|
|
246
|
|
|
241
|
|
||||
Special items, net
|
6
|
|
|
2
|
|
|
6
|
|
|
1
|
|
||||
Other
|
158
|
|
|
143
|
|
|
459
|
|
|
449
|
|
||||
Total regional expenses
|
$
|
1,933
|
|
|
$
|
1,833
|
|
|
$
|
5,582
|
|
|
$
|
5,323
|
|
|
(1)
|
During the three months ended September 30, 2019 and 2018, we recognized $150 million and $142 million, respectively, of expense under our capacity purchase agreement with Republic Airline Inc. (Republic). During the nine months ended September 30, 2019 and 2018, we recognized $442 million and $423 million, respectively, of expense under our capacity purchase agreement with Republic. We hold a 25% equity interest in Republic Airways Holdings Inc., the parent company of Republic.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating revenues:
|
|
|
|
|
|
||||||||||
Passenger
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
31,663
|
|
|
$
|
30,714
|
|
Cargo
|
208
|
|
|
260
|
|
|
647
|
|
|
748
|
|
||||
Other
|
707
|
|
|
735
|
|
|
2,139
|
|
|
2,132
|
|
||||
Total operating revenues
|
11,910
|
|
|
11,556
|
|
|
34,449
|
|
|
33,594
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
1,989
|
|
|
2,234
|
|
|
5,710
|
|
|
6,100
|
|
||||
Salaries, wages and benefits
|
3,217
|
|
|
3,129
|
|
|
9,503
|
|
|
9,234
|
|
||||
Regional expenses
|
1,913
|
|
|
1,810
|
|
|
5,616
|
|
|
5,275
|
|
||||
Maintenance, materials and repairs
|
610
|
|
|
526
|
|
|
1,745
|
|
|
1,499
|
|
||||
Other rent and landing fees
|
530
|
|
|
502
|
|
|
1,568
|
|
|
1,463
|
|
||||
Aircraft rent
|
335
|
|
|
318
|
|
|
996
|
|
|
939
|
|
||||
Selling expenses
|
424
|
|
|
395
|
|
|
1,194
|
|
|
1,136
|
|
||||
Depreciation and amortization
|
499
|
|
|
468
|
|
|
1,469
|
|
|
1,366
|
|
||||
Special items, net
|
228
|
|
|
207
|
|
|
487
|
|
|
615
|
|
||||
Other
|
1,337
|
|
|
1,261
|
|
|
3,860
|
|
|
3,835
|
|
||||
Total operating expenses
|
11,082
|
|
|
10,850
|
|
|
32,148
|
|
|
31,462
|
|
||||
Operating income
|
828
|
|
|
706
|
|
|
2,301
|
|
|
2,132
|
|
||||
Nonoperating income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
131
|
|
|
85
|
|
|
389
|
|
|
240
|
|
||||
Interest expense, net
|
(281
|
)
|
|
(259
|
)
|
|
(835
|
)
|
|
(764
|
)
|
||||
Other income (expense), net
|
(10
|
)
|
|
45
|
|
|
69
|
|
|
109
|
|
||||
Total nonoperating expense, net
|
(160
|
)
|
|
(129
|
)
|
|
(377
|
)
|
|
(415
|
)
|
||||
Income before income taxes
|
668
|
|
|
577
|
|
|
1,924
|
|
|
1,717
|
|
||||
Income tax provision
|
160
|
|
|
144
|
|
|
472
|
|
|
466
|
|
||||
Net income
|
$
|
508
|
|
|
$
|
433
|
|
|
$
|
1,452
|
|
|
$
|
1,251
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
508
|
|
|
$
|
433
|
|
|
$
|
1,452
|
|
|
$
|
1,251
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Pension, retiree medical and other postretirement benefits
|
(19
|
)
|
|
(17
|
)
|
|
(53
|
)
|
|
(50
|
)
|
||||
Investments
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total other comprehensive loss, net of tax
|
(19
|
)
|
|
(17
|
)
|
|
(50
|
)
|
|
(50
|
)
|
||||
Total comprehensive income
|
$
|
489
|
|
|
$
|
416
|
|
|
$
|
1,402
|
|
|
$
|
1,201
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash
|
$
|
303
|
|
|
$
|
265
|
|
Short-term investments
|
4,854
|
|
|
4,482
|
|
||
Restricted cash and short-term investments
|
158
|
|
|
154
|
|
||
Accounts receivable, net
|
1,872
|
|
|
1,755
|
|
||
Receivables from related parties, net
|
11,232
|
|
|
10,666
|
|
||
Aircraft fuel, spare parts and supplies, net
|
1,710
|
|
|
1,442
|
|
||
Prepaid expenses and other
|
594
|
|
|
493
|
|
||
Total current assets
|
20,723
|
|
|
19,257
|
|
||
Operating property and equipment
|
|
|
|
||||
Flight equipment
|
41,971
|
|
|
41,180
|
|
||
Ground property and equipment
|
8,891
|
|
|
8,466
|
|
||
Equipment purchase deposits
|
1,567
|
|
|
1,277
|
|
||
Total property and equipment, at cost
|
52,429
|
|
|
50,923
|
|
||
Less accumulated depreciation and amortization
|
(18,152
|
)
|
|
(17,123
|
)
|
||
Total property and equipment, net
|
34,277
|
|
|
33,800
|
|
||
Operating lease right-of-use assets
|
8,795
|
|
|
9,094
|
|
||
Other assets
|
|
|
|
||||
Goodwill
|
4,091
|
|
|
4,091
|
|
||
Intangibles, net of accumulated amortization of $694 and $663, respectively
|
2,095
|
|
|
2,137
|
|
||
Deferred tax asset
|
714
|
|
|
1,280
|
|
||
Other assets
|
1,184
|
|
|
1,219
|
|
||
Total other assets
|
8,084
|
|
|
8,727
|
|
||
Total assets
|
$
|
71,879
|
|
|
$
|
70,878
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current maturities of long-term debt and finance leases
|
$
|
2,356
|
|
|
$
|
2,547
|
|
Accounts payable
|
1,861
|
|
|
1,707
|
|
||
Accrued salaries and wages
|
1,355
|
|
|
1,363
|
|
||
Air traffic liability
|
5,569
|
|
|
4,339
|
|
||
Loyalty program liability
|
3,197
|
|
|
3,267
|
|
||
Operating lease liabilities
|
1,657
|
|
|
1,639
|
|
||
Other accrued liabilities
|
2,063
|
|
|
2,259
|
|
||
Total current liabilities
|
18,058
|
|
|
17,121
|
|
||
Noncurrent liabilities
|
|
|
|
||||
Long-term debt and finance leases, net of current maturities
|
20,857
|
|
|
20,650
|
|
||
Pension and postretirement benefits
|
5,570
|
|
|
6,863
|
|
||
Loyalty program liability
|
5,325
|
|
|
5,272
|
|
||
Operating lease liabilities
|
7,499
|
|
|
7,857
|
|
||
Other liabilities
|
1,310
|
|
|
1,345
|
|
||
Total noncurrent liabilities
|
40,561
|
|
|
41,987
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholder’s equity
|
|
|
|
||||
Common stock, $1.00 par value; 1,000 shares authorized, issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
16,881
|
|
|
16,802
|
|
||
Accumulated other comprehensive loss
|
(6,042
|
)
|
|
(5,992
|
)
|
||
Retained earnings
|
2,421
|
|
|
960
|
|
||
Total stockholder’s equity
|
13,260
|
|
|
11,770
|
|
||
Total liabilities and stockholder’s equity
|
$
|
71,879
|
|
|
$
|
70,878
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
$
|
2,910
|
|
|
$
|
1,295
|
|
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures and aircraft purchase deposits
|
(3,043
|
)
|
|
(2,697
|
)
|
||
Proceeds from sale of property and equipment and sale-leaseback transactions
|
671
|
|
|
855
|
|
||
Purchases of short-term investments
|
(2,878
|
)
|
|
(2,582
|
)
|
||
Sales of short-term investments
|
2,524
|
|
|
2,816
|
|
||
Decrease (increase) in restricted short-term investments
|
(2
|
)
|
|
72
|
|
||
Other investing activities
|
(68
|
)
|
|
(5
|
)
|
||
Net cash used in investing activities
|
(2,796
|
)
|
|
(1,541
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
2,800
|
|
|
2,149
|
|
||
Payments on long-term debt and finance leases
|
(2,835
|
)
|
|
(1,940
|
)
|
||
Deferred financing costs
|
(41
|
)
|
|
(48
|
)
|
||
Net cash provided by (used in) financing activities
|
(76
|
)
|
|
161
|
|
||
Net increase (decrease) in cash and restricted cash
|
38
|
|
|
(85
|
)
|
||
Cash and restricted cash at beginning of period
|
276
|
|
|
390
|
|
||
Cash and restricted cash at end of period (1)
|
$
|
314
|
|
|
$
|
305
|
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease liabilities:
|
|
|
|
||||
Operating leases
|
$
|
853
|
|
|
$
|
728
|
|
Finance leases
|
46
|
|
|
—
|
|
||
Settlement of bankruptcy obligations
|
7
|
|
|
—
|
|
||
Supplemental information:
|
|
|
|
||||
Interest paid, net
|
772
|
|
|
741
|
|
||
Income taxes paid
|
5
|
|
|
14
|
|
|
(1)
|
The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
|
Cash
|
$
|
303
|
|
|
$
|
294
|
|
Restricted cash included in restricted cash and short-term investments
|
11
|
|
|
11
|
|
||
Total cash and restricted cash
|
$
|
314
|
|
|
$
|
305
|
|
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Loss |
|
Retained
Earnings |
|
Total
|
||||||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
16,802
|
|
|
$
|
(5,992
|
)
|
|
$
|
960
|
|
|
$
|
11,770
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|
230
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Balance at March 31, 2019
|
—
|
|
|
16,827
|
|
|
(6,005
|
)
|
|
1,190
|
|
|
12,012
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
714
|
|
|
714
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Intercompany equity transfer
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Balance at June 30, 2019
|
—
|
|
|
16,859
|
|
|
(6,023
|
)
|
|
1,904
|
|
|
12,740
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
508
|
|
|
508
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Intercompany equity transfer
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|||||
