-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VIr4knxM89ACkKTqR5LcJT1+qQTvJDNnOIzoa3Q1X4cPEp/jOxPHaqm6cefpNfeM s/GxjR1YD/34jxA5sWqG0Q== 0000950152-96-002641.txt : 19960529 0000950152-96-002641.hdr.sgml : 19960529 ACCESSION NUMBER: 0000950152-96-002641 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960528 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANS WORLD AIRLINES INC /NEW/ CENTRAL INDEX KEY: 0000278327 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 431145889 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07815 FILM NUMBER: 96572590 BUSINESS ADDRESS: STREET 1: ONE CITY CENTRE STREET 2: 515 N SIXTH ST CITY: ST LOUIS STATE: MO ZIP: 63101 BUSINESS PHONE: 3145893261 MAIL ADDRESS: STREET 1: ONE CITY CENTRE STREET 2: 515 N 6TH ST CITY: ST LOUIS STATE: MO ZIP: 63101 10-Q/A 1 TRANS WORLD AIRLINES 1 - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A NO. 1 |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-7815 TRANS WORLD AIRLINES, INC. (Exact name of registrant as specified in its charter) Delaware 43-1145889 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One City Centre 515 N. 6th Street St. Louis, Missouri 63101 (Address of principal executive offices, including zip code) (314) 589-3000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes |X| No |_| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding as of Class May 1, 1996 ------------------------ ----------------- Common Stock, par value 36,945,398 $0.01 per share In addition, as of May 1, 1996 there were 6,425,118 shares of Employee Preferred Stock outstanding. - -------------------------------------------------------------------------------- 2 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Trans World Airlines, Inc. and Subsidiaries CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS For the Three Months Ended March 31, 1996 and 1995 (Amounts in Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended March 31, ---------------------------------- 1996 1995 Reorganized Predecessor Company Company ----------- ----------- Operating revenues: Passenger $ 677,932 $ 595,429 Freight and mail 35,904 35,240 All other 68,597 61,651 ----------- ----------- Total 782,433 692,320 ----------- ----------- Operating expenses: Salaries, wages and benefits 296,323 281,707 Earned stock compensation 4,984 - Aircraft fuel and oil 129,396 101,790 Passenger sales commissions 63,940 59,629 Aircraft maintenance materials and repairs 47,758 35,511 Depreciation and amortization 39,613 41,666 Operating lease rentals 70,305 69,503 Passenger food and beverages 25,541 23,335 All other 158,764 155,440 ----------- ----------- Total 836,624 768,581 ----------- ----------- Operating loss (54,191) (76,261) ----------- ----------- Other charges (credits): Interest expense 33,547 51,937 Interest and investment income (6,086) (3,144) Disposition of assets, gains and losses - net 214 271 Other charges and credits - net (7,588) (2,572) ----------- ----------- Total 20,087 46,492 ----------- ----------- Loss before income taxes (74,278) (122,753) Provision (credit) for income taxes (37,171) 42 ----------- ----------- Net loss (37,107) (122,795) Preferred stock dividend requirements 23,998 3,750 ----------- ----------- Loss applicable to common shares $ (61,105) $ (126,545) =========== =========== Per share amounts: Loss before special preferred stock dividend requirements $ (.98) Special preferred stock dividend requirement - redemption of 12% Preferred Stock (.48) ----------- Net loss $ (1.46) ===========
See notes to condensed consolidated financial statements 1 3 Trans World Airlines, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 1996 and December 31, 1995 (Amounts in Thousands) ASSETS
Reorganized Company ---------------------------------- March 31, December 31, 1996 1995 ----------- ------------ (Unaudited) Current assets: Cash and cash equivalents $ 374,715 $ 304,340 Receivables, less allowance for doubtful accounts, $14,057 in 1996 and $13,517 in 1995 299,911 226,451 Spare parts, materials and supplies, less allowance for obsolescence, $3,664 in 1996 and $2,201 in 1995 133,692 143,374 Prepaid expenses and other 87,790 54,358 ----------- ----------- Total 896,108 728,523 ----------- ----------- Property: Property owned: Flight equipment 321,608 303,248 Prepayments on flight equipment 24,791 - Land, buildings and improvements 55,904 54,722 Other property and equipment 41,909 39,032 ----------- ----------- Total owned property 444,212 397,002 Less accumulated depreciation 31,088 18,769 ----------- ----------- Property owned - net 413,124 