FORT WORTH, Texas, July 23, 2020 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its second-quarter 2020 financial results, including:

-- Second-quarter pretax loss of $2.7 billion. Excluding net special items1, second-quarter pretax loss of $4.3 billion. -- Second-quarter net loss of $2.1 billion, or ($4.82) per share. Excluding net special items1, second-quarter net loss of $3.4 billion, or ($7.82) per share. -- Boosted available liquidity by a net $3.6 billion in the quarter through offerings of common stock, convertible bonds and secured bonds. -- Ended second quarter with approximately $10.2 billion of available liquidity. Additionally, signed term sheet with the U.S. Department of the Treasury for $4.75 billion secured loan, which is expected to close in the third quarter, and announced two senior secured note transactions totaling $1.2 billion. The company’s second-quarter pro forma liquidity balance including these transactions would be approximately $16.2 billion.

“This was one of the most challenging quarters in American’s history,” said American Airlines Chairman and CEO Doug Parker. “COVID-19 and the resulting shutdown of the U.S. economy have caused severe disruptions to global demand for air travel. In spite of these challenges, the American Airlines team has done a phenomenal job taking care of our customers and our fellow team members.

“We have moved swiftly to improve our liquidity, conserve cash and ensure customers are safe when they travel,” Parker continued. “There is much uncertainty ahead, but we remain confident we will emerge from this crisis more agile and more efficient than ever before.”

Supporting team members, customers and communitiesCaring for team members, customers and the communities it serves remains the top priority for American as it navigates the current environment.

To ensure the safety and well-being of team members and customers, American:

-- Updated its policies to make face coverings mandatory throughout the customer journey and for team members while at work. -- Instituted temperature checks for team members across the system and began asking customers to certify they are symptom-free before traveling. -- Created a Travel Health Advisory Panel, comprising internal leaders and outside experts in the field of infectious disease prevention, to advise on health and cleaning matters. -- Started working with the Global Biorisk Advisory Council on GBAC STARTM Accreditation for cleaning and disinfection practices for its aircraft and lounges. -- Further enhanced its cleaning and disinfection procedures throughout the operation, including the use of an electrostatic spray inside each aircraft every seven days, which kills 99.9999% of viruses and bacteria within 10 minutes.

To provide customers additional flexibility, American:

-- Waived change fees for customers who book new tickets for future travel by July 31, 2020. -- Extended its change fee waiver for customers who have existing tickets for travel through Sept. 30, 2020. -- Began notifying customers whose flights may be full, allowing them to move to more open flights when available at no cost. -- Expanded flexible travel waivers and name changes for corporate customers. -- Eliminated the reinstatement fee for AAdvantage® award ticket changes made more than 60 days prior to travel. -- Provided eligible AAdvantage elite members with a credit of up to $400 to use toward an American Airlines Vacations package.

To support the communities it serves, American:

-- Expanded its cargo service to transport critical goods between the United States and Europe, Asia and Latin America. American currently operates more than 310 weekly widebody and cargo-only flights and transported more than 100 million pounds of mail, goods and supplies critical to the global economy in the second quarter. -- Announced a program to provide up to 1 million Business Extra® points to small businesses and nonprofit organizations in need of travel support. -- Worked with Deloitte to deliver more than 40,000 medical gowns to first responders at Mount Sinai Hospital in New York. -- Partnered with Hyatt Hotels Corporation to give free vacations to thousands of employees at NYC Health + Hospitals/Elmhurst Hospital. -- Donated more than 600,000 pounds of food to food banks, nonprofit organizations, schools and other groups fighting food insecurity.

Conserving cashAmerican continues to take steps to reduce costs and preserve cash. The airline estimates that it will reduce its 2020 total operating and capital expenditures by more than $15 billion, achieved primarily through cost savings resulting from less flying. In addition, the company implemented the following cost actions:

-- Retired four aircraft types, consisting of 20 Embraer 190s, 34 Boeing 757s, 17 Boeing 767s and nine Airbus A330-300s, along with a number of older regional aircraft. In addition, the company placed its Airbus A330-200s and certain older Boeing 737s into a temporary storage program. In aggregate, these changes remove more than 150 aircraft from the fleet and bring forward the cost savings and efficiencies associated with operating fewer aircraft types. -- Introduced additional voluntary leave of absence and early-out programs to help right-size its frontline team. American anticipates having over 20,000 more team members on payroll than needed to operate its fall schedule. In total, more than 41,000 team members have opted for an early retirement, a reduced work schedule or a partially paid leave. -- Consistent with the CARES Act, reduced its management and support staff team, including officers, by approximately 5,100 positions, or 30%. -- Announced changes to its international schedule for 2021. American expects its summer 2021 long-haul international capacity to be down 25% versus 2019 and also plans to exit 19 international routes from six hubs. These changes will allow the airline to reset its international network for future growth as demand returns. -- Reduced non-aircraft capital expense by $700 million in 2020 and another $300 million in 2021 through reductions in fleet modification work, the elimination of all new ground service equipment purchases, and pausing all noncritical facility investments and IT projects.