Balance at September 30, 2019
|
$
|
—
|
|
|
$
|
16,881
|
|
|
$
|
(6,042
|
)
|
|
$
|
2,421
|
|
|
$
|
13,260
|
|
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Accumulated
Other Comprehensive Loss |
|
Retained
Earnings (Deficit) |
|
Total
|
||||||||||
Balance at December 31, 2017
|
$
|
—
|
|
|
$
|
16,716
|
|
|
$
|
(5,873
|
)
|
|
$
|
(955
|
)
|
|
$
|
9,888
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|
209
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Impact of adoption of Accounting Standards Update (ASU) 2016-01 related to financial instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
60
|
|
|||||
Impact of adoption of ASU 2016-02 related to leases
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
197
|
|
|||||
Balance at March 31, 2018
|
—
|
|
|
16,740
|
|
|
(5,891
|
)
|
|
(489
|
)
|
|
10,360
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
609
|
|
|
609
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Balance at June 30, 2018
|
—
|
|
|
16,760
|
|
|
(5,906
|
)
|
|
120
|
|
|
10,974
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
433
|
|
|
433
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Share-based compensation expense
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|||||
Balance at September 30, 2018
|
$
|
—
|
|
|
$
|
16,783
|
|
|
$
|
(5,923
|
)
|
|
$
|
553
|
|
|
$
|
11,413
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Fleet impairment (1)
|
$
|
201
|
|
|
$
|
—
|
|
|
$
|
201
|
|
|
$
|
—
|
|
Fleet restructuring expenses (2)
|
72
|
|
|
101
|
|
|
232
|
|
|
327
|
|
||||
Litigation reserve adjustments
|
(53
|
)
|
|
—
|
|
|
(53
|
)
|
|
45
|
|
||||
Merger integration expenses (3)
|
29
|
|
|
68
|
|
|
106
|
|
|
188
|
|
||||
Mark-to-market adjustments on bankruptcy obligations, net (4)
|
(22
|
)
|
|
17
|
|
|
(18
|
)
|
|
(39
|
)
|
||||
Severance expenses (5)
|
—
|
|
|
20
|
|
|
7
|
|
|
20
|
|
||||
Intangible asset impairment (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||
Labor contract expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
Other operating charges, net
|
1
|
|
|
1
|
|
|
12
|
|
|
35
|
|
||||
Mainline operating special items, net
|
228
|
|
|
207
|
|
|
487
|
|
|
615
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Mark-to-market adjustments on equity and other investments,
net (7) |
45
|
|
|
15
|
|
|
37
|
|
|
82
|
|
||||
Debt refinancing and extinguishment charges
|
7
|
|
|
—
|
|
|
14
|
|
|
13
|
|
||||
Nonoperating special items, net
|
52
|
|
|
15
|
|
|
51
|
|
|
95
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax special items, net (8)
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
(1)
|
Fleet impairment includes a non-cash write-down of aircraft related to the planned retirement of American's Embraer E190 fleet.
|
(2)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(3)
|
Merger integration expenses included costs associated with integration projects, principally American's technical operations, flight attendant, human resources and payroll systems.
|
(4)
|
Bankruptcy obligations that will be settled in shares of AAG common stock are marked-to-market based on AAG's stock price.
|
(5)
|
Severance expenses primarily included costs associated with reductions of management and support staff team members.
|
(6)
|
Intangible asset impairment includes a non-cash charge to write-off American's Brazil route authority as a result of the U.S.-Brazil open skies agreement.
|
(7)
|
Mark-to-market adjustments on equity and other investments, net primarily relates to net unrealized losses associated with American's equity investment in China Southern Airlines Company Limited (China Southern Airlines).
|
(8)
|
Income tax special items, net 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,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Passenger revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Passenger travel
|
$
|
10,226
|
|
|
$
|
9,790
|
|
|
$
|
29,215
|
|
|
$
|
28,278
|
|
Loyalty revenue - travel (1)
|
769
|
|
|
771
|
|
|
2,448
|
|
|
2,436
|
|
||||
Total passenger revenue
|
10,995
|
|
|
10,561
|
|
|
31,663
|
|
|
30,714
|
|
||||
Cargo
|
208
|
|
|
260
|
|
|
647
|
|
|
748
|
|
||||
Other:
|
|
|
|
|
|
|
|
|
|
||||||
Loyalty revenue - marketing services
|
570
|
|
|
613
|
|
|
1,742
|
|
|
1,765
|
|
||||
Other revenue
|
137
|
|
|
122
|
|
|
397
|
|
|
367
|
|
||||
Total other revenue
|
707
|
|
|
735
|
|
|
2,139
|
|
|
2,132
|
|
||||
Total operating revenues
|
$
|
11,910
|
|
|
$
|
11,556
|
|
|
$
|
34,449
|
|
|
$
|
33,594
|
|
|
(1)
|
Loyalty revenue included in passenger revenue is principally comprised of mileage credit redemptions earned through travel and mileage credits sold to co-branded credit card and other partners.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Domestic
|
$
|
7,814
|
|
|
$
|
7,424
|
|
|
$
|
23,048
|
|
|
$
|
22,071
|
|
Latin America
|
1,218
|
|
|
1,210
|
|
|
3,829
|
|
|
3,939
|
|
||||
Atlantic
|
1,596
|
|
|
1,504
|
|
|
3,677
|
|
|
3,471
|
|
||||
Pacific
|
367
|
|
|
423
|
|
|
1,109
|
|
|
1,233
|
|
||||
Total passenger revenue
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
31,663
|
|
|
$
|
30,714
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
(In millions)
|
||||||
Loyalty program liability
|
$
|
8,522
|
|
|
$
|
8,539
|
|
Air traffic liability
|
5,569
|
|
|
4,339
|
|
||
Total
|
$
|
14,091
|
|
|
$
|
12,878
|
|
Balance at December 31, 2018
|
$
|
8,539
|
|
Deferral of revenue
|
2,587
|
|
|
Recognition of revenue (1)
|
(2,604
|
)
|
|
Balance at September 30, 2019 (2)
|
$
|
8,522
|
|
|
(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, 2019, 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, 2019
|
|
December 31, 2018
|
||||
Secured
|
|
|
|
||||
2013 Credit Facilities, variable interest rate of 3.80%, installments through 2025
|
$
|
1,807
|
|
|
$
|
1,825
|
|
2014 Credit Facilities, variable interest rate of 4.05%, installments through 2021
|
1,215
|
|
|
1,215
|
|
||
April 2016 Credit Facilities, variable interest rate of 4.04%, installments through 2023
|
970
|
|
|
980
|
|
||
December 2016 Credit Facilities, variable interest rate of 4.03%, installments through 2023
|
1,225
|
|
|
1,225
|
|
||
Enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 3.00% to 8.39%, averaging 4.07%, maturing from 2020 to 2032
|
11,929
|
|
|
11,648
|
|
||
Equipment loans and other notes payable, fixed and variable interest rates ranging from 3.16% to 7.31%, averaging 3.74%, maturing from 2019 to 2031
|
4,882
|
|
|
5,060
|
|
||
Special facility revenue bonds, fixed interest rate of 5.00%, maturing from 2020 to 2031
|
725
|
|
|
769
|
|
||
Total long-term debt
|
22,753
|
|
|
22,722
|
|
||
Less: Total unamortized debt discount, premium and issuance costs
|
215
|
|
|
219
|
|
||
Less: Current maturities
|
2,252
|
|
|
2,466
|
|
||
Long-term debt, net of current maturities
|
$
|
20,286
|
|
|
$
|
20,037
|
|
2013 Revolving Facility
|
$
|
1,000
|
|
2014 Revolving Facility
|
1,543
|
|
|
April 2016 Revolving Facility
|
300
|
|
|
Total
|
$
|
2,843
|
|
|
2019-1 Aircraft EETCs
|
||||
|
Series AA
|
|
Series A
|
|
Series B
|
Aggregate principal issued
|
$579 million
|
|
$289 million
|
|
$229 million
|
Remaining escrowed proceeds
|
$308 million
|
|
$154 million
|
|
$122 million
|
Fixed interest rate per annum
|
3.15%
|
|
3.50%
|
|
3.85%
|
Maturity date
|
February 2032
|
|
February 2032
|
|
February 2028
|
|
Fair Value Measurements as of September 30, 2019
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Short-term investments (1), (2):
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
670
|
|
|
$
|
670
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Bank notes/certificates of deposit/time deposits
|
3,046
|
|
|
—
|
|
|
3,046
|
|
|
—
|
|
||||
Corporate obligations
|
888
|
|
|
—
|
|
|
888
|
|
|
—
|
|
||||
Repurchase agreements
|
250
|
|
|
—
|
|
|
250
|
|
|
—
|
|
||||
|
4,854
|
|
|
670
|
|
|
4,184
|
|
|
—
|
|
||||
Restricted cash and short-term investments (1)
|
158
|
|
|
15
|
|
|
143
|
|
|
—
|
|
||||
Long-term investments (3)
|
183
|
|
|
183
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
5,195
|
|
|
$
|
868
|
|
|
$
|
4,327
|
|
|
$
|
—
|
|
|
(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 $1.0 billion of bank notes/certificates of deposit/time deposits and $125 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 the condensed consolidated balance sheets.
