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8-K - 8-K - American Airlines Group Inc.d665534d8k.htm

Exhibit 99.1

 

LOGO

Investor Relations Update

January 28, 2014

On December 9, 2013, the Plan of Reorganization of AMR Corporation became effective and the related merger transaction was completed. As a result, US Airways Group became a wholly-owned subsidiary of the reorganized AMR Corporation (renamed American Airlines Group Inc., or AAG). AAG is providing guidance on a combined basis for 2014. In addition, this guidance reflects certain reclassifications to conform to the new American Airlines Group Inc. financial statement presentation.

General Overview

 

    Capacity - 2014 total system capacity is expected to be up approximately 3.5% vs 2013 primarily due to more active aircraft, larger gauge aircraft replacing smaller gauge legacy aircraft, and longer stage length. Full year domestic capacity is expected to be up approximately 1% and international capacity is expected to be up approximately 9% vs. 2013.

 

    Cash - As of Dec. 31, 2013, American had $10.3 billion in total cash and investments, of which $1.0 billion was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $710 million of this unrestricted cash balance was held as Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.04 bolivars to the dollar. The period of time to exchange those funds into dollars and repatriate them has been increasing and is presently more than a year. On Jan. 24, 2014, the Venezuelan government announced that a newly-implemented system will determine the exchange rate (currently 11.36 to the dollar) for repatriation of income from future ticket sales, and introduced new procedures for approval of repatriation of local currency. American is working with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency.

 

    Fuel - For the first quarter 2014, AAG expects to pay an average of between $3.07 and $3.12 per gallon of mainline jet fuel (including taxes & hedges). Forecasted volume and fuel prices are provided in the tables below. The Company has hedges in place into 2015 but has not entered into any new hedge contracts since closing the merger.

 

    Cargo / Other Revenue - Includes cargo revenue, frequent flyer revenue, ticket change fees, excess/overweight baggage fees, first and second bag fees, contract services, simulator rental, airport clubs and inflight service revenues.

 

    Taxes / NOL - As of Dec. 31, 2013, AAG had approximately $10.7 billion of net operating losses (NOLs) available to reduce future federal taxable income, all of which are expected to be available for use in 2014. The Company also had approximately $4.8 billion of NOLs to reduce future state taxable income, all of which are expected to be available for use in 2014. The Company’s net deferred tax asset, which includes the NOL, is subject to a full valuation allowance. As of Dec. 31, 2013, the tax affected valuation allowances associated with federal and state NOLs approximate $4.7 billion and $0.4 billion, respectively. In accordance with generally accepted accounting principles, utilization of NOLs to offset book taxable income reduces the net deferred tax asset and results in the release of corresponding valuation allowances, which offset the tax provision on our income statement dollar for dollar.

 

    Ownership Restrictions - Under AAG’s certificate of incorporation, AAG common stock (AAL) and convertible preferred stock (AALCP) are subject to certain transfer restrictions designed to preserve its NOLs and related income tax benefits. A copy of the certificate of incorporation was contained in a Form 8-K filed by AAG with the Securities and Exchange Commission on Dec. 9, 2013.

Please refer to the footnotes and the forward looking statements page of this document for additional information


LOGO

Mainline Update

January 28, 2014

Mainline Comments

 

    Combined mainline data includes American Airlines and US Airways operated flights, and all operating expenses are for mainline operated flights only. Please refer to the following page for information pertaining to regional data.

 

    The data in the table below includes the historical non-GAAP financial results, which reflect certain reclassifications to conform to the new American Airlines Group Inc. financial statement presentation.

