UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 15, 2020
AMERICAN AIRLINES GROUP INC.
AMERICAN AIRLINES, INC.
(Exact name of registrant as specified in its charter)
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| | | | |
| Delaware | | 1-8400 | | 75-1825172 |
| Delaware | | 1-2691 | | 13-1502798 |
| (State or other Jurisdiction of Incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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| | | | | |
| 1 Skyview Drive, | Fort Worth, | Texas | | | 76155 |
| 1 Skyview Drive, | Fort Worth, | Texas | | | 76155 |
| (Address of principal executive offices) | | | (Zip Code) |
Registrant’s telephone number, including area code:
(817) 963-1234
(817) 963-1234
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| | |
| N/A |
| (Former name or former address if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.01 par value per share | | AAL | | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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| ITEM 7.01. | REGULATION FD DISCLOSURE. |
As previously disclosed, in the fourth quarter of 2018, American Airlines Group Inc. (the Company) elected to early adopt Accounting Standards Update 2016-02: Leases (Topic 842) (the New Lease Standard) as of January 1, 2018. A significant portion of the adjustments recorded in the fourth quarter of 2018 to adopt the New Lease Standard related to prior 2018 quarters. The Company previously recast the 2018 quarters for the adoption of the New Lease Standard in Note 17 to the Company’s Consolidated Financial Statements in Part II, Item 8A of its 2018 Form 10-K filed on February 25, 2019. Note 17 presents a table of summarized financial data by quarter.
This filing is to provide a convenient table based on the 2018 annual income statement and the unaudited quarterly income statements, in each case as previously reported and as recast. In particular, the quarterly “recast” data in the table below, when aggregated, equals the amounts shown in the 2018 annual statement of operations as filed in the Company's 2018 Form 10-K.
No change has been made in any of the income statement amounts previously presented in the Company’s 2018 Form 10-K or in the comparative 2018 periods of the Company’s 2019 Form 10-Qs. Similarly, the summarized financial data table in Note 17 remains unchanged.
The information in this Item 7.01 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 1Q18 As Filed (1) | | New Lease Standard Adjustments | | 1Q18 As Recast (2) | | 2Q18 As Filed (1) | | New Lease Standard Adjustments | | 2Q18 As Recast (2) | | 3Q18 As Filed (1) | | New Lease Standard Adjustments | | 3Q18 As Recast (2) | | 4Q18 As Filed (3) | | New Lease Standard Adjustments | | 4Q18 As Recast |
| Operating revenues: | |
| Passenger | $ | 9,480 |
| | $ | — |
| | $ | 9,480 |
| | $ | 10,674 |
| | $ | — |
| | $ | 10,674 |
| | $ | 10,561 |
| | $ | — |
| | $ | 10,561 |
| | $ | 9,962 |
| | $ | — |
| | $ | 9,962 |
|
| Cargo | 227 |
| | — |
| | 227 |
| | 261 |
| | — |
| | 261 |
| | 260 |
| | — |
| | 260 |
| | 264 |
| | — |
| | 264 |
|
| Other | 694 |
| | — |
| | 694 |
| | 708 |
| | — |
| | 708 |
| | 738 |
| | — |
| | 738 |
| | 712 |
| | — |
| | 712 |
|
| Total operating revenues | 10,401 |
| | — |
| | 10,401 |
| | 11,643 |
| | — |
| | 11,643 |
| | 11,559 |
| | — |
| | 11,559 |
| | 10,938 |
| | — |
| | 10,938 |
|
| Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | |
| Aircraft fuel and related taxes | 1,763 |
| | — |
| | 1,763 |
| | 2,103 |
| | — |
| | 2,103 |
| | 2,234 |
| | — |
| | 2,234 |
| | 1,953 |
| | — |
| | 1,953 |
|
| Salaries, wages and benefits | 3,017 |
| | — |
| | 3,017 |
| | 3,093 |
| | 2 |
| | 3,095 |
| | 3,129 |
| | 2 |
| | 3,131 |
| | 3,011 |
| | (4 | ) | | 3,007 |
|
| Regional expenses | 1,698 |
| | — |
| | 1,698 |
| | 1,793 |
| | — |
| | 1,793 |
| | 1,833 |
| | — |
| | 1,833 |
| | 1,810 |
| | — |
| | 1,810 |
|
| Maintenance, materials and repairs | 469 |
| | — |
| | 469 |
| | 505 |
| | — |
| | 505 |
| | 526 |
| | — |
| | 526 |
| | 550 |
| | — |
| | 550 |
|
| Other rent and landing fees | 462 |
| | 5 |
| | 467 |
| | 490 |
| | 5 |
| | 495 |
| | 497 |
| | 5 |
| | 502 |
| | 452 |
| | (15 | ) | | 437 |
|
| Aircraft rent | 304 |
| | 5 |
| | 309 |
| | 305 |
| | 6 |
| | 311 |
| | 312 |
| | 6 |
| | 318 |
| | 343 |
| | (17 | ) | | 326 |
|
| Selling expenses | 356 |
| | — |