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Value |
|
Fair
Value |
|
Carrying
Value |
|
Fair
Value |
||||||||
Long-term debt, including current maturities
|
$
|
22,538
|
|
|
$
|
23,277
|
|
|
$
|
22,503
|
|
|
$
|
22,497
|
|
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Three Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
|
174
|
|
|
168
|
|
|
9
|
|
|
9
|
|
||||
Expected return on assets
|
|
(203
|
)
|
|
(225
|
)
|
|
(4
|
)
|
|
(6
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
7
|
|
|
7
|
|
|
(59
|
)
|
|
(59
|
)
|
||||
Unrecognized net loss (gain)
|
|
37
|
|
|
35
|
|
|
(8
|
)
|
|
(5
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
16
|
|
|
$
|
(14
|
)
|
|
$
|
(61
|
)
|
|
$
|
(60
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Pension Benefits
|
|
Retiree Medical and Other
Postretirement Benefits |
||||||||||||
Nine Months Ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Service cost
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Interest cost
|
|
524
|
|
|
504
|
|
|
26
|
|
|
26
|
|
||||
Expected return on assets
|
|
(609
|
)
|
|
(675
|
)
|
|
(12
|
)
|
|
(17
|
)
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (benefit)
|
|
21
|
|
|
21
|
|
|
(177
|
)
|
|
(178
|
)
|
||||
Unrecognized net loss (gain)
|
|
113
|
|
|
107
|
|
|
(24
|
)
|
|
(15
|
)
|
||||
Net periodic benefit cost (income)
|
|
$
|
51
|
|
|
$
|
(41
|
)
|
|
$
|
(184
|
)
|
|
$
|
(181
|
)
|
|
Pension, Retiree
Medical and Other Postretirement Benefits |
|
Unrealized Gain (Loss) on Investments
|
|
Income Tax
Benefit (Provision) (1) |
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
(4,658
|
)
|
|
$
|
(5
|
)
|
|
$
|
(1,329
|
)
|
|
$
|
(5,992
|
)
|
Other comprehensive income (loss) before
reclassifications |
(1
|
)
|
|
4
|
|
|
(1
|
)
|
|
2
|
|
||||
Amounts reclassified from AOCI
|
(67
|
)
|
|
—
|
|
|
15
|
|
(2)
|
(52
|
)
|
||||
Net current-period other comprehensive income
(loss) |
(68
|
)
|
|
4
|
|
|
14
|
|
|
(50
|
)
|
||||
Balance at September 30, 2019
|
$
|
(4,726
|
)
|
|
$
|
(1
|
)
|
|
$
|
(1,315
|
)
|
|
$
|
(6,042
|
)
|
|
(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, |
|
|||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||||
Amortization of pension, retiree
medical and other postretirement benefits: |
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service benefit
|
|
$
|
(40
|
)
|
|
$
|
(40
|
)
|
|
$
|
(121
|
)
|
|
$
|
(121
|
)
|
|
Nonoperating other income (expense), net
|
Actuarial loss
|
|
22
|
|
|
23
|
|
|
69
|
|
|
71
|
|
|
Nonoperating other income (expense), net
|
||||
Total reclassifications for the period,
net of tax |
|
$
|
(18
|
)
|
|
$
|
(17
|
)
|
|
$
|
(52
|
)
|
|
$
|
(50
|
)
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Aircraft fuel and related taxes
|
$
|
485
|
|
|
$
|
506
|
|
|
$
|
1,395
|
|
|
$
|
1,369
|
|
Salaries, wages and benefits
|
76
|
|
|
86
|
|
|
241
|
|
|
254
|
|
||||
Capacity purchases from third-party regional carriers (1)
|
900
|
|
|
817
|
|
|
2,665
|
|
|
2,440
|
|
||||
Maintenance, materials and repairs
|
14
|
|
|
1
|
|
|
23
|
|
|
6
|
|
||||
Other rent and landing fees
|
159
|
|
|
148
|
|
|
472
|
|
|
436
|
|
||||
Aircraft rent
|
8
|
|
|
7
|
|
|
23
|
|
|
20
|
|
||||
Selling expenses
|
102
|
|
|
94
|
|
|
299
|
|
|
275
|
|
||||
Depreciation and amortization
|
72
|
|
|
65
|
|
|
210
|
|
|
200
|
|
||||
Other
|
97
|
|
|
86
|
|
|
288
|
|
|
275
|
|
||||
Total regional expenses
|
$
|
1,913
|
|
|
$
|
1,810
|
|
|
$
|
5,616
|
|
|
$
|
5,275
|
|
|
(1)
|
During the three months ended September 30, 2019 and 2018, American recognized $150 million and $142 million, respectively, of expense under its capacity purchase agreement with Republic Airline Inc. (Republic). During the nine months ended September 30, 2019 and 2018, American recognized $442 million and $423 million, respectively, of expense under its capacity purchase agreement with Republic. American holds a 25% equity interest in Republic Airways Holdings Inc., the parent company of Republic.
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
AAG (1)
|
$
|
13,382
|
|
|
$
|
12,808
|
|
AAG’s wholly-owned subsidiaries (2)
|
(2,150
|
)
|
|
(2,142
|
)
|
||
Total
|
$
|
11,232
|
|
|
$
|
10,666
|
|
|
(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.
|
(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)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Passenger revenue
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
434
|
|
|
4.1
|
|
Cargo revenue
|
208
|
|
|
260
|
|
|
(52
|
)
|
|
(19.9
|
)
|
|||
Other operating revenue
|
708
|
|
|
738
|
|
|
(30
|
)
|
|
(4.1
|
)
|
|||
Total operating revenues
|
11,911
|
|
|
11,559
|
|
|
352
|
|
|
3.0
|
|
|||
Mainline and regional aircraft fuel and related taxes
|
2,474
|
|
|
2,740
|
|
|
(266
|
)
|
|
(9.7
|
)
|
|||
Salaries, wages and benefits
|
3,219
|
|
|
3,131
|
|
|
88
|
|
|
2.8
|
|
|||
Total operating expenses
|
11,103
|
|
|
10,874
|
|
|
229
|
|
|
2.1
|
|
|||
Operating income
|
808
|
|
|
685
|
|
|
123
|
|
|
18.0
|
|
|||
Pre-tax income
|
557
|
|
|
496
|
|
|
61
|
|
|
12.4
|
|
|||
Income tax provision
|
132
|
|
|
124
|
|
|
8
|
|
|
7.1
|
|
|||
Net income
|
425
|
|
|
372
|
|
|
53
|
|
|
14.2
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Pre-tax income
|
$
|
557
|
|
|
$
|
496
|
|
|
$
|
61
|
|
|
12.4
|
|
Adjusted for: Total pre-tax net special items (1)
|
278
|
|
|
224
|
|
|
54
|
|
|
24.0
|
|
|||
Pre-tax income excluding net special items
|
$
|
835
|
|
|
$
|
720
|
|
|
$
|
115
|
|
|
16.0
|
|
|
(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 of this report for details on the components of net special items.
