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American Airlines reports fourth-quarter and full-year 2023 financial results
المصدر: Nasdaq GlobeNewswire / 25 يناير 2024 06:00:01 America/Chicago
FORT WORTH, Texas, Jan. 25, 2024 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its fourth-quarter and full-year 2023 financial results, including:
- Record full-year revenue of approximately $53 billion.
- GAAP fourth-quarter and full-year net income of $19 million and $822 million, or $0.03 and $1.21 per diluted share, respectively.
- Excluding net special items1, fourth-quarter and full-year net income of $192 million and $1.9 billion, or $0.29 and $2.65 per diluted share, respectively.
- Achieved best-ever fourth-quarter and full-year completion factor.
- Generated GAAP operating cash flow of $3.8 billion and the airline’s highest full-year free cash flow2 of $1.8 billion.
- Reduced total debt3 by $3.2 billion in 2023. The company is more than 75% of the way to its 2025 total debt reduction goal.
“The American Airlines team produced an exceptionally strong performance in 2023,” said American’s CEO Robert Isom. “We are delivering on our commitments and remain well-positioned for the future, supported by the strength of our network and travel rewards program, our young and simplified fleet, our operational reliability, and our outstanding team. As we look forward, we remain focused on delivering a reliable operation for our customers and reengineering the business to build an even more efficient airline.”
Operational reliability
American and its regional partners operated nearly 2 million flights in 2023, with an average load factor of 83.5%. The company produced its best-ever fourth-quarter and full-year completion factor, with the lowest number of cancellations annually since the merger in 2013.The airline’s strong operational momentum continued through the holiday travel period. American achieved its best-ever completion factor and on-time departures as well as its lowest mishandled baggage rate over the holidays.
Financial performance
For the full year, American produced record revenue of nearly $53 billion. In the fourth quarter, the company generated revenue of more than $13 billion and an operating margin of 5.0% on a GAAP basis. Excluding the impact of net special items1, American produced an operating margin of 5.1% in the fourth quarter, exceeding the high end of the company’s prior guidance. These results were driven by continued strong demand for American’s product, record revenue from its travel rewards program, strong operational performance and effective cost control.Liquidity and balance sheet
Strengthening the balance sheet remains a top priority for the company. American reduced total debt3 by more than $500 million in the fourth quarter and by approximately $3.2 billion in 2023. The company is more than 75% of the way to its goal of reducing total debt3 by $15 billion by the end of 2025. As of Dec. 31, 2023, American had reduced its total debt3 by approximately $11.4 billion from peak levels in mid-2021.The company ended the year with approximately $10.4 billion of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.
Guidance and investor update
Based on present demand trends and the current fuel price forecast and excluding the impact of special items4, the company expects its first-quarter 2024 adjusted loss per diluted share4 to be between ($0.15) and ($0.35). American expects its full-year 2024 adjusted earnings per diluted share4 to be between $2.25 and $3.25.For additional financial forecasting detail, please refer to the company’s investor update, furnished with this press release with the SEC on Form 8-K. This filing will also be available at aa.com/investorrelations.
Conference call and webcast details
The company will conduct a live audio webcast of its financial results conference call at 7:30 a.m. CT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Feb. 25.Notes
See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information, including the calculation of free cash flow.- The company recognized $173 million of net special items in the fourth quarter after the effect of taxes, which principally included $216 million of nonoperating net special items for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments. The company recognized $1.0 billion of net special items in 2023 after the effect of taxes, which included operating net special items of $979 million principally related to one-time charges resulting from the ratification of a new collective bargaining agreement with American’s mainline pilots, as well as nonoperating net special items of $362 million for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments.
- Please see the accompanying notes for the company’s definition of free cash flow, a non-GAAP measure.
- All references to total debt include debt, finance and operating lease liabilities and pension obligations.
- Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking information to GAAP as the nature or amount of net special items cannot be determined at this time.