378,233 ----------- ----------- Property held under capital leases: Flight equipment 172,812 172,812 Land, buildings and improvements 54,761 54,761 Other property and equipment 6,838 6,862 ----------- ----------- Total property held under capital leases 234,411 234,435 Less accumulated amortization 22,015 12,602 ----------- ----------- Property held under capital leases - net 212,396 221,833 ----------- ----------- Total property - net 625,520 600,066 ----------- ----------- Investments and other assets: Investments in affiliated companies 99,677 98,156 Investments, receivables, and other 193,705 165,471 Routes, gates and slots - net 445,267 450,916 Reorganization value in excess of amounts allocable to identifiable assets - net 814,592 825,079 ----------- ----------- Total 1,553,241 1,539,622 ----------- ----------- Total $3,074,869 $2,868,211 =========== ===========
See notes to condensed consolidated financial statements 2 4 Trans World Airlines, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 1996 and December 31, 1995 (Amounts in Thousands Except Share Amounts) LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Reorganized Company ----------------------------------- March 31, December 31, 1996 1995 ----------- ------------ (Unaudited) Current liabilities: Obligation for 12% Preferred Stock called for redemption (Note 4) $ 83,929 $ - Current maturities of long-term debt 70,621 67,566 Current obligations under capital leases 41,167 42,835 Advance ticket sales 304,348 209,936 Accounts payable, trade and other 148,216 145,318 Accrued expenses: Employee compensation and benefits 115,015 119,353 Interest on debt and capital leases 30,253 44,710 Taxes 24,544 16,995 Other accrued expenses 198,806 193,380 ----------- ----------- Total accrued expenses 368,618 374,438 ----------- ----------- Total 1,016,899 840,093 ----------- ----------- Long-term liabilities and deferred credits: Long-term debt, less current maturities 740,129 764,031 Obligations under capital leases, less current obligations 250,388 259,630 Postretirement benefits other than pensions 454,059 461,346 Noncurrent pension liabilities 21,130 21,253 Other noncurrent liabilities and deferred credits 146,631 157,573 ----------- ----------- Total 1,612,337 1,663,833 ----------- ----------- Mandatorily redeemable 12% preferred stock, (aggregate liquidation preference of $111,179 in 1995) - 61,430 ----------- ----------- Shareholders' equity (deficiency): 8% cumulative convertible exchangeable preferred stock, $50 liquidation preference; 3,869 shares issued and outstanding 39 - Employee preferred stock, $0.01 liquidation preference; special voting rights; 5,301 shares issued and outstanding 53 53 Common stock, $0.01 par value, shares issued and outstanding: 1996 - 36,943; 1995 - 35,129 369 351 Additional paid-in capital 512,417 332,589 Accumulated deficit (67,245) (30,138) ----------- ----------- Total 445,633 302,855 ----------- ----------- Total $3,074,869 $2,868,211 =========== ===========
See notes to condensed consolidated financial statements 3 5 Trans World Airlines, Inc. and Subsidiaries CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS For the Three Months Ended March 31, 1996 and 1995 (Amounts in Thousands) (Unaudited)
Three Months Ended March 31, ------------------------------- 1996 1995 Reorganized Predecessor Company Company Cash flows from operating activities: ----------- ------------ Net loss $ (37,107) $(122,795) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation and amortization 39,613 41,666 Amortization of discount and expense on debt 2,405 5,959 Interest paid in common stock 11,332 - Equity in undistributed earnings of affiliates not consolidated (1,521) (795) Net losses on disposition of property and noncurrent investment assets 214 271 Employee earned stock compensation 4,984 - Change in operating assets and liabilities; Decrease (increase) in: Receivables (73,460) (38,072) Inventories 8,528 6,763 Prepaid expenses and other current assets (33,432) 202 Other assets (7,197) 5,817 Increase (decrease) in: Accounts payable and accrued expenses (3,151) 110,320 Advance ticket sales 94,412 44,321 Benefits, other noncurrent liabilities and deferred credits (17,918) (5,084) ---------- ---------- Net cash provided (used) (12,298) 48,573 ---------- ---------- Cash flows from investing activities: Proceeds from sale of property 324 942 Capital expenditures (46,687) (7,547) Net decrease (increase) in investments, receivables, and other (21,737) (16,894) ---------- ---------- Net cash used (68,100) (23,499) ---------- ---------- Cash flows from financing activities: Repayment of long-term debt and capital lease obligations (35,865) (10,753) Net proceeds from sale of preferred stock 186,163 - Increase (decrease) in bank overdrafts and other 475 (1,840) ----------- ---------- Net cash provided (used) 150,773 (12,593) ----------- ---------- Net increase in cash and cash equivalents 70,375 12,481 Cash and cash equivalents at beginning of period 304,340 138,531 ----------- ---------- Cash and cash equivalents at end of period $ 374,715 $ 151,012 =========== ==========
