American Airlines reports fourth-quarter and full-year 2023 financial results

FORT WORTH, Texas, Jan. 25, 2024 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ:AAL) today reported its fourth-quarter and full-year 2023 financial results, including:

• Record full-year revenue of approximately $53 billion.
• GAAP fourth-quarter and full-year net income of $19 million and $822 million, or $0.03 and $1.21 per diluted share, respectively.
• Excluding net special items¹, fourth-quarter and full-year net income of $192 million and $1.9 billion, or $0.29 and $2.65 per diluted share, respectively.
• Achieved best-ever fourth-quarter and full-year completion factor.
• Generated GAAP operating cash flow of $3.8 billion and the airline's highest full-year free cash flow² of $1.8 billion.
• Reduced total debt³ by $3.2 billion in 2023. The company is more than 75% of the way to its 2025 total debt reduction goal.

"The American Airlines team produced an exceptionally strong performance in 2023," said American's CEO Robert Isom. "We are delivering on our commitments and remain well-positioned for the future, supported by the strength of our network and travel rewards program, our young and simplified fleet, our operational reliability, and our outstanding team. As we look forward, we remain focused on delivering a reliable operation for our customers and reengineering the business to build an even more efficient airline."

Operational reliability

American and its regional partners operated nearly 2 million flights in 2023, with an average load factor of 83.5%. The company produced its best-ever fourth-quarter and full-year completion factor, with the lowest number of cancellations annually since the merger in 2013.

The airline's strong operational momentum continued through the holiday travel period. American achieved its best-ever completion factor and on-time departures as well as its lowest mishandled baggage rate over the holidays.

Financial performance

For the full year, American produced record revenue of nearly $53 billion. In the fourth quarter, the company generated revenue of more than $13 billion and an operating margin of 5.0% on a GAAP basis. Excluding the impact of net special items¹, American produced an operating margin of 5.1% in the fourth quarter, exceeding the high end of the company's prior guidance. These results were driven by continued strong demand for American's product, record revenue from its travel rewards program, strong operational performance and effective cost control.

Liquidity and balance sheet

Strengthening the balance sheet remains a top priority for the company. American reduced total debt³ by more than $500 million in the fourth quarter and by approximately $3.2 billion in 2023. The company is more than 75% of the way to its goal of reducing total debt³ by $15 billion by the end of 2025. As of Dec. 31, 2023, American had reduced its total debt³ by approximately $11.4 billion from peak levels in mid-2021.

The company ended the year with approximately $10.4 billion of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.

Guidance and investor update

Based on present demand trends and the current fuel price forecast and excluding the impact of special items⁴, the company expects its first-quarter 2024 adjusted loss per diluted share⁴ to be between ($0.15) and ($0.35). American expects its full-year 2024 adjusted earnings per diluted share⁴ to be between $2.25 and $3.25.

For additional financial forecasting detail, please refer to the company's investor update, furnished with this press release with the SEC on Form 8-K. This filing will also be available at aa.com/investorrelations.

Conference call and webcast details

The company will conduct a live audio webcast of its financial results conference call at 7:30 a.m. CT 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 Feb. 25.

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, including the calculation of free cash flow.

1. The company recognized $173 million of net special items in the fourth quarter after the effect of taxes, which principally included $216 million of nonoperating net special items for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments. The company recognized $1.0 billion of net special items in 2023 after the effect of taxes, which included operating net special items of $979 million principally related to one-time charges resulting from the ratification of a new collective bargaining agreement with American's mainline pilots, as well as nonoperating net special items of $362 million for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments.
2. Please see the accompanying notes for the company's definition of free cash flow, a non-GAAP measure.
3. All references to total debt include debt, finance and operating lease liabilities and pension obligations.
4. Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking information to GAAP as the nature or amount of net special items cannot be determined at this time.

About American Airlines Group

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 @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 Exchange Act of 1934, as amended, 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 herein as well as in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (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. Additionally, 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. 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. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.

