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FORM 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the Transition Period From
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to
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American Airlines Group Inc.
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(Exact name of registrant as specified in its charter)
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Delaware
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75-1825172
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4333 Amon Carter Blvd., Fort Worth, Texas 76155
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(817) 963-1234
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(Address of principal executive offices, including zip code)
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Registrant's telephone number, including area code
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American Airlines, Inc.
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(Exact name of registrant as specified in its charter)
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Delaware
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13-1502798
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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4333 Amon Carter Blvd., Fort Worth, Texas 76155
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(817) 963-1234
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(Address of principal executive offices, including zip code)
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Registrant's telephone number, including area code
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Page
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PART I: FINANCIAL INFORMATION
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Item 1A.
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Condensed Consolidated Financial Statements of American Airlines Group Inc.
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Condensed Consolidated Statements of Operations
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Condensed Consolidated Statements of Comprehensive Income (Loss)
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Condensed Consolidated Balance Sheets
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Condensed Consolidated Statements of Cash Flows
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Notes to the Condensed Consolidated Financial Statements
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Item 1B.
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Condensed Consolidated Financial Statements of American Airlines, Inc.
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Condensed Consolidated Statements of Operations
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Condensed Consolidated Statements of Comprehensive Income (Loss)
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Condensed Consolidated Balance Sheets
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Condensed Consolidated Statements of Cash Flows
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Notes to the Condensed Consolidated Financial Statements
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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PART II: OTHER INFORMATION
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Item 1.
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Legal Proceedings
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Item 1A.
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Risk Factors
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Item 6.
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Exhibits
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SIGNATURES
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ITEM 1A.
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AMERICAN AIRLINES GROUP INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Three Months Ended March 31,
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2014
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2013
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Operating revenues
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Mainline passenger
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$
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7,258
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$
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4,614
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Regional passenger
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1,407
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679
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Cargo
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206
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156
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Other
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1,124
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649
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Total operating revenues
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9,995
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6,098
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Operating expenses
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Aircraft fuel and related taxes
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2,711
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1,934
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Salaries, wages and benefits
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2,119
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1,267
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Regional expenses
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1,594
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780
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Maintenance, materials and repairs
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485
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326
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Other rent and landing fees
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424
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288
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Aircraft rent
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320
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165
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Selling expenses
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401
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290
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Depreciation and amortization
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307
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204
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Special items, net
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(137
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)
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71
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Other
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1,041
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702
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Total operating expenses
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9,265
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6,027
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Operating income
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730
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71
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Nonoperating income (expense)
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Interest income
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7
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4
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Interest expense, net of capitalized interest
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(243
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)
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(254
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)
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Other, net
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(1
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)
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(24
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)
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Total nonoperating expense, net
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(237
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)
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(274
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)
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Income (loss) before reorganization items, net
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493
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(203
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)
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Reorganization items, net
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—
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(160
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)
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Income (loss) before income taxes
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493
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(363
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)
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Income tax provision (benefit)
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13
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(22
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)
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Net income (loss)
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$
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480
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$
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(341
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)
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Earnings (loss) per share
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Basic
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$
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0.66
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$
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(1.37
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)
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Diluted
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$
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0.65
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$
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(1.37
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)
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Weighted average shares outstanding (in thousands)
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Basic
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723,971
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249,491
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Diluted
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741,335
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249,491
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Three Months Ended March 31,
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2014
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2013
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Net income (loss)
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$
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480
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$
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(341
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)
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Other comprehensive loss before tax:
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Defined benefit pension plans and retiree medical:
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Amortization of actuarial gain and prior service cost
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(45
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)
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(33
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)
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Derivative financial instruments:
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Change in fair value
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(67
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)
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(15
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)
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Reclassification into earnings
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7
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(1
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)
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Unrealized gain (loss) on investments:
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Net change in value
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2
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(1
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)
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Other comprehensive loss before tax
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(103
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)
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(50
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)
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Non-cash tax provision
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—
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—
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Comprehensive income (loss)
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$
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377
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$
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(391
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)
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March 31, 2014
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December 31, 2013
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ASSETS
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Current assets
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Cash
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$
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1,259
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$
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1,140
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Short-term investments
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8,405
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8,111
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Restricted cash and short-term investments
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947
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1,035
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Accounts receivable, net
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2,008
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1,560
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Aircraft fuel, spare parts and supplies, net
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1,052
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1,012
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Prepaid expenses and other
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1,522
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1,465
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Total current assets
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15,193
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14,323
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Operating property and equipment
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Flight equipment
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24,687
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23,730
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Ground property and equipment
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5,663
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5,585
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Equipment purchase deposits
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1,045
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1,077
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Total property and equipment, at cost
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31,395
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30,392
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Less accumulated depreciation and amortization
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(11,451
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)
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(11,133
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)
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Total property and equipment, net
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19,944
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19,259
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Other assets
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Goodwill
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4,089
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4,086
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Intangibles, net of accumulated amortization of $399 and $373, respectively
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2,319
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2,311
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Other assets
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2,192
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2,299
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Total other assets
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8,600
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8,696
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Total assets
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$
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43,737
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$
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42,278
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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Current liabilities
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Current maturities of long-term debt and capital leases
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$
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1,441
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$
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1,446
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Accounts payable
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1,646
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1,368
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Accrued salaries and wages
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908
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1,143
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Air traffic liability
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5,686
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4,380
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Frequent flyer liability
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2,951
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3,005
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Other accrued liabilities
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2,447
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2,464
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Total current liabilities
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15,079
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13,806
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Noncurrent liabilities
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Long-term debt and capital leases, net of current maturities
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15,244
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15,353
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Pension and postretirement benefits
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5,766
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5,828
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Deferred gains and credits, net
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990
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|
935
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Mandatorily convertible preferred stock and other bankruptcy settlement obligations
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2,322
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5,928
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Other liabilities
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3,241
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3,159
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Total noncurrent liabilities
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27,563
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31,203
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Commitments and contingencies
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Stockholders' equity (deficit)
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Common stock, $0.01 par value; 1,750,000,000 shares authorized, 649,953,273 shares outstanding as of March 31, 2014; 526,805,522 shares outstanding as of December 31, 2013.
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6
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|
5
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Additional paid-in capital
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14,040
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10,592
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Accumulated other comprehensive loss
|
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(2,135
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)
|
|
(2,032
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)
|
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Accumulated deficit
|
|
(10,816
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)
|
|
(11,296
|
)
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Total stockholders' equity (deficit)
|
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1,095
|
|
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(2,731
|
)
|
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Total liabilities and stockholders' equity (deficit)
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$
|
43,737
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|
|
$
|
42,278
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Three Months Ended March 31,
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2014
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2013
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Net cash provided by operating activities
|
|
$
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1,256
|
|
|
$
|
700
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Cash flows from investing activities:
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|
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Capital expenditures and aircraft purchase deposits
|
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(1,047
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)
|
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(885
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)
|
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Increase in short-term investments
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(294
|
)
|
|
(226
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)
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Decrease (increase) in restricted cash and short-term investments
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88
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|
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(3
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)
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Net proceeds from slot transaction
|
|
307
|
|
|
—
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Proceeds from sale of property and equipment
|
|
3
|
|
|
26
|
|
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Net cash used in investing activities
|
|
(943
|
)
|
|
(1,088
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)
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Cash flows from financing activities:
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Payments on long-term debt and capital leases
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(501
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)
|
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(394
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)
|
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Proceeds from issuance of long-term debt
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224
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|
|
161
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Payments of employee withholding taxes on net share issuances
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(84
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)
|
|
—
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Exercise of stock options
|
|
9
|
|
|
—
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Deferred financing costs
|
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(7
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)
|
|
(17
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)
|
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Sale-leaseback transactions
|
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165
|
|
|
764
|
|
||
Net cash provided by (used in) financing activities
|
|
(194
|
)
|
|
514
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|
||
Net increase in cash
|
|
119
|
|
|
126
|
|
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Cash at beginning of period
|
|
1,140
|
|
|
480
|
|
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Cash at end of period
|
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$
|
1,259
|
|
|
$
|
606
|
|
|
|
|
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|
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Non-cash investing and financing activities:
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|
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Settlement of bankruptcy settlement obligation
|
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$
|
3,557
|
|
|
$
|
—
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Supplemental information:
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|
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Interest paid, net of amounts capitalized
|
|
204
|
|
|
125
|
|
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Income tax paid
|
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3
|
|
|
2
|
|
•
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Reclassifications between various operating income line items to conform the presentation of Cargo and Other revenues.
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•
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Reclassifications between various operating expense line items to conform the presentation of Regional expenses.
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•
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Reclassifications between Other nonoperating income (expense), net and Operating expenses to conform the presentation of foreign currency gains and losses.
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Three Months Ended March 31,
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2013
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As Reclassified
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Historical
|
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Operating revenues:
|
|
|
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Mainline passenger
|
|
$
|
4,614
|
|
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$
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4,614
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Regional passenger
|
|
679
|
|
|
679
|
|
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Cargo
|
|
156
|
|
|
155
|
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Other
|
|
649
|
|
|
650
|
|
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Total operating revenues
|
|
6,098
|
|
|
6,098
|
|
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Operating expenses:
|
|
|
|
|
||||
Aircraft fuel and related taxes
|
|
1,934
|
|
|
2,200
|
|
||
Salaries, wages and benefits
|
|
1,267
|
|
|
1,484
|
|
||
Regional expenses
|
|
780
|
|
|
—
|
|
||
Maintenance, materials and repairs
|
|
326
|
|
|
383
|
|
||
Other rent and landing fees
|
|
288
|
|
|
346
|
|
||
Aircraft rent
|
|
165
|
|
|
164
|
|
||
Selling expenses
|
|
290
|
|
|
276
|
|
||
Depreciation and amortization
|
|
204
|
|
|
246
|
|
||
Special items, net
|
|
71
|
|
|
28
|
|
||
Other
|
|
702
|
|
|
919
|
|
||
Total operating expenses
|
|
6,027
|
|
|
6,046
|
|
||
Operating income
|
|
71
|
|
|
52
|
|
||
Nonoperating income (expense):
|
|
|
|
|
||||
Interest income
|
|
4
|
|
|
4
|
|
||
Interest expense, net of capitalized interest
|
|
(254
|
)
|
|
(250
|
)
|
||
Other, net
|
|
(24
|
)
|
|
(9
|
)
|
||
Total nonoperating expense, net
|
|
$
|
(274
|
)
|
|
$
|
(255
|
)
|
•
|
all secured claims against the Debtors have been reinstated;
|
•
|
allowed administrative claims, priority claims and convenience claims have been or will be paid in full in cash;
|
•
|
other holders of allowed pre-petition unsecured claims, holders of allowed interests and certain employees of AMR received or will receive
72%
of AAG Common Stock (on a fully converted basis) authorized to be issued pursuant to the Plan and in connection with the Merger under the following provisions:
|
◦
|
all creditors holding general unsecured claims against American that are guaranteed by AAG and general unsecured claims against AAG that are guaranteed by American (Double-Dip Unsecured Claims) were treated the same under the Plan. Holders of Double-Dip Unsecured Claims received, at the Effective Date, their recovery in shares of AAG Series A Preferred Stock with a stated amount equal to the allowed amount of their claims, including post-petition interest at the non-default rate;
|
◦
|
all creditors holding Single-Dip Unsecured Claims were treated the same regardless of whether the claim was asserted against the AAG Debtors, the American Debtors, or other Debtors. As used herein, "Single-Dip Unsecured Claims" means the general unsecured claims against the Debtors that are not guaranteed by any other Debtor, other than the claims of the Debtors' labor unions representing mainline workers. Holders of Single-Dip Unsecured Claims received, at the Effective Date, a portion of their recovery in shares of AAG Series A Preferred Stock and a right, subject to the trading price of the Company's common stock during the 120-day period after the Effective Date, to receive their remaining recovery in shares of AAG Common Stock 120 days after the Effective Date;
|
◦
|
holders of certain labor-related deemed claims and certain non-management, non-union employees as specified in the Plan received, at the Effective Date, the right to receive an allocation of shares of AAG Common Stock representing
23.6%
of the total number of shares of AAG Common Stock ultimately distributed to holders of pre-petition general unsecured creditors against the Debtors. On the Effective Date, pursuant to the Plan, an initial allocation of approximately
39 million
shares of AAG Common Stock was made related to these labor and employee groups, of which approximately
27 million
shares were distributed on the Effective Date and approximately
13 million
shares of which were withheld in connection with the Company making a cash payment of approximately
$300 million
for certain required withholding taxes;
|
◦
|
holders of allowed interests in AMR (primarily holders of AMR common stock existing immediately prior to the Effective Date) received, at the Effective Date, a distribution of approximately
26 million
shares of AAG Common Stock representing
3.5%
of the total number of shares of AAG Common Stock contemplated for issuance pursuant to the Plan and will receive additional shares of AAG Common Stock if, among other considerations, the trading price of the Company's common stock at various points during the 120-day period after the Effective Date provides for a full recovery to claimholders and other allowed priority interests; and
|
◦
|
holders of disputed claims at the Effective Date, to the extent such disputed claims become allowed Single-Dip Unsecured Claims after the Effective Date, are eligible to receive shares of AAG Common Stock held in reserve
|
•
|
$385 million
in cash to the Pension plans in connection with missed contributions to the pension plans during Chapter 11 and interest and penalty interest thereon;
|
•
|
$107 million
in cash to holders in partial or full satisfaction of their claims, including to holders of administrative claims, and state and local priority tax claims;
|
•
|
$196 million
in cure payments to holders of secured debt; and
|
•
|
Approximately
$380 million
for payroll taxes associated with equity distributions to employees.
|
(1)
|
Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to (i) the rejection or modification of financings related to aircraft and (ii) entry of orders treated as unsecured claims with respect to facility agreements supporting certain issuances of special facility revenue bonds. The Debtors recorded an estimated claim associated with the rejection or modification of a financing or facility agreement when the applicable motion was filed with the Bankruptcy Court to reject or modify such financing and the Debtors believed that it was probable the motion would be approved, and there was sufficient information to estimate the claim.
|
(2)
|
Pursuant to the Plan, the Debtors agreed to allow certain post-petition unsecured claims on obligations. As a result, during the
three
months ended
March 31, 2013
, the Company recorded reorganization charges to adjust estimated allowed claim amounts previously recorded on rejected special facility revenue bonds of
$127 million
, which are included in the table above.
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
AAG Series A Preferred Stock
|
|
$
|
589
|
|
|
$
|
3,833
|
|
Single-Dip equity obligations
|
|
1,259
|
|
|
1,246
|
|
||
Labor-related deemed claim
|
|
474
|
|
|
849
|
|
||
Total
|
|
$
|
2,322
|
|
|
$
|
5,928
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Mainline operating special items, net
(a)
|
|
$
|
(137
|
)
|
|
$
|
71
|
|
(a)
|
The 2014 first quarter mainline operating special items totaled a net credit of
$137 million
, which principally included a
$309 million
gain on the sale of slots at DCA and a net
$32 million
credit for bankruptcy related items primarily reflecting fair value adjustments for bankruptcy settlement obligations. These special credits were offset in part by
$142 million
of cash merger integration expenses including amounts related to the pilot memorandum of understanding, information technology, professional fees, severance, re-branding of aircraft and airport facilities, relocation and training as well as
$60 million
of non-cash compensation expense for merger equity awards.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Regional operating special items, net
|
|
$
|
4
|
|
|
$
|
2
|
|
Nonoperating special items, net
(b)
|
|
47
|
|
|
116
|
|
||
Reorganization items, net
(c)
|
|
—
|
|
|
160
|
|
||
Income tax special items, net
(d)
|
|
8
|
|
|
—
|
|
(b)
|
The
2014
first
quarter nonoperating special items of
$47 million
were principally due to non-cash interest accretion of
$31 million
on the bankruptcy settlement obligations.
|
(c)
|
In the
2013
first
quarter, the Company recognized reorganization expenses as a result of the filing of the Chapter 11 Cases. These amounts consisted primarily of estimated allowed claim amounts and professional fees.
|
(d)
|
The
2014
first
quarter included a special
$8 million
non-cash deferred income tax provision related to certain indefinite-lived intangible assets.
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Basic EPS:
|
|
|
|
||||
Net income (loss)
|
$
|
480
|
|
|
$
|
(341
|
)
|
Weighted-average common shares outstanding (in thousands)
|
723,971
|
|
|
249,491
|
|
||
Basic EPS
|
$
|
0.66
|
|
|
$
|
(1.37
|
)
|
|
|
|
|
||||
Diluted EPS:
|
|
|
|
||||
Net income (loss)
|
$
|
480
|
|
|
$
|
(341
|
)
|
Change in fair value of conversion feature on 7.25% convertible senior notes
(a)
|
5
|
|
|
—
|
|
||
Net income (loss) for purposes of computing diluted EPS
|
$
|
485
|
|
|
$
|
(341
|
)
|
Share computation for diluted EPS (in thousands):
|
|
|
|
||||
Weighted-average shares outstanding
|
723,971
|
|
|
249,491
|
|
||
Dilutive effect of stock awards
|
13,534
|
|
|
—
|
|
||
Assumed conversion of 7.25% convertible senior notes
(a)
|
3,830
|
|
|
—
|
|
||
Weighted average common shares outstanding - as adjusted
|
741,335
|
|
|
249,491
|
|
||
Diluted EPS
|
$
|
0.65
|
|
|
$
|
(1.37
|
)
|
|
|
|
|
||||
The following were excluded from the computation of diluted EPS (in thousands):
|
|
|
|
||||
Stock options, SARs and RSUs because inclusion would be antidilutive
|
33
|
|
|
20,010
|
|
||
Convertible notes because inclusion would be antidilutive
|
—
|
|
|
34,581
|
|
(a)
|
In March 2014, the Company notified the holders of US Airways Group's
7.25%
convertible senior notes that it has elected to settle all future conversions solely in cash instead of shares of AAG Common Stock in accordance with the related indenture. Thus, the diluted shares include the weighted average impact of the 7.25% convertible senior notes only for the period from January 1, 2014 to March 12, 2014. In addition, under GAAP, the Company must adjust the numerator for purposes of calculating diluted earnings per share by the change in fair value of the conversion feature from March 12, 2014 to March 31, 2014, which increased GAAP net income for purposes of computing diluted earnings per share by
$5 million
.
|
|
March 31,
2014 |
|
December 31, 2013
|
||||
Secured
|
|
|
|
||||
American
|
|
|
|
||||
Secured indebtedness, fixed and variable interest rates ranging from 1.43% to 8.10%, maturing from 2014 to 2023
|
$
|
1,966
|
|
|
$
|
2,140
|
|
Aircraft enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 4.00% to 7.00%, maturing from 2017 to 2025
|
3,415
|
|
|
3,516
|
|
||
Special facility revenue bonds, fixed interest rates ranging from 7.125% to 8.50%, maturing from 2016 to 2031
|
1,313
|
|
|
1,313
|
|
||
7.50% senior secured notes, interest only payments until due in 2016
|
900
|
|
|
1,000
|
|
||
Senior secured credit facility, variable interest rate of 3.75%, installments through 2019
|
1,886
|
|
|
1,891
|
|
||
AAdvantage Miles advance purchase, effective rate of 8.30%, installments through 2017
|
568
|
|
|
611
|
|
||
Other secured obligations, fixed interest rates ranging from 5.20% to 12.20%, maturing from 2014 to 2035
|
532
|
|
|
380
|
|
||
Total American secured debt
|
10,580
|
|
|
10,851
|
|
||
US Airways Group
|
|
|
|
||||
2013 Citicorp Credit Facility tranche B-1, variable interest rate of 3.50%, installments through 2019
|
1,000
|
|
|
1,000
|
|
||
2013 Citicorp Credit Facility tranche B-2, variable interest rate of 3.00%, installments through 2016
|
600
|
|
|
600
|
|
||
Aircraft enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 3.95% to 11.00%, maturing from 2014 to 2025
|
2,703
|
|
|
2,515
|
|
||
Equipment loans and other notes payable, fixed and variable interest rates ranging from 1.55% to 8.48%, maturing from 2015 to 2029
|
1,297
|
|
|
1,330
|
|
||
Other secured obligations, fixed interest rates ranging from 5.20% to 8.00%, maturing from 2015 to 2028
|
46
|
|
|
47
|
|
||
Total US Airways Group secured debt
|
5,646
|
|
|
5,492
|
|
||
Total AAG secured debt
|
16,226
|
|
|
16,343
|
|
||
Unsecured
|
|
|
|
||||
US Airways Group
|
|
|
|
||||
6.125% senior notes, interest only payments until due in 2018
|
500
|
|
|
500
|
|
||
7.25% convertible senior notes, interest only payments until due in 2014
|
22
|
|
|
22
|
|
||
Industrial development bonds, fixed interest rate of 6.30%, interest only payments until due in 2023
|
29
|
|
|
29
|
|
||
Total US Airways Group unsecured debt
|
551
|
|
|
551
|
|
||
Total AAG unsecured debt
|
551
|
|
|
551
|
|
||
Total long-term debt and capital lease obligations
|
16,777
|
|
|
16,894
|
|
||
Less: total unamortized debt discount
|
92
|
|
|
95
|
|
||
Less: current maturities
|
1,441
|
|
|
1,446
|
|
||
Long-term debt and capital lease obligations, net of current maturities
|
$
|
15,244
|
|
|
$
|
15,353
|
|
|
|
Fair Value Measurements as of March 31, 2014
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Short-term investments
(1), (2)
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
3,596
|
|
|
$
|
3,596
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government agency investments
|
|
941
|
|
|
—
|
|
|
941
|
|
|
—
|
|
||||
Repurchase agreements
|
|
99
|
|
|
—
|
|
|
99
|
|
|
—
|
|
||||
Corporate obligations
|
|
3,064
|
|
|
—
|
|
|
3,064
|
|
|
—
|
|
||||
Bank notes / Certificates of deposit / Time deposits
|
|
705
|
|
|
—
|
|
|
705
|
|
|
—
|
|
||||
|
|
8,405
|
|
|
3,596
|
|
|
4,809
|
|
|
—
|
|
||||
Restricted cash and short-term investments
(1)
|
|
947
|
|
|
891
|
|
|
56
|
|
|
—
|
|
||||
Fuel derivative contracts, net
(1)
|
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||
Total
|
|
$
|
9,402
|
|
|
$
|
4,487
|
|
|
$
|
4,915
|
|
|
$
|
—
|
|
(1)
|
Unrealized gains or losses on short-term investments, restricted cash and short-term investments, and derivatives qualifying for hedge accounting are recorded in Accumulated other comprehensive income (loss) at each measurement date.
|
(2)
|
The Company's short-term investments mature in one year or less except
$441 million
of U.S. government agency investments and
$2.1 billion
of corporate obligations.