Bolstering liquidityIn addition to reducing its operating and capital expenditures, American has taken a number of steps to strengthen its liquidity position. The company:

-- Ended the second quarter with $10.2 billion of available liquidity, including a net $3.6 billion raised in the quarter through offerings of common stock, convertible bonds and secured bonds. The company also raised $360 million through municipal facility bonds, the net proceeds from which are included in its restricted cash and short-term investments. -- Refinanced the delayed draw term loan credit facility the company entered into in March 2020, which was set to mature in March 2021. By refinancing this loan, American does not have any large non-aircraft debt maturities until its $750 million unsecured bonds mature in June 2022. -- Signed a term sheet with the U.S. Department of the Treasury for a $4.75 billion secured loan under the CARES Act. The company expects the loan to be finalized in the third quarter. -- Announced $1.2 billion of committed financing subject to final documentation and other closing conditions in the form of two senior secured note transactions to be collateralized by intellectual property and other assets with Goldman Sachs Merchant Bank. The company expects these notes to be issued in the third quarter. -- Reduced its daily cash burn rate from nearly $100 million in April to approximately $30 million in June. This improvement was driven by higher than forecast revenue and larger savings resulting from the company’s cost-reduction initiatives. The company’s second-quarter cash burn rate2 was approximately $55 million per day vs. its previous forecast of $70 million per day.

Demand and capacity outlook Passenger demand and load factors have improved since bottoming out in April, but continue to be significantly below 2019 levels. While May and June revenue trends were encouraging, demand has weakened somewhat during July as COVID-19 cases have increased and new travel restrictions have been put into place. The company will continue to match its forward capacity with observed bookings trends and presently expects its third quarter system capacity to be down approximately 60% year over year.

Conference call and webcast detailsThe company will conduct a live audio webcast of its financial results call today at 7:30 a.m. CDT. 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. 23.

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.

1. The 2020 second quarter mainline operating special items, net principally included $1.8 billion of Payroll Support Program (PSP) financial assistance, offset in part by $332 million of salary and medical costs associated with certain team members who opted in to voluntary early retirement programs. Second quarter 2020 regional special items, net primarily 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 associated with certain team members who opted in to voluntary early retirement programs. Second quarter 2020 nonoperating special items, net principally included charges associated with debt refinancings and extinguishments. 2. The company defines cash burn as the sum of all net cash receipts less all cash disbursements, but excluding the effect of new financings and new aircraft purchases.

