UNITED STATES SECURITIES AND EXCHANGE COMMISSION
(Mark One)
| þ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the quarterly period ended September 30, 2003 |
or
| o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
| For the transition period from to |
Commission file number 1-12649
AMERICA WEST HOLDINGS CORPORATION
| DELAWARE | 86-0847214 | |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 111 WEST RIO SALADO PARKWAY, TEMPE, ARIZONA | 85281 | |
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| (Address of principal executive offices) | (Zip Code) |
(480) 693-0800
N/A
Commission file number 0-12337
AMERICA WEST AIRLINES, INC.
| DELAWARE | 86-0418245 | |
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 4000 EAST SKY HARBOR BLVD, PHOENIX, ARIZONA | 85034 | |
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| (Address of principal executive offices) | (Zip Code) |
(480) 693-0800
N/A
Indicate by check mark whether each 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 þ No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
As of October 21, 2003, America West Holdings Corporation has 941,431 shares of class A common stock and 34,616,013 shares of class B common stock outstanding. As of October 21, 2003, America West Airlines, Inc. has 1,000 shares of class B common stock outstanding, all of which are held by America West Holdings Corporation.
PART I - FINANCIAL INFORMATION
America West Holding Corporation (“Holdings” or the “Company”) is the holding company that owns all of the stock of America West Airlines, Inc. (“AWA”). AWA, the eighth largest passenger airline in the United States, accounted for most of Holdings’ revenues and expenses in 2003. In addition, Holdings owns all of the outstanding stock of The Leisure Company (“TLC”), which sells individual and group travel packages. This combined Form 10-Q is filed by both Holdings and AWA and includes the financial statements of each company in Item 1A and Item 1B, respectively.
| ITEM 1A. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – AMERICA WEST HOLDINGS CORPORATION. |
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Balance Sheets
(in thousands except share data)
| September 30, | December 31, | |||||||||
| 2003 | 2002 | |||||||||
| (unaudited) | ||||||||||
| Assets | ||||||||||
Current assets: |
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Cash and cash equivalents |
$ | 386,316 | $ | 335,750 | ||||||
Short-term investments |
40,185 | 24,738 | ||||||||
Restricted cash |
43,876 | — | ||||||||
Accounts receivable, net |
125,233 | 82,197 | ||||||||
Expendable spare parts and supplies, net |
58,192 | 55,894 | ||||||||
Prepaid expenses |
152,128 | 110,337 | ||||||||
Total current assets |
805,930 | 608,916 | ||||||||
Property and equipment: |
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Flight equipment |
885,684 | 880,446 | ||||||||
Other property and equipment |
273,641 | 274,329 | ||||||||
Equipment purchase deposits |
39,050 | 46,050 | ||||||||
| 1,198,375 | 1,200,825 | |||||||||
Less accumulated depreciation and amortization |
592,350 | 551,065 | ||||||||
Net property and equipment |
606,025 | 649,760 | ||||||||
Other assets: |
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Investments in debt securities |
44,688 | — | ||||||||
Restricted cash |
69,433 | 45,968 | ||||||||
Other assets, net |
136,965 | 134,309 | ||||||||
Total other assets |
251,086 | 180,277 | ||||||||
| $ | 1,663,041 | $ | 1,438,953 | |||||||
See accompanying notes to condensed consolidated financial statements.
