AMERICAN AIRLINES GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2013 FINANCIAL RESULTS

Transcription

1 Investor Relations FOR RELEASE: Tuesday, AMERICAN AIRLINES GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2013 FINANCIAL RESULTS FORT WORTH, Texas American Airlines Group Inc. (NASDAQ: AAL) today reported fourth quarter and full year 2013 results. As the result of the merger which closed on Dec. 9, 2013, US Airways Group became a subsidiary of AMR Corporation which changed its name to American Airlines Group Inc. (AAG) Fourth quarter 2013 combined net profit was $436 million on a non-gaap basis excluding net special charges. This represents a $478 million improvement versus the company s combined fourth quarter 2012 non-gaap net loss of $42 million excluding net special credits 2013 combined net profit was $1.9 billion on a non-gaap basis excluding net special charges, a $1.5 billion improvement versus the company s combined 2012 non-gaap net profit of $407 million excluding net special charges The company ended the year with $10.3 billion in total cash and investments. Since the merger, the company has used more than $300 million of cash to reduce its diluted shares outstanding by approximately 14 million For the fourth quarter 2013, AAG reported a GAAP net loss of $2.0 billion, which includes $2.4 billion of net special charges. This compares to a net profit of $262 million, which includes $350 million of net special credits in the fourth quarter AAG s GAAP financial results include the results for US Airways only for the period from the completion of the merger on Dec. 9, 2013 through Dec. 31, For full year 2013, GAAP net loss was $1.8 billion, which includes $3.1 billion of net special charges. This compares to a full year 2012 net loss of $1.9 billion, which includes $1.7 billion of net special charges. The company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways on a combined basis, which is a non-gaap formulation that combines the results for AMR Corporation and US Airways Group. Therefore, it includes the results of US Airways Group for the full period (not just the period since the merger closed). See the

2 Page 2 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. Fourth quarter 2013 combined net profit was $436 million on a non-gaap basis excluding net special charges. This compares to a combined non-gaap net loss of $42 million excluding net special credits for the same period in Based on a diluted share count of 742 million, fourth quarter 2013 diluted earnings per share was $0.59 on a non-gaap basis. For 2013, the company s combined net profit was $1.9 billion on a non-gaap basis excluding net special charges. This represents a $1.5 billion improvement over the company s combined 2012 non-gaap net profit of $407 million excluding net special charges. The early returns on our merger are very positive, said Doug Parker, CEO of American Airlines Group Inc. Our teams are working well together and our customers are already beginning to see the benefits of our combined network. We have much work ahead, but believe we are on our way to restoring American as the greatest airline in the world. These financial results are evidence of the strong foundation we have in place and we anticipate improving upon these results as we further integrate our operations in 2014." Merger Integration Since closing the merger on Dec. 9, 2013, the company has made significant progress in integrating American Airlines and US Airways. Key accomplishments include: Launched the first phase of codesharing which offers customers improved access to the company s global network by allowing them to book select flights on both airlines' networks Provided reciprocal benefits for Club members and Elite members, including priority check-in, waiver of fees for checked bags, complimentary access to preferred seats, priority security, early boarding and priority baggage delivery Allowed AAdvantage and Dividend Miles members to earn and redeem miles when traveling across either airline's network Trained more than 85,000 customer-facing employees Revenue and Cost Comparisons On a combined basis, total revenues in the fourth quarter were $10.0 billion, up 8.7 percent versus the fourth quarter 2012 on a 3.4 percent increase in total available seat miles (ASMs). Fourth quarter combined consolidated passenger revenue per ASM (PRASM) was cents, up 5.0 percent versus the fourth quarter 2012, driven by a 5.3 percent increase in yield.

3 Page 3 Strong demand and high load factors led to 2013 total combined revenues of $40.4 billion, which were up 4.7 percent versus Full year combined consolidated PRASM was cents, up 2.6 percent versus Total combined operating expenses in the fourth quarter were $9.7 billion, up 7.0 percent over fourth quarter Combined fourth quarter mainline cost per available seat mile (CASM) was cents, up 4.2 percent on a 3.6 percent increase in mainline ASMs versus fourth quarter Excluding special charges, fuel and profit sharing, mainline CASM was flat compared to the fourth quarter 2012, at 8.49 cents. Regional CASM excluding special charges and fuel was cents, up 1.8 percent on a 1.6 percent increase in regional ASMs versus fourth quarter For the full year 2013, total combined operating expenses were $37.8 billion, up 0.6 percent versus Excluding special charges, fuel and profit sharing, combined mainline CASM decreased 3.1 percent to 8.37 cents versus Regional CASM excluding special credits and fuel increased 1.1 percent to cents versus Liquidity and Financing Transactions As of Dec. 31, 2013, American had $10.3 billion in total cash and investments, of which $1.0 billion was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $710 million of this unrestricted cash balance was held as Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.04 bolivars to the dollar. The period of time to exchange those funds into dollars and repatriate them has been increasing and is presently more than a year. On Jan. 24, 2014, the Venezuelan government announced that a newly-implemented system will determine the exchange rate (currently to the dollar) for repatriation of income from future ticket sales, and introduced new procedures for approval of repatriation of local currency. American is working with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. During the fourth quarter, the company elected to pay approximately $300 million in tax withholdings for employees under the Plan of Reorganization in lieu of issuing shares of common stock, thereby reducing the number of shares issued under the Plan by approximately 13 million. On Jan. 9, 2014, the first distribution date, the company paid approximately $23 million in additional employee tax withholdings in lieu of issuing approximately 1 million shares of common stock. The company may make a similar election on future distribution dates as both a service to our team members and an indication of our confidence in the value of our common stock. Additional balance sheet and liquidity detail will be included in the company s Form 10-K to be filed in February. During the fourth quarter, the company engaged in these additional financing transactions:

4 Page 4 Completed the American Airlines offering of the Series B EETC in aggregate face amount of $512 million and the Series C EETC in aggregate face amount of $256 million Amended the American Airlines term loan facility and the revolving credit facility to lower the applicable LIBOR margins to 3.0% for both offerings. As part of this amendment, the LIBOR floor with respect to the term loan facility was reduced from 1.0% to 0.75% Utilized the floating rate debt market to refinance eight US Airways aircraft (six A321s and two A320s) at significantly reduced rates Financed two US Airways spare engine deliveries with a floating rate debt facility originated in 2012 while negotiating an interest rate reduction for the entire facility On Jan. 16, 2014 the company also amended the US Airways term loan facility, to lower the applicable LIBOR margin from 3.0% to 2.75% for Tranche B1. In addition, the LIBOR floor was reduced from 1.0% to 0.75% on both the Tranche B1 and Tranche B2 loans These financing activities demonstrate the confidence that the capital markets have in the new American Airlines and the confidence we have in our future, said Derek Kerr, CFO of American Airlines Group Inc. Special Charges In the fourth quarter, the company recognized a combined total of $2.4 billion in net special charges, including: $2.2 billion in net reorganization charges consisting primarily of a deemed claim to employees, professional fees and estimated allowed claim amounts $497 million in operating expense net special charges primarily related to the pilot memorandum of understanding that became effective upon merger close, merger related costs and professional fees and a charge related to the pilot long-term disability obligation $324 million in non-cash income tax benefits primarily related to gains recorded in Other Comprehensive Income, offset in part by a charge related to deferred tax liabilities on indefinite lived assets $31 million in operating revenue net special credits related to a change in accounting method resulting from the modification of the company s AAdvantage miles agreement with Citibank $21 million in non-operating net special charges primarily related to interest charges to recognize post-petition interest expense on unsecured obligations Notable Accomplishments

5 Page 5 Additional Integration Related On Dec. 9, 2013, US Airways Group became a subsidiary of AMR Corporation which changed its name to American Airlines Group Inc. The company s common stock began trading on the NASDAQ Global Select Market under the ticker AAL. Union presidents and more than 1,000 of the company s employees joined American s senior management team for the televised NASDAQ opening bell ceremony Announced the new leadership team through the Managing Director level Co-located our revenue management team to ensure the company is executing pricing and revenue management strategies as one organization Took the unprecedented step of asking team members to vote to select the aircraft livery of the merged carrier. More than 60,000 team members participated Fleet/Network Continued to modernize its fleet with new, fuel-efficient aircraft. The company inducted thirteen Airbus A320 family aircraft, two A aircraft, five Boeing B and one Boeing B aircraft into its fleet Signed agreements with Bombardier Inc. and Embraer S.A. to purchase 90 new 76-seat regional jets that will replace smaller, less efficient 50-seat regional aircraft scheduled for retirement Began nonstop service between its largest hub at Dallas/Fort Worth and Bogota, Colombia and Roatan, Honduras and announced proposed new service between Dallas/Fort Worth and Hong Kong and Shanghai Began nonstop service between its Miami hub and Curitiba and Porto Alegre, Brazil Expanded the company s international reach from its hub at Charlotte, N.C. with the announcement of new, seasonal summer service to Barcelona, Spain; Brussels, Belgium; Lisbon, Portugal and Manchester, England Announced the company will begin service to Edinburgh, Scotland from its Philadelphia hub this summer Held the grand opening of an expanded Terminal F in PHL, the exclusive home of US Airways Express. The airport project which was managed by the company, quadrupled the facilities central area to 37,000 square feet and added 20 new food, beverage and retail outlets for our customers Community Relations Received the highest possible ranking in the 2014 Corporate Equality Index (CEI) by the Human Rights Campaign (HRC). Since 2002, with the launch of the Corporate Equality Index, American was the only airline to achieve the CEI s perfect score and one of only a handful of corporations to do so every year since 2002

