Name: American Airlines Group Inc. (NASDAQ:AAL) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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American Airlines Group Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss)	822)	127)	(1,993)	(8,885)	1,686)
Depreciation and amortization	2,254)	2,298)	2,335)	2,370)	2,318)
Debt extinguishment costs	267)	3)	31)	—)	—)
Special items, net non-cash	41)	226)	52)	1,599)	376)
Pension and postretirement	(13)	(405)	(321)	(319)	(178)
Deferred income tax provision (benefit)	299)	65)	(555)	(2,568)	560)
Share-based compensation	102)	78)	98)	91)	94)
Net gains from sale of property and equipment and sale-leaseback transactions	—)	—)	(22)	(95)	(112)
Other, net	(205)	(37)	38)	47)	(62)
(Increase) decrease in accounts receivable	95)	(637)	(304)	538)	73)
(Increase) decrease in other assets	(11)	(775)	(402)	(38)	(373)
Increase (decrease) in accounts payable and accrued liabilities	873)	585)	461)	(626)	327)
Increase (decrease) in air traffic liability	(545)	658)	1,454)	(51)	469)
Increase (decrease) in loyalty program liability	182)	10)	(60)	580)	76)
Contributions to pension plans	(73)	(5)	(247)	(9)	(1,230)
Increase (decrease) in other liabilities	(285)	(18)	139)	823)	(209)
Changes in operating assets and liabilities	236)	(182)	1,041)	1,217)	(867)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities	2,981)	2,046)	2,697)	2,342)	2,129)
Net cash provided by (used in) operating activities	3,803)	2,173)	704)	(6,543)	3,815)
Capital expenditures, net of aircraft purchase deposit returns	(2,596)	(2,546)	(208)	(1,958)	(4,268)
Proceeds from sale of property and equipment and sale-leaseback transactions	230)	147)	374)	1,016)	904)
Sales of short-term investments	8,861)	14,972)	13,923)	2,803)	4,144)
Purchases of short-term investments	(7,323)	(11,257)	(19,454)	(5,873)	(3,184)
(Increase) decrease in restricted short-term investments	51)	1)	(401)	(308)	(3)
Purchase of equity investments	—)	(321)	(28)	—)	—)
Other investing activities	275)	(360)	(189)	(22)	164)
Net cash (used in) provided by investing activities	(502)	636)	(5,983)	(4,342)	(2,243)
Payments on long-term debt and finance leases	(7,718)	(3,752)	(7,343)	(3,535)	(4,190)
Proceeds from issuance of long-term debt	4,822)	1,069)	12,190)	11,780)	3,960)
Proceeds from issuance of equity	—)	—)	460)	2,970)	—)
Dividend payments	—)	—)	—)	(43)	(178)
Other financing activities	(310)	52)	(19)	(178)	(1,160)
Net cash provided by (used in) financing activities	(3,206)	(2,631)	5,288)	10,994)	(1,568)
Net increase (decrease) in cash and restricted cash	95)	178)	9)	109)	4)
Cash and restricted cash at beginning of year	586)	408)	399)	290)	286)
Cash and restricted cash at end of year	681)	586)	408)	399)	290)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The cash flow trajectory from 2019 to 2023 reflects a period of severe volatility followed by a phased recovery. A significant contraction occurred in 2020, characterized by massive net losses and negative operating cash flows, which necessitated an aggressive financing strategy to maintain liquidity. By 2023, operating cash flows returned to pre-pandemic levels, although the balance sheet remains influenced by the debt accumulated during the crisis years.

Operating Cash Flow Recovery: Net cash provided by operating activities exhibited a U-shaped recovery, plummeting from 3,815 million US$ in 2019 to a deficit of 6,543 million US$ in 2020, before climbing back to 3,803 million US$ by 2023. This recovery was supported by a return to positive net income and significant adjustments in operating liabilities, particularly in accounts payable and accrued liabilities, which saw a substantial increase to 873 million US$ in 2023.
Investment and Capital Expenditure Trends: Capital expenditures showed extreme variance, dropping to a low of 208 million US$ in 2021 before returning to a higher spending regime of approximately 2.5 billion US$ in 2022 and 2023. The entity also utilized short-term investments as a primary liquidity lever, evidenced by the high volume of purchases and sales, peaking in 2021 and 2022, indicating an active management of cash reserves to cover operational gaps.
Financing Strategy and Debt Servicing: A pivot in financing strategy is evident. In 2020 and 2021, the entity relied heavily on the issuance of long-term debt, totaling approximately 23.9 billion US$ over those two years, supplemented by equity issuances. From 2022 onward, the strategy shifted toward debt reduction, with payments on long-term debt and finance leases reaching 7,718 million US$ in 2023, coinciding with a sharp decrease in new debt proceeds.
Liquidity and Cash Position: Despite the volatility in operating and investing activities, the ending cash and restricted cash balance maintained a consistent upward trend, growing from 290 million US$ at the end of 2019 to 681 million US$ at the end of 2023. This gradual accumulation suggests a conservative approach to liquidity management following the instability of the 2020-2021 period.

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