SEC Info℠ | Home | Search | My Interests | Help | Sign In | Please Sign In | ||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size 1/25/18 American Airlines Group Inc. 8-K:2,7 1/25/18 4:1.9M American Airlines Inc |
Document/Exhibit Description Pages Size 1: 8-K Current Report HTML 25K 2: EX-99.1 Miscellaneous Exhibit HTML 337K 3: EX-99.2 Miscellaneous Exhibit HTML 119K 4: EX-99.3 Miscellaneous Exhibit HTML 212K
Exhibit |
● | Accounting Changes - On January 1, 2018, the company adopted two new Accounting Standard
Updates: (ASUs): ASU 2014-9: Revenue from Contracts with Customers (the “New Revenue Standard”) and ASU 2017-07: Retirement Benefits (the “New Retirement Standard”). The Company has recast certain 2017 financial information previously reported in accordance with GAAP in effect as of December 31, 2017 to reflect the adoption of these standards. This recast financial information is included in Exhibit 99.3 to this Form 8-K. All 2018 guidance is based off the recast 2017 financial information. |
● | Revenue - The company expects its first quarter
total revenue per available seat mile (TRASM) to be up approximately 2.0 to 4.0 percent year-over-year. |
● | Fuel - Based on the January 22, 2018 forward curve, the company expects to pay an average of between $2.07 and $2.12 per gallon of consolidated jet fuel (including taxes) in the first quarter. Forecasted volume and fuel prices are provided in the following pages. |
● | CASM
- Consistent with guidance provided in October 2017, consolidated CASM excluding fuel and special items is expected to be up approximately 2.0 percent1 in 2018. First quarter consolidated CASM excluding fuel and special items is expected to be up approximately 4.0 percent1 year-over-year due primarily to salary and benefit increases provided to our team members (including the salary increases given to our pilots and flight attendants, which became effective on April 26, 2017), higher revenue-related expenses, increased rent and landing fees, and higher depreciation and amortization resulting from increased capex. For the remainder of the year, the company’s year-over-year increase in CASM excluding fuel and special items is expected to be smaller each quarter. The
company continues to expect its 2019 and 2020 CASM excluding fuel and special items to be up approximately 1.0 to 2.0 percent in each year. |
● | Capacity - Consistent with previous guidance, 2018 total system capacity is expected to be up 2.5 percent vs. 2017 on a schedule over schedule basis. Actual capacity growth will be slightly higher due to the year-over-year impact of the flight cancellations resulting from two consecutive hurricanes that hit Florida and the Caribbean in September 2017. Growth is driven by utilization (~2.0 pts), expected completion factor (~0.5 pts) and increased gauge (~0.5 pts). Both full year domestic and
international capacity is expected to be approximately 3.0 percent higher year-over-year. |
● | Liquidity - As of December 31, 2017, the company had approximately $7.6 billion in total available liquidity, comprised of unrestricted cash and investments of $5.1 billion and $2.5 billion in undrawn revolver capacity. The company also had a restricted cash position of $318 million. |
● | Capital
Expenditures - The company expects to spend $3.7 billion in capex in 2018, including $1.9 billion in aircraft and $1.8 billion in non-aircraft capex. The company now expects to spend $2.8 billion in aircraft and $1.8 billion in non-aircraft capex in 2019 and $2.5 billion in aircraft and $1.6 billion in non-aircraft capex in 2020. The company anticipates that the aircraft capex for these years will be financed at approximately 80%. |
● | Taxes - As of December 31, 2017, the company had approximately $10.2 billion of federal net operating losses (NOLs) and $3.5 billion of state NOLs, substantially all of which
are expected to be available in 2018 to reduce future federal and state taxable income. The company expects to recognize a provision for income taxes in 2018 at an effective rate of approximately 24 percent, which will be substantially non-cash. |
● | Pre-tax Margin and EPS - Based on the assumptions outlined above, the company expects its first quarter pre-tax margin excluding special items to be approximately 2.0% to 4.0%1. In addition, the company expects to report full year 2018 earnings per diluted share excluding special items between $5.50 and $6.501. |
1. | The