See notes to condensed consolidated financial statements 4 6 Trans World Airlines, Inc. and Subsidiaries CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS For the Three Months Ended March 31, 1996 and 1995 (Amounts in Thousands) SUPPLEMENTAL CASH FLOW INFORMATION ----------------------------------
Three Months Ended March 31, ----------------------------- 1996 1995 Reorganized Predecessor Company Company ------------ ----------- Cash paid during the period for: Interest $ 33,116 $ 10,879 =========== =========== Income taxes $ 35 $ 30 =========== =========== Noncash operating, investing and financing activities: Promissory note issued to finance aircraft predelivery payments $ 1,523 $ - =========== =========== Common Stock issued in lieu of cash dividends $ 3,255 $ - =========== =========== Property acquired and obligations recorded under new capital transactions $ - $ 9,928 =========== ===========
Accounting policy For purposes of the Statements of Consolidated Cash Flows, TWA considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. See notes to condensed consolidated financial statements 5 7 TRANS WORLD AIRLINES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1996 (UNAUDITED) During the period from 1992 through 1995, Trans World Airlines, Inc. ("TWA" or the "Company") underwent two separate Chapter 11 reorganizations, the first in 1992-93 (the "'93 Reorganization") and the second in 1995 (the "'95 Reorganization"). For a detailed discussion of the Company's reorganizations, refer to the Company's Annual Report on Form 10-K for the year ended December 31, 1995. In connection with the '95 Reorganization TWA has applied fresh start reporting in accordance with generally accepted accounting principles resulting in the Company's assets and liabilities being adjusted to reflect fair values. Because of the application of fresh start reporting, the consolidated financial statements for periods after the '95 Reorganization are not comparable in all respects to the consolidated financial statements of the Predecessor Company for periods prior to the reorganization. For accounting purposes the inception date of the Reorganized Company is deemed to be September 1, 1995. A vertical black line is shown in the consolidated financial statements to separate the Reorganized Company from the Predecessor Company since they are not comparable. 1. BASIS OF PRESENTATION: The consolidated financial statements include the accounts of TWA and its subsidiaries. The results of Worldspan, L.P. ("Worldspan"), a 25% owned affiliate, are recorded under the equity method and are included in the Statements of Consolidated Operations in Other Charges (Credits). The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission but do not include all information and footnotes required by generally accepted accounting principles pursuant to such rules and regulations. The condensed consolidated financial 6 8 statements include all adjustments, which are of a normal recurring nature and are necessary, in the opinion of management, for a fair statement of the results for these interim periods. These consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. The consolidated balance sheet at December 31, 1995 has been derived from the audited consolidated financial statements at that date. Certain amounts previously reported have been reclassified to conform with the current presentation. The airline industry generally, and TWA specifically, has historically experienced seasonal changes between quarterly periods, with the second and third quarters usually out-performing the first and fourth. Accordingly, the results for the three months ended March 31 should not be read as an indicator of future results for the full year. 2. CONTINGENCIES: There has not been any significant change in the status of the contingencies reflected in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995, which, among other matters, described various contingencies and other legal actions against TWA, except as discussed in Part I. Financial Information -- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and Part II. Other Information -- Item 1. Legal Proceedings. 