About American Airlines GroupAmerican’s purpose is 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 InformationCertain 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 Act), the Securities Exchange Act of 1934, as amended (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 our 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 our 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 in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (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 our other filings with the Securities and Exchange Commission. There may be other factors of which we are 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. In particular, the consequences of the COVID-19 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. 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. 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 Percent 6 Months Ended Percent June 30, June 30, 2020 2019 Change 2020 2019 Change - ------- - - ------- - ------- - ------- - - ------- - ------- Operating revenues: Passenger $ 1,108 $ 11,011 (89.9 ) $ 8,788 $ 20,669 (57.5 ) Cargo 130 221 (41.0 ) 277 439 (36.9 ) Other 384 728 (47.2 ) 1,072 1,436 (25.4 ) - ------- - - ------- - - ------- - - ------- - Total operating revenues 1,622 11,960 (86.4 ) 10,137 22,544 (55.0 ) Operating expenses: Aircraft fuel and related taxes 217 1,995 (89.1 ) 1,612 3,722 (56.7 ) Salaries, wages and benefits 2,538 3,200 (20.7 ) 5,679 6,290 (9.7 ) Regional expenses: Fuel 92 487 (81.1 ) 480 909 (47.2 ) Depreciation and amortization 84 83 1.9 168 162 3.7 Other 625 1,316 (52.6 ) 2,076 2,577 (19.4 ) Maintenance, materials and repairs 287 575 (50.1 ) 915 1,136 (19.4 ) Other rent and landing fees 315 535 (41.2 ) 783 1,039 (24.6 ) Aircraft rent 334 334 - 669 661 1.2 Selling expenses 43 401 (89.1 ) 348 771 (54.8 ) Depreciation and amortization 499 489 1.9 1,059 969 9.2 Special items, net (1,494 ) 121 nm (1) (362 ) 259 nm Other 568 1,271 (55.3 ) 1,744 2,521 (30.8 ) - ------- - - ------- - ----- - - ------- - - ------- - Total operating expenses 4,108 10,807 (62.0 ) 15,171 21,016 (27.8 ) - ------- - - ------- - ----- - - ------- - - ------- - Operating income (loss) (2,486 ) 1,153 nm (5,034 ) 1,528 nm Nonoperating income (expense): Interest income 10 35 (72.5 ) 31 68 (54.7 ) Interest expense, net (254 ) (275 ) (7.5 ) (512 ) (546 ) (6.2 ) Other income (expense), net 71 (31 ) nm (34 ) 78 nm - ------- - - ------- - - ------- - - ------- - Total nonoperating expense, net (173 ) (271 ) (36.1 ) (515 ) (400 ) 28.6 - ------- - - ------- - - ------- - - ------- - Income (loss) before income taxes (2,659 ) 882 nm (5,549 ) 1,128 nm Income tax provision (benefit) (592 ) 220 nm (1,241 ) 281 nm - ------- - - ------- - - ------- - - ------- - Net income (loss) $ (2,067 ) $ 662 nm $ (4,308 ) $ 847 nm - ------- - - ------- - - ------- - - ------- - Earnings (loss) per common share: Basic $ (4.82 ) $ 1.49 $ (10.08 ) $ 1.89 - ------- - - ------- - - ------- - - ------- - Diluted $ (4.82 ) $ 1.49 $ (10.08 ) $ 1.88 - ------- - - ------- - - ------- - - ------- - Weighted average shares outstanding (in thousands): Basic 428,807 445,008 427,260 448,479 - ------- - - ------- - - ------- - - ------- - Diluted 428,807 445,587 427,260 449,508 - ------- - - ------- - - ------- - - ------- - Note: Percent change may not recalculate due to rounding. (1) Not meaningful or greater than 100% change.

