-----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, VSko0Vv6bXHh3JQ+l6pB5y17ORojzJA1LDhP596eRUFBwD/+SV148vxLHQnpaJyM C6rqKGxSO50XWLjMTcLRRA== 0000950153-99-000947.txt : 19990722 0000950153-99-000947.hdr.sgml : 19990722 ACCESSION NUMBER: 0000950153-99-000947 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990721 ITEM INFORMATION: FILED AS OF DATE: 19990721 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICA WEST HOLDINGS CORP CENTRAL INDEX KEY: 0001029863 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 860847214 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-12649 FILM NUMBER: 99667978 BUSINESS ADDRESS: STREET 1: 51 W THIRD STREET STREET 2: C/O AMERICA WEST AIRLINES CITY: TEMPE STATE: AZ ZIP: 85281 BUSINESS PHONE: 6026930800 MAIL ADDRESS: STREET 1: 4000 E SKY HARBOR BLVD STREET 2: C/O AMERICA WEST AIRLINES CITY: PHOENIX STATE: AZ ZIP: 85034 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICA WEST AIRLINES INC CENTRAL INDEX KEY: 0000706270 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 860418245 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-12337 FILM NUMBER: 99667979 BUSINESS ADDRESS: STREET 1: 4000 E SKY HARBOR BLVD STREET 2: STE 2100 CITY: PHOENIX STATE: AZ ZIP: 85034 BUSINESS PHONE: 6026930800 MAIL ADDRESS: STREET 1: 4000 EAST SKY HARBOR BLVD STREET 2: STE 2100 CITY: PHOENIX STATE: AZ ZIP: 85034 8-K 1 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 21, 1999 Commission File Number 1-12649 AMERICA WEST HOLDINGS CORPORATION (Exact name of registrant as specified in its charter) Delaware 86-0847214 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 51 W. Third Street (602) 693-0800 Tempe, Arizona 85281 (Registrant's telephone number, (Address of principal executive offices) including area code) Commission File Number 1-10140 AMERICA WEST AIRLINES, INC. (Exact name of registrant as specified in its charter) Delaware 86-0418245 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4000 E. Sky Harbor Boulevard (602) 693-0800 Phoenix, Arizona 85034-3899 (Registrant's telephone number, (Address of principal executive offices) including area code) 2 FORM 8-K AMERICA WEST HOLDINGS CORPORATION AMERICA WEST AIRLINES, INC. ITEM 5. OTHER EVENTS America West Holdings Corporation Press Release issued July 20, 1999 regarding 1999 Second Quarter Earnings (copy of press release attached hereto) 3 [AMERICA WEST HOLDING CORPORATION LETTERHEAD] Investor Contact: Nancy Gore Phoenix, AZ (PDT) 480/693-2843 Media Contact: Patty Nowack Phoenix, AZ (PDT) 480/693-5729 FOR IMMEDIATE RELEASE: Tues., July 20, 1999 AMERICA WEST REPORTS RECORD SECOND QUARTER EARNINGS; EARNINGS PER SHARE INCREASE 23 PERCENT PHOENIX (NYSE:AWA)--American West Holdings Corporation, parent company of America West Airlines, Inc. and The Leisure Company, today reported record second quarter 1999 net income of $42.3 million, the best quarterly earnings in Company history. Diluted earnings per share (EPS) for the 1999 second quarter were a record $1.06, a 23 percent increase over 1998's second quarter EPS, the previous record of $0.86. Year-to-date performance also set records for the best half year in America West's history including record operating revenues of $1.1 billion, record net income of $68.2 million and record EPS of $1.68. Excluding the amortization of excess reorganization value (ERV), diluted earnings per share would have been $1.19 for the 1999 second quarter versus the reported $1.06 and $1.95 year-to-date versus the reported $1.68. "We are very pleased to report our seventh consecutive record quarter, and the best quarter in our Company's history," said William A. Franke, chairman and chief executive officer, America West Holdings Corporation. "These results reflect the success of our strategies at both America West Airlines and The Leisure Company and reinforce our commitment to continued growth." more/... 