EX-99.1 2 a8kerexhibit991q1-23.htm EX-99.1 Document


Exhibit 99.1
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Corporate Communications
  mediarelations@aa.com
Investor Relations
investor.relations@aa.com

FOR RELEASE: Thursday, April 27, 2023
AMERICAN AIRLINES REPORTS FIRST-QUARTER 2023 FINANCIAL RESULTS
FORT WORTH, Texas –– American Airlines Group Inc. (NASDAQ: AAL) today reported its first-quarter 2023 financial results, including:
•First-quarter net income of $10 million, or $0.02 per diluted share. Excluding net special items1, first-quarter net income of $33 million, or $0.05 per diluted share.
•Record first-quarter revenue of $12.2 billion, which represents a 37% increase year over year.
•Generated record operating cash flow of $3.3 billion2 and record free cash flow of $3.0 billion2 in the first quarter.
•Ended the quarter with $14.4 billion of total available liquidity.
•Reiterating full-year 2023 adjusted earnings per diluted share3 target of $2.50 to $3.50.
“The American Airlines team ran a great operation and delivered on our financial guidance for the quarter, resulting in a first-quarter profit for the first time in four years,” said American’s CEO Robert Isom. “Looking ahead to the remainder of 2023, we remain focused on reliability, profitability, strengthening the balance sheet, and creating even more value for our shareholders, team members, customers and the communities we serve.”
Running a reliable operation
The American Airlines team delivered a strong operational performance during the first quarter. American and its regional partners operated more than 476,000 flights in the first quarter, with an average load factor of 80.0%.
American delivered its best-ever first quarter completion factor and controllable completion factor, resulting in 13 mainline, 11 regional, and five combined mainline and regional zero-cancellation days, a significant improvement over the same period last year. American also outperformed the industry in on-time departures for the quarter, ranking first among the nine largest U.S. carriers.
Returning to profitability
American produced revenues of $12.2 billion in the quarter, a record for the first quarter and an increase of 37% versus the first quarter of 2022 on 9.2% more capacity. The strong revenue performance was driven by the continued strength of the demand environment. The company

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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produced an operating margin of 3.6% on a GAAP basis and 3.7% excluding the impact of net special items. American produced net income of $10 million in the first quarter on a GAAP basis.
Demand for American’s product remains strong. Domestic and short-haul international revenue continue to perform well, and the airline has seen noticeable strength in long-haul international demand and yield performance this year.
American will make a profit-sharing payment to its team members for the first time in three years. The company has accrued approximately $211 million to its profit-sharing pool, which for the purposes of 2022 was measured as the 12-month period ended March 31, 2023, and will be paid to team members in May.
Liquidity and balance sheet
American generated record operating and free cash flow of $3.3 billion2 and $3.0 billion2, respectively, in the first quarter. The company reduced total debt4 by more than $850 million in the quarter. Strengthening the balance sheet continues to be a top priority, and the company is approximately 60% of the way to its goal of reducing total debt by $15 billion by the end of 2025. As of March 31, 2023, American had reduced its total debt by more than $9 billion from peak levels in the second quarter of 2021. The company ended the quarter with approximately $14.4 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 demand trends and the current fuel price forecast and excluding the impact of special items, the company expects its second-quarter 2023 adjusted earnings per diluted share3 to be between $1.20 and $1.40. American continues to expect its full-year 2023 adjusted earnings per diluted share3 to be between $2.50 and $3.50. The company’s forecasts include the estimated impact of anticipated new labor agreements.
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 May 27.
Notes
See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of free cash flow and all GAAP to non-GAAP financial information.
1.The company recognized $23 million of net special items after the effect of taxes in the first quarter, which principally included charges associated with debt refinancings and extinguishments.

