ОРЕАНДА-НОВОСТИ. American Airlines Group Inc. (NASDAQ:AAL) today reported its second quarter 2016 results. The Company’s second quarter highlights include:

  • Second quarter 2016 pre-tax profit of $1.5 billion, or $1.6 billion excluding special charges, and net profit of $950 million, or $1.0 billion excluding special charges
  • Second quarter 2016 earnings per diluted share was $1.68 versus $2.41 for the same period last year. Second quarter adjusted1 earnings per diluted share was $2.81 versus $2.62 for the second quarter 2015
  • Returned more than $1.7 billion to stockholders through share repurchases and dividends
  • On July 12, the Company announced new agreements with its AAdvantage® credit card partners, Citi, Barclaycard US and MasterCard which are expected to add $200 million in pre-tax income in the second half of 2016, $550 million in 2017, and $800 million in 2018, with continued modest improvement in pre-tax income each year beyond, in each case as compared to results expected under the prior credit card arrangements
  • On July 18, the Company reached an agreement with Airbus to defer delivery of the 22 A350 XWB aircraft it has on order, providing more widebody fleet flexibility and reducing 2017 and 2018 capital expenditures

The Company reported a Generally Accepted Accounting Principles (GAAP) net profit of $950 million, or $1.68 per diluted share. This compares to a GAAP net profit of $1.7 billion in the second quarter 2015, or $2.41 per diluted share. As a result of the reversal of the valuation allowance on the Company’s deferred tax assets as of December 31, 2015, the Company’s 2016 results include a $543 million provision for income taxes at an effective rate of approximately 38 percent, of which $541 million is non-cash due to net operating loss utilization. There was no tax provision for federal income taxes recorded in 2015.

The impact of the year-over-year change in non-cash income tax expense is removed by comparing pre-tax income. The Company reported GAAP pre-tax income in the second quarter of $1.5 billion, and pre-tax income excluding special charges of $1.6 billion. These are the second highest second quarter pre-tax earnings in Company history, behind only the $1.7 billion GAAP and $1.9 billion excluding special charges, reported in the second quarter of 2015. Adjusted earnings per diluted share was a record $2.81, up 7 percent from $2.62 per diluted share in the second quarter of 2015.

“These strong second-quarter results are the result of the hard work by our people to improve every aspect of our airline. The more than 100,000 team members of American Airlines are doing an outstanding job of taking care of our customers,” said Doug Parker, Chairman and CEO. “In addition, our recently announced AAdvantage credit card agreements show that the world's largest airline network is a powerful draw for both our business partners and our customers.”

Second Quarter 2016 Highlights?

             
    GAAP   Non-GAAP
    2Q16 2Q15   2Q16 2Q15
             
  Total operating revenues ($ mil) $   10,363   $   10,827     $   10,363   $   10,827  
  Total operating expenses ($ mil)     8,612       8,906         8,547       8,752  
  Operating income     1,751       1,921         1,816       2,075  
             
  Pre-tax income ($ mil)     1,493       1,719         1,594       1,862  
  Pre-tax margin   14.4 %   15.9 %     15.4 %   17.2 %
             
  Net income ($ mil)     950       1,704         1,001       1,854  
             
  Fully diluted earnings per share $   1.68   $   2.41     $   1.77   $   2.62  
  Adjusted earnings per diluted share 1    -     -     $   2.81   $   2.62  
             

Revenue and Cost Comparisons

Second quarter 2016 revenue was hurt by competitive capacity growth, continued global macroeconomic softness and foreign currency weakness. Total revenue in the second quarter was $10.4 billion, a decrease of 4.3 percent versus the second quarter of 2015 on a 1.9 percent increase in total available seat miles (ASMs). Consolidated passenger revenue per ASM (PRASM) was 12.71 cents, down 6.3 percent versus the second quarter of 2015. Consolidated passenger yield was 15.42 cents, down 5.3 percent year-over-year.

Total operating expenses in the second quarter were $8.6 billion, a decrease of 3.3 percent compared to the second quarter 2015 due primarily to a 24.9 percent decrease in consolidated fuel expense. The Company’s second quarter operating expenses include a $98 million accrual related to the Company’s profit sharing program, which took effect in 2016.

Second quarter mainline cost per available seat mile (CASM) was 11.32 cents, down 4.6 percent on a 1.2 percent increase in mainline ASMs versus the second quarter 2015. Excluding fuel and special charges, mainline CASM was 9.12 cents, up 4.0 percent. Regional CASM was 18.78 cents, down 9.8 percent versus the second quarter 2015 on an 8.0 percent increase in regional ASMs. Excluding fuel and special charges, regional CASM was 15.29 cents, down 4.6 percent.

