American Airlines Reports Second-Quarter 2023 Financial Results

FORT WORTH, Texas, July 20, 2023 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ:AAL) today reported its second-quarter 2023 financial results, including:

• Record quarterly revenue of $14.1 billion, a 4.7% increase year over year.
• Second-quarter net income of $1.3 billion, or $1.88 per diluted share. Excluding net special items¹, second-quarter net income of $1.4 billion, or $1.92 per diluted share.
• Generated operating cash flow of $1.8 billion and free cash flow of $1.2 billion in the second quarter.
• Ended the quarter with $14.9 billion of total available liquidity.
• Raising full-year adjusted EPS² guidance to between $3.00 and $3.75 per diluted share.
• Credit rating upgraded two notches to B+ by Fitch.

"It was another fantastic quarter for American, driven by the hard work of our team to deliver a reliable operation for our customers and the continued strong demand for our product," said American's CEO Robert Isom. "Our operation is performing at historically strong levels, and we have worked to refresh our fleet and build a comprehensive global network, all of which helped to produce record revenues in the second quarter. We will build on this momentum the rest of the year and continue to prioritize reliability, profitability, accountability and strengthening our balance sheet."

Running a reliable operation

The American Airlines team delivered a strong operational performance during the quarter, achieving its best-ever second-quarter completion factor and controllable completion factor³. American and its regional partners operated nearly 500,000 flights in the second quarter, with an average load factor of approximately 86%.

American delivered a record Memorial Day weekend mainline completion factor and controllable completion factor, while operating its largest-ever mainline Memorial Day weekend schedule. The momentum continued into June, with the American team delivering a record June completion factor and controllable completion factor, despite weather and air traffic control challenges. In the second quarter, American achieved its best-ever April, May and June controllable completion factors³ and delivered 11 more combined zero-cancellation days versus the same period last year.

Returning to profitability

American produced record quarterly revenues of $14.1 billion in the second quarter. The strong revenue performance was driven by continued broad-based demand strength and American's completion factor performance in the quarter. Demand was particularly strong in the month of June driven by an increase in close-in bookings. Domestic and short-haul international revenue continue to perform well, and the airline has seen noticeable strength in long-haul international demand and yield performance.

In the second quarter, the company produced an operating margin of 15.4% and net income of $1.3 billion on a GAAP basis. Excluding net special items¹, American produced net income of $1.4 billion in the second quarter.

Liquidity and balance sheet

American generated operating cash flow and free cash flow of nearly $1.8 billion and $1.2 billion, respectively, in the second quarter. The company reduced total debt⁴ by $387 million in the quarter. Strengthening the balance sheet continues to be a top priority, and American is nearly two-thirds of the way to its goal of reducing total debt by $15 billion by the end of 2025. As of June 30, 2023, American had reduced its total debt by approximately $9.4 billion from peak levels in mid-2021. The company's commitment to strengthening its balance sheet is being recognized, as evidenced by Fitch upgrading the company's rating two notches, to B+. The company ended the quarter with approximately $14.9 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 demand trends and the current fuel price forecast and excluding the impact of special items, the company expects its third-quarter 2023 adjusted earnings per diluted share² to be between $0.85 and $0.95. American now expects its full-year 2023 adjusted earnings per diluted share² to be between $3.00 and $3.75. The company's forecasts include the estimated impact of anticipated new labor agreements.

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 Aug. 20.

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 $33 million of net special items after the effect of taxes in the second quarter, which principally included charges associated with debt extinguishments and mark-to-market adjustments on equity investments.
2. Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time.
3. Excludes second-quarter 2020 and second-quarter 2021, which were impacted by significantly reduced capacity due to COVID-19.
4. All references to total debt include debt, finance leases, operating lease liabilities and pension obligations.

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 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 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 June 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.