2
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Balance Sheets
(in thousands except share data)
| September 30, | December 31, | |||||||||
| 2003 | 2002 | |||||||||
| (unaudited) | ||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||
Current liabilities: |
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Current maturities of long-term debt |
$ | 94,789 | $ | 19,116 | ||||||
Current obligations under capital leases |
3,441 | 3,122 | ||||||||
Accounts payable |
183,198 | 183,304 | ||||||||
Air traffic liability |
263,118 | 192,450 | ||||||||
Accrued compensation and vacation benefits |
52,645 | 39,076 | ||||||||
Accrued taxes |
47,562 | 35,159 | ||||||||
Other accrued liabilities |
39,279 | 38,607 | ||||||||
Total current liabilities |
684,032 | 510,834 | ||||||||
Long-term debt, less current maturities |
700,191 | 700,983 | ||||||||
Capital leases, less current obligations |
8,545 | 11,999 | ||||||||
Deferred credits and other liabilities |
142,791 | 146,959 | ||||||||
Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $.01 par value. Authorized 48,800,000
shares; no shares issued |
— | — | ||||||||
Class A common stock, $.01 par value. Authorized
1,200,000 shares; issued and outstanding 941,431 shares at
September 30, 2003 and December 31, 2002 |
9 | 9 | ||||||||
Class B common stock, $.01 par value. Authorized 100,000,000
shares; issued and outstanding 50,869,908 shares at September 30, 2003
and 49,055,180 shares at December 31, 2002 |
509 | 491 | ||||||||
Additional paid-in capital |
629,575 | 628,868 | ||||||||
Accumulated deficit |
(206,406 | ) | (257,014 | ) | ||||||
Accumulated other comprehensive income |
10,001 | 2,030 | ||||||||
| 433,688 | 374,384 | |||||||||
Less: Cost of class B common stock in treasury, 16,283,895
shares at September 30, 2003 and December 31, 2002 |
(306,206 | ) | (306,206 | ) | ||||||
Total stockholders’ equity |
127,482 | 68,178 | ||||||||
| $ | 1,663,041 | $ | 1,438,953 | |||||||
See accompanying notes to condensed consolidated financial statements.
3
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Statements of Operations
(in thousands except per share data)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
| September 30, | September 30, | |||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
| (as restated) | (as restated) | |||||||||||||||||
Operating revenues: |
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Passenger |
$ | 552,564 | $ | 489,327 | $ | 1,591,496 | $ | 1,433,611 | ||||||||||
Cargo |
6,201 | 6,045 | 21,101 | 20,620 | ||||||||||||||
Other |
33,537 | 24,979 | 78,709 | 70,557 | ||||||||||||||
Total operating revenues |
592,302 | 520,351 | 1,691,306 | 1,524,788 | ||||||||||||||
Operating expenses: |
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Salaries and related costs |
156,623 | 155,100 | 472,765 | 443,669 | ||||||||||||||
Aircraft rents |
74,417 | 76,548 | 221,862 | 220,057 | ||||||||||||||
Other rents and landing fees |
38,210 | 39,904 | 115,475 | 119,716 | ||||||||||||||
Aircraft fuel |
91,595 | 81,673 | 271,481 | 213,209 | ||||||||||||||
Agency commissions |
5,589 | 8,357 | 18,072 | 33,114 | ||||||||||||||
Aircraft maintenance materials and repairs |
50,854 | 57,726 | 173,572 | 186,521 | ||||||||||||||
Depreciation and amortization |
16,407 | 18,946 | 51,036 | 53,331 | ||||||||||||||
Special charges, net |
— | (2,000 | ) | 14,370 | 19,030 | |||||||||||||
Other |
108,472 | 124,264 | 332,373 | 358,353 | ||||||||||||||
Total operating expenses |
542,167 | 560,518 | 1,671,006 | 1,647,000 | ||||||||||||||
Operating income (loss) |
50,135 | (40,167 | ) | 20,300 | (122,212 | ) | ||||||||||||
Nonoperating income (expenses): |
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Interest income |
1,666 | 2,427 | 4,231 | 8,468 | ||||||||||||||
Interest expense, net |
(19,484 | ) | (17,887 | ) | (57,504 | ) | (55,018 | ) | ||||||||||