|
•
|
Raised $961 million from enhanced equipment trust certificates (EETCs) and other aircraft and flight equipment financings, of which $643 million was used to repay existing indebtedness; and
|
•
|
Raised $111 million from aircraft sale-leaseback transactions.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Reconciliation of Pre-Tax Income Excluding Net Special Items:
|
|
|
|
|
|
|
|
||||||||
Pre-tax income - GAAP
|
$
|
557
|
|
|
$
|
496
|
|
|
$
|
1,685
|
|
|
$
|
1,489
|
|
Pre-tax net special items (1):
|
|
|
|
|
|
|
|
||||||||
Operating special items, net
|
234
|
|
|
209
|
|
|
493
|
|
|
616
|
|
||||
Nonoperating special items, net
|
44
|
|
|
15
|
|
|
43
|
|
|
95
|
|
||||
Total pre-tax net special items
|
278
|
|
|
224
|
|
|
536
|
|
|
711
|
|
||||
Pre-tax income excluding net special items
|
$
|
835
|
|
|
$
|
720
|
|
|
$
|
2,221
|
|
|
$
|
2,200
|
|
|
(1)
|
See Note 2 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information on net special items.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Reconciliation of Total Operating Costs per Available Seat
Mile (CASM) Excluding Net Special Items and Fuel:
|
|
|
|
|
|
|
|
||||||||
(In millions)
|
|
|
|
|
|
|
|
||||||||
Total operating expenses - GAAP
|
$
|
11,103
|
|
|
$
|
10,874
|
|
|
$
|
32,119
|
|
|
$
|
31,518
|
|
Operating net special items:
|
|
|
|
|
|
|
|
||||||||
Mainline operating special items, net (1)
|
(228
|
)
|
|
(207
|
)
|
|
(487
|
)
|
|
(615
|
)
|
||||
Regional operating special items, net
|
(6
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|
(1
|
)
|
||||
Fuel:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes - mainline
|
(1,989
|
)
|
|
(2,234
|
)
|
|
(5,710
|
)
|
|
(6,100
|
)
|
||||
Aircraft fuel and related taxes - regional
|
(485
|
)
|
|
(506
|
)
|
|
(1,395
|
)
|
|
(1,369
|
)
|
||||
Total operating expenses, excluding net special items and fuel
|
$
|
8,395
|
|
|
$
|
7,925
|
|
|
$
|
24,521
|
|
|
$
|
23,433
|
|
(In millions)
|
|
|
|
|
|
|
|
||||||||
Total Available Seat Miles (ASM)
|
75,820
|
|
|
75,039
|
|
|
214,816
|
|
|
213,756
|
|
||||
(In cents)
|
|
|
|
|
|
|
|
||||||||
Total operating CASM
|
14.64
|
|
|
14.49
|
|
|
14.95
|
|
|
14.74
|
|
||||
Operating net special items per ASM:
|
|
|
|
|
|
|
|
||||||||
Mainline operating special items, net (1)
|
(0.30
|
)
|
|
(0.28
|
)
|
|
(0.23
|
)
|
|
(0.29
|
)
|
||||
Regional operating special items, net
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Fuel per ASM:
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes - mainline
|
(2.62
|
)
|
|
(2.98
|
)
|
|
(2.66
|
)
|
|
(2.85
|
)
|
||||
Aircraft fuel and related taxes - regional
|
(0.64
|
)
|
|
(0.67
|
)
|
|
(0.65
|
)
|
|
(0.64
|
)
|
||||
Total operating CASM, excluding net special items and fuel
|
11.07
|
|
|
10.56
|
|
|
11.41
|
|
|
10.96
|
|
|
(1)
|
See Note 2 to AAG’s Condensed Consolidated Financial Statements in Part I, Item 1A for further information on net special items.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|||||||||
Revenue passenger miles (millions) (a)
|
64,874
|
|
|
61,865
|
|
|
4.9
|
%
|
|
182,334
|
|
|
175,589
|
|
|
3.8
|
%
|
Available seat miles (millions) (b)
|
75,820
|
|
|
75,039
|
|
|
1.0
|
%
|
|
214,816
|
|
|
213,756
|
|
|
0.5
|
%
|
Passenger load factor (percent) (c)
|
85.6
|
|
|
82.4
|
|
|
3.2
|
pts
|
|
84.9
|
|
|
82.1
|
|
|
2.8
|
pts
|
Yield (cents) (d)
|
16.95
|
|
|
17.07
|
|
|
(0.7
|
)%
|
|
17.37
|
|
|
17.49
|
|
|
(0.7
|
)%
|
Passenger revenue per available seat mile (cents) (e)
|
14.50
|
|
|
14.07
|
|
|
3.0
|
%
|
|
14.74
|
|
|
14.37
|
|
|
2.6
|
%
|
Total revenue per available seat mile (cents) (f)
|
15.71
|
|
|
15.40
|
|
|
2.0
|
%
|
|
16.04
|
|
|
15.72
|
|
|
2.0
|
%
|
Aircraft at end of period (g)
|
1,552
|
|
|
1,541
|
|
|
0.7
|
%
|
|
1,552
|
|
|
1,541
|
|
|
0.7
|
%
|
Fuel consumption (gallons in millions)
|
1,209
|
|
|
1,190
|
|
|
1.5
|
%
|
|
3,420
|
|
|
3,367
|
|
|
1.6
|
%
|
Average aircraft fuel price including related taxes (dollars per gallon)
|
2.05
|
|
|
2.30
|
|
|
(11.1
|
)%
|
|
2.08
|
|
|
2.22
|
|
|
(6.4
|
)%
|
Full-time equivalent employees at end of period
|
131,900
|
|
|
130,500
|
|
|
1.1
|
%
|
|
131,900
|
|
|
130,500
|
|
|
1.1
|
%
|
Operating cost per available seat mile (cents) (h)
|
14.64
|
|
|
14.49
|
|
|
1.0
|
%
|
|
14.95
|
|
|
14.74
|
|
|
1.4
|
%
|
|
(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 ASMs.
|
(g)
|
Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes seven Embraer 140 regional aircraft that are in temporary storage.
|
(h)
|
Operating cost per available seat mile (CASM) – Operating expenses divided by ASMs.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Passenger
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
434
|
|
|
4.1
|
|
Cargo
|
208
|
|
|
260
|
|
|
(52
|
)
|
|
(19.9
|
)
|
|||
Other
|
708
|
|
|
738
|
|
|
(30
|
)
|
|
(4.1
|
)
|
|||
Total operating revenues
|
$
|
11,911
|
|
|
$
|
11,559
|
|
|
$
|
352
|
|
|
3.0
|
|
|
|
|
Increase (Decrease)
vs. Three Months Ended September 30, 2018 |
||||||||||||||
|
Three Months Ended
September 30, 2019 |
|
RPMs
|
|
ASMs
|
|
Load
Factor
|
|
Passenger
Yield
|
|
PRASM
|
||||||
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
||||||
Passenger revenue
|
$
|
10,995
|
|
|
4.9%
|
|
1.0
|
%
|
|
3.2
|
pts
|
|
(0.7
|
)%
|
|
3.0
|
%
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Aircraft fuel and related taxes
|
$
|
1,989
|
|
|
$
|
2,234
|
|
|
$
|
(245
|
)
|
|
(11.0
|
)
|
Salaries, wages and benefits
|
3,219
|
|
|
3,131
|
|
|
88
|
|
|
2.8
|
|
|||
Maintenance, materials and repairs
|
610
|
|
|
526
|
|
|
84
|
|
|
15.9
|
|
|||
Other rent and landing fees
|
530
|
|
|
502
|
|
|
28
|
|
|
5.5
|
|
|||
Aircraft rent
|
335
|
|
|
318
|
|
|
17
|
|
|
5.2
|
|
|||
Selling expenses
|
424
|
|
|
395
|
|
|
29
|
|
|
7.3
|
|
|||
Depreciation and amortization
|
499
|
|
|
468
|
|
|
31
|
|
|
6.6
|
|
|||
Special items, net
|
228
|
|
|
207
|
|
|
21
|
|
|
10.2
|
|
|||
Other
|
1,336
|
|
|
1,260
|
|
|
76
|
|
|
6.1
|
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
|||||||
Aircraft fuel and related taxes
|
485
|
|
|
506
|
|
|
(21
|
)
|
|
(4.2
|
)
|
|||
Other
|
1,448
|
|
|
1,327
|
|
|
121
|
|
|
9.2
|
|
|||
Total operating expenses
|
$
|
11,103
|
|
|
$
|
10,874
|
|
|
$
|
229
|
|
|
2.1
|
|
|
Three Months Ended
September 30, |
|
Percent
Increase
(Decrease)
|
|||||
|
2019
|
|
2018
|
|
||||
|
(In cents, except percentage changes)
|
|||||||
Total CASM:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
2.62
|
|
|
2.98
|
|
|
(11.9
|
)
|
Salaries, wages and benefits
|
4.25
|
|
|
4.17
|
|
|
1.7
|
|
Maintenance, materials and repairs
|
0.80
|
|
|
0.70
|
|
|
14.7
|
|
Other rent and landing fees
|
0.70
|
|
|
0.67
|
|
|
4.4
|
|
Aircraft rent
|
0.44
|
|
|
0.42
|
|
|
4.1
|
|
Selling expenses
|
0.56
|
|
|
0.53
|
|
|
6.2
|
|
Depreciation and amortization
|
0.66
|
|
|
0.62
|
|
|
5.5
|
|
Special items, net
|
0.30
|
|
|
0.28
|
|
|
9.1
|
|
Other
|
1.76
|
|
|
1.68
|
|
|
5.0
|
|
Regional expenses:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
0.64
|
|
|
0.67
|
|
|
(5.2
|
)
|
Other
|
1.91
|
|
|
1.77
|
|
|
8.0
|
|
Total CASM
|
14.64
|
|
|
14.49
|
|
|
1.0
|
|
Special items, net
|
(0.30
|
)
|
|
(0.28
|
)
|
|
9.1
|
|
Regional operating special items, net
|
(0.01
|
)
|
|
—
|
|
|
nm (1)
|
|
Aircraft fuel and related taxes:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes - mainline
|
(2.62
|
)
|
|
(2.98
|
)
|
|
(11.9
|
)
|
Aircraft fuel and related taxes - regional
|
(0.64
|
)
|
|
(0.67
|
)
|
|
(5.2
|
)
|
Total CASM, excluding net special items and fuel
|
11.07
|
|
|
10.56
|
|
|
4.8
|
|
|
•
|
Mainline aircraft fuel and related taxes per ASM decreased 11.9% primarily due to an 11.2% decrease in the average price per gallon of fuel including related taxes to $2.03 in the third quarter of 2019 from $2.28 in the third quarter of 2018.
|
•
|
Maintenance, materials and repairs per ASM increased 14.7% in the third quarter of 2019 as compared to the third quarter of 2018, primarily due to a contract change that resulted in certain flight equipment transitioning to a flight hour based contract (referred to as power by the hour) whereby expense is incurred and recognized based on actual hours flown. Previously, this flight equipment was covered by a time and materials based contract whereby expense is incurred and recognized as maintenance is performed. An increase in the volume of airframe and engine overhauls performed under time and material based contracts as well as an increase in the volume of component part repairs also drove higher maintenance expenses in the third quarter of 2019.
|
•
|
Selling expenses per ASM increased 6.2% primarily due to higher commission expense and credit card fees driven by the overall increase in revenues.