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Long-term debt, including current maturities
|
|
$
|
16,685
|
|
|
$
|
17,494
|
|
|
$
|
16,799
|
|
|
$
|
17,035
|
|
|
|
Pension Benefits
|
|
Retiree Medical and Other Benefits
|
||||||||||||
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
186
|
|
|
163
|
|
|
15
|
|
|
13
|
|
||||
Expected return on assets
|
|
(196
|
)
|
|
(180
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||
Settlements
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
|
7
|
|
|
7
|
|
|
(61
|
)
|
|
(61
|
)
|
||||
Unrecognized net loss (gain)
|
|
11
|
|
|
23
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Net periodic benefit cost
|
|
$
|
10
|
|
|
$
|
14
|
|
|
$
|
(53
|
)
|
|
$
|
(54
|
)
|
|
Location in condensed consolidated statements of operations
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||||
Amount of gain (loss) reclassified from accumulated OCI into income
(1)
|
Aircraft fuel and related taxes
|
|
$
|
(7
|
)
|
|
$
|
1
|
|
Amount of gain (loss) recognized in income on derivative
(2)
|
Aircraft fuel and related taxes
|
|
5
|
|
|
7
|
|
||
Amount of gain (loss) recognized in condensed consolidated statements of operations
(3)
|
Aircraft fuel and related taxes
|
|
$
|
(2
|
)
|
|
$
|
8
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
Gross asset
(1)
|
$
|
50
|
|
|
$
|
109
|
|
Gross liability
(2)
|
—
|
|
|
—
|
|
||
Net recognized asset (liability) in condensed consolidated balance sheet
|
50
|
|
|
109
|
|
||
|
|
|
|
||||
Gross asset (liability) offset in condensed consolidated balance sheet:
|
|
|
|
||||
Financial instruments
|
—
|
|
|
—
|
|
||
Cash collateral received (posted)
(3)
|
—
|
|
|
—
|
|
||
Net amount
|
$
|
50
|
|
|
$
|
109
|
|
(1)
|
Fuel derivative assets are included in prepaid expenses and other on the accompanying condensed consolidated balance sheets.
|
(2)
|
Fuel derivative liabilities are included in accrued liabilities on the accompanying condensed consolidated balance sheets.
|
(3)
|
As of
March 31, 2014
, the Company had no posted cash collateral.
|
|
|
Pension and retiree medical liability
|
|
Unrealized gain/(loss) on investments
|
|
Derivative financial instruments
|
|
Income tax benefit (expense)
|
|
Total
|
||||||||||
Balance at December 31, 2013
|
|
$
|
(887
|
)
|
|
$
|
(2
|
)
|
|
$
|
67
|
|
|
$
|
(1,210
|
)
|
|
$
|
(2,032
|
)
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
(45
|
)
|
|
2
|
|
|
7
|
|
|
—
|
|
|
(36
|
)
|
|||||
Net current-period other comprehensive income (loss)
|
|
(45
|
)
|
|
2
|
|
|
(60
|
)
|
|
—
|
|
|
(103
|
)
|
|||||
Balance at March 31, 2014
|
|
$
|
(932
|
)
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
(1,210
|
)
|
|
$
|
(2,135
|
)
|
Details about accumulated other comprehensive income (loss) components
|
|
Amount reclassified from accumulated other comprehensive income (loss)
|
Affected line item in the statement where net income (loss) is presented
|
|||||||
|
Three Months Ended March 31,
|
|
||||||||
|
2014
|
|
2013
|
|
||||||
Amortization of pension and retiree medical liability:
|
|
|
|
|
|
|
||||
Prior service cost
|
|
$
|
(54
|
)
|
|
$
|
(54
|
)
|
|
Salaries, wages and benefits
|
Actuarial loss
|
|
9
|
|
|
21
|
|
|
Salaries, wages and benefits
|
||
Derivative financial instruments:
|
|
|
|
|
|
|
||||
Cash flow hedges
|
|
7
|
|
|
(1
|
)
|
|
Aircraft fuel and related taxes
|
||
Unrealized gain (loss) on investments:
|
|
|
|
|
|
|
||||
Net change in value
|
|
2
|
|
|
—
|
|
|
Other, net
|
||
Total reclassifications for the period
|
|
$
|
(36
|
)
|
|
$
|
(34
|
)
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Aircraft fuel and related taxes
|
|
$
|
500
|
|
|
$
|
265
|
|
Salaries, wages and benefits
|
|
265
|
|
|
173
|
|
||
Capacity purchases from third-party regional carriers
|
|
347
|
|
|
34
|
|
||
Maintenance, materials and repairs
|
|
87
|
|
|
70
|
|
||
Other rent and landing fees
|
|
96
|
|
|
59
|
|
||
Aircraft rent
|
|
14
|
|
|
1
|
|
||
Selling expenses
|
|
72
|
|
|
37
|
|
||
Depreciation and amortization
|
|
53
|
|
|
42
|
|
||
Special items, net
|
|
4
|
|
|
2
|
|
||
Other
|
|
156
|
|
|
97
|
|
||
Total regional expenses
|
|
$
|
1,594
|
|
|
$
|
780
|
|
|
|
Three Months Ended March 31, 2014
|
||||||||||||||||||||||||||
|
|
American Airlines Group (Parent Company Only)
|
|
American
|
|
US Airways Group (Parent Company Only)
|
|
US Airways
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Reclassifications
|
|
American Airlines Group Inc. Consolidated
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mainline passenger
|
|
$
|
—
|
|
|
$
|
4,906
|
|
|
$
|
—
|
|
|
$
|
2,352
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,258
|
|
Regional passenger
|
|
—
|
|
|
669
|
|
|
—
|
|
|
738
|
|
|
—
|
|
|
—
|
|
|
1,407
|
|
|||||||
Cargo
|
|
—
|
|
|
168
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
206
|
|
|||||||
Other
|
|
—
|
|
|
726
|
|
|
—
|
|
|
418
|
|
|
744
|
|
|
(764
|
)
|
|
1,124
|
|
|||||||
Total operating revenues
|
|
—
|
|
|
6,469
|
|
|
—
|
|
|
3,546
|
|
|
744
|
|
|
(764
|
)
|
|
9,995
|
|
|||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Aircraft fuel and related taxes
|
|
—
|
|
|
1,871
|
|
|
—
|
|
|
840
|
|
|
—
|
|
|
—
|
|
|
2,711
|
|
|||||||
Salaries, wages and benefits
|
|
—
|
|
|
1,398
|
|
|
—
|
|
|
719
|
|
|
197
|
|
|
(195
|
)
|
|
2,119
|
|
|||||||
Regional expenses
|
|
—
|
|
|
758
|
|
|
—
|
|
|
828
|
|
|
—
|
|
|
8
|
|
|
1,594
|
|
|||||||
Maintenance, materials and repairs
|
|
—
|
|
|
332
|
|
|
—
|
|
|
153
|
|
|
85
|
|
|
(85
|
)
|
|
485
|
|
|||||||
Other rent and landing fees
|
|
—
|
|
|
285
|
|
|
—
|
|
|
139
|
|
|
7
|
|
|
(7
|
)
|
|
424
|
|
|||||||
Aircraft rent
|
|
—
|
|
|
216
|
|
|
—
|
|
|
104
|
|
|
21
|
|
|
(21
|
)
|
|
320
|
|
|||||||
Selling expenses
|
|
—
|
|
|
284
|
|
|
—
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|
401
|
|
|||||||
Depreciation and amortization
|
|
—
|
|
|
214
|
|
|
—
|
|
|
95
|
|
|
10
|
|
|
(12
|
)
|
|
307
|
|
|||||||
Special items, net
|
|
24
|
|
|
(216
|
)
|
|
—
|
|
|
55
|
|
|
3
|
|
|
(3
|
)
|
|
(137
|
)
|
|||||||
Other
|
|
2
|
|
|
749
|
|
|
—
|
|
|
308
|
|
|
431
|
|
|
(449
|
)
|
|
1,041
|
|
|||||||
Total operating expenses
|
|
26
|
|
|
5,891
|
|
|
—
|
|
|
3,358
|
|
|
754
|
|
|
(764
|
)
|
|
9,265
|
|
|||||||
Operating income (loss)
|
|
(26
|
)
|
|
578
|
|
|
—
|
|
|
188
|
|
|
(10
|
)
|
|
—
|
|
|
730
|
|
|||||||
Nonoperating income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest income
|
|
2
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
(4
|
)
|
|
7
|
|
|||||||
Interest expense, net
|
|
(4
|
)
|
|
(168
|
)
|
|
(10
|
)
|
|
(65
|
)
|
|
—
|
|
|
4
|
|
|
(243
|
)
|
|||||||
Equity in earnings of subsidiaries
|
|
453
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
(571
|
)
|
|
—
|
|
|||||||
Other, net
|
|
—
|
|
|
(5
|
)
|
|
(56
|
)
|
|
3
|
|
|
1
|
|
|
56
|
|
|
(1
|
)
|
|||||||
Total nonoperating income (expense), net
|
|
451
|
|
|
(166
|
)
|
|
52
|
|
|
(61
|
)
|
|
2
|
|
|
(515
|
)
|
|
(237
|
)
|
|||||||
Income (loss) before income taxes
|
|
425
|
|
|
412
|
|
|
52
|
|
|
127
|
|
|
(8
|
)
|
|
(515
|
)
|
|
493
|
|
|||||||
Income tax provision
|
|
1
|
|
|
11
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||||
Net income (loss)
|
|
$
|
424
|
|
|
$
|
401
|
|
|
$
|
52
|
|
|
$
|
126
|
|
|
$
|
(8
|
)
|
|
$
|
(515
|
)
|
|
$
|
480
|
|
|
|
Three Months Ended March 31, 2014
|
||||||||||||||||||||||||||
|
|
American Airlines Group (Parent Company Only)
|
|
American
|
|
US Airways Group (Parent Company Only)
|
|
US Airways
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Reclassifications
|
|
American Airlines Group Inc. Consolidated
|
||||||||||||||
Net income (loss)
|
|
$
|
424
|
|
|
$
|
401
|
|
|
$
|
52
|
|
|
$
|
126
|
|
|
$
|
(8
|
)
|
|
$
|
(515
|
)
|
|
$
|
480
|
|
Other comprehensive loss before tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Defined benefit pension plans and retiree medical:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Amortization of actuarial gain and prior service cost
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
|||||||
Derivative financial instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in fair value
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|||||||
Reclassification into earnings
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||||
Unrealized gain (loss) on investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net change in value
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Other comprehensive loss before tax
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|||||||
Non-cash tax provision
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Comprehensive income (loss)
|
|
$
|
424
|
|
|
$
|
299
|
|
|
$
|
52
|
|
|
$
|
125
|
|
|
$
|
(8
|
)
|
|
$
|
(515
|
)
|
|
$
|
377
|
|
|
|
March 31, 2014
|
||||||||||||||||||||||||||
|
|
American Airlines Group (Parent Company Only)
|
|
American
|
|
US Airways Group (Parent Company Only)
|
|
US Airways
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Reclassifications
|
|
American Airlines Group Inc. Consolidated
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash
|
|
$
|
1
|
|
|
$
|
983
|
|
|
$
|
1
|
|
|
$
|
269
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
1,259
|
|
Short-term investments
|
|
—
|
|
|
4,979
|
|
|
—
|
|
|
3,423
|
|
|
3
|
|
|
—
|
|
|
8,405
|
|
|||||||
Restricted cash and short-term investments
|
|
—
|
|
|
699
|
|
|
—
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
947
|
|
|||||||
Accounts receivable, net
|
|
(7
|
)
|
|
1,521
|
|
|
—
|
|
|
473
|
|
|
21
|
|
|
—
|
|
|
2,008
|
|
|||||||
Receivables from related parties,net
|
|
2,474
|
|
|
—
|
|
|
155
|
|
|
444
|
|
|
499
|
|
|
(3,572
|
)
|
|
—
|
|
|||||||
Aircraft fuel, spare parts and supplies, net
|
|
—
|
|
|
664
|
|
|
—
|
|
|
330
|
|
|
58
|
|
|
—
|
|
|
1,052
|
|
|||||||
Prepaid expenses and other
|
|
—
|
|
|
606
|
|
|
—
|
|
|
989
|
|
|
22
|
|
|
(95
|
)
|
|
1,522
|
|
|||||||
Total current assets
|
|
2,468
|
|
|
9,452
|
|
|
156
|
|
|
6,176
|
|
|
608
|
|
|
(3,667
|
)
|
|
15,193
|
|
|||||||
Operating property and equipment
|
|
—
|
|
|
13,928
|
|
|
—
|
|
|
5,736
|
|
|
280
|
|
|
—
|
|
|
19,944
|
|
|||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Investment in subsidiaries
|
|
—
|
|
|
—
|
|
|
5,461
|
|
|
—
|
|
|
—
|
|
|
(5,461
|
)
|
|
—
|
|
|||||||
Goodwill
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,089
|
|
|
—
|
|
|
—
|
|
|
4,089
|
|
|||||||
Intangibles, net of accumulated amortization
|
|
—
|
|
|
844
|
|
|
—
|
|
|
1,475
|
|
|
—
|
|
|
—
|
|
|
2,319
|
|
|||||||
Other assets
|
|
42
|
|
|
2,016
|
|
|
—
|
|
|
136
|
|
|
32
|
|
|
(34
|
)
|
|
2,192
|
|
|||||||
Total other assets
|
|
42
|
|
|
2,860
|
|
|
5,461
|
|
|
5,700
|
|
|
32
|
|
|
(5,495
|
)
|
|
8,600
|
|
|||||||
Total assets
|
|
$
|
2,510
|
|
|
$
|
26,240
|
|
|
$
|
5,617
|
|
|
$
|
17,612
|
|
|
$
|
920
|
|
|
$
|
(9,162
|
)
|
|
$
|
43,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||||||||||||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current maturities of long-term debt and capital leases
|
|
$
|
—
|
|
|
$
|
951
|
|
|
$
|
22
|
|
|
$
|
468
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,441
|
|
Accounts payable
|
|
—
|
|
|
1,230
|
|
|
—
|
|
|
374
|
|
|
42
|
|
|
—
|
|
|
1,646
|
|
|||||||
Payables to related parties, net
|
|
—
|
|
|
2,843
|
|
|
421
|
|
|
84
|
|
|
224
|
|
|
(3,572
|
)
|
|
—
|
|
|||||||
Air traffic liability
|
|
—
|
|
|
3,808
|
|
|
—
|
|
|
1,878
|
|
|
—
|
|
|
—
|
|
|
5,686
|
|
|||||||
Frequent flyer liability
|
|
—
|
|
|
1,761
|
|
|
—
|
|
|
1,190
|
|
|
—
|
|
|
—
|
|
|
2,951
|
|
|||||||
Other accrued liabilities
|
|
(12
|
)
|
|
1,972
|
|
|
168
|
|
|
1,076
|
|
|
151
|
|
|
—
|
|
|
3,355
|
|
|||||||
Total current liabilities
|
|
(12
|
)
|
|
12,565
|
|
|
611
|
|
|
5,070
|
|
|
417
|
|
|
(3,572
|
)
|
|
15,079
|
|
|||||||
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt and capital leases, net of current maturities
|
|
7
|
|
|
9,590
|
|
|
523
|
|
|
5,158
|
|
|
—
|
|
|
(34
|
)
|
|
15,244
|
|
|||||||
Pensions and postretirement benefits
|
|
—
|
|
|
5,631
|
|
|
—
|
|
|
108
|
|
|
27
|
|
|
—
|
|
|
5,766
|
|
|||||||
Mandatorily convertible preferred stock and other bankruptcy settlement obligations
|
|
74
|
|
|
2,242
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
2,322
|
|
|||||||
Negative investment in subsidiaries
|
|
1,345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,345
|
)
|
|
—
|
|
|||||||
Other liabilities
|
|
1
|
|
|
2,453
|
|
|
—
|
|
|
1,861
|
|
|
272
|
|
|
(356
|
)
|
|
4,231
|
|
|||||||
Total noncurrent liabilities
|
|
1,427
|
|
|
19,916
|
|
|
523
|
|
|
7,127
|
|
|
305
|
|
|
(1,735
|
)
|
|
27,563
|
|
|||||||
Stockholders’ equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Additional paid-in capital
|
|
14,040
|
|
|
8,481
|
|
|
4,629
|
|
|
5,468
|
|
|
192
|
|
|
(18,770
|
)
|
|
14,040
|
|
|||||||
Accumulated other comprehensive income (loss)
|
|
(2,135
|
)
|
|
(2,254
|
)
|
|
11
|
|
|
11
|
|
|
—
|
|
|
2,232
|
|
|
(2,135
|
)
|
|||||||
Retained earnings (deficit)
|
|
(10,816
|
)
|
|
(12,468
|
)
|
|
(157
|
)
|
|
(64
|
)
|
|
6
|
|
|
12,683
|
|
|
(10,816
|
)
|
|||||||
Total stockholders’ equity (deficit)
|
|
1,095
|
|
|
(6,241
|
)
|
|
4,483
|
|
|
5,415
|
|
|
198
|
|
|
(3,855
|
)
|
|
1,095
|
|
|||||||
Total liabilities and stockholders’ equity (deficit)
|
|
$
|
2,510
|
|
|
$
|
26,240
|
|
|
$
|
5,617
|
|
|
$
|
17,612
|
|
|
$
|
920
|
|
|
$
|
(9,162
|
)
|
|
$
|
43,737
|
|
|
|
December 31, 2013
|
||||||||||||||||||||||||||
|
|
American Airlines Group (Parent Company Only)
|
|
American
|
|
US Airways Group (Parent Company Only)
|
|
US Airways
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Reclassifications
|
|
American Airlines Group Inc. Consolidated
|
||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash
|
|
$
|
1
|
|
|
$
|
829
|
|
|
$
|
1
|
|
|
$
|
303
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
1,140
|
|
Short-term investments
|
|
—
|
|
|
5,162
|
|
|
—
|
|
|
2,947
|
|
|
2
|
|
|
—
|
|
|
8,111
|
|
|||||||
Restricted cash and short-term investments
|
|
—
|
|
|
702
|
|
|
—
|
|
|
333
|
|
|
—
|
|
|
—
|
|
|
1,035
|
|
|||||||
Accounts receivable, net
|
|
—
|
|
|
1,186
|
|
|
—
|
|
|
357
|
|
|
17
|
|
|
—
|
|
|
1,560
|
|
|||||||
Receivables from related parties, net
|
|
2,468
|
|
|
—
|
|
|
144
|
|
|
407
|
|
|
459
|
|
|
(3,478
|
)
|
|
—
|
|
|||||||
Aircraft fuel, spare parts and supplies, net
|
|
—
|
|
|
620
|
|
|
—
|
|
|
296
|
|
|
96
|
|
|
—
|
|
|
1,012
|
|
|||||||
Prepaid expenses and other
|
|
—
|
|
|
702
|
|
|
—
|
|
|
857
|
|
|
20
|
|
|
(114
|
)
|
|
1,465
|
|
|||||||
Total current assets
|
|
2,469
|
|
|
9,201
|
|
|
145
|
|
|
5,500
|
|
|
600
|
|
|
(3,592
|
)
|
|
14,323
|
|
|||||||
Operating property and equipment
|
|
—
|
|
|
13,469
|
|
|
—
|
|
|
5,506
|
|
|
284
|
|
|
—
|
|
|
19,259
|
|
|||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment in subsidiaries
|
|
—
|
|
|
—
|
|
|
5,317
|
|
|
—
|
|
|
—
|
|
|
(5,317
|
)
|
|
—
|
|
|||||||
Goodwill
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,086
|
|
|
—
|
|
|
—
|
|
|
4,086
|
|
|||||||
Intangibles, net of accumulated amortization
|
|
—
|
|
|
812
|
|
|
—
|
|
|
1,496
|
|
|
3
|
|
|
—
|
|
|
2,311
|
|
|||||||
Other assets
|
|
42
|
|
|
2,130
|
|
|
—
|
|
|
131
|
|
|
30
|
|
|
(34
|
)
|
|
2,299
|
|
|||||||
Total other assets
|
|
42
|
|
|
2,942
|
|
|
5,317
|
|
|
5,713
|
|
|
33
|
|
|
(5,351
|
)
|
|
8,696
|
|
|||||||
Total assets
|
|
$
|
2,511
|
|
|
$
|
25,612
|
|
|
$
|
5,462
|
|
|
$
|
16,719
|
|
|
$
|
917
|
|
|
$
|
(8,943
|
)
|
|
$
|
42,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||||||||||||||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Current maturities of long-term debt and capital leases
|
|
$
|
—
|
|
|
$
|
957
|
|
|
$
|
22
|
|
|
$
|
467
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,446
|
|
Accounts payable
|
|
—
|
|
|
1,013
|
|
|
—
|
|
|
304
|
|
|
51
|
|
|
—
|
|
|
1,368
|
|
|||||||
Payables to related parties, net
|
|
—
|
|
|
2,807
|
|
|
408
|
|
|
50
|
|
|
213
|
|
|
(3,478
|
)
|
|
—
|
|
|||||||
Air traffic liability
|
|
—
|
|
|
3,145
|
|
|
—
|
|
|
1,235
|
|
|
—
|
|
|
—
|
|
|
4,380
|
|
|||||||
Frequent flyer liability
|
|
—
|
|
|
1,760
|
|
|
—
|
|
|
1,245
|
|
|
—
|
|
|
—
|
|
|
3,005
|
|
|||||||
Other accrued liabilities
|
|
(9
|
)
|
|
2,237
|
|
|
103
|
|
|
1,137
|
|
|
139
|
|
|
—
|
|
|
3,607
|
|
|||||||
Total current liabilities
|
|
(9
|
)
|
|
11,919
|
|
|
533
|
|
|
4,438
|
|
|
403
|
|
|
(3,478
|
)
|
|
13,806
|
|
|||||||
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Long-term debt and capital leases, net of current maturities
|
|
7
|
|
|
9,852
|
|
|
523
|
|
|
5,005
|
|
|
—
|
|
|
(34
|
)
|
|
15,353
|
|
|||||||
Pensions and postretirement benefits
|
|
—
|
|
|
5,693
|
|
|
—
|
|
|
109
|
|
|
26
|
|
|
—
|
|
|
5,828
|
|
|||||||
Mandatorily convertible preferred stock and other bankruptcy settlement obligations
|
|
435
|
|
|
5,424
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
5,928
|
|
|||||||
Negative investment in subsidiaries
|
|
4,808
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,808
|
)
|
|
—
|
|
|||||||
Other liabilities
|
|
1
|
|
|
2,384
|
|
|
—
|
|
|
1,905
|
|
|
277
|
|
|
(473
|
)
|
|
4,094
|
|
|||||||
Total noncurrent liabilities
|
|
5,251
|
|
|
23,353
|
|
|
523
|
|
|
7,019
|
|
|
372
|
|
|
(5,315
|
)
|
|
31,203
|
|
|||||||
Stockholders’ equity (deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Common stock
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||||
Additional paid-in capital
|
|
10,592
|
|
|
5,361
|
|
|
4,602
|
|
|
5,441
|
|
|
126
|
|
|
(15,530
|
)
|
|
10,592
|
|
|||||||
Accumulated other comprehensive income (loss)
|
|
(2,032
|
)
|
|
(2,152
|
)
|
|
12
|
|
|
12
|
|
|
—
|
|
|
2,128
|
|
|
(2,032
|
)
|
|||||||
Retained earnings (deficit)
|
|
(11,296
|
)
|
|
(12,869
|
)
|
|
(208
|
)
|
|
(191
|
)
|
|
16
|
|
|
13,252
|
|
|
(11,296
|
)
|
|||||||
Total stockholders’ equity (deficit)
|
|
(2,731
|
)
|
|
(9,660
|
)
|
|
4,406
|
|
|
5,262
|
|
|
142
|
|
|
(150
|
)
|
|
(2,731
|
)
|
|||||||
Total liabilities and stockholders’ equity (deficit)
|
|
$
|
2,511
|
|
|
$
|
25,612
|
|
|
$
|
5,462
|
|
|
$
|
16,719
|
|
|
$
|
917
|
|
|
$
|
(8,943
|
)
|
|
$
|
42,278
|
|
|
|
Three Months Ended March 31, 2014
|
||||||||||||||||||||||||||
|
|
American Airlines Group (Parent Company Only)
|
|
American
|
|
US Airways Group (Parent Company Only)
|
|
US Airways
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations and Reclassifications
|
|
American Airlines Group Inc. Consolidated
|
||||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(9
|
)
|
|
$
|
742
|
|
|
$
|
—
|
|
|
$
|
515
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
1,256
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital expenditures and aircraft purchase deposits
|
|
—
|
|
|
(722
|
)
|
|
—
|
|
|
(316
|
)
|
|
(9
|
)
|
|
—
|
|
|
(1,047
|
)
|
|||||||
Decrease (increase) in investments
|
|
—
|
|
|
183
|
|
|
—
|
|
|
(477
|
)
|
|
—
|
|
|
—
|
|
|
(294
|
)
|
|||||||
Decrease in restricted cash and short-term investments
|
|
—
|
|
|
3
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|||||||
Net proceeds from slot transaction
|
|
—
|
|
|
299
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
307
|
|
|||||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Net cash used in investing activities
|
|
—
|
|
|
(234
|
)
|
|
—
|
|
|
(700
|
)
|
|
(9
|
)
|
|
—
|
|
|
(943
|
)
|
|||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Payments on long-term debt and capital leases
|
|
—
|
|
|
(430
|
)
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|
(501
|
)
|
|||||||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
—
|
|
|
—
|
|
|
224
|
|
|
—
|
|
|
—
|
|
|
224
|
|
|||||||
Payments of employee withholding taxes on net share issuances
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(84
|
)
|
|||||||
Funds transferred from (to) affiliates
|
|
84
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of stock options
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Deferred financing costs
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||||
Sale-leaseback transactions
|
|
—
|
|
|
165
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
165
|
|
|||||||
Net cash provided by (used in) financing activities
|
|
9
|
|
|
(354
|
)
|
|
—
|
|
|
151
|
|
|
—
|
|
|
—
|
|
|
(194
|
)
|
|||||||
Net increase (decrease) in cash
|
|
—
|
|
|
154
|
|
|
—
|
|
|
(34
|
)
|
|
(1
|
)
|
|
—
|
|
|
119
|
|
|||||||
Cash at beginning of period
|
|
1
|
|
|
829
|
|
|
1
|
|
|
303
|
|
|
6
|
|
|
—
|
|
|
1,140
|
|
|||||||
Cash at end of period
|
|
$
|
1
|
|
|
$
|
983
|
|
|
$
|
1
|
|
|
$
|
269
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
1,259
|
|
Conversion date
|
|
Conversion type
|
|
Shares converted
|
|
Increase (decrease) in AAG preferred shares outstanding
|
|
Increase (decrease) in AAG common shares outstanding
|
April 1, 2014
|
|
Optional
|
|
30
|
|
(30)
|
|
23
|
April 2, 2014
|
|
Optional
|
|
294
|
|
(294)
|
|
222
|
April 8, 2014
|
|
Mandatory
|
|
17,230
|
|
(17,230)
|
|
13,007
|
|
|
|
|
17,554
|
|
(17,554)
|
|
13,252
|
Conversion date
|
|
Preferred conversion
|
|
Single-dip distribution
|
|
Labor distribution
|
|
Legacy AAMRQ holders
|
|
Increase in AAG Common Shares outstanding
|
April 8, 2014
|
|
13,252
|
|
48,219
|
|
8,902
|
|
72,383
|
|
142,756
|
ITEM 1B.