 

    American Airlines Group  
    4Q13A4     FY13A4     1Q14E     2Q14E     3Q14E     4Q14E     FY14E  

Mainline Guidance

             

Available Seat Miles (ASMs) (bil)

    57.0        231.9        ~57.2        ~60.8        ~61.9        ~59.8        239.8   

CASM ex fuel, special items and profit sharing (YOY % change)1

    8.49        8.37        +3% to +5%       +2% to +4%       +2% to +4%       +1% to +3%        +2% to +4%   

Cargo Revenues ($ mil)

    227        830        ~210        ~210        ~215        ~235        ~870   

Other Revenues ($ mil)2

    1,003        4,016        ~1,140        ~1,140        ~1,135        ~1,135        ~4,550   

Average Fuel Price (incl. taxes & hedges) ($/gal) (as of 1/23/14)

  $ 3.06      $ 3.08        3.07 to 3.12        3.00 to 3.05        2.98 to 3.03        2.95 to 3.00        3.00 to 3.05   

Fuel Gallons Consumed (mil)

    882        3,608        ~870        ~927        ~949        ~905        ~3,651   

Interest (Income) ($ mil)

    (6     (22     ~(6     ~(7     ~(7     ~(8     ~(28

Interest Expense ($ mil)2

    259        1,027        ~215        ~225        ~230        ~230        ~900   

Other Non-Operating (Income)/Expense ($mil)2,3

    13        41        ~2        ~2        ~2        ~2        ~8   

CAPEX Guidance ($ mil) Inflow/(Outflow)

             

Non-Aircraft CAPEX

        ~(255     ~(259     ~(177     ~(207     ~(898

Net Aircraft CAPEX & PDPs

        ~(86     ~(158     ~(487     ~(508     ~(1,238

Notes:

 

1. CASM ex fuel, special items and profit sharing is a non-GAAP financial measure. Please see the GAAP to non-GAAP reconciliation at the end of this document.
2. Excludes special items; please see the GAAP to non-GAAP reconciliation at the end of this document.
3. Other Non-Operating (Income)/Expense includes primarily gains and losses from foreign currency.
4. Fourth quarter and full year 2013 results represent combined data assuming US Airways was included in the results for the full period, as further described in our January 28, 2014 earnings press release.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


LOGO

Regional Update

January 28, 2014

Regional Comments

 

    AAG receives feed from 10 regional airlines, including wholly owned subsidiaries American Eagle, PSA Airlines, and Piedmont Airlines.

 

    The data in the table below includes the historical non-GAAP financial results, which reflect certain reclassifications to conform to the new American Airlines Group Inc. financial statement presentation.

 

    All operating expenses (including capacity purchase agreements) associated with regional operations are included within the regional non-fuel operating expense line item on the income statement.

 

    American Airlines Group  
    4Q13A4     FY13A4     1Q14E     2Q14E     3Q14E     4Q14E     FY14E  

Regional Guidance

             

Available Seat Miles (ASMs) (bil)

    6.95        28.04        ~6.85        ~7.32        ~7.58        ~7.49        ~29.24   

CASM ex fuel and special items (YOY % change)1

    15.73        15.38        +2% to +4%        +2% to +4%        +1% to +3%        +0% to +2%        +1% to +3%   

Average Fuel Price (incl. taxes & hedges) ($/gal) (as of 1/23/14)

    3.04        3.07        3.04 to 3.09        2.99 to 3.04        2.98 to 3.03        2.94 to 2.99        2.99 to 3.04   

Fuel Gallons Consumed (mil)

    170        687        ~165        ~177        ~182        ~179        ~703   

American Airlines Group Regional Carriers

 

  American Eagle2    Air Wisconsin Airlines Corporation
  SkyWest Airlines, Inc.    Mesa Airlines, Inc.
  ExpressJet Airlines, Inc.    Piedmont Airlines, Inc.2
  Republic Airline Inc.    PSA Airlines, Inc.2
  Chautauqua Airlines, Inc.    Trans States Airlines, Inc.3

Notes:

 

1. CASM ex fuel expense and special items is a non-GAAP financial measure. Please see the GAAP to non-GAAP reconciliation at the end of this document.
2. Wholly owned subsidiary of American Airlines Group Inc.
3. Pro-rate agreement.
4. Fourth quarter and full year 2013 results represent combined data assuming US Airways was included in the results for the full period, as further described in our January 28, 2014 earnings press release.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


LOGO

Fleet Update

January 28, 2014

Fleet Comments

 

    The Company expects to take delivery of 83 mainline aircraft during 2014, consisting of 10 A319s, 42 A321s, 3 A332s, 20 B738s, 2 B788s and 6 B773s. In addition, the company expects to retire 25 MD80s, 14 B734s, 19 B757s, 4 A320s and 12 B762s by the end of 2014 (all B734 aircraft are expected to exit the fleet by the end of Q3 2014).