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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2.Excludes the cash flow impact of financial assistance received pursuant to Payroll Support Program Agreements with the U.S. Department of the Treasury in prior periods. Please see the accompanying notes for the company’s definition of free cash flow, a non-GAAP measure.
3.Adjusted earnings per diluted share guidance excludes the impact of net special items. The company is unable to reconcile certain forward-looking projections to GAAP as the nature or amount of net special items cannot be determined at this time.
4.All references to total debt include debt, finance leases, operating lease liabilities and pension obligations.
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 on Twitter @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 March 31, 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 Reports First-Quarter 2023 Financial Results
April 27, 2023
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American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited) 
 3 Months Ended
March 31,		Percent
Increase
(Decrease)
 20232022
Operating revenues:
Passenger$11,103 $7,818 42.0 
Cargo223 364 (38.7)
Other863 717 20.4 
Total operating revenues12,189 8,899 37.0 
Operating expenses:
Aircraft fuel and related taxes3,167 2,502 26.6 
Salaries, wages and benefits3,281 3,154 4.1 
Regional expenses:
Regional operating expenses1,062 972 9.2 
Regional depreciation and amortization80 80 0.6 
Maintenance, materials and repairs712 617 15.4 
Other rent and landing fees708 678 4.4 
Aircraft rent344 353 (2.5)
Selling expenses438 332 31.8 
Depreciation and amortization486 492 (1.2)
Special items, net13 157 (91.4)
Other1,460 1,285 13.5 
Total operating expenses11,751 10,622 10.6 
Operating income (loss)438 (1,723) nm
(1)
Nonoperating income (expense):
Interest income125 8  nm
Interest expense, net(540)(463)16.6 
Other income (expense), net(6)92  nm
Total nonoperating expense, net(421)(363)16.0 
Income (loss) before income taxes17 (2,086) nm
Income tax provision (benefit)7 (451) nm
Net income (loss)$10 $(1,635) nm
Earnings (loss) per common share:
Basic$0.02 $(2.52)
Diluted$0.02 $(2.52)
Weighted average shares outstanding (in thousands):
Basic652,000 649,503 
Diluted656,707 649,503 
Note: Percent change may not recalculate due to rounding.
(1)Not meaningful or greater than 100% change.


American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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American Airlines Group Inc.
Consolidated Operating Statistics (1)
(Unaudited)
 3 Months Ended
March 31,		Increase
(Decrease)
 20232022
Revenue passenger miles (millions)52,01444,29017.4 %
Available seat miles (ASM) (millions)65,00659,5339.2 %
Passenger load factor (percent)80.074.45.6 pts
Yield (cents)21.3517.6520.9 %
Passenger revenue per ASM (cents)17.0813.1330.1 %
Total revenue per ASM (cents)18.7514.9525.4 %
Cargo ton miles (millions)422536(21.2) %
Cargo yield per ton mile (cents)52.7567.81(22.2) %
Fuel consumption (gallons in millions)9658947.9 %
Average aircraft fuel price including related taxes (dollars per gallon) 3.282.8017.3 %
Operating cost per ASM (cents)18.0817.841.3 %
Operating cost per ASM excluding net special items (cents)18.0617.582.7 %
Operating cost per ASM excluding net special items and fuel (cents)13.1813.38(1.4) %
Passenger enplanements (thousands)48,23242,72212.9 %
Departures (thousands):
Mainline27524113.8 %
Regional201231(12.8) %
Total4764720.8 %
Average stage length (miles):
Mainline1,1231,158(3.0) %
Regional469484(3.2) %
Total8468282.2 %
Aircraft at end of period:
Mainline (2)
9318815.7 %
Regional (3)
533572(6.8) %
Total1,4641,4530.8 %
Full-time equivalent employees at end of period:
Mainline103,100100,5002.6 %
Regional (4)
27,70026,5004.5 %
Total130,800127,0003.0 %
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)Excludes six Boeing 737-800 mainline aircraft that are in temporary storage at March 31, 2023.
(3)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 70 regional aircraft that are in temporary storage at March 31, 2023 as follows: 41 Embraer 145, 19 Bombardier CRJ 700, five Embraer 170, four Bombardier CRJ 900 and one Embraer 175.
(4)Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
 3 Months Ended
March 31,		Increase
(Decrease)
 20232022
Domestic (1)
Revenue passenger miles (millions)35,750 32,632 9.6 %
Available seat miles (ASM) (millions)44,554 41,873 6.4 %
Passenger load factor (percent)80.2 77.9 2.3 pts
Passenger revenue (dollars in millions)8,037 6,060 32.6 %
Yield (cents)22.48 18.57 21.1 %
Passenger revenue per ASM (cents)18.04 14.47 24.6 %
Latin America (2)
Revenue passenger miles (millions)9,008 7,652 17.7 %
Available seat miles (millions)10,510 10,310 1.9 %
Passenger load factor (percent)85.7 74.2 11.5 pts
Passenger revenue (dollars in millions)1,915 1,227 56.1 %
Yield (cents)21.26 16.04 32.6 %
Passenger revenue per ASM (cents)18.22 11.90 53.1 %
Atlantic
Revenue passenger miles (millions)5,821 3,605 61.5 %
Available seat miles (millions)8,242 6,380 29.2 %
Passenger load factor (percent)70.6 56.5 14.1 pts
Passenger revenue (dollars in millions)931 466 99.6 %
Yield (cents)16.00 12.94 23.6 %
Passenger revenue per ASM (cents)11.30 7.31 54.5 %
Pacific
Revenue passenger miles (millions)1,435 401  nm
Available seat miles (millions)1,700 970 75.3 %
Passenger load factor (percent)84.4 41.4 43.0 pts
Passenger revenue (dollars in millions)220 65  nm
Yield (cents)15.30 16.13 (5.2) %
Passenger revenue per ASM (cents)12.91 6.67 93.5 %
Total International
Revenue passenger miles (millions)16,264 11,658 39.5 %
Available seat miles (millions)20,452 17,660 15.8 %
Passenger load factor (percent)79.5 66.0 13.5 pts
Passenger revenue (dollars in millions)3,066 1,758 74.4 %
Yield (cents)18.85 15.08 25.0 %
Passenger revenue per ASM (cents)14.99 9.96 50.6 %
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.

