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Information Technology : Technology Hardware, Storage & Peripherals | Mid Cap Value
Company profile

Western Digital Corporation (Western Digital) is a developer, manufacturer and provider of data storage devices and solutions that address the needs of the information technology (IT) industry and the infrastructure that enables the proliferation of data in virtually every industry. The Company's portfolio of offerings addresses three categories: Datacenter Devices and Solutions (capacity and performance enterprise hard disk drives (HDDs), enterprise solid state drives (SSDs), datacenter software and system solutions); Client Devices (mobile, desktop, gaming and digital video hard drives, client SSDs, embedded products and wafers), and Client Solutions (removable products, hard drive content solutions and flash content solutions). The Company develops and manufactures a portion of the recording heads and magnetic media used in its hard drive products.

Postmarket

Last Trade
Delayed
$44.90
0.02 (0.04%)
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Market Hours

Closing Price
$44.88
Day's Change
-0.97 (-2.12%)
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Day's High
46.54
Day's Low
44.74
Volume
(Heavy Day)
Volume:
4,834,076

10-day average volume:
3,896,748
4,834,076

American Airlines Reports Third-Quarter 2020 Financial Results

7:08 am ET October 22, 2020 (Globe Newswire) Print

American Airlines Group Inc. (NASDAQ: AAL) today reported its third-quarter 2020 financial results, including:

-- Third-quarter revenue of $3.2 billion, down 73% year-over-year on a 59% year-over-year reduction in total available seat miles (ASMs).

-- Third-quarter pretax loss of $3.1 billion. Excluding net special items, third-quarter pretax loss of $3.6 billion.

-- Third-quarter net loss of $2.4 billion, or ($4.71) per share. Excluding net special items, third-quarter net loss of $2.8 billion, or ($5.54) per share.

-- Ended third quarter with approximately $13.6 billion of total available liquidity. In addition, in October, the company increased its loan capacity by $2 billion through the CARES Act loan program to $7.5 billion. With this increase, the company's third-quarter pro forma liquidity balance is approximately $15.6 billion.

-- Announced authorization to issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.

"During the third quarter, we took action to reduce our costs, strengthen our financial position, and ensure our customers return to travel with confidence," said American Airlines Chairman and CEO Doug Parker. "The American Airlines team is doing a remarkable job taking care of our customers and each other during the most challenging time in our industry's history.

"We have a long road ahead and our team remains fully engaged and focused not just on managing through the pandemic, but on making sure we are prepared for when demand returns. We are confident that the continued efforts of our team and the actions we have taken will drive customer confidence and strengthen our company for the future."

Supporting team members, customers and communities

To ensure the safety and well-being of its team members and customers, American:

-- Upgraded its Clean Commitment by adding the electrostatic spraying solution SurfaceWise2 to its cleaning and safety program. SurfaceWise2 is approved by the EPA as the first-ever long-lasting product to help fight the spread of the novel coronavirus and it will be applied to American's entire fleet in the coming months.

-- Announced a preflight COVID-19 testing program to help reopen markets to travel. Testing options are now available to customers traveling to Hawaii and Costa Rica, with Jamaica and the Bahamas soon to follow.

-- Launched a new travel tool to help customers quickly see the current COVID-19 travel guidelines for domestic and international destinations.

-- Continues to work with the Global Biorisk Advisory Council for GBAC STAR Accreditation for its aircraft and lounges. American is the first airline to seek the accreditation and expects to receive the designation by the end of 2020.

To provide its customers additional flexibility, American:

-- Eliminated change fees for most domestic and short-haul international flying. American will also allow customers to keep the full value of their original tickets if they change their plans prior to scheduled travel.

-- Is giving customers the option to stand by on flights on the same day at no charge.

-- Enhanced its Basic Economy product to give customers the ability to tailor their travel experience, including upgrades, Preferred and Main Cabin Extra seats, priority boarding, and same-day flight changes.

-- Is allowing AAdvantage elite members to apply their current travel benefits when purchasing a Basic Economy fare.

-- Reopened additional Admirals Club lounges with enhanced cleaning and safety protocols as customers begin planning holiday travel.