4 America West Holdings Corporation Second Quarter 1999 Financial Results / 2 America West Airlines reported record second quarter revenue of $554.2 million compared with $519.5 million in the 1998 quarter. Passenger revenue per available seat mile (RASM) of 8.08 cents was up 0.1 percent compared with a year ago, despite a 4.8 percent increase in average stage length. Operating cost per available seat mile (CASM) rose 1.0 percent to 7.40 cents, driven by Year 2000 (Y2K) computer readiness expenditures and higher fuel prices. A total of $9.7 million was spent on the Y2K project in this year's quarter, an increase of $8.5 million over the second quarter 1998. Fuel expense for the quarter increased 11 percent to $53.1 million, driven by a 3.8 percent increase in average cost per gallon. Fuel expense was reduced by the Company's fuel hedging program, which resulted in $1.3 million of savings in the second quarter. Excluding Y2K expenses and fuel, CASM declined 1.0 percent in the quarter. The Leisure Company reported second quarter revenues of $65.6 million, a 30 percent increase over the prior year's quarter. The revenue growth was driven by two acquisitions over the past year. Gross profit increased 8.0 percent to $15.4 million. Pretax earnings decreased slightly from $3.8 million in 1998 to $3.4 million due to higher infrastructure costs related to future growth needs and a year-over-year increase in fees paid for services provided by America West Airlines. Year-to-date revenues for The Leisure Company were $111.6 million, a 19.5 percent increase. Pretax earnings for the half-year increased 3.4 percent to $6.4 million. America West Holdings, pursuant to its stock repurchase program, purchased $35.8 million of its equity since the first quarter's reporting date in mid-April. Year-to-date purchases total $55.8 million. The Corporation has now returned more than $247.5 million to its equity holders through stock and warrant repurchases. 5 America West Holdings Corporation Second Quarter 1999 Financial Results / 3 Included in the current quarter's financial results was a $2.7 million pre-tax gain on the sale of Priceline.com equity. America West Airlines purchased 30,000 shares at a price of $16 per share through a directed shares program, which was set up as part of Priceline.com's initial public offering in March 1999. These shares were sold in June 1999. America West Airlines continues to hold 312,500 warrants to purchase Priceline.com common stock for $3.20 per share, which has a current value of approximately $30 million. These warrants are not yet registered. In addition to traditional earnings results, the Corporation also reports earnings per share excluding excess reorganization value (ERV). Amortized over a 20-year period, ERV is an intangible asset established as a result of America West's emergence from financial restructuring in August 1994. Management believes that an improved understanding of the Corporation's results can be gained by adjusting for the impact of this non-cash charge. This press release contains forward-looking statements within the meaning of the Securities Litigation Reform Act that involve risks and uncertainties, including competitive practices in the industry, the impact of changes in fuel prices, relationships with employees, the impact of industry regulation and other factors described from time to time in the Company's publicly available SEC reports, which could cause actual results to differ materially. 6 America West Holdings Corporation Second Quarter 1999 Financial Results / 4 America West Holdings Corporation is an aviation and travel services company with 1998 sales of $2.0 billion. Wholly owned subsidiary America West Airlines is the nation's ninth largest carrier serving more than 90 destinations in the U.S., Canada and Mexico. The Leisure Company, also a wholly owned subsidiary, is one of the nation's largest tour packagers. This press release, as well as releases issued in the past year by America West Holdings and its affiliates, can be accessed on the America West Internet site at www.americawest.com or via the Corporation's fax-on-demand system by calling 888/AWA-FAXS. The following tables outline the second quarter and year-to-date 1999 financial and statistical results of America West: 7 America West Holdings Corporation Second Quarter 1999 Financial Results/5 America West Holdings Corporation Condensed Consolidated Statements of Income (in thousands except per share amounts) (unaudited)