About American Airlines Group
To Care for People on Life’s Journey®. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL and the company’s stock is included in the S&P 500. Learn more about what’s happening at American by visiting news.aa.com and connect with American @AmericanAir and at Facebook.com/AmericanAirlines.Cautionary statement regarding forward-looking statements and information
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the company’s plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the 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. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. Additionally, there may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.American Airlines Group Inc. Condensed Consolidated Statements of Operations (In millions, except share and per share amounts) (Unaudited) 3 Months Ended December 31, Percent Increase 12 Months Ended December 31, Percent Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Operating revenues: Passenger $ 12,010 $ 12,131 (1.0 ) $ 48,512 $ 44,568 8.8 Cargo 199 263 (24.2 ) 812 1,233 (34.1 ) Other 853 795 7.2 3,464 3,170 9.3 Total operating revenues 13,062 13,189 (1.0 ) 52,788 48,971 7.8 Operating expenses: Aircraft fuel and related taxes 3,159 3,421 (7.7 ) 12,257 13,791 (11.1 ) Salaries, wages and benefits 3,689 3,199 15.3 14,580 12,972 12.4 Regional expenses: Regional operating expenses 1,101 1,006 9.3 4,325 4,064 6.4 Regional depreciation and amortization 79 81 (1.8 ) 318 321 (0.8 ) Maintenance, materials and repairs 875 735 19.1 3,265 2,684 21.6 Other rent and landing fees 714 649 10.0 2,928 2,730 7.3 Aircraft rent 338 350 (3.2 ) 1,369 1,395 (1.9 ) Selling expenses 443 484 (8.5 ) 1,799 1,815 (0.9 ) Depreciation and amortization 480 492 (2.3 ) 1,936 1,977 (2.1 ) Special items, net 9 4 nm (1) 971 193 nm Other 1,519 1,385 9.7 6,006 5,422 10.8 Total operating expenses 12,406 11,806 5.1 49,754 47,364 5.0 Operating income 656 1,383 (52.5 ) 3,034 1,607 88.8 Nonoperating income (expense): Interest income 136 110 24.1 591 216 nm Interest expense, net (519 ) (532 ) (2.3 ) (2,145 ) (1,962 ) 9.3 Other income (expense), net (241 ) 50 nm (359 ) 325 nm Total nonoperating expense, net (624 ) (372 ) 67.9 (1,913 ) (1,421 ) 34.6 Income before income taxes 32 1,011 (96.8 ) 1,121 186 nm Income tax provision 13 208 (93.6 ) 299 59 nm Net income $ 19 $ 803 (97.6 ) $ 822 $ 127 nm Earnings per common share: Basic $ 0.03 $ 1.23 $ 1.26 $ 0.20 Diluted $ 0.03 $ 1.14 $ 1.21 $ 0.19 Weighted average shares outstanding (in thousands): Basic 654,725 650,944 653,612 650,345 Diluted 657,079 716,070 719,669 655,122 Note: Percent change may not recalculate due to rounding. (1) Not meaningful or greater than 100% change. American Airlines Group Inc. Consolidated Operating Statistics (1) (Unaudited) 3 Months Ended December 31, Increase 12 Months Ended December 31, Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Revenue passenger miles (millions) 58,331 55,320 5.4 % 231,926 215,624 7.6 % Available seat miles (ASM) (millions) 69,773 65,962 5.8 % 277,723 260,226 6.7 % Passenger load factor (percent) 83.6 83.9 (0.3 ) pts 83.5 82.9 0.6 pts Yield (cents) 20.59 21.93 (6.1 )% 20.92 20.67 1.2 % Passenger revenue per ASM (cents) 17.21 18.39 (6.4 )% 17.47 17.13 2.0 % Total revenue per ASM (cents) 18.72 19.99 (6.4 )% 19.01 18.82 1.0 % Cargo ton miles (millions) 501 458 9.5 % 1,840 1,972 (6.7 )% Cargo yield per ton mile (cents) 39.74 57.39 (30.8 )% 44.13 62.52 (29.4 )% Fuel consumption (gallons in millions) 1,033 979 5.5 % 4,140 3,901 6.1 % Average aircraft fuel price including related taxes (dollars per gallon) 3.06 3.50 (12.5 )% 2.96 3.54 (16.3 )% Operating cost per ASM (cents) 17.78 17.90 (0.7 )% 17.92 18.20 (1.6 )% Operating cost per ASM excluding net special items (cents) 17.77 17.89 (0.7 )% 17.56 18.13 (3.1 )% Operating cost per ASM excluding net special items and fuel (cents) 13.24 12.70 4.2 % 13.15 12.83 2.5 % Passenger enplanements (thousands) 53,567 50,934 5.2 % 210,692 199,288 5.7 % Departures (thousands): Mainline 285 277 2.9 % 1,145 1,052 8.9 % Regional 222 201 10.3 % 855 903 (5.3 )% Total 507 478 6.0 % 2,000 1,955 2.3 % Average stage length (miles): Mainline 1,157 1,132 2.3 1,147 1,161 (1.2 )% Regional 458 469 (2.3 )% 463 477 (3.0 )% Total 851 853 (0.2 )% 855 845 1.1 % Aircraft at end of period: Mainline 965 925 4.3 % 965 925 4.3 % Regional (2) 556 536 3.7 % 556 536 3.7 % Total 1,521 1,461 4.1 % 1,521 1,461 4.1 % Full-time equivalent employees at end of period: Mainline 103,200 102,000 1.2 % 103,200 102,000 1.2 % Regional (3) 28,900 27,700 4.3 % 28,900 27,700 4.3 % Total 132,100 129,700 1.9 % 132,100 129,700 1.9 % Note: Amounts may not recalculate due to rounding. (1) Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers. (2) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 77 regional aircraft that were in temporary storage as of December 31, 2023 as follows: 57 Embraer 145, 11 Bombardier CRJ 700, six Bombardier CRJ 900, and three Embraer 170. (3) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries. American Airlines Group Inc. Consolidated Revenue Statistics by Region (Unaudited) 3 Months Ended December 31, Increase 12 Months Ended December 31, Increase 2023 2022 (Decrease) 2023 2022 (Decrease) Domestic (1) Revenue passenger miles (millions) 39,610 38,065 4.1 % 155,374 149,410 4.0 % Available seat miles (ASM) (millions) 46,805 44,939 4.2 % 185,206 176,447 5.0 % Passenger load factor (percent) 84.6 84.7 (0.1 ) pts 83.9 84.7 (0.8 ) pts Passenger revenue (dollars in millions) 8,744 8,945 (2.2 )% 34,592 32,911 5.1 % Yield (cents) 22.08 23.50 (6.1 )% 22.26 22.03 1.1 % Passenger revenue per ASM (cents) 18.68 19.90 (6.1 )% 18.68 18.65 0.1 % Latin America (2) Revenue passenger miles (millions) 8,570 8,379 2.3 % 33,337 32,467 2.7 % Available seat miles (millions) 9,950 9,853 1.0 % 38,531 39,131 (1.5 )% Passenger load factor (percent) 86.1 85.0 1.1 pts 86.5 83.0 3.5 pts Passenger revenue (dollars in millions) 1,674 1,793 (6.6 )% 6,719 6,150 9.2 % Yield (cents) 19.53 21.40 (8.7 )% 20.16 18.94 6.4 % Passenger revenue per ASM (cents) 16.82 18.20 (7.6 )% 17.44 15.72 10.9 % Atlantic Revenue passenger miles (millions) 8,307 7,676 8.2 % 36,581 30,949 18.2 % Available seat miles (millions) 10,728 9,725 10.3 % 46,056 40,679 13.2 % Passenger load factor (percent) 77.4 78.9 (1.5 ) pts 79.4 76.1 3.3 pts Passenger revenue (dollars in millions) 1,330 1,222 8.9 % 6,205 5,070 22.4 % Yield (cents) 16.02 15.92 0.6 % 16.96 16.38 3.5 % Passenger revenue per ASM (cents) 12.40 12.57 (1.3 )% 13.47 12.46 8.1 % Pacific Revenue passenger miles (millions) 1,844 1,200 53.6 % 6,634 2,798 nm Available seat miles (millions) 2,290 1,445 58.5 % 7,930 3,969 99.8 % Passenger load factor (percent) 80.5 83.1 (2.6 ) pts 83.7 70.5 13.2 pts Passenger revenue (dollars in millions) 262 171 53.1 % 996 437 nm Yield (cents) 14.19 14.23 (0.3 )% 15.00 15.62 (3.9 )% Passenger revenue per ASM (cents) 11.43 11.82 (3.4 )% 12.55 11.01 14.0 % Total International Revenue passenger miles (millions) 18,721 17,255 8.5 % 76,552 66,214 15.6 % Available seat miles (millions) 22,968 21,023 9.3 % 92,517 83,779 10.4 % Passenger load factor (percent) 81.5 82.1 (0.6 ) pts 82.7 79.0 3.7 pts Passenger revenue (dollars in millions) 3,266 3,186 2.5 % 13,920 11,657 19.4 % Yield (cents) 17.45 18.46 (5.5 )% 18.18 17.61 3.3 % Passenger revenue per ASM (cents) 14.22 15.15 (6.2 )% 15.05 13.91 8.1 % Note: Amounts may not recalculate due to rounding. (1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands. (2) Latin America results include the Caribbean. Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis.
