GlobeNewswire Inc | Jul 22, 2021 07:00AM EDT

July 22, 2021

FORT WORTH, Texas, July 22, 2021 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its second-quarter 2021 financial results, including:

-- Second-quarter net profit of $19 million, or $0.03 per diluted share. Excluding net special items1, second-quarter net loss of $1.1 billion, or ($1.69) per share. -- Second-quarter revenue of $7.5 billion, up 87% sequentially from the first quarter of 2021. -- Ended the second quarter with approximately $21.3 billion of total available liquidity, a record for the Company. -- Accelerated the deleveraging process with prepayment of $950 million spare parts term loan. -- Company plans to pay down approximately $15 billion of debt by the end of 2025.

We have taken a number of steps to solidify our business through our Green Flag Plan and it shows in our second-quarter results, said Americans Chairman and CEO Doug Parker. We have reshaped our network, simplified our fleet and made our cost structure more efficient, all to create an airline that will outperform competitors and deliver for customers. The green flag has dropped and we are ready thanks to the tremendous efforts and dedication of the American Airlines team.

American is committed to strengthening its business and returning to profitability by focusing on its three strategic objectives: Create a world-class customer experience, make culture a competitive advantage and build American to thrive forever.

To create a world-class customer experience, American:

-- Plans to operate more than 150 new routes this summer, including several new destinations and greater connectivity in Miami, Austin, Texas, and Orlando, Florida. During the summer season, American expects to fly more than 90% of its domestic seat capacity and 80% of its international seat capacity, in each case as compared to 2019. -- Scheduled 10 new domestic and four new international destinations from Austin for this fall as a result of increased customer demand. American and its partners will offer the most options in Austin this fall, with nearly 100 peak day departures. -- Transitioned regional flight operations at Reagan National Airport from Gate 35X to a new 14-gate concourse, providing customers with a range of new amenities, including an all dual-class operation. -- Continued to launch COVID-19 testing tools to make flying safer and easier, including self-administered and packable home tests. -- Worked with VeriFLY to expand the apps capabilities to include COVID-19 vaccination verification, which is now available in 11 countries, with more planned in the third quarter. Customer usage of VeriFLY has quadrupled since the first quarter and the app can be used at expedited check-in lanes at most U.S. hub airports. -- Introduced Five Star Essentials at Charlotte Douglas International Airport, Dallas Fort Worth International Airport and Miami International Airport. The service provides an extra set of hands during the customer journey from check-in to the gate. -- Continued to welcome back customers to Admirals Club lounges across the system with new signature menu offerings and the expansion of innovative touchless technology. All Admirals Club lounges will reopen by the end of August and Americans Flagship Lounge locations will start reopening this fall. -- Reintroduced full beverage service in all domestic premium cabins and resumed offering canned drinks, juice and water in the main cabin. -- Revamped its premium cabin onboard amenity kits in partnership with Shinola and D.S. & Durga, brands celebrated for thoughtful design and creativity. -- Refreshed its inflight entertainment offerings by adding new lifestyle entertainment choices with free access to Rosetta Stone and Skillshare, making it the first U.S. airline to tap into online/remote learning from 35,000 feet.

To make culture a competitive advantage, American:

-- Fortified its staffing by completing all required recall pilot training and bringing back more than 3,000 team members from leaves with thousands more flight attendants returning from leaves this fall. American has hired nearly 3,500 new team members so far in 2021 and plans to hire 350 pilots this year and more than 1,000 pilots and 800 flight attendants in 2022. -- Donated 10 million AAdvantage miles to Make-A-Wish, the organization that creates life-changing wishes for children with critical illnesses, to help grant 95 wishes, in honor of Americans 95th birthday. -- Initiated a new partnership with the National Park Foundation to encourage exploration of some of the countrys most iconic natural wonders, historic sites, and cultural treasures, and to connect customers with opportunities to support the future of Americas national parks. Customers donated more than 37 million AAdvantage miles to the National Park Foundation through the airlines new Miles for Our Planet initiative. -- Raised nearly $1.5 million in support of the American Red Cross and Red Crescent Societies efforts to fight the COVID-19 pandemic around the world, including in Brazil, India and other countries in need of assistance to battle the devastating virus. The airline and more than 11,000 AAdvantage members raised the full amount in less than one month. -- Partnered with United Way of Miami-Dade to provide travel assistance and help reunite families that were impacted by the tragic building collapse in Surfside, Florida.