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American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
		3 Months Ended June 30,								Percent Increase			6 Months Ended June 30,								Percent Increase
			2023				2022			(Decrease)				2023				2022			(Decrease)
Operating revenues:
Passenger		$	12,978			$	12,223			6.2			$	24,081			$	20,041			20.2
Cargo			197				328			(39.8	)			420				692			(39.2	)
Other			880				871			1.1				1,743				1,588			9.8
Total operating revenues			14,055				13,422			4.7				26,244				22,321			17.6
Operating expenses:
Aircraft fuel and related taxes			2,723				4,020			(32.3	)			5,890				6,522			(9.7	)
Salaries, wages and benefits			3,635				3,235			12.4				6,917				6,389			8.3
Regional expenses:
Regional operating expenses			1,073				992			8.3				2,135				1,964			8.8
Regional depreciation and amortization			80				80			(0.6	)			160				160			-
Maintenance, materials and repairs			808				647			24.9				1,520				1,264			20.3
Other rent and landing fees			762				694			9.8				1,470				1,372			7.1
Aircraft rent			344				345			(0.4	)			688				698			(1.4	)
Selling expenses			489				504			(3.0	)			927				836			10.8
Depreciation and amortization			483				504			(4.0	)			969				995			(2.6	)
Special items, net			-				(5	)		(99.4	)			13				152			(91.2	)
Other			1,495				1,389			7.6				2,955				2,675			10.5
Total operating expenses			11,892				12,405			(4.1	)			23,644				23,027			2.7
Operating income (loss)			2,163				1,017			nm	(1)			2,600				(706	)		nm
Nonoperating income (expense):
Interest income			162				29			nm				288				37			nm
Interest expense, net			(548	)			(468	)		17.1				(1,088	)			(932	)		16.8
Other income (expense), net			(14	)			25			nm				(21	)			118			nm
Total nonoperating expense, net			(400	)			(414	)		(3.4	)			(821	)			(777	)		5.7
Income (loss) before income taxes			1,763				603			nm				1,779				(1,483	)		nm
Income tax provision (benefit)			425				127			nm				431				(324	)		nm
Net income (loss)		$	1,338			$	476			nm			$	1,348			$	(1,159	)		nm
Earnings (loss) per common share:
Basic		$	2.05			$	0.73						$	2.06			$	(1.78	)
Diluted		$	1.88			$	0.68						$	1.91			$	(1.78	)
Weighted average shares outstanding (in thousands):
Basic			653,602				650,346							652,801				649,925
Diluted			719,345				718,532							718,890				649,925
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 June 30,				Increase				6 Months Ended June 30,				Increase
		2023		2022		(Decrease)				2023		2022		(Decrease)
Revenue passenger miles (millions)		60,020		57,516		4.4%				112,034		101,806		10.0%
Available seat miles (ASM) (millions)		69,658		66,163		5.3%				134,665		125,697		7.1%
Passenger load factor (percent)		86.2		86.9		(0.7)		pts		83.2		81.0		2.2		pts
Yield (cents)		21.62		21.25		1.7%				21.49		19.69		9.2%
Passenger revenue per ASM (cents)		18.63		18.47		0.8%				17.88		15.94		12.2%
Total revenue per ASM (cents)		20.18		20.29		(0.5)%				19.49		17.76		9.7%
Cargo ton miles (millions)		427		500		(14.7)%				849		1,036		(18.1)%
Cargo yield per ton mile (cents)		46.31		65.58		(29.4)%				49.51		66.74		(25.8)%
Fuel consumption (gallons in millions)		1,041		997		4.4%				2,006		1,891		6.0%
Average aircraft fuel price including related taxes (dollars per gallon)		2.62		4.03		(35.1)%				2.94		3.45		(14.8)%
Operating cost per ASM (cents)		17.07		18.75		(8.9)%				17.56		18.32		(4.2)%
Operating cost per ASM excluding net special items (cents)		17.06		18.76		(9.0)%				17.54		18.20		(3.6)%
Operating cost per ASM excluding net special items and fuel (cents)		13.16		12.68		3.7%				13.17		13.01		1.2%
Passenger enplanements (thousands)		54,285		53,068		2.3%				102,517		95,790		7.0%
Departures (thousands):
Mainline		289		260		11.3%				564		501		12.5%
Regional		209		243		(13.9)%				411		474		(13.4)%
Total		498		503		(0.9)%				975		975		-	%
Average stage length (miles):
Mainline		1,141		1,181		(3.4)%				1,132		1,170		(3.2)%
Regional		463		478		(3.1)%				466		481		(3.2)%
Total		856		841		1.8 %				851		835		2.0%
Aircraft at end of period:
Mainline(2)		944		895		5.5%				944		895		5.5%
Regional(3)		526		576		(8.7)%				526		576		(8.7)%
Total		1,470		1,471		(0.1)%				1,470		1,471		(0.1)%
Full-time equivalent employees at end of period:
Mainline		104,400		102,100		2.3%				104,400		102,100		2.3%
Regional(4)		28,100		27,100		3.7%				28,100		27,100		3.7%
Total		132,500		129,200		2.6%				132,500		129,200		2.6%
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)Excludes three Boeing 737-800 mainline aircraft that were in temporary storage as of June 30, 2023.
(3)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 74 regional aircraft that were in temporary storage as of June 30, 2023 as follows: 53 Embraer 145, 12 Bombardier CRJ 700, six Embraer 170, and three Bombardier CRJ 900.
(4)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 June 30,				Increase				6 Months Ended June 30,				Increase
			2023		2022		(Decrease)				2023		2022		(Decrease)
Domestic(1)
Revenue passenger miles (millions)			39,758		39,488		0.7%				75,509		72,120		4.7%
Available seat miles (ASM) (millions)			45,700		43,948		4.0 %				90,255		85,821		5.2%
Passenger load factor (percent)			87.0		89.9		(2.9)		pts		83.7		84.0		(0.3)		pts
Passenger revenue (dollars in millions)			9,195		9,120		0.8 %				17,232		15,180		13.5%
Yield (cents)			23.13		23.10		0.1 %				22.82		21.05		8.4%
Passenger revenue per ASM (cents)			20.12		20.75		(3.0)%				19.09		17.69		7.9%
Latin America(2)
Revenue passenger miles (millions)			7,926		8,424		(5.9)%				16,934		16,077		5.3%
Available seat miles (millions)			9,200		9,801		(6.1)%				19,710		20,112		(2.0)%
Passenger load factor (percent)			86.2		86.0		0.2		pts		85.9		79.9		6.0		pts
Passenger revenue (dollars in millions)			1,640		1,534		6.9 %				3,555		2,761		28.8%
Yield (cents)			20.69		18.21		13.6 %				20.99		17.17		22.2%
Passenger revenue per ASM (cents)			17.82		15.65		13.9 %				18.04		13.73		31.4%
Atlantic
Revenue passenger miles (millions)			10,689		9,045		18.2%				16,510		12,649		30.5%
Available seat miles (millions)			12,823		11,630		10.3%				21,065		18,010		17.0%