3. EARNINGS (LOSS) PER SHARE In computing the loss applicable to common shares for the three months ended March 31, 1996, the net loss has been increased by dividend requirements on the Mandatorily Redeemable 12% Preferred Stock (the "12% Preferred Stock") (including amortization of the difference between the fair value of the 12% Preferred Stock on the date of issuance and the redemption value plus, with respect to the March 22, 1996 call for the redemption, a special dividend requirement of approximately $20.0 million to reflect the excess of the early redemption price over the carrying value of the 12% Preferred 7 9 Stock), and on the 8% Cumulative Convertible Exchangeable Preferred Stock (the "8% Preferred Stock") issued in March 1996. In computing the related net loss per share, the loss applicable to common shares has been divided by the average aggregate number of outstanding shares of Common Stock (36.3 million) and Employee Preferred Stock (5.5 million; including 0.2 million shares which have been earned but not yet allocated to employees) which, with the exception of certain special voting rights, is the functional equivalent of Common Stock. No effect has been given to stock options, warrants or potential issuances of additional Common Stock or Employee Preferred Stock as the impact would have been anti-dilutive. Earnings per share of the Predecessor Company are not presented as the amounts are not meaningful. 4. PREFERRED STOCK: In March 1996, the Company completed an offering, pursuant to Rule 144A of the Securities Act of 1933 (the "Act"), of 3,869,000 shares of its 8% Preferred Stock, with a liquidation preference of $50 per share. Each share of the 8% Preferred Stock may be converted at any time, at the option of the holder, unless previously redeemed or exchanged, into shares of Common Stock at a conversion price of $20.269 per share (equivalent to a conversion rate of approximately 2.467 shares of Common Stock for each share of 8% Preferred Stock), subject to adjustment. The 8% Preferred Stock has not been registered under the Act at this time; however, pursuant to the registration rights agreement between the Company and the initial purchasers of the 8% Preferred Stock, the Company is obligated to register resales of the 8% Preferred Stock, the Debentures (as defined below), and the underlying shares of Common Stock issuable upon conversion thereof by August 19, 1996. In addition, the Company must use its best efforts to keep the shelf registration effective until March 22, 1999. The 8% Preferred Stock may not be redeemed prior to March 15, 1999. On or after March 15, 1999, the 8% Preferred Stock may be redeemed, in whole or in part, at the option of the Company, at specified redemption prices. The 8% Preferred Stock may be exchanged, in whole but not in part, at the option of the Company, for the Company's 8% 8 10 Convertible Subordinated Debentures Due 2006 (the "Debentures") on any dividend payment date beginning March 15, 1998 at the rate of $50 principal amount of Debentures for each share of 8% Preferred Stock outstanding at the time of exchange; provided that all accrued and unpaid dividends, whether or not earned or declared, on the 8% Preferred Stock to the date of exchange have been paid or set aside for payment and certain other conditions are met. On March 22, 1996, the Company announced a call for redemption on April 26, 1996 (the "Redemption Date") of all of its issued and outstanding 12% Preferred Stock. Such shares were redeemed at a redemption price (the "Redemption Price") per share equal to $75.00, plus accrued dividends to and including the Redemption Date, of $2.8667 per share. On April 26, 1996, the Company paid an aggregate of $84.9 million in redemption of the 12% Preferred Stock. 5. ACCOUNTING FOR STOCK-BASED COMPENSATION On January 1, 1996, TWA adopted Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). TWA elected to continue to apply the intrinsic value based method for recognizing compensation expense for stock-based employee compensation plans. Therefore the adoption of SFAS 123 had no impact on the Company's results of operations or financial position. 9 11 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized. TRANS WORLD AIRLINES, INC. Dated: May 24, 1996 By: /s/ Jody A. Ruth ----------------------------------- Vice President and Corporate Controller (duly authorized representative of registrant) 35 -----END PRIVACY-ENHANCED MESSAGE-----