|
AMERICAN AIRLINES, INC. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Operating revenues
|
|
|
|
|
||||
Mainline passenger
|
|
$
|
4,906
|
|
|
$
|
4,614
|
|
Regional passenger
|
|
669
|
|
|
679
|
|
||
Cargo
|
|
168
|
|
|
156
|
|
||
Other
|
|
726
|
|
|
636
|
|
||
Total operating revenues
|
|
6,469
|
|
|
6,085
|
|
||
Operating expenses
|
|
|
|
|
||||
Aircraft fuel and related taxes
|
|
1,871
|
|
|
1,934
|
|
||
Salaries, wages and benefits
|
|
1,398
|
|
|
1,264
|
|
||
Regional expenses
|
|
758
|
|
|
766
|
|
||
Maintenance, materials and repairs
|
|
332
|
|
|
326
|
|
||
Other rent and landing fees
|
|
285
|
|
|
287
|
|
||
Aircraft rent
|
|
216
|
|
|
165
|
|
||
Selling expenses
|
|
284
|
|
|
290
|
|
||
Depreciation and amortization
|
|
214
|
|
|
204
|
|
||
Special items, net
|
|
(216
|
)
|
|
71
|
|
||
Other
|
|
749
|
|
|
712
|
|
||
Total operating expenses
|
|
5,891
|
|
|
6,019
|
|
||
Operating income
|
|
578
|
|
|
66
|
|
||
Nonoperating income (expense)
|
|
|
|
|
||||
Interest income
|
|
7
|
|
|
4
|
|
||
Interest expense, net of capitalized interest
|
|
(168
|
)
|
|
(169
|
)
|
||
Other, net
|
|
(5
|
)
|
|
(24
|
)
|
||
Total nonoperating expense, net
|
|
(166
|
)
|
|
(189
|
)
|
||
Income (loss) before reorganization items, net
|
|
412
|
|
|
(123
|
)
|
||
Reorganization items, net
|
|
—
|
|
|
(160
|
)
|
||
Income (loss) before income taxes
|
|
412
|
|
|
(283
|
)
|
||
Income tax provision (benefit)
|
|
11
|
|
|
(30
|
)
|
||
Net income (loss)
|
|
$
|
401
|
|
|
$
|
(253
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Net income (loss)
|
|
$
|
401
|
|
|
$
|
(253
|
)
|
Other comprehensive loss before tax:
|
|
|
|
|
||||
Defined benefit pension plans and retiree medical:
|
|
|
|
|
||||
Amortization of actuarial gain and prior service cost
|
|
(44
|
)
|
|
(33
|
)
|
||
Derivative financial instruments:
|
|
|
|
|
||||
Change in fair value
|
|
(67
|
)
|
|
(15
|
)
|
||
Reclassification into earnings
|
|
7
|
|
|
(1
|
)
|
||
Unrealized gain (loss) on investments:
|
|
|
|
|
||||
Net change in value
|
|
2
|
|
|
(1
|
)
|
||
Other comprehensive loss before tax
|
|
(102
|
)
|
|
(50
|
)
|
||
Non-cash tax provision
|
|
—
|
|
|
—
|
|
||
Comprehensive income (loss)
|
|
$
|
299
|
|
|
$
|
(303
|
)
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash
|
|
$
|
983
|
|
|
$
|
829
|
|
Short-term investments
|
|
4,979
|
|
|
5,162
|
|
||
Restricted cash and short-term investments
|
|
699
|
|
|
702
|
|
||
Accounts receivable, net
|
|
1,521
|
|
|
1,186
|
|
||
Aircraft fuel, spare parts and supplies, net
|
|
664
|
|
|
620
|
|
||
Prepaid expenses and other
|
|
606
|
|
|
702
|
|
||
Total current assets
|
|
9,452
|
|
|
9,201
|
|
||
Operating property and equipment
|
|
|
|
|
||||
Flight equipment
|
|
19,182
|
|
|
18,534
|
|
||
Ground property and equipment
|
|
5,057
|
|
|
5,002
|
|
||
Equipment purchase deposits
|
|
829
|
|
|
847
|
|
||
Total property and equipment, at cost
|
|
25,068
|
|
|
24,383
|
|
||
Less accumulated depreciation and amortization
|
|
(11,140
|
)
|
|
(10,914
|
)
|
||
Total property and equipment, net
|
|
13,928
|
|
|
13,469
|
|
||
Other assets
|
|
|
|
|
||||
Intangibles, net of accumulated amortization of $378 and $375, respectively
|
|
844
|
|
|
812
|
|
||
Other assets
|
|
2,016
|
|
|
2,130
|
|
||
Total other assets
|
|
2,860
|
|
|
2,942
|
|
||
Total assets
|
|
$
|
26,240
|
|
|
$
|
25,612
|
|
LIABILITIES AND STOCKHOLDER'S DEFICIT
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Current maturities of long-term debt and capital leases
|
|
$
|
951
|
|
|
$
|
957
|
|
Accounts payable
|
|
1,230
|
|
|
1,013
|
|
||
Accrued salaries and wages
|
|
533
|
|
|
659
|
|
||
Air traffic liability
|
|
3,808
|
|
|
3,145
|
|
||
Frequent flyer liability
|
|
1,761
|
|
|
1,760
|
|
||
Payable to affiliates
|
|
2,843
|
|
|
2,807
|
|
||
Other accrued liabilities
|
|
1,439
|
|
|
1,578
|
|
||
Total current liabilities
|
|
12,565
|
|
|
11,919
|
|
||
Noncurrent liabilities
|
|
|
|
|
||||
Long-term debt and capital leases, net of current maturities
|
|
9,590
|
|
|
9,852
|
|
||
Pension and postretirement benefits
|
|
5,631
|
|
|
5,693
|
|
||
Deferred gains and credits, net
|
|
285
|
|
|
278
|
|
||
Bankruptcy settlement obligations
|
|
2,242
|
|
|
5,424
|
|
||
Other liabilities
|
|
2,168
|
|
|
2,106
|
|
||
Total noncurrent liabilities
|
|
19,916
|
|
|
23,353
|
|
||
Commitments and contingencies
|
|
|
|
|
||||
Stockholder's deficit
|
|
|
|
|
||||
Common stock - $1 par value; 1,000 shares authorized, issued and outstanding
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
8,481
|
|
|
5,361
|
|
||
Accumulated other comprehensive loss
|
|
(2,254
|
)
|
|
(2,152
|
)
|
||
Accumulated deficit
|
|
(12,468
|
)
|
|
(12,869
|
)
|
||
Total stockholder's deficit
|
|
(6,241
|
)
|
|
(9,660
|
)
|
||
Total liabilities and stockholder's deficit
|
|
$
|
26,240
|
|
|
$
|
25,612
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Net cash provided by operating activities
|
|
$
|
742
|
|
|
$
|
696
|
|
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures and aircraft purchase deposits
|
|
(722
|
)
|
|
(882
|
)
|
||
Decrease (increase) in short-term investments
|
|
183
|
|
|
(228
|
)
|
||
Decrease (increase) in restricted cash and short-term investments
|
|
3
|
|
|
(3
|
)
|
||
Net proceeds from slot transaction
|
|
299
|
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
|
3
|
|
|
26
|
|
||
Net cash used in investing activities
|
|
(234
|
)
|
|
(1,087
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Payments on long-term debt and capital leases
|
|
(430
|
)
|
|
(392
|
)
|
||
Proceeds from issuance of long-term debt
|
|
—
|
|
|
161
|
|
||
Funds transferred to affiliates
|
|
(84
|
)
|
|
—
|
|
||
Deferred financing costs
|
|
(5
|
)
|
|
(17
|
)
|
||
Sale-leaseback transactions
|
|
165
|
|
|
764
|
|
||
Net cash provided by (used in) financing activities
|
|
(354
|
)
|
|
516
|
|
||
Net increase in cash
|
|
154
|
|
|
125
|
|
||
Cash at beginning of period
|
|
829
|
|
|
474
|
|
||
Cash at end of period
|
|
$
|
983
|
|
|
$
|
599
|
|
|
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
|
||||
Settlement of bankruptcy settlement obligation
|
|
$
|
3,104
|
|
|
$
|
—
|
|
Supplemental information:
|
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
|
170
|
|
|
125
|
|
||
Income tax paid
|
|
2
|
|
|
1
|
|
AMERICAN AIRLINES, INC.
|
||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
||||
(Unaudited)
|
•
|
Reclassifications between various operating income line items to conform the presentation of Cargo and Other revenues.
|
•
|
Reclassifications between various operating expense line items to conform the presentation of Regional expenses.
|
•
|
Reclassifications between Other nonoperating income (expense), net and Operating expenses to conform the presentation of foreign currency gains and losses.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2013
|
||||||
|
|
As Reclassified
|
|
Historical
|
||||
Operating revenues:
|
|
|
|
|
||||
Mainline passenger
|
|
$
|
4,614
|
|
|
$
|
4,614
|
|
Regional passenger
|
|
679
|
|
|
679
|
|
||
Cargo
|
|
156
|
|
|
155
|
|
||
Other
|
|
636
|
|
|
637
|
|
||
Total operating revenues
|
|
6,085
|
|
|
6,085
|
|
||
Operating expenses:
|
|
|
|
|
||||
Aircraft fuel and related taxes
|
|
1,934
|
|
|
2,199
|
|
||
Salaries, wages and benefits
|
|
1,264
|
|
|
1,312
|
|
||
Regional expenses
|
|
766
|
|
|
269
|
|
||
Maintenance, materials and repairs
|
|
326
|
|
|
318
|
|
||
Other rent and landing fees
|
|
287
|
|
|
342
|
|
||
Aircraft rent
|
|
165
|
|
|
164
|
|
||
Selling expenses
|
|
290
|
|
|
276
|
|
||
Depreciation and amortization
|
|
204
|
|
|
241
|
|
||
Special items, net
|
|
71
|
|
|
28
|
|
||
Other
|
|
712
|
|
|
889
|
|
||
Total operating expenses
|
|
6,019
|
|
|
6,038
|
|
||
Operating income
|
|
66
|
|
|
47
|
|
||
Nonoperating income (expense):
|
|
|
|
|
||||
Interest income
|
|
4
|
|
|
4
|
|
||
Interest expense, net of capitalized interest
|
|
(169
|
)
|
|
(165
|
)
|
||
Other, net
|
|
(24
|
)
|
|
(9
|
)
|
||
Total nonoperating expense, net
|
|
$
|
(189
|
)
|
|
$
|
(170
|
)
|
•
|
all secured claims against the Debtors have been reinstated;
|
•
|
allowed administrative claims, priority claims and convenience claims have been or will be paid in full in cash;
|
•
|
other holders of allowed pre-petition unsecured claims, holders of allowed interests and certain employees of AMR received or will receive
72%
of AAG Common Stock (on a fully converted basis) authorized to be issued pursuant to the Plan and in connection with the Merger under the following provisions:
|
◦
|
all creditors holding general unsecured claims against American that are guaranteed by AAG and general unsecured claims against AAG that are guaranteed by American (Double-Dip Unsecured Claims) were treated the same under the Plan. Holders of Double-Dip Unsecured Claims received, at the Effective Date, their recovery in shares of AAG Series A Preferred Stock with a stated amount equal to the allowed amount of their claims, including post-petition interest at the non-default rate;
|
◦
|
all creditors holding Single-Dip Unsecured Claims were treated the same regardless of whether the claim was asserted against the AAG Debtors, the American Debtors, or other Debtors. As used herein, "Single-Dip Unsecured Claims" means the general unsecured claims against the Debtors that are not guaranteed by any other Debtor, other than the claims of the Debtors' labor unions representing mainline workers. Holders of Single-Dip Unsecured Claims received, at the Effective Date, a portion of their recovery in shares of AAG Series A Preferred Stock and a right, subject to the trading price of AAG's common stock during the 120-day period after the Effective Date, to receive their remaining recovery in shares of AAG Common Stock 120 days after the Effective Date;
|
◦
|
holders of certain labor-related deemed claims and certain non-management, non-union employees as specified in the Plan received, at the Effective Date, the right to receive an allocation of shares of AAG Common Stock representing
23.6%
of the total number of shares of AAG Common Stock ultimately distributed to holders of pre-petition general unsecured creditors against the Debtors. On the Effective Date, pursuant to the Plan, an initial allocation of approximately
39 million
shares of AAG Common Stock was made related to these labor and employee groups, of which approximately
27 million
shares were distributed on the Effective Date and
|
◦
|
holders of allowed interests in AMR (primarily holders of AMR common stock existing immediately prior to the Effective Date) received, at the Effective Date, a distribution of approximately
26 million
shares of AAG Common Stock representing
3.5%
of the total number of shares of AAG Common Stock contemplated for issuance pursuant to the Plan and will receive additional shares of AAG Common Stock if, among other considerations, the trading price of AAG's common stock at various points during the 120-day period after the Effective Date provides for a full recovery to claimholders and other allowed priority interests; and
|
◦
|
holders of disputed claims at the Effective Date, to the extent such disputed claims become allowed Single-Dip Unsecured Claims after the Effective Date, are eligible to receive shares of AAG Common Stock held in reserve (Disputed Claims Reserve), beginning
120
days after the Effective Date. Disputed claimholders that subsequently become Single-Dip unsecured claimholders will receive, subject to the availability of sufficient shares in the Disputed Claims Reserve, the number of shares of AAG Common Stock that the disputed claimholder would have received had such claimholder been a Single-Dip unsecured claimholder as of the Effective Date.
|
•
|
$385 million
in cash to the Pension plans in connection with missed contributions to the pension plans during Chapter 11 and interest and penalty interest thereon;
|
•
|
$107 million
in cash to holders in partial or full satisfaction of their claims, including to holders of administrative claims, and state and local priority tax claims;
|
•
|
$196 million
in cure payments to holders of secured debt; and
|
•
|
Approximately
$380 million
for payroll taxes associated with equity distributions to employees.
|
(1)
|
Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to (i) the rejection or modification of financings related to aircraft and (ii) entry of orders treated as unsecured claims with respect to facility agreements supporting certain issuances of special facility revenue bonds. The Debtors recorded an estimated claim associated with the rejection or modification of a financing or facility agreement when the applicable motion was filed with the Bankruptcy Court to reject or modify such financing and the Debtors believed that it was probable the motion would be approved, and there was sufficient information to estimate the claim.
|
(2)
|
Pursuant to the Plan, the Debtors agreed to allow certain post-petition unsecured claims on obligations. As a result, during the
three
months ended
March 31, 2013
, American recorded reorganization charges to adjust estimated allowed claim amounts previously recorded on rejected special facility revenue bonds of
$127 million
, which are included in the table above.
|
|
|
March 31, 2014
|
|
|
December 31, 2013
|
|
||
Single-Dip and Double-Dip equity obligations
|
|
1,768
|
|
|
4,575
|
|
||
Labor-related deemed claim
|
|
474
|
|
|
849
|
|
||
Total
|
|
$
|
2,242
|
|
|
$
|
5,424
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Mainline operating special items, net
(a)
|
|
$
|
(216
|
)
|
|
$
|
71
|
|
(a)
|
The
2014
first
quarter mainline operating special items totaled a net credit of
$216 million
, which principally included a
$305 million
gain on the sale of slots at DCA and a net
$56 million
credit for bankruptcy related items primarily reflecting fair value adjustments for bankruptcy settlement obligations. These special credits were offset in part by
$91 million
of cash merger integration expenses including amounts related to the pilot memorandum of understanding, information technology, professional fees, severance, re-branding of aircraft and airport facilities, relocation and training as well as
$43 million
of non-cash compensation expense for merger equity awards.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Regional operating special items, net
|
|
$
|
1
|
|
|
$
|
—
|
|
Nonoperating special items, net
(b)
|
|
44
|
|
|
27
|
|
||
Reorganization items, net
(c)
|
|
—
|
|
|
160
|
|
||
Income tax special items, net
(d)
|
|
7
|
|
|
—
|
|
(b)
|
The
2014
first
quarter nonoperating special items of
$44 million
were principally due to non-cash interest accretion of
$27 million
on the bankruptcy settlement obligations.
|
(c)
|
In the
2013
first
quarter, American recognized reorganization expenses as a result of the filing of the Chapter 11 Cases. These amounts consisted primarily of estimated allowed claim amounts and professional fees.
|
(d)
|
The
2014
first
quarter included a special
$7 million
non-cash deferred income tax provision related to certain indefinite-lived intangible assets.
|
|
March 31,
2014 |
|
December 31, 2013
|
||||
Secured
|
|
|
|
||||
Secured indebtedness, fixed and variable interest rates ranging from 1.43% to 8.10%, maturing from 2014 to 2023
|
$
|
1,966
|
|
|
$
|
2,140
|
|
Aircraft enhanced equipment trust certificates (EETCs), fixed interest rates ranging from 4.00% to 7.00%, maturing from 2017 to 2025
|
3,415
|
|
|
3,516
|
|
||
Special facility revenue bonds, fixed interest rates ranging from 7.125% to 8.50%, maturing from 2016 to 2031
|
1,313
|
|
|
1,313
|
|
||
7.50% senior secured notes, interest only payments until due in 2016
|
900
|
|
|
1,000
|
|
||
Senior secured credit facility, variable interest rate of 3.75%, installments through 2019
|
1,886
|
|
|
1,891
|
|
||
AAdvantage Miles advance purchase, effective rate of 8.30%, installments through 2017
|
568
|
|
|
611
|
|
||
Other secured obligations, fixed interest rates ranging from 5.20% to 12.20%, maturing from 2014 to 2035
|
532
|
|
|
380
|
|
||
|
10,580
|
|
|
10,851
|
|
||
Unsecured
|
|
|
|
||||
Affiliate unsecured obligations
|
27
|
|
|
27
|
|
||
|
27
|
|
|
27
|
|
||
Total long-term debt and capital lease obligations
|
10,607
|
|
|
10,878
|
|
||
Less: total unamortized debt discount
|
66
|
|
|
69
|
|
||
Less: current maturities
|
951
|
|
|
957
|
|
||
Long-term debt and capital lease obligations, net of current maturities
|
$
|
9,590
|
|
|
$
|
9,852
|
|
|
|
Fair Value Measurements as of March 31, 2014
|
||||||||||||||
Description
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Short-term investments
(1), (2)
|
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
|
$
|
171
|
|
|
$
|
171
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Government agency investments
|
|
941
|
|
|
—
|
|
|
941
|
|
|
—
|
|
||||
Repurchase agreements
|
|
99
|
|
|
—
|
|
|
99
|
|
|
—
|
|
||||
Corporate obligations
|
|
3,064
|
|
|
—
|
|
|
3,064
|
|
|
—
|
|
||||
Bank notes / Certificates of deposit / Time deposits
|
|
704
|
|
|
—
|
|
|
704
|
|
|
—
|
|
||||
|
|
4,979
|
|
|
171
|
|
|
4,808
|
|
|
—
|
|
||||
Restricted cash and short-term investments
(1)
|
|
699
|
|
|
643
|
|
|
56
|
|
|
—
|
|
||||
Fuel derivative contracts, net
(1)
|
|
50
|
|
|
—
|
|
|
50
|
|
|
—
|
|
||||
Total
|
|
$
|
5,728
|
|
|
$
|
814
|
|
|
$
|
4,914
|
|
|
$
|
—
|
|
(1)
|
Unrealized gains or losses on short-term investments, restricted cash and short-term investments, and derivatives qualifying for hedge accounting are recorded in Accumulated other comprehensive income (loss) at each measurement date.
|
(2)
|
American's short-term investments mature in one year or less except for
$441 million
of U.S. government agency investments and
$2.1 billion
of corporate obligations.