Passenger load factor (percent)			83.4		77.8		5.6		pts		78.4		70.2		8.2		pts
Passenger revenue (dollars in millions)			1,888		1,481		27.5%				2,819		1,947		44.8%
Yield (cents)			17.66		16.37		7.9%				17.07		15.39		10.9%
Passenger revenue per ASM (cents)			14.72		12.73		15.6%				13.38		10.81		23.8%
Pacific
Revenue passenger miles (millions)			1,647		559		nm				3,081		960		nm
Available seat miles (millions)			1,935		784		nm				3,635		1,754		nm
Passenger load factor (percent)			85.1		71.2		13.9		pts		84.8		54.7		30.1		pts
Passenger revenue (dollars in millions)			255		88		nm				475		153		nm
Yield (cents)			15.50		15.81		(2.0)%				15.40		15.94		(3.4)%
Passenger revenue per ASM (cents)			13.19		11.26		17.1 %				13.06		8.72		49.7%
Total International
Revenue passenger miles (millions)			20,262		18,028		12.4 %				36,525		29,686		23.0%
Available seat miles (millions)			23,958		22,215		7.8 %				44,410		39,876		11.4%
Passenger load factor (percent)			84.6		81.2		3.4		pts		82.2		74.4		7.8		pts
Passenger revenue (dollars in millions)			3,783		3,103		21.9 %				6,849		4,861		40.9%
Yield (cents)			18.67		17.21		8.5 %				18.75		16.38		14.5%
Passenger revenue per ASM (cents)			15.79		13.97		13.0 %				15.42		12.19		26.5%
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 (Loss) (GAAP measure) to Operating Income (Loss) Excluding Net Special Items (non-GAAP measure) - Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure) - 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) 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 (Loss) Excluding Net Special Items		3 Months Ended June 30,								Percent Increase		6 Months Ended June 30,								Percent Increase
				2023				2022			(Decrease)			2023				2022			(Decrease)
			(in millions)										(in millions)
	Operating income (loss) as reported		$	2,163			$	1,017					$	2,600			$	(706	)
	Operating net special items:
	Mainline operating special items, net(1)			-				(5	)					13				152
	Regional operating special items, net			6				-						6				-
	Operating income (loss) excluding net special items		$	2,169			$	1,012			nm		$	2,619			$	(554	)		nm
	Calculation of Operating Margin
	Operating income (loss) as reported		$	2,163			$	1,017					$	2,600			$	(706	)
	Total operating revenues as reported		$	14,055			$	13,422					$	26,244			$	22,321
	Operating margin			15.4	%			7.6	%					9.9	%			(3.2	%)
	Calculation of Operating Margin Excluding Net Special Items
	Operating income (loss) excluding net special items		$	2,169			$	1,012					$	2,619			$	(554	)
	Total operating revenues as reported		$	14,055			$	13,422					$	26,244			$	22,321
	Operating margin excluding net special items			15.4	%			7.5	%					10.0	%			(2.5	%)
	Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items
	Pre-tax income (loss) as reported		$	1,763			$	603					$	1,779			$	(1,483	)
	Pre-tax net special items:
	Mainline operating special items, net(1)			-				(5	)					13				152
	Regional operating special items, net			6				-						6				-
	Nonoperating special items, net(2)			28				89						45				92
	Total pre-tax net special items			34				84						64				244
	Pre-tax income (loss) excluding net special items		$	1,797			$	687			nm		$	1,843			$	(1,239	)		nm
	Calculation of Pre-Tax Margin
	Pre-tax income (loss) as reported		$	1,763			$	603					$	1,779			$	(1,483	)
	Total operating revenues as reported		$	14,055			$	13,422					$	26,244			$	22,321
	Pre-tax margin			12.5	%			4.5	%					6.8	%			(6.6	%)
	Calculation of Pre-Tax Margin Excluding Net Special Items
	Pre-tax income (loss) excluding net special items		$	1,797			$	687					$	1,843			$	(1,239	)
	Total operating revenues as reported		$	14,055			$	13,422					$	26,244			$	22,321
	Pre-tax margin excluding net special items			12.8	%			5.1	%					7.0	%			(5.6	%)
			3 Months Ended June 30,								Percent Increase		6 Months Ended June 30,								Percent Increase
	Reconciliation of Net Income (Loss) 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 (loss) as reported		$	1,338			$	476					$	1,348			$	(1,159	)
	Net special items:
	Total pre-tax net special items(1), (2)			34				84						64				244
	Income tax special items, net			-				(9	)					-				(9	)
	Net tax effect of net special items			(1	)			(18	)					(8	)			(53	)
	Net income (loss) excluding net special items		$	1,371			$	533			nm		$	1,404			$	(977	)		nm
	Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items
	Net income (loss) excluding net special items		$	1,371			$	533					$	1,404			$	(977	)
	Shares used for computation (in thousands):
	Basic			653,602				650,346						652,801				649,925
	Diluted			719,345				718,532						718,890				649,925
	Earnings (loss) per share excluding net special items:
	Basic		$	2.10			$	0.82					$	2.15			$	(1.50	)
	Diluted		$	1.92			$	0.76					$	1.98			$	(1.50	)
	Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel
	Total operating expenses as reported		$	11,892			$	12,405					$	23,644			$	23,027
	Operating net special items:
	Mainline operating special items, net(1)			-				5						(13	)			(152	)
	Regional operating special items, net			(6	)			-						(6	)			-
	Total operating expenses excluding net special items			11,886				12,410						23,625				22,875
	Aircraft fuel and related taxes			(2,723	)			(4,020	)					(5,890	)			(6,522	)
	Total operating expenses excluding net special items and fuel		$	9,163			$	8,390					$	17,735			$	16,353
			(in cents)										(in cents)
	Total operating expenses per ASM as reported			17.07				18.75						17.56				18.32
	Operating net special items per ASM:
	Mainline operating special items, net(1)			-				0.01						(0.01	)			(0.12	)
	Regional operating special items, net			(0.01	)			-						-				-
	Total operating expenses per ASM excluding net special items			17.06				18.76						17.54				18.20
	Aircraft fuel and related taxes per ASM			(3.91	)			(6.08	)					(4.37	)			(5.19	)
	Total operating expenses per ASM excluding net special items and fuel			13.16				12.68						13.17				13.01
	Note: Amounts may not recalculate due to rounding.
	FOOTNOTES:
(1)	The 2022 six 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.