Fleet

As part of the Company’s fleet renewal program, the Company invested $1.2 billion in new aircraft during the second quarter, including 14 new mainline aircraft and 14 new regional aircraft, while removing 31 aircraft from the fleet.

On July 18, the Company reached an agreement with Airbus to defer delivery of the 22 A350 XWB aircraft it has on order. Under the new schedule, the Company expects to take delivery of its first A350 aircraft in late 2018, instead of the spring of 2017 as previously expected. The Company now expects to take delivery of these A350 aircraft from 2018 through 2022, with an average deferral of 26 months. This change reduces the Company’s planned capital expenditures for 2017 and 2018 and provides capacity flexibility.

Capital Return Program

As of June 30, 2016, the Company had approximately $9.5 billion in total available liquidity, consisting of unrestricted cash and short-term investments of $7.1 billion and $2.4 billion in undrawn revolver capacity. The Company also had a restricted cash position of $640 million.

The Company returned more than $1.7 billion to its stockholders in the second quarter through the payment of $58 million in quarterly dividends and the repurchase of $1.7 billion of common stock, or 50.2 million shares, at an average price of $33.55 per share. The Company has returned approximately $8.4 billion to stockholders through share repurchases and dividends since it began its capital return program in mid-2014.

Shares repurchased under the buyback programs may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions. Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements and other relevant factors. The programs do not obligate the Company to repurchase any specific number of shares or continue a dividend for any fixed period, and may be suspended at any time at the Company's discretion.

The Company also declared a dividend of $0.10 per share to be paid on August 19, 2016, to stockholders of record as of August 5, 2016.

Notable Accomplishments

Finance, Marketing, and Network Accomplishments

  • On July 7, the U.S. Department of Transportation (DOT) tentatively awarded American the authority for five daily flights to Jos? Mart? International Airport in Havana, Cuba, including four from Miami and one from Charlotte. Service is expected to begin in November. In addition, on June 10 the DOT awarded American the right to operate scheduled service between Miami and five cities in Cuba – Camaguey, Cienfuegos, Holguin, Santa Clara and Varadero. Service to those cities is expected to begin in September and will represent American’s first-ever scheduled flights to Cuba
  • The Company completed several financing transactions during the quarter, including the issuance of a new $1 billion 7-year term loan secured by the Company’s mainline spare parts, $844 million in special facility revenue refunding bonds related to the John F. Kennedy International Airport (JFK) which refinanced existing outstanding JFK bonds that carried a higher interest rate. In addition, the Company issued the $829 million 2016-2 Enhanced Equipment Trust Certificates consisting of both AA and A tranches. This transaction was then augmented in early July with a $227 million B tranche
  • The AAdvantage® program was named Best Elite Program in the Americas by the Freddie Awards
  • American Airlines Cargo was named Cargo Airline of the Year for the second year in a row, and Best Cargo Airline of the Americas for the ninth year in a row, in voting sponsored by Air Cargo News
  • On June 23, American launched nonstop service between Los Angeles and Auckland, New Zealand with the Boeing 787-8

Integration Accomplishments

  • American has now made Flagship University in Fort Worth the single training location for all of American’s 25,000 flight attendants
  • The Fleet Service team became the first uniformed work group to have a common uniform on May 1
  • Forty mainline aircraft were painted in the new livery, bringing the total to 76 percent of our combined mainline fleet

Community Relations Accomplishments

  • American announced a multi-year, multi-million dollar commitment to Stand Up To Cancer
  • On May 26, the first American Airlines Charity Golf Tournament raised more than $225,000 for three Dallas/Fort Worth-based charities, including the Bush Institute’s Military Service Initiative, Komen Dallas County and American Airlines Education Foundation
  • American’s Regional Community Relations Council at Tech Ops – Tulsa pledged $50,000 to Tulsa Public Schools for professional Science, Technology, Engineering and Math development for teachers as part of the Support Our Schools campaign
  • The American Airlines Education Foundation awarded more than $750,000 in scholarships to 287 children of employees. Each recipient received a $2,500 scholarship, and first-generation college students received an additional one-time award of $1,000. This fall, these students will study at 177 universities across 39 states, Puerto Rico and Washington, D.C.