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
||||||||
Long-term debt, including current maturities
|
|
$
|
10,541
|
|
|
$
|
11,032
|
|
|
$
|
10,809
|
|
|
$
|
11,045
|
|
|
|
Pension Benefits
|
|
Retiree Medical and Other Benefits
|
||||||||||||
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
185
|
|
|
163
|
|
|
14
|
|
|
13
|
|
||||
Expected return on assets
|
|
(195
|
)
|
|
(180
|
)
|
|
(5
|
)
|
|
(4
|
)
|
||||
Settlements
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of:
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
|
7
|
|
|
7
|
|
|
(60
|
)
|
|
(61
|
)
|
||||
Unrecognized net loss (gain)
|
|
11
|
|
|
23
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Net periodic benefit cost
|
|
$
|
10
|
|
|
$
|
14
|
|
|
$
|
(53
|
)
|
|
$
|
(54
|
)
|
|
Location in condensed consolidated statements of operations
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||||
Amount of gain (loss) reclassified from accumulated OCI into income
(1)
|
Aircraft fuel and related taxes
|
|
$
|
(7
|
)
|
|
$
|
1
|
|
Amount of gain (loss) recognized in income on derivative
(2)
|
Aircraft fuel and related taxes
|
|
5
|
|
|
7
|
|
||
Amount of gain (loss) recognized in condensed consolidated statements of operations
(3)
|
Aircraft fuel and related taxes
|
|
$
|
(2
|
)
|
|
$
|
8
|
|
|
Location
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||||
Amount of (gain) loss reclassified from accumulated OCI into income
(1)
|
Reclassification into earnings
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
Amount of gain (loss) recognized in OCI on derivative
(1)
|
Change in fair value
|
|
(57
|
)
|
|
(13
|
)
|
||
Amount of gain (loss) recognized in condensed consolidated statements of comprehensive income
|
|
|
$
|
(50
|
)
|
|
$
|
(14
|
)
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
Gross asset
(1)
|
$
|
50
|
|
|
$
|
109
|
|
Gross liability
(2)
|
—
|
|
|
—
|
|
||
Net recognized asset (liability) in condensed consolidated balance sheet
|
50
|
|
|
109
|
|
||
|
|
|
|
||||
Gross asset (liability) offset in condensed consolidated balance sheet:
|
|
|
|
||||
Financial instruments
|
—
|
|
|
—
|
|
||
Cash collateral received (posted)
(3)
|
—
|
|
|
—
|
|
||
Net amount
|
$
|
50
|
|
|
$
|
109
|
|
(1)
|
Fuel derivative assets are included in prepaid expenses and other on the accompanying condensed consolidated balance sheets.
|
(2)
|
Fuel derivative liabilities are included in accrued liabilities on the accompanying condensed consolidated balance sheets.
|
(3)
|
As of
March 31, 2014
, American had no posted cash collateral.
|
|
|
Pension and retiree medical liability
|
|
Unrealized
gain/(loss)
on
investments
|
|
Derivative
financial
instruments
|
|
Income
tax
benefit/
(expense)
|
|
Total
|
||||||||||
Balance at December 31, 2013
|
|
$
|
(899
|
)
|
|
$
|
1
|
|
|
$
|
65
|
|
|
$
|
(1,319
|
)
|
|
$
|
(2,152
|
)
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
(44
|
)
|
|
2
|
|
|
7
|
|
|
—
|
|
|
(35
|
)
|
|||||
Net current-period other comprehensive loss
|
|
(44
|
)
|
|
2
|
|
|
(60
|
)
|
|
—
|
|
|
(102
|
)
|
|||||
Balance at March 31, 2014
|
|
$
|
(943
|
)
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
(1,319
|
)
|
|
$
|
(2,254
|
)
|
Details about accumulated other comprehensive income (loss) components
|
|
Amount reclassified from accumulated other comprehensive income (loss)
|
Affected line item in the statement where net income (loss) is presented
|
|||||||
|
Three Months Ended March 31,
|
|
||||||||
|
2014
|
|
2013
|
|
||||||
Amortization of pension and retiree medical liability:
|
|
|
|
|
|
|
||||
Prior service cost
|
|
$
|
(53
|
)
|
|
$
|
(54
|
)
|
|
Salaries, wages and benefits
|
Actuarial loss
|
|
9
|
|
|
21
|
|
|
Salaries, wages and benefits
|
||
Derivative financial instruments:
|
|
|
|
|
|
|
||||
Cash flow hedges
|
|
7
|
|
|
(1
|
)
|
|
Aircraft fuel and related taxes
|
||
Unrealized gain (loss) on investments:
|
|
|
|
|
|
|
||||
Net change in value
|
|
2
|
|
|
—
|
|
|
Other, net
|
||
Total reclassifications for the period
|
|
$
|
(35
|
)
|
|
$
|
(34
|
)
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Aircraft fuel and related taxes
|
|
$
|
252
|
|
|
$
|
265
|
|
Salaries, wages and benefits
|
|
5
|
|
|
5
|
|
||
Capacity purchases from third-party regional carriers
|
|
296
|
|
|
303
|
|
||
Maintenance, materials and repairs
|
|
1
|
|
|
1
|
|
||
Other rent and landing fees
|
|
55
|
|
|
54
|
|
||
Aircraft rent
|
|
5
|
|
|
1
|
|
||
Selling expenses
|
|
36
|
|
|
37
|
|
||
Depreciation and amortization
|
|
37
|
|
|
37
|
|
||
Special items, net
|
|
1
|
|
|
—
|
|
||
Other
|
|
70
|
|
|
63
|
|
||
Total regional expenses
|
|
$
|
758
|
|
|
$
|
766
|
|
|
March 31,
2014 |
|
December 31, 2013
|
||||
American Airlines Group
|
$
|
(2,471
|
)
|
|
$
|
(2,455
|
)
|
Envoy Aviation Group Inc.
(1)
|
(400
|
)
|
|
(394
|
)
|
||
Other American Airlines Group subsidiaries
|
28
|
|
|
42
|
|
||
|
$
|
(2,843
|
)
|
|
$
|
(2,807
|
)
|
(1)
|
Formerly known as AMR Eagle Holding Corporation, the net payable to AAG's wholly-owned regional airline operating under the brand name of American Eagle consists principally of amounts due under regional capacity purchase agreements.
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
|
Three Months Ended March 31, 2013
|
|||||||||||||||
|
Three Months Ended March 31, 2014
|
|
AAG
|
|
US Airways Group
|
|
Combined
|
|
Percent Change
(1)
|
|||||||||
|
(In millions)
|
|
|
|||||||||||||||
Mainline and regional passenger revenues
|
$
|
8,665
|
|
|
$
|
5,293
|
|
|
$
|
2,960
|
|
|
$
|
8,253
|
|
|
5.0
|
|
Total operating revenues
|
9,995
|
|
|
6,098
|
|
|
3,370
|
|
|
9,468
|
|
|
5.6
|
|
||||
Mainline and regional aircraft fuel and related taxes
|
3,211
|
|
|
2,199
|
|
|
1,132
|
|
|
3,331
|
|
|
(3.6
|
)
|
||||
Total operating expenses
|
9,265
|
|
|
6,027
|
|
|
3,268
|
|
|
9,295
|
|
|
(0.3
|
)
|
||||
Operating income
|
730
|
|
|
71
|
|
|
102
|
|
|
173
|
|
|
nm
|
|
||||
Net income (loss)
|
480
|
|
|
(341
|
)
|
|
44
|
|
|
(297
|
)
|
|
nm
|
|
||||
Net special charges (credits)
(2)
|
(78
|
)
|
|
349
|
|
|
10
|
|
|
359
|
|
|
nm
|
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
|
|
(In millions)
|
||||||
Cash and short-term investments
|
|
$
|
9,664
|
|
|
$
|
9,251
|
|
Restricted cash and short-term investments
(1)
|
|
947
|
|
|
1,035
|
|
||
Total cash and short-term investments
|
|
$
|
10,611
|
|
|
$
|
10,286
|
|
(1)
|
Restricted cash and investments primarily include cash collateral to secure workers’ compensation claims.
|
|
Three Months Ended March 31, 2014
|
|
Three Months Ended March 31, 2013
|
||||||||||||
Reconciliation of Operating Cost per ASM Excluding Special Items, Fuel and Profit Sharing - Mainline Only
|
|
AAG
|
|
US Airways Group
|
|
Combined
|
|||||||||
|
(In millions, except per ASM amounts)
|
||||||||||||||
Total operating expenses
|
$
|
9,265
|
|
|
$
|
6,027
|
|
|
$
|
3,268
|
|
|
$
|
9,295
|
|
Less regional expenses:
|
|
|
|
|
|
|
|
||||||||
Fuel
|
(500
|
)
|
|
(265
|
)
|
|
(271
|
)
|
|
(536
|
)
|
||||
Other
|
(1,094
|
)
|
|
(515
|
)
|
|
(561
|
)
|
|
(1,076
|
)
|
||||
Total mainline operating expenses
|
7,671
|
|
|
5,247
|
|
|
2,436
|
|
|
7,683
|
|
||||
Less: Special items, net
|
137
|
|
|
(71
|
)
|
|
(39
|
)
|
|
(110
|
)
|
||||
Mainline operating expenses, excluding special items
|
7,808
|
|
|
5,176
|
|
|
2,397
|
|
|
7,573
|
|
||||
Less: Aircraft fuel and related taxes
|
(2,711
|
)
|
|
(1,934
|
)
|
|
(861
|
)
|
|
(2,795
|
)
|
||||
Mainline operating expenses, excluding special items and fuel
|
5,097
|
|
|
3,242
|
|
|
1,536
|
|
|
4,778
|
|
||||
Less: Profit sharing
|
(5
|
)
|
|
—
|
|
|
(6
|
)
|
|
(6
|
)
|
||||
Mainline operating expenses, excluding special items, fuel and profit sharing
|
$
|
5,092
|
|
|
$
|
3,242
|
|
|
$
|
1,530
|
|
|
$
|
4,772
|
|
|
|
|
|
|
|
|
|
||||||||
Available Seat Miles (ASM)
|
56,831
|
|
|
37,393
|
|
|
17,961
|
|
|
55,354
|
|
||||
|
|
|
|
|
|
|
|
||||||||
(In cents)
|
|
|
|
|
|
|
|
||||||||
Mainline operating expenses per ASM
|
$
|
13.50
|
|
|
|
|
|
|
$
|
13.88
|
|
||||
Less: Special items, net per ASM
|
0.24
|
|
|
|
|
|
|
(0.20
|
)
|
||||||
Mainline operating expenses per ASM, excluding special items
|
13.74
|
|
|
|
|
|
|
13.68
|
|
||||||
Less: Aircraft fuel and related taxes per ASM
|
(4.77
|
)
|
|
|
|
|
|
(5.05
|
)
|
||||||
Mainline operating expenses per ASM, excluding special items and fuel
|
8.97
|
|
|
|
|
|
|
8.63
|
|
||||||
Less: Profit sharing per ASM
|
(0.01
|
)
|
|
|
|
|
|
(0.01
|
)
|
||||||
Mainline operating expenses per ASM, excluding special items, fuel and profit sharing
|
$
|
8.96
|
|
|
|
|
|
|
$
|
8.62
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Mainline operating special items, net
(1)
|
|
$
|
(137
|
)
|
|
$
|
71
|
|
Regional operating special items, net
|
|
4
|
|
|
2
|
|
||
Nonoperating special items, net
(2)
|
|
47
|
|
|
116
|
|
||
Reorganization items, net
(3)
|
|
—
|
|
|
160
|
|
||
Income tax special items, net
(4)
|
|
8
|
|
|
—
|
|
||
Total
|
|
$
|
(78
|
)
|
|
$
|
349
|
|
(1)
|
The
2014
first
quarter mainline operating special items totaled a net credit of
$137 million
, which principally included a $309 million gain on the sale of slots at DCA and a net
$32 million
credit for bankruptcy related items primarily reflecting fair value adjustments for bankruptcy settlement obligations. These special credits were offset in part by
$142 million
of cash merger integration expenses including amounts related to the Merger Pilot MOU, information technology, professional fees, severance, re-branding of aircraft and airport facilities, relocation and training as well as
$60 million
of non-cash compensation expense for merger equity awards.
|
|
|
Three Months Ended March 31,
|
|
Increase (Decrease)
|
|||||
|
|
2014
|
|
2013 (Note 1)
|
|
||||
Mainline
|
|
|
|
|
|
|
|||
Revenue passenger miles (millions)
(a)
|
|
45,828
|
|
|
45,024
|
|
|
1.8
|
%
|
Available seat miles (ASM) (millions)
(b)
|
|
56,831
|
|
|
55,354
|
|
|
2.7
|
%
|
Passenger load factor (percent)
(c)
|
|
80.6
|
|
|
81.3
|
|
|
(0.7) pts
|
|
Yield (cents)
(d)
|
|
15.84
|
|
|
15.13
|
|
|
4.7
|
%
|
Passenger revenue per ASM (cents)
(e)
|
|
12.77
|
|
|
12.30
|
|
|
3.8
|
%
|
Operating cost per ASM (cents)
(f)
|
|
13.50
|
|
|
13.88
|
|
|
(2.7
|
)%
|
Passenger enplanements (thousands)
(g)
|
|
34,843
|
|
|
34,434
|
|
|
1.2
|
%
|
Departures (thousands)
|
|
279
|
|
|
279
|
|
|
—
|
%
|
Aircraft at end of period
|
|
977
|
|
|
967
|
|
|
1.0
|
%
|
Block hours (thousands)
(h)
|
|
853
|
|
|
841
|
|
|
1.4
|
%
|
Average stage length (miles)
(i)
|
|
1,189
|
|
|
1,171
|
|
|
1.5
|
%
|
Fuel consumption (gallons in millions)
|
|
874
|
|
|
858
|
|
|
1.9
|
%
|
Average aircraft fuel price including related taxes ($/gallon)
|
|
3.10
|
|
|
3.26
|
|
|
(4.8
|
)%
|
Full-time equivalent employees at end of period
|
|
93,378
|
|
|
91,838
|
|
|
1.7
|
%
|
Regional
(j)
|
|
|
|
|
|
|
|||
Revenue passenger miles (millions)
(a)
|
|
5,058
|
|
|
4,997
|
|
|
1.2
|
%
|
Available seat miles (millions)
(b)
|
|
6,561
|
|
|
6,775
|
|
|
(3.2
|
)%
|
Passenger load factor (percent)
(c)
|
|
77.1
|
|
|
73.8
|
|
|
3.3 pts
|
|
Yield (cents)
(d)
|
|
27.82
|
|
|
28.86
|
|
|
(3.6
|
)%
|
Passenger revenue per ASM (cents)
(e)
|
|
21.45
|
|
|
21.29
|
|
|
0.8
|
%
|
Operating cost per ASM (cents)
(f)
|
|
24.30
|
|
|
23.80
|
|
|
2.1
|
%
|
Passenger enplanements (thousands)
(g)
|
|
11,709
|
|
|
11,667
|
|
|
0.4
|
%
|
Aircraft at end of period
|
|
560
|
|
|
531
|
|
|
5.5
|
%
|
Fuel consumption (gallons in millions)
|
|
161
|
|
|
166
|
|
|
(2.6
|
)%
|
Average aircraft fuel price including related taxes ($/gallon)
|
|
3.10
|
|
|
3.23
|
|
|
(4.2
|
)%
|
Total Mainline and Regional
|
|
|
|
|
|
|
|||
Revenue passenger miles (millions)
(a)
|
|
50,886
|
|
|
50,021
|
|
|
1.7
|
%
|
Available seat miles (millions)
(b)
|
|
63,392
|
|
|
62,129
|
|
|
2.0
|
%
|
Cargo ton miles (millions)
(k)
|
|
560
|
|
|
500
|
|
|
11.9
|
%
|
Passenger load factor (percent)
(c)
|
|
80.3
|
|
|
80.5
|
|
|
(0.2) pts
|
|
Yield (cents)
(d)
|
|
17.03
|
|
|
16.50
|
|
|
3.2
|
%
|
Passenger revenue per ASM (cents)
(e)
|
|
13.67
|
|
|
13.28
|
|
|
2.9
|
%
|
Total revenue per ASM (cents)
(l)
|
|
15.77
|
|
|
15.24
|
|
|
3.5
|
%
|
Cargo yield per ton mile (cents)
(m)
|
|
36.88
|
|
|
39.35
|
|
|
(6.3
|
)%
|
Passenger enplanements (thousands)
(g)
|
|
46,552
|
|
|
46,101
|
|
|
1.0
|
%
|
Aircraft at end of period
|
|
1,537
|
|
|
1,498
|
|
|
2.6
|
%
|
Fuel consumption (gallons in millions)
|
|
1,035
|
|
|
1,024
|
|
|
1.2
|
%
|
Average aircraft fuel price including related taxes ($/gallon)
|
|
3.10
|
|
|
3.25
|
|
|
(4.7
|
)%
|
(a)
|
Revenue passenger mile (RPM) — A basic measure of sales volume. One RPM represents one passenger flown one mile.
|
(b)
|
Available seat mile (ASM) — A basic measure of production. One ASM represents one seat flown one mile.
|
(c)
|
Passenger load factor — The percentage of available seats that are filled with revenue passengers.
|
(d)
|
Yield — A measure of airline revenue derived by dividing passenger revenue by RPMs.
|
(e)
|
Passenger revenue per available seat mile (PRASM) — Passenger revenues divided by ASMs.
|
(f)
|
Operating cost per available seat mile (CASM) — Operating expenses divided by ASMs.
|
(g)
|
Passenger enplanements — The number of passengers on board an aircraft, including local, connecting and through passengers.
|
(h)
|
Block hours — The hours measured from the moment an aircraft first moves under its own power, including taxi time, for the purposes of flight until the aircraft is docked at the next point of landing and its power is shut down.
|
(i)
|
Average stage length — The average of the distances flown on each segment of every route.
|
(j)
|
Regional statistics include Envoy Aviation Group Inc. (formerly known as AMR Eagle Holding Corporation), Piedmont Airlines, Inc., PSA Airlines, Inc. and operating and financial results from our capacity purchase agreements with Air Wisconsin Airlines Corporation, Chautauqua Airlines, Inc., ExpressJet Airlines, Inc., Mesa Airlines, Inc., Republic Airline Inc. and SkyWest Airlines, Inc.
|
(k)
|
Cargo ton miles — A basic measure of cargo transportation. One cargo ton mile represents one ton of cargo transported one mile.
|
(l)
|
Total revenue per available seat mile (RASM) — Total revenues divided by total mainline and regional ASMs.
|
(m)
|
Cargo yield per ton mile — Cargo revenues divided by total mainline and regional cargo ton miles.