American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
	3 Months Ended December 31,								Percent Increase			12 Months Ended December 31,								Percent Increase
	2023				2022				(Decrease)			2023				2022				(Decrease)
Operating revenues:
Passenger	$	12,010			$	12,131			(1.0	)		$	48,512			$	44,568			8.8
Cargo		199				263			(24.2	)			812				1,233			(34.1	)
Other		853				795			7.2				3,464				3,170			9.3
Total operating revenues		13,062				13,189			(1.0	)			52,788				48,971			7.8
Operating expenses:
Aircraft fuel and related taxes		3,159				3,421			(7.7	)			12,257				13,791			(11.1	)
Salaries, wages and benefits		3,689				3,199			15.3				14,580				12,972			12.4
Regional expenses:
Regional operating expenses		1,101				1,006			9.3				4,325				4,064			6.4
Regional depreciation and amortization		79				81			(1.8	)			318				321			(0.8	)
Maintenance, materials and repairs		875				735			19.1				3,265				2,684			21.6
Other rent and landing fees		714				649			10.0				2,928				2,730			7.3
Aircraft rent		338				350			(3.2	)			1,369				1,395			(1.9	)
Selling expenses		443				484			(8.5	)			1,799				1,815			(0.9	)
Depreciation and amortization		480				492			(2.3	)			1,936				1,977			(2.1	)
Special items, net		9				4			nm	(1)			971				193			nm
Other		1,519				1,385			9.7				6,006				5,422			10.8
Total operating expenses		12,406				11,806			5.1				49,754				47,364			5.0
Operating income		656				1,383			(52.5	)			3,034				1,607			88.8
Nonoperating income (expense):
Interest income		136				110			24.1				591				216			nm
Interest expense, net		(519	)			(532	)		(2.3	)			(2,145	)			(1,962	)		9.3
Other income (expense), net		(241	)			50			nm				(359	)			325			nm
Total nonoperating expense, net		(624	)			(372	)		67.9				(1,913	)			(1,421	)		34.6
Income before income taxes		32				1,011			(96.8	)			1,121				186			nm
Income tax provision		13				208			(93.6	)			299				59			nm
Net income	$	19			$	803			(97.6	)		$	822			$	127			nm
Earnings per common share:
Basic	$	0.03			$	1.23						$	1.26			$	0.20
Diluted	$	0.03			$	1.14						$	1.21			$	0.19
Weighted average shares outstanding (in thousands):
Basic		654,725				650,944							653,612				650,345
Diluted		657,079				716,070							719,669				655,122
Note: Percent change may not recalculate due to rounding.
(1) Not meaningful or greater than 100% change.

American Airlines Group Inc.
Consolidated Operating Statistics (1)
(Unaudited)
	3 Months Ended December 31,				Increase			12 Months Ended December 31,				Increase
	2023		2022		(Decrease)			2023		2022		(Decrease)
Revenue passenger miles (millions)	58,331		55,320		5.4	%		231,926		215,624		7.6	%
Available seat miles (ASM) (millions)	69,773		65,962		5.8	%		277,723		260,226		6.7	%
Passenger load factor (percent)	83.6		83.9		(0.3	) pts		83.5		82.9		0.6	pts
Yield (cents)	20.59		21.93		(6.1	)%		20.92		20.67		1.2	%
Passenger revenue per ASM (cents)	17.21		18.39		(6.4	)%		17.47		17.13		2.0	%
Total revenue per ASM (cents)	18.72		19.99		(6.4	)%		19.01		18.82		1.0	%
Cargo ton miles (millions)	501		458		9.5	%		1,840		1,972		(6.7	)%
Cargo yield per ton mile (cents)	39.74		57.39		(30.8	)%		44.13		62.52		(29.4	)%
Fuel consumption (gallons in millions)	1,033		979		5.5	%		4,140		3,901		6.1	%
Average aircraft fuel price including related taxes (dollars per gallon)	3.06		3.50		(12.5	)%		2.96		3.54		(16.3	)%
Operating cost per ASM (cents)	17.78		17.90		(0.7	)%		17.92		18.20		(1.6	)%
Operating cost per ASM excluding net special items (cents)	17.77		17.89		(0.7	)%		17.56		18.13		(3.1	)%
Operating cost per ASM excluding net special items and fuel (cents)	13.24		12.70		4.2	%		13.15		12.83		2.5	%
Passenger enplanements (thousands)	53,567		50,934		5.2	%		210,692		199,288		5.7	%
Departures (thousands):
Mainline	285		277		2.9	%		1,145		1,052		8.9	%
Regional	222		201		10.3	%		855		903		(5.3	)%
Total	507		478		6.0	%		2,000		1,955		2.3	%
Average stage length (miles):
Mainline	1,157		1,132		2.3			1,147		1,161		(1.2	)%
Regional	458		469		(2.3	)%		463		477		(3.0	)%
Total	851		853		(0.2	)%		855		845		1.1	%
Aircraft at end of period:
Mainline	965		925		4.3	%		965		925		4.3	%
Regional (2)	556		536		3.7	%		556		536		3.7	%
Total	1,521		1,461		4.1	%		1,521		1,461		4.1	%
Full-time equivalent employees at end of period:
Mainline	103,200		102,000		1.2	%		103,200		102,000		1.2	%
Regional (3)	28,900		27,700		4.3	%		28,900		27,700		4.3	%
Total	132,100		129,700		1.9	%		132,100		129,700		1.9	%
Note: Amounts may not recalculate due to rounding.
(1) Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.
(2) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 77 regional aircraft that were in temporary storage as of December 31, 2023 as follows: 57 Embraer 145, 11 Bombardier CRJ 700, six Bombardier CRJ 900, and three Embraer 170.
(3) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.