6 Page 6 Raised and contributed more than $19 million in 2013 for global nonprofit organizations. More specifically, employee and customer giving campaigns raised approximately: o o o o $1.55 million in the annual United Way campaign $605,000 in donation campaigns for breast cancer research at M.D. Anderson $166,000 for American Cancer Society Making Strides Against Breast Cancer (MSABC) through the airline s second annual BE PINK campaign. Funds were raised through uniform and merchandise sales, MSABC walks in 17 cities, onboard donations and a contribution from the airline $153,000 through participating in national Susan G. Komen Race for the Cure events Partnered with Snowball Express to bring 1,800 children and spouses of fallen military to Dallas/Fort Worth for an all-expenses paid weekend of fun. In total, American Airlines Miles for Kids in need program supported 174 children s organizations worldwide and provided travel for critical surgeries to over 600 children and parents Sky Ball XI, in partnership with the Air Power Foundation, raised more than $1.2 million funding programs that directly benefit veterans, members of our military, Wounded Warriors and their families. Additional employee and customer donation campaigns supporting the USO and Hero Miles raised more than $2.3 million Conference Call / Webcast Details The company will conduct a live audio webcast of its earnings call today at 10:30 a.m. ET, which will be available to the public on a listen-only basis at An archive of the webcast will be available on the website through Feb. 28, Investor Guidance Investor guidance will be available at immediately following the 10:30 a.m. ET conference call. The company will provide guidance on a combined basis related to cost per available seat mile (CASM) excluding special items, fuel and profit sharing, fuel prices, other revenues and estimated interest expense/income on the Presentations/ Updates section of its Investor Relations web site. This update will also include information regarding capacity guidance, fleet plans and estimated capital spending for About American Airlines Group American Airlines Group (NASDAQ: AAL) is the holding company for American Airlines and US Airways. Together with American Eagle and US Airways Express, the airlines operate an average of nearly 6,700 flights per day to 339 destinations in 54 countries from its hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. American s AAdvantage and US Airways Dividend Miles programs allow

7 Page 7 members to earn and redeem miles for travel and everyday purchases as well as flight upgrades, vacation packages, car rentals, hotel stays and other retail products. American is a founding member of the oneworld alliance, whose members and members-elect serve 981 destinations with 14,244 daily flights to 151 countries. Connect with American on or Facebook.com/AmericanAirlines and follow US Airways on and on Facebook.com/USAirways. Cautionary Statement Regarding Forward-Looking Statements and Information This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 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 benefits of the business combination transaction involving American Airlines Group Inc. (formerly named AMR Corporation) (the "Company") and US Airways Group, Inc. ("US Airways"), including future financial and operating results, the Company's plans, objectives, expectations and intentions, and other statements that are not historical facts. These forward-looking statements are based on the Company's 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. The following factors, among others, could cause actual results and financial position and timing of certain events to differ materially from those described in the forward-looking statements: the challenges and costs of integrating operations and achieving anticipated synergies; the effects of divestitures pursuant to the settlement with the Department of Justice and certain states; the price of, market for and potential market price volatility of the Company's common stock and preferred stock; the Company's significant liquidity requirements and substantial levels of indebtedness; the impact of significant operating losses in the future; downturns in economic conditions that adversely affect our business; the impact of the price and availability of fuel and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of industry consolidation; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the Company's high level of fixed obligations and ability to fund general corporate requirements, obtain additional financing and respond to competitive developments; any failure to comply with the liquidity covenants contained in financing arrangements; provisions in credit card processing and other commercial agreements that may affect the Company's liquidity; the impact of union disputes, employee strikes and other laborrelated disruptions; the inability to maintain labor costs at competitive levels; interruptions or disruptions in service at one or more of the Company's hub airports; regulatory changes affecting the allocation of slots; the Company's reliance on third-party regional operators or third-party service providers; the Company's reliance on and costs, rights and functionality of third-party distribution channels, including those provided by global distribution systems, conventional travel agents and online travel agents; the impact of extensive government regulation; the impact of heavy taxation; the impact of changes to the Company's business model; the loss of key personnel or inability to attract and retain qualified personnel; the impact of conflicts overseas or terrorist attacks, and the impact of ongoing security concerns; the Company's ability to operate and grow its route network; the impact of environmental regulation; the Company's reliance on technology and automated systems and the impact of any failure or disruption of, or delay in, these technologies or systems; costs of ongoing data security

8 Page 8 compliance requirements and the impact of any significant data security breach; the impact of any accident involving the Company's aircraft or the aircraft of its regional operators; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; the Company's dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the impact of changing economic and other conditions and seasonality of the Company's business; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the impact of global events that affect travel behavior, such as an outbreak of a contagious disease; the impact of foreign currency exchange rate fluctuations and limitations on the repatriation of cash held in foreign countries; the Company's ability to use NOLs and certain other tax attributes; and other economic, business, competitive, and/or regulatory factors affecting the Company's business, including those set forth in the filings of US Airways and the Company with the SEC, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of their respective annual reports on Form 10-K and quarterly reports on Form 10-Q, current reports on Form 8-K and other SEC filings. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. 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 except as required by law