Federal government assistance |
— | 6,202 | 81,255 | 8,466 | ||||||||||||||
Other, net |
625 | (157 | ) | 2,326 | (2,449 | ) | ||||||||||||
Total nonoperating income (expenses), net |
(17,193 | ) | (9,415 | ) | 30,308 | (40,533 | ) | |||||||||||
Income (loss) before income tax benefit and
cumulative effect
of change in accounting principle |
32,942 | (49,582 | ) | 50,608 | (162,745 | ) | ||||||||||||
Income tax benefit |
— | — | — | (35,071 | ) | |||||||||||||
Income (loss) before cumulative effect of change in
accounting principle |
32,942 | (49,582 | ) | 50,608 | (127,674 | ) | ||||||||||||
Cumulative effect of change in accounting principle |
— | — | — | (208,223 | ) | |||||||||||||
Net income (loss) |
$ | 32,942 | $ | (49,582 | ) | $ | 50,608 | $ | (335,897 | ) | ||||||||
Basic income (loss) per share: |
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Income (loss) before cumulative effect of change in
accounting principle |
$ | 0.94 | $ | (1.47 | ) | $ | 1.48 | $ | (3.79 | ) | ||||||||
Cumulative effect of change in accounting principle |
— | — | — | (6.17 | ) | |||||||||||||
Basic income (loss) per share |
$ | 0.94 | $ | (1.47 | ) | $ | 1.48 | $ | (9.96 | ) | ||||||||
Diluted income (loss) per share: |
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Income (loss) before cumulative effect of change in
accounting principle |
$ | 0.60 | $ | (1.47 | ) | $ | 1.18 | $ | (3.79 | ) | ||||||||
Cumulative effect of change in accounting principle |
— | — | — | (6.17 | ) | |||||||||||||
Diluted income (loss) per share |
$ | 0.60 | $ | (1.47 | ) | $ | 1.18 | $ | (9.96 | ) | ||||||||
Shares used for computation: |
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Basic |
35,037 | 33,723 | 34,161 | 33,726 | ||||||||||||||
Diluted |
59,285 | 33,723 | 49,507 | 33,726 | ||||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Nine Months Ended | ||||||||||
| September 30, | ||||||||||
| 2003 | 2002 | |||||||||
| (as restated) | ||||||||||
Net cash provided by (used in) operating activities |
$ | 159,350 | $ | (24,876 | ) | |||||
Cash flows from investing activities: |
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Purchases of property and equipment |
(119,196 | ) | (117,816 | ) | ||||||
Purchases of short-term investments |
(51,186 | ) | (69,838 | ) | ||||||
Sales of short-term investments |
35,739 | 29,815 | ||||||||
Purchases of investments in debt securities |
(46,189 | ) | — | |||||||
Sales of investments in debt securities |
1,501 | — | ||||||||
(Increase) decrease in restricted cash |
(23,465 | ) | 1,349 | |||||||
Proceeds from disposition of assets |
24,283 | 90 | ||||||||
Proceeds from sale and leaseback of aircraft |
— | 175,478 | ||||||||
Net cash provided by (used in) investing activities |
(178,513 | ) | 19,078 | |||||||
Cash flows from financing activities: |
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Repayment of debt |
(14,719 | ) | (191,702 | ) | ||||||
Proceeds from issuance of debt |
86,828 | 435,386 | ||||||||
Payment of debt issue costs |
(3,105 | ) | (12,667 | ) | ||||||
Other |
725 | (149 | ) | |||||||
Net cash provided by financing activities |
69,729 | 230,868 | ||||||||
Net increase in cash and cash equivalents |
50,566 | 225,070 | ||||||||
Cash and cash equivalents at beginning of period |
335,750 | 156,865 | ||||||||
Cash and cash equivalents at end of period |
$ | 386,316 | $ | 381,935 | ||||||
Cash, cash equivalents and short-term investments at end of period |
$ | 426,501 | $ | 421,958 | ||||||
Cash, cash equivalents, short-term investments and investments in debt
securities at end of period |
$ | 471,189 | $ | 421,958 | ||||||
Cash paid (refunded) for: |
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Interest, net of amounts capitalized |
$ | 14,304 | $ | 20,005 | ||||||
Income taxes refunded |
$ | (438 | ) | $ | ||||||