American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
				6 Months Ended June 30,
					2023					2022
	Net cash provided by operating activities			$	5,096				$	2,924
	Cash flows from investing activities:
	Capital expenditures, net of aircraft purchase deposit returns				(1,244	)				(1,405	)
	Proceeds from sale-leaseback transactions				111					-
	Proceeds from sale of property and equipment				72					19
	Purchases of short-term investments				(7,587	)				(10,083	)
	Sales of short-term investments				4,656					10,135
	Decrease (increase) in restricted short-term investments				33					(10	)
	Purchase of equity investment				-					(200	)
	Other investing activities				214					(156	)
	Net cash used in investing activities				(3,745	)				(1,700	)
	Cash flows from financing activities:
	Payments on long-term debt and finance leases				(3,246	)				(1,659	)
	Proceeds from issuance of long-term debt				2,143					574
	Other financing activities				(55	)				(10	)
	Net cash used in financing activities				(1,158	)				(1,095	)
	Net increase in cash and restricted cash				193					129
	Cash and restricted cash at beginning of period				586					408
(1)	Cash and restricted cash at end of period			$	779				$	537
(1)	The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
	Cash			$	614				$	401
	Restricted cash included in restricted cash and short-term investments				165					136
	Total cash and restricted cash			$	779				$	537