To support the communities it serves, American:

-- More than doubled its cargo-only flying from August to September and operated more than 1,900 flights serving 32 destinations during the third quarter. To date, these cargo flights have helped the airline's customers move more than 85 million pounds of critical goods around the world amidst the COVID-19 outbreak. Through these efforts, the company's cargo revenue was $207 million in the third quarter, effectively flat year-over-year on a 59% reduction in total ASMs.

-- Donated more than 1 million pounds of food to fight hunger in communities around the world since the start of the pandemic. Through its partnership with Feeding America, and other charitable organizations, American has contributed its surplus food to help provide meals to families in need throughout the U.S., Europe, Asia and Latin America.

Conserving cash

American continues to take aggressive action to reduce costs and preserve cash. The airline estimates that it has removed approximately $17 billion from its operating and capital budgets for 2020. This has been achieved primarily through cost savings resulting from reduced flying. The company also:

-- Removed more than 150 aircraft from its fleet through early retirements or by placing aircraft into temporary storage. In addition to the previously announced retirements of the Boeing 757, Boeing 767, Embraer E190, Airbus A330-300, Bombardier CRJ-200 and certain other regional aircraft, the company recently decided to permanently retire all 15 of its Airbus A330-200 aircraft.

-- Reached an agreement with Boeing to secure rights to defer deliveries of 18 737 MAX aircraft scheduled to be delivered in 2021 and 2022 to 2023 and 2024. The company also finalized a series of sale-leaseback transactions to finance its remaining Airbus A321 aircraft deliveries in 2021. As a result, the company now has financing secured for all of its planned deliveries through 2021.

-- Made the difficult decision to proceed with furloughs to reduce headcount absent an extension of the CARES Act Payroll Support Program (PSP). In total, more than 20,000 team members have opted for an early out or long-term leave, and 19,000 team members were furloughed beginning Oct. 1. The company, along with its union partners, continues to aggressively fight for an extension of the PSP that would allow the airline to bring back those furloughed employees and reinstate service to small- and medium-sized markets that have suffered without the extension of funds.

-- Reduced its non-aircraft capital expense -- by $700 million in 2020 and another $300 million in 2021 -- through reductions in fleet modification work, the elimination of all new ground service equipment purchases, and pausing all noncritical facility investments and IT projects.

Bolstering liquidity

In addition to reducing its operating and capital expenditures, American continues to strengthen its liquidity position. The company:

-- Finalized a $5.5 billion loan agreement with the U.S. Department of the Treasury through the CARES Act loan program. In October, the company increased its loan capacity through the program to $7.5 billion.

-- Closed $1.2 billion of financing with Goldman Sachs Merchant Bank through two senior secured note transactions. American does not have any large non-aircraft debt maturities until its $750 million unsecured bonds mature in June 2022.

-- Received the final payments of allotted PSP funds, including an incremental $168 million of previously unallocated funds identified by the Treasury Department.

-- Announced authorization to issue up to $1 billion of equity in an at-the-market offering to further bolster liquidity.

-- Reduced its daily cash burn rate to approximately $44 million per day in the third quarter from approximately $58 million per day in the second quarter. The company presently expects its fourth-quarter cash burn rate to be approximately $25 to $30 million per day.

-- The company's third-quarter pro forma liquidity balance is approximately $15.6 billion and it expects to end the fourth quarter with more than $13 billion in total available liquidity, which excludes any proceeds from the $1 billion at-the-market equity offering.

Demand and capacity outlook

American saw improvements in passenger demand and load factors during the third quarter, but both continue to be significantly below 2019 levels. The company will continue to match its forward capacity with observed bookings trends and currently expects its fourth-quarter system capacity to be down more than 50% year over year, with long-haul international capacity down approximately 75% year over year.

Conference call and webcast details

The company will conduct a live audio webcast of its financial results call at 7:30 a.m. CDT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Nov. 22.

Notes

See the accompanying notes in the Financial Tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information.

-- The company recognized $519 million of operating net special items during the third quarter 2020. Mainline operating special items, net principally included $1.9 billion of Payroll Support Program (PSP) financial assistance, offset in part by $871 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs or who were involuntarily furloughed starting Oct. 1, 2020, as a result of reductions to the company's operation due to COVID-19 and $742 million of fleet impairment charges. Regional operating special items, net totaled $224 million and principally includes the PSP financial assistance.