| | 356 |
| | 385 |
| | — |
| | 385 |
| | 395 |
| | — |
| | 395 |
| | 383 |
| | — |
| | 383 |
|
| Depreciation and amortization | 445 |
| | (5 | ) | | 440 |
| | 463 |
| | (6 | ) | | 457 |
| | 473 |
| | (5 | ) | | 468 |
| | 458 |
| | 16 |
| | 474 |
|
| Special items, net | 195 |
| | 30 |
| | 225 |
| | 152 |
| | 30 |
| | 182 |
| | 215 |
| | (8 | ) | | 207 |
| | 225 |
| | (52 | ) | | 173 |
|
| Other | 1,261 |
| | — |
| | 1,261 |
| | 1,326 |
| | (13 | ) | | 1,313 |
| | 1,296 |
| | (36 | ) | | 1,260 |
| | 1,204 |
| | 50 |
| | 1,254 |
|
| Total operating expenses | 9,970 |
| | 35 |
| | 10,005 |
| | 10,615 |
| | 24 |
| | 10,639 |
| | 10,910 |
| | (36 | ) | | 10,874 |
| | 10,389 |
| | (22 | ) | | 10,367 |
|
| Operating income | 431 |
| | (35 | ) | | 396 |
| | 1,028 |
| | (24 | ) | | 1,004 |
| | 649 |
| | 36 |
| | 685 |
| | 549 |
| | 22 |
| | 571 |
|
| Nonoperating income (expense): | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | 25 |
| | — |
| | 25 |
| | 30 |
| | — |
| | 30 |
| | 29 |
| | — |
| | 29 |
| | 34 |
| | — |
| | 34 |
|
| Interest expense, net | (265 | ) | | 3 |
| | (262 | ) | | (266 | ) | | 3 |
| | (263 | ) | | (265 | ) | | 3 |
| | (262 | ) | | (261 | ) | | (9 | ) | | (270 | ) |
| Other income (expense), net | 82 |
| | (3 | ) | | 79 |
| | (23 | ) | | 8 |
| | (15 | ) | | 43 |
| | 1 |
| | 44 |
| | 65 |
| | (6 | ) | | 59 |
|
| Total nonoperating expense, net | (158 | ) | | — |
| | (158 | ) | | (259 | ) | | 11 |
| | (248 | ) | | (193 | ) | | 4 |
| | (189 | ) | | (162 | ) | | (15 | ) | | (177 | ) |
| Income before income taxes | 273 |
| | (35 | ) | | 238 |
| | 769 |
| | (13 | ) | | 756 |
| | 456 |
| | 40 |
| | 496 |
| | 387 |
| | 7 |
| | 394 |
|
| Income tax provision | 87 |
| | (8 | ) | | 79 |
| | 203 |
| | (3 | ) | | 200 |
| | 115 |
| | 9 |
| | 124 |
| | 68 |
| | 1 |
| | 69 |
|
| Net income | $ | 186 |
| | $ | (27 | ) | | $ | 159 |
| | $ | 566 |
| | $ | (10 | ) | | $ | 556 |
| | $ | 341 |
| | $ | 31 |
| | $ | 372 |
| | $ | 319 |
| | $ | 6 |
| | $ | 325 |
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| | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | $ | 0.39 |
| | $ | (0.05 | ) | | $ | 0.34 |
| | $ | 1.22 |
| | $ | (0.02 | ) | | $ | 1.20 |
| | $ | 0.74 |
| | $ | 0.07 |
| | $ | 0.81 |
| | $ | 0.69 |
| | $ | 0.02 |
| | $ | 0.71 |
|
| Diluted | $ | 0.39 |
| | $ | (0.05 | ) | | $ | 0.34 |
| | $ | 1.22 |
| | $ | (0.02 | ) | | $ | 1.20 |
| | $ | 0.74 |
| | $ | 0.07 |
| | $ | 0.81 |
| | $ | 0.69 |
| | $ | 0.01 |
| | $ | 0.70 |
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| Weighted average shares outstanding (in thousands): | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | 472,297 |
| | | | 472,297 |
| | 463,533 |
| | | | 463,533 |
| | 460,526 |
| | | | 460,526 |
| | 460,589 |
| | | | 460,589 |
|
| Diluted | 474,598 |
| | | | 474,598 |
| | 464,618 |
| | | | 464,618 |
| | 461,507 |
| | | | 461,507 |
| | 461,915 |
| | | | 461,915 |
|
Note: May not recalculate due to rounding.
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(1) | Amounts presented in these columns are from the respective quarterly Form 10-Qs filed in 2018. |
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(2) | As previously disclosed, the Company recast the 2018 quarters for the adoption of the New Lease Standard in its 2018 Form 10-K filed on February 25, 2019. The 1Q18, 2Q18 and 3Q18 as recast amounts presented in these columns were also presented in the comparative period of the respective quarterly Form 10-Qs filed in 2019 and are unchanged from those respective filings. |
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(3) | Amounts presented in these columns are from the Company's fourth quarter 2018 earnings release filed on Form 8-K on January 24, 2019. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines Group Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | AMERICAN AIRLINES GROUP INC. |
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| Date: January 15, 2020 | By: | | /s/ Derek J. Kerr |
| | | | Derek J. Kerr |
| | | | Executive Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, American Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | AMERICAN AIRLINES, INC. |
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| Date: January 15, 2020 | By: | | /s/ Derek J. Kerr |
| | | | Derek J. Kerr |
| | | | Executive Vice President and Chief Financial Officer |