|
|
|
Three Months Ended March 31,
|
|
$ Change
|
|
$ Change Due to Merger
|
|
Change Excluding Merger Impact
|
|||||||||||||||
|
|
2014
|
|
2013
|
|
|
|
$
|
|
%
|
|||||||||||||
|
|
(In millions, except percentage changes)
|
|||||||||||||||||||||
Mainline passenger
|
|
$
|
7,258
|
|
|
$
|
4,614
|
|
|
$
|
2,644
|
|
|
$
|
2,352
|
|
|
$
|
292
|
|
|
6.3
|
|
Regional passenger
|
|
1,407
|
|
|
679
|
|
|
728
|
|
|
738
|
|
|
(10
|
)
|
|
(1.4
|
)
|
|||||
Cargo
|
|
206
|
|
|
156
|
|
|
50
|
|
|
38
|
|
|
12
|
|
|
7.4
|
|
|||||
Other
|
|
1,124
|
|
|
649
|
|
|
475
|
|
|
381
|
|
|
94
|
|
|
14.5
|
|
|||||
Total operating revenues
|
|
$
|
9,995
|
|
|
$
|
6,098
|
|
|
$
|
3,897
|
|
|
$
|
3,509
|
|
|
$
|
388
|
|
|
6.4
|
|
•
|
Mainline passenger revenues
in
creased
$292 million
, or
6.3%
, in the
first
quarter of
2014
from the
2013
period due to higher yields and revenue per ASM, offset in part by slightly lower load factors.
|
•
|
Cargo revenues increased
$12 million
, or
7.4%
, in the first quarter of
2014
from the
2013
period driven primarily by an increase in transatlantic freight volumes.
|
•
|
Other revenues increased
$94 million
, or
14.5%
, in the
first
quarter of
2014
from the
2013
period driven primarily by higher revenues associated with our frequent flyer programs.
|
|
|
Three Months Ended March 31,
|
|
$ Change
|
|
$ Change Due to Merger
|
|
Change Excluding Merger Impact
|
|||||||||||||||
|
|
2014
|
|
2013
|
|
|
|
$
|
|
%
|
|||||||||||||
|
|
(In millions, except percentage changes)
|
|||||||||||||||||||||
Aircraft fuel and related taxes
|
|
$
|
2,711
|
|
|
$
|
1,934
|
|
|
$
|
777
|
|
|
$
|
840
|
|
|
$
|
(63
|
)
|
|
(3.3
|
)
|
Salaries, wages and benefits
|
|
2,119
|
|
|
1,267
|
|
|
852
|
|
|
719
|
|
|
133
|
|
|
10.5
|
|
|||||
Maintenance, materials and repairs
|
|
485
|
|
|
326
|
|
|
159
|
|
|
153
|
|
|
6
|
|
|
1.9
|
|
|||||
Other rent and landing fees
|
|
424
|
|
|
288
|
|
|
136
|
|
|
139
|
|
|
(3
|
)
|
|
(0.9
|
)
|
|||||
Aircraft rent
|
|
320
|
|
|
165
|
|
|
155
|
|
|
104
|
|
|
51
|
|
|
31.1
|
|
|||||
Selling expenses
|
|
401
|
|
|
290
|
|
|
111
|
|
|
117
|
|
|
(6
|
)
|
|
(2.1
|
)
|
|||||
Depreciation and amortization
|
|
307
|
|
|
204
|
|
|
103
|
|
|
94
|
|
|
9
|
|
|
4.7
|
|
|||||
Special items, net
|
|
(137
|
)
|
|
71
|
|
|
(208
|
)
|
|
55
|
|
|
(263
|
)
|
|
nm
|
|
|||||
Other
|
|
1,041
|
|
|
702
|
|
|
339
|
|
|
301
|
|
|
38
|
|
|
5.4
|
|
|||||
Total mainline operating expenses
|
|
7,671
|
|
|
5,247
|
|
|
2,424
|
|
|
2,522
|
|
|
(98
|
)
|
|
(1.8
|
)
|
|||||
Regional expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Fuel
|
|
500
|
|
|
265
|
|
|
235
|
|
|
247
|
|
|
(12
|
)
|
|
(4.8
|
)
|
|||||
Other
|
|
1,094
|
|
|
515
|
|
|
579
|
|
|
561
|
|
|
18
|
|
|
3.4
|
|
|||||
Total regional operating expenses
|
|
1,594
|
|
|
780
|
|
|
814
|
|
|
808
|
|
|
6
|
|
|
0.6
|
|
|||||
Total operating expenses
|
|
$
|
9,265
|
|
|
$
|
6,027
|
|
|
$
|
3,238
|
|
|
$
|
3,330
|
|
|
$
|
(92
|
)
|
|
(1.5
|
)
|
•
|
Aircraft fuel and related taxes
de
creased
3.3%
primarily due to a
de
crease in the average price per gallon of fuel, net of the effects of hedging, which was offset in part by an increase in consumption.
|
•
|
Salaries, wages and benefits
in
creased 10.5% primarily due to the Merger Pilot MOU that was effective upon the closing of the Merger, newly implemented FAA rules on pilot and flight attendant duty times, as well as increased costs from certain stock-based compensation programs driven by a 45% increase in the price of our common stock from $25.25 to $36.60 during the first quarter of 2014.
|
•
|
Aircraft rent
in
creased
31.1%
primarily as a result of new aircraft deliveries since the end of the 2013 first quarter as we continue our fleet renewal program.
|
|
|
Three Months Ended March 31,
|
|
$ Change
|
|
$ Change Due to Merger
|
|
Change Excluding Merger Impact
|
|||||||||||||||
|
|
2014
|
|
2013
|
|
|
|
$
|
|
%
|
|||||||||||||
|
|
(In millions, except percentage changes)
|
|||||||||||||||||||||
Interest income
|
|
$
|
7
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
53.2
|
|
Interest expense, net of capitalized interest
|
|
(243
|
)
|
|
(254
|
)
|
|
11
|
|
|
(74
|
)
|
|
85
|
|
|
(33.4
|
)
|
|||||
Other, net
|
|
(1
|
)
|
|
(24
|
)
|
|
23
|
|
|
4
|
|
|
19
|
|
|
(81.8
|
)
|
|||||
Total nonoperating expense, net
|
|
$
|
(237
|
)
|
|
$
|
(274
|
)
|
|
$
|
37
|
|
|
$
|
(70
|
)
|
|
$
|
107
|
|
|
(39.1
|
)
|
(1)
|
Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to (i) the rejection or modification of financings related to aircraft and (ii) entry of orders treated as unsecured claims with respect to facility agreements supporting certain issuances of special facility revenue bonds. The Debtors recorded an estimated claim associated with the rejection or modification of a financing or facility agreement when the applicable motion was filed with the Bankruptcy Court to reject or modify such financing and the Debtors believed that it was probable the motion would be approved, and there was sufficient information to estimate the claim.
|
(2)
|
Pursuant to the Plan, the Debtors agreed to allow certain post-petition unsecured claims on obligations. As a result, during the
three
months ended
March 31, 2013
, we recorded reorganization charges to adjust estimated allowed claim amounts previously recorded on rejected special facility revenue bonds of
$127 million
, which are included in the table above.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Mainline operating special items, net
(1)
|
|
$
|
(216
|
)
|
|
$
|
71
|
|
Regional operating special items, net
|
|
1
|
|
|
—
|
|
||
Nonoperating special items, net
(2)
|
|
44
|
|
|
27
|
|
||
Reorganization items, net
(3)
|
|
—
|
|
|
160
|
|
||
Income tax special items, net
(4)
|
|
7
|
|
|
—
|
|
||
Total
|
|
$
|
(164
|
)
|
|
$
|
258
|
|
|
|
Three Months Ended March 31,
|
|
Percent Increase (Decrease)
|
|||||||
|
|
2014
|
|
2013
|
|
||||||
|
|
(In millions)
|
|
|
|||||||
Mainline passenger
|
|
$
|
4,906
|
|
|
$
|
4,614
|
|
|
6.3
|
|
Regional passenger
|
|
669
|
|
|
679
|
|
|
(1.4
|
)
|
||
Cargo
|
|
168
|
|
|
156
|
|
|
7.7
|
|
||
Other
|
|
726
|
|
|
636
|
|
|
14.1
|
|
||
Total operating revenues
|
|
$
|
6,469
|
|
|
$
|
6,085
|
|
|
6.3
|
|
•
|
Mainline passenger revenues
in
creased
$292 million
, or
6.3%
, in the
first
quarter of
2014
from the
2013
period due to higher yields and revenue per ASM, offset in part by slightly lower load factors.
|
•
|
Cargo revenues increased
$12 million
, or
7.7%
, in the first quarter of
2014
from the
2013
period driven primarily by an increase in transatlantic freight volumes.
|
•
|
Other revenues increased
$90 million
, or
14.1%
, in the
first
quarter of
2014
from the
2013
period driven primarily by higher revenues associated with American's frequent flyer program.
|
|
|
Three Months Ended March 31,
|
|
Percent Increase (Decrease)
|
|||||||
|
|
2014
|
|
2013
|
|
||||||
|
|
(In millions)
|
|
|
|||||||
Aircraft fuel and related taxes
|
|
$
|
1,871
|
|
|
$
|
1,934
|
|
|
(3.3
|
)
|
Salaries, wages and benefits
|
|
1,398
|
|
|
1,264
|
|
|
10.6
|
|
||
Maintenance, materials and repairs
|
|
332
|
|
|
326
|
|
|
1.9
|
|
||
Other rent and landing fees
|
|
285
|
|
|
287
|
|
|
(0.9
|
)
|
||
Aircraft rent
|
|
216
|
|
|
165
|
|
|
31.0
|
|
||
Selling expenses
|
|
284
|
|
|
290
|
|
|
(2.1
|
)
|
||
Depreciation and amortization
|
|
214
|
|
|
204
|
|
|
4.7
|
|
||
Special items, net
|
|
(216
|
)
|
|
71
|
|
|
nm
|
|
||
Other
|
|
749
|
|
|
712
|
|
|
5.2
|
|
||
Total mainline operating expenses
|
|
5,133
|
|
|
5,253
|
|
|
(2.3
|
)
|
||
Regional expenses:
|
|
|
|
|
|
|
|||||
Fuel
|
|
252
|
|
|
265
|
|
|
(4.7
|
)
|
||
Other
|
|
506
|
|
|
501
|
|
|
0.9
|
|
||
Total regional operating expenses
|
|
758
|
|
|
766
|
|
|
(1.0
|
)
|
||
Total operating expenses
|
|
$
|
5,891
|
|
|
$
|
6,019
|
|
|
(2.1
|
)
|
•
|
Aircraft fuel and related taxes
de
creased
3.3%
primarily due to a
de
crease in the average price per gallon of fuel, net of the effects of hedging, which was offset in part by an increase in consumption.
|
•
|
Salaries, wages and benefits
in
creased
10.6%
primarily due to the Merger Pilot MOU that was effective upon the closing of the Merger, newly implemented FAA rules on pilot and flight attendant duty times, as well as increased costs from certain stock-based compensation programs driven by a 45% increase in the price of AAG's common stock from $25.25 to $36.60 during the first quarter of 2014.
|
•
|
Aircraft rent
in
creased
31.0%
primarily as a result of new aircraft deliveries since the end of the 2013 first quarter as American continues its fleet renewal program.
|
|
|
Three Months Ended March 31,
|
|
Percent Increase (Decrease)
|
|||||||
|
|
2014
|
|
2013
|
|
||||||
|
|
(In millions)
|
|
|
|||||||
Interest income
|
|
$
|
7
|
|
|
$
|
4
|
|
|
57.6
|
|
Interest expense, net of capitalized interest
|
|
(168
|
)
|
|
(169
|
)
|
|
(0.6
|
)
|
||
Other, net
|
|
(5
|
)
|
|
(24
|
)
|
|
(82.6
|
)
|
||
Total nonoperating expense, net
|
|
$
|
(166
|
)
|
|
$
|
(189
|
)
|
|
(12.4
|
)
|
Aircraft and facility financing renegotiations and rejections
(1), (2)
|
|
$
|
136
|
|
Professional fees
|
|
39
|
|
|
Other
|
|
(15
|
)
|
|
Total reorganization items, net
|
|
$
|
160
|
|
(1)
|
Amounts include allowed claims (claims approved by the Bankruptcy Court) and estimated allowed claims relating to (i) the rejection or modification of financings related to aircraft and (ii) entry of orders treated as unsecured claims with respect to facility agreements supporting certain issuances of special facility revenue bonds. The Debtors recorded an estimated claim associated with the rejection or modification of a financing or facility agreement when the applicable motion was filed with the Bankruptcy Court to reject or modify such financing and the Debtors believed that it was probable the motion would be approved, and there was sufficient information to estimate the claim.
|
(2)
|
Pursuant to the Plan, the Debtors agreed to allow certain post-petition unsecured claims on obligations. As a result, during the
three
months ended
March 31, 2013
, American recorded reorganization charges to adjust estimated allowed claim amounts previously recorded on rejected special facility revenue bonds of
$127 million
, which are included in the table above.
|
|
|
AAG
|
|
American
|
||||||||||||
|
|
March 31,
2014 |
|
December 31,
2013 |
|
March 31,
2014 |
|
December 31,
2013 |
||||||||
Cash
|
|
$
|
1,259
|
|
|
$
|
1,140
|
|
|
$
|
983
|
|
|
$
|
829
|
|
Short-term investments
|
|
8,405
|
|
|
8,111
|
|
|
4,979
|
|
|
5,162
|
|
||||
Restricted cash and short-term investments
(1)
|
|
947
|
|
|
1,035
|
|
|
699
|
|
|
702
|
|
||||
Total cash, short-term investments and restricted cash and short-term investments
|
|
$
|
10,611
|
|
|
$
|
10,286
|
|
|
$
|
6,661
|
|
|
$
|
6,693
|
|
(1)
|
Our restricted cash and short-term investments related primarily to collateral held to support projected workers compensation obligations.
|
|
S&P Local Issuer Credit Rating
|
|
Fitch Issuer Default Credit Rating
|
|
Moody's Corporate Family Rating
|
American Airlines Group
|
B
|
|
B+
|
|
B1
|
American Airlines
|
B
|
|
B+
|
|
*
|
*
|
The credit agency does not rate this category for the respective entity.
|
|
|
Remainder of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019 and Thereafter
|
|
Total
|
|||||||
Airbus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
A320 Family
|
|
40
|
|
|
43
|
|
|
25
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
128
|
|
A320 Neo
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
25
|
|
|
65
|
|
|
100
|
|
A330-200
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
A350 XWB
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
10
|
|
|
6
|
|
|
22
|
|
Boeing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
737 Family
|
|
15
|
|
|
20
|
|
|
20
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
75
|
|
737 MAX
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
17
|
|
|
80
|
|
|
100
|
|
777-300 ER
|
|
5
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
787 Family
|
|
2
|
|
|
11
|
|
|
13
|
|
|
9
|
|
|
7
|
|
|
—
|
|
|
42
|
|
Bombardier
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
CRJ900
(1)
|
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
Embraer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
ERJ175
(1)
|
|
—
|
|
|
24
|
|
|
24
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
60
|
|
Total
|
|
79
|
|
|
115
|
|
|
84
|
|
|
80
|
|
|
59
|
|
|
151
|
|
|
568
|
|
(1)
|
These aircraft may be operated by wholly-owned subsidiaries or leased to third-party regional carriers which would operate the aircraft under capacity purchase arrangements.
|
|
|
Remainder of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019 and Thereafter
|
|
Total
|
||||||||||||||
Payments for American aircraft commitments and certain engines
(1)
|
|
$
|
2,161
|
|
|
$
|
3,926
|
|
|
$
|
4,059
|
|
|
$
|
3,667
|
|
|
$
|
3,692
|
|
|
$
|
11,348
|
|
|
$
|
28,853
|
|
Payments for US Airways aircraft commitments and certain engines
|
|
$
|
705
|
|
|
$
|
561
|
|
|
$
|
112
|
|
|
$
|
716
|
|
|
$
|
985
|
|
|
$
|
556
|
|
|
$
|
3,635
|
|
(1)
|
These amounts are net of purchase deposits currently held by the manufacturers and include all commitments for regional aircraft. American has granted Boeing a security interest in its purchase deposits with Boeing. American's purchase deposits totaled
$1.0 billion
as of
March 31, 2014
.
|
|
Payments due by Period
|
|
|
|||||||||||||||||||||||||
|
|
Remainder of 2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019 and Thereafter
|
|
Total
|
||||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||||||
American Airlines
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capital lease obligations
(1), (3)
|
|
$
|
662
|
|
|
$
|
882
|
|
|
$
|
1,703
|
|
|
$
|
850
|
|
|
$
|
733
|
|
|
$
|
5,750
|
|
|
$
|
10,580
|
|
Interest obligations
(2), (3)
|
|
347
|
|
|
526
|
|
|
434
|
|
|
392
|
|
|
400
|
|
|
1,099
|
|
|
3,198
|
|
|||||||
Commitments for aircraft and engine purchases and operating leases
(4), (5)
|
|
3,245
|
|
|
5,144
|
|
|
5,193
|
|
|
4,746
|
|
|
4,686
|
|
|
16,719
|
|
|
39,733
|
|
|||||||
Regional capacity purchase agreements
(6)
|
|
276
|
|
|
670
|
|
|
676
|
|
|
520
|
|
|
511
|
|
|
3,849
|
|
|
6,502
|
|
|||||||
Minimum pension contribution and other purchase obligations
(7)
|
|
356
|
|
|
334
|
|
|
302
|
|
|
281
|
|
|
275
|
|
|
3,961
|
|
|
5,509
|
|
|||||||
Total AA Contractual Obligations
|
|
$
|
4,886
|
|
|
$
|
7,556
|
|
|
$
|
8,308
|
|
|
$
|
6,789
|
|
|
$
|
6,605
|
|
|
$
|
31,378
|
|
|
$
|
65,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
US Airways Group and Other AAG subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Debt and capital lease obligations
(1), (3)
|
|
$
|
423
|
|
|
$
|
459
|
|
|
$
|
947
|
|
|
$
|
391
|
|
|
$
|
1,046
|
|
|
$
|
2,931
|
|
|
$
|
6,197
|
|
Interest obligations
(2), (3)
|
|
263
|
|
|
271
|
|
|
264
|
|
|
240
|
|
|
208
|
|
|
396
|
|
|
1,642
|
|
|||||||
Commitments for aircraft and engine purchases and operating leases
(4), (5)
|
|
1,276
|
|
|
1,295
|
|
|
753
|
|
|
1,311
|
|
|
1,434
|
|
|
1,918
|
|
|
7,987
|
|
|||||||
Regional capacity purchase agreements
(6)
|
|
863
|
|
|
1,014
|
|
|
869
|
|
|
734
|
|
|
552
|
|
|
1,161
|
|
|
5,193
|
|
|||||||
Total AAG Contractual Obligations
|
|
$
|
7,711
|
|
|
$
|
10,595
|
|
|
$
|
11,141
|
|
|
$
|
9,465
|
|
|
$
|
9,845
|
|
|
$
|
37,784
|
|
|
$
|
86,541
|
|
(1)
|
Amounts represent contractual amounts due. For American, excludes
$66 million
and for US Airways Group, excludes
$26 million
of unamortized debt discount as of
March 31, 2014
.
|
(2)
|
For variable-rate debt, future interest obligations are estimated using the current forward rates at
March 31, 2014
.
|
(3)
|
For American, includes
$3.4 billion
of future principal payments and
$918 million
of future interest payments, respectively, and for US Airways Group, includes
$2.7 billion
of future principal payments and
$929 million
of future interest payments, respectively, as of March 31, 2014, related to EETCs associated with mortgage financings for the purchase of certain aircraft.
|
(4)
|
See Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations -
"Liquidity and Capital Resources"
for additional information about the obligations of American and US Airways Group.
|
(5)
|
For American, includes
$305 million
and for US Airways Group, includes
$1.9 billion
of future minimum lease payments related to EETC leverage leased financings of certain aircraft as of March 31, 2014.
|
(6)
|
Represents minimum payments under capacity purchase agreements with third-party regional carriers. These commitments are estimates of costs based on assumed minimum levels of flying under the capacity purchase agreements and our actual payments could differ materially.
|
(7)
|
Includes minimum pension contributions based on actuarially determined estimates and other postretirement benefit payments based on estimated payments through 2023. See Note
9
to American's condensed consolidated financial statements in Part I, Item 1B.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
•
|
the inability to successfully combine our businesses in a manner that permits us to achieve the synergies and other benefits anticipated to result from the Merger;
|
•
|
the challenge of integrating complex systems, operating procedures, regulatory compliance programs, technology, aircraft fleets, networks, and other assets in a manner that minimizes any adverse impact on customers, suppliers, employees, and other constituencies;
|
•
|
the effects of divestitures and other operational commitments in connection with the settlement of the litigation brought by the DOJ and certain states prior to the closing of the Merger;
|
•
|
the challenge of forming and maintaining an effective and cohesive management team;
|
•
|
the diversion of the attention of our management and other key employees;
|
•
|
the challenge of integrating workforces while maintaining focus on providing consistent, high quality customer service and running an efficient operation;
|
•
|
the risks relating to integrating various computer, communications and other technology systems, including designing and implementing an integrated customer reservations system, that will be necessary to operate American and US Airways as a single airline and to achieve cost synergies by eliminating redundancies in the businesses;
|
•
|
the disruption of, or the loss of momentum in, our ongoing business;
|
•
|
branding or rebranding initiatives may involve substantial costs and may not be favorably received by customers; and
|
•
|
potential unknown liabilities, liabilities that are significantly larger than we currently anticipate and unforeseen increased expenses or delays associated with the Merger, including costs in excess of the cash transition costs that we currently anticipate.
|
•
|
limit our ability to obtain additional funding for working capital, to withstand operating risks that are customary in the industry, capital expenditures, acquisitions, investments, integration costs, and general corporate purposes, and adversely affect the terms on which such funding can be obtained;
|
•
|
require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness and other obligations, thereby reducing the funds available for other purposes;
|
•
|
make us more vulnerable to economic downturns and catastrophic external events;
|
•
|
contain restrictive covenants that could:
|
▪
|
limit our ability to merge, consolidate, sell assets, incur additional indebtedness, issue preferred stock, make investments and pay dividends; and
|
▪
|
significantly constrain our ability to respond, or respond quickly, to unexpected disruptions in our own operations, the U.S. or global economies, or the businesses in which we operate, or to take advantage of opportunities that would improve our business, operations, or competitive position versus other airlines; and
|
•
|
limit our ability to withstand competitive pressures and reduce our flexibility in responding to changing business and economic conditions.
|
•
|
a decrease in revenues results in a disproportionately greater percentage decrease in earnings;
|
•
|
we may not have sufficient liquidity to fund all of these fixed obligations if our revenues decline or costs increase; and
|
•
|
we may have to use our working capital to fund these fixed obligations instead of funding general corporate requirements, including capital expenditures.