 

    The Company expects to take delivery of 43 regional aircraft during 2014, consisting of 19 CR9 aircraft (15 at the company’s wholly owned subsidiary PSA Airlines) and 24 E175 aircraft. In addition, the Company expects to retire 25 E140 aircraft and 2 Dash-100 aircraft.

 

     Mainline Ending Fleet Count  
     2013A      1QE      2QE      3QE      4QE  

E190

     20         20         20         20         20   

A319

     108         108         112         114         118   

MD80

     162         153         153         143         137   

B734

     14         13         8         —           —     

A320

     70         68         68         67         66   

B738

     226         231         236         240         246   

B757

     114         110         103         99         95   

A321

     96         108         116         132         138   

B762

     19         12         7         7         7   

B763

     58         58         58         58         58   

B788

     —           —           —           —           2   

A332

     12         13         15         15         15   

A333

     9         9         9         9         9   

B772

     47         47         47         47         47   

B773

     10         11         13         14         16   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     965         961         965         965         974   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Regional Ending Fleet Count  
     2013A      1QE      2QE      3QE      4QE  

Dash-100

     29         28         27         27         27   

Dash-300

     11         11         11         11         11   

E140

     74         69         60         52         49   

E145

     118         118         118         118         118   

CR2

     138         138         138         138         138   

CR7

     61         61         61         61         61   

E170

     20         20         20         20         20   

CR9

     51         51         55         63         70   

E175

     56         62         68         74         80   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     558         558         558         564         574   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
 

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


LOGO

Shares Outstanding

January 28, 2014

Shares Outstanding Comments

 

  The estimated weighted average shares outstanding for the remainder of the year are listed below.

 

  Pursuant to the Plan of Reorganization and the related Merger Agreement, the Company became obligated to issue approximately 756 million shares of common stock (assuming, among other things, conversion of all shares of convertible preferred stock). The Company’s estimated diluted share count is approximately 743 million for the first quarter of 2014. The decrease in diluted share count is primarily due to approximately 14 million aggregate shares withheld on the initial Dec. 9, 2013 and subsequent Jan. 9, 2014 distribution dates in satisfaction of employee tax obligations. The Company is not required to but may withhold additional shares in satisfaction of tax liabilities for eligible employee groups in connection with future issuances contemplated by the Plan of Reorganization, principally to be at the remaining mandatory conversion dates (days 60, 90 and 120 following the close of the merger). No future net issuances are assumed in this guidance.

2014 Shares Outstanding ($ and shares mil)1

 

     Shares         

For Q12

   Basic      Diluted      Interest Addback  

Earnings above $40

     724         743       $ 0.3   

Earnings up to $40

     724         738         —     

Net loss

     724         724         —     
     Shares         

For Q2-Q4 Average

   Basic      Diluted         

Earnings

     730         747      

Net loss

     730         730      
     Shares         

For FY 2014 Average

   Basic      Diluted         

Earnings

     729         746      

Net loss

     729         729      

Notes:

 

1. Shares outstanding are based upon several estimates and assumptions, including average per share stock price, stock options, stock appreciation rights, restricted stock unit award activity and conversion of outstanding senior convertible notes. The number of shares in actual calculations of earnings per share will likely be different from those set forth above.
2. The Company’s remaining outstanding 7.25% notes, which are convertible into approximately 5 million shares, mature in May 2014.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


American Airlines Group Inc. (Formerly AMR Corporation)

Consolidated Statements of Operations

(In millions)

(Unaudited)

Note: The historical financial results for periods prior to fourth quarter 2013 reflect certain reclassifications to conform to the new American Airlines Group Inc. financial statement presentation. See note below table for more detail.