To build American to thrive forever, American:

-- Committed to develop a science-based target for reducing its greenhouse gas emissions by 2035, supporting the airlines existing commitment to reach net-zero emissions by 2050. American also agreed to terms to purchase up to 10 million gallons of carbon-neutral sustainable aviation fuel (SAF) produced by Prometheus Fuels, which uses a novel process to make net zero carbon transportation fuels, including SAF. -- Announced investment in Vertical Aerospace, a leading U.K.-based engineering and aeronautical business developing electric vertical takeoff and landing aircraft. With the investment, American is demonstrating its focus on emerging technologies to reduce carbon emissions and investing in innovative ways that could improve the customer journey. -- During the second quarter, American had debt amortization and prepayments of approximately $985 million.

Liquidity and balance sheetThe Companys daily cash burn rate turned positive for the second quarter to a cash build rate of approximately $1 million per day2. American ended the second quarter with a record of approximately $21.3 billion of total available liquidity. The Company expects to keep near-term liquidity at elevated levels but expects to step down its target liquidity to approximately $10 billion to $12 billion in 2022.

American is committed to improving its balance sheet. The Company now expects to reduce its debt by more than $15 billion by the end of 2025 versus its previous guidance of $8 billion to $10 billion. American plans to accomplish this objective through naturally occurring amortization, by using excess cash and free cash flow to pay down prepayable debt, and by potentially using cash instead of debt for certain future aircraft deliveries.

As evidence of the Companys commitment to delever and its confidence in the future, today American is prepaying the entirety of its $950 million spare parts term loan that was scheduled to mature in April 2023.

Network and partnershipsAmerican and JetBlue continue to roll out benefits for customers to create a seamless customer experience. Starting this fall, AAdvantage elite and TrueBlue Mosaic members will also begin to enjoy benefits across both carriers. This next phase of benefits will include priority check-in, security and boarding, plus up to two complimentary checked bags. Americans AAdvantage members and JetBlues TrueBlue members already earn miles or points traveling on either carrier. AAdvantage is now the only loyalty program that allows elite status-earning opportunities when flying across three U.S. carriers American, JetBlue and Alaska Airlines.

As a result of Americans Northeast Alliance with JetBlue, New York and Boston travelers are seeing significantly expanded travel opportunities with new nonstop service and additional codeshare routes. As part of the alliance, American and JetBlue will operate more than 700 daily flights from New York and Boston this winter, giving customers more choice than any other airline can offer. Additionally, customers traveling on a joint American-JetBlue itinerary will now experience the fastest secure side connecter at New York JFK and an industry-leading network. Expansion of the airlines network will provide better global connectivity for growing markets like Austin, Texas, and Nashville, Tennessee.

With Americans extensive network, partnerships and membership in oneworld, customers returning to travel have access to an unmatched global network.

Guidance and investor updateAmerican will continue to match its forward capacity with observed bookings trends. Based on current trends, the Company expects its third-quarter capacity to be down approximately 15% to 20% compared to the third quarter of 2019. American expects its third-quarter total revenue to be down approximately 20% versus the third quarter of 2019. The Company also expects its third quarter pre-tax margin excluding net special items will be between negative 3% and negative 7%3.

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

Conference call and webcast detailsThe Companywill conduct a live audio webcast of its financial results conference call at7:30 a.m. CDT 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 throughat least Aug. 22.

NotesSee 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.

-- The Company recognized$1.4 billionof net special credits before the effect of taxes in the second quarter of 2021 principally related to the financial assistance received pursuant to Payroll Support Program Agreements. -- A reconciliation of this calculation can be found in the tables that follow. -- American 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.

About American Airlines GroupAmericans purpose is to care for people on lifes journey. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL and the Companys stock is included in the S&P 500. Learn more about whats 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, the Exchange Act 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 Companys 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 Companys 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 Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (especially in Part I, Item 2. Managements 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 Companys other filings with the Securities and Exchange Commission. In particular, the consequences of the coronavirus outbreak to economic conditions and the travel industry in general and the financial position and operating results of the Company in particular have been material, are changing rapidly, and cannot be predicted. 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.