|
•
|
because the Merger was completed on December 9, 2013, AAG's 2013 consolidated results of operations include the results of US Airways Group and its subsidiaries only for 23 days of 2013;
|
•
|
the Merger was accounted for using the acquisition method of accounting with AAG as the acquiring entity, resulting in an adjustment to the carrying values of the assets and liabilities of US Airways Group compared to its historical carrying values;
|
•
|
during the course of our Chapter 11 Cases and in connection with our emergence from Chapter 11 and the effectiveness of the Plan, we recorded material expenses, charges, costs and other accounting entries related to our restructuring process, many of which generally had not been incurred in the past and are not expected to be incurred in the future; and
|
•
|
certain prior accounting presentations, including the manner in which we report our regional operations, have been changed and historical results restated to conform to the current presentation.
|
•
|
changes in law which affect the services that can be offered by airlines in particular markets and at particular airports, or the types of fees that can be charged to passengers;
|
•
|
the granting and timing of certain governmental approvals (including antitrust or foreign government approvals) needed for codesharing alliances and other arrangements with other airlines;
|
•
|
restrictions on competitive practices (for example, court orders, or agency regulations or orders, that would curtail an airline’s ability to respond to a competitor);
|
•
|
the adoption of new passenger security standards or regulations that impact customer service standards (for example, a "passenger bill of rights");
|
•
|
restrictions on airport operations, such as restrictions on the use of Slots at airports or the auction or reallocation of Slot rights currently held by us; and
|
•
|
the adoption of more restrictive locally-imposed noise restrictions.
|
•
|
actual or potential changes in international, national, regional, and local economic, business and financial conditions, including recession, inflation, higher interest rates, wars, terrorist attacks, or political instability;
|
•
|
changes in consumer preferences, perceptions, spending patterns, or demographic trends;
|
•
|
changes in the competitive environment due to industry consolidation, changes in airline alliance affiliations, and other factors;
|
•
|
actual or potential disruptions to the ATC systems, including as a result of "sequestration" or any other interruption in government funding;
|
•
|
increases in costs of safety, security, and environmental measures;
|
•
|
outbreaks of diseases that affect travel behavior; and
|
•
|
weather and natural disasters.
|
•
|
AAG's operating and financial results failing to meet the expectations of securities analysts or investors;
|
•
|
changes in financial estimates or recommendations by securities analysts;
|
•
|
material announcements by us or our competitors;
|
•
|
movements in fuel prices;
|
•
|
new regulatory pronouncements and changes in regulatory guidelines;
|
•
|
general and industry-specific economic conditions;
|
•
|
the success or failure of AAG's integration efforts;
|
•
|
changes in our key personnel;
|
•
|
distributions of shares of our common stock pursuant to our plan of reorganization
,
including distributions from the disputed claims reserve established under the plan of reorganization upon the resolution of the underlying claims;
|
•
|
public sales of a substantial number of shares of our common stock or issuances of our common stock upon the exercise or conversion of convertible securities, options, warrants, RSUs, SARs, or similar rights;
|
•
|
increases or decreases in reported holdings by insiders or other significant stockholders;
|
•
|
fluctuations in trading volume; and
|
•
|
changes in market values of airline companies as well as general market conditions.
|
•
|
advance notice procedures for stockholder proposals to be considered at stockholders’ meetings;
|
•
|
the ability of our board of directors to fill vacancies on the board;
|
•
|
a prohibition against stockholders taking action by written consent;
|
•
|
a prohibition against stockholders calling special meetings of stockholders;
|
•
|
a requirement that holders of at least 80% of the voting power of the shares entitled to vote in the election of directors approve any amendment of our Bylaws submitted to stockholders for approval; and
|
•
|
super-majority voting requirements to modify or amend specified provisions of our Certificate of Incorporation.
|
ITEM 6.
|
EXHIBITS
|
Date: April 23, 2014 By:
|
/s/ Derek J. Kerr
|
|
Derek J. Kerr
|
|
Executive Vice President and Chief Financial Officer
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Date: April 23, 2014 By:
|
/s/ Derek J. Kerr
|
|
Derek J. Kerr
|
|
Executive Vice President and Chief Financial Officer
|
|
(Duly Authorized Officer and Principal Financial Officer)
|
Exhibit Number
|
|
Description
|
10.1
|
|
Amended and Restated Guarantee, dated as of March 31, 2014, from US Airways Group and AAG, relating to obligations of US Airways under the equipment notes relating to its Series 2010-1 Pass Through Certificates.
|
10.2
|
|
Amended and Restated Guarantee, dated as of March 31, 2014, from US Airways Group and AAG, relating to obligations of US Airways under the equipment notes relating to its Series 2011-1 Pass Through Certificates.
|
10.3
|
|
Amended and Restated Guarantee, dated as of March 31, 2014, from US Airways Group and AAG, relating to obligations of US Airways under the equipment notes relating to its Series 2012-1 Pass Through Certificates.
|
10.4
|
|
Amended and Restated Guarantee, dated as of March 31, 2014, from US Airways Group and AAG, relating to obligations of US Airways under the equipment notes relating to its Series 2012-2 Pass Through Certificates.
|
10.5
|
|
Amended and Restated Guarantee, dated as of March 31, 2014, from US Airways Group and AAG, relating to obligations of US Airways under the equipment notes relating to its Series 2013-1 Pass Through Certificates.
|
12.1
|
|
Computation of ratio of earnings to combined fixed charges and preferred dividends American Airlines Group Inc. for the quarter ended March 31, 2014 and 2013.
|
12.2
|
|
Computation of ratio of earnings to fixed charges American Airlines, Inc. for the quarter ended March 31, 2014 and 2013.
|
31.1
|
|
Certification of AAG Chief Executive Officer pursuant to Rule 13a-14(a).
|
31.2
|
|
Certification of AAG Chief Financial Officer pursuant to Rule 13a-14(a).
|
31.3
|
|
Certification of American Chief Executive Officer pursuant to Rule 13a-14(a).
|
31.4
|
|
Certification of American Chief Financial Officer pursuant to Rule 13a-14(a).
|
32.1
|
|
Certification pursuant to Rule 13a-14(b) and section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code).
|
32.2
|
|
Certification pursuant to Rule 13a-14(b) and section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code).
|
101
|
|
Interactive data files pursuant to Rule 405 of Regulation S-T.
|
Exhibit 10.1
Execution Version
AMENDED AND RESTATED GUARANTEE
dated as of March 31, 2014
from
US AIRWAYS GROUP, INC.
and
AMERICAN AIRLINES GROUP INC.
One (1) Airbus A320-200 Aircraft
Five (5) Airbus A321-200 Aircraft
Two (2) Airbus A330-200 Aircraft
TABLE OF CONTENTS
Page | ||||||
Section 1. |
Guarantee | 2 | ||||
Section 2. |
No Implied Third Party Beneficiaries | 3 | ||||
Section 3. |
Waiver; No Set-off; Reinstatement; Subrogation | 3 | ||||
Section 4. |
Amendments, Etc | 4 | ||||
Section 5. |
Payments | 4 | ||||
Section 6. |
Integration; Counterparts; Successors and Assigns; Headings | 4 | ||||
Section 7. |
Notices | 4 | ||||
Section 8. |
No Waivers | 4 | ||||
Section 9. |
Severability | 5 | ||||
Section 10. |
GOVERNING LAW | 5 |
i
AMENDED AND RESTATED GUARANTEE
AMENDED AND RESTATED GUARANTEE, dated as of March 31, 2014 (as amended, modified or supplemented from time to time, this Guarantee), from US AIRWAYS GROUP, INC., a Delaware corporation (together with its permitted successors and assigns, USAG) and AMERICAN AIRLINES GROUP INC., a Delaware corporation (together with its permitted successors and assigns, AAG and, together with USAG, the Guarantors), to the parties listed in Schedule I hereto (collectively, together with their successors and permitted assigns, the Parties, and, individually, a Party).
WHEREAS, US Airways, Inc., a Delaware corporation (Owner), a direct wholly-owned subsidiary of USAG, a direct wholly-owned subsidiary of AAG, has entered into that certain Note Purchase Agreement dated as of December 21, 2010 (the Note Purchase Agreement), among Owner, Wilmington Trust Company, as pass through trustee under each of the Pass Through Trust Agreements (the Pass Through Trustee), Wilmington Trust Company, as Subordination Agent (the Subordination Agent), Wells Fargo Bank Northwest, National Association, as Escrow Agent under each of the Escrow and Paying Agent Agreements, and Wilmington Trust Company, as Paying Agent under each of the Escrow and Paying Agent Agreements;
WHEREAS, capitalized terms used but not defined herein shall have the meanings set forth in the Note Purchase Agreement; and
WHEREAS, in order to finance the aircraft identified on Schedule II hereto (the Aircraft), Owner has issued or will issue, as the case may be, the Equipment Notes under the Trust Indentures;
WHEREAS, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, USAG delivered the Guarantee dated as of April 24, 2013 (the Prior Guarantee) to the Parties;
WHEREAS, USAG and AAG desire to amend and restate the Prior Guarantee on the terms set forth herein and each of the Parties desires to consent to such amendment and restatement;
NOW, THEREFORE, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Guarantee .
(a) Each Guarantor does hereby acknowledge that it is fully aware of the terms and conditions of the Trust Indentures, the Participation Agreements, the Equipment Notes and the transactions and the other documents contemplated thereby, and the Guarantors jointly and severally hereby irrevocably and fully and unconditionally guarantee, as primary obligor and not as surety merely, to the Parties, as their respective interests may appear, the payment by Owner of all payment obligations when due under the Trust Indentures, the Participation Agreements and the Equipment Notes (such obligations of Owner guaranteed hereby being hereafter referred to, individually, as a Guaranteed Obligation and, collectively, as the Guaranteed Obligations) in accordance with the terms of the Financing Agreements. The Guarantors jointly and severally hereby agree that in the event that Owner fails to pay any Guaranteed Obligation when due for any reason (including, without limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceedings affecting the status, existence, assets or obligations of Owner, or the disaffirmance with respect to Owner of any Trust Indenture or any other Financing Agreement to which Owner is a party in any such proceeding) after the date on which such Guaranteed Obligation became due and payable and the applicable grace period has expired, the Guarantors shall pay or cause to be paid forthwith, upon the receipt of notice from the Indenture Trustee (such notice to be sent to Owner (to the extent the Indenture Trustee is not stayed or prevented from doing so by operation of law) and each Guarantor) stating that such Guaranteed Obligation was not paid when due after the applicable grace period has expired and stating the amount of such Guaranteed Obligation.
(b) The obligations of the Guarantors hereunder shall not be, to the fullest extent permitted by law, affected by the genuineness, validity, regularity or enforceability (or lack thereof) of any of Owners obligations under any Trust Indenture or any other Financing Agreement to which Owner is a party, any amendment, waiver or other modification of any Trust Indenture or such other Financing Agreement (except that any such amendment or other modification shall be given effect in determining the obligations of the Guarantors hereunder), or by any substitution, release or exchange of collateral for or other guaranty of any of the Guaranteed Obligations (except to the extent that such substitution, release or exchange is not undertaken in accordance with the terms of the Financing Agreements) without the consent of each Guarantor, or by any priority or preference to which any other obligations of Owner may be entitled over Owners obligations under any Trust Indenture and the other Financing Agreements to which Owner is a party, or by any other circumstance that might otherwise constitute a legal or equitable defense to or discharge of the obligations of a surety or guarantor including, without limitation, any defense arising out of any laws of the United States of America or of any State thereof which would excuse, discharge, exempt, modify or delay the due or punctual payment and performance of the obligations of the Guarantors hereunder. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not, to the fullest extent permitted by law, affect the liability of the Guarantors hereunder: (a) the extension of the time for or waiver of, at any time or from time to time, without notice to the Guarantors, Owners performance of or compliance with any of its obligations under the Financing Agreements (except that such extension or waiver shall be given effect in determining the obligations of the Guarantors hereunder), (b) any assignment, transfer, lease or other arrangement by which Owner transfers possession or loses control of the use of any Aircraft, (c) any defect in the title, condition, design, operation or fitness for use of, or damage to or loss or destruction of, any Aircraft, whether or not due to the fault of Owner, (d) any merger or consolidation of Owner or either Guarantor into or with any other Person, or any sale, transfer, lease or disposal of any of its assets, (e) any issuance of Additional Series Equipment Notes or (f) any change in the ownership of any shares of capital stock of Owner.
2
(c) This Guarantee is an absolute, present and continuing guaranty of payment and performance and not of collection and is in no way conditional or contingent upon any attempt to collect from Owner any unpaid amounts due. The Guarantors specifically agree, to the fullest extent permitted by law, that it shall not be necessary or required, and that the Guarantors shall not be entitled to require, that any Party (i) file suit or proceed to obtain or assert a claim for personal judgment against Owner for the Guaranteed Obligations, or (ii) make any effort at collection of the Guaranteed Obligations from Owner, or (iii) foreclose against or seek to realize upon any security now or hereafter existing for the Guaranteed Obligations, including the Collateral (as defined in the Trust Indentures), or (iv) file suit or proceed to obtain or assert a claim for personal judgment against any other Person liable for the Guaranteed Obligations, or make any effort at collection of the Guaranteed Obligations from any such other Person, or exercise or assert any other right or remedy to which any Party is or may be entitled in connection with the Guaranteed Obligations or any security or other guaranty therefor, or (v) assert or file any claim against the assets of Owner or any other guarantor or other Person liable for the Guaranteed Obligations, or any part thereof, before or as a condition of enforcing the liability of the Guarantors under this Guarantee or requiring payment of said Guaranteed Obligations by the Guarantors hereunder, or at any time thereafter.
Section 2. No Implied Third Party Beneficiaries . This Guarantee shall not be deemed to create any right in any Person except a Party and shall not be construed in any respect to be a contract in whole or in part for the benefit of any other Person.
Section 3. Waiver; No Set-off; Reinstatement; Subrogation . The Guarantors waive notice of the acceptance of this Guarantee and of the performance or nonperformance by Owner, demand for payment from Owner or any other Person, notice of nonpayment or failure to perform on the part of Owner, diligence, presentment, protest, dishonor and, to the fullest extent permitted by law, all other demands or notices whatsoever, other than the request for payment hereunder and notice provided for in Section 1 hereof. The obligations of the Guarantors shall be absolute and unconditional and shall remain in full force and effect until satisfaction of all Guaranteed Obligations and, without limiting the generality of the foregoing, to the extent not prohibited by applicable law, shall not be released, discharged or otherwise affected by the existence of any claims, set-off, defense or other rights that the Guarantors may have at any time and from time to time against any Party, whether in connection herewith or any unrelated transactions. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded or must otherwise be returned by any Party upon the insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding with respect to Owner or otherwise, all as though such payment had not been made. The Guarantor, by virtue of any payment hereunder to a Party, shall be subrogated to such Partys claim against Owner or any other Person relating thereto; provided , however , that neither Guarantor shall be entitled to receive payment from Owner in respect of any claim against Owner arising from a payment by such Guarantor in the event of any insolvency, bankruptcy, liquidation, reorganization or other similar proceedings relating to Owner, or in the event of any proceedings for voluntary liquidation, dissolution or other winding-up of Owner, whether or not involving insolvency or bankruptcy proceedings, in which case the Guaranteed Obligations shall be paid and performed in full before any payment in respect of a claim by such Guarantor shall be made by or on behalf of Owner.
3
Section 4. Amendments, Etc . No amendment of or supplement to this Guarantee, or waiver or modification of, or consent under, the terms hereof, shall be effective unless evidenced by an instrument in writing signed by the Guarantors and each Party against whom such amendment, supplement, waiver, modification or consent is to be enforced.
Section 5. Payments . All payments by the Guarantors hereunder in respect of any Obligation shall be made in Dollars and otherwise as provided in the relevant Trust Indenture, the relevant Participation Agreement or the relevant Equipment Note in which such Guaranteed Obligation is contained.
Section 6. Integration; Counterparts; Successors and Assigns; Headings . This Guarantee (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the Guarantors and the Parties, with respect to the subject matter hereof, (b) may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and (c) shall be binding upon the successors and assigns of the Guarantors and shall inure to the benefit of, and shall be enforceable by, each of the Parties to the fullest extent permitted by applicable laws. The headings in this Guarantee are for purposes of reference only, and shall not limit or otherwise affect the meanings hereof.
Section 7. Notices . All requests, notices or other communications hereunder shall be in writing, addressed as follows:
If to USAG:
US Airways Group, Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to AAG:
American Airlines Group Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to a Party:
to the address or telecopy number set forth in the Participation Agreements
All requests, notices or other communications shall be given in the manner, and shall be effective at the times and under the terms, set forth in Section 12.7 of the Participation Agreements.
Section 8. No Waivers . No failure on the part of any Party to exercise, no delay in exercising, and no course of dealing with respect to, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.
4
Section 9. Severability . To the fullest extent permitted by applicable law, any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or any provision in any other Operative Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10. GOVERNING LAW . THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)). THIS GUARANTEE IS BEING DELIVERED IN NEW YORK, NEW YORK.
Section 11. Consent . By agreeing, acknowledging and consenting to this Guarantee by their signatures below, each Party hereby consents to the amendment and restatement effected by this Guarantee.
5
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed as of the day and year first written above.
US AIRWAYS GROUP, INC. | ||
By: | /s/ Thomas T. Weir | |
Name: Thomas T. Weir Title: Vice President & Treasurer |
||
AMERICAN AIRLINES GROUP INC. | ||
By: | /s/ Thomas T. Weir | |
Name: Thomas T. Weir Title: Vice President & Treasurer |
ACKNOWLEDGED, AGREED AND CONSENTED: | ||
WILMINGTON TRUST COMPANY, as Indenture Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Pass Through Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. Title: Assistant Vice President |
||
WILMINGTON TRUST COMPANY, as Subordination Agent | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. Title: Assistant Vice President |
2
SCHEDULE I
TO GUARANTEE
PARTIES
Wilmington Trust Company, as Indenture Trustee
Wilmington Trust Company, as Pass Through Trustee
Wilmington Trust Company, as Subordination Agent
SCHEDULE I
Page 1
SCHEDULE II
TO GUARANTEE
AIRCRAFT
U.S. Registration Mark |
MSN # | Aircraft Type | Engines | Engine Model Type | ||||
N125UW |
4086 | Airbus A320-214 |
699598
699611 |
CFM56-5B4 | ||||
N535UW |
3993 | Airbus A321-231 |
V15206
V15208 |
V2533-A5 | ||||
N537UW |
4041 | Airbus A321-231 |
V15242
V15244 |
V2533-A5 | ||||
N539UW |
4082 | Airbus A321-231 |
V15194
V15256 |
V2533-A5 | ||||
N541UW |
4123 | Airbus A321-231 |
V15297
V15299 |
V2533-A5 | ||||
N542UW |
4134 | Airbus A321-231 |
V15282
V15284 |
V2533-A5 | ||||
N279AY |
1011 | Airbus A330-243 |
41625
41626 |
Trent 772B | ||||
N280AY |
1022 | Airbus A330-243 |
41641
41642 |
Trent 772B |
SCHEDULE II
Page 1
Exhibit 10.2
Execution Version
AMENDED AND RESTATED GUARANTEE
dated as of March 31, 2014
from
US AIRWAYS GROUP, INC.
and
AMERICAN AIRLINES GROUP INC.
Six (6) Airbus A321-231 Aircraft
Two (2) Airbus A330-243 Aircraft
One (1) Airbus A320-214 Aircraft
TABLE OF CONTENTS
Page | ||||||
Section 1. |
Guarantee | 2 | ||||
Section 2. |
No Implied Third Party Beneficiaries | 3 | ||||
Section 3. |
Waiver; No Set-off; Reinstatement; Subrogation | 3 | ||||
Section 4. |
Amendments, Etc | 4 | ||||
Section 5. |
Payments | 4 | ||||
Section 6. |
Integration; Counterparts; Successors and Assigns; Headings | 4 | ||||
Section 7. |
Notices | 4 | ||||
Section 8. |
No Waivers | 4 | ||||
Section 9. |
Severability | 5 | ||||
Section 10. |
GOVERNING LAW | 5 |
i
AMENDED AND RESTATED GUARANTEE
AMENDED AND RESTATED GUARANTEE, dated as of March 31, 2014 (as amended, modified or supplemented from time to time, this Guarantee), from US AIRWAYS GROUP, INC., a Delaware corporation (together with its permitted successors and assigns, USAG) and AMERICAN AIRLINES GROUP INC., a Delaware corporation (together with its permitted successors and assigns, AAG and, together with USAG, the Guarantors), to the parties listed in Schedule I hereto (collectively, together with their successors and permitted assigns, the Parties, and, individually, a Party).
WHEREAS, US Airways, Inc., a Delaware corporation (Owner), a direct wholly-owned subsidiary of USAG, a direct wholly-owned subsidiary of AAG, has entered into that certain Note Purchase Agreement dated as of June 28, 2011 (the Note Purchase Agreement), among Owner, Wilmington Trust Company, as pass through trustee under each of the Pass Through Trust Agreements (the Pass Through Trustee), Wilmington Trust Company, as Subordination Agent (the Subordination Agent), Wells Fargo Bank Northwest, National Association, as Escrow Agent under each of the Escrow and Paying Agent Agreements, and Wilmington Trust Company, as Paying Agent under each of the Escrow and Paying Agent Agreements;
WHEREAS, capitalized terms used but not defined herein shall have the meanings set forth in the Note Purchase Agreement; and
WHEREAS, in order to finance the aircraft identified on Schedule II hereto (the Aircraft), Owner has issued or will issue, as the case may be, the Equipment Notes under the Trust Indentures;
WHEREAS, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, USAG delivered the Guarantee dated as of April 24, 2013 (the Prior Guarantee) to the Parties;
WHEREAS, USAG and AAG desire to amend and restate the Prior Guarantee on the terms set forth herein and each of the Parties desires to consent to such amendment and restatement;
NOW, THEREFORE, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Guarantee .