|
•
|
Depreciation and amortization per ASM increased 5.5% due in part to airport and other facility improvements and the harmonization of interior configurations across the mainline fleet. Depreciation associated with our fleet renewal program also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes per ASM decreased 5.2% primarily due to a 10.9% decrease in the average price per gallon of fuel including related taxes to $2.13 in the third quarter of 2019 from $2.39 in the third quarter of 2018. This decrease was offset in part by a 7.6% increase in gallons of fuel consumed, principally due to increased capacity.
|
•
|
Regional other operating expenses per ASM increased 8.0% primarily driven by an 8.5% increase in regional capacity, principally from our wholly-owned regional carriers.
|
|
Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Fleet impairment (1)
|
$
|
201
|
|
|
$
|
—
|
|
Fleet restructuring expenses (2)
|
72
|
|
|
101
|
|
||
Litigation reserve adjustments
|
(53
|
)
|
|
—
|
|
||
Merger integration expenses (3)
|
29
|
|
|
68
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net (4)
|
(22
|
)
|
|
17
|
|
||
Severance expenses (5)
|
—
|
|
|
20
|
|
||
Other operating charges, net
|
1
|
|
|
1
|
|
||
Total mainline operating special items, net
|
228
|
|
|
207
|
|
||
Regional operating special items, net
|
6
|
|
|
2
|
|
||
Total operating special items, net
|
$
|
234
|
|
|
$
|
209
|
|
|
(1)
|
Fleet impairment includes a non-cash write-down of aircraft related to the planned retirement of our Embraer E190 fleet.
|
(2)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(3)
|
Merger integration expenses included costs associated with integration projects, principally our technical operations, flight attendant, human resources and payroll systems.
|
(4)
|
Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.
|
(5)
|
Severance expenses primarily included costs associated with reductions of management and support staff team members.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
34
|
|
|
$
|
29
|
|
|
$
|
5
|
|
|
18.0
|
|
Interest expense, net
|
(284
|
)
|
|
(262
|
)
|
|
(22
|
)
|
|
8.2
|
|
|||
Other income (expense), net
|
(1
|
)
|
|
44
|
|
|
(45
|
)
|
|
nm
|
|
|||
Total nonoperating expense, net
|
$
|
(251
|
)
|
|
$
|
(189
|
)
|
|
$
|
(62
|
)
|
|
32.7
|
|
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Passenger
|
$
|
31,663
|
|
|
$
|
30,714
|
|
|
$
|
949
|
|
|
3.1
|
|
Cargo
|
647
|
|
|
748
|
|
|
(101
|
)
|
|
(13.5
|
)
|
|||
Other
|
2,145
|
|
|
2,141
|
|
|
4
|
|
|
0.2
|
|
|||
Total operating revenues
|
$
|
34,455
|
|
|
$
|
33,603
|
|
|
$
|
852
|
|
|
2.5
|
|
|
|
|
Increase (Decrease)
vs. Nine Months Ended September 30, 2018 |
||||||||||||
|
Nine Months Ended
September 30, 2019 |
|
RPMs
|
|
ASMs
|
|
Load
Factor
|
|
Passenger
Yield
|
|
PRASM
|
||||
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
||||
Passenger revenue
|
$
|
31,663
|
|
|
3.8%
|
|
0.5%
|
|
2.8
|
pts
|
|
(0.7)%
|
|
2.6
|
%
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Aircraft fuel and related taxes
|
$
|
5,710
|
|
|
$
|
6,100
|
|
|
$
|
(390
|
)
|
|
(6.4
|
)
|
Salaries, wages and benefits
|
9,509
|
|
|
9,243
|
|
|
266
|
|
|
2.9
|
|
|||
Maintenance, materials and repairs
|
1,745
|
|
|
1,499
|
|
|
246
|
|
|
16.4
|
|
|||
Other rent and landing fees
|
1,568
|
|
|
1,463
|
|
|
105
|
|
|
7.2
|
|
|||
Aircraft rent
|
996
|
|
|
939
|
|
|
57
|
|
|
6.1
|
|
|||
Selling expenses
|
1,194
|
|
|
1,136
|
|
|
58
|
|
|
5.1
|
|
|||
Depreciation and amortization
|
1,469
|
|
|
1,366
|
|
|
103
|
|
|
7.5
|
|
|||
Special items, net
|
487
|
|
|
615
|
|
|
(128
|
)
|
|
(20.8
|
)
|
|||
Other
|
3,859
|
|
|
3,834
|
|
|
25
|
|
|
0.6
|
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
|||||||
Aircraft fuel and related taxes
|
1,395
|
|
|
1,369
|
|
|
26
|
|
|
1.8
|
|
|||
Other
|
4,187
|
|
|
3,954
|
|
|
233
|
|
|
5.9
|
|
|||
Total operating expenses
|
$
|
32,119
|
|
|
$
|
31,518
|
|
|
$
|
601
|
|
|
1.9
|
|
|
Nine Months Ended
September 30, |
|
Percent
Increase
(Decrease)
|
|||||
|
2019
|
|
2018
|
|
||||
|
(In cents, except percentage changes)
|
|||||||
Total CASM:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
2.66
|
|
|
2.85
|
|
|
(6.9
|
)
|
Salaries, wages and benefits
|
4.43
|
|
|
4.32
|
|
|
2.4
|
|
Maintenance, materials and repairs
|
0.81
|
|
|
0.70
|
|
|
15.8
|
|
Other rent and landing fees
|
0.73
|
|
|
0.68
|
|
|
6.6
|
|
Aircraft rent
|
0.46
|
|
|
0.44
|
|
|
5.6
|
|
Selling expenses
|
0.56
|
|
|
0.53
|
|
|
4.6
|
|
Depreciation and amortization
|
0.68
|
|
|
0.64
|
|
|
7.0
|
|
Special items, net
|
0.23
|
|
|
0.29
|
|
|
(21.1
|
)
|
Other
|
1.80
|
|
|
1.79
|
|
|
0.2
|
|
Regional expenses:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes
|
0.65
|
|
|
0.64
|
|
|
1.3
|
|
Other
|
1.95
|
|
|
1.85
|
|
|
5.4
|
|
Total CASM
|
14.95
|
|
|
14.74
|
|
|
1.4
|
|
Special items, net
|
(0.23
|
)
|
|
(0.29
|
)
|
|
(21.1
|
)
|
Aircraft fuel and related taxes:
|
|
|
|
|
|
|||
Aircraft fuel and related taxes - mainline
|
(2.66
|
)
|
|
(2.85
|
)
|
|
(6.9
|
)
|
Aircraft fuel and related taxes - regional
|
(0.65
|
)
|
|
(0.64
|
)
|
|
1.3
|
|
Total CASM, excluding net special items and fuel
|
11.41
|
|
10.96
|
|
|
4.1
|
|
•
|
Mainline aircraft fuel and related taxes per ASM decreased 6.9% primarily due to a 6.6% decrease in the average price per gallon of fuel including related taxes to $2.06 in the first nine months of 2019 from $2.20 in the first nine months of 2018.
|
•
|
Maintenance, materials and repairs per ASM increased 15.8% in the first nine months of 2019 as compared to the first nine months of 2018, primarily due to a contract change that resulted in certain flight equipment transitioning to a flight hour based contract (referred to as power by the hour) whereby expense is incurred and recognized based on actual hours flown. Previously, this flight equipment was covered by a time and materials based contract whereby expense is incurred and recognized as maintenance is performed. An increase in the volume of airframe and engine overhauls performed under time and material based contracts as well as an increase in the volume of component part repairs also drove higher maintenance expenses in the first nine months of 2019.
|
•
|
Other rent and landing fees per ASM increased 6.6% primarily due to an expansion at Dallas Fort Worth International Airport (DFW) that became fully operational in May 2019 and rate increases at certain hub airports in the first nine months of 2019 as compared to the first nine months of 2018.
|
•
|
Aircraft rent per ASM increased 5.6% primarily due to 22 leased mainline aircraft delivered subsequent to the third quarter of 2018.
|
•
|
Depreciation and amortization per ASM increased 7.0% due in part to airport and other facility improvements and the harmonization of interior configurations across the mainline fleet. Depreciation associated with our fleet renewal program also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes per ASM increased 1.3% primarily due to an 8.0% increase in gallons of fuel consumed, principally due to increased capacity. This increase was offset in part by a 5.7% decrease in the average
|
•
|
Regional other operating expenses per ASM increased 5.4% primarily driven by a 7.7% increase in regional capacity, principally from our wholly-owned regional carriers.
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Fleet impairment (1)
|
$
|
201
|
|
|
$
|
—
|
|
Fleet restructuring expenses (2)
|
232
|
|
|
327
|
|
||
Litigation reserve adjustments
|
(53
|
)
|
|
45
|
|
||
Merger integration expenses (3)
|
106
|
|
|
188
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net (4)
|
(18
|
)
|
|
(39
|
)
|
||
Severance expenses (5)
|
7
|
|
|
20
|
|
||
Intangible asset impairment (6)
|
—
|
|
|
26
|
|
||
Labor contract expenses
|
—
|
|
|
13
|
|
||
Other operating charges, net
|
12
|
|
|
35
|
|
||
Total mainline operating special items, net
|
487
|
|
|
615
|
|
||
Regional operating special items, net
|
6
|
|
|
1
|
|
||
Total operating special items, net
|
$
|
493
|
|
|
$
|
616
|
|
|
(1)
|
Fleet impairment includes a non-cash write-down of aircraft related to the planned retirement of our Embraer E190 fleet.
|
(2)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(3)
|
Merger integration expenses included costs associated with integration projects, principally our technical operations, flight attendant, human resources and payroll systems.
|
(4)
|
Bankruptcy obligations that will be settled in shares of our common stock are marked-to-market based on our stock price.
|
(5)
|
Severance expenses primarily included costs associated with reductions of management and support staff team members.
|
(6)
|
Intangible asset impairment includes a non-cash charge to write-off our Brazil route authority as a result of the U.S.-Brazil open skies agreement.