Third quarter 2020 nonoperating special items, net totaled $21 million and principally included net unrealized gains associated with certain equity investments.

-- A reconciliation of this calculation can be found in the tables that follow.

About American Airlines Group

American's purpose is to care for people on life's journey. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL and the company's stock is included in the S&P 500. Learn more about what's happening at American by visiting news.aa.com and connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.

Cautionary Statement Regarding Forward-Looking Statements and Information

Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended (the Securities Act), the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "project," "could," "should," "would," "continue," "seek," "target," "guidance," "outlook," "if current trends continue," "optimistic," "forecast" and other similar words. Such statements include, but are not limited to, statements about the company's plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the company's current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 (especially in Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company's other filings with the Securities and Exchange Commission. There may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. In particular, the consequences of the COVID-19 outbreak to economic conditions and the travel industry in general and the financial position and operating results of the company in particular have been material, are changing rapidly, and cannot be predicted. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Forward looking statements speak only as of the date hereof or as of the dates indicated in the statement.

Corporate Communications

mediarelations@aa.com

Investor Relations

investor.relations@aa.com



American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
                                                     3 Months Ended September 30,                  Percent    9 Months Ended September 30,          Percent
                                                                 2020                2019          Change          2020               2019          Change
Operating revenues:
Passenger                                            $           2,540          $    10,995        (76.9 )    $    11,328        $    31,663        (64.2 )
Cargo                                                            207                 208           (0.4  )         484                647           (25.1 )
Other                                                            426                 708           (39.9 )         1,497              2,145         (30.2 )
Total operating revenues                                         3,173               11,911        (73.4 )         13,309             34,455        (61.4 )
Operating expenses:
Aircraft fuel and related taxes                                  453                 1,989         (77.2 )         2,065              5,710         (63.8 )
Salaries, wages and benefits                                     2,705               3,219         (16.0 )         8,384              9,509         (11.8 )
Regional expenses:
Fuel                                                             158                 485           (67.4 )         638                1,395         (54.2 )
Depreciation and amortization                                    79                  84            (6.4  )         247                246           0.3
Other                                                            677                 1,364         (50.3 )         2,753              3,941         (30.1 )
Maintenance, materials and repairs                               337                 610           (44.7 )         1,253              1,745         (28.2 )
Other rent and landing fees                                      367                 530           (30.8 )         1,149              1,568         (26.7 )
Aircraft rent                                                    336                 335           0.2             1,004              996           0.8
Selling expenses                                                 70                  424           (83.5 )         418                1,194         (65.0 )
Depreciation and amortization                                    498                 499           (0.3  )         1,557              1,469         6.0
Special items, net                                               (295        )       228           nm              (657    )          487           nm
Other                                                            659                 1,336         (50.7 )         2,404              3,859         (37.7 )
Total operating expenses                                         6,044               11,103        (45.6 )         21,215             32,119        (33.9 )
Operating income (loss)                                          (2,871      )       808           nm              (7,906  )          2,336         nm
Nonoperating income (expense):
Interest income                                                  5                   34            (84.9 )         36                 103           (64.9 )
Interest expense, net                                            (340        )       (284    )     19.6            (851    )          (830    )     2.6
Other income (expense), net                                      111                 (1      )     nm              77                 76            1.2
Total nonoperating expense, net                                  (224        )       (251    )     (10.8 )         (738    )          (651    )     13.4
Income (loss) before income taxes                                (3,095      )       557           nm              (8,644  )          1,685         nm
Income tax provision (benefit)                                   (696        )       132           nm              (1,937  )          413           nm
Net income (loss)                                    $           (2,399      )  $    425           nm         $    (6,707  )     $    1,272         nm
Earnings (loss) per common share:
Basic                                                $           (4.71       )  $    0.96                     $    (14.76  )     $    2.85
Diluted                                              $           (4.71       )  $    0.96                     $    (14.76  )     $    2.84
Weighted average shares outstanding (in thousands):
Basic                                                            509,049             441,915                       454,523            446,291
Diluted                                                          509,049             442,401                       454,523            447,139
Note: Percent change may not recalculate due to rounding.
Not meaningful or greater than 100% change.
American Airlines Group Inc.
Consolidated Operating Statistics
(Unaudited)
                                                                          3 Months Ended September 30,                                   9 Months Ended September 30,
                                                                          2020               2019               Change                   2020               2019               Change
Mainline
Revenue passenger miles (millions)                                        14,789             57,426             (74.2             ) %    59,844             161,184            (62.9             ) %
Available seat miles (ASM) (millions)                                     25,562             66,330             (61.5             ) %    92,398             187,848            (50.8             ) %