The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures:
- Operating Income (GAAP measure) to Operating Income Excluding Net Special Items (non-GAAP measure)
- Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure)
- Pre-Tax Income (GAAP measure) to Pre-Tax Income Excluding Net Special Items (non-GAAP measure)
- Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure)
- Net Income (GAAP measure) to Net Income Excluding Net Special Items (non-GAAP measure)
- Basic and Diluted Earnings Per Share (GAAP measure) to Basic and Diluted Earnings Per Share Excluding Net Special Items (non-GAAP measure)
Management uses these non-GAAP financial measures to evaluate the Company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance.
Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs excluding net special items and fuel and CASM excluding net special items and fuel to evaluate the Company's current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude fuel and net special items allows management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.
Reconciliation of Operating Income Excluding Net Special Items 3 Months Ended December 31, Percent Increase 12 Months Ended December 31, Percent Increase 2023 2022 (Decrease) 2023 2022 (Decrease) (in millions) (in millions) Operating income as reported $ 656 $ 1,383 $ 3,034 $ 1,607 Operating net special items: Mainline operating special items, net (1) 9 4 971 193 Regional operating special items, net - 2 8 5 Operating income excluding net special items $ 665 $ 1,389 (52.1%) $ 4,013 $ 1,805 nm Calculation of Operating Margin Operating income as reported $ 656 $ 1,383 $ 3,034 $ 1,607 Total operating revenues as reported $ 13,062 $ 13,189 $ 52,788 $ 48,971 Operating margin 5.0 % 10.5 % 5.7 % 3.3 % Calculation of Operating Margin Excluding Net Special Items Operating income excluding net special items $ 665 $ 1,389 $ 4,013 $ 1,805 Total operating revenues as reported $ 13,062 $ 13,189 $ 52,788 $ 48,971 Operating margin excluding net special items 5.1 % 10.5 % 7.6 % 3.7 % Reconciliation of Pre-Tax Income Excluding Net Special Items Pre-tax income as reported $ 32 $ 1,011 $ 1,121 $ 186 Pre-tax net special items: Mainline operating special items, net (1) 9 4 971 193 Regional operating special items, net - 2 8 5 Nonoperating special items, net (2) 216 40 362 74 Total pre-tax net special items 225 46 1,341 272 Pre-tax income excluding net special items $ 257 $ 1,057 (75.7%) $ 2,462 $ 458 nm Calculation of Pre-Tax Margin Pre-tax income as reported $ 32 $ 1,011 $ 1,121 $ 186 Total operating revenues as reported $ 13,062 $ 13,189 $ 52,788 $ 48,971 Pre-tax margin 0.2 % 7.7 % 2.1 % 0.4 % Calculation of Pre-Tax Margin Excluding Net Special Items Pre-tax income excluding net special items $ 257 $ 1,057 $ 2,462 $ 458 Total operating revenues as reported $ 13,062 $ 13,189 $ 52,788 $ 48,971 Pre-tax margin excluding net special items 2.0 % 8.0 % 4.7 % 0.9 % 3 Months Ended December 31, Percent Increase 12 Months Ended December 31, Percent Increase Reconciliation of Net Income Excluding Net Special Items 2023 2022 (Decrease) 2023 2022 (Decrease) (in millions, except share and per share amounts) (in millions, except share and per share amounts) Net income as reported $ 19 $ 803 $ 822 $ 127 Net special items: Total pre-tax net special items (1), (2) 225 46 1,341 272 Income tax special