cbrown1
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http://www.usairways.com/en-US/aboutus/pressroom/pressreleases.html
US Airways Reports Record Second Quarter Profit
Record pretax profit of $409 million excluding special items
Highlights of US Airways Group, Inc.'s (the Company) second quarter 2013 results:
-- Second quarter pretax profit excluding net special items was a record $409 million - the highest for any quarter in Company history.
-- The Company has made significant progress with its merger integration planning efforts with American Airlines.The merger remains on track and the Company continues to expect it to close in the third quarter.
TEMPE, Ariz., July 24, 2013 /PRNewswire/ -- US Airways Group, Inc. (NYSE: LCC) today reported its second quarter 2013 financial results. For the second quarter 2013, pretax profit excluding net special items was $409 million, the highest in Company history. Net profit excluding net special items was a record $324 million, or $1.58 per diluted share. Net profit excluding net special items for the second quarter 2012 was $321 million, or $1.61 per diluted share. The Company's 2013 second quarter net profit excluding net special items was negatively impacted by a non-cash provision for income tax of $85 million. There was no provision for income tax recorded in 2012.
(Logo: http://photos.prnewswire.com/prnh/20120103/LA28814LOGO)
On a GAAP basis, the Company reported a net profit of $287 million for its second quarter 2013, or $1.40 per diluted share. This compares to a net profit of $306 million, or $1.54 per diluted share, for the same period in 2012. The Company's 2013 second quarter net profit was negatively impacted by a non-cash provision for income tax of $67 million.
See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.
"These record financial results are thanks to the 32,000 team members of US Airways who delivered record results on multiple fronts," said US Airways Chairman and CEO Doug Parker. "This performance provides excellent momentum as we transition into the new American Airlines. The teams are working very well together and we continue to expect to close the merger in the third quarter."
Revenue and Cost Comparisons
Total revenues in the second quarter were a record $3.9 billion, up 2.9 percent versus the second quarter 2012 on a 3.4 percent increase in total available seat miles (ASMs). Total revenue per ASM was 16.22 cents, down 0.5 percent versus the same period last year driven by a 2.8 percent decrease in passenger yield, offset by a record quarterly load factor of 85.1 percent.
Total operating expenses in the second quarter were $3.4 billion, up 1.0 percent over the same period last year. Mainline cost per available seat mile (CASM) was 12.88 cents, down 2.0 percent on a 4.2 percent increase in mainline ASMs. Excluding special items, fuel and profit sharing, mainline CASM was 8.21 cents, down 0.4 percent versus the same period last year. Express CASM excluding special items and fuel was 14.34 cents, up 1.1 percent on a 0.3 percent decrease in ASMs.
Liquidity
As of June 30, 2013, the Company had a record $4.0 billion in total cash and investments, of which $350 million was restricted. This is up approximately $1.1 billion from the Company's first quarter 2013 total cash and investments balance of $2.9 billion, of which $352 million was restricted.
During the second quarter, the Company raised approximately $870 million in net incremental cash through a series of financing transactions. These transactions included the refinancing of the Company's term loan (resulting in approximately $270 million in incremental cash); the issuance of high yield bonds in an aggregate principal amount of $500 million; and a $100 million C-tranche to its 2012-2 EETC.
"We are extremely pleased with the results of our recent financing transactions," said US Airways' Chief Financial Officer Derek Kerr. "Our record financial results combined with our pending merger with American have enabled the Company to refinance its term loan and secure incremental liquidity at very attractive rates."
Special Items
The Company recognized approximately $55 million of net special items before taxes in the second quarter. Operating special items totaled $24 million and were primarily related to merger costs. The Company also recognized approximately $31 million in nonoperating special items primarily related to debt extinguishment charges due to non-cash write offs of debt discount and debt issuance costs in connection with conversions of the Company's 7.25% convertible senior notes and repayment of the Citicorp North America term loan. The net tax effect of these special items was approximately $18 million.
Merger Update
The Company and its representatives continue to work closely with their counterparts at American in merger integration planning. The Company continues to expect the transaction to close in the third quarter. Recent accomplishments include:
June 10: US Airways and American announced the new Board of Directors and the senior leadership team for the new American Airlines Group Inc.
June 10: The Securities Exchange Commission (SEC) Form S-4 Registration Statement was declared effective by the SEC.
June 19: US Airways' Chairman and CEO Doug Parker and American Airlines' Senior Vice President, General Counsel & Chief Compliance Officer Gary Kennedy, jointly testified before the Senate Subcommittee on Aviation, Operations, Safety and Security about the benefits of the new American Airlines to customers, employees, financial stakeholders and communities.
July 12: US Airways' shareholders approved the proposed merger with 99.8 percent in favor and 0.2 percent against.
To date, leadership teams have been announced for operations, finance, revenue management, marketing, human resources, corporate communications, and legal and labor relations.
Notable Accomplishments
The Company completed installation of Gogo? Wi-Fi in-flight Internet service on its fleet of 270 Airbus A319, A320, A321 and Embraer 190 aircraft along with 58 Embraer 170 and 175 aircraft operated by Republic Airlines as US Airways Express. With the completion of installation, 90 percent of US Airways' domestic flights now offer customers in-flight wireless access.
After a four-year hiatus, the Company resumed service to Shannon, Ireland with daily, non-stop, summer service from its international gateway at Philadelphia.
US Airways launched year-round, daily non-stop service to Sao Paulo, Brazil from its largest hub at Charlotte, N.C. The new flight is US Airways' second destination in South America and complements the airline's existing non-stop service to Rio de Janeiro from Charlotte.
The US Airways Education Foundation awarded a record $455,000 in college scholarships to 130 children of employees and retirees. Since 1992, the US Airways Education Foundation has awarded nearly $4.6 million in scholarships to dependents of US Airways employees as well as grants to nonprofit organizations that support children's educational programs. The Foundation is funded entirely by fundraising events and donations.
US Airways received FAA certification on its wide-body Airbus A330 aircraft for SafeRoute?, a set of four flight deck applications that will provide enhanced operational safety and efficiency in all phases of flight as part of the FAA's NextGen implementation program. US Airways is the first airline to receive certification for the combination of all four of these applications.
US Airways and airlines serving Philadelphia International Airport signed a new two year lease extension with the City of Philadelphia that allows for $734 million in new capital investments at the airport. Partnering with the City on these projects is critical to creating a better customer experience at US Airways' largest international gateway and also to the airport's long-term ability to compete with other hubs across the country.
For the second year in a row, US Airways was named "Best of the Best Top Veteran-Friendly Companies" by U.S. Veterans Magazine and a "Best for Vets" employer for the third year in a row by Military Times Edge Magazine.