Passenger load factor (percent)                                           57.9               86.6               (28.7             ) pts  64.8               85.8               (21.0             ) pts
Passenger enplanements (thousands)                                        14,217             40,511             (64.9             ) %    50,030             117,065            (57.3             ) %
Departures (thousands)                                                    144                287                (49.6             ) %    478                837                (42.9             ) %
Aircraft at end of period                                                 848                940                (9.8              ) %    848                940                (9.8              ) %
Block hours (thousands)                                                   406                898                (54.7             ) %    1,385              2,610              (46.9             ) %
Average stage length (miles)                                              1,094              1,234              (11.4             ) %    1,121              1,211              (7.5              ) %
Fuel consumption (gallons in millions)                                    377                981                (61.5             ) %    1,338              2,772              (51.7             ) %
Average aircraft fuel price including related taxes (dollars per gallon)  1.20               2.03               (40.7             ) %    1.54               2.06               (25.1             ) %
Full-time equivalent employees at end of period                           87,700             103,800            (15.5             ) %    87,700             103,800            (15.5             ) %
Regional
Revenue passenger miles (millions)                                        3,332              7,448              (55.3             ) %    10,679             21,150             (49.5             ) %
Available seat miles (millions)                                           5,206              9,490              (45.1             ) %    17,550             26,968             (34.9             ) %
Passenger load factor (percent)                                           64.0               78.5               (14.5             ) pts  60.8               78.4               (17.6             ) pts
Passenger enplanements (thousands)                                        6,897              15,420             (55.3             ) %    21,656             44,265             (51.1             ) %
Aircraft at end of period                                                 533                612                (12.9             ) %    533                612                (12.9             ) %
Fuel consumption (gallons in millions)                                    122                228                (46.6             ) %    407                648                (37.2             ) %
Average aircraft fuel price including related taxes (dollars per gallon)  1.30               2.13               (38.9             ) %    1.57               2.15               (27.1             ) %
Full-time equivalent employees at end of period                           22,800             28,100             (18.9             ) %    22,800             28,100             (18.9             ) %
Total Mainline & Regional
Revenue passenger miles (millions)                                        18,121             64,874             (72.1             ) %    70,523             182,334            (61.3             ) %
Available seat miles (millions)                                           30,768             75,820             (59.4             ) %    109,948            214,816            (48.8             ) %
Passenger load factor (percent)                                           58.9               85.6               (26.7             ) pts  64.1               84.9               (20.8             ) pts
Yield (cents)                                                             14.01              16.95              (17.3             ) %    16.06              17.37              (7.5              ) %
Passenger revenue per ASM (cents)                                         8.25               14.50              (43.1             ) %    10.30              14.74              (30.1             ) %
Total revenue per ASM (cents)                                             10.31              15.71              (34.4             ) %    12.11              16.04              (24.5             ) %
Cargo ton miles (millions)                                                337                621                (45.8             ) %    949                1,889              (49.8             ) %
Cargo yield per ton mile (cents)                                          61.61              33.57              83.6                %    51.05              34.24              49.1                %
Passenger enplanements (thousands)                                        21,114             55,931             (62.3             ) %    71,686             161,330            (55.6             ) %
Aircraft at end of period                                                 1,381              1,552              (11.0             ) %    1,381              1,552              (11.0             ) %
Fuel consumption (gallons in millions)                                    499                1,209              (58.7             ) %    1,745              3,420              (49.0             ) %
Average aircraft fuel price including related taxes (dollars per gallon)  1.23               2.05               (40.1             ) %    1.55               2.08               (25.4             ) %
Full-time equivalent employees at end of period                           110,500            131,900            (16.2             ) %    110,500            131,900            (16.2             ) %
Operating cost per ASM (cents)                                            19.64              14.64              34.2                %    19.30              14.95              29.1                %
Operating cost per ASM excluding net special items (cents)                21.33              14.33              48.8                %    20.17              14.72              37.0                %
Operating cost per ASM excluding net special items and fuel (cents)       19.34              11.07              74.7                %    17.72              11.41              55.2                %
Excludes 12 Boeing 737-800 mainline aircraft that are in temporary storage.
Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.
Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes 29 regional aircraft that are in temporary storage as follows: 13 Embraer 175, seven Embraer 140, six Embraer 145 and three Bombardier CRJ900 aircraft.
Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.
Note: Amounts may not recalculate due to rounding.
American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
                                         3 Months Ended September 30,                 9 Months Ended September 30,
                                         2020          2019            Change         2020       2019               Change
Domestic
Revenue passenger miles (millions)       16,508        41,951          (60.6 )   %    55,168     121,144            (54.5 )   %
Available seat miles (ASM) (millions)    26,284        48,821          (46.2 )   %    85,956     141,153            (39.1 )   %
Passenger load factor (percent)          62.8          85.9            (23.1 )   pts  64.2       85.8               (21.6 )   pts