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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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 (Loss) (GAAP measure) to Operating Income (Loss) Excluding Net Special Items (non-GAAP measure)
–Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure)
–Pre-Tax Income (Loss) (GAAP measure) to Pre-Tax Income (Loss) 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 (Loss) (GAAP measure) to Net Income (Loss) Excluding Net Special Items (non-GAAP measure)
–Basic and Diluted Earnings (Loss) Per Share (GAAP measure) to Basic and Diluted Earnings (Loss) 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 (Loss) Excluding Net Special Items3 Months Ended
March 31,		Percent
Increase
(Decrease)
20232022
 (in millions) 
Operating income (loss) as reported$438 $(1,723)
Operating net special items:
   Mainline operating special items, net (1)
13 157 
Operating income (loss) excluding net special items$451 $(1,566)nm
Calculation of Operating Margin   
Operating income (loss) as reported$438 $(1,723)
Total operating revenues as reported$12,189 $8,899 
Operating margin3.6 %(19.4 %)
Calculation of Operating Margin Excluding Net Special Items   
Operating income (loss) excluding net special items$451 $(1,566)
Total operating revenues as reported$12,189 $8,899 
Operating margin excluding net special items3.7 %(17.6 %)
Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items   
Pre-tax income (loss) as reported$17 $(2,086)
Pre-tax net special items:
   Mainline operating special items, net (1)
13 157 
   Nonoperating special items, net (2)
15 3 
Total pre-tax net special items28 160 
Pre-tax income (loss) excluding net special items$45 $(1,926)nm
Calculation of Pre-Tax Margin
Pre-tax income (loss) as reported$17 $(2,086)
Total operating revenues as reported$12,189 $8,899 
Pre-tax margin0.1 %(23.4 %)
Calculation of Pre-Tax Margin Excluding Net Special Items
Pre-tax income (loss) excluding net special items$45 $(1,926)
Total operating revenues as reported$12,189 $8,899 
Pre-tax margin excluding net special items0.4 %(21.6 %)

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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Reconciliation of Net Income (Loss) Excluding Net Special Items3 Months Ended
March 31,		Percent
Increase
(Decrease)
20232022
 (in millions, except share and per share amounts)
Net income (loss) as reported$10 $(1,635)
Net special items:
   Total pre-tax net special items (1), (2)
28 160 
   Net tax effect of net special items(5)(35)
Net income (loss) excluding net special items$33 $(1,510)nm
Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items
Net income (loss) excluding net special items$33 $(1,510)
Shares used for computation (in thousands):
   Basic652,000 649,503 
   Diluted656,707 649,503 
Earnings (loss) per share excluding net special items:
   Basic$0.05 $(2.32)
   Diluted $0.05 $(2.32)
Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel
Total operating expenses as reported$11,751 $10,622 
Operating net special items:
   Mainline operating special items, net (1)
(13)(157)
Total operating expenses excluding net special items11,738 10,465 
Aircraft fuel and related taxes(3,167)(2,502)
Total operating expenses excluding net special items and fuel $8,571 $7,963 
 (in cents)
Total operating expenses per ASM as reported18.08 17.84 
Operating net special items per ASM:
   Mainline operating special items, net (1)
(0.02)(0.26)
Total operating expenses per ASM excluding net special items18.06 17.58 
Aircraft fuel and related taxes per ASM(4.87)(4.20)
Total operating expenses per ASM excluding net special items and fuel13.18 13.38 
Note: Amounts may not recalculate due to rounding.
FOOTNOTES: 
(1)The 2022 first quarter 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.