Special Items

In the second quarter, the Company recognized $101 million in net special charges before the effect of income taxes, including:

  • Operating special charges totaled a net charge of $65 million, which principally included $115 million of merger integration expenses, offset in part by a $56 million net credit principally consisting of fair value adjustments for bankruptcy settlement obligations
  • Nonoperating special charges of $36 million related principally to non-cash write offs of unamortized bond discounts and issuance costs in connection with a bond refinancing

About American Airlines Group

American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld® alliance, whose members serve more than 1,000 destinations with about 14,250 daily flights to over 150 countries. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index.

                         
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  
    2016       2015     Change     2016       2015     Change  
                         
Operating revenues:                        
Mainline passenger $   7,209     $   7,655         (5.8 )   $   13,773     $   14,644         (5.9 )  
Regional passenger     1,786         1,759         1.6         3,309         3,211         3.1    
Cargo     174         194         (10.4 )       336         388         (13.6 )  
Other     1,194         1,219         (2.1 )       2,380         2,411       (1.3 )  
Total operating revenues     10,363         10,827         (4.3 )       19,798         20,654         (4.1 )  
                         
Operating expenses:                        
Aircraft fuel and related taxes     1,314         1,774         (25.9 )       2,343         3,318         (29.4 )  
Salaries, wages and benefits     2,670         2,364         13.0         5,322         4,737         12.4    
Regional expenses:                        
Fuel     279         349         (20.0 )       498         660         (24.5 )  
Other     1,239         1,208         2.5         2,452         2,359         3.9    
Maintenance, materials and repairs     453         502         (9.7 )       871         995         (12.5 )  
Other rent and landing fees     458         451         1.5         879         859         2.4    
Aircraft rent     302         316         (4.3 )       609         633         (3.8 )  
Selling expenses     334         350         (4.7 )       642         686         (6.4 )  
Depreciation and amortization     374         340         10.1         729         676         7.8    
Special items, net     62         144         (57.3 )       161         447         (64.1 )  
Other     1,127         1,108         1.7         2,205         2,147         2.7    
Total operating expenses     8,612         8,906         (3.3 )       16,711         17,517         (4.6 )  
                                                 
Operating income     1,751         1,921         (8.8 )       3,087         3,137         (1.6 )  
                         
Nonoperating income (expense):                        
Interest income     16         10         58.8         28         19         47.1    
Interest expense, net     (249 )       (223 )       11.5         (488 )       (432 )       12.7    
Other, net     (25 )       11       nm         (17 )       (62 )       (71.7 )  
Total nonoperating expense, net     (258 )       (202 )       28.0         (477 )       (475 )       0.2    
                                                 
Income before income taxes     1,493         1,719         (13.2 )       2,610         2,662         (2.0 )  
                         
Income tax provision     543         15       nm         960         26       nm    
                                                 
Net income $   950     $   1,704         (44.3 )   $   1,650     $   2,636         (37.4 )  
                                                 
                                                 
Earnings per common share:                                                
Basic $   1.69     $   2.47             $   2.82     $   3.81            
Diluted $   1.68     $   2.41             $   2.80     $   3.70            
                                                 
Weighted average shares outstanding (in thousands):                                                
Basic     563,000         688,727                 584,622         692,571            
Diluted     566,040         707,611                 588,764         712,270            
                                                 
Note: Percent change may not recalculate due to rounding.                      
                               
American Airlines Group Inc.  
Consolidated Operating Statistics  
(Unaudited)  
                               
    3 Months Ended
June 30,		         6 Months Ended
June 30,		        
    2016   2015   Change     2016   2015   Change    
                               
Mainline                              
Revenue passenger miles (millions)     51,927     51,632       0.6   %     98,147     96,481       1.7   %  
Available seat miles (ASM) (millions)     62,670     61,920       1.2   %     120,234     117,773       2.1   %  
Passenger load factor (percent)     82.9     83.4       (0.5 ) pts     81.6     81.9       (0.3 ) pts  
Yield (cents)     13.88     14.83       (6.4 ) %     14.03     15.18       (7.5 ) %  
Passenger revenue per ASM (cents)     11.50     12.36       (7.0 ) %     11.46     12.43       (7.9 ) %  
                               
Passenger enplanements (thousands)     37,699     37,823       (0.3 ) %     72,246     71,774       0.7   %  
Departures (thousands)     283     285       (0.8 ) %     555     555       -   %  
Aircraft at end of period     947     963       (1.7 ) %     947     963       (1.7 ) %  
                               