American Airlines Group Inc. Consolidated Operating Statistics (Unaudited) 3 Months Ended 6 Months Ended June 30, June 30, 2020 2019 Change 2020 2019 Change ------- ------- ------- ------- ------- ------- Mainline Revenue passenger miles (millions) 5,742 55,277 (89.6 ) % 45,055 103,758 (56.6 ) % Available seat miles (ASM) (millions) 13,647 63,195 (78.4 ) % 66,836 121,518 (45.0 ) % Passenger load factor (percent) 42.1 87.5 (45.4 ) pts 67.4 85.4 (18.0 ) pts Passenger enplanements (thousands) 5,460 40,007 (86.4 ) % 35,813 76,553 (53.2 ) % Departures (thousands) 81 279 (71.1 ) % 333 550 (39.4 ) % Aircraft at end of period (1) 849 966 (12.1 ) % 849 966 (12.1 ) % Block hours (thousands) 220 877 (74.9 ) % 979 1,712 (42.8 ) % Average stage length (miles) 1,068 1,219 (12.4 ) % 1,132 1,199 (5.6 ) % Fuel consumption (gallons in millions) 198 938 (78.9 ) % 961 1,791 (46.4 ) % Average aircraft fuel price including related 1.10 2.13 (48.4 ) % 1.68 2.08 (19.3 ) % taxes (dollars per gallon) Full-time equivalent employees at end of period 86,000 106,100 (18.9 ) % 86,000 106,100 (18.9 ) % Regional(2) Revenue passenger miles (millions) 1,489 7,381 (79.8 ) % 7,347 13,702 (46.4 ) % Available seat miles (millions) 3,434 9,127 (62.4 ) % 12,344 17,478 (29.4 ) % Passenger load factor (percent) 43.4 80.9 (37.5 ) pts 59.5 78.4 (18.9 ) pts Passenger enplanements (thousands) 2,911 15,457 (81.2 ) % 14,760 28,845 (48.8 ) % Aircraft at end of period (3) 545 613 (11.1 ) % 545 613 (11.1 ) % Fuel consumption (gallons in millions) 77 220 (65.3 ) % 285 420 (32.1 ) % Average aircraft fuel price including related 1.20 2.21 (45.7 ) % 1.68 2.17 (22.2 ) % taxes (dollars per gallon) Full-time equivalent employees at end of period 21,400 27,700 (22.7 ) % 21,400 27,700 (22.7 ) % (4) Total Mainline & Regional Revenue passenger miles (millions) 7,231 62,658 (88.5 ) % 52,402 117,460 (55.4 ) % Available seat miles (millions) 17,081 72,322 (76.4 ) % 79,180 138,996 (43.0 ) % Passenger load factor (percent) 42.3 86.6 (44.3 ) pts 66.2 84.5 (18.3 ) pts Yield (cents) 15.32 17.57 (12.8 ) % 16.77 17.60 (4.7 ) % Passenger revenue per ASM (cents) 6.48 15.22 (57.4 ) % 11.10 14.87 (25.4 ) % Total revenue per ASM (cents) 9.50 16.54 (42.6 ) % 12.80 16.22 (21.1 ) % Cargo ton miles (millions) 176 644 (72.6 ) % 612 1,269 (51.8 ) % Cargo yield per ton mile (cents) 73.98 34.29 nm 45.24 34.57 30.9 % Passenger enplanements (thousands) 8,371 55,464 (84.9 ) % 50,573 105,398 (52.0 ) % Aircraft at end of period (1) (3) 1,394 1,579 (11.7 ) % 1,394 1,579 (11.7 ) % Fuel consumption (gallons in millions) 275 1,158 (76.3 ) % 1,246 2,211 (43.6 ) % Average aircraft fuel price including related 1.13 2.14 (47.5 ) % 1.68 2.09 (19.8 ) % taxes (dollars per gallon) Full-time equivalent employees at end of period 107,400 133,800 (19.7 ) % 107,400 133,800 (19.7 ) % Operating cost per ASM (cents) 24.05 14.94 61.0 % 19.16 15.12 26.7 % Operating cost per ASM excluding net special 33.84 14.78 nm 19.73 14.93 32.1 % items (cents) Operating cost per ASM excluding net special 32.04 11.34 nm 17.08 11.60 47.2 % items and fuel (cents) (1) Excludes 22 mainline aircraft that are in temporary storage as follows: 15 Airbus A330-200 and seven Boeing 737-800 aircraft. (2) Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers. (3) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes 20 regional aircraft that are in temporary storage as follows: 13 Embraer 175, four Embraer 145 and three Bombardier CRJ700 aircraft. (4) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries. Note: Amounts may not recalculate due to rounding.