 

     4Q12     1Q13     2Q13     3Q13     4Q13     FY13  

Operating revenues:

            

Mainline passenger

   $ 4,440      $ 4,614      $ 4,888      $ 5,253      $ 4,838      $ 19,594   

Regional passenger

     706        679        752        766        730        2,927   

Cargo

     172        156        169        164        186        676   

Other

     619        649        640        645        682        2,615   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     5,937        6,098        6,449        6,828        6,436        25,812   

Operating expenses:

            

Aircraft fuel and related taxes

     1,913        1,934        1,880        1,950        1,864        7,628   

Salaries, wages and benefits

     1,383        1,267        1,284        1,380        1,345        5,276   

Regional expenses:

            

Fuel

     250        265        260        270        261        1,056   

Other

     509        515        509        515        516        2,056   

Maintenance, materials and repairs

     290        326        317        289        290        1,222   

Other rent and landing fees

     262        288        284        279        266        1,117   

Aircraft rent

     139        165        181        192        205        743   

Selling expenses

     230        290        273        294        271        1,128   

Depreciation and amortization

     196        204        207        204        215        830   

Special items, net

     58        71        12        15        184        282   

Other

     700        702        730        739        727        2,898   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     5,930        6,027        5,937        6,127        6,144        24,236   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     7        71        512        701        292        1,576   

Nonoperating income (expense):

            

Interest income

     6        4        5        5        6        20   

Interest expense, net

     (150     (254     (161     (226     (194     (836

Other, net

     271        (24     (12     (40     (13     (89
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonoperating income (expense), net

     127        (274     (168     (261     (201     (905
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before reorganization items, net

     134        (203     344        440        91        671   

Reorganization items, net

     (441     (160     (124     (151     (2,220     (2,655
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (307     (363     220        289        (2,129     (1,984

Income tax benefit

     (569     (22     —          —          (324     (346
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 262      $ (341   $ 220      $ 289      $ (1,805   $ (1,638
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The income statements for periods prior to fourth quarter 2013 reflect certain reclassifications between various financial statement line items to provide the new financial statement presentation. These reclassifications do not impact the historic net income. These reclassifications are comprised principally of the following items:

 

  Reclassifications between various operating expense line items to conform the presentation of regional airline expenses.

 

  Reclassifications between other nonoperating expense, net and operating expenses to conform the presentation of foreign currency gains and losses.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


US Airways Group, Inc.

Consolidated Statements of Operations

(In millions)

(Unaudited)

Note: The historical financial results for periods prior to fourth quarter 2013 reflect certain reclassifications to conform to the new American Airlines Group Inc. financial statement presentation. See note below table for more detail.

 

     4Q12     1Q13     2Q13     3Q13     4Q13     FY13  

Operating revenues:

            

Mainline passenger

   $ 2,080      $ 2,197      $ 2,560      $ 2,594      $ 2,322      $ 9,673   

Regional passenger

     808        763        888        864        832        3,348   

Cargo

     41        41        35        37        41        154   

Other

     322        369        367        345        352        1,432   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

     3,251        3,370        3,850        3,840        3,547        14,607   

Operating expenses:

            

Aircraft fuel and related taxes

     830        861        872        915        833        3,481   

Salaries, wages and benefits

     577        614        679        658        659        2,611   

Regional expenses:

            

Fuel

     268        271        261        265        256        1,052   

Other

     547        561        561        549        582        2,253   

Maintenance, materials and repairs

     177        175        188        180        161        705   

Other rent and landing fees

     127        135        148        155        143        582   

Aircraft rent

     159        154        153        150        136        593   

Selling expenses

     107        112        124        128        116        480   

Depreciation and amortization

     66        71        73        77        81        302   

Special items, net

     9        39        24        40        313        415   

Other

     261        275        288        296        271        1,130   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     3,128        3,268        3,371        3,413        3,551        13,604   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     123        102        479        427        (4     1,003   

Nonoperating income (expense):

            