Block hours (thousands)     901     903       (0.2 ) %     1,746     1,736       0.6   %  
Average stage length (miles)     1,241     1,236       0.4   %     1,223     1,216       0.6   %  
Fuel consumption (gallons in millions)     931     936       (0.5 ) %     1,786     1,781       0.2   %  
Average aircraft fuel price including related taxes (dollars per gallon)    1.41     1.90       (25.5 ) %     1.31     1.86       (29.6 ) %  
Full-time equivalent employees at end of period     103,100     100,700       2.4   %     103,100     100,700       2.4   %  
                               
Operating cost per ASM (cents)     11.32     11.87       (4.6 ) %     11.45     12.31       (7.0 ) %  
Operating cost per ASM excluding special items (cents)     11.22     11.64       (3.6 ) %     11.31     11.93       (5.2 ) %  
Operating cost per ASM excluding special items and fuel (cents)     9.12     8.77       4.0   %     9.36     9.11       2.7   %  
                               
Regional (A)                              
Revenue passenger miles (millions)     6,409     6,189       3.5   %     11,959     11,530       3.7   %  
Available seat miles (millions)     8,081     7,481       8.0   %     15,581     14,417       8.1   %  
Passenger load factor (percent)     79.3     82.7       (3.4 ) pts     76.8     80.0       (3.2 ) pts  
Yield (cents)     27.87     28.42       (1.9 ) %     27.67     27.85       (0.6 ) %  
Passenger revenue per ASM (cents)     22.10     23.51       (6.0 ) %     21.24     22.27       (4.6 ) %  
                               
Passenger enplanements (thousands)     14,252     14,377       (0.9 ) %     26,620     26,619       -   %  
Aircraft at end of period     600     578       3.8   %     600     578       3.8   %  
Fuel consumption (gallons in millions)     191     182       4.9   %     369     350       5.4   %  
Average aircraft fuel price including related taxes (dollars per gallon)    1.46     1.91       (23.7 ) %     1.35     1.89       (28.4 ) %  
Full-time equivalent employees at end of period (B)     20,400     19,700       3.6   %     20,400     19,700       3.6   %  
                               
Operating cost per ASM (cents)     18.78     20.82       (9.8 ) %     18.94     20.94       (9.6 ) %  
Operating cost per ASM excluding special items (cents)     18.75     20.69       (9.4 ) %     18.88     20.82       (9.3 ) %  
Operating cost per ASM excluding special items and fuel (cents)     15.29     16.02       (4.6 ) %     15.68     16.24       (3.4 ) %  
                               
Total Mainline & Regional                              
Revenue passenger miles (millions)     58,336     57,821       0.9   %     110,106     108,011       1.9   %  
Available seat miles (millions)     70,751     69,401       1.9   %     135,815     132,190       2.7   %  
Cargo ton miles (millions)     610     594       2.6   %     1,153     1,148       0.5   %  
Passenger load factor (percent)     82.5     83.3       (0.8 ) pts     81.1     81.7       (0.6 ) pts  
Yield (cents)     15.42     16.28       (5.3 ) %     15.51     16.53       (6.1 ) %  
Passenger revenue per ASM (cents)     12.71     13.57       (6.3 ) %     12.58     13.51       (6.9 ) %  
Total revenue per ASM (cents)     14.65     15.60       (6.1 ) %     14.58     15.62       (6.7 ) %  
Cargo yield per ton mile (cents)     28.48     32.62       (12.7 ) %     29.09     33.83       (14.0 ) %  
                               
Passenger enplanements (thousands)     51,951     52,200       (0.5 ) %     98,866     98,393       0.5   %  
Aircraft at end of period     1,547     1,541       0.4   %     1,547     1,541       0.4   %  
Fuel consumption (gallons in millions)     1,122     1,118       0.4   %     2,155     2,131       1.1   %  
Average aircraft fuel price including related taxes (dollars per gallon)    1.42     1.90       (25.2 ) %     1.32     1.87       (29.3 ) %  
Full-time equivalent employees at end of period (B)     123,500     120,400       2.6   %     123,500     120,400       2.6   %  
                               
Operating cost per ASM (cents)     12.17     12.83       (5.2 ) %     12.30     13.25       (7.1 ) %  
Operating cost per ASM excluding special items (cents)     12.08     12.61       (4.2 ) %     12.18     12.90       (5.6 ) %  
Operating cost per ASM excluding special items and fuel (cents)     9.83     9.55       2.9   %     10.09     9.89       2.0   %  
                               
                               
(A) Regional includes wholly owned regional airline subsidiaries and operating results from capacity purchase carriers.  
(B) 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
June 30,		         6 Months Ended
June 30,		        
      2016   2015   Change     2016   2015   Change    
                                 