items, net - - - (9 ) Net tax effect of net special items (52 ) (22 ) (304 ) (62 ) Net income excluding net special items $ 192 $ 827 (76.8%) $ 1,859 $ 328 nm Reconciliation of Basic and Diluted Earnings Per Share Excluding Net Special Items Net income excluding net special items $ 192 $ 827 $ 1,859 $ 328 Shares used for computation (in thousands): Basic 654,725 650,944 653,612 650,345 Diluted 718,807 716,070 719,669 655,122 Earnings per share excluding net special items: Basic $ 0.29 $ 1.27 $ 2.84 $ 0.50 Diluted (3) $ 0.29 $ 1.17 $ 2.65 $ 0.50 Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel Total operating expenses as reported $ 12,406 $ 11,806 $ 49,754 $ 47,364 Operating net special items: Mainline operating special items, net (1) (9 ) (4 ) (971 ) (193 ) Regional operating special items, net - (2 ) (8 ) (5 ) Total operating expenses excluding net special items 12,397 11,800 48,775 47,166 Aircraft fuel and related taxes (3,159 ) (3,421 ) (12,257 ) (13,791 ) Total operating expenses excluding net special items and fuel $ 9,238 $ 8,379 $ 36,518 $ 33,375 (in cents) (in cents) Total operating expenses per ASM as reported 17.78 17.90 17.92 18.20 Operating net special items per ASM: Mainline operating special items, net (1) (0.01 ) (0.01 ) (0.35 ) (0.07 ) Regional operating special items, net - - - - Total operating expenses per ASM excluding net special items 17.77 17.89 17.56 18.13 Aircraft fuel and related taxes per ASM (4.53 ) (5.19 ) (4.41 ) (5.30 ) Total operating expenses per ASM excluding net special items and fuel 13.24 12.70 13.15 12.83 Note: Amounts may not recalculate due to rounding. FOOTNOTES: (1) The 2023 twelve month period mainline operating special items, net principally included $989 million of one-time charges resulting from the ratification of a new collective bargaining agreement with our mainline pilots, including a one-time payment of $754 million as well as adjustments to other benefit-related items of $235 million.
The 2022 twelve month period mainline operating special items, net principally included a non-cash impairment charge to write down the carrying value of the Company's retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. The Company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.(2) Principally included charges associated with debt refinancings and extinguishments as well as mark-to-market net unrealized gains and losses associated with certain equity investments. (3) The 2023 three and twelve month period diluted earnings per share gives effect to, among other things, the Company's outstanding 6.5% senior convertible notes by (a) adding back to earnings $13 million and $47 million of interest expense, respectively, related to such convertible notes, net of estimated profit sharing, short-term incentive and tax effects and (b) including in the diluted shares outstanding, 61.7 million shares issuable in respect to such convertible notes.
The 2022 three month period diluted earnings per share gives effect to, among other things, the Company's outstanding 6.5% senior convertible notes by (a) adding back to earnings $11 million of interest expense related to such convertible notes, net of estimated profit sharing, short-term incentive and tax effects and (b) including in the diluted shares outstanding, 61.7 million shares issuable in respect to such convertible notes.