Corporate Communicationsmediarelations@aa.com

Investor Relationsinvestor.relations@aa.com



American Airlines Group Inc.Condensed Consolidated Statements of Operations(In millions, except share and per share amounts)(Unaudited) 3 Months Ended June 30, Percent 6 Months Ended June 30, Percent Increase Increase 2021 2020 ^(1) (Decrease) 2021 2020 ^(1) (Decrease) Operating revenues:Passenger $ 6,545 $ 1,108 nm ^(2) $ 9,724 $ 8,788 10.7 Cargo 326 130 nm 641 277 nm Other 607 384 57.9 1,121 1,072 4.5 Totaloperating 7,478 1,622 nm 11,486 10,137 13.3 revenues Operating expenses:Aircraftfuel and 1,611 309 nm 2,644 2,092 26.4 relatedtaxesSalaries,wages and 2,862 2,610 9.6 5,593 5,830 (4.1 )benefitsRegional expenses:Regionaloperating 558 408 37.1 1,102 1,464 (24.7 )expensesRegionaldepreciation 77 84 (8.2 ) 159 168 (5.5 )andamortizationMaintenance,materials 459 287 59.9 835 915 (8.8 )and repairsOther rentand landing 686 413 66.2 1,256 1,024 22.7 feesAircraft 356 334 6.4 706 669 5.6 rentSelling 277 57 nm 427 442 (3.4 )expensesDepreciationand 481 499 (3.6 ) 959 1,059 (9.4 )amortizationSpecial (1,288 ) (1,494 ) (13.8 ) (2,996 ) (362 ) nm items, netOther 958 601 59.6 1,675 1,870 (10.5 )Totaloperating 7,037 4,108 71.3 12,360 15,171 (18.5 )expenses Operatingincome 441 (2,486 ) nm (874 ) (5,034 ) (82.6 )(loss) Nonoperatingincome (expense):Interest 5 10 (50.7 ) 8 31 (73.2 )incomeInterest (486 ) (254 ) 91.0 (856 ) (512 ) 67.3 expense, netOther income(expense), 49 71 (31.1 ) 158 (34 ) nm netTotalnonoperating (432 ) (173 ) nm (690 ) (515 ) 34.2 expense, net Income(loss) 9 (2,659 ) nm (1,564 ) (5,549 ) (71.8 )beforeincome taxes Income tax (10 ) (592 ) (98.4 ) (333 ) (1,241 ) (73.1 )benefit Net income $ 19 $ (2,067 ) nm $ (1,231 ) $ (4,308 ) (71.4 )(loss) Earnings(loss) per commonshare:Basic $ 0.03 $ (4.82 ) $ (1.92 ) $ (10.08 ) Diluted $ 0.03 $ (4.82 ) $ (1.92 ) $ (10.08 ) Weightedaverageshares outstanding(inthousands):Basic 644,123 428,807 639,366 427,260 Diluted 656,372 428,807 639,366 427,260 Note: Percent change maynot recalculate due to rounding. ^(1) Beginning in the first quarter of 2021, aircraft fuel and related taxes aswell as certain salaries, wages and benefits, other rent and landing fees,selling and other expenses are no longer allocated to regional expenses on theCompany?s condensed consolidated statements of operations. The three and sixmonths ended June 30, 2020 condensed consolidated statements of operations havebeen recast to conform to the 2021 presentation. This statement of operationspresentation change has no impact on total operating expenses or net loss. ^(2) Not meaningful or greater than 100% change.