9 Page 9 American Airlines Group Inc. (Formerly AMR Corporation) GAAP Results - Consolidated Statements of Operations Reflects AAG Standalone Results for Periods Prior to Merger Close Includes US Airways Group Results for Period from December 9, 2013 to 2013 (In millions, except share and per share amounts) (Unaudited) Percent Percent Change Change (A) (B) (A) (B) Operating revenues: Mainline passenger $ 5,463 $ 4, $ 20,218 $ 18, Regional passenger ,131 2, Cargo Other ,709 2, Total operating revenues 7,367 5, ,743 24, Operating expenses: Aircraft fuel and related taxes 2,075 1, ,839 7, Salaries, wages and benefits 1,530 1, ,460 6,217 (12.2) Regional expenses: Fuel ,120 1, Other ,206 2, Maintenance, materials and repairs ,260 1, Other rent and landing fees ,152 1, Aircraft rent Selling expenses ,158 1, Depreciation and amortization Special items, net nm Other ,969 2, Total operating expenses 7,252 5, ,344 24, Operating income nm 1, nm Nonoperating income (expense): Interest income (21.4) Interest expense, net (214) (150) 43.0 (856) (632) 35.2 Other, net (11) 271 nm (88) 221 nm Total nonoperating income (expense), net (219) 127 nm (924) (385) nm Income (loss) before reorganization items, net (104) 134 nm 475 (237) nm Reorganization items, net (2,220) (441) nm (2,655) (2,208) 20.2 Loss before income taxes (2,324) (307) nm (2,180) (2,445) (10.9) Income tax benefit (324) (569) (43.1) (346) (569) (39.3) Net income (loss) $ (2,000) $ 262 nm $ (1,834) $ (1,876) (2.3) Earnings (loss) per common share (C): Basic $ (8.66) $ 3.94 $ (17.03) $ (28.23) Diluted $ (8.66) $ 3.46 $ (17.03) $ (28.23) Weighted average shares outstanding (in thousands) (C): Basic 231,062 66, ,645 66,478 Diluted 231,062 75, ,645 66,478 Note: Percent change may not recalculate due to rounding. (A) American Airlines Group Inc. (formerly AMR Corporation) is a holding company and its principal, wholly owned subsidiaries are American Airlines, Inc. ("American") and, effective December 9, 2013 (the "effective date"), US Airways Group, Inc. ("US Airways Group"). US Airways Group became a subsidiary of AMR Corporation ("AMR") as a result of a merger transaction. Also in connection with the merger, AMR changed its name to American Airlines Group Inc. ("AAG" or the "Company"). Therefore, the results for the three months and twelve months ended 2013 include the results for US Airways Group for the period from December 9, 2013 to This impacts the comparability of AAG's financial statements under GAAP for the 2013 and 2012 period. Refer to the AAG combined financial statements for an alternative, non-gaap presentation. (B) Certain prior period amounts have been reclassified between various financial statement line items to conform to the new AAG financial statement presentation. These reclassifications do not impact the historic net income. These reclassifications are comprised principally of the following items: Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating income (expense), net and operating expenses to conform the presentation of foreign currency gains and losses. (C) Pursuant to the Company's Fourth Amended Joint Chapter 11 Plan of Reorganization (the "Plan") and the related Merger Agreement, AAG became obligated to issue approximately 756 million shares of common stock (traded under the symbol: "AAL") (including among other things, shares necessary to satisfy the conversion of all shares of AAG convertible preferred stock). The Company s estimated fourth quarter diluted share count is approximately 742 million. Please see GAAP to Non-GAAP reconciliations. The decrease in diluted share count is primarily due to approximately 13 million shares withheld by the Company during the fourth quarter in satisfaction of employee tax obligations. The Company is not required to, but may withhold additional shares in satisfaction of tax liabilities for eligible employee groups in connection with future issuances contemplated by the Plan, principally at the remaining mandatory conversion dates (days 60, 90 and 120 following the effective date). The Company s GAAP weighted average diluted shares outstanding for the fourth quarter and year ended 2013 includes the weighted effect of shares outstanding for both the pre and post merger periods. The shares outstanding for the 69 day pre-merger period (October 1, 2013 through December 8, 2013) consist only of the AMR common stock formerly traded under the symbol: "AAMRQ". In accordance with GAAP, these former AAMRQ shares have been adjusted for all periods presented to retrospectively reflect the two initial distributions made to date pursuant to the Company's Plan, whereby holders of AAMRQ received on the effective date an initial distribution of approximately shares of AAL, and on January 9, 2013, an additional distribution of approximately shares of AAL, for a total of shares of new AAL for each share of AAMRQ previously owned. The shares outstanding for the 23 day post-merger period (December 9, 2013 through 2013) include the full amount of shares to be issued pursuant to the Plan over the 120 day distribution period adjusted for the approximate 13 million shares withheld by the Company in satisfaction of employee tax obligations. Former AAMRQ holders as of the effective date may in the future receive additional distributions based on the trading price of AAL common stock during the remaining 120 day period after the effective date and the total amount of allowed claims, in accordance with the terms of the Plan. Accordingly, the Company s common shares outstanding and related GAAP basic and diluted EPS reported herein for all periods presented may change in the future, including amounts to be reported in the Company's 2013 Form 10-K, to reflect additional retrospective adjustments for future common stock distributions to former holders of AAMRQ.

