Form 8-K AMERICAN AIRLINES, INC. To: July 12 Submitted by: American Airlines Group Inc.


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Room 99.1

Second Quarter Investor Relations Update

July 12, 2022

Overview

Ability: During the second quarter, the company flew 66.2 billion total available seat miles, down 8.5% from the second quarter of 2019, compared to its earlier forecast of a decline of 7% to 8 %.

Revenue: The Company expects its second quarter total revenue to be up approximately 12% compared to the second quarter of 2019.

TRASMQ2 Total Revenue Per Available Seat Mile (TRASM) is expected to increase approximately 22.5% from the second quarter of 2019, compared to the company’s previous guidance of 20% to 22%.

CASM1: The company expects its second quarter CASM to be up about 12% from 2019, compared to its previous guidance of up between 10% and 11%. This change from the previous forecast is primarily due to lower than forecast capacity and higher expenses associated with a lower than forecast completion factor.

Fuel: The Company expects its fuel cost to be between $4.00 and $4.05 per gallon of jet fuel (including tax) and will have consumed approximately 997 million gallons in the second quarter of 2022.

Taxes: The Company expects to record an income tax provision at an effective tax rate of approximately 22% in the second quarter, which will be substantially non-cash. See “Net Special Items” and “GAAP/Non-GAAP Reconciliation” below.

Outstanding shares: For the second quarter, the Company’s basic and diluted weighted average shares outstanding for financial reporting purposes were 650.3 million and 718.5 million, respectively.

Net Special Items: The company expects to report net special items of approximately $85 million in the second quarter before the effect of taxes.

Margin before tax2: The Company expects to report a pre-tax margin of approximately 5% in the second quarter.

Liquidity: The company expects to end the second quarter with approximately $15.6 billion in total available cash.

These results and those reflected in the accompanying reconciliation tables are preliminary and final second quarter results are subject to change. These preliminary results are based on the Company’s current estimates and are subject to the completion of the Company’s financial closing procedures.

1 Total operating cost per available seat mile. All CASM indications exclude fuel and net special items. CASM excluding fuel and net special items is a non-GAAP measure presented for comparability with prior guidance. For a reconciliation of CASM excluding fuel and net special items to the most comparable GAAP measure, please see the GAAP and non-GAAP reconciliation at the end of this document.

2 All pre-tax margin forecasts exclude net special items. Pre-tax margin excluding net special items is a non-GAAP measure presented for comparability with prior guidance. For a reconciliation of pre-tax margin to the most comparable GAAP measure, please see the GAAP and non-GAAP reconciliation at the end of this document.


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Second Quarter Investor Relations Update

July 12, 2022

Summary

2nd quarter 20221.2

Previous Tips
06/03/2022
Current direction
07/12/2022
Available Seat Miles (ASM) (bil) ~ -7.0% to -8.0%
(vs. 2Q19)
~ -8.5% (vs. 2Q19)
~66.2 billion ASM
Total income ~ +11.0% to +13.0%
(vs. 2Q19)
~ +12.0%
(vs. 2Q19)
TRASM ~ +20.0% to +22.0%
(vs. 2Q19)
~ +22.5%
(vs. 2Q19)
CASM excluding fuel and net exceptional items ~ +10.0% to +11.0%
(vs. 2Q19)
~ +12.0%
(vs. 2Q19)
Average fuel price (taxes included) ($/gal) ~$3.92 to $3.97 ~$4.00 to $4.05
Gallons of fuel consumed (mil) ~997
Other non-operating expenses excluding net special items ($ millions) ~$325
Pre-tax margin excluding net exceptional items 4.0% to 6.0% ~5.0%
Diluted shares outstanding for the calculation of earnings per share
excluding exceptional items net (mil)
718.5

Remarks:

1. Includes guidance on certain non-GAAP measures, which excludes, among other things, net special items. Please see the GAAP/non-GAAP reconciliation at the end of this document.
2. Numbers may not be recalculated due to rounding.

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GAAP/non-GAAP reconciliation

July 12, 2022

The Company sometimes uses financial measures that are derived from the summary consolidated financial statements but are not presented in accordance with GAAP to understand and evaluate its current operating performance and to enable comparisons from period to period. The Company believes that 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 supplemental to, and not a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company provides a reconciliation of published non-GAAP financial measures to their comparable financial measures on a GAAP basis. The tables below provide reconciliations of the following GAAP measures to their non-GAAP measures: Pretax earnings (GAAP measure) to pretax earnings excluding net special items (non-GAAP measure) and pretax margin (GAAP measure) to pretax margin excluding net special items (non-GAAP measure). Management uses these non-GAAP financial measures to assess the Company’s current operating performance and to provide period-to-period comparisons. As the nature and amount of net special items may vary from period to period, the adjustment to exclude net special items provides management with an additional tool to understand the Company’s core operating performance. . In addition, the tables below provide reconciliations between total operating costs (GAAP measure) and total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs by ASM ( CASM) and CASM excluding net special items and fuel. Management uses total operating costs and CASM excluding net special items and fuel to assess the Company’s current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, affects the comparability of financial performance from period to period. The adjustment to exclude fuel and net special items provides management with an additional tool to understand and analyze non-fuel costs and the Company’s core operating performance.

GAAP and non-GAAP reconciliation of profit before tax
($ million)
Orientation 2Q22
Total income $ 13,395
Income before tax $ 585
Margin before taxes 4.4 %
Net special items before taxes 85
Net profit before tax excluding exceptional items $ 670
Pre-tax margin excluding net exceptional items 5.0 %

Note: Amounts may not be recalculated due to rounding.


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GAAP/non-GAAP reconciliation

July 12, 2022

GAAP/non-GAAP reconciliation
(M$ except ASM and CASM data)
2Q22 range
Down High
Total operating expenses $ 12,391 $ 12,441
Lower fuel costs 3,988 4,038
Less net operating special items (5) (5)
Total operating expenses excluding fuel and net special items (non-GAAP) $ 8,408 $ 8,408
Total CASM (cts) 18.72 18.79
Total CASM excluding fuel and net special items (cts) (non-GAAP) 12.70 12.70
Percentage change from 2Q 2019 (%) 12.0% 12.0%
Total ASM (bil) 66.2 66.2
Other non-operating expenses
Other non-operating expenses $ 415 $ 415
Less net non-operating exceptional items 90 90
Other non-operating expenses excluding net exceptional items (excluding GAAP) $ 325 $ 325

Note: Amounts may not be recalculated due to rounding.


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July 12, 2022

Caution Regarding Forward-Looking Statements

Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act, the Exchange Act and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as “may , “”will”, “expect”, “intend”, “anticipate”, “believe”, “estimate”, “plan”, “project”, “could”, “should”, ” should”, “continue”. “seek”, “target”, “direction”, “outlook”, “if current trends continue”, “optimistic”, “forecast” and other similar words. These statements include, but are not limited to, statements about the Company’s plans, objectives, expectations, intentions, estimates and strategies for the future, the continued availability of borrowings under revolving lines of credit and other statements that are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and are subject to important risks and uncertainties that may cause actual results, financial condition and the timing of certain events to differ materially. information contained in forward-looking statements. statements. These risks and uncertainties include, but are not limited to, those set forth herein and in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2022 (particularly 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. In particular, the consequences of the coronavirus outbreak on economic conditions and the travel industry generally and on the Company’s financial condition and results of operations specifically have been significant, rapidly changing and cannot be predicted. . In addition, there may be other factors not currently known to the Company which may affect the matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The Company undertakes no obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements other than as required by law. Any forward-looking statement speaks only as of the date hereof or as of the dates indicated in the statement.

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