American Airlines Group Inc.Consolidated Operating Statistics ^(1)(Unaudited) 3 Months Ended Increase 6 Months Ended Increase June 30, June 30, 2021 2020 (Decrease) 2021 2020 (Decrease) Revenuepassenger 42,022 7,231 nm % 64,486 52,402 23.1 %miles(millions)Availableseat miles 54,555 17,081 nm % 92,319 79,180 16.6 %(ASM)(millions)Passengerload factor 77.0 42.3 34.7 pts 69.9 66.2 3.7 pts(percent)Yield 15.57 15.32 1.7 % 15.08 16.77 (10.1 ) %(cents)Passengerrevenue per 12.00 6.48 85.0 % 10.53 11.10 (5.1 ) %ASM (cents)Totalrevenue per 13.71 9.50 44.3 % 12.44 12.80 (2.8 ) %ASM (cents)Cargo tonmiles 555 176 nm % 1,087 612 77.5 %(millions)Cargo yieldper ton mile 58.86 73.98 (20.4 ) % 59.02 45.24 30.4 %(cents) Fuelconsumption 844 275 nm % 1,452 1,246 16.5 %(gallons inmillions)Averageaircraftfuel priceincluding 1.91 1.13 69.5 % 1.82 1.68 8.4 %relatedtaxes(dollars pergallon) Operatingcost per ASM 12.90 24.05 (46.4 ) % 13.39 19.16 (30.1 ) %(cents)Operatingcost per ASMexcluding 15.57 33.84 (54.0 ) % 17.05 19.73 (13.6 ) %net specialitems(cents)Operatingcost per ASMexcluding 12.61 32.04 (60.6 ) % 14.18 17.08 (17.0 ) %net specialitems andfuel (cents) Passengerenplanements 44,019 8,371 nm % 68,256 50,573 35.0 %(thousands)Departures (thousands):Mainline 220 81 nm % 372 333 11.8 %Regional 247 103 nm % 433 383 13.0 %Total 467 184 nm % 805 716 12.4 %Averagestage length (miles):Mainline 1,172 1,068 9.8 % 1,186 1,132 4.7 %Regional 483 482 0.1 % 492 473 4.2 %Total 808 738 9.3 % 813 779 4.3 %Aircraft atend of period:Mainline ^ 854 849 0.6 % 854 849 0.6 %(2)Regional ^ 559 545 2.6 % 559 545 2.6 %(3)Total 1,413 1,394 1.4 % 1,413 1,394 1.4 %Full-timeequivalentemployees at end ofperiod:Mainline 91,100 86,000 5.9 % 91,100 86,000 5.9 %Regional ^ 26,300 21,400 22.9 % 26,300 21,400 22.9 %(4)Total 117,400 107,400 9.3 % 117,400 107,400 9.3 % Note:Amounts maynot recalculatedue torounding. ^(1) Unless otherwise noted, operating statistics include mainline and regionaloperations. Regional includes wholly-owned regional airline subsidiaries andoperating results from capacity purchase carriers.^(2) Excludes 37 Boeing 737-800 mainline aircraft that are in temporary storage at June 30, 2021.^(3) Includes aircraft owned and leased by American as well as aircraftoperated by third-party regional carriers under capacity purchase agreements.Excludes three Embraer 145 regional aircraft that are in temporary storage atJune 30, 2021.^(4) Regional full-time equivalent employees only include our wholly-ownedregional airline subsidiaries.