Passenger revenue (dollars in millions)  2,296         7,814           (70.6 )   %    9,102      23,048             (60.5 )   %
Yield (cents)                            13.91         18.63           (25.3 )   %    16.50      19.03              (13.3 )   %
Passenger revenue per ASM (cents)        8.74          16.00           (45.4 )   %    10.59      16.33              (35.1 )   %
Latin America
Revenue passenger miles (millions)       1,133         7,615           (85.1 )   %    8,450      23,795             (64.5 )   %
Available seat miles (millions)          1,773         8,813           (79.9 )   %    11,541     28,177             (59.0 )   %
Passenger load factor (percent)          63.9          86.4            (22.5 )   pts  73.2       84.4               (11.2 )   pts
Passenger revenue (dollars in millions)  172           1,218           (85.8 )   %    1,386      3,829              (63.8 )   %
Yield (cents)                            15.23         15.99           (4.8  )   %    16.41      16.09              1.9       %
Passenger revenue per ASM (cents)        9.73          13.82           (29.6 )   %    12.01      13.59              (11.6 )   %
Atlantic
Revenue passenger miles (millions)       342           11,707          (97.1 )   %    4,716      26,513             (82.2 )   %
Available seat miles (millions)          1,827         13,914          (86.9 )   %    8,883      32,638             (72.8 )   %
Passenger load factor (percent)          18.7          84.1            (65.4 )   pts  53.1       81.2               (28.1 )   pts
Passenger revenue (dollars in millions)  56            1,596           (96.5 )   %    621        3,677              (83.1 )   %
Yield (cents)                            16.22         13.64           19.0      %    13.16      13.87              (5.1  )   %
Passenger revenue per ASM (cents)        3.04          11.47           (73.5 )   %    6.99       11.27              (38.0 )   %
Pacific
Revenue passenger miles (millions)       138           3,601           (96.2 )   %    2,189      10,882             (79.9 )   %
Available seat miles (millions)          884           4,272           (79.3 )   %    3,568      12,848             (72.2 )   %
Passenger load factor (percent)          15.6          84.3            (68.7 )   pts  61.4       84.7               (23.3 )   pts
Passenger revenue (dollars in millions)  16            367             (95.8 )   %    219        1,109              (80.3 )   %
Yield (cents)                            11.28         10.20           10.6      %    9.98       10.19              (2.0  )   %
Passenger revenue per ASM (cents)        1.76          8.59            (79.6 )   %    6.12       8.63               (29.0 )   %
Total International
Revenue passenger miles (millions)       1,613         22,923          (93.0 )   %    15,355     61,190             (74.9 )   %
Available seat miles (millions)          4,484         26,999          (83.4 )   %    23,992     73,663             (67.4 )   %
Passenger load factor (percent)          36.0          84.9            (48.9 )   pts  64.0       83.1               (19.1 )   pts
Passenger revenue (dollars in millions)  244           3,181           (92.3 )   %    2,226      8,615              (74.2 )   %
Yield (cents)                            15.10         13.88           8.8       %    14.49      14.08              2.9       %
Passenger revenue per ASM (cents)        5.43          11.78           (53.9 )   %    9.28       11.70              (20.7 )   %
Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.
Latin America results include the Caribbean.
Note: Amounts may not recalculate due to rounding.
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
American Airlines Group Inc. (the company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.
The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures:
-- Pre-Tax Income (Loss) (GAAP measure) to Pre-Tax Income (Loss) Excluding Net Special Items (non-GAAP measure)
-- Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure)
-- Net Income (Loss) (GAAP measure) to Net Income (Loss) Excluding Net Special Items (non-GAAP measure)
-- Basic and Diluted Earnings (Loss) Per Share (GAAP measure) to Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items (non-GAAP measure)
-- Operating Income (Loss) (GAAP measure) to Operating Income (Loss) Excluding Net Special Items (non-GAAP measure)
Management uses these non-GAAP financial measures to evaluate the company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the company's core operating performance.
Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure). Management uses total operating costs excluding net special items and aircraft fuel to evaluate the company's current operating performance and for period-to-period comparisons. The price of fuel, over which the company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude aircraft fuel and net special items allows management an additional tool to understand and analyze the company's non-fuel costs and core operating performance.
                                                                                                                                   3 Months Ended September 30,                                  Percent Change                         9 Months Ended September 30,                                  Percent Change
                                        Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items                                                              2020         2019                                                                                    2020         2019
                                                                                                                                   (in millions, except per share amounts)                                                              (in millions, except per share amounts)
                                        Pre-tax income (loss) as reported                                                          $                                     (3,095  )  $ 557                                               $                                     (8,644  )  $ 1,685
                                        Pre-tax net special items:
                                        Mainline operating special items, net                                                                                            (295    )    228                                                                                     (657    )    487
                                        Regional operating special items, net                                                                                            (224    )    6                                                                                       (309    )    6
                                        Nonoperating special items, net                                                                                                  (21     )    44                                                                                      207          43
                                        Total pre-tax net special items                                                                                                  (540    )    278                                                                                     (759    )    536
                                        Pre-tax income (loss) excluding net special items                                          $                                     (3,635  )  $ 835        nm                                     $                                     (9,403  )  $ 2,221      nm