Interest income

     1        —          1        —          —          2   

Interest expense, net

     (87     (84     (90     (88     (85     (348

Other, net

     (1     26        (36     (3     (14     (26
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonoperating expense, net

     (87     (58     (125     (91     (99     (372
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     36        44        354        336        (103     631   

Income tax provision (benefit)

     (1     —          67        120        52        239   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 37      $ 44      $ 287      $ 216      $ (155   $ 392   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The income statements for periods prior to fourth quarter 2013 reflect certain reclassifications between various financial statement line items to provide the new financial statement presentation of American Airlines Group. US Airways Group also applied acquisition accounting as of December 9, 2013 and its statements of operations for the period from December 9 through December 31, 2013 reflect the related adjustments. The reclassifications do not impact the historic net income and are comprised principally of the following items:

 

  Reclassifications between other operating expenses and operating revenues to conform the presentation of frequent flyer revenues.

 

  Reclassifications between various operating expense line items to conform the presentation of regional airline expenses.

 

  Reclassifications between other nonoperating expense, net and operating expenses to conform the presentation.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


LOGO

GAAP to Non-GAAP Reconciliation

January 28, 2014

The Company is providing disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure financial performance excluding special items and profit sharing, which is more indicative of the Company’s ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline CASM excluding fuel, special items and profit sharing and regional CASM excluding fuel and special items is useful to investors because both the cost and availability of fuel are subject to many economic and political factors beyond the Company’s control.

 

    

American Airlines Group Inc GAAP to Non-GAAP Reconciliation

($ mil except ASM and CASM data)

 
     4Q13      FY13     1Q14 Range      2Q14 Range      3Q14 Range      4Q14 Range      FY14 Range  
     Actual      Actual     Low      High      Low      High      Low      High      Low      High      Low      High  

Mainline

                                  

Mainline operating expenses1

   $ 8,080       $ 31,423      $ 7,749       $ 7,892       $ 7,916       $ 8,063       $ 7,955       $ 8,103       $ 7,798       $ 7,944       $ 31,422       $ 32,006   

Less mainline fuel

     2,697         11,109        2,671         2,714         2,781         2,827         2,828         2,875         2,670         2,715         10,950         11,132   

Less special items

     497         697        —           —           —           —           —           —           —           —           —           —     

Less profit sharing

     49         209        —           —           —           —           —           —           —           —           —           —     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Mainline operating expense excluding fuel, special items and profit sharing

     4,837         19,408        5,079         5,177         5,135         5,236         5,127         5,227         5,128         5,229         20,473         20,874   

Mainline CASM (cts)1

     14.17         13.55        13.55         13.80         13.02         13.26         12.85         13.09         13.04         13.28         13.10         13.35   

Mainline CASM excluding fuel, special items and profit sharing (Non-GAAP) (cts)

     8.49         8.37        8.88         9.05         8.45         8.61         8.28         8.44         8.57         8.74         8.54         8.70   

Mainline ASMs (bil)

     57.0         231.9        57.2         57.2         60.8         60.8         61.9         61.9         59.8         59.8         239.8         239.8   

Regional

                                  

Regional operating expenses

   $ 1,615       $ 6,417      $ 1,608       $ 1,638       $ 1,651       $ 1,682       $ 1,689       $ 1,721       $ 1,704       $ 1,736       $ 6,642       $ 6,767   

Less regional fuel expense

     517         2,108        502         510         529         538         542         551         526         535         2,099         2,135   

Less special items

     5         (4     —           —           —           —           —           —           —           —           —           —     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Regional operating expenses excluding fuel and special items

     1,093         4,313        1,106         1,128         1,121         1,143         1,147         1,170         1,177         1,201         4,542         4,632   

Regional CASM (cts)

     23.24         22.88        23.47         23.91         22.55         22.97         22.28         22.70         22.75         23.18         22.71         23.14   

Regional CASM excluding fuel and special items (Non-GAAP) (cts)

     15.73         15.38        16.15         16.46         15.32         15.62         15.13         15.43         15.72         16.03         15.53         15.84   

Regional ASMs (bil)