American Airlines Group Inc.Consolidated Revenue Statistics by Region(Unaudited) 3 Months Ended Increase 6 Months Ended Increase June 30, June 30, 2021 2020 (Decrease) 2021 2020 (Decrease) Domestic ^(1) Revenuepassenger 34,871 6,804 nm % 53,408 38,661 38.1 %miles(millions)Availableseat miles 41,037 15,434 nm % 68,989 59,672 15.6 %(ASM)(millions)Passengerload factor 85.0 44.1 40.9 pts 77.4 64.8 12.6 pts(percent)Passengerrevenue 5,444 1,027 nm % 8,099 6,806 19.0 %(dollars inmillions)Yield (cents) 15.61 15.09 3.5 % 15.16 17.60 (13.9 ) %Passengerrevenue per 13.27 6.65 99.5 % 11.74 11.41 2.9 %ASM (cents) Latin America ^(2)Revenuepassenger 5,970 200 nm % 9,546 7,316 30.5 %miles(millions)Availableseat miles 8,461 700 nm % 16,326 9,768 67.1 %(millions)Passengerload factor 70.6 28.6 42.0 pts 58.5 74.9 (16.4 ) pts(percent)Passengerrevenue 936 34 nm % 1,417 1,214 16.8 %(dollars inmillions)Yield (cents) 15.68 17.07 (8.2 ) % 14.85 16.59 (10.5 ) %Passengerrevenue per 11.06 4.88 nm % 8.68 12.42 (30.1 ) %ASM (cents) Atlantic Revenuepassenger 939 189 nm % 1,139 4,374 (74.0 ) %miles(millions)Availableseat miles 4,035 817 nm % 5,186 7,056 (26.5 ) %(millions)Passengerload factor 23.3 23.1 0.2 pts 22.0 62.0 (40.0 ) pts(percent)Passengerrevenue 125 42 nm % 147 565 (74.0 ) %(dollars inmillions)Yield (cents) 13.26 22.28 (40.5 ) % 12.88 12.92 (0.3 ) %Passengerrevenue per 3.09 5.16 (40.1 ) % 2.83 8.01 (64.7 ) %ASM (cents) Pacific Revenuepassenger 242 38 nm % 393 2,051 (80.9 ) %miles(millions)Availableseat miles 1,022 130 nm % 1,818 2,684 (32.3 ) %(millions)Passengerload factor 23.7 29.0 (5.3 ) pts 21.6 76.4 (54.8 ) pts(percent)Passengerrevenue 40 5 nm % 61 203 (70.0 ) %(dollars inmillions)Yield (cents) 16.71 12.61 32.6 % 15.49 9.89 56.6 %Passengerrevenue per 3.96 3.65 8.4 % 3.35 7.56 (55.7 ) %ASM (cents) Total InternationalRevenuepassenger 7,151 427 nm % 11,078 13,741 (19.4 ) %miles(millions)Availableseat miles 13,518 1,647 nm % 23,330 19,508 19.6 %(millions)Passengerload factor 52.9 25.9 27.0 pts 47.5 70.4 (22.9 ) pts(percent)Passengerrevenue 1,101 81 nm % 1,625 1,982 (18.0 ) %(dollars inmillions)Yield (cents) 15.39 18.98 (18.9 ) % 14.67 14.42 1.7 %Passengerrevenue per 8.14 4.92 65.5 % 6.97 10.16 (31.4 ) %ASM (cents) Note: Amounts may notrecalculate 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 FinancialInformation to Non-GAAP Financial Information American Airlines Group Inc. (the Company) sometimes uses financial measuresthat are derived from the condensed consolidated financial statements but thatare not presented in accordance with GAAP to understand and evaluate itscurrent operating performance and to allow for period-to-period comparisons.The Company believes these non-GAAP financial measures may also provide usefulinformation to investors and others. These non-GAAP measures may not becomparable to similarly titled non-GAAP measures of other companies, and shouldbe considered in addition to, and not as a substitute for or superior to, anymeasure of performance, cash flow or liquidity prepared in accordance withGAAP. The Company is providing a reconciliation of reported non-GAAP financialmeasures to their comparable financial measures on a GAAP basis.

The tables below present the reconciliations of the following GAAP measures totheir non-GAAP measures:

- Pre-Tax Income (Loss) (GAAP measure) to Pre-Tax Loss Excluding Net SpecialItems (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 Loss Excluding Net Special Items(non-GAAP measure)- Basic and Diluted Earnings (Loss) Per Share (GAAP measure) to Basic andDiluted Loss Per Share Excluding Net Special Items (non-GAAP measure)- Operating Income (Loss) (GAAP measure) to Operating Loss Excluding NetSpecial Items (non-GAAP measure)

Management uses these non-GAAP financial measures to evaluate the Company?scurrent operating performance and to allow for period-to-period comparisons. Asnet special items may vary from period-to-period in nature and amount, theadjustment to exclude net special items allows management an additional tool tounderstand the Company?s core operating performance.