company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be determined at this time. |
• | All operating expenses are presented on a consolidated basis. |
• | First quarter consolidated CASM excluding fuel and special items is expected to be up approximately 4.0 percent in the first quarter. This year-over-year increase is primarily driven by the impact of the company’s mid-contract pay increases to its pilots and flight attendants, which became effective on April 26, 2017, higher revenue-related expenses, increased rent and
landing fees, and higher depreciation and amortization resulting from increased capex. |
1Q18E | 2Q18E | 3Q18E | 4Q18E | FY18E2 | |||||
Consolidated
Guidance1 | |||||||||
Available Seat Miles (ASMs) (bil) | ~66.2 | ~73.4 | ~76.0 | ~69.1 | ~284.7 | ||||
Cargo
Revenues ($ mil)3 | ~225 | ~245 | ~250 | ~265 | ~985 | ||||
Other Revenues ($ mil)3 | ~665 | ~670 | ~710 | ~700 | ~2,745 | ||||
Average
Fuel Price (incl. taxes) ($/gal) (as of 1/22/2018) | 2.07 to 2.12 | 2.07 to 2.12 | 2.06 to 2.11 | 2.03 to 2.08 | 2.06 to 2.11 | ||||
Fuel Gallons Consumed (mil) | ~1,043 | ~1,154 | ~1,197 | ~1,090 | ~4,484 | ||||
CASM
ex fuel and special items (YOY % change)4 | +3% to +5% | +1.5% to +3.5% | +0.5% to +2.5% | +0% to +2% | +1% to +3% | ||||
Interest Income ($ mil) | ~(22) | ~(27) | ~(28) | ~(26) | ~(103) | ||||
Interest
Expense ($ mil) | ~267 | ~266 | ~264 | ~265 | ~1,062 | ||||
Other Non-Operating (Income)/Expense ($ mil)5 | ~(75) | ~(75) | ~(75) | ~(75) | ~(300) | ||||
CAPEX
Guidance ($ mil) Inflow/(Outflow) | |||||||||
Non-Aircraft CAPEX | ~(450) | ~(450) | ~(450) | ~(450) | ~(1,800) | ||||
Gross
Aircraft CAPEX & net PDPs | ~(390) | ~(274) | ~(688) | ~(514) | ~(1,866) | ||||
Assumed Aircraft Financing | ~210 | ~191 | ~565 | ~363 | ~1,328 | ||||
Net
Aircraft CAPEX & PDPs2 | ~(180) | ~(83) | ~(123) | ~(151) | ~(538) |
1. | Includes
guidance on certain non-GAAP measures, which exclude special items. The company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of special items cannot be determined at this time. Please see the GAAP to non-GAAP reconciliation at the end of this document. |
2. | Numbers may not recalculate due to rounding. |
3. | Cargo/Other revenue includes cargo revenue, loyalty program revenue, and contract services. |
4. | CASM ex fuel and special items is a non-GAAP financial measure. |
5. | Other
Non-Operating (Income)/Expense primarily includes non-service related pension and retiree medical benefit income/costs, gains and losses from foreign currency, and income/loss from the company’s approximate 25% ownership interest in Republic Airways Holdings Inc. |
• | In 2018, the company expects to take delivery of 22 mainline aircraft comprised of 16 B738 Max aircraft and 6 B789 aircraft. The company also expects to retire 19 MD80 mainline aircraft. |
• | In 2018, the company expects to reduce the regional fleet count by a net of 4 aircraft, resulting from the addition of 9 CRJ700 aircraft, 6 E175 aircraft and 28 ERJ140 aircraft, as well as the reduction of 33 CRJ200 aircraft, 3 Dash 8-100 aircraft and 11 Dash
8-300 aircraft. |
Active Mainline Year Ending Fleet Count | Active
Regional Year Ending Fleet Count1 | |||||||||||||||||||||||||
2017A | 2018E | 2019E | 2020E | 2017A | 2018E | 2019E | 2020E | |||||||||||||||||||
A319 | 125 | 125 | 125 | 125 | CRJ200 | 68 | 35 | 35 | 35 | |||||||||||||||||
A320 | 48 | 48 | 48 | 48 | CRJ700 | 110 | 119 | 111 | 111 | |||||||||||||||||
A321 | 219 | 219 | 219 | 219 | CRJ900 | 118 | 118 | 118 | 118 | |||||||||||||||||
A321
neo | — | — | 25 | 50 | DASH 8-100 | 3 | — | — | — | |||||||||||||||||
A332 | 15 | 15 | 15 | 15 | DASH
8-300 | 11 | — | — | — | |||||||||||||||||
A333 | 9 | 9 | 9 | — | E175 | 148 | 154 | 159 | 159 | |||||||||||||||||
A350 | — | — | — | 2 | ERJ140 | 21 | 49 | 49 | 49 | |||||||||||||||||
B738 | 304 | 304 | 292 | 259 | ERJ145 | 118 | 118 | 118 | 118 | |||||||||||||||||
B738
Max | 4 | 20 | 40 | 60 | 597 | 593 | 590 | 590 | ||||||||||||||||||
B757 | 34 | 34 | 34 | 24 | ||||||||||||||||||||||
B763 | 24 | 24 | 24 | 24 | ||||||||||||||||||||||
B772 | 47 | 47 | 47 | 47 | ||||||||||||||||||||||
B773 | 20 | 20 | 20 | 20 | ||||||||||||||||||||||
B788 | 20 | 20 | 20 | 20 | ||||||||||||||||||||||
B789 | 14 | 20 | 22 | 22 | ||||||||||||||||||||||
E190 | 20 | 20 | — | — | ||||||||||||||||||||||
MD80 | 45 | 26 | — | — | ||||||||||||||||||||||
948 | 951 | 940 | 935 |
1. | At
