SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2002 or |
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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 | |
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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 | ||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code (480) 693-0800
| N/A
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| (Former name, former address and former fiscal year, if changed since last report) |
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 | ||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code (480) 693-0800
| N/A
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| (Former name, former address and former fiscal year, if changed since last report) |
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 XX No ____
As of July 19, 2002, America West Holdings Corporation has 941,431 shares of class A common stock and 32,781,951 shares of class B common stock outstanding. As of July 19, 2002, 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
ITEM 1A. CONSOLIDATED FINANCIAL STATEMENTS – AMERICA WEST HOLDINGS CORPORATION
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Balance Sheets
(In thousands except share data)
| June 30, | December 31, | |||||||||||
| 2002 | 2001 | |||||||||||
| (Unaudited) | ||||||||||||
Assets |
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Current assets: |
||||||||||||
Cash and cash equivalents |
$ | 426,373 | $ | 156,865 | ||||||||
Short-term investments |
60,129 | — | ||||||||||
Accounts receivable, net |
123,900 | 109,012 | ||||||||||
Expendable spare parts and supplies, net |
50,455 | 51,833 | ||||||||||
Prepaid expenses |
78,667 | 43,688 | ||||||||||
Total current assets |
739,524 | 361,398 | ||||||||||
Property and equipment: |
||||||||||||
Flight equipment |
976,119 | 1,082,649 | ||||||||||
Other property and equipment |
268,415 | 258,400 | ||||||||||
Equipment purchase deposits |
46,150 | 49,650 | ||||||||||
| 1,290,684 | 1,390,699 | |||||||||||
Less accumulated depreciation and amortization |
619,783 | 564,796 | ||||||||||
Net property and equipment |
670,901 | 825,903 | ||||||||||
Other assets: |
||||||||||||
Restricted cash |
64,448 | 54,546 | ||||||||||
Reorganization value in excess of amounts allocable to
identifiable assets, net |
— | 272,284 | ||||||||||
Deferred tax asset, net |
84 | — | ||||||||||
Other assets, net |
149,184 | 56,778 | ||||||||||
Total other assets |
213,716 | 383,608 | ||||||||||
| $ | 1,624,141 | $ | 1,570,909 | |||||||||
See accompanying notes to condensed consolidated financial statements.
2
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Balance Sheets
(In thousands except share data)
| June 30, | December 31, | ||||||||||
| 2002 | 2001 | ||||||||||
| (Unaudited) | |||||||||||
Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Current maturities of long-term debt |
$ | 32,612 | $ | 119,141 | |||||||
Accounts payable |
178,593 | 253,318 | |||||||||
Air traffic liability |
249,407 | 187,714 | |||||||||
Accrued compensation and vacation benefits |
40,974 | 41,470 | |||||||||
Accrued taxes |
33,022 | 59,240 | |||||||||
Other accrued liabilities |
34,562 | 29,643 | |||||||||
Total current liabilities |
569,170 | 690,526 | |||||||||
Long-term debt, less current maturities |
720,198 | 222,955 | |||||||||
Deferred credits and other liabilities |
145,816 | 133,779 | |||||||||
Deferred tax liability, net |
— | 1,306 | |||||||||
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
June 30, 2002 and December 31, 2001 |
9 | 9 | |||||||||
Class B common stock, $.01 par value. Authorized 100,000,000
shares; issued and outstanding 49,065,846 shares at June 30, 2002
and 49,070,346 shares at December 31, 2001 |
491 | 491 | |||||||||
Additional paid-in capital |
629,028 | 593,784 | |||||||||
Retained earnings (deficit) |
(133,884 | ) | 232,875 | ||||||||
Accumulated other comprehensive income (loss) |
(481 | ) | 1,390 | ||||||||
| 495,163 | 828,549 | ||||||||||
Less: Cost of class B common stock in treasury, 16,283,895
shares at June 30, 2002 and December 31, 2001 |
(306,206 | ) | (306,206 | ) | |||||||
Total stockholders’ equity |
188,957 | 522,343 | |||||||||
| $ | 1,624,141 | $ | 1,570,909 | ||||||||
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 | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||
Operating revenues: |
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Passenger |
$ | 507,309 | $ | 547,428 | $ | 944,284 | $ | 1,100,194 | ||||||||||