American Airlines Group Inc. Consolidated Revenue Statistics by Region (Unaudited) 3 Months Ended 6 Months Ended June 30, June 30, 2020 2019 Change 2020 2019 Change ------ ------ ------- ------ ------ ------- Domestic(1) Revenue passenger miles (millions) 6,804 41,477 (83.6 ) % 38,661 79,194 (51.2 ) % Available seat miles (ASM) (millions) 15,434 47,050 (67.2 ) % 59,672 92,332 (35.4 ) % Passenger load factor (percent) 44.1 88.2 (44.1 ) pts 64.8 85.8 (21.0 ) pts Passenger revenue (dollars in millions) 1,027 8,009 (87.2 ) % 6,806 15,235 (55.3 ) % Yield (cents) 15.09 19.31 (21.9 ) % 17.60 19.24 (8.5 ) % Passenger revenue per ASM (cents) 6.65 17.02 (60.9 ) % 11.41 16.50 (30.9 ) % Latin America(2) Revenue passenger miles (millions) 200 7,829 (97.4 ) % 7,316 16,179 (54.8 ) % Available seat miles (millions) 700 9,157 (92.4 ) % 9,768 19,364 (49.6 ) % Passenger load factor (percent) 28.6 85.5 (56.9 ) pts 74.9 83.6 (8.7 ) pts Passenger revenue (dollars in millions) 34 1,241 (97.2 ) % 1,214 2,612 (53.5 ) % Yield (cents) 17.07 15.85 7.7 % 16.59 16.14 2.8 % Passenger revenue per ASM (cents) 4.88 13.55 (64.0 ) % 12.42 13.49 (7.9 ) % Atlantic Revenue passenger miles (millions) 189 9,763 (98.1 ) % 4,374 14,806 (70.5 ) % Available seat miles (millions) 817 11,898 (93.1 ) % 7,056 18,724 (62.3 ) % Passenger load factor (percent) 23.1 82.1 (59.0 ) pts 62.0 79.1 (17.1 ) pts Passenger revenue (dollars in millions) 42 1,407 (97.0 ) % 565 2,080 (72.8 ) % Yield (cents) 22.28 14.41 54.6 % 12.92 14.05 (8.0 ) % Passenger revenue per ASM (cents) 5.16 11.83 (56.4 ) % 8.01 11.11 (27.9 ) % Pacific Revenue passenger miles (millions) 38 3,589 (98.9 ) % 2,051 7,281 (71.8 ) % Available seat miles (millions) 130 4,217 (96.9 ) % 2,684 8,576 (68.7 ) % Passenger load factor (percent) 29.0 85.1 (56.1 ) pts 76.4 84.9 (8.5 ) pts Passenger revenue (dollars in millions) 5 354 (98.7 ) % 203 742 (72.6 ) % Yield (cents) 12.61 9.86 27.9 % 9.89 10.18 (2.9 ) % Passenger revenue per ASM (cents) 3.65 8.39 (56.5 ) % 7.56 8.65 (12.5 ) % Total International Revenue passenger miles (millions) 427 21,181 (98.0 ) % 13,741 38,266 (64.1 ) % Available seat miles (millions) 1,647 25,272 (93.5 ) % 19,508 46,664 (58.2 ) % Passenger load factor (percent) 25.9 83.8 (57.9 ) pts 70.4 82.0 (11.6 ) pts Passenger revenue (dollars in millions) 81 3,002 (97.3 ) % 1,982 5,434 (63.5 ) % Yield (cents) 18.98 14.17 34.0 % 14.42 14.20 1.6 % Passenger revenue per ASM (cents) 4.92 11.88 (58.6 ) % 10.16 11.64 (12.8 ) % (1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands. (2)Latin America results include the Caribbean. Note: Amounts may not recalculate due to rounding.