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 purchases 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.
				6 Months Ended June 30, 2023
				(in millions)
	Net cash provided by operating activities			$	5,096
	Adjusted net cash used in investing activities(1)				(833	)
	Free cash flow			$	4,263
(1)	The following table provides a reconciliation of adjusted net cash used in investing activities for the six months ended June 30, 2023 (in millions):
	Net cash used in investing activities			$	(3,745	)
	Adjustments:
	Net purchases of short-term investments				2,931
	Increase in restricted cash				(19	)
	Adjusted net cash used in investing activities			$	(833	)

American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions, except shares)
	June 30, 2023				December 31, 2022
	(unaudited)
Assets
Current assets
Cash	$	614			$	440
Short-term investments		11,447				8,525
Restricted cash and short-term investments		984				995
Accounts receivable, net		2,073				2,138
Aircraft fuel, spare parts and supplies, net		2,280				2,279
Prepaid expenses and other		822				892
Total current assets		18,220				15,269
Operating property and equipment
Flight equipment		40,570				39,703
Ground property and equipment		9,996				9,913
Equipment purchase deposits		767				613
Total property and equipment, at cost		51,333				50,229
Less accumulated depreciation and amortization		(21,062	)			(20,029	)
Total property and equipment, net		30,271				30,200
Operating lease right-of-use assets		8,076				8,094
Other assets
Goodwill		4,091				4,091
Intangibles, net		2,055				2,059
Deferred tax asset		2,660				3,099
Other assets		1,887				1,904
Total other assets		10,693				11,153
Total assets	$	67,260			$	64,716
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Current maturities of long-term debt and finance leases	$	3,874			$	3,274
Accounts payable		2,406				2,149
Accrued salaries and wages		1,723				1,713
Air traffic liability		8,530				6,745
Loyalty program liability		3,492				3,169
Operating lease liabilities		1,431				1,465
Other accrued liabilities		2,860				2,981
Total current liabilities		24,316				21,496
Noncurrent liabilities
Long-term debt and finance leases, net of current maturities		30,772				32,389
Pension and postretirement benefits		2,694				2,837
Loyalty program liability		5,884				5,976
Operating lease liabilities		6,506				6,559
Other liabilities		1,473				1,258
Total noncurrent liabilities		47,329				49,019
Stockholders' equity (deficit)
Common stock, 653,286,761 shares outstanding at June 30, 2023		7				6
Additional paid-in capital		7,321				7,291
Accumulated other comprehensive loss		(4,550	)			(4,585	)
Retained deficit		(7,163	)			(8,511	)
Total stockholders' deficit		(4,385	)			(5,799	)
Total liabilities and stockholders' equity (deficit)	$	67,260			$	64,716