Cargo |
7,255 | 9,762 | 14,575 | 19,760 | ||||||||||||||
Other |
29,582 | 30,009 | 45,578 | 54,718 | ||||||||||||||
Total operating revenues |
544,146 | 587,199 | 1,004,437 | 1,174,672 | ||||||||||||||
Operating expenses: |
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Salaries and related costs |
146,038 | 147,322 | 288,569 | 296,317 | ||||||||||||||
Aircraft rents |
70,618 | 89,002 | 143,509 | 176,880 | ||||||||||||||
Other rents and landing fees |
38,382 | 34,816 | 79,812 | 70,189 | ||||||||||||||
Aircraft fuel |
73,448 | 91,465 | 131,536 | 192,899 | ||||||||||||||
Agency commissions |
10,508 | 22,251 | 24,757 | 45,556 | ||||||||||||||
Aircraft maintenance materials and repairs |
63,537 | 65,304 | 128,795 | 130,468 | ||||||||||||||
Depreciation and amortization |
17,727 | 15,553 | 34,385 | 30,071 | ||||||||||||||
Amortization of excess reorganization value |
— | 4,974 | — | 9,948 | ||||||||||||||
Special charges |
— | 35,695 | 60,255 | 35,695 | ||||||||||||||
Other |
122,467 | 134,330 | 234,089 | 264,668 | ||||||||||||||
Total operating expenses |
542,725 | 640,712 | 1,125,707 | 1,252,691 | ||||||||||||||
Operating income (loss) |
1,421 | (53,513 | ) | (121,270 | ) | (78,019 | ) | |||||||||||
Nonoperating income (expenses): |
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Interest income |
3,252 | 4,489 | 6,041 | 7,521 | ||||||||||||||
Interest expense, net |
(19,958 | ) | (4,924 | ) | (37,131 | ) | (10,419 | ) | ||||||||||
Federal government assistance |
2,264 | — | 2,264 | — | ||||||||||||||
Other, net |
166 | 65 | (2,292 | ) | 124 | |||||||||||||
Total nonoperating expenses, net |
(14,276 | ) | (370 | ) | (31,118 | ) | (2,774 | ) | ||||||||||
Loss before income tax benefit and cumulative effect of change
in accounting principle |
(12,855 | ) | (53,883 | ) | (152,388 | ) | (80,793 | ) | ||||||||||
Income tax benefit |
(4,401 | ) | (11,399 | ) | (57,913 | ) | (25,473 | ) | ||||||||||
Loss before cumulative effect of change in accounting principle |
(8,454 | ) | (42,484 | ) | (94,475 | ) | (55,320 | ) | ||||||||||
Cumulative effect of change in accounting principle |
— | — | (272,284 | ) | — | |||||||||||||
Net loss |
$ | (8,454 | ) | $ | (42,484 | ) | $ | (366,759 | ) | $ | (55,320 | ) | ||||||
Basic loss per share: |
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Loss before cumulative effect of change in accounting principle |
$ | (0.25 | ) | $ | (1.26 | ) | $ | (2.80 | ) | $ | (1.64 | ) | ||||||
Cumulative effect of change in accounting principle |
— | — | (8.07 | ) | — | |||||||||||||
Basic loss per share |
$ | (0.25 | ) | $ | (1.26 | ) | $ | (10.87 | ) | $ | (1.64 | ) | ||||||
Diluted loss per share: |
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Loss before cumulative effect of change in accounting principle |
$ | (0.25 | ) | $ | (1.26 | ) | $ | (2.80 | ) | $ | (1.64 | ) | ||||||
Cumulative effect of change in accounting principle |
— | — | (8.07 | ) | — | |||||||||||||
Diluted loss per share |
$ | (0.25 | ) | $ | (1.26 | ) | $ | (10.87 | ) | $ | (1.64 | ) | ||||||
Shares used for computation: |
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Basic |
33,726 | 33,646 | 33,727 | 33,633 | ||||||||||||||
Diluted |
33,726 | 33,646 | 33,727 | 33,633 | ||||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
AMERICA WEST HOLDINGS CORPORATION
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended | ||||||||||
| June 30, | ||||||||||
| 2002 | 2001 | |||||||||
Net cash provided by operating activities |
$ | 789 | $ | 100,671 | ||||||
Cash flows from investing activities: |
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Purchases of property and equipment |
(78,953 | ) | (222,863 | ) | ||||||
Sales (purchases) of short-term investments |
(60,129 | ) | 22,822 | |||||||
Proceeds from sale and leaseback of aircraft |
175,478 | 64,000 | ||||||||
Equipment purchase deposits and other |
62 | 5,907 | ||||||||
Net cash provided by (used in) investing activities |
36,458 | (130,134 | ) | |||||||
Cash flows from financing activities: |
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Repayment of debt |
(165,999 | ) | (120,829 | ) | ||||||
Proceeds from issuance of debt |
435,386 | 152,422 | ||||||||
Payments of debt issue costs |
(36,987 | ) | — | |||||||
Other |
(139 | ) | (132 | ) | ||||||
Net cash provided by financing activities |
232,261 | 31,461 | ||||||||
Net increase in cash and cash equivalents |
269,508 | 1,998 | ||||||||
Cash and cash equivalents at beginning of period |
156,865 | |||||||||