Domestic - Mainline                              
Revenue passenger miles (millions)     33,418     33,170       0.7   %     63,808     62,755       1.7   %  
Available seat miles (ASM) (millions)     38,701     38,321       1.0   %     75,244     73,993       1.7   %  
Passenger load factor (percent)     86.3     86.6       (0.3 ) pts     84.8     84.8       -   pts  
Yield (cents)     14.47     15.32       (5.6 ) %     14.59     15.57       (6.3 ) %  
Passenger revenue per ASM (cents)     12.49     13.26       (5.8 ) %     12.37     13.21       (6.4 ) %  
                                 
Domestic Consolidated - Mainline and                              
Total Regional (A)                              
Revenue passenger miles (millions)     39,826     39,359       1.2   %     75,767     74,285       2.0   %  
Available seat miles (ASM) (millions)     46,782     45,802       2.1   %     90,825     88,411       2.7   %  
Passenger load factor (percent)     85.1     85.9       (0.8 ) pts     83.4     84.0       (0.6 ) pts  
Yield (cents)     16.63     17.38       (4.3 ) %     16.65     17.48       (4.7 ) %  
Passenger revenue per ASM (cents)     14.15     14.94       (5.2 ) %     13.89     14.69       (5.4 ) %  
                                 
Latin America                              
Revenue passenger miles (millions)     7,421     7,570       (2.0 ) %     15,476     15,753       (1.8 ) %  
Available seat miles (ASM) (millions)     9,469     9,895       (4.3 ) %     19,949     20,488       (2.6 ) %  
Passenger load factor (percent)     78.4     76.5       1.9   pts     77.6     76.9       0.7   pts  
Yield (cents)     12.65     14.42       (12.3 ) %     13.24     15.48       (14.5 ) %  
Passenger revenue per ASM (cents)     9.91     11.04       (10.2 ) %     10.27     11.90       (13.7 ) %  
                                 
Atlantic                                
Revenue passenger miles (millions)     7,879     8,221       (4.2 ) %     12,680     12,993       (2.4 ) %  
Available seat miles (ASM) (millions)     10,677     10,553       1.2   %     17,570     17,321       1.4   %  
Passenger load factor (percent)     73.8     77.9       (4.1 ) pts     72.2     75.0       (2.8 ) pts  
Yield (cents)     14.34     14.43       (0.6 ) %     14.39     14.45       (0.4 ) %  
Passenger revenue per ASM (cents)     10.58     11.24       (5.9 ) %     10.38     10.84       (4.2 ) %  
                                 
Pacific                                
Revenue passenger miles (millions)     3,209     2,671       20.2   %     6,183     4,980       24.2   %  
Available seat miles (ASM) (millions)     3,823     3,151       21.3   %     7,471     5,971       25.1   %  
Passenger load factor (percent)     83.9     84.8       (0.9 ) pts     82.8     83.4       (0.6 ) pts  
Yield (cents)     9.52     11.04       (13.7 ) %     9.60     11.14       (13.8 ) %  
Passenger revenue per ASM (cents)     7.99     9.35       (14.5 ) %     7.94     9.29       (14.5 ) %  
                                 
Total International                              
Revenue passenger miles (millions)     18,509     18,462       0.3   %     34,339     33,726       1.8   %  
Available seat miles (ASM) (millions)     23,969     23,599       1.6   %     44,990     43,780       2.8   %  
Passenger load factor (percent)     77.2     78.2       (1.0 ) pts     76.3     77.0       (0.7 ) pts  
Yield (cents)     12.83     13.94       (8.0 ) %     13.01     14.44       (9.9 ) %  
Passenger revenue per ASM (cents)     9.90     10.90       (9.2 ) %     9.93     11.12       (10.8 ) %  
                                 
(A) Revenue statistics for all Regional flying are included herein.    
                                 
Note: Amounts may not recalculate due to rounding.                          
                       
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information                 
                       
American Airlines Group Inc. (the "Company") is providing the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure financial performance excluding special items, which is more indicative of the Company’s ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline and regional CASM excluding fuel is useful to investors because both the cost and availability of fuel are subject to many economic and political factors beyond the Company’s control. Management uses mainline and regional CASM excluding special items and fuel to evaluate the Company's operating performance.  
                       