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
103
|
|
|
$
|
84
|
|
|
$
|
19
|
|
|
21.6
|
|
Interest expense, net
|
(830
|
)
|
|
(788
|
)
|
|
(42
|
)
|
|
5.3
|
|
|||
Other income, net
|
76
|
|
|
108
|
|
|
(32
|
)
|
|
(29.1
|
)
|
|||
Total nonoperating expense, net
|
$
|
(651
|
)
|
|
$
|
(596
|
)
|
|
$
|
(55
|
)
|
|
9.2
|
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Passenger
|
$
|
10,995
|
|
|
$
|
10,561
|
|
|
$
|
434
|
|
|
4.1
|
|
Cargo
|
208
|
|
|
260
|
|
|
(52
|
)
|
|
(19.9
|
)
|
|||
Other
|
707
|
|
|
735
|
|
|
(28
|
)
|
|
(3.9
|
)
|
|||
Total operating revenues
|
$
|
11,910
|
|
|
$
|
11,556
|
|
|
$
|
354
|
|
|
3.1
|
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Aircraft fuel and related taxes
|
$
|
1,989
|
|
|
$
|
2,234
|
|
|
$
|
(245
|
)
|
|
(11.0
|
)
|
Salaries, wages and benefits
|
3,217
|
|
|
3,129
|
|
|
88
|
|
|
2.8
|
|
|||
Maintenance, materials and repairs
|
610
|
|
|
526
|
|
|
84
|
|
|
15.9
|
|
|||
Other rent and landing fees
|
530
|
|
|
502
|
|
|
28
|
|
|
5.5
|
|
|||
Aircraft rent
|
335
|
|
|
318
|
|
|
17
|
|
|
5.2
|
|
|||
Selling expenses
|
424
|
|
|
395
|
|
|
29
|
|
|
7.3
|
|
|||
Depreciation and amortization
|
499
|
|
|
468
|
|
|
31
|
|
|
6.6
|
|
|||
Special items, net
|
228
|
|
|
207
|
|
|
21
|
|
|
10.2
|
|
|||
Other
|
1,337
|
|
|
1,261
|
|
|
76
|
|
|
6.1
|
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
|||||||
Aircraft fuel and related taxes
|
485
|
|
|
506
|
|
|
(21
|
)
|
|
(4.2
|
)
|
|||
Other
|
1,428
|
|
|
1,304
|
|
|
124
|
|
|
9.6
|
|
|||
Total operating expenses
|
$
|
11,082
|
|
|
$
|
10,850
|
|
|
$
|
232
|
|
|
2.1
|
|
•
|
Mainline aircraft fuel and related taxes decreased 11.0% primarily due to an 11.2% decrease in the average price per gallon of fuel including related taxes to $2.03 in the third quarter of 2019 from $2.28 in the third quarter of 2018.
|
•
|
Maintenance, materials and repairs increased 15.9% in the third quarter of 2019 as compared to the third quarter of 2018, primarily due to a contract change that resulted in certain flight equipment transitioning to a flight hour based contract (referred to as power by the hour) whereby expense is incurred and recognized based on actual hours flown. Previously, this flight equipment was covered by a time and materials based contract whereby expense is incurred and recognized as maintenance is performed. An increase in the volume of airframe and engine overhauls performed under time and material based contracts as well as an increase in the volume of component part repairs also drove higher maintenance expenses in the third quarter of 2019.
|
•
|
Selling expenses increased 7.3% primarily due to higher commission expense and credit card fees driven by the overall increase in revenues.
|
•
|
Depreciation and amortization increased 6.6% due in part to airport and other facility improvements and the harmonization of interior configurations across the mainline fleet. Depreciation associated with American's fleet renewal program also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes decreased 4.2% primarily due to a 10.9% decrease in the average price per gallon of fuel including related taxes to $2.13 in the third quarter of 2019 from $2.39 in the third quarter of 2018. This decrease was offset in part by a 7.6% increase in gallons of fuel consumed, principally due to increased capacity.
|
•
|
Regional other operating expenses increased 9.6% primarily driven by an increase in regional capacity.
|
|
Three Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Fleet impairment (1)
|
$
|
201
|
|
|
$
|
—
|
|
Fleet restructuring expenses (2)
|
72
|
|
|
101
|
|
||
Litigation reserve adjustments
|
(53
|
)
|
|
—
|
|
||
Merger integration expenses (3)
|
29
|
|
|
68
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net (4)
|
(22
|
)
|
|
17
|
|
||
Severance expenses (5)
|
—
|
|
|
20
|
|
||
Other operating charges, net
|
1
|
|
|
1
|
|
||
Total mainline operating special items, net
|
$
|
228
|
|
|
$
|
207
|
|
|
(1)
|
Fleet impairment includes a non-cash write-down of aircraft related to the planned retirement of American's Embraer E190 fleet.
|
(2)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(3)
|
Merger integration expenses included costs associated with integration projects, principally American's technical operations, flight attendant, human resources and payroll systems.
|
(4)
|
Bankruptcy obligations that will be settled in shares of AAG common stock are marked-to-market based on AAG's stock price.
|
(5)
|
Severance expenses primarily included costs associated with reductions of management and support staff team members.
|
|
Three Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
||||||||
|
2019
|
|
2018
|
|
|||||||||
|
(In millions, except percentage changes)
|
||||||||||||
Interest income
|
$
|
131
|
|
|
$
|
85
|
|
|
$
|
46
|
|
|
53.8
|
Interest expense, net
|
(281
|
)
|
|
(259
|
)
|
|
(22
|
)
|
|
8.4
|
|||
Other income (expense), net
|
(10
|
)
|
|
45
|
|
|
(55
|
)
|
|
nm
|
|||
Total nonoperating expense, net
|
$
|
(160
|
)
|
|
$
|
(129
|
)
|
|
$
|
(31
|
)
|
|
24.1
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Passenger
|
$
|
31,663
|
|
|
$
|
30,714
|
|
|
$
|
949
|
|
|
3.1
|
|
Cargo
|
647
|
|
|
748
|
|
|
(101
|
)
|
|
(13.5
|
)
|
|||
Other
|
2,139
|
|
|
2,132
|
|
|
7
|
|
|
0.3
|
|
|||
Total operating revenues
|
$
|
34,449
|
|
|
$
|
33,594
|
|
|
$
|
855
|
|
|
2.5
|
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Aircraft fuel and related taxes
|
$
|
5,710
|
|
|
$
|
6,100
|
|
|
$
|
(390
|
)
|
|
(6.4
|
)
|
Salaries, wages and benefits
|
9,503
|
|
|
9,234
|
|
|
269
|
|
|
2.9
|
|
|||
Maintenance, materials and repairs
|
1,745
|
|
|
1,499
|
|
|
246
|
|
|
16.4
|
|
|||
Other rent and landing fees
|
1,568
|
|
|
1,463
|
|
|
105
|
|
|
7.2
|
|
|||
Aircraft rent
|
996
|
|
|
939
|
|
|
57
|
|
|
6.1
|
|
|||
Selling expenses
|
1,194
|
|
|
1,136
|
|
|
58
|
|
|
5.1
|
|
|||
Depreciation and amortization
|
1,469
|
|
|
1,366
|
|
|
103
|
|
|
7.5
|
|
|||
Special items, net
|
487
|
|
|
615
|
|
|
(128
|
)
|
|
(20.8
|
)
|
|||
Other
|
3,860
|
|
|
3,835
|
|
|
25
|
|
|
0.7
|
|
|||
Regional expenses:
|
|
|
|
|
|
|
|
|||||||
Aircraft fuel and related taxes
|
1,395
|
|
|
1,369
|
|
|
26
|
|
|
1.8
|
|
|||
Other
|
4,221
|
|
|
3,906
|
|
|
315
|
|
|
8.0
|
|
|||
Total operating expenses
|
$
|
32,148
|
|
|
$
|
31,462
|
|
|
$
|
686
|
|
|
2.2
|
|
•
|
Mainline aircraft fuel and related taxes decreased 6.4% primarily due to a 6.6% decrease in the average price per gallon of fuel including related taxes to $2.06 in the first nine months of 2019 from $2.20 in the first nine months of 2018.
|
•
|
Maintenance, materials and repairs increased 16.4% in the first nine months of 2019 as compared to the first nine months of 2018, primarily due to a contract change that resulted in certain flight equipment transitioning to a flight hour based contract (referred to as power by the hour) whereby expense is incurred and recognized based on actual hours flown. Previously, this flight equipment was covered by a time and materials based contract whereby expense is incurred and recognized as maintenance is performed. An increase in the volume of airframe and engine overhauls performed under time and material based contracts as well as an increase in the volume of component part repairs also drove higher maintenance expenses in the first nine months of 2019.
|
•
|
Other rent and landing fees increased 7.2% primarily due to an expansion at DFW that became fully operational in May 2019 and rate increases at certain hub airports in the first nine months of 2019 as compared to the first nine months of 2018.
|
•
|
Aircraft rent increased 6.1% primarily due to 22 leased mainline aircraft delivered subsequent to the third quarter of 2018.
|
•
|
Depreciation and amortization increased 7.5% due in part to airport and other facility improvements and the harmonization of interior configurations across the mainline fleet. Depreciation associated with American's fleet renewal program also contributed to the increase.
|
•
|
Regional aircraft fuel and related taxes increased 1.8% primarily due to an 8.0% increase in gallons of fuel consumed, principally due to increased capacity. This increase was offset in part by a 5.7% decrease in the average price per gallon of fuel including related taxes to $2.15 in the first nine months of 2019 from $2.28 in the first nine months of 2018.
|
•
|
Regional other operating expenses increased 8.0% primarily driven by an increase in regional capacity.