Additionally, the tables below present the reconciliations of total operatingcosts (GAAP measure) to total operating costs excluding net special items andfuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASMexcluding net special items and fuel. Management uses total operating costs andCASM excluding net special items and aircraft fuel to evaluate the Company?scurrent operating performance and for period-to-period comparisons. The priceof fuel, over which the Company has no control, impacts the comparability ofperiod-to-period financial performance. The adjustment to exclude aircraft fueland net special items allows management an additional tool to understand andanalyze the Company?s non-fuel costs and core operating performance. 3 Months Ended June 30, Percent 6 Months Ended June 30, Percent Increase Increase Reconciliation of Pre-Tax Loss Excluding 2021 2020 (Decrease) 2021 2020 (Decrease) Net Special Items (in millions, except share (in millions, except share and per share amounts) and per share amounts) Pre-tax income (loss) as $ 9 $ (2,659 ) $ (1,564 ) $ (5,549 ) reported Pre-tax net special items: Mainline operating (1,288 ) (1,494 ) (2,996 ) (362 ) special items, net ^(1) Regional operating (167 ) (178 ) (381 ) (85 ) special items, net ^(2) Nonoperating special items, 37 11 13 228 net ^(3) Total pre-tax net special (1,418 ) (1,661 ) (3,364 ) (219 ) items Pre-tax loss excluding net $ (1,409 ) $ (4,320 ) (6,740.0 %) $ (4,928 ) $ (5,768 ) (1,460.0 %) special items Calculation of Pre-Tax Margin Pre-tax income (loss) as $ 9 $ (2,659 ) $ (1,564 ) $ (5,549 ) reported Total operating $ 7,478 $ 1,622 $ 11,486 $ 10,137 revenues as reported Pre-tax margin 0.1 % (163.9 %) (13.6 %) (54.7 %) Calculation of Pre-Tax Margin Excluding Net Special Items Pre-tax loss excluding net $ (1,409 ) $ (4,320 ) $ (4,928 ) $ (5,768 ) special items Total operating $ 7,478 $ 1,622 $ 11,486 $ 10,137 revenues as reported Pre-tax margin excluding net (18.8 %) (266.3 %) (42.9 %) (56.9 %) special items Reconciliation of Net Loss Excluding Net Special Items Net income (loss) as $ 19 $ (2,067 ) $ (1,231 ) $ (4,308 ) reported Net special items: Total pre-tax net special (1,418 ) (1,661 ) (3,364 ) (219 ) items ^(1), (2), (3) Net tax effect of net special 309 374 762 44 items Net loss excluding net $ (1,090 ) $ (3,354 ) (6,750.0 %) $ (3,833 ) $ (4,483 ) (1,450.0 %) special items Reconciliation of Basic and Diluted Loss Per Share Excluding Net Special Items Net loss excluding net $ (1,090 ) $ (3,354 ) $ (3,833 ) $ (4,483 ) special items Shares used for computation (in thousands): Basic and 644,123 428,807 639,366 427,260 diluted Loss per share excluding net special items: Basic and $ (1.69 ) $ (7.82 ) $ (6.00 ) $ (10.49 ) diluted 3 Months Ended June 30, 6 Months Ended June 30, Reconciliation of Operating Loss Excluding 2021 2020 2021 2020 Net Special Items (in millions) (in millions) Operating income (loss) $ 441 $ (2,486 ) $ (874 ) $ (5,034 ) as reported Operating net special items: Mainline operating (1,288 ) (1,494 ) (2,996 ) (362 ) special items, net ^(1) Regional operating (167 ) (178 ) (381 ) (85 ) special items, net ^(2) Operating loss excluding net $ (1,014 ) $ (4,158 ) $ (4,251 ) $ (5,481 ) special items Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel Total operating $ 7,037 $ 4,108 $ 12,360 $ 15,171 expenses as reported Operating net special items: Mainline operating 1,288 1,494 2,996 362 special items, net ^(1) Regional operating 167 178 381 85 special items, net ^(2) Total operating expenses, 8,492 5,780 15,737 15,618 excluding net special items Aircraft fuel and related (1,611 ) (309 ) (2,644 ) (2,092 ) taxes Total operating expenses, $ 6,881 $ 5,471 $ 13,093 $ 13,526 excluding net special items and fuel (in cents) (in cents) Total operating expenses per 12.90 24.05 13.39 19.16 ASM as reported Operating net special items per ASM: Mainline operating 2.36 8.75 3.25 0.46 special items, net ^(1) Regional operating 0.31 1.04 0.41 0.11 special items, net ^(2) Total operating expenses per 15.57 33.84 17.05 19.73 ASM, excluding net special items Aircraft fuel and related (2.95 ) (1.81 ) (2.86 ) (2.64 ) taxes per ASM Total operating expenses per 12.61 32.04 14.18 17.08 ASM, excluding net special items and fuel Note: Amounts may not recalculate due to rounding. FOOTNOTES: The 2021 second quarter mainline operating special items, net principally included $1.3 billion of Payroll Support Program (PSP) financial assistance. The 2021 six month period mainline operating special items, net principally included $3.2 billion of PSP financial assistance, offset in part by $168 million of salary and medical costs primarily associated with certain team members who opted in to voluntary early retirement programs offered as a result of reductions to the Company?s operation due to the COVID-19 pandemic.