the end of 2017, the company had 38 ERJ140 regional aircraft in temporary storage, which are not included in the active regional ending fleet count. Additionally, two E170 regional aircraft were being operated by Republic Airways Holdings Inc under a short-term contract that has now ended. |
• | The estimated weighted average shares outstanding for 2018 are listed below. |
• | On January 25, 2017, the company’s Board authorized a new $2.0 billion share repurchase program to expire by the end of 2018. This brings the total amount authorized for share repurchase programs
to $11.0 billion since the merger. All prior repurchase programs had been fully expended as of December 31, 2016. |
• | In the fourth quarter of 2017, the company repurchased 4.6 million shares at a cost of $227 million. Including share repurchases, shares withheld to cover taxes associated with employee equity awards and share distributions, and the cash extinguishment of convertible debt, the company’s share count has dropped 37 percent from 756.1 million shares at merger close to 475.5 million shares outstanding on December 31, 2017. |
2018
Shares Outstanding (shares mil)1 | ||||||
Shares | ||||||
For Q1 | Basic | Diluted | ||||
Earnings | 475 | 478 | ||||
Net
loss | 475 | 475 | ||||
Shares | ||||||
For
Q2-Q4 Average | Basic | Diluted | ||||
Earnings | 477 | 479 | ||||
Net loss | 477 | 477 | ||||
Shares | ||||||
For
FY 2018 Average | Basic | Diluted | ||||
Earnings | 476 | 479 | ||||
Net loss | 476 | 476 |
1. | Shares
outstanding are based upon several estimates and assumptions, including average per share stock price and stock award activity and does not assume any future share repurchases. The number of shares in actual calculations of earnings per share will likely be different from those set forth above. |
American
Airlines Group Inc. GAAP to Non-GAAP Reconciliation ($ mil except ASM and CASM data) | |||||||||||||||||||||||||||||||||||||||
1Q18 Range | 2Q18 Range | 3Q18 Range | 4Q18 Range | FY18 Range | |||||||||||||||||||||||||||||||||||
Low | High | Low | High | Low | High | Low | High | Low | High | ||||||||||||||||||||||||||||||
Consolidated1 | |||||||||||||||||||||||||||||||||||||||
Consolidated
operating expenses | $ | 9,837 | $ | 10,038 | $ | 10,264 | $ | 10,476 | $ | 10,501 | $ | 10,721 | $ | 10,049 | $ | 10,260 | $ | 40,569 | $ | 41,414 | |||||||||||||||||||
Less
fuel expense | 2,159 | 2,211 | 2,389 | 2,446 | 2,466 | 2,526 | 2,213 | 2,267 | 9,226 | 9,451 | |||||||||||||||||||||||||||||
Less
special items | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Consolidated
operating expense excluding fuel and special items | 7,678 | 7,827 | 7,875 | 8,030 | 8,035 | 8,195 | 7,836 | 7,993 | 31,343 | 31,963 | |||||||||||||||||||||||||||||
Consolidated
CASM (cts) | 14.86 | 15.16 | 13.98 | 14.27 | 13.82 | 14.11 | 14.54 | 14.85 | 14.25 | 14.55 | |||||||||||||||||||||||||||||
Consolidated
CASM excluding fuel and special items (Non-GAAP) (cts) | 11.60 | 11.82 | 10.73 | 10.94 | 10.57 | 10.78 | 11.34 | 11.57 | 11.01 | 11.23 | |||||||||||||||||||||||||||||
YOY
(%) | 3.0 | % | 5.0 | % | 1.5 | % | 3.5 | % | 0.5 | % | 2.5 | % | 0.0 | % | 2.0 | % | 1.0 | % | 3.0 | % | |||||||||||||||||||
Consolidated
ASMs (bil) | 66.2 | 66.2 | 73.4 | 73.4 | 76.0 | 76.0 | 69.1 | 69.1 | 284.7 | 284.7 | |||||||||||||||||||||||||||||
Other
non-operating (income)/expense1 | |||||||||||||||||||||||||||||||||||||||
Other
non-operating (income)/expense | $ | (75 | ) | $ | (75 | ) | $ | (75 | ) | $ | (75 | ) | $ | (75 | ) | $ | (75 | ) | $ | (75 | ) | $ | (75 | ) | $ | (300 | ) | $ | (300 | ) | |||||||||
Less
special items | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other
non-operating (income)/expense excluding special items | (75 | ) | (75 | ) | (75 | ) | (75 | ) | (75 | ) | (75 | ) | (75 | ) | (75 | ) | (300 | ) | (300 | ) |
Notes: | Amounts
may not recalculate due to rounding. |
1. | Certain of the guidance provided excludes special items. The company is unable to fully reconcile such forward-looking guidance to the corresponding GAAP measure because the full nature and amount of the special items cannot be determined at this time. Special items for this period may include merger integration expenses and fleet restructuring expenses. |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
Filed on / For Period End: | 1/25/18 | |||
1/22/18 | ||||
1/1/18 | ||||
12/31/17 | ||||
9/30/17 | 10-Q | |||
4/26/17 | 8-K | |||
1/25/17 | 8-K | |||
12/31/16 | 10-K | |||
List all Filings |