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
Fleet impairment (1)
|
$
|
201
|
|
|
$
|
—
|
|
Fleet restructuring expenses (2)
|
232
|
|
|
327
|
|
||
Litigation reserve adjustments
|
(53
|
)
|
|
45
|
|
||
Merger integration expenses (3)
|
106
|
|
|
188
|
|
||
Mark-to-market adjustments on bankruptcy obligations, net (4)
|
(18
|
)
|
|
(39
|
)
|
||
Severance expenses (5)
|
7
|
|
|
20
|
|
||
Intangible asset impairment (6)
|
—
|
|
|
26
|
|
||
Labor contract expenses
|
—
|
|
|
13
|
|
||
Other operating charges, net
|
12
|
|
|
35
|
|
||
Total mainline operating special items, net
|
$
|
487
|
|
|
$
|
615
|
|
|
(1)
|
Fleet impairment includes a non-cash write-down of aircraft related to the planned retirement of American's Embraer E190 fleet.
|
(2)
|
Fleet restructuring expenses principally included accelerated depreciation and rent expense for aircraft and related equipment grounded or expected to be grounded earlier than planned.
|
(3)
|
Merger integration expenses included costs associated with integration projects, principally American's technical operations, flight attendant, human resources and payroll systems.
|
(4)
|
Bankruptcy obligations that will be settled in shares of AAG common stock are marked-to-market based on AAG's stock price.
|
(5)
|
Severance expenses primarily included costs associated with reductions of management and support staff team members.
|
(6)
|
Intangible asset impairment includes a non-cash charge to write-off American's Brazil route authority as a result of the U.S.-Brazil open skies agreement.
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease)
|
|
Percent
Increase
(Decrease)
|
|||||||||
|
2019
|
|
2018
|
|
||||||||||
|
(In millions, except percentage changes)
|
|||||||||||||
Interest income
|
$
|
389
|
|
|
$
|
240
|
|
|
$
|
149
|
|
|
62.1
|
|
Interest expense, net
|
(835
|
)
|
|
(764
|
)
|
|
(71
|
)
|
|
9.3
|
|
|||
Other income, net
|
69
|
|
|
109
|
|
|
(40
|
)
|
|
(37.1
|
)
|
|||
Total nonoperating expense, net
|
$
|
(377
|
)
|
|
$
|
(415
|
)
|
|
$
|
38
|
|
|
(9.0
|
)
|
|
AAG
|
|
American
|
||||||||||||
|
September 30, 2019
|
|
December 31, 2018
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||
Cash
|
$
|
312
|
|
|
$
|
275
|
|
|
$
|
303
|
|
|
$
|
265
|
|
Short-term investments
|
4,856
|
|
|
4,485
|
|
|
4,854
|
|
|
4,482
|
|
||||
Undrawn revolving credit facilities
|
2,843
|
|
|
2,843
|
|
|
2,843
|
|
|
2,843
|
|
||||
Total available liquidity
|
$
|
8,011
|
|
|
$
|
7,603
|
|
|
$
|
8,000
|
|
|
$
|
7,590
|
|
|
(1)
|
In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new Airbus aircraft imported from Europe. We are evaluating the impact of this announcement on our future Airbus deliveries. See Part II, Item 1A. Risk Factors - “We operate a global business with international operations that are subject to economic and political instability and have been, and in the future may continue to be, adversely affected by numerous events, circumstances or government actions beyond our control.”
|
(2)
|
On March 13, 2019, a directive from the FAA grounded all U.S.-registered Boeing 737 MAX aircraft. We currently have 76 Boeing 737 MAX Family aircraft on order and we have not taken delivery of any Boeing 737 MAX Family aircraft since the grounding. As a result of delivery delays of the Boeing 737 MAX aircraft caused by the grounding, we have updated the delivery schedule for the remainder of 2019 by moving 11 Boeing 737 MAX aircraft from 2019 into 2020. The extent of the delay to the scheduled deliveries of the Boeing 737 MAX aircraft included in the table above is expected to be impacted by the length of time the FAA order remains in place, Boeing's production rate and the pace at which Boeing can deliver aircraft following the lifting of the FAA order, among other factors. The above table reflects our estimate of future Boeing 737 MAX aircraft deliveries based on information currently available to us; however, the actual delivery schedule is expected to differ from the table above.
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
Remainder
of 2019 |
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024 and Thereafter
|
|
Total
|
||||||||||||||
American
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal amount (a), (c)
|
$
|
682
|
|
|
$
|
2,054
|
|
|
$
|
3,501
|
|
|
$
|
1,543
|
|
|
$
|
4,063
|
|
|
$
|
10,910
|
|
|
$
|
22,753
|
|
Interest obligations (b), (c)
|
236
|
|
|
820
|
|
|
704
|
|
|
578
|
|
|
491
|
|
|
1,199
|
|
|
4,028
|
|
|||||||
Finance lease obligations
|
29
|
|
|
147
|
|
|
123
|
|
|
127
|
|
|
110
|
|
|
287
|
|
|
823
|
|
|||||||
Aircraft and engine purchase
commitments (d)
|
730
|
|
|
1,985
|
|
|
943
|
|
|
1,348
|
|
|
1,542
|
|
|
7,426
|
|
|
13,974
|
|
|||||||
Operating lease commitments (e)
|
457
|
|
|
1,978
|
|
|
1,950
|
|
|
1,777
|
|
|
1,592
|
|
|
5,488
|
|
|
13,242
|
|
|||||||
Regional capacity purchase agreements (f)
|
288
|
|
|
1,095
|
|
|
1,011
|
|
|
879
|
|
|
755
|
|
|
1,313
|
|
|
5,341
|
|
|||||||
Minimum pension obligations (g)
|
—
|
|
|
625
|
|
|
671
|
|
|
939
|
|
|
909
|
|
|
1,263
|
|
|
4,407
|
|
|||||||
Retiree medical and other postretirement benefits
|
6
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
23
|
|
|
280
|
|
|
360
|
|
|||||||
Other purchase obligations (h)
|
668
|
|
|
3,371
|
|
|
3,579
|
|
|
684
|
|
|
115
|
|
|
157
|
|
|
8,574
|
|
|||||||
Total American Contractual Obligations
|
$
|
3,096
|
|
|
$
|
12,092
|
|
|
$
|
12,499
|
|
|
$
|
7,892
|
|
|
$
|
9,600
|
|
|
$
|
28,323
|
|
|
$
|
73,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
AAG Parent and Other AAG Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Principal amount (a)
|
$
|
750
|
|
|
$
|
505
|
|
|
$
|
2
|
|
|
$
|
752
|
|
|
$
|
2
|
|
|
$
|
18
|
|
|
$
|
2,029
|
|
Interest obligations (b)
|
43
|
|
|
51
|
|
|
39
|
|
|
21
|
|
|
1
|
|
|
4
|
|
|
159
|
|
|||||||
Minimum pension obligations (g)
|
—
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
6
|
|
|
18
|
|
|
39
|
|
|||||||
Operating lease commitments
|
5
|
|
|
16
|
|
|
15
|
|
|
13
|
|
|
7
|
|
|
22
|
|
|
78
|
|
|||||||
Total AAG Contractual Obligations
|
$
|
3,894
|
|
|
$
|
12,668
|
|
|
$
|
12,560
|
|
|
$
|
8,684
|
|
|
$
|
9,616
|
|
|
$
|
28,385
|
|
|
$
|
75,807
|
|
|
(a)
|
Amounts represent contractual amounts due. Excludes $215 million and $8 million of unamortized debt discount, premium and issuance costs as of September 30, 2019 for American and AAG Parent, 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, 2019.
|
(c)
|
Includes $11.9 billion of future principal payments and $2.4 billion of future interest payments as of September 30, 2019, related to EETCs associated with mortgage financings of certain aircraft and spare engines.
|
(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. The amounts in this line reflect the updated delivery schedule of Boeing 737 MAX aircraft described in footnote 2 to the table "Aircraft and Engine Purchase Commitments" above.
|
(e)
|
Includes $222 million of future minimum lease payments related to EETC leveraged lease financings of certain aircraft as of September 30, 2019.
|
(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
|
(g)
|
Includes minimum pension contributions based on actuarially determined estimates as of December 31, 2018 and is based on estimated payments through 2028. During the first nine months of 2019, we made $1.2 billion in contributions to fund our pension plans. These contributions exceeded the $786 million in minimum required contributions for 2019.
|
(h)
|
Includes purchase commitments for jet fuel, construction projects and information technology support.
|
•
|
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; and
|
•
|
contain restrictive covenants that could, among other things:
|
◦
|
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 fares offered or 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, including increases in such disasters and related costs caused by more severe weather due to climate change.