3 Months Ended 3 Months Ended Percent June 30, 1999 June 30, 1998 Change -------------- -------------- ------- Operating revenues: Passenger $524,246 $491,042 6.8 Cargo 10,670 11,887 (10.2) TLC net revenues 15,393 14,258 8.0 Other 19,171 16,508 16.1 -------- -------- Total Operating revenues 569,480 533,695 6.7 -------- -------- Operating expenses: Salaries and related costs 120,434 112,743 6.8 Aircraft rental 65,577 60,195 8.9 Rentals and landing fees 31,589 28,795 9.7 Aircraft fuel 53,070 47,798 11.0 Agency commissions 30,750 34,900 (11.9) Aircraft maintenance materials and repairs 51,938 44,041 17.9 Depreciation and amortization 12,322 12,765 (3.5) Reorganization value amortization 4,974 4,974 - TLC expenses 11,990 10,267 16.8 Other 111,245 100,476 10.7 -------- -------- Total operating expenses 493,889 456,954 8.1 -------- -------- Operating income 75,591 76,741 (1.5) -------- -------- Nonoperating income (expenses): Interest income 2,658 3,972 (33.1) Interest expense, net (5,995) (6,313) (5.0) Other, net 3,064 (652) n.m. -------- -------- Total nonoperating expenses, net (273) (2,993) (90.9) -------- -------- Income before income taxes 75,318 73,748 2.1 -------- -------- Income taxes 33,064 32,331 2.3 -------- -------- Net income $ 42,254 $ 41,417 2.0 ======== ======== Earnings per share: Basic: $ 1.12 $ 0.95 17.9 ======== ======== Diluted: $ 1.06 $ 0.86 23.3 ======== ======== Shares used for computation: Basic: 37,824 43,617 (13.3) ======== ======== Diluted: 39,985 48,410 (17.4) ======== ========
8 America West Holdings Corporation Second Quarter 1999 Financial Results / 6 America West Airlines, Inc. Statements of Income (in thousands) (unaudited)
3 Months Ended 3 Months Ended Percent June 30, 1999 June 30, 1998 Change -------------- -------------- ------- Operating revenues: Passenger........................................ $524,246 $491,042 6.8 Cargo............................................ 10,670 11,887 (10.2) Other............................................ 19,277 16,560 16.4 -------- -------- Total operating revenues......................... 554,193 519,489 6.7 -------- -------- Operating expenses: Salaries and related costs....................... 119,962 112,262 6.9 Aircraft rental.................................. 65,577 60,195 8.9 Rentals and landing fees......................... 31,589 28,794 9.7 Aircraft fuel.................................... 53,070 47,798 11.0 Agency commissions............................... 30,750 34,900 (11.9) Aircraft maintenance materials and repairs....... 51,938 44,041 17.9 Depreciation and amortization.................... 12,322 12,765 (3.5) Reorganization value amortization................ 4,974 4,974 - Other............................................ 109,952 99,968 10.0 -------- -------- Total operating expenses......................... 480,134 445,697 7.7 -------- -------- Operating income................................. 74,059 73,792 0.4 -------- -------- Nonoperating income (expenses): Interest income.................................. 4,402 6,041 (27.1) Interest expense, net............................ (7,804) (8,263) (5.6) Other, net....................................... 3,238 - - -------- -------- Total nonoperating expenses, net................. (164) (2,222) (92.6) -------- -------- Income before income taxes......................... $ 73,895 $ 71,570 3.2 ======== ========
9 America West Holdings Corporation Second Quarter 1999 Financial Results / 7
3 Months Ended 3 Months Ended Percent June 30, 1999 June 30, 1998 Change Operating Statistics: Number of aircraft at end of period 113 104 8.7 Available seat miles/ASMs (in millions) 6,491 6,082 6.7 Block hours 122,692 115,050 6.6 Average stage length (miles) 858 819 4.8 Revenue passenger miles/RPMs (in millions) 4,477 4,287 4.4 Load Factor (%) 69.0 70.5 (1.5) points Passenger enplanements (000) 4,724 4,643 1.7 Passenger yield (cents) 11.71 11.46 2.2 Passenger revenue per ASM (cents) 8.08 8.07 0.1 Operating cost per ASM (cents) 7.40 7.33 1.0 Average fuel cost per gallon (cents) 51.08 49.23 3.8 Fuel gallons consumed (in millions) 103.9 97.1 7.0 Full-time equivalent employees at end of period 11,181 10,526 6.2
10 America West Holdings Corporation Second Quarter 1999 Financial Results / 8 The Leisure Company Statements of Income (in thousands) (unaudited)
3 Months Ended 3 Months Ended Percent June 30, 1999 June 30, 1998 Change -------------- -------------- ------- Operating revenues $65,553 $50,436 30.0 Cost of goods sold 50,160 36,178 38.6 ------- ------- Net revenues 15,393 14,258 8.0 Total operating expenses 11,990 10,267 16.8 ------- ------- Operating income 3,403 3,991 (14.7) ------- ------- Nonoperating income (expenses), net 36 (147) n.m. ------- ------- Income before income taxes $ 3,439 $ 3,844 (10.5) ======= =======