American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
	3 Months Ended December 31,				Increase			12 Months Ended December 31,				Increase
	2023		2022		(Decrease)			2023		2022		(Decrease)
Domestic (1)
Revenue passenger miles (millions)	39,610		38,065		4.1	%		155,374		149,410		4.0	%
Available seat miles (ASM) (millions)	46,805		44,939		4.2	%		185,206		176,447		5.0	%
Passenger load factor (percent)	84.6		84.7		(0.1	) pts		83.9		84.7		(0.8	) pts
Passenger revenue (dollars in millions)	8,744		8,945		(2.2	)%		34,592		32,911		5.1	%
Yield (cents)	22.08		23.50		(6.1	)%		22.26		22.03		1.1	%
Passenger revenue per ASM (cents)	18.68		19.90		(6.1	)%		18.68		18.65		0.1	%
Latin America (2)
Revenue passenger miles (millions)	8,570		8,379		2.3	%		33,337		32,467		2.7	%
Available seat miles (millions)	9,950		9,853		1.0	%		38,531		39,131		(1.5	)%
Passenger load factor (percent)	86.1		85.0		1.1	pts		86.5		83.0		3.5	pts
Passenger revenue (dollars in millions)	1,674		1,793		(6.6	)%		6,719		6,150		9.2	%
Yield (cents)	19.53		21.40		(8.7	)%		20.16		18.94		6.4	%
Passenger revenue per ASM (cents)	16.82		18.20		(7.6	)%		17.44		15.72		10.9	%
Atlantic
Revenue passenger miles (millions)	8,307		7,676		8.2	%		36,581		30,949		18.2	%
Available seat miles (millions)	10,728		9,725		10.3	%		46,056		40,679		13.2	%
Passenger load factor (percent)	77.4		78.9		(1.5	) pts		79.4		76.1		3.3	pts
Passenger revenue (dollars in millions)	1,330		1,222		8.9	%		6,205		5,070		22.4	%
Yield (cents)	16.02		15.92		0.6	%		16.96		16.38		3.5	%
Passenger revenue per ASM (cents)	12.40		12.57		(1.3	)%		13.47		12.46		8.1	%
Pacific
Revenue passenger miles (millions)	1,844		1,200		53.6	%		6,634		2,798		nm
Available seat miles (millions)	2,290		1,445		58.5	%		7,930		3,969		99.8	%
Passenger load factor (percent)	80.5		83.1		(2.6	) pts		83.7		70.5		13.2	pts
Passenger revenue (dollars in millions)	262		171		53.1	%		996		437		nm
Yield (cents)	14.19		14.23		(0.3	)%		15.00		15.62		(3.9	)%
Passenger revenue per ASM (cents)	11.43		11.82		(3.4	)%		12.55		11.01		14.0	%
Total International
Revenue passenger miles (millions)	18,721		17,255		8.5	%		76,552		66,214		15.6	%
Available seat miles (millions)	22,968		21,023		9.3	%		92,517		83,779		10.4	%
Passenger load factor (percent)	81.5		82.1		(0.6	) pts		82.7		79.0		3.7	pts
Passenger revenue (dollars in millions)	3,266		3,186		2.5	%		13,920		11,657		19.4	%
Yield (cents)	17.45		18.46		(5.5	)%		18.18		17.61		3.3	%
Passenger revenue per ASM (cents)	14.22		15.15		(6.2	)%		15.05		13.91		8.1	%
Note: Amounts may not recalculate due to rounding.
(1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.
(2) Latin America results include the Caribbean.