                                        Calculation of Pre-Tax Margin
                                        Pre-tax income (loss) as reported                                                          $                                     (3,095  )  $ 557                                               $                                     (8,644  )  $ 1,685
                                        Total operating revenues as reported                                                       $                                     3,173      $ 11,911                                            $                                     13,309     $ 34,455
                                        Pre-tax margin                                                                                                                   -97.6   %    4.7     %                                                                               -64.9   %    4.9     %
                                        Calculation of Pre-Tax Margin Excluding Net Special Items
                                        Pre-tax income (loss) excluding net special items                                          $                                     (3,635  )  $ 835                                               $                                     (9,403  )  $ 2,221
                                        Total operating revenues as reported                                                       $                                     3,173      $ 11,911                                            $                                     13,309     $ 34,455
                                        Pre-tax margin excluding net special items                                                                                       -114.6  %    7.0     %                                                                               -70.7   %    6.4     %
                                        Reconciliation of Net Income (Loss) Excluding Net Special Items
                                        Net income (loss) as reported                                                              $                                     (2,399  )  $ 425                                               $                                     (6,707  )  $ 1,272
                                        Net special items:
                                        Total pre-tax net special items                                                                                                  (540    )    278                                                                                     (759    )    536
                                        Net tax effect of net special items                                                                                              121          (73     )                                                                               165          (131    )
                                        Net income (loss) excluding net special items                                              $                                     (2,818  )  $ 630        nm                                     $                                     (7,301  )  $ 1,677      nm
                                        Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items
                                        Net income (loss) excluding net special items                                              $                                     (2,818  )  $ 630                                               $                                     (7,301  )  $ 1,677
                                        Shares used for computation (in thousands):
                                        Basic                                                                                                                            509,049      441,915                                                                                 454,523      446,291
                                        Diluted                                                                                                                          509,049      442,401                                                                                 454,523      447,139
                                        Earnings (loss) per share excluding net special items:
                                        Basic                                                                                      $                                     (5.54   )  $ 1.43                                              $                                     (16.06  )  $ 3.76
                                        Diluted                                                                                    $                                     (5.54   )  $ 1.42                                              $                                     (16.06  )  $ 3.75
                                                                                                                                   3 Months Ended September 30,                                                                         9 Months Ended September 30,
                                        Reconciliation of Operating Income (Loss) Excluding Net Special Items                                                            2020         2019                                                                                    2020         2019
                                                                                                                                   (in millions)                                                                                        (in millions)
                                        Operating income (loss) as reported                                                        $                                     (2,871  )  $ 808                                               $                                     (7,906  )  $ 2,336
                                        Operating net special items:
                                        Mainline operating special items, net                                                                                            (295    )    228                                                                                     (657    )    487
                                        Regional operating special items, net                                                                                            (224    )    6                                                                                       (309    )    6
                                        Operating income (loss) excluding net special items                                        $                                     (3,390  )  $ 1,042                                             $                                     (8,872  )  $ 2,829
                                        Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel
                                        Total operating expenses as reported                                                       $                                     6,044      $ 11,103                                            $                                     21,215     $ 32,119
                                        Operating net special items:
                                        Mainline operating special items, net                                                                                            295          (228    )                                                                               657          (487    )