America West Holdings Corporation Adjustment for Amortization of Excess Reorganization Value (ERV)(a) (in thousands except per share data)
3 Months Ended 3 Months Ended June 30, 1999 June 30, 1998 -------------- -------------- Diluted EPS - as reported $ 1.06 $ 0.86 Pretax amortization of ERV(b) 5,373 5,373 After-tax amortization of ERV(c) 5,373 5,373 Diluted shares 39,985 48,410 Amortization of ERV per share $ 0.13 $ 0.11 Diluted EPS - as adjusted $ 1.19 $ 0.97
(a) ERV is an intangible asset that was established upon the Company's emergence from financial restructuring in August 1994 and is being amortized over a 20-year period. (b) Includes $399,000 of ERV for second quarter 1999 and 1998, respectively, classified as TLC expenses. (c) Amortization of ERV is not a tax-deductible expense. 11 America West Holdings Corporation Second Quarter 1999 Financial Results/9 America West Holdings Corporation Condensed Consolidated Balance Sheets (in thousands of dollars)
June 30, 1999 December 31, 1998 ------------- ----------------- (unaudited) Assets Current assets Cash equivalents and short-term investments $ 186,592 $ 135,845 Other current assets, net 193,643 166,258 ---------- ---------- Total current assets 380,235 302,103 ---------- ---------- Property and equipment, net 777,111 762,040 Other assets Restricted cash 33,433 35,262 Reorganization value in excess of amounts allocable to identifiable assets, net 326,024 336,772 Deferred income tax and other assets 115,545 88,853 ---------- ---------- Total assets $1,632,348 $1,525,030 ========== ========== Liabilities and Stockholders' Equity Current liabilities Current maturities of long-term debt and capital leases $ 75,141 $ 80,439 Other liabilities 555,443 454,820 ---------- ---------- Total current liabilities 630,584 535,259 ---------- ---------- Long-term debt, less current maturities 198,003 207,906 Deferred credits and other noncurrent liabilities 109,621 112,407 Stockholders' equity 694,140 669,458 ---------- ---------- Total liabilities and stockholders' equity $1,632,348 $1,525,030 ========== ==========
12 America West Holdings Corporation Second Quarter 1999 Financial Results / 10 America West Holdings Corporation Condensed Consolidated Statements of Income (in thousands except per share amounts) (unaudited)
6 Months Ended 6 Months Ended Percent June 30, 1999 June 30, 1998 Change Operating revenues: Passenger ................................... $1,002,868 $ 934,834 7.3 Cargo ....................................... 21,398 24,492 (12.6) TLC net revenues ............................ 28,664 26,570 7.9 Other ....................................... 36,176 31,015 16.6 ---------- ---------- Total operating revenues .................... 1,089,106 1,016,911 7.1 ---------- ---------- Operating expenses: Salaries and related costs .................. 238,495 218,859 9.0 Aircraft rental ............................. 131,102 118,940 10.2 Rentals and landing fees .................... 60,850 58,253 4.5 Aircraft fuel ............................... 97,433 98,082 (0.7) Agency commissions .......................... 60,442 66,517 (9.1) Aircraft maintenance materials and repairs .. 100,624 86,469 16.4 Depreciation and amortization ............... 23,997 25,063 (4.3) Reorganization value amortization ........... 9,948 9,948 - TLC expenses ................................ 22,450 20,116 11.6 Other ....................................... 217,459 188,516 15.4 ---------- ---------- Total operating expenses .................... 962,800 890,763 8.1 ---------- ---------- Operating income ............................ 126,306 126,148 0.1 ---------- ---------- Nonoperating income (expenses): Interest income ............................. 5,560 6,972 (20.3) Interest expense, net ....................... (12,257) (14,048) (12.7) Other, net .................................. 2,446 (1,068) n.m. ---------- ---------- Total nonoperating expenses, net ............ (4,251) (8,144) (47.8) ---------- ---------- Income before income taxes ................... 122,055 118,004 3.4 ---------- ---------- Income taxes ................................. 53,862 51,449 4.7 ---------- ---------- Net income ................................... $ 68,193 $ 66,555 2.5 ========== ========== Earnings per share: Basic: ...................................... $ 1.78 $ 1.52 17.1 ========== ========== Diluted: .................................... $ 1.68 $ 1.38 21.7 ========== ========== Shares used for computation: Basic: ...................................... $ 38,407 $ 43,808 (12.3) ========== ========== Diluted: .................................... $ 40,547 $ 48,132 (15.8) ========== ==========