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:

• Operating Income (GAAP measure) to Operating Income Excluding Net Special Items (non-GAAP measure)
• Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure)
• Pre-Tax Income (GAAP measure) to Pre-Tax Income 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 (GAAP measure) to Net Income Excluding Net Special Items (non-GAAP measure)
• Basic and Diluted Earnings Per Share (GAAP measure) to Basic and Diluted Earnings Per Share 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) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs excluding net special items and fuel and CASM excluding net special items and 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 fuel and net special items allows management an additional tool to understand and analyze the Company's non-fuel costs and core operating performance.

	Reconciliation of Operating Income Excluding Net Special Items		3 Months Ended December 31,								Percent Increase			12 Months Ended December 31,								Percent Increase
			2023				2022				(Decrease)			2023				2022				(Decrease)
			(in millions)											(in millions)
	Operating income as reported		$	656			$	1,383						$	3,034			$	1,607
	Operating net special items:
	Mainline operating special items, net (1)			9				4							971				193
	Regional operating special items, net			-				2							8				5
	Operating income excluding net special items		$	665			$	1,389			(52.1%)			$	4,013			$	1,805			nm
	Calculation of Operating Margin
	Operating income as reported		$	656			$	1,383						$	3,034			$	1,607
	Total operating revenues as reported		$	13,062			$	13,189						$	52,788			$	48,971
	Operating margin			5.0	%			10.5	%						5.7	%			3.3	%
	Calculation of Operating Margin Excluding Net Special Items
	Operating income excluding net special items		$	665			$	1,389						$	4,013			$	1,805
	Total operating revenues as reported		$	13,062			$	13,189						$	52,788			$	48,971
	Operating margin excluding net special items			5.1	%			10.5	%						7.6	%			3.7	%
	Reconciliation of Pre-Tax Income Excluding Net Special Items
	Pre-tax income as reported		$	32			$	1,011						$	1,121			$	186
	Pre-tax net special items:
	Mainline operating special items, net (1)			9				4							971				193
	Regional operating special items, net			-				2							8				5
	Nonoperating special items, net (2)			216				40							362				74
	Total pre-tax net special items			225				46							1,341				272
	Pre-tax income excluding net special items		$	257			$	1,057			(75.7%)			$	2,462			$	458			nm
	Calculation of Pre-Tax Margin
	Pre-tax income as reported		$	32			$	1,011						$	1,121			$	186
	Total operating revenues as reported		$	13,062			$	13,189						$	52,788			$	48,971
	Pre-tax margin			0.2	%			7.7	%						2.1	%			0.4	%
	Calculation of Pre-Tax Margin Excluding Net Special Items
	Pre-tax income excluding net special items		$	257			$	1,057						$	2,462			$	458
	Total operating revenues as reported		$	13,062			$	13,189						$	52,788			$	48,971
	Pre-tax margin excluding net special items			2.0	%			8.0	%						4.7	%			0.9	%
			3 Months Ended December 31,								Percent Increase			12 Months Ended December 31,								Percent Increase
	Reconciliation of Net Income Excluding Net Special Items		2023				2022				(Decrease)			2023				2022				(Decrease)
			(in millions, except share and per share amounts)											(in millions, except share and per share amounts)
	Net income as reported		$	19			$	803						$	822			$	127
	Net special items:
	Total pre-tax net special items (1), (2)			225				46							1,341				272
	Income tax special items, net			-				-							-				(9	)