                                        Regional operating special items, net                                                                                            224          (6      )                                                                               309          (6      )
                                        Total operating expenses, excluding net special items                                                                            6,563        10,869                                                                                  22,181       31,626
                                        Fuel:
                                        Aircraft fuel and related taxes - mainline                                                                                       (453    )    (1,989  )                                                                               (2,065  )    (5,710  )
                                        Aircraft fuel and related taxes - regional                                                                                       (158    )    (485    )                                                                               (638    )    (1,395  )
                                        Total operating expenses, excluding net special items and fuel                             $                                     5,952      $ 8,395                                             $                                     19,478     $ 24,521
                                                                                                                                   (in cents)                                                                                           (in cents)
                                        Total operating expenses per ASM as reported                                                                                     19.64        14.64                                                                                   19.30        14.95
                                        Operating net special items per ASM:
                                        Mainline operating special items, net                                                                                            0.96         (0.30   )                                                                               0.60         (0.23   )
                                        Regional operating special items, net                                                                                            0.73         (0.01   )                                                                               0.28         -
Average Daily Cash Burn
            The company's average daily cash burn is presented in the table below, which is a non-GAAP measure that management believes is useful information to investors and others in evaluating the company's liquidity position and cash flows from its core operating performance. The company defines cash burn as net cash provided by (used in) operating activities, net cash provided by (used in) investing activities and net cash provided by (used in) financing activities, adjusted for (1) CARES Act Payroll Support Program grant proceeds, (2) net purchases (proceeds from sale) of short-term investments and restricted short-term investments, (3) proceeds from issuance of long-term debt, net of deferred financing costs, but excluding aircraft financing, (4) proceeds from issuance of equity, (5) prepayments of long-term debt and (6) other cash flows that are not representative of our core operating performance.
            This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP.
                                                                                                                  3 Months Ended                                                                                                 3 Months Ended
                                                                                                                  September 30, 2020                                                                                             June 30, 2020
                                                                                                                  (in millions, except days in period)
            Net cash used in operating activities                                                                 $                                                                                                    (2,604 )  $              (908   )
            Net cash provided by (used in) investing activities                                                                                                                                                        923                      (6,799 )
            Net cash provided by financing activities                                                                                                                                                                  1,511                    7,688
            Adjustments:
            CARES Act Payroll Support Program grant proceeds                                                                                                                                                           (525   )                 (3,693 )
            Net purchases (proceeds from sale) of short-term investments and restricted short-term investments                                                                                                         (1,391 )                 6,608
            Proceeds from issuance of non-aircraft long-term debt, net of deferred financing costs                                                                                                                     (1,926 )                 (7,714 )
            Proceeds from issuance of equity                                                                                                                                                                           -                        (1,525 )
            Prepayments of long-term debt                                                                                                                                                                              -                        1,047
            Other                                                                                                                                                                                                      -                        -
            Total cash burn                                                                                       $                                                                                                    (4,012 )  $              (5,296 )
            Days in period                                                                                                                                                                                             92                       91
            Average daily cash burn                                                                               $                                                                                                    (44    )  $              (58    )
            Note: Amounts may not recalculate due to rounding.
            Of the total cash burn for each of the three months ended September 30, 2020 and June 30, 2020, approximately $540 million and $505 million were cash payments for debt amortization, respectively, and approximately $120 million and $50 million were cash payments for salary and medical costs for our voluntary early retirement programs, respectively, totaling an equivalent of approximately $8 million per day and $6 million per day, respectively.
