OREANDA-NEWS. American Airlines Group Inc. (NASDAQ: AAL) reported its fourth quarter and full year 2014 results.

Reported record fourth quarter 2014 net profit excluding net special charges of USD 1.1 billion, up 153 percent versus the fourth quarter 2013. For the year, the Company's 2014 net profit excluding net special charges was a record USD 4.2 billion, up 115 percent versus 2013

Completed the Company's previously announced USD 1 billion share repurchase program more than one year before its expiration. Announced authorization of an additional USD 2 billion share repurchase program to be completed by the end of 2016

Declared a dividend of USD 0.10 per share to be paid on February 23, 2015, to shareholders of record as of February 9, 2015

For the fourth quarter 2014, American Airlines Group reported a record GAAP net profit of USD 597 million. This compares to a GAAP net loss of USD 2.0 billion in the fourth quarter 2013, which includes the results for US Airways only for the period from the completion of the merger on December 9, 2013, through December 31, 2013.

For full year 2014, GAAP net profit was USD 2.9 billion, compared to a full year 2013 GAAP net loss of USD 1.8 billion for AMR Corporation, which includes the results for US Airways only for the period from the completion of the merger on December 9, 2013, through December 31, of 2013.

The Company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways excluding special charges and on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group. On this basis, the Company's fourth quarter 2014 net profit excluding net special charges was a record USD 1.1 billion, or USD 1.52 per diluted share. This represents a 153 percent improvement over the combined non-GAAP net profit of USD 436 million excluding net special charges for the same period in 2013. The Company's fourth quarter 2014 pretax margin excluding net special charges was a record 10.6 percent.

Excluding net special charges, the Company's 2014 net profit was a record USD 4.2 billion, or USD 5.70 per diluted share. This represents a 115 percent improvement over the Company's combined 2013 non-GAAP net profit excluding net special charges of USD 1.9 billion.

See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.

"Our record 2014 results close out a fantastic first year for our merger. These results would not have been possible without the efforts of our more than 100,000 team members," said Doug Parker, American Airlines Group Chairman and CEO. "They have done a great job of working together to take care of our customers and restore American as the greatest airline in the world.

"We have much to do in the year ahead as we continue to integrate two large carriers. The results we have achieved thus far, combined with our economic outlook, give us confidence that 2015 will be another outstanding year for American Airlines."

Revenue and Cost Comparisons

Total revenue in the fourth quarter was a record USD 10.2 billion, an increase of 2.1 percent versus the fourth quarter 2013 on a combined basis and excluding special items, on a 1.7 percent increase in total available seat miles (ASMs). Consolidated passenger revenue per ASM (PRASM) was 13.50 cents, down 1.0 percent versus the fourth quarter 2013 on a combined basis. Consolidated passenger yield was a record 16.84 cents, up 0.9 percent year-over-year.

Strong demand throughout the year led to 2014 total revenue of USD 42.7 billion, up 5.6 percent versus 2013 on a combined basis and excluding special items. Full year consolidated PRASM was 13.97 cents, up 2.2 percent versus 2013 on a combined basis.

Total operating expenses in the fourth quarter were USD 9.3 billion, a decrease of 4.1 percent compared to combined fourth quarter 2013 due primarily to a 17.3 percent decrease in consolidated fuel expense. Fourth quarter mainline cost per available seat mile (CASM) was 13.32 cents, down 6.1 percent on a 1.5 percent increase in mainline ASMs versus combined fourth quarter 2013. Excluding special charges and fuel, mainline CASM was 8.67 cents, up 1.1 percent compared to the combined fourth quarter 2013. Regional CASM excluding special charges and fuel was 15.87 cents, up 0.9 percent on a 3.8 percent increase in regional ASMs versus combined fourth quarter 2013.

For the full year 2014, total operating expenses were USD 38.4 billion, up 1.5 percent versus combined 2013. Excluding special charges and fuel, mainline CASM increased 2.0 percent to 8.63 cents versus combined 2013. Regional CASM excluding special items and fuel increased 3.6 percent to 15.94 cents versus combined 2013.

Liquidity

At December 31, 2014, American had approximately USD 8.1 billion in total cash and short-term investments, of which USD 774 million was restricted. The Company also had an undrawn revolving credit facility of USD 1.8 billion.

Also in the fourth quarter, the Company returned USD 959 million to its shareholders through the payment of USD 72 million in quarterly dividends and the repurchase of USD 887 million of common stock, or 20.5 million shares. When combined with the USD 113 million of shares repurchased in the third quarter 2014, the Company repurchased a total of 23.4 million shares at an average price of USD 42.72 per share in 2014.The Company's USD 1 billion share repurchase program announced in July 2014 is now complete - more than one year ahead of its scheduled expiration. The Company also purchased approximately 52,000 shares from its Disputed Claims Reserve at the prevailing market price to satisfy certain tax obligations resulting from the November 4, 2014, distribution.

As of December 31, 2014, approximately USD 656 million of the Company's unrestricted cash and short-term investment balance was held in Venezuelan bolivars. This balance includes approximately USD 621 million valued at 6.3 bolivars and approximately USD 35 million valued at 12.0 bolivars, with the rate depending on the date the Company submitted its repatriation request to the Venezuelan government. These rates are materially more favorable than the exchange rates currently prevailing for other transactions conducted outside of the Venezuelan government's currency exchange system. The Company's cash balance held in Venezuelan bolivars decreased USD 65 million from the September 30, 2014 balance of USD 721 million. In the fourth quarter of 2014, the Company incurred an USD 11 million foreign currency loss related to the receipt of USD 23 million at a rate of 6.3 bolivars to the dollar for one of its 2012 repatriation requests originally valued at a rate of 4.3 bolivars to the dollar. Accordingly, the Company revalued its remaining pending 2012 repatriation requests from 4.3 to 6.3 bolivars to the dollar resulting in additional foreign currency losses of USD 19 million. In total, the Company recognized a USD 30 million special charge for these foreign currency losses in the fourth quarter of 2014.

The Company has significantly reduced capacity in this market. The Company is continuing to work with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. The Company is monitoring this situation closely and continues to evaluate its holdings of Venezuelan bolivars for additional foreign currency losses, which could be material.

The Company also announced that its Board of Directors declared a dividend of USD 0.10 per share for shareholders of record as of February 9, 2015. The dividend will be paid on February 23, 2015. In addition, the Company announced that its Board also authorized an additional USD 2 billion share repurchase program to be completed by the end of 2016.

Shares repurchased under the program announced above 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 program does 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 management's discretion.