10 Page 10 American Airlines Group Inc. (Formerly AMR Corporation) Non-GAAP Consolidated Statements of Operations Reflects AAG Standalone Results Excluding US Airways Group for All Periods Presented (In millions, except share and per share amounts) (Unaudited) Percent Percent Change Change (A) (B) (A) (B) Operating revenues: Mainline passenger $ 4,838 $ 4, $ 19,594 $ 18, Regional passenger ,927 2, Cargo Other ,615 2, Total operating revenues 6,436 5, ,812 24, Operating expenses: Aircraft fuel and related taxes 1,864 1,913 (2.6) 7,628 7,705 (1.0) Salaries, wages and benefits 1,345 1,383 (2.8) 5,276 6,217 (15.1) Regional expenses: Fuel ,056 1, Other ,056 2, Maintenance, materials and repairs ,222 1, Other rent and landing fees ,117 1, Aircraft rent Selling expenses ,128 1, Depreciation and amortization (1.7) Special items, net nm (26.9) Other ,898 2, Total operating expenses 6,144 5, ,236 24,707 (1.9) Operating income nm 1, nm Nonoperating income (expense): Interest income (21.8) Interest expense, net (194) (150) 29.9 (836) (632) 32.1 Other, net (13) 271 nm (89) 221 nm Total nonoperating income (expense), net (201) 127 nm (905) (385) nm Income (loss) before reorganization items, net (32.1) 671 (237) nm Reorganization items, net (2,220) (441) nm (2,655) (2,208) 20.2 Loss before income taxes (2,129) (307) nm (1,984) (2,445) (18.9) Income tax benefit (324) (569) (43.1) (346) (569) (39.3) Net income (loss) $ (1,805) $ 262 nm $ (1,638) $ (1,876) (12.7) Note: Percent change may not recalculate due to rounding. (A) American Airlines Group Inc. (formerly AMR Corporation) is a holding company and its principal, wholly owned subsidiaries are American Airlines, Inc. ("American") and, effective December 9, 2013, US Airways Group, Inc. ("US Airways Group"). US Airways Group became a subsidiary of AMR Corporation ("AMR") as a result of a merger transaction. Also in connection with the merger, AMR changed its name to American Airlines Group Inc. ("AAG"). Under GAAP, AAG does not include in its consolidated financial results the results of US Airways Group prior to closing of the merger. This impacts the comparability of AAG's financial statements under GAAP for the 2013 and 2012 period. This table presents the AAG fourth quarter and full year 2013 and 2012 results of operations on a stand alone basis, which differs from GAAP solely because it excludes the results of US Airways Group for the period from December 9, 2013 to Management believes this presentation provides a more meaningful comparison of fourth quarter and full year results. Please see GAAP to non-gaap reconciliations. (B) Certain prior period amounts have been reclassified between various financial statement line items to conform to the new AAG financial statement presentation. These reclassifications do not impact the historic net income. These reclassifications are comprised principally of the following items: Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating income (expense), net and operating expenses to conform the presentation of foreign currency gains and losses.

11 Page 11 US Airways Group, Inc. Non-GAAP Combined Predecessor and Successor - Consolidated Statements of Operations (In millions, except share and per share amounts) (Unaudited) 2013 Successor + Predecessor Successor + Predecessor 2012 Predecessor Percent Change Predecessor Percent Change (A) (B) (A) (B) Operating revenues: Mainline passenger $ 2,322 $ 2, $ 9,673 $ 8, Regional passenger ,348 3,349 - Cargo (0.1) Other ,432 1, Total operating revenues 3,547 3, ,607 13, Operating expenses: Aircraft fuel and related taxes ,481 3,489 (0.2) Salaries, wages and benefits ,611 2, Regional expenses: Fuel (4.7) 1,052 1,098 (4.2) Other ,253 2, Maintenance, materials and repairs (8.8) (1.6) Other rent and landing fees Aircraft rent (14.8) (7.7) Selling expenses Depreciation and amortization Special items, net nm nm Other ,130 1, Total operating expenses 3,551 3, ,604 12, Operating income (loss) (4) 123 nm 1, Nonoperating income (expense): Interest income - 1 (23.7) Interest expense, net (85) (87) (1.0) (348) (343) 1.6 Other, net (14) (1) nm (26) 128 nm Total nonoperating expense, net (99) (87) 13.8 (372) (213) 74.4 Income (loss) before income taxes (103) 36 nm (1.0) Income tax provision (benefit) (C) 52 (1) nm nm Net income (loss) $ (155) $ 37 nm $ 392 $ 637 (38.5) Note: Percent change may not recalculate due to rounding. (A) On December 9, 2013, US Airways Group, Inc. ("US Airways Group") became a subsidiary of AMR Corporation ("AMR") as a result of a merger transaction. Also in connection with the merger, AMR changed its name to American Airlines Group Inc. ("AAG"). US Airways Group applied acquisition accounting as of December 9, 2013 and its statements of operations for the period from December 9 through 2013 reflect the related adjustments. As a result, in accordance with GAAP, US Airways Group's consolidated financial statements after December 9, 2013 are deemed not comparable to its financial statements for any period prior to the merger. However, to provide a basis for comparison to prior year results, US Airways Group has combined the results for predecessor and successor 2013 periods. Management believes this presentation provides a more meaningful comparison of fourth quarter and full year results. Please see GAAP to non-gaap reconciliations. (B) Certain prior period amounts have been reclassified between various financial statement line items to conform to the new AAG financial statement presentation. These reclassifications do not impact the historic net income. These historic financial statements also do not reflect the impact of acquisition accounting, which US Airways Group will apply prospectively to its financial statements as of December 9, These reclassifications are comprised principally of the following items: Reclassifications between other operating expenses and operating revenues to conform the presentation of frequent flyer revenues. Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating expense, net and operating expenses to conform the presentation. (C) In connection with the application of acquisition accounting in conjunction with the merger, US Airways Group returned to a net deferred tax asset position subject to a full valuation allowance which is consistent with American Airlines Group. The US Airways Group Non-GAAP Combined Predecessor and Successor Consolidated Statements of Operations are prepared assuming this net deferred tax asset is subject to a full valuation allowance for the post-merger period from December 9 through 2013, therefore US Airways Group did not recognize income tax expense for this post-merger period. Had the net deferred tax asset not been subject to a full valuation allowance, US Airways Group would have recorded $66 million of income tax benefit for this post-merger period.