Cash payments for salary and medical costs associated with our voluntary early retirement programs were approximately $120 million and $290 million for the 2021 second quarter and six month period, respectively.

The 2020 second quarter mainline operating special items, net principally included $1.8 billion of PSP financial assistance, offset in part by $332^ million of salary and medical costs primarily associated with certain team(1) members who opted in to voluntary early retirement programs. The 2020 six month period mainline operating special items, net principally included $1.8 billion of PSP financial assistance, offset in part by $743 million of fleet impairment charges, $537 million of salary and medical costs primarily associated with certain team members who opted in to voluntary early retirement programs and $228 million of one-time labor contract expenses resulting from the ratification of a new contract with the Company?s maintenance and fleet service team members, including signing bonuses and adjustments to vacation accruals resulting from pay rate increases.

Fleet impairment charges in the 2020 six month period included a $675 million non-cash write-down of aircraft and spare parts and $68 million in write-offs of right-of-use assets and lease return costs associated with our mainline fleet, principally Boeing 757, Boeing 767, Airbus A330-300 and Embraer 190 fleets, which were retired as a result of the decline in demand for air travel due to the COVID-19 pandemic. The 2021 second quarter regional operating special items, net principally included $167 million of PSP financial assistance. The 2021 six month period regional operating special items, net principally included $410 million of PSP financial assistance, offset in part by $27 million of fleet impairment charges. The fleet impairment charges principally included a non-cash write-down of regional aircraft resulting from the Company?s decision to retire its remaining fleet of Embraer 140 aircraft earlier than planned.

The 2020 second quarter regional operating special items, net principally included $216 million of PSP financial assistance, offset in part by $24^ million of fleet impairment charges and $14 million of salary and medical costs(2) primarily associated with certain team members who opted in to voluntary early retirement programs. The 2020 six month period regional operating special items, net principally included $216 million of PSP financial assistance, offset in part by $117 million of fleet impairment charges and $14 million of salary and medical costs as discussed above.

Fleet impairment charges in the 2020 second quarter and six month period included a non-cash write-down of aircraft and spare parts associated with our regional fleet, principally certain Embraer 140 and Bombardier CRJ200 aircraft, which were retired as a result of the decline in demand for air travel due to the COVID-19 pandemic. Principally included mark-to-market net unrealized gains and losses associated^ with certain equity investments and treasury rate lock derivative instruments(3) as well as non-cash charges associated with debt refinancings and extinguishments.

Average Daily Cash Build (Burn) The Company?s average daily cash build (burn) 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 liquidity position and cash flows from its core operating performance. The Company defines cash build (burn) as net cash provided by (used in) operating activities, net cash provided by (used in) investing activities and net cash provided by (used in) financing activities, adjusted for (1) Payroll Support Program financial assistance, (2) net purchases (proceeds from sale) of short-term investments and restricted short-term investments, (3) proceeds from issuance of long-term debt, net of deferred financing costs, but excluding aircraft financing, (4) proceeds from issuance of equity, (5) prepayments of long-term debt and (6) other cash flows that are not representative of the Company?s core operating performance.

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. 3 Months Ended June 30, 2021 (in millions, except days in period) Net cash provided by operating activities $ 3,470 Net cash used in investing activities (3,883 ) Net cash provided by financing activities 444 Adjustments: Payroll Support Program financial assistance (2,631 ) Net purchases of short-term investments and restricted 4,071 short-term investments Proceeds from issuance of non-aircraft long-term debt, (1,231 ) net of deferred financing costs Proceeds from issuance of equity (144 ) Prepayments of long-term debt 22 Other - Total cash build (burn) ^(1) $ 118 Days in period 91 Average daily cash build (burn) $ 1 Note: Amounts may not recalculate due to rounding. Of the total cash build for the three months ended June 30, 2021,^ approximately $965 million were cash payments for debt amortization and(1) approximately $120 million were cash payments for salary and medical costs principally for the Company?s voluntary early retirement programs totaling an equivalent of approximately $12 million of cash burn per day.