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: - 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) - Operating Income (Loss) (GAAP measure) to Operating Income (Loss) 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). Management uses total operating costs excluding net special items and aircraft 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 aircraft fuel and net special items allows management an additional tool to understand and analyze the company’s non-fuel costs and core operating performance. 3 Months Ended 6 Months Ended June 30, Percent Change June 30, Percent Change -------------- -------------- Reconciliation of Pre-Tax Income (Loss) 2020 2019 2020 2019 Excluding Net Special Items ---------------------- - ------- - - ------- - - ------- - ------- (in millions, except per (in millions, except per share amounts) share amounts) Pre-tax income (loss) $ (2,659 ) $ 882 $ (5,549 ) $ 1,128 as reported Pre-tax net special items: Mainline operating (1,494 ) 121 (362 ) 259 special items, net (1) Regional operating (178 ) - (85 ) - special items, net (2) Nonoperating special 11 69 228 (1 ) items, net (3) - ------- - - ------- - - ------- - - ------- - Total pre-tax net (1,661 ) 190 (219 ) 258 special items Pre-tax income (loss) excluding net special $ (4,320 ) $ 1,072 nm $ (5,768 ) $ 1,386 nm items Calculation of Pre-Tax Margin ---------------------- Pre-tax income (loss) $ (2,659 ) $ 882 $ (5,549 ) $ 1,128 as reported Total operating $ 1,622 $ 11,960 $ 10,137 $ 22,544 revenues as reported Pre-tax margin -163.9 % 7.4 % -54.7 % 5.0 % Calculation of Pre-Tax Margin Excluding Net Special Items ---------------------- Pre-tax income (loss) excluding net special $ (4,320 ) $ 1,072 $ (5,768 ) $ 1,386 items Total operating $ 1,622 $ 11,960 $ 10,137 $ 22,544 revenues as reported Pre-tax margin excluding net special -266.3 % 9.0 % -56.9 % 6.1 % items Reconciliation of Net Income (Loss) Excluding Net Special Items ---------------------- Net income (loss) as $ (2,067 ) $ 662 $ (4,308 ) $ 847 reported Net special items: Total pre-tax net special items (1), (1,661 ) 190 (219 ) 258 (2), (3) Net tax effect of net 374 (42 ) 44 (58 ) special items - ------- - - ------- - - ------- - - ------- - Net income (loss) excluding net special $ (3,354 ) $ 810 nm $ (4,483 ) $ 1,047 nm items Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items ---------------------- Net income (loss) excluding net special $ (3,354 ) $ 810 $ (4,483 ) $ 1,047 items Shares used for computation (in thousands): Basic 428,807 445,008 427,260 448,479 - ------- - - ------- - - ------- - - ------- - Diluted 428,807 445,587 427,260 449,508 - ------- - - ------- - - ------- - - ------- - Earnings (loss) per share excluding net special items: Basic $ (7.82 ) $ 1.82 $ (10.49 ) $ 2.33 - ------- - - ------- - - ------- - - ------- - Diluted $ (7.82 ) $ 1.82 $ (10.49 ) $ 2.33 - ------- - - ------- - - ------- - - ------- - 3 Months Ended 6 Months Ended June 30, June 30, Reconciliation of Operating Income 2020 2019 2020 2019 (Loss) Excluding Net Special Items ---------------------- - ------- - - ------- - - ------- - - ------- - (in millions) (in millions) Operating income $ (2,486 ) $ 1,153 $ (5,034 ) $ 1,528 (loss) as reported Operating net special items: Mainline operating (1,494 ) 121 (362 ) 259 special items, net (1) Regional operating (178 ) - (85 ) - special items, net (2) - ------- - - ------- - - ------- - - ------- - Operating income (loss) excluding net $ (4,158 ) $ 1,274 $ (5,481 ) $ 1,787 special items Reconciliation of Total Operating Cost per ASM Excluding Net Special Items and Fuel ---------------------- Total operating $ 4,108 $ 10,807 $ 15,171 $ 21,016 expenses as reported Operating net special items: Mainline operating 1,494 (121 ) 362 (259 ) special items, net (1) Regional operating 178 - 85 - special items, net (2) - ------- - - ------- - - ------- - - ------- - Total operating expenses, excluding 5,780 10,686 15,618 20,757 net special items Fuel: Aircraft fuel and related taxes - (217 ) (1,995 ) (1,612 ) (3,722 ) mainline Aircraft fuel and related taxes - (92 ) (487 ) (480 ) (909 ) regional - ------- - - ------- - - ------- - - ------- - Total operating expenses, excluding $ 5,471 $ 8,204 $ 13,526 $ 16,126 net special items and fuel (in cents) (in cents) Total operating expenses per ASM as 24.05 14.94 19.16 15.12 reported Operating net special items per ASM: Mainline operating 8.75 (0.17 ) 0.46 (0.19 ) special items, net (1) Regional operating 1.04 - 0.11 - special items, net (2) - ------- - - ------- - - ------- - - ------- - Total operating expenses per ASM, 33.84 14.78 19.73 14.93 excluding net special items Fuel per ASM: Aircraft fuel and related taxes - (1.27 ) (2.76 ) (2.04 ) (2.68 ) mainline Aircraft fuel and related taxes - (0.54 ) (0.67 ) (0.61 ) (0.65 ) regional - ------- - - ------- - - ------- - - ------- - Total operating expenses per ASM, 32.04 11.34 17.08 11.60 excluding net special items and fuel Note: Amounts may not recalculate due to rounding. FOOTNOTES: The 2020 second quarter mainline operating special items, net principally included $1.8 billion of Payroll Support Program (PSP) financial assistance, offset in part by $332 million of salary and medical costs associated with certain team 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 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. (1) The fleet impairment charges included a $675 million non-cash write-down of mainline aircraft and spare parts and $68 million in write-offs of right-of-use assets and lease return costs resulting from the company’s decision to retire certain aircraft earlier than planned driven by the decline in air travel due to COVID-19. Aircraft retired include Boeing 757, Boeing 767, Airbus A330-300 and Embraer 190 aircraft. The 2019 second quarter mainline operating special items principally included $77 million of fleet restructuring expenses and $39 million of merger integration expenses. The 2019 six month period mainline operating special items principally included $160 million of fleet restructuring expenses and $76 million of merger integration expenses. The 2020 second quarter regional operating special items, net primarily 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 associated with certain team members who opted in to voluntary early retirement programs. The 2020 six month period regional operating special items, net included $216 million of PSP financial assistance, offset in part by $117 million of fleet impairment charges and $14 million of salary (2) and medical costs associated with certain team members who opted in to voluntary early retirement programs. The fleet impairment charges principally included a non-cash write-down of regional aircraft and spare parts resulting from the company’s decision to retire certain aircraft earlier than planned driven by the decline in air travel due to COVID-19. Aircraft retired include certain Embraer 140 and Bombardier CRJ200 aircraft. Principally included mark-to-market net unrealized gains and losses associated with certain equity (3) investments and treasury rate lock derivative instruments as well as charges associated with debt refinancings and extinguishments.