12 Page 12 American Airlines Group Inc. (Formerly AMR Corporation) Non-GAAP Combined Consolidated Statements of Operations Reflects Combined Consolidated Results for AAG and US Airways Group, Inc. (In millions, except share and per share amounts) (Unaudited) American Airlines Group US Airways Group Combined American Airlines Group US Airways Group Combined Percent Change (A) (B) (A) (C) (C) (A) (D) Operating revenues: Mainline passenger $ 4,838 $ 2,322 $ 7,160 $ 4,440 $ 2,080 $ 6, Regional passenger , , Cargo Other , Total operating revenues 6,436 3,547 9,983 5,937 3,251 9, Operating expenses: Aircraft fuel and related taxes 1, ,697 1, ,743 (1.7) Salaries, wages and benefits 1, ,004 1, , Regional expenses: Fuel (0.2) Other , , Maintenance, materials and repairs (3.2) Other rent and landing fees Aircraft rent Selling expenses Depreciation and amortization Special items, net nm Other Total operating expenses 6,144 3,551 9,695 5,930 3,128 9, Operating income (loss) 292 (4) nm Nonoperating income (expense): Interest income (0.5) Interest expense, net (194) (85) (279) (150) (87) (237) 18.6 Other, net (13) (14) (14) (E) 271 (1) 270 nm Total nonoperating income (expense), net (201) (99) (287) 127 (87) 40 nm Income (loss) before reorganization items, net 91 (103) (99.8) Reorganization items, net (2,220) - (2,220) (441) - (441) nm Income (loss) before income taxes (2,129) (103) (2,219) (307) 36 (271) nm Income tax provision (benefit) (324) 52 (272) (569) (1) (570) (52.4) Net income (loss) $ (1,805) $ (155) $ (1,947) $ 262 $ 37 $ 299 nm Note: Percent change may not recalculate due to rounding. (A) American Airlines Group Inc. (formerly AMR Corporation) is a holding company and its principal, wholly owned subsidiaries are American Airlines, Inc. ("American") and, effective December 9, 2013, US Airways Group, Inc. ("US Airways Group"). US Airways Group became a subsidiary of AMR Corporation ("AMR") as a result of a merger transaction. Also in connection with the merger, AMR changed its name to American Airlines Group Inc. ("AAG" or the "Company"). Under GAAP, AAG does not include in its financial results the results of US Airways Group prior to closing of the merger. This impacts the comparability of AAG's financial statements under GAAP for the fourth quarter of 2013 and This table presents the fourth quarter results on a "combined basis." Combined basis means the Company combines the financial results of AAG on a stand alone basis excluding the results of US Airways Group for the period from December 9, 2013 to 2013, with the results of US Airways Group after combining successor and predecessor amounts. Management believes this presentation provides a more meaningful quarter over quarter comparison. Please see GAAP to non-gaap reconciliations. (B) US Airways Group applied acquisition accounting as of December 9, 2013 and its statements of operations for the period from December 9 through 2013 reflect the related adjustments. As a result, in accordance with GAAP, US Airways Group's consolidated financial statements after December 9, 2013 are deemed not comparable to its financial statements for any period prior to the merger. However, to provide a basis for comparison to prior year results, US Airways Group has combined the results for predecessor and successor 2013 periods. Management believes this presentation provides a more meaningful quarter over quarter comparison. (C) Certain prior period amounts have been reclassified between various financial statement line items to conform to the new AAG financial statement presentation. These reclassifications do not impact the historic net income. For American Airlines Group, these reclassifications are comprised principally of the following items: Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating income (expense), net and operating expenses to conform the presentation of foreign currency gains and losses. For US Airways Group, these historic financial statements do not reflect the impact of acquisition accounting, which US Airways Group will apply prospectively to its financial statements as of December 9, 2013, and the reclassifications are comprised principally of the following items: Reclassifications between other operating expenses and operating revenues to conform the presentation of frequent flyer revenues. Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating expense, net and operating expenses to conform the presentation. (D) Percent change is a comparison of the combined results. (E) Combined results exclude $13 million of US Airways Group nonoperating other, net expense which is eliminated in consolidation with AAG. This expense represents a non-cash mark to market fair value adjustment for US Airways Group s 7.25% convertible senior notes that are convertible into shares of AAG common stock subsequent to the merger.