	Net tax effect of net special items			(52	)			(22	)						(304	)			(62	)
	Net income excluding net special items		$	192			$	827			(76.8%)			$	1,859			$	328			nm
	Reconciliation of Basic and Diluted Earnings Per Share Excluding Net Special Items
	Net income excluding net special items		$	192			$	827						$	1,859			$	328
	Shares used for computation (in thousands):
	Basic			654,725				650,944							653,612				650,345
	Diluted			718,807				716,070							719,669				655,122
	Earnings per share excluding net special items:
	Basic		$	0.29			$	1.27						$	2.84			$	0.50
	Diluted (3)		$	0.29			$	1.17						$	2.65			$	0.50
	Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel
	Total operating expenses as reported		$	12,406			$	11,806						$	49,754			$	47,364
	Operating net special items:
	Mainline operating special items, net (1)			(9	)			(4	)						(971	)			(193	)
	Regional operating special items, net			-				(2	)						(8	)			(5	)
	Total operating expenses excluding net special items			12,397				11,800							48,775				47,166
	Aircraft fuel and related taxes			(3,159	)			(3,421	)						(12,257	)			(13,791	)
	Total operating expenses excluding net special items and fuel		$	9,238			$	8,379						$	36,518			$	33,375
			(in cents)											(in cents)
	Total operating expenses per ASM as reported			17.78				17.90							17.92				18.20
	Operating net special items per ASM:
	Mainline operating special items, net (1)			(0.01	)			(0.01	)						(0.35	)			(0.07	)
	Regional operating special items, net			-				-							-				-
	Total operating expenses per ASM excluding net special items			17.77				17.89							17.56				18.13
	Aircraft fuel and related taxes per ASM			(4.53	)			(5.19	)						(4.41	)			(5.30	)
	Total operating expenses per ASM excluding net special items and fuel			13.24				12.70							13.15				12.83
	Note: Amounts may not recalculate due to rounding.
	FOOTNOTES:
(1)	The 2023 twelve month period mainline operating special items, net principally included $989 million of one-time charges resulting from the ratification of a new collective bargaining agreement with our mainline pilots, including a one-time payment of $754 million as well as adjustments to other benefit-related items of $235 million. The 2022 twelve month period mainline operating special items, net principally included a non-cash impairment charge to write down the carrying value of the Company's retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. The Company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.
(2)	Principally included charges associated with debt refinancings and extinguishments as well as mark-to-market net unrealized gains and losses associated with certain equity investments.
(3)	The 2023 three and twelve month period diluted earnings per share gives effect to, among other things, the Company's outstanding 6.5% senior convertible notes by (a) adding back to earnings $13 million and $47 million of interest expense, respectively, related to such convertible notes, net of estimated profit sharing, short-term incentive and tax effects and (b) including in the diluted shares outstanding, 61.7 million shares issuable in respect to such convertible notes. The 2022 three month period diluted earnings per share gives effect to, among other things, the Company's outstanding 6.5% senior convertible notes by (a) adding back to earnings $11 million of interest expense related to such convertible notes, net of estimated profit sharing, short-term incentive and tax effects and (b) including in the diluted shares outstanding, 61.7 million shares issuable in respect to such convertible notes.