(a) Each Guarantor does hereby acknowledge that it is fully aware of the terms and conditions of the Trust Indentures, the Participation Agreements, the Equipment Notes and the transactions and the other documents contemplated thereby, and the Guarantors jointly and severally hereby irrevocably and fully and unconditionally guarantee, as primary obligor and not as surety merely, to the Parties, as their respective interests may appear, the payment by Owner of all payment obligations when due under the Trust Indentures, the Participation Agreements and the Equipment Notes (such obligations of Owner guaranteed hereby being hereafter referred to, individually, as a Guaranteed Obligation and, collectively, as the Guaranteed Obligations) in accordance with the terms of the Financing Agreements. The Guarantors jointly and severally hereby agree that in the event that Owner fails to pay any Guaranteed Obligation when due for any reason (including, without limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceedings affecting the status, existence, assets or obligations of Owner, or the disaffirmance with respect to Owner of any Trust Indenture or any other Financing Agreement to which Owner is a party in any such proceeding) after the date on which such Guaranteed Obligation became due and payable and the applicable grace period has expired, the Guarantors shall pay or cause to be paid forthwith, upon the receipt of notice from the Indenture Trustee (such notice to be sent to Owner (to the extent the Indenture Trustee is not stayed or prevented from doing so by operation of law) and each Guarantor) stating that such Guaranteed Obligation was not paid when due after the applicable grace period has expired and stating the amount of such Guaranteed Obligation.
(b) The obligations of the Guarantors hereunder shall not be, to the fullest extent permitted by law, affected by the genuineness, validity, regularity or enforceability (or lack thereof) of any of Owners obligations under any Trust Indenture or any other Financing Agreement to which Owner is a party, any amendment, waiver or other modification of any Trust Indenture or such other Financing Agreement (except that any such amendment or other modification shall be given effect in determining the obligations of the Guarantors hereunder), or by any substitution, release or exchange of collateral for or other guaranty of any of the Guaranteed Obligations (except to the extent that such substitution, release or exchange is not undertaken in accordance with the terms of the Financing Agreements) without the consent of each Guarantor, or by any priority or preference to which any other obligations of Owner may be entitled over Owners obligations under any Trust Indenture and the other Financing Agreements to which Owner is a party, or by any other circumstance that might otherwise constitute a legal or equitable defense to or discharge of the obligations of a surety or guarantor including, without limitation, any defense arising out of any laws of the United States of America or of any State thereof which would excuse, discharge, exempt, modify or delay the due or punctual payment and performance of the obligations of the Guarantors hereunder. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not, to the fullest extent permitted by law, affect the liability of the Guarantors hereunder: (a) the extension of the time for or waiver of, at any time or from time to time, without notice to the Guarantors, Owners performance of or compliance with any of its obligations under the Financing Agreements (except that such extension or waiver shall be given effect in determining the obligations of the Guarantors hereunder), (b) any assignment, transfer, lease or other arrangement by which Owner transfers possession or loses control of the use of any Aircraft, (c) any defect in the title, condition, design, operation or fitness for use of, or damage to or loss or destruction of, any Aircraft, whether or not due to the fault of Owner, (d) any merger or consolidation of Owner or either Guarantor into or with any other Person, or any sale, transfer, lease or disposal of any of its assets, (e) any issuance of Additional Series Equipment Notes or (f) any change in the ownership of any shares of capital stock of Owner.
2
(c) This Guarantee is an absolute, present and continuing guaranty of payment and performance and not of collection and is in no way conditional or contingent upon any attempt to collect from Owner any unpaid amounts due. The Guarantors specifically agree, to the fullest extent permitted by law, that it shall not be necessary or required, and that the Guarantors shall not be entitled to require, that any Party (i) file suit or proceed to obtain or assert a claim for personal judgment against Owner for the Guaranteed Obligations, or (ii) make any effort at collection of the Guaranteed Obligations from Owner, or (iii) foreclose against or seek to realize upon any security now or hereafter existing for the Guaranteed Obligations, including the Collateral (as defined in the Trust Indentures), or (iv) file suit or proceed to obtain or assert a claim for personal judgment against any other Person liable for the Guaranteed Obligations, or make any effort at collection of the Guaranteed Obligations from any such other Person, or exercise or assert any other right or remedy to which any Party is or may be entitled in connection with the Guaranteed Obligations or any security or other guaranty therefor, or (v) assert or file any claim against the assets of Owner or any other guarantor or other Person liable for the Guaranteed Obligations, or any part thereof, before or as a condition of enforcing the liability of the Guarantors under this Guarantee or requiring payment of said Guaranteed Obligations by the Guarantors hereunder, or at any time thereafter.
Section 2. No Implied Third Party Beneficiaries . This Guarantee shall not be deemed to create any right in any Person except a Party and shall not be construed in any respect to be a contract in whole or in part for the benefit of any other Person.
Section 3. Waiver; No Set-off; Reinstatement; Subrogation . The Guarantors waive notice of the acceptance of this Guarantee and of the performance or nonperformance by Owner, demand for payment from Owner or any other Person, notice of nonpayment or failure to perform on the part of Owner, diligence, presentment, protest, dishonor and, to the fullest extent permitted by law, all other demands or notices whatsoever, other than the request for payment hereunder and notice provided for in Section 1 hereof. The obligations of the Guarantors shall be absolute and unconditional and shall remain in full force and effect until satisfaction of all Guaranteed Obligations and, without limiting the generality of the foregoing, to the extent not prohibited by applicable law, shall not be released, discharged or otherwise affected by the existence of any claims, set-off, defense or other rights that the Guarantors may have at any time and from time to time against any Party, whether in connection herewith or any unrelated transactions. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded or must otherwise be returned by any Party upon the insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding with respect to Owner or otherwise, all as though such payment had not been made. The Guarantor, by virtue of any payment hereunder to a Party, shall be subrogated to such Partys claim against Owner or any other Person relating thereto; provided , however , that neither Guarantor shall be entitled to receive payment from Owner in respect of any claim against Owner arising from a payment by such Guarantor in the event of any insolvency, bankruptcy, liquidation, reorganization or other similar proceedings relating to Owner, or in the event of any proceedings for voluntary liquidation, dissolution or other winding-up of Owner, whether or not involving insolvency or bankruptcy proceedings, in which case the Guaranteed Obligations shall be paid and performed in full before any payment in respect of a claim by such Guarantor shall be made by or on behalf of Owner.
3
Section 4. Amendments, Etc . No amendment of or supplement to this Guarantee, or waiver or modification of, or consent under, the terms hereof, shall be effective unless evidenced by an instrument in writing signed by the Guarantors and each Party against whom such amendment, supplement, waiver, modification or consent is to be enforced.
Section 5. Payments . All payments by the Guarantors hereunder in respect of any Obligation shall be made in Dollars and otherwise as provided in the relevant Trust Indenture, the relevant Participation Agreement or the relevant Equipment Note in which such Guaranteed Obligation is contained.
Section 6. Integration; Counterparts; Successors and Assigns; Headings . This Guarantee (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the Guarantors and the Parties, with respect to the subject matter hereof, (b) may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and (c) shall be binding upon the successors and assigns of the Guarantors and shall inure to the benefit of, and shall be enforceable by, each of the Parties to the fullest extent permitted by applicable laws. The headings in this Guarantee are for purposes of reference only, and shall not limit or otherwise affect the meanings hereof.
Section 7. Notices . All requests, notices or other communications hereunder shall be in writing, addressed as follows:
If to USAG:
US Airways Group, Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to AAG:
American Airlines Group Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to a Party:
to the address or telecopy number set forth in the Participation Agreements
All requests, notices or other communications shall be given in the manner, and shall be effective at the times and under the terms, set forth in Section 12.7 of the Participation Agreements.
Section 8. No Waivers . No failure on the part of any Party to exercise, no delay in exercising, and no course of dealing with respect to, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.
4
Section 9. Severability . To the fullest extent permitted by applicable law, any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or any provision in any other Operative Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10. GOVERNING LAW . THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)). THIS GUARANTEE IS BEING DELIVERED IN NEW YORK, NEW YORK.
Section 11. Consent . By agreeing, acknowledging and consenting to this Guarantee by their signatures below, each Party hereby consents to the amendment and restatement effected by this Guarantee.
5
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed as of the day and year first written above.
US AIRWAYS GROUP, INC. | ||
By: | /s/ Thomas T. Weir | |
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer | ||
AMERICAN AIRLINES GROUP INC. | ||
By: | /s/ Thomas T. Weir | |
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer |
ACKNOWLEDGED, AGREED AND CONSENTED: | ||
WILMINGTON TRUST COMPANY, as Indenture Trustee | ||
By: | /s/ Robert P. Hines, Jr. | |
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Pass Through Trustee | ||
By: | /s/ Robert P. Hines, Jr. | |
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Subordination Agent | ||
By: | /s/ Robert P. Hines, Jr. | |
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President |
2
SCHEDULE I
TO GUARANTEE
PARTIES
Wilmington Trust Company, as Indenture Trustee
Wilmington Trust Company, as Pass Through Trustee
Wilmington Trust Company, as Subordination Agent
SCHEDULE I
Page 1
SCHEDULE II
TO GUARANTEE
AIRCRAFT
U.S. Registration Mark |
MSN # | Aircraft Type | Engine Model Type | |||
N543UW | 4843 | Airbus A321-231 | V2533-A5 | |||
N544UW | 4847 | Airbus A321-231 | V2533-A5 | |||
N545UW | 4850 | Airbus A321-231 | V2533-A5 | |||
N546UW | 4885 | Airbus A321-231 | V2533-A5 | |||
N284AY | 1095 | Airbus A330-243 | Trent 772-B60 | |||
N285AY | 1100 | Airbus A330-243 | Trent 772-B60 | |||
N534UW | 3989 | Airbus A321-231 | V2533-A5 | |||
N536UW | 4025 | Airbus A321-231 | V2533-A5 | |||
N126UW | 4149 | Airbus A320-214 | CFM56-5B4 |
SCHEDULE II
Page 1
Exhibit 10.3
Execution Version
AMENDED AND RESTATED GUARANTEE
dated as of March 31, 2014
from
US AIRWAYS GROUP, INC.
and
AMERICAN AIRLINES GROUP INC.
Ten (10) Airbus A321-231 and Four (4) Airbus A321-211 Aircraft
TABLE OF CONTENTS
Page | ||||||
Section 1. |
Guarantee | 2 | ||||
Section 2. |
No Implied Third Party Beneficiaries | 3 | ||||
Section 3. |
Waiver; No Set-off; Reinstatement; Subrogation | 3 | ||||
Section 4. |
Amendments, Etc | 4 | ||||
Section 5. |
Payments | 4 | ||||
Section 6. |
Integration; Counterparts; Successors and Assigns; Headings | 4 | ||||
Section 7. |
Notices | 4 | ||||
Section 8. |
No Waivers | 4 | ||||
Section 9. |
Severability | 5 | ||||
Section 10. |
GOVERNING LAW | 5 |
i
AMENDED AND RESTATED GUARANTEE
AMENDED AND RESTATED GUARANTEE, dated as of March 31, 2014 (as amended, modified or supplemented from time to time, this Guarantee), from US AIRWAYS GROUP, INC., a Delaware corporation (together with its permitted successors and assigns, USAG) and AMERICAN AIRLINES GROUP INC., a Delaware corporation (together with its permitted successors and assigns, AAG and, together with USAG, the Guarantors), to the parties listed in Schedule I hereto (collectively, together with their successors and permitted assigns, the Parties, and, individually, a Party).
WHEREAS, US Airways, Inc., a Delaware corporation (Owner), a direct wholly-owned subsidiary of USAG, a direct wholly-owned subsidiary of AAG, has entered into that certain Note Purchase Agreement dated as of May 14, 2012 (the Note Purchase Agreement), among Owner, Wilmington Trust Company, as pass through trustee under each of the Pass Through Trust Agreements (the Pass Through Trustee), Wilmington Trust Company, as Subordination Agent (the Subordination Agent), Wells Fargo Bank Northwest, National Association, as Escrow Agent under each of the Escrow and Paying Agent Agreements, and Wilmington Trust Company, as Paying Agent under each of the Escrow and Paying Agent Agreements;
WHEREAS, capitalized terms used but not defined herein shall have the meanings set forth in the Note Purchase Agreement; and
WHEREAS, in order to finance the aircraft identified on Schedule II hereto (the Aircraft), Owner has issued or will issue, as the case may be, the Equipment Notes under the Trust Indentures;
WHEREAS, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, USAG delivered the Guarantee dated as of April 24, 2013 (the Prior Guarantee) to the Parties;
WHEREAS, USAG and AAG desire to amend and restate the Prior Guarantee on the terms set forth herein and each of the Parties desires to consent to such amendment and restatement;
NOW, THEREFORE, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Guarantee .
(a) Each Guarantor does hereby acknowledge that it is fully aware of the terms and conditions of the Trust Indentures, the Participation Agreements, the Equipment Notes and the transactions and the other documents contemplated thereby, and the Guarantors jointly and severally hereby irrevocably and fully and unconditionally guarantee, as primary obligor and not as surety merely, to the Parties, as their respective interests may appear, the payment by Owner of all payment obligations when due under the Trust Indentures, the Participation Agreements and the Equipment Notes (such obligations of Owner guaranteed hereby being hereafter referred to, individually, as a Guaranteed Obligation and, collectively, as the Guaranteed Obligations) in accordance with the terms of the Financing Agreements. The Guarantors jointly and severally hereby agree that in the event that Owner fails to pay any Guaranteed Obligation when due for any reason (including, without limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceedings affecting the status, existence, assets or obligations of Owner, or the disaffirmance with respect to Owner of any Trust Indenture or any other Financing Agreement to which Owner is a party in any such proceeding) after the date on which such Guaranteed Obligation became due and payable and the applicable grace period has expired, the Guarantors shall pay or cause to be paid forthwith, upon the receipt of notice from the Indenture Trustee (such notice to be sent to Owner (to the extent the Indenture Trustee is not stayed or prevented from doing so by operation of law) and each Guarantor) stating that such Guaranteed Obligation was not paid when due after the applicable grace period has expired and stating the amount of such Guaranteed Obligation.
(b) The obligations of the Guarantors hereunder shall not be, to the fullest extent permitted by law, affected by the genuineness, validity, regularity or enforceability (or lack thereof) of any of Owners obligations under any Trust Indenture or any other Financing Agreement to which Owner is a party, any amendment, waiver or other modification of any Trust Indenture or such other Financing Agreement (except that any such amendment or other modification shall be given effect in determining the obligations of the Guarantors hereunder), or by any substitution, release or exchange of collateral for or other guaranty of any of the Guaranteed Obligations (except to the extent that such substitution, release or exchange is not undertaken in accordance with the terms of the Financing Agreements) without the consent of each Guarantor, or by any priority or preference to which any other obligations of Owner may be entitled over Owners obligations under any Trust Indenture and the other Financing Agreements to which Owner is a party, or by any other circumstance that might otherwise constitute a legal or equitable defense to or discharge of the obligations of a surety or guarantor including, without limitation, any defense arising out of any laws of the United States of America or of any State thereof which would excuse, discharge, exempt, modify or delay the due or punctual payment and performance of the obligations of the Guarantors hereunder. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not, to the fullest extent permitted by law, affect the liability of the Guarantors hereunder: (a) the extension of the time for or waiver of, at any time or from time to time, without notice to the Guarantors, Owners performance of or compliance with any of its obligations under the Financing Agreements (except that such extension or waiver shall be given effect in determining the obligations of the Guarantors hereunder), (b) any assignment, transfer, lease or other arrangement by which Owner transfers possession or loses control of the use of any Aircraft, (c) any defect in the title, condition, design, operation or fitness for use of, or damage to or loss or destruction of, any Aircraft, whether or not due to the fault of Owner, (d) any merger or consolidation of Owner or either Guarantor into or with any other Person, or any sale, transfer, lease or disposal of any of its assets, (e) any issuance of Series C Equipment Notes or (f) any change in the ownership of any shares of capital stock of Owner.
2
(c) This Guarantee is an absolute, present and continuing guaranty of payment and performance and not of collection and is in no way conditional or contingent upon any attempt to collect from Owner any unpaid amounts due. The Guarantors specifically agree, to the fullest extent permitted by law, that it shall not be necessary or required, and that the Guarantors shall not be entitled to require, that any Party (i) file suit or proceed to obtain or assert a claim for personal judgment against Owner for the Guaranteed Obligations, or (ii) make any effort at collection of the Guaranteed Obligations from Owner, or (iii) foreclose against or seek to realize upon any security now or hereafter existing for the Guaranteed Obligations, including the Collateral (as defined in the Trust Indentures), or (iv) file suit or proceed to obtain or assert a claim for personal judgment against any other Person liable for the Guaranteed Obligations, or make any effort at collection of the Guaranteed Obligations from any such other Person, or exercise or assert any other right or remedy to which any Party is or may be entitled in connection with the Guaranteed Obligations or any security or other guaranty therefor, or (v) assert or file any claim against the assets of Owner or any other guarantor or other Person liable for the Guaranteed Obligations, or any part thereof, before or as a condition of enforcing the liability of the Guarantors under this Guarantee or requiring payment of said Guaranteed Obligations by the Guarantors hereunder, or at any time thereafter.
Section 2. No Implied Third Party Beneficiaries . This Guarantee shall not be deemed to create any right in any Person except a Party and shall not be construed in any respect to be a contract in whole or in part for the benefit of any other Person.
Section 3. Waiver; No Set-off; Reinstatement; Subrogation . The Guarantors waive notice of the acceptance of this Guarantee and of the performance or nonperformance by Owner, demand for payment from Owner or any other Person, notice of nonpayment or failure to perform on the part of Owner, diligence, presentment, protest, dishonor and, to the fullest extent permitted by law, all other demands or notices whatsoever, other than the request for payment hereunder and notice provided for in Section 1 hereof. The obligations of the Guarantors shall be absolute and unconditional and shall remain in full force and effect until satisfaction of all Guaranteed Obligations and, without limiting the generality of the foregoing, to the extent not prohibited by applicable law, shall not be released, discharged or otherwise affected by the existence of any claims, set-off, defense or other rights that the Guarantors may have at any time and from time to time against any Party, whether in connection herewith or any unrelated transactions. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded or must otherwise be returned by any Party upon the insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding with respect to Owner or otherwise, all as though such payment had not been made. The Guarantor, by virtue of any payment hereunder to a Party, shall be subrogated to such Partys claim against Owner or any other Person relating thereto; provided , however , that neither Guarantor shall be entitled to receive payment from Owner in respect of any claim against Owner arising from a payment by such Guarantor in the event of any insolvency, bankruptcy, liquidation, reorganization or other similar proceedings relating to Owner, or in the event of any proceedings for voluntary liquidation, dissolution or other winding-up of Owner, whether or not involving insolvency or bankruptcy proceedings, in which case the Guaranteed Obligations shall be paid and performed in full before any payment in respect of a claim by such Guarantor shall be made by or on behalf of Owner.
3
Section 4. Amendments, Etc . No amendment of or supplement to this Guarantee, or waiver or modification of, or consent under, the terms hereof, shall be effective unless evidenced by an instrument in writing signed by the Guarantors and each Party against whom such amendment, supplement, waiver, modification or consent is to be enforced.
Section 5. Payments . All payments by the Guarantors hereunder in respect of any Obligation shall be made in Dollars and otherwise as provided in the relevant Trust Indenture, the relevant Participation Agreement or the relevant Equipment Note in which such Guaranteed Obligation is contained.
Section 6. Integration; Counterparts; Successors and Assigns; Headings . This Guarantee (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the Guarantors and the Parties, with respect to the subject matter hereof, (b) may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and (c) shall be binding upon the successors and assigns of the Guarantors and shall inure to the benefit of, and shall be enforceable by, each of the Parties to the fullest extent permitted by applicable laws. The headings in this Guarantee are for purposes of reference only, and shall not limit or otherwise affect the meanings hereof.
Section 7. Notices . All requests, notices or other communications hereunder shall be in writing, addressed as follows:
If to USAG:
US Airways Group, Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to AAG:
American Airlines Group Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to a Party:
to the address or telecopy number set forth in the Participation Agreements
All requests, notices or other communications shall be given in the manner, and shall be effective at the times and under the terms, set forth in Section 12.7 of the Participation Agreements.
Section 8. No Waivers . No failure on the part of any Party to exercise, no delay in exercising, and no course of dealing with respect to, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.
4
Section 9. Severability . To the fullest extent permitted by applicable law, any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or any provision in any other Operative Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10. GOVERNING LAW . THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)). THIS GUARANTEE IS BEING DELIVERED IN NEW YORK, NEW YORK.
Section 11. Consent . By agreeing, acknowledging and consenting to this Guarantee by their signatures below, each Party hereby consents to the amendment and restatement effected by this Guarantee.
5
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed as of the day and year first written above.
US AIRWAYS GROUP, INC. | ||
By: | /s/ Thomas T. Weir | |
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer | ||
AMERICAN AIRLINES GROUP INC. | ||
By: | /s/ Thomas T. Weir | |
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer |
ACKNOWLEDGED, AGREED AND CONSENTED: | ||
WILMINGTON TRUST COMPANY, as Indenture Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Pass Through Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Subordination Agent | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President |
2
SCHEDULE I
TO GUARANTEE
PARTIES
Wilmington Trust Company, as Indenture Trustee
Wilmington Trust Company, as Pass Through Trustee
Wilmington Trust Company, as Subordination Agent
SCHEDULE I
Page 1
SCHEDULE II
TO GUARANTEE
AIRCRAFT
U.S. Registration Mark |
MSN # |
Aircraft Type |
Engine Model Type |
|||
N538UW | 4050 | Airbus A321-231 | IAE V2533-A5 | |||
N540UW | 4107 | Airbus A321-231 | IAE V2533-A5 | |||
N559UW | 5292 | Airbus A321-231 | IAE V2533-A5 | |||
N560UW | 5300 | Airbus A321-231 | IAE V2533-A5 | |||
N561UW | 5317 | Airbus A321-231 | IAE V2533-A5 | |||
N562UW | 5332 | Airbus A321-231 | IAE V2533-A5 | |||
N563UW | 5368 | Airbus A321-231 | IAE V2533-A5 | |||
N564UW | 5374 | Airbus A321-231 | IAE V2533-A5 | |||
N565UW | 5409 | Airbus A321-231 | IAE V2533-A5 | |||
N566UW | 5422 | Airbus A321-231 | IAE V2533-A5 | |||
N198UW | 5444 | Airbus A321-211 | CFM56-5B3P | |||
N199UW | 5475 | Airbus A321-211 | CFM56-5B3P | |||
N150UW | 5504 | Airbus A321-211 | CFM56-5B3P | |||
N151UW | 5513 | Airbus A321-211 | CFM56-5B3P |
SCHEDULE II
Page 1
Exhibit 10.4
Execution Version
AMENDED AND RESTATED GUARANTEE
dated as of March 31, 2014
from
US AIRWAYS GROUP, INC.
and
AMERICAN AIRLINES GROUP INC.