13 Page 13 American Airlines Group Inc. (Formerly AMR Corporation) Non-GAAP Combined Consolidated Statements of Operations Reflects Combined Consolidated Results for AAG and US Airways Group, Inc. (In millions, except share and per share amounts) (Unaudited) American Airlines Group US Airways Group Combined American Airlines Group US Airways Group Combined Percent Change (A) (B) (A) (C) (C) (A) (D) Operating revenues: Mainline passenger $ 19,594 $ 9,673 $ 29,267 $ 18,743 $ 8,941 $ 27, Regional passenger 2,927 3,348 6,275 2,914 3,349 6, Cargo Other 2,615 1,432 4,047 2,523 1,321 3, Total operating revenues 25,812 14,607 40,419 24,855 13,765 38, Operating expenses: Aircraft fuel and related taxes 7,628 3,481 11,109 7,705 3,489 11,194 (0.8) Salaries, wages and benefits 5,276 2,611 7,887 6,217 2,402 8,619 (8.5) Regional expenses: Fuel 1,056 1,052 2,108 1,012 1,098 2,110 (0.1) Other 2,056 2,253 4,309 2,016 2,219 4, Maintenance, materials and repairs 1, ,927 1, , Other rent and landing fees 1, ,699 1, , Aircraft rent , , Selling expenses 1, ,608 1, , Depreciation and amortization , , Special items, net Other 2,898 1,130 4,028 2,674 1,074 3, Total operating expenses 24,236 13,604 37,840 24,707 12,915 37, Operating income 1,576 1,003 2, nm Nonoperating income (expense): Interest income (19.5) Interest expense, net (836) (348) (1,184) (632) (343) (975) 21.4 Other, net (89) (26) (102) (E) nm Total nonoperating expense, net (905) (372) (1,264) (385) (213) (598) nm Income (loss) before reorganization items, net ,315 (237) nm Reorganization items, net (2,655) - (2,655) (2,208) - (2,208) 20.2 Income (loss) before income taxes (1,984) 631 (1,340) (2,445) 637 (1,808) (25.9) Income tax provision (benefit) (346) 239 (107) (569) - (569) (81.2) Net income (loss) $ (1,638) $ 392 $ (1,233) $ (1,876) $ 637 $ (1,239) (0.5) Note: Percent change may not recalculate due to rounding. (A) American Airlines Group Inc. (formerly AMR Corporation) is a holding company and its principal, wholly owned subsidiaries are American Airlines, Inc. ("American") and, effective December 9, 2013, US Airways Group, Inc. ("US Airways Group"). US Airways Group became a subsidiary of AMR Corporation ("AMR") as a result of a merger transaction. Also in connection with the merger, AMR changed its name to American Airlines Group Inc. ("AAG" or the "Company"). Under GAAP, AAG does not include in its financial results the results of US Airways Group prior to closing of the merger. This impacts the comparability of AAG's financial statements under GAAP for 2013 and This table presents the annual results on a "combined basis." Combined basis means the Company combines the financial results of AAG on a stand alone basis excluding the results of US Airways Group for the period from December 9, 2013 to 2013, with the results of US Airways Group after combining successor and predecessor amounts. Management believes this presentation provides a more meaningful year over year comparison. Please see GAAP to non-gaap reconciliations. (B) US Airways Group applied acquisition accounting as of December 9, 2013 and its statements of operations for the period from December 9 through 2013 reflect the related adjustments. As a result, in accordance with GAAP, US Airways Group's consolidated financial statements after December 9, 2013 are deemed not comparable to its financial statements for any period prior to the merger. However, to provide a basis for comparison to prior year results, US Airways Group has combined the results for predecessor and successor 2013 periods. Management believes this presentation provides a more meaningful year over year comparison. (C) Certain prior period amounts have been reclassified between various financial statement line items to conform to the new AAG financial statement presentation. These reclassifications do not impact the historic net income. For American Airlines Group, these reclassifications are comprised principally of the following items: Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating income (expense), net and operating expenses to conform the presentation of foreign currency gains and losses. For US Airways Group, these historic financial statements do not reflect the impact of acquisition accounting, which US Airways Group will apply prospectively to its financial statements as of December 9, 2013, and the reclassifications are comprised principally of the following items: Reclassifications between other operating expenses and operating revenues to conform the presentation of frequent flyer revenues. Reclassifications between various operating expense line items to conform the presentation of regional airline expenses. Reclassifications between other nonoperating expense, net and operating expenses to conform the presentation. (D) Percent change is a comparison of the combined results. (E) Combined results exclude $13 million of US Airways Group nonoperating other, net expense which is eliminated in consolidation with AAG. This expense represents a non-cash mark to market fair value adjustment for US Airways Group s 7.25% convertible senior notes that are convertible into shares of AAG common stock subsequent to the merger.