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
 3 Months Ended
March 31,
 20232022
Net cash provided by operating activities$3,333 $1,185 
Cash flows from investing activities:
Capital expenditures, net of aircraft purchase deposit returns(505)(807)
Purchases of short-term investments(5,131)(7,035)
Sales of short-term investments2,666 7,089 
Decrease in restricted short-term investments29 36 
Other investing activities145 (54)
Net cash used in investing activities(2,796)(771)
Cash flows from financing activities:
Payments on long-term debt and finance leases(2,326)(661)
Proceeds from issuance of long-term debt1,824 367 
Other financing activities(37)(16)
Net cash used in financing activities(539)(310)
Net increase (decrease) in cash and restricted cash(2)104 
Cash and restricted cash at beginning of period586 408 
Cash and restricted cash at end of period (1)
$584 $512 
(1)The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
Cash$452 $376 
Restricted cash included in restricted cash and short-term investments132 136 
Total cash and restricted cash$584 $512 


American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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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 purchases 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.
 3 Months Ended
March 31, 2023
 
(in millions)
Net cash provided by operating activities$3,333 
Adjusted net cash used in investing activities (1)
(317)
Free cash flow$3,016 
(1)The following table provides a reconciliation of adjusted net cash used in investing activities for the three months ended March 31, 2023 (in millions):
Net cash used in investing activities$(2,796)
Adjustments:
Net purchases of short-term investments2,465 
Decrease in restricted cash14 
Adjusted net cash used in investing activities$(317)

American Airlines Reports First-Quarter 2023 Financial Results
April 27, 2023
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American Airlines Group Inc.
Condensed Consolidated Balance Sheets
(In millions, except shares) 
March 31, 2023December 31, 2022
 (unaudited) 
Assets
Current assets
Cash$452 $440 
Short-term investments11,041 8,525 
Restricted cash and short-term investments955 995 
Accounts receivable, net1,989 2,138 
Aircraft fuel, spare parts and supplies, net2,308 2,279 
Prepaid expenses and other907 892 
Total current assets17,652 15,269 
Operating property and equipment
Flight equipment40,020 39,703 
Ground property and equipment10,030 9,913 
Equipment purchase deposits640 613 
Total property and equipment, at cost50,690 50,229 
Less accumulated depreciation and amortization(20,546)(20,029)
Total property and equipment, net30,144 30,200 
Operating lease right-of-use assets 7,838 8,094 
Other assets
Goodwill4,091 4,091 
Intangibles, net 2,057 2,059 
Deferred tax asset3,088 3,099 
Other assets1,916 1,904 
Total other assets11,152 11,153 
Total assets$66,786 $64,716 
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Current maturities of long-term debt and finance leases$3,579 $3,274 
Accounts payable2,455 2,149 
Accrued salaries and wages1,809 1,713 
Air traffic liability9,053 6,745 
Loyalty program liability3,486 3,169 
Operating lease liabilities 1,439 1,465 
Other accrued liabilities2,769 2,981 
Total current liabilities24,590 21,496 
Noncurrent liabilities
Long-term debt and finance leases, net of current maturities31,586 32,389 
Pension and postretirement benefits2,737 2,837 
Loyalty program liability5,881 5,976 
Operating lease liabilities 6,325 6,559 
Other liabilities1,438 1,258 
Total noncurrent liabilities47,967 49,019 
Stockholders' equity (deficit)
Common stock, 652,817,674 shares outstanding at March 31, 2023
7 6 
Additional paid-in capital7,290 7,291 
Accumulated other comprehensive loss(4,567)(4,585)
Retained deficit(8,501)(8,511)
Total stockholders' deficit(5,771)(5,799)
Total liabilities and stockholders’ equity (deficit)$66,786 $64,716