American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions) (Unaudited)
			Year Ended December 31,
			2023				2022
	Net cash provided by operating activities		$	3,803			$	2,173
	Cash flows from investing activities:
	Capital expenditures, net of aircraft purchase deposit returns			(2,596	)			(2,546	)
	Proceeds from sale of property and equipment and sale-leaseback transactions			230				147
	Sales of short-term investments			8,861				14,972
	Purchases of short-term investments			(7,323	)			(11,257	)
	Decrease in restricted short-term investments			51				1
	Purchase of equity investments			-				(321	)
	Other investing activities			275				(360	)
	Net cash provided by (used in) investing activities			(502	)			636
	Cash flows from financing activities:
	Payments on long-term debt and finance leases			(7,718	)			(3,752	)
	Proceeds from issuance of long-term debt			4,822				1,069
	Other financing activities			(310	)			52
	Net cash used in financing activities			(3,206	)			(2,631	)
	Net increase in cash and restricted cash			95				178
	Cash and restricted cash at beginning of year			586				408
(1)	Cash and restricted cash at end of year		$	681			$	586
(1)	The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
	Cash		$	578			$	440
	Restricted cash included in restricted cash and short-term investments			103				146
	Total cash and restricted cash		$	681			$	586

Free Cash Flow

The Company's free cash flow summary 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 ability to generate cash from its core operating performance that is available for use to reinvest in the business or to reduce debt. The Company defines free cash flows as net cash provided by operating activities less net cash used in investing activities, adjusted for (1) net sales of short-term investments and (2) change in restricted cash. We believe that calculating free cash flow as adjusted for these items is more useful for investors because short-term investment activity and restricted cash are not representative of activity core to our operations.

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. Our calculation of free cash flow is not intended, and should not be used, to measure the residual cash flow available for discretionary expenditures because, among other things, it excludes mandatory debt service requirements and certain other non-discretionary expenditures.

 

			Year Ended December 31, 2023
			(in millions)
	Net cash provided by operating activities		$	3,803
	Adjusted net cash used in investing activities (1)			(1,997	)
	Free cash flow		$	1,806
(1)	The following table provides a reconciliation of adjusted net cash used in investing activities for the year ended December 31, 2023 (in millions):
	Net cash used in investing activities		$	(502	)
	Adjustments:
	Net sales of short-term investments			(1,538	)
	Decrease in restricted cash			43
	Adjusted net cash used in investing activities		$	(1,997	)

American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions, except shares)
	December 31, 2023				December 31, 2022
	(unaudited)
Assets
Current assets
Cash	$	578			$	440
Short-term investments		7,000				8,525
Restricted cash and short-term investments		910				995
Accounts receivable, net		2,026				2,138
Aircraft fuel, spare parts and supplies, net		2,400				2,279
Prepaid expenses and other		658				892
Total current assets		13,572				15,269
Operating property and equipment
Flight equipment		41,794				39,703
Ground property and equipment		10,307				9,913
Equipment purchase deposits		760				613
Total property and equipment, at cost		52,861				50,229
Less accumulated depreciation and amortization		(22,097	)			(20,029	)
Total property and equipment, net		30,764				30,200
Operating lease right-of-use assets		7,939				8,094
Other assets
Goodwill		4,091				4,091
Intangibles, net		2,051				2,059
Deferred tax asset		2,888				3,099
Other assets		1,753				1,904
Total other assets		10,783				11,153
Total assets	$	63,058			$	64,716
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Current maturities of long-term debt and finance leases	$	3,632			$	3,274
Accounts payable		2,353				2,149
Accrued salaries and wages		2,377				1,713
Air traffic liability		6,200				6,745
Loyalty program liability		3,453				3,169
Operating lease liabilities		1,309				1,465
Other accrued liabilities		2,738				2,981
Total current liabilities		22,062				21,496
Noncurrent liabilities
Long-term debt and finance leases, net of current maturities		29,270				32,389
Pension and postretirement benefits		3,044				2,837
Loyalty program liability		5,874				5,976
Operating lease liabilities		6,452				6,559
Other liabilities		1,558				1,258
Total noncurrent liabilities		46,198				49,019
Stockholders' equity (deficit)
Common stock, 654,273,192 shares outstanding at December 31, 2023		7				6
Additional paid-in capital		7,374				7,291
Accumulated other comprehensive loss		(4,894	)			(4,585	)
Retained deficit		(7,689	)			(8,511	)
Total stockholders' deficit		(5,202	)			(5,799	)
Total liabilities and stockholders' equity (deficit)	$	63,058			$	64,716