14 Page Change American US Airways Combined American US Airways Combined American US Airways Combined Mainline Revenue passenger miles (millions) 31,345 15,544 46,889 30,558 14,871 45, % 4.5 % 3.2 % Available seat miles (ASM) (millions) 38,302 18,707 57,009 37,466 17,546 55, % 6.6 % 3.6 % Passenger load factor (percent) pts (1.7) pts (0.4) pts Yield (cents) % 6.8 % 6.4 % Passenger revenue per ASM (cents) % 4.7 % 6.0 % Passenger enplanements (thousands) 21,274 13,965 35,239 21,072 13,350 34, % 4.6 % 2.4 % Departures (thousands) % 4.4 % 3.1 % Aircraft at end of period % 0.9 % 1.2 % Block hours (thousands) % 5.0 % 3.0 % Average stage length (miles) 1, ,184 1, , % 0.2 % 0.4 % Fuel consumption (gallons in millions) % 6.1 % 3.2 % Average aircraft fuel price including related taxes (dollars per gallon) (4.4) % (5.4) % (4.7) % Full-time equivalent employees at end of period 59,400 32,129 91,529 62,400 31,236 93,636 (4.8) % 2.9 % (2.3) % Operating cost per ASM (cents) % 10.1 % 4.2 % Operating cost per ASM excluding special items (cents) (0.8) % (2.2) % (1.3) % Operating cost per ASM excluding special items and fuel (cents) % (0.2) % 0.9 % Operating cost per ASM excluding special items, fuel and profit sharing (cents) % (1.6) % - % Regional* Revenue passenger miles (millions) 2,660 2,707 5,367 2,511 2,770 5, % (2.3) % 1.6 % Available seat miles (millions) 3,471 3,477 6,948 3,347 3,492 6, % (0.4) % 1.6 % Passenger load factor (percent) pts (1.5) pts - pts Yield (cents) (2.4) % 5.4 % 1.5 % Passenger revenue per ASM (cents) (0.3) % 3.4 % 1.6 % Passenger enplanements (thousands) 5,497 6,974 12,471 5,295 7,103 12, % (1.8) % 0.6 % Aircraft at end of period % (1.4) % 4.1 % Fuel consumption (gallons in millions) % 1.0 % 5.0 % Average aircraft fuel price including related taxes (dollars per gallon) (4.1) % (5.6) % (4.9) % Operating cost per ASM (cents) (1.2) % 3.1 % 1.0 % Operating cost per ASM excluding special items (cents) (1.9) % 3.1 % 0.6 % Operating cost per ASM excluding special items and fuel (cents) (3.3) % 6.8 % 1.8 % Total Mainline & Regional Revenue passenger miles (millions) 34,005 18,251 52,256 33,069 17,641 50, % 3.5 % 3.0 % Available seat miles (millions) 41,773 22,184 63,957 40,813 21,038 61, % 5.4 % 3.4 % Cargo ton miles (millions) % 7.8 % 12.9 % Passenger load factor (percent) pts (1.6) pts (0.3) pts Yield (cents) % 5.6 % 5.3 % Passenger revenue per ASM (cents) % 3.6 % 5.0 % Total revenue per ASM (cents) % 3.5 % 5.1 % Cargo yield per ton mile (cents) (4.8) % (6.9) % (5.2) % Passenger enplanements (thousands) 26,771 20,939 47,710 26,367 20,453 46, % 2.4 % 1.9 % Aircraft at end of period , , % (0.2) % 2.2 % Fuel consumption (gallons in millions) , , % 4.8 % 3.5 % Average aircraft fuel price including related taxes (dollars per gallon) (4.4) % (5.4) % (4.7) % Operating cost per ASM (cents) % 7.7 % 3.5 % Operating cost per ASM excluding special items (cents) (0.9) % (1.5) % (1.1) % Operating cost per ASM excluding special items and fuel (cents) % 0.9 % 0.9 % Operating cost per ASM excluding special items, fuel and profit sharing (cents) % (0.1) % 0.2 % * Regional includes wholly owned regional airline subsidiaries and operating results from capacity purchase carriers. Note: Amounts may not recalculate due to rounding. American Airlines Group, Inc. Combined Operating Statistics (Unaudited)