American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions)
                                                             September 30, 2020        December 31, 2019
                                                             (unaudited)
Assets
Current assets
Cash                                                         $         253             $        280
Short-term investments                                                 8,031                    3,546
Restricted cash and short-term investments                             508                      158
Accounts receivable, net                                               1,135                    1,750
Aircraft fuel, spare parts and supplies, net                           1,633                    1,851
Prepaid expenses and other                                             780                      621
Total current assets                                                   12,340                   8,206
Operating property and equipment
Flight equipment                                                       37,576                   42,537
Ground property and equipment                                          9,451                    9,443
Equipment purchase deposits                                            1,899                    1,674
Total property and equipment, at cost                                  48,926                   53,654
Less accumulated depreciation and amortization                         (16,670   )              (18,659  )
Total property and equipment, net                                      32,256                   34,995
Operating lease right-of-use assets                                    7,979                    8,737
Other assets
Goodwill                                                               4,091                    4,091
Intangibles, net                                                       2,039                    2,084
Deferred tax asset                                                     2,425                    645
Other assets                                                           1,643                    1,237
Total other assets                                                     10,198                   8,057
Total assets                                                 $         62,773          $        59,995
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Current maturities of long-term debt and finance leases      $         2,710           $        2,861
Accounts payable                                                       1,077                    2,062
Accrued salaries and wages                                             1,919                    1,541
Air traffic liability                                                  4,903                    4,808
Loyalty program liability                                              2,051                    3,193
Operating lease liabilities                                            1,736                    1,708
Other accrued liabilities                                              2,188                    2,138
Total current liabilities                                              16,584                   18,311
Noncurrent liabilities
Long-term debt and finance leases, net of current maturities           30,076                   21,454
Pension and postretirement benefits                                    6,310                    6,052
Loyalty program liability                                              7,043                    5,422
Operating lease liabilities                                            6,683                    7,421
Other liabilities                                                      1,605                    1,453
Total noncurrent liabilities                                           51,717                   41,802
Stockholders' equity (deficit)
Common stock                                                           5                        4
Additional paid-in capital                                             5,430                    3,945
Accumulated other comprehensive loss                                   (6,476    )              (6,331   )
Retained earnings (deficit)                                            (4,487    )              2,264
Total stockholders' deficit                                            (5,528    )              (118     )
Total liabilities and stockholders' equity (deficit)         $         62,773          $        59,995
American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
                                                                        9 Months Ended September 30,
                                                                                        2020                 2019
Net cash provided by (used in) operating activities                     $               (3,680          )  $ 3,215
Cash flows from investing activities:
Capital expenditures and aircraft purchase deposits                                     (1,810          )    (3,129          )
Proceeds from sale-leaseback transactions                                               433                  629
Proceeds from sale of property and equipment                                            251                  42
Purchases of short-term investments                                                     (7,086          )    (2,878          )
Sales of short-term investments                                                         2,603                2,524
Increase in restricted short-term investments                                           (317            )    (2              )
Other investing activities                                                              (112            )    (68             )
Net cash used in investing activities                                                   (6,038          )    (2,882          )
Cash flows from financing activities:
Proceeds from issuance of long-term debt                                                11,564               3,550
Payments on long-term debt and finance leases                                           (3,018          )    (2,835          )
Proceeds from issuance of equity                                                        1,527                -
Deferred financing costs                                                                (132            )    (51             )
Treasury stock repurchases                                                              (173            )    (825            )
Dividend payments                                                                       (43             )    (135            )
Net cash provided by (used in) financing activities                                     9,725                (296            )
Net increase in cash and restricted cash                                                7                    37
Cash and restricted cash at beginning of period                                         290                  286
Cash and restricted cash at end of period                               $               297                $ 323
The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
Cash                                                                    $               253                $ 312
Restricted cash included in restricted cash and short-term investments                  44                   11
Total cash and restricted cash                                          $               297                $ 323

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