|
•
|
macro-economic conditions, including the price of fuel;
|
•
|
changes in market values of airline companies as well as general market conditions;
|
•
|
our operating and financial results failing to meet the expectations of securities analysts or investors;
|
•
|
changes in financial estimates or recommendations by securities analysts;
|
•
|
changes in our level of outstanding indebtedness and other obligations;
|
•
|
changes in our credit rating;
|
•
|
material announcements by us or our competitors;
|
•
|
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;
|
•
|
public sales of a substantial number of shares of AAG common stock or issuances of AAG common stock upon the exercise or conversion of restricted stock unit awards, stock appreciation rights, or other securities that may be issued from time to time;
|
•
|
increases or decreases in reported holdings by insiders or other significant stockholders; and
|
•
|
fluctuations in trading volume.
|
•
|
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;
|
•
|
stockholders 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.
|
Period
|
|
Total number of
shares purchased
|
|
Average price
paid per share
|
|
Total number of shares
purchased as part of
publicly announced
plan or program
|
|
Maximum dollar value of shares
that may be purchased under
the plan or program
(in millions)
|
July 2019
|
|
609,500
|
|
$30.75
|
|
609,500
|
|
$1,031
|
August 2019
|
|
5,141,278
|
|
$26.97
|
|
5,141,278
|
|
$893
|
September 2019
|
|
1,524,832
|
|
$27.94
|
|
1,524,832
|
|
$850
|
Exhibit
Number
|
Description
|
|
|
4.1
|
|
4.2
|
|
4.3
|
|
4.4
|
|
4.5
|
|
4.6
|
|
4.7
|
|
4.8
|
4.9
|
|
4.10
|
|
4.11
|
|
4.12
|
|
4.13
|
|
4.14
|
|
4.15
|
|
4.16
|
|
4.17
|
|
4.18
|
|
4.19
|
|
4.20
|
|
10.1
|
|
31.1
|
|
31.2
|
|
31.3
|
|
|
|
|
|
|
|
American Airlines Group Inc.
|
|
|
|
|
Date: October 24, 2019
|
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 24, 2019
|
By:
|
|
/s/ Derek J. Kerr
|
|
|
|
Derek J. Kerr
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
Reference
|
Replacement Reference
|
Letter Agreement AAL-PA-3219-LA-1302236R1
|
Letter Agreement AAL-PA-3219-LA-1302236R2
|
AGREED AND ACCEPTED
|
||
|
|
|
August 20, 2019
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE BOEING COMPANY
|
|
AMERICAN AIRLINES, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ The Boeing Company
|
|
/s/ American Airlines, Inc.
|
Signature
|
|
Signature
|
|
|
|
The Boeing Company
|
|
American Airlines, Inc.
|
Printed name
|
|
Printed name
|
|
|
|
Attorney-in-Fact
|
|
VP and Treasurer
|
Title
|
|
Title
|
LETTER AGREEMENTS
|
|
SA
NUMBER
|
|
3219-01
|
[****]
|
|
|
3219-02
|
Special Terms – Seats and In-Flight Entertainment
|
|
|
3219-04
|
[****]
|
|
|
3219-05R1
|
Spare Parts Commitments
|
SA-3
|
|
3219-06R1
|
Spare Parts Initial Provisioning
|
SA-3
|
|
3219-08R2
|
Open Configuration Matters WITHDRAWN
|
SA-8
|
|
6-1162-AKP-071R1
|
[****]
Terminated per AAL-PA-1977-LA-1105595 |
|
|
6-1162-AKP-072R2
|
[****]
Terminated per AAL-PA-1977-LA-1105595 |
|
|
6-1162-AKP-073R1
|
Accident Claims and Litigation
|
|
|
6-1162-CLO-1031R1
|
[****]
WITHDRAWN
|
SA-2
SA-3
|
|
6-1162-CLO-1032R1
|
[****]
Terminated |
SA-3
|
|
6-1162-CLO-1039
|
[****]
|
|
|
6-1162-CLO-1042
|
[****]
|
|
|
6-1162-CLO-1043R1
|
787 Inspection Process
|
SA-3
|
|
6-1162-CLO-1045R1
|
[****]
|
SA-2
|
|
6-1162-CLO-1046
|
SA-eE, COTS Software and End User License Matters
WITHDRAWN
|
SA-3
|
|
6-1162-CLO-1047R4
|
[****]
|
SA-11
|
|
6-1162-CLO-1048
|
Final Matters WITHDRAWN
|
SA-2
|
|
6-1162-CLO-1049R2
|
CS1 Matters
|
SA-6
|
|
6-1162-TRW-0664R2
|
Aircraft Purchase Rights and Substitution Rights
|
SA-11
|
|
|
Attachment A(R2) – MADP Exercise Dates WITHDRAWN
|
SA-11
|
|
|
Attachment B(R2) – QADP Exercise Dates WITHDRAWN
|
SA-11
|
|
|
Attachment C(R3) – MADP & QADP Rights Aircraft:
Description/Price Data Attachment C(R4)
|
SA-11
|
|
Attachment D – Form of Purchase Agreement Supplement
|
SA-11
|
|
|
Attachment E – Letter Agreements To Be Included In Purchase Agreement Supplement
|
SA-6
|
|
6-1162-TRW-0665
|
[****] WITHDRAWN
|
SA-3
|
|
6-1162-TRW-0666
|
[****] WITHDRAWN
|
SA-3
|
|
6-1162-TRW-0667R3
|
[****]
|
SA-11
|
|
6-1162-TRW-0668R1
|
Special Matters Relating to COTS Software and End User License Agreements
|
SA-3
|
|
6-1162-TRW-0670R1
|
Miscellaneous Commitments for Model 787 Aircraft
|
SA-3
|
|
6-1162-TRW-0671
|
[****]
WITHDRAWN
|
SA-3
|
|
6-1162-TRW-0672R1
|
Promotional Support Agreement
|
SA-3
|
|
6-1162-TRW-0673R1
|
Confidentiality
|
SA-3
|
|
6-1162-TRW-0674R4
|
Business Considerations
|
SA-11
|
|
AAL-PA-3219-LA-08836R2
|
[****]
|
SA-11
|
|
AAL-PA-3219-LA-08837R1
|
[****]
|
SA-6
|
|
AAL-PA-3219-LA-08838
|
[****]
|
SA-3
|
|
AAL-LA-1106678
|
Assignment Matters
|
SA-3
|
|
AAL-PA-3219-LA-1302236R2
|
[****]
|
SA-13
|
|
AAL-PA-3219-LA-1604503R1
|
787 [****] Matters
|
SA-8
|
|
AAL-PA-03219-LA-1701988
|
[****]
|
SA-10
|
|
AAL-PA-03219_LA-1804779
|
[****]
|
SA-11
|
|
AAL-PA-03219-LA-1802262R1
|
[****]
|
SA-12
|
|
AAL-PA-03219-LA-1802492
|
Open Configuration Matters
|
SA-11
|
ATTACHMENTS
|
|
|
Attachment 1
|
Schedule for [****] of 787-9 MADP Rights
|
SA-11
|
Attachment 2
|
Schedule for [****] of 787-9 QADP Rights
|
SA-11
|
Attachment 3
|
787-9 Purchase Rights Aircraft [****] Schedule
|
SA-11
|
|
|
The Boeing Company
P.O. Box 3707
Seattle, WA 98124‑2207
|
Subject:
|
[****]
|
Reference:
|
Purchase Agreement No. PA-3219 (Purchase Agreement) between The Boeing Company (Boeing) and American Airlines, Inc. (Customer) relating to Model 787 aircraft (Aircraft)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Boeing Company
P.O. Box 3707
Seattle, WA 98124‑2207
|
THE BOEING COMPANY
|
||
|
||
By
|
/s/ The Boeing Company
|
|
|
||
Its
|
Attorney-In-Fact
|
|
|
||
|
||
|
||
|
||
ACCEPTED AND AGREED TO this
|
||
|
||
Date:
|
August 20, 2019
|
|
|
||
AMERICAN AIRLINES, INC.
|
||
|
||
By
|
/s/ American Airlines, Inc.
|
|
|
||
Its
|
VP and Treasurer
|
|
|
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
[****]
|
|
|
|
|
|
(i)
|
[****];
|
(ii)
|
[****];
|
(iii)
|
[****];
|
(iv)
|
[****];
|
(v)
|
[****];
|
(vi)
|
[****];
|
(vii)
|
[****]; and
|
(viii)
|
[****]
|
(i)
|
as required, [****];
|
(ii)
|
[****] Boeing, Customer and [****]; and
|
(iii)
|
[****].
|
(i)
|
Boeing will [****].
|
(ii)
|
The [****] and Boeing, as determined by Boeing.
|
(iii)
|
The [****].
|
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.
|
|
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/s/ W. Douglas Parker
|
|
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Name: W. Douglas Parker
|
|
|
Title: Chief Executive Officer
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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:
|
(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, 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)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ W. Douglas Parker
|
Name: W. Douglas Parker
|
Title: Chief Executive Officer
|
Date: October 24, 2019
|
|
/s/ Derek J. Kerr
|
Name: Derek J. Kerr
|
Title: Executive Vice President and Chief Financial Officer
|
Date: October 24, 2019
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ W. Douglas Parker
|
Name: W. Douglas Parker
|
Title: Chief Executive Officer
|
Date: October 24, 2019
|
|
/s/ Derek J. Kerr
|
Name: Derek J. Kerr
|
Title: Executive Vice President and Chief Financial Officer
|
Date: October 24, 2019
|