American Airlines Group Inc.Condensed Consolidated Statements of Cash Flows(In millions)(Unaudited) 6 Months Ended June 30, 2021 2020 Net cash provided by (used in) operating $ 3,644 $ (1,076 )activitiesCash flows from investing activities: Capital expenditures, net of aircraft 118 (1,233 )purchase deposit returnsProceeds from sale-leaseback transactions 163 376 Proceeds from sale of property and equipment 161 148 Purchases of short-term investments (13,840 ) (7,936 )Sales of short-term investments 2,837 2,131 Increase in restricted short-term (404 ) (386 )investmentsOther investing activities (71 ) (61 )Net cash used in investing activities (11,036 ) (6,961 )Cash flows from financing activities: Proceeds from issuance of long-term debt 12,096 9,464 Payments on long-term debt and finance (5,040 ) (2,477 )leasesProceeds from issuance of equity 460 1,527 Deferred financing costs (166 ) (84 )Treasury stock repurchases and shareswithheld for taxes pursuant to employee (13 ) (173 )stock plansDividend payments - (43 )Other financing activities 121 - Net cash provided by financing activities 7,458 8,214 Net increase in cash and restricted cash 66 177 Cash and restricted cash at beginning of 399 290 periodCash and restricted cash at end of period ^ $ 465 $ 467 (1) ^(1) The following table provides a reconciliation of cash and restrictedcash to amounts reported within the condensed consolidated balance sheets: Cash $ 325 $ 462 Restricted cash included in restricted cash 140 5 and short-term investmentsTotal cash and restricted cash $ 465 $ 467

American Airlines Group Inc.Condensed Consolidated Balance Sheets(In millions, except shares)

June 30, December 31, 2021 2020 (unaudited) Assets Current assets Cash $ 325 $ 245 Short-term investments 17,625 6,619 Restricted cash and short-term investments 999 609 Accounts receivable, net 1,249 1,342 Aircraft fuel, spare parts and supplies, net 1,789 1,614 Prepaid expenses and other 660 666 Total current assets 22,647 11,095 Operating property and equipment Flight equipment 37,577 37,816 Ground property and equipment 9,132 9,194 Equipment purchase deposits 714 1,446 Total property and equipment, at cost 47,423 48,456 Less accumulated depreciation and amortization (17,218 ) (16,757 )Total property and equipment, net 30,205 31,699 Operating lease right-of-use assets 7,958 8,039 Other assets Goodwill 4,091 4,091 Intangibles, net 2,008 2,029 Deferred tax asset 3,631 3,239 Other assets 1,924 1,816 Total other assets 11,654 11,175 Total assets $ 72,464 $ 62,008 Liabilities and Stockholders? Equity (Deficit) Current liabilities Current maturities of long-term debt and finance $ 2,798 $ 2,797 leasesAccounts payable 2,172 1,196 Accrued salaries and wages 1,580 1,716 Air traffic liability 7,095 4,757 Loyalty program liability 2,632 2,033 Operating lease liabilities 1,587 1,651 Other accrued liabilities 3,657 2,419 Total current liabilities 21,521 16,569 Noncurrent liabilities Long-term debt and finance leases, net of current 37,201 29,796 maturitiesPension and postretirement benefits 6,627 7,069 Loyalty program liability 6,674 7,162 Operating lease liabilities 6,711 6,777 Other liabilities 1,397 1,502 Total noncurrent liabilities 58,610 52,306 Stockholders? equity (deficit) Common stock, 647,446,499 shares outstanding at 6 6 June 30, 2021Additional paid-in capital 7,200 6,894 Accumulated other comprehensive loss (6,997 ) (7,103 )Retained deficit (7,876 ) (6,664 )Total stockholders? deficit (7,667 ) (6,867 ) Total liabilities and stockholders? equity $ 72,464 $ 62,008 (deficit)