American Airlines Group Inc. Condensed Consolidated Balance Sheets (In millions) June 30, December 2020 31, 2019 ----------- ----------- (unaudited) Assets Current assets Cash $ 462 $ 280 Short-term investments 9,351 3,546 Restricted cash and short-term investments 539 158 Accounts receivable, net 879 1,750 Aircraft fuel, spare parts and supplies, net 1,653 1,851 Prepaid expenses and other 905 621 - ------- - - ------- - Total current assets 13,789 8,206 Operating property and equipment Flight equipment 38,672 42,537 Ground property and equipment 9,386 9,443 Equipment purchase deposits 1,786 1,674 - ------- - - ------- - Total property and equipment, at cost 49,844 53,654 Less accumulated depreciation and amortization (16,493 ) (18,659 ) - ------- - - ------- - Total property and equipment, net 33,351 34,995 Operating lease right-of-use assets 8,323 8,737 Other assets Goodwill 4,091 4,091 Intangibles, net 2,049 2,084 Deferred tax asset 1,725 645 Other assets 1,216 1,237 - ------- - - ------- - Total other assets 9,081 8,057 - ------- - - ------- - Total assets $ 64,544 $ 59,995 - ------- - - ------- - Liabilities and Stockholders’ Equity (Deficit) Current liabilities Current maturities of long-term debt and finance leases $ 2,575 $ 2,861 Accounts payable 1,175 2,062 Accrued salaries and wages 1,518 1,541 Air traffic liability 5,119 4,808 Loyalty program liability 2,354 3,193 Operating lease liabilities 1,804 1,708 Other accrued liabilities 3,455 2,138 - ------- - - ------- - Total current liabilities 18,000 18,311 Noncurrent liabilities Long-term debt and finance leases, net of current maturities 28,698 21,454 Pension and postretirement benefits 6,019 6,052 Loyalty program liability 6,608 5,422 Operating lease liabilities 6,972 7,421 Other liabilities 1,416 1,453 - ------- - - ------- - Total noncurrent liabilities 49,713 41,802 Stockholders' equity (deficit) Common stock 5 4 Additional paid-in capital 5,377 3,945 Accumulated other comprehensive loss (6,463 ) (6,331 ) Retained earnings (deficit) (2,088 ) 2,264 - ------- - - ------- - Total stockholders' deficit (3,169 ) (118 ) - ------- - - ------- - Total liabilities and stockholders’ equity (deficit) $ 64,544 $ 59,995 - ------- - - ------- -

American Airlines Group Inc. Condensed Consolidated Statements of Cash Flows (In millions)(Unaudited) 6 Months Ended June 30, 2020 2019 - ------ - - ------ - Net cash provided by (used in) operating activities $ (1,076 ) $ 2,387 Cash flows from investing activities: Capital expenditures and aircraft purchase deposits (1,233 ) (2,323 ) Proceeds from sale-leaseback transactions 376 518 Proceeds from sale of property and equipment 148 19 Purchases of short-term investments (7,936 ) (2,201 ) Sales of short-term investments 2,131 1,611 Increase in restricted short-term investments (386 ) (2 ) Other investing activities (61 ) (35 ) - ------ - - ------ - Net cash used in investing activities (6,961 ) (2,413 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 9,464 2,589 Payments on long-term debt and finance leases (2,477 ) (1,781 ) Proceeds from issuance of equity 1,527 - Deferred financing costs (84 ) (23 ) Treasury stock repurchases (173 ) (625 ) Dividend payments (43 ) (90 ) - ------ - - ------ - Net cash provided by financing activities 8,214 70 - ------ - - ------ - Net increase in cash and restricted cash 177 44 Cash and restricted cash at beginning of period 290 286 - ------ - - ------ - Cash and restricted cash at end of period (1) $ 467 $ 330 ------------------------------- - ------ - - ------ - (1) The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets: Cash $ 462 $ 319 Restricted cash included in restricted cash and short-term investments 5 11 - ------ - - ------ - Total cash and restricted cash $ 467 $ 330 - ------ - - ------ -

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