13 America West Holdings Corporation Second Quarter 1999 Financial Results / 11 America West Airlines, Inc. Statements of Income (in thousands) (unaudited)
6 Months Ended 6 Months Ended Percent June 30, 1999 June 30, 1998 Change -------------- -------------- ------- Operating revenues: Passenger $1,002,868 $934,834 7.3 Cargo 21,398 24,492 (12.6) Other 36,389 31,116 16.9 -------------- -------------- Total operating revenues 1,060,655 990,442 7.1 -------------- -------------- Operating expenses: Salaries and related costs 237,517 217,846 9.0 Aircraft rental 131,102 118,940 10.2 Rentals and landing fees 60,850 58,252 4.5 Aircraft fuel 97,433 98,082 (0.7) Agency commissions 60,442 66,517 (9.1) Aircraft maintenance materials and repairs 100,624 86,469 16.4 Depreciation and amortization 23,997 25,063 (4.3) Reorganization value amortization 9,948 9,948 - Other 215,794 187,710 15.0 -------------- -------------- Total operating expenses 937,707 868,827 7.9 -------------- -------------- Operating income 122,948 121,615 1.1 -------------- -------------- Nonoperating income (expenses): Interest income 8,915 11,086 (19.6) Interest expense, net (15,824) (17,935) (11.8) Other, net 2,647 (264) n.m. -------------- -------------- Total nonoperating expenses, net (4,262) (7,113) (40.1) -------------- -------------- Income before income taxes $ 118,686 $114,502 3.7 ============== ==============
14 America West Holdings Corporation Second Quarter 1999 Financial Results / 12
6 Months Ended 6 Months Ended Percent June 30, 1999 June 30, 1998 Change -------------- -------------- ------- Operating Statistics: Number of aircraft at end of period 113 104 8.7 Available seat miles/ASMs (in millions) 12,789 11,928 7.2 Block hours 242,326 228,252 6.2 Average stage length (miles) 857 811 5.7 Revenue passenger miles/RPMs (in millions) 8,507 7,923 7.4 Load factor (%) 66.5 66.4 0.1 points Passenger enplanements (000) 8,987 8,792 2.2 Passenger yield (cents) 11.79 11.80 (0.1) Passenger revenue per ASM (cents) 7.84 7.84 -- Operating cost per ASM (cents) 7.33 7.28 0.7 Average fuel cost per gallon (cents) 47.90 51.56 (7.1) Fuel gallons consumed (in millions) 203.4 190.2 6.9 Full-time equivalent employees at end of period 11,181 10,526 6.2
15 America West Holdings Corporation Second Quarter 1999 Financial Results / 13 The Leisure Company Statements of Income (in thousands) (unaudited)
6 Months Ended 6 Months Ended Percent June 30, 1999 June 30, 1998 Change -------------- -------------- ------- Operating revenues $111,612 $93,396 19.5 Cost of goods sold 82,948 66,826 24.1 -------- ------- Net revenues 28,664 26,570 7.9 Total operating expenses 22,450 20,116 11.6 -------- ------- Operating income 6,214 6,454 (3.7) -------- ------- Nonoperating income (expenses), net 163 (286) n.m. -------- ------- Income before income taxes $ 6,377 $ 6,168 3.4 ======== =======
America West Holdings Corporation Adjustment for Amortization of Excess Reorganization Value (ERV)(a) (in thousands except per share data)
6 Months Ended 6 Months Ended June 30, 1999 June 30, 1998 -------------- -------------- Diluted EPS - as reported $ 1.68 $ 1.38 Pretax amortization of ERV (b) 10,746 10,746 After-tax amortization of ERV (c) 10,746 10,746 Diluted shares 40,547 48,132 Amortization of ERV per share $ 0.27 $ 0.22 Diluted EPS - as adjusted $ 1.95 $ 1.60
(a) ERV is an intangible asset that was established upon the Company's emergence from financial restructuring in August 1994 and is being amortized over a 20-year period. (b) Includes $798,000 of ERV for six months ended June 30, 1999 and 1998, respectively, classified as TLC expenses. (c) Amortization of ERV is not a tax-deductible expense. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 21, 1999 AMERICA WEST HOLDINGS CORPORATION By: /s/ W. Douglas Parker ------------------------------------------ W. Douglas Parker Executive Vice President AMERICA WEST AIRLINES, INC. By: /s/ Kathleen M. Doyle ------------------------------------------ Kathleen M. Doyle Vice President and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----