     6.95         28.04        6.85         6.85         7.32         7.32         7.58         7.58         7.49         7.49         29.24         29.24   

Other Revenues

                                  

Other Revenues

   $ 1,034       $ 4,047        1,140         1,140         1,140         1,140         1,135         1,135         1,135         1,135         4,550         4,550   

Less special items

     31         31        —           —           —           —           —           —           —           —           —           —     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Revenues excluding special items

     1,003         4,016        1,140         1,140         1,140         1,140         1,135         1,135         1,135         1,135         4,550         4,550   

Interest Expense

                                  

Interest Expense

   $ 279       $ 1,184        215         215         225         225         230         230         230         230         900         900   

Less special items

     20         157        —           —           —           —           —           —           —           —           —           —     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Interest Expense excluding special items

     259         1,027        215         215         225         225         230         230         230         230         900         900   

Other Non-Operating (Income)/Expense

                                  

Other non-operating (income)/expense

   $ 14       $ 102        2         2         2         2         2         2         2         2         8         8   

Less special items

     1         61        —           —           —           —           —           —           —           —           —           —     
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other non-operating (income)/expense excluding special items

     13         41        2         2         2         2         2         2         2         2         8         8   

Notes: Amounts may not recalculate due to rounding.

(1) Forecasted mainline operating expenses exclude profit sharing and special items.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information


LOGO

Forward Looking Statements

January 28, 2014

Cautionary Statement Regarding Forward-Looking Statements

This document includes forward-looking statements within the meaning of 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 benefits of the business combination transaction involving American Airlines Group Inc. (formerly named AMR Corporation) (the “Company”) and US Airways Group, Inc. (“US Airways”), including future financial and operating results, the Company’s plans, objectives, expectations and intentions, 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. The following factors, among others, could cause actual results and financial position and timing of certain events to differ materially from those described in the forward-looking statements: the challenges and costs of integrating operations and achieving anticipated synergies; the effects of divestitures pursuant to the settlement with the Department of Justice and certain states; the price of, market for and potential market price volatility of the Company’s common stock and preferred stock; the Company’s significant liquidity requirements and substantial levels of indebtedness; the impact of significant operating losses in the future; downturns in economic conditions that adversely affect our business; the impact of the price and availability of fuel and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of industry consolidation; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the Company’s high level of fixed obligations and ability to fund general corporate requirements, obtain additional financing and respond to competitive developments; any failure to comply with the liquidity covenants contained in financing arrangements; provisions in credit card processing and other commercial agreements that may affect the Company’s liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; the inability to maintain labor costs at competitive levels; interruptions or disruptions in service at one or more of the Company’s hub airports; regulatory changes affecting the allocation of slots; the Company’s reliance on third-party regional operators or third-party service providers; the Company’s reliance on and costs, rights and functionality of third-party distribution channels, including those provided by global distribution systems, conventional travel agents and online travel agents; the impact of extensive government regulation; the impact of heavy taxation; the impact of changes to the Company’s business model; the loss of key personnel or inability to attract and retain qualified personnel; the impact of conflicts overseas or terrorist attacks, and the impact of ongoing security concerns; the Company’s ability to operate and grow its route network; the impact of environmental regulation; the Company’s reliance on technology and automated systems and the impact of any failure or disruption of, or delay in, these technologies or systems; costs of ongoing data security compliance requirements and the impact of any significant data security breach; the impact of any accident involving the Company’s aircraft or the aircraft of its regional operators; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; the Company’s dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the impact of changing economic and other conditions and seasonality of the Company’s business; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the impact of global events that affect travel behavior, such as an outbreak of a contagious disease; the impact of foreign currency exchange rate fluctuations and limitations on the repatriation of cash held in foreign countries; the Company’s ability to use NOLs and certain other tax attributes; and other economic, business, competitive, and/or regulatory factors affecting the Company’s business, including those set forth in the filings of US Airways and the Company with the SEC, especially in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of their respective annual reports on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and other SEC filings. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. 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 except as required by law.

 

Please refer to the footnotes and the forward looking statements page of this document for additional information