      3 Months Ended
June 30,		 Percent Change 6 Months Ended
June 30,		 Percent Change  
  Reconciliation of Pre-Tax Income Excluding Special Items     2016       2015       2016       2015      
      (in millions, except per share amounts)   (in millions, except per share amounts)    
                       
  Pre-tax income as reported   $   1,493     $   1,719     $   2,610     $   2,662      
  Pre-tax special items:                    
  Special items, net (1)       62         144         161         447      
  Regional operating special items, net       3         10         8         18      
  Nonoperating special items, net (2)       36         (11 )       36         (19 )    
  Total pre-tax special items       101         143         205         446      
                       
  Pre-tax income excluding special items   $   1,594     $   1,862     -14 % $   2,815     $   3,108     -9 %  
                       
                       
  Calculation of Pre-Tax Margin                    
                       
  Pre-tax income as reported   $   1,493     $   1,719     $   2,610     $   2,662      
                       
  Total operating revenues as reported   $   10,363     $   10,827     $   19,798     $   20,654      
                       
  Pre-tax margin     14.4 %     15.9 %     13.2 %     12.9 %    
                       
                       
  Calculation of Pre-Tax Margin Excluding Special Items                    
                       
  Pre-tax income excluding special items   $   1,594     $   1,862     $   2,815     $   3,108      
                       
  Total operating revenues as reported   $   10,363     $   10,827     $   19,798     $   20,654      
                       
  Pre-tax margin excluding special items     15.4 %     17.2 %     14.2 %     15.0 %    
                       
                       
  Reconciliation of Net Income Excluding Special Items                    
                       
  Net income as reported   $   950     $   1,704     $   1,650     $   2,636      
  Special items:                    
  Total pre-tax special items       101         143         205         446      
  Income tax special items       -         7         -         16      
  Net tax effect of special items       (50 )       -         (89 )       -      
  Net income excluding special items   $   1,001     $   1,854     -46 % $   1,766     $   3,098     -43 %  
                       
                       
  Reconciliation of Net Income Excluding Special Items and Non-Cash                    
  Income Tax Provision (3)                    
                       
  Net income as reported   $   950     $   1,704     $   1,650     $   2,636      
  Total pre-tax special items       101         143         205         446      
  Total non-cash income tax provision       541         7         954         16      
  Net income excluding special items and non-cash income tax provision   $   1,592     $   1,854     -14 % $   2,809     $   3,098     -9 %  
                       
                       
  Reconciliation of Basic and Diluted Earnings Per Share Excluding                    
  Special Items                    
                       
  Net income excluding special items   $   1,001     $   1,854     $   1,766     $   3,098      
                       
  Shares used for computation (in thousands):                    
  Basic       563,000         688,727         584,622         692,571      
  Diluted       566,040         707,611         588,764         712,270      
                                       
  Earnings per share excluding special items:                    
  Basic   $   1.78     $   2.69     $   3.02     $   4.47      
  Diluted   $   1.77     $   2.62     $   3.00     $   4.35      
                                       
                       
  Reconciliation of Basic and Diluted Earnings Per Share Excluding                    
  Special Items and Non-Cash Income Tax Provision (3)        
           
  Net income excluding special items and non-cash income tax provision   $   1,592     $   1,854     $   2,809     $   3,098      
                       
  Shares used for computation (in thousands):                    
  Basic       563,000         688,727       584,622         692,571      
  Diluted       566,040         707,611       588,764         712,270      
                                       
  Adjusted earnings per share (excludes special items and non-cash income tax provision):                    
  Basic   $   2.83     $   2.69     $   4.81     $   4.47      
  Diluted   $   2.81     $   2.62     $   4.77     $   4.35      
                                       
                       
      3 Months Ended
June 30,		   6 Months Ended
June 30,		    
  Reconciliation of Operating Income Excluding Special Items     2016       2015       2016       2015      
      (in millions)   (in millions)    
                       
  Operating income as reported   $   1,751     $   1,921     $   3,087     $   3,137      
                       
  Special items:                    
  Special items, net       62         144         161         447      
  Regional operating special items, net       3         10         8         18      
  Operating income excluding special items   $   1,816     $   2,075     $   3,256     $   3,602      
                       
                       
  Reconciliation of Operating Cost per ASM Excluding Special   3 Months Ended
June 30,		   6 Months Ended
June 30,		    
  Items and Fuel - Mainline only     2016       2015       2016       2015      
      (in millions)   (in millions)    
                       
  Total operating expenses as reported   $   8,612     $   8,906     $   16,711     $   17,517      
  Less regional expenses as reported:                    
  Fuel       (279 )       (349 )       (498 )       (660 )    
  Other       (1,239 )       (1,208 )       (2,452 )       (2,359 )    
  Total mainline operating expenses as reported       7,094         7,349         13,761         14,498      
                       