American Airlines Group Inc. Condensed Consolidated Statements of Cash Flows (In millions) (Unaudited) Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 3,803 $ 2,173 Cash flows from investing activities: Capital expenditures, net of aircraft purchase deposit returns (2,596 ) (2,546 ) Proceeds from sale of property and equipment and sale-leaseback transactions 230 147 Sales of short-term investments 8,861 14,972 Purchases of short-term investments (7,323 ) (11,257 ) Decrease in restricted short-term investments 51 1 Purchase of equity investments - (321 ) Other investing activities 275 (360 ) Net cash provided by (used in) investing activities (502 ) 636 Cash flows from financing activities: Payments on long-term debt and finance leases (7,718 ) (3,752 ) Proceeds from issuance of long-term debt 4,822 1,069 Other financing activities (310 ) 52 Net cash used in financing activities (3,206 ) (2,631 ) Net increase in cash and restricted cash 95 178 Cash and restricted cash at beginning of year 586 408 (1) Cash and restricted cash at end of year $ 681 $ 586 (1) The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets: Cash $ 578 $ 440 Restricted cash included in restricted cash and short-term investments 103 146 Total cash and restricted cash $ 681 $ 586 Free Cash Flow
The Company's free cash flow summary is presented in the table below, which is a non-GAAP measure that management believes is useful information to investors and others in evaluating the Company's ability to generate cash from its core operating performance that is available for use to reinvest in the business or to reduce debt. The Company defines free cash flows as net cash provided by operating activities less net cash used in investing activities, adjusted for (1) net sales of short-term investments and (2) change in restricted cash. We believe that calculating free cash flow as adjusted for these items is more useful for investors because short-term investment activity and restricted cash are not representative of activity core to our operations.
This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. Our calculation of free cash flow is not intended, and should not be used, to measure the residual cash flow available for discretionary expenditures because, among other things, it excludes mandatory debt service requirements and certain other non-discretionary expenditures.
Year Ended December 31, 2023 (in millions) Net cash provided by operating activities $ 3,803 Adjusted net cash used in investing activities (1) (1,997 ) Free cash flow $ 1,806 (1) The following table provides a reconciliation of adjusted net cash used in investing activities for the year ended December 31, 2023 (in millions): Net cash used in investing activities $ (502 ) Adjustments: Net sales of short-term investments (1,538 ) Decrease in restricted cash 43 Adjusted net cash used in investing activities $ (1,997 ) American Airlines Group Inc. Condensed Consolidated Balance Sheets (In millions, except shares) December 31, 2023 December 31, 2022 (unaudited) Assets Current assets Cash $ 578 $ 440 Short-term investments 7,000 8,525 Restricted cash and short-term investments 910 995 Accounts receivable, net 2,026 2,138 Aircraft fuel, spare parts and supplies, net 2,400 2,279 Prepaid expenses and other 658 892 Total current assets 13,572 15,269 Operating property and equipment Flight equipment 41,794 39,703 Ground property and equipment 10,307 9,913 Equipment purchase deposits 760 613 Total property and equipment, at cost 52,861 50,229 Less accumulated depreciation and amortization (22,097 ) (20,029 ) Total property and equipment, net 30,764 30,200 Operating lease right-of-use assets 7,939 8,094 Other assets Goodwill 4,091 4,091 Intangibles, net 2,051 2,059 Deferred tax asset 2,888 3,099 Other assets 1,753 1,904 Total other assets 10,783 11,153 Total assets $ 63,058 $ 64,716 Liabilities and Stockholders’ Equity (Deficit) Current liabilities Current maturities of long-term debt and finance leases $ 3,632 $ 3,274 Accounts payable 2,353 2,149 Accrued salaries and wages 2,377 1,713 Air traffic liability 6,200 6,745 Loyalty program liability 3,453 3,169 Operating lease liabilities 1,309 1,465 Other accrued liabilities 2,738 2,981 Total current liabilities 22,062 21,496 Noncurrent liabilities Long-term debt and finance leases, net of current maturities 29,270 32,389 Pension and postretirement benefits 3,044 2,837 Loyalty program liability 5,874 5,976 Operating lease liabilities 6,452 6,559 Other liabilities 1,558 1,258 Total noncurrent liabilities 46,198 49,019 Stockholders' equity (deficit) Common stock, 654,273,192 shares outstanding at December 31, 2023 7 6 Additional paid-in capital 7,374 7,291 Accumulated other comprehensive loss (4,894 ) (4,585 ) Retained deficit (7,689 ) (8,511 ) Total stockholders' deficit (5,202 ) (5,799 ) Total liabilities and stockholders’ equity (deficit) $ 63,058 $ 64,716 