  Special items, net (1)       (62 )       (144 )       (161 )       (447 )    
  Mainline operating expenses, excluding special items       7,032         7,205         13,600         14,051      
                       
  Aircraft fuel and related taxes       (1,314 )       (1,774 )       (2,343 )       (3,318 )    
  Mainline operating expenses, excluding special items and fuel    $   5,718     $   5,431     $   11,257     $   10,733      
                       
      (in cents)   (in cents)    
                       
  Mainline operating expenses per ASM as reported       11.32         11.87         11.45         12.31      
                       
  Special items, net per ASM (1)       (0.10 )       (0.23 )       (0.13 )       (0.38 )    
  Mainline operating expenses per ASM, excluding special items       11.22         11.64         11.31         11.93      
                       
  Aircraft fuel and related taxes per ASM       (2.10 )       (2.86 )       (1.95 )       (2.82 )    
  Mainline operating expenses per ASM, excluding special items                                    
  and fuel       9.12         8.77         9.36         9.11      
                       
  Note: Amounts may not recalculate due to rounding.                    
                       
  Reconciliation of Operating Cost per ASM Excluding Special   3 Months Ended
June 30,		   6 Months Ended
June 30,		    
  Items and Fuel - Regional only     2016       2015       2016       2015      
      (in millions)   (in millions)    
                       
  Total regional operating expenses as reported   $   1,518     $   1,557     $   2,950     $   3,019      
                       
  Regional operating special items, net       (3 )       (10 )       (8 )       (18 )    
  Regional operating expenses, excluding special items       1,515         1,547         2,942         3,001      
                       
  Aircraft fuel and related taxes       (279 )       (349 )       (498 )       (660 )    
  Regional operating expenses, excluding special items and fuel   $   1,236     $   1,198     $   2,444     $   2,341      
                       
      (in cents)   (in cents)    
                       
  Regional operating expenses per ASM as reported       18.78         20.82         18.94         20.94      
                       
  Regional operating special items, net per ASM       (0.03 )       (0.13 )       (0.05 )       (0.12 )    
  Regional operating expenses per ASM, excluding special items       18.75         20.69         18.88         20.82      
                       
  Aircraft fuel and related taxes per ASM       (3.46 )       (4.66 )       (3.20 )       (4.58 )    
  Regional operating expenses per ASM, excluding special items and fuel       15.29         16.02         15.68         16.24      
                       
  Note: Amounts may not recalculate due to rounding.                    
                       
  Reconciliation of Operating Cost per ASM Excluding Special    3 Months Ended
June 30,		   6 Months Ended
June 30,		    
  Items and Fuel - Total Mainline and Regional     2016       2015       2016       2015      
      (in millions)   (in millions)    
                       
  Total operating expenses as reported   $   8,612     $   8,906     $   16,711     $   17,517      
                       
  Special items:                    
  Special items, net (1)       (62 )       (144 )       (161 )       (447 )    
  Regional operating special items, net       (3 )       (10 )       (8 )       (18 )    
  Total operating expenses, excluding special items       8,547         8,752         16,542         17,052      
                       
  Fuel:                    
  Aircraft fuel and related taxes - mainline       (1,314 )       (1,774 )       (2,343 )       (3,318 )    
  Aircraft fuel and related taxes - regional       (279 )       (349 )       (498 )       (660 )    
  Total operating expenses, excluding special items and fuel    $   6,954     $   6,629     $   13,701     $   13,074      
                       
      (in cents)   (in cents)    
                       
  Total operating expenses per ASM as reported       12.17         12.83         12.30         13.25      
                       
  Special items per ASM:                    
  Special items, net (1)       (0.09 )       (0.21 )       (0.12 )       (0.34 )    
  Regional operating special items, net       -         (0.01 )       (0.01 )       (0.01 )    
  Total operating expenses per ASM, excluding special items       12.08         12.61         12.18         12.90      
                       
  Fuel per ASM:                    
  Aircraft fuel and related taxes - mainline       (1.86 )       (2.56 )       (1.73 )       (2.51 )    
  Aircraft fuel and related taxes - regional       (0.39 )       (0.50 )       (0.37 )       (0.50 )    
  Total operating expenses per ASM, excluding special items                                    
  and fuel       9.83         9.55         10.09         9.89      
                       
  Note: Amounts may not recalculate due to rounding.                    
                       
  FOOTNOTES:                    
                       
  (1 ) The 2016 second quarter mainline operating special items totaled a net charge of $62 million, which principally included $112 million of merger integration expenses, offset in part by a $56 million net credit for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations. The 2016 six month period mainline operating special items totaled a net charge of $161 million, which principally included $242 million of merger integration expenses, offset in part by a $61 million net credit for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations. For the 2016 second quarter and six month period, merger integration expenses included costs related to information technology, alignment of labor union contracts, fleet restructuring, re-branding of aircraft, airport facilities and uniforms, professional fees, severance, as well as relocation and training.    
           
      The 2015 second quarter mainline operating special items totaled a net charge of $144 million, which principally included $224 million of merger integration expenses, offset in part by a $68 million net credit for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations. The 2015 six month period mainline operating special items totaled a net charge of $447 million, which principally included $543 million of merger integration expenses, offset in part by a $73 million net credit for bankruptcy related items principally consisting of fair value adjustments for bankruptcy settlement obligations. For the 2015 second quarter and six month period, merger integration expenses included costs related to alignment of labor union contracts, fleet restructuring, information technology, professional fees, severance, re-branding of aircraft, airport facilities and uniforms, relocation and training, as well as share-based compensation.    
                       
  (2 ) In connection with a bond refinancing, the Company recorded a $36 million nonoperating special charge in the 2016 second quarter and six month period related to non-cash write offs of unamortized bond discounts and issuance costs as well as payments of redemption premiums and fees.    
                       
  (3 ) As a result of the Company's profitability and the reversal of the valuation allowance on its deferred tax assets at December 31, 2015, the Company was required to recognize a $543 million and $960 million provision for income taxes in the 2016 second quarter and six month period, respectively, on a Generally Accepted Accounting Principles basis. Of these amounts, $541 million and $954 million in the 2016 second quarter and six month period, respectively, was non-cash due to the utilization of net operating losses (NOLs). For periods prior to 2016, the Company recognized a nominal tax provision for certain states and international jurisdictions where NOLs were limited or not available to be used. Accordingly, amounts reported in the 2016 second quarter and six month period for income tax provision and net income are not comparable to the respective 2015 periods. Therefore, the Company is presenting net income and earnings per share excluding special items and non-cash income tax provision in order to provide more meaningful period-over-period comparisons.    
American Airlines Group Inc.     
Condensed Consolidated Balance Sheets    
(In millions)    
(Unaudited)    
           
  June 30, 2016   December 31, 2015    
Assets          
           
Current assets          
Cash $   446     $   390      
Short-term investments     6,672         5,864      
Restricted cash and short-term investments     640         695      
Accounts receivable, net     1,593         1,425      
Aircraft fuel, spare parts and supplies, net     999         863      
Prepaid expenses and other     834         748      
Total current assets     11,184         9,985      
           
Operating property and equipment          
Flight equipment     35,553         33,185      
Ground property and equipment     6,726         6,402      
Equipment purchase deposits     1,136         1,067      
Total property and equipment, at cost     43,415         40,654      
Less accumulated depreciation and amortization     (13,804 )       (13,144 )    
Total property and equipment, net     29,611         27,510      
           
Other assets          
Goodwill     4,091         4,091      
Intangibles, net     2,213         2,249      
Deferred tax asset     1,965         2,477      
Other assets     1,987         2,103      
Total other assets     10,256         10,920      
                   
Total assets $   51,051     $   48,415      
                   
Liabilities and Stockholders’ Equity          
           
Current liabilities          
Current maturities of long-term debt and capital leases $   1,715     $   2,231      
Accounts payable     1,944         1,563      
Accrued salaries and wages     1,327         1,205      
Air traffic liability     4,984         3,747      
Loyalty program liability     2,511         2,525      
Other accrued liabilities     2,436         2,334      
Total current liabilities     14,917         13,605      
           
Noncurrent liabilities          
Long-term debt and capital leases, net of current maturities     21,131         18,330      
Pension and postretirement benefits     7,426         7,450      
Deferred gains and credits, net     590         667      
Other liabilities     2,675         2,728      
Total noncurrent liabilities     31,822         29,175      
           
Stockholders' equity          
Common stock     5         6      
Additional paid-in capital     8,351         11,591        
Accumulated other comprehensive loss     (4,763 )       (4,732 )      
Retained earnings (deficit)     719         (1,230 )    
Total stockholders' equity     4,312         5,635      
                   
Total liabilities and stockholders’ equity $   51,051     $   48,415