Seven (7) Airbus A321-200 and Four (4) Airbus A330-200 Aircraft
TABLE OF CONTENTS
Page | ||||||
Section 1. |
Guarantee | 2 | ||||
Section 2. |
No Implied Third Party Beneficiaries | 3 | ||||
Section 3. |
Waiver; No Set-off; Reinstatement; Subrogation | 3 | ||||
Section 4. |
Amendments, Etc | 4 | ||||
Section 5. |
Payments | 4 | ||||
Section 6. |
Integration; Counterparts; Successors and Assigns; Headings | 4 | ||||
Section 7. |
Notices | 4 | ||||
Section 8. |
No Waivers | 4 | ||||
Section 9. |
Severability | 5 | ||||
Section 10. |
GOVERNING LAW | 5 |
i
AMENDED AND RESTATED GUARANTEE
AMENDED AND RESTATED GUARANTEE, dated as of March 31, 2014 (as amended, modified or supplemented from time to time, this Guarantee), from US AIRWAYS GROUP, INC., a Delaware corporation (together with its permitted successors and assigns, USAG) and AMERICAN AIRLINES GROUP INC., a Delaware corporation (together with its permitted successors and assigns, AAG and, together with USAG, the Guarantors), to the parties listed in Schedule I hereto (collectively, together with their successors and permitted assigns, the Parties, and, individually, a Party).
WHEREAS, US Airways, Inc., a Delaware corporation (Owner), a direct wholly-owned subsidiary of USAG, a direct wholly-owned subsidiary of AAG, has entered into that certain Note Purchase Agreement dated as of December 13, 2012 (the Note Purchase Agreement), among Owner, Wilmington Trust Company, as pass through trustee under each of the Pass Through Trust Agreements (the Pass Through Trustee), Wilmington Trust Company, as Subordination Agent (the Subordination Agent), Wilmington Trust, National Association, as Escrow Agent under each of the Escrow and Paying Agent Agreements, and Wilmington Trust Company, as Paying Agent under each of the Escrow and Paying Agent Agreements;
WHEREAS, capitalized terms used but not defined herein shall have the meanings set forth in the Note Purchase Agreement; and
WHEREAS, in order to finance the aircraft identified on Schedule II hereto (the Aircraft), Owner has issued or will issue, as the case may be, the Equipment Notes under the Trust Indentures;
WHEREAS, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, USAG delivered the Guarantee dated as of April 24, 2013 (the Prior Guarantee) to the Parties;
WHEREAS, USAG and AAG desire to amend and restate the Prior Guarantee on the terms set forth herein and each of the Parties desires to consent to such amendment and restatement;
NOW, THEREFORE, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Guarantee .
(a) Each Guarantor does hereby acknowledge that it is fully aware of the terms and conditions of the Trust Indentures, the Participation Agreements, the Equipment Notes and the transactions and the other documents contemplated thereby, and the Guarantors jointly and severally hereby irrevocably and fully and unconditionally guarantee, as primary obligor and not as surety merely, to the Parties, as their respective interests may appear, the payment by Owner of all payment obligations when due under the Trust Indentures, the Participation Agreements and the Equipment Notes (such obligations of Owner guaranteed hereby being hereafter referred to, individually, as a Guaranteed Obligation and, collectively, as the Guaranteed Obligations) in accordance with the terms of the Financing Agreements. The Guarantors jointly and severally hereby agree that in the event that Owner fails to pay any Guaranteed Obligation when due for any reason (including, without limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceedings affecting the status, existence, assets or obligations of Owner, or the disaffirmance with respect to Owner of any Trust Indenture or any other Financing Agreement to which Owner is a party in any such proceeding) after the date on which such Guaranteed Obligation became due and payable and the applicable grace period has expired, the Guarantors shall pay or cause to be paid forthwith, upon the receipt of notice from the Indenture Trustee (such notice to be sent to Owner (to the extent the Indenture Trustee is not stayed or prevented from doing so by operation of law) and each Guarantor) stating that such Guaranteed Obligation was not paid when due after the applicable grace period has expired and stating the amount of such Guaranteed Obligation.
(b) The obligations of the Guarantors hereunder shall not be, to the fullest extent permitted by law, affected by the genuineness, validity, regularity or enforceability (or lack thereof) of any of Owners obligations under any Trust Indenture or any other Financing Agreement to which Owner is a party, any amendment, waiver or other modification of any Trust Indenture or such other Financing Agreement (except that any such amendment or other modification shall be given effect in determining the obligations of the Guarantors hereunder), or by any substitution, release or exchange of collateral for or other guaranty of any of the Guaranteed Obligations (except to the extent that such substitution, release or exchange is not undertaken in accordance with the terms of the Financing Agreements) without the consent of each Guarantor, or by any priority or preference to which any other obligations of Owner may be entitled over Owners obligations under any Trust Indenture and the other Financing Agreements to which Owner is a party, or by any other circumstance that might otherwise constitute a legal or equitable defense to or discharge of the obligations of a surety or guarantor including, without limitation, any defense arising out of any laws of the United States of America or of any State thereof which would excuse, discharge, exempt, modify or delay the due or punctual payment and performance of the obligations of the Guarantors hereunder. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not, to the fullest extent permitted by law, affect the liability of the Guarantors hereunder: (a) the extension of the time for or waiver of, at any time or from time to time, without notice to the Guarantors, Owners performance of or compliance with any of its obligations under the Financing Agreements (except that such extension or waiver shall be given effect in determining the obligations of the Guarantors hereunder), (b) any assignment, transfer, lease or other arrangement by which Owner transfers possession or loses control of the use of any Aircraft, (c) any defect in the title, condition, design, operation or fitness for use of, or damage to or loss or destruction of, any Aircraft, whether or not due to the fault of Owner, (d) any merger or consolidation of Owner or either Guarantor into or with any other Person, or any sale, transfer, lease or disposal of any of its assets, (e) any issuance of Series C Equipment Notes or (f) any change in the ownership of any shares of capital stock of Owner.
2
(c) This Guarantee is an absolute, present and continuing guaranty of payment and performance and not of collection and is in no way conditional or contingent upon any attempt to collect from Owner any unpaid amounts due. The Guarantors specifically agree, to the fullest extent permitted by law, that it shall not be necessary or required, and that the Guarantors shall not be entitled to require, that any Party (i) file suit or proceed to obtain or assert a claim for personal judgment against Owner for the Guaranteed Obligations, or (ii) make any effort at collection of the Guaranteed Obligations from Owner, or (iii) foreclose against or seek to realize upon any security now or hereafter existing for the Guaranteed Obligations, including the Collateral (as defined in the Trust Indentures), or (iv) file suit or proceed to obtain or assert a claim for personal judgment against any other Person liable for the Guaranteed Obligations, or make any effort at collection of the Guaranteed Obligations from any such other Person, or exercise or assert any other right or remedy to which any Party is or may be entitled in connection with the Guaranteed Obligations or any security or other guaranty therefor, or (v) assert or file any claim against the assets of Owner or any other guarantor or other Person liable for the Guaranteed Obligations, or any part thereof, before or as a condition of enforcing the liability of the Guarantors under this Guarantee or requiring payment of said Guaranteed Obligations by the Guarantors hereunder, or at any time thereafter.
Section 2. No Implied Third Party Beneficiaries . This Guarantee shall not be deemed to create any right in any Person except a Party and shall not be construed in any respect to be a contract in whole or in part for the benefit of any other Person.
Section 3. Waiver; No Set-off; Reinstatement; Subrogation . The Guarantors waive notice of the acceptance of this Guarantee and of the performance or nonperformance by Owner, demand for payment from Owner or any other Person, notice of nonpayment or failure to perform on the part of Owner, diligence, presentment, protest, dishonor and, to the fullest extent permitted by law, all other demands or notices whatsoever, other than the request for payment hereunder and notice provided for in Section 1 hereof. The obligations of the Guarantors shall be absolute and unconditional and shall remain in full force and effect until satisfaction of all Guaranteed Obligations and, without limiting the generality of the foregoing, to the extent not prohibited by applicable law, shall not be released, discharged or otherwise affected by the existence of any claims, set-off, defense or other rights that the Guarantors may have at any time and from time to time against any Party, whether in connection herewith or any unrelated transactions. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded or must otherwise be returned by any Party upon the insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding with respect to Owner or otherwise, all as though such payment had not been made. The Guarantor, by virtue of any payment hereunder to a Party, shall be subrogated to such Partys claim against Owner or any other Person relating thereto; provided , however , that neither Guarantor shall be entitled to receive payment from Owner in respect of any claim against Owner arising from a payment by such Guarantor in the event of any insolvency, bankruptcy, liquidation, reorganization or other similar proceedings relating to Owner, or in the event of any proceedings for voluntary liquidation, dissolution or other winding-up of Owner, whether or not involving insolvency or bankruptcy proceedings, in which case the Guaranteed Obligations shall be paid and performed in full before any payment in respect of a claim by such Guarantor shall be made by or on behalf of Owner.
3
Section 4. Amendments, Etc . No amendment of or supplement to this Guarantee, or waiver or modification of, or consent under, the terms hereof, shall be effective unless evidenced by an instrument in writing signed by the Guarantors and each Party against whom such amendment, supplement, waiver, modification or consent is to be enforced.
Section 5. Payments . All payments by the Guarantors hereunder in respect of any Obligation shall be made in Dollars and otherwise as provided in the relevant Trust Indenture, the relevant Participation Agreement or the relevant Equipment Note in which such Guaranteed Obligation is contained.
Section 6. Integration; Counterparts; Successors and Assigns; Headings . This Guarantee (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the Guarantors and the Parties, with respect to the subject matter hereof, (b) may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and (c) shall be binding upon the successors and assigns of the Guarantors and shall inure to the benefit of, and shall be enforceable by, each of the Parties to the fullest extent permitted by applicable laws. The headings in this Guarantee are for purposes of reference only, and shall not limit or otherwise affect the meanings hereof.
Section 7. Notices . All requests, notices or other communications hereunder shall be in writing, addressed as follows:
If to USAG:
US Airways Group, Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to AAG:
American Airlines Group Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to a Party:
to the address or telecopy number set forth in the Participation Agreements
All requests, notices or other communications shall be given in the manner, and shall be effective at the times and under the terms, set forth in Section 12.7 of the Participation Agreements.
Section 8. No Waivers . No failure on the part of any Party to exercise, no delay in exercising, and no course of dealing with respect to, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.
4
Section 9. Severability . To the fullest extent permitted by applicable law, any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or any provision in any other Operative Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10. GOVERNING LAW . THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)). THIS GUARANTEE IS BEING DELIVERED IN NEW YORK, NEW YORK.
Section 11. Consent . By agreeing, acknowledging and consenting to this Guarantee by their signatures below, each Party hereby consents to the amendment and restatement effected by this Guarantee.
5
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed as of the day and year first written above.
US AIRWAYS GROUP, INC. | ||
By: |
/s/ Thomas T. Weir |
|
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer | ||
AMERICAN AIRLINES GROUP INC. | ||
By: |
/s/ Thomas T. Weir |
|
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer |
ACKNOWLEDGED, AGREED AND CONSENTED: | ||
WILMINGTON TRUST COMPANY, as Indenture Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Pass Through Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Subordination Agent | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President |
2
SCHEDULE I
TO GUARANTEE
PARTIES
Wilmington Trust Company, as Indenture Trustee
Wilmington Trust Company, as Pass Through Trustee
Wilmington Trust Company, as Subordination Agent
SCHEDULE I
Page 1
SCHEDULE II
TO GUARANTEE
AIRCRAFT
U.S. Registration Mark |
MSN # |
Aircraft Type |
Engine Model Type |
|||
N152UW |
5588 | A321-211 | CFM56-5B3/3B1 | |||
N153UW |
5594 | A321-211 | CFM56-5B3/3B1 | |||
N286AY |
1415 | A330-243 | Trent 772B-60/16 | |||
N287AY |
1417 | A330-243 | Trent 772B-60/16 | |||
N154UW |
5644 | A321-211 | CFM56-5B3/3B1 | |||
N155UW |
5659 | A321-211 | CFM56-5B3/3B1 | |||
N156UW |
5684 | A321-211 | CFM56-5B3/3B1 | |||
N157UW |
5696 | A321-211 | CFM56-5B3/3B1 | |||
N288AY |
1441 | A330-243 | Trent 772B-60/16 | |||
N567UW |
5728 | A321-231 | V2533-A5 | |||
N289AY |
1455 | A330-243 | Trent 772B-60/16 |
SCHEDULE II
Page 1
Exhibit 10.5
Execution Version
AMENDED AND RESTATED GUARANTEE
dated as of March 31, 2014
from
US AIRWAYS GROUP, INC.
and
AMERICAN AIRLINES GROUP INC.
Fourteen (14) Airbus A321-231 and Four (4) Airbus A330-243 Aircraft
TABLE OF CONTENTS
Page | ||||||
Section 1. |
Guarantee | 2 | ||||
Section 2. |
No Implied Third Party Beneficiaries | 3 | ||||
Section 3. |
Waiver; No Set-off; Reinstatement; Subrogation | 3 | ||||
Section 4. |
Amendments, Etc | 4 | ||||
Section 5. |
Payments | 4 | ||||
Section 6. |
Integration; Counterparts; Successors and Assigns; Headings | 4 | ||||
Section 7. |
Notices | 4 | ||||
Section 8. |
No Waivers | 4 | ||||
Section 9. |
Severability | 5 | ||||
Section 10. |
GOVERNING LAW | 5 |
i
AMENDED AND RESTATED GUARANTEE
AMENDED AND RESTATED GUARANTEE, dated as of March 31, 2014 (as amended, modified or supplemented from time to time, this Guarantee), from US AIRWAYS GROUP, INC., a Delaware corporation (together with its permitted successors and assigns, USAG) and AMERICAN AIRLINES GROUP INC., a Delaware corporation (together with its permitted successors and assigns, AAG and, together with USAG, the Guarantors), to the parties listed in Schedule I hereto (collectively, together with their successors and permitted assigns, the Parties, and, individually, a Party).
WHEREAS, US Airways, Inc., a Delaware corporation (Owner), a direct wholly-owned subsidiary of USAG, a direct wholly-owned subsidiary of AAG, has entered into that certain Note Purchase Agreement dated as of April 24, 2013 (the Note Purchase Agreement), among Owner, Wilmington Trust Company, as pass through trustee under each of the Pass Through Trust Agreements (the Pass Through Trustee), Wilmington Trust Company, as Subordination Agent (the Subordination Agent), Wilmington Trust, National Association, as Escrow Agent under each of the Escrow and Paying Agent Agreements, and Wilmington Trust Company, as Paying Agent under each of the Escrow and Paying Agent Agreements;
WHEREAS, capitalized terms used but not defined herein shall have the meanings set forth in the Note Purchase Agreement; and
WHEREAS, in order to finance the aircraft identified on Schedule II hereto (the Aircraft), Owner has issued or will issue, as the case may be, the Equipment Notes under the Trust Indentures;
WHEREAS, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, USAG delivered the Guarantee dated as of April 24, 2013 (the Prior Guarantee) to the Parties;
WHEREAS, USAG and AAG desire to amend and restate the Prior Guarantee on the terms set forth herein and each of the Parties desires to consent to such amendment and restatement;
NOW, THEREFORE, in order to induce the Pass Through Trustee to purchase the Equipment Notes and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Guarantee .
(a) Each Guarantor does hereby acknowledge that it is fully aware of the terms and conditions of the Trust Indentures, the Participation Agreements, the Equipment Notes and the transactions and the other documents contemplated thereby, and the Guarantors jointly and severally hereby irrevocably and fully and unconditionally guarantee, as primary obligor and not as surety merely, to the Parties, as their respective interests may appear, the payment by Owner of all payment obligations when due under the Trust Indentures, the Participation Agreements and the Equipment Notes (such obligations of Owner guaranteed hereby being hereafter referred to, individually, as a Guaranteed Obligation and, collectively, as the Guaranteed Obligations) in accordance with the terms of the Financing Agreements. The Guarantors jointly and severally hereby agree that in the event that Owner fails to pay any Guaranteed Obligation when due for any reason (including, without limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceedings affecting the status, existence, assets or obligations of Owner, or the disaffirmance with respect to Owner of any Trust Indenture or any other Financing Agreement to which Owner is a party in any such proceeding) after the date on which such Guaranteed Obligation became due and payable and the applicable grace period has expired, the Guarantors shall pay or cause to be paid forthwith, upon the receipt of notice from the Indenture Trustee (such notice to be sent to Owner (to the extent the Indenture Trustee is not stayed or prevented from doing so by operation of law) and each Guarantor) stating that such Guaranteed Obligation was not paid when due after the applicable grace period has expired and stating the amount of such Guaranteed Obligation.
(b) The obligations of the Guarantors hereunder shall not be, to the fullest extent permitted by law, affected by the genuineness, validity, regularity or enforceability (or lack thereof) of any of Owners obligations under any Trust Indenture or any other Financing Agreement to which Owner is a party, any amendment, waiver or other modification of any Trust Indenture or such other Financing Agreement (except that any such amendment or other modification shall be given effect in determining the obligations of the Guarantors hereunder), or by any substitution, release or exchange of collateral for or other guaranty of any of the Guaranteed Obligations (except to the extent that such substitution, release or exchange is not undertaken in accordance with the terms of the Financing Agreements) without the consent of each Guarantor, or by any priority or preference to which any other obligations of Owner may be entitled over Owners obligations under any Trust Indenture and the other Financing Agreements to which Owner is a party, or by any other circumstance that might otherwise constitute a legal or equitable defense to or discharge of the obligations of a surety or guarantor including, without limitation, any defense arising out of any laws of the United States of America or of any State thereof which would excuse, discharge, exempt, modify or delay the due or punctual payment and performance of the obligations of the Guarantors hereunder. Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not, to the fullest extent permitted by law, affect the liability of the Guarantors hereunder: (a) the extension of the time for or waiver of, at any time or from time to time, without notice to the Guarantors, Owners performance of or compliance with any of its obligations under the Financing Agreements (except that such extension or waiver shall be given effect in determining the obligations of the Guarantors hereunder), (b) any assignment, transfer, lease or other arrangement by which Owner transfers possession or loses control of the use of any Aircraft, (c) any defect in the title, condition, design, operation or fitness for use of, or damage to or loss or destruction of, any Aircraft, whether or not due to the fault of Owner, (d) any merger or consolidation of Owner or either Guarantor into or with any other Person, or any sale, transfer, lease or disposal of any of its assets, (e) any issuance of Series C Equipment Notes or (f) any change in the ownership of any shares of capital stock of Owner.
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(c) This Guarantee is an absolute, present and continuing guaranty of payment and performance and not of collection and is in no way conditional or contingent upon any attempt to collect from Owner any unpaid amounts due. The Guarantors specifically agree, to the fullest extent permitted by law, that it shall not be necessary or required, and that the Guarantors shall not be entitled to require, that any Party (i) file suit or proceed to obtain or assert a claim for personal judgment against Owner for the Guaranteed Obligations, or (ii) make any effort at collection of the Guaranteed Obligations from Owner, or (iii) foreclose against or seek to realize upon any security now or hereafter existing for the Guaranteed Obligations, including the Collateral (as defined in the Trust Indentures), or (iv) file suit or proceed to obtain or assert a claim for personal judgment against any other Person liable for the Guaranteed Obligations, or make any effort at collection of the Guaranteed Obligations from any such other Person, or exercise or assert any other right or remedy to which any Party is or may be entitled in connection with the Guaranteed Obligations or any security or other guaranty therefor, or (v) assert or file any claim against the assets of Owner or any other guarantor or other Person liable for the Guaranteed Obligations, or any part thereof, before or as a condition of enforcing the liability of the Guarantors under this Guarantee or requiring payment of said Guaranteed Obligations by the Guarantors hereunder, or at any time thereafter.
Section 2. No Implied Third Party Beneficiaries . This Guarantee shall not be deemed to create any right in any Person except a Party and shall not be construed in any respect to be a contract in whole or in part for the benefit of any other Person.
Section 3. Waiver; No Set-off; Reinstatement; Subrogation . The Guarantors waive notice of the acceptance of this Guarantee and of the performance or nonperformance by Owner, demand for payment from Owner or any other Person, notice of nonpayment or failure to perform on the part of Owner, diligence, presentment, protest, dishonor and, to the fullest extent permitted by law, all other demands or notices whatsoever, other than the request for payment hereunder and notice provided for in Section 1 hereof. The obligations of the Guarantors shall be absolute and unconditional and shall remain in full force and effect until satisfaction of all Guaranteed Obligations and, without limiting the generality of the foregoing, to the extent not prohibited by applicable law, shall not be released, discharged or otherwise affected by the existence of any claims, set-off, defense or other rights that the Guarantors may have at any time and from time to time against any Party, whether in connection herewith or any unrelated transactions. This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded or must otherwise be returned by any Party upon the insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceeding with respect to Owner or otherwise, all as though such payment had not been made. The Guarantor, by virtue of any payment hereunder to a Party, shall be subrogated to such Partys claim against Owner or any other Person relating thereto; provided , however , that neither Guarantor shall be entitled to receive payment from Owner in respect of any claim against Owner arising from a payment by such Guarantor in the event of any insolvency, bankruptcy, liquidation, reorganization or other similar proceedings relating to Owner, or in the event of any proceedings for voluntary liquidation, dissolution or other winding-up of Owner, whether or not involving insolvency or bankruptcy proceedings, in which case the Guaranteed Obligations shall be paid and performed in full before any payment in respect of a claim by such Guarantor shall be made by or on behalf of Owner.
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Section 4. Amendments, Etc . No amendment of or supplement to this Guarantee, or waiver or modification of, or consent under, the terms hereof, shall be effective unless evidenced by an instrument in writing signed by the Guarantors and each Party against whom such amendment, supplement, waiver, modification or consent is to be enforced.
Section 5. Payments . All payments by the Guarantors hereunder in respect of any Obligation shall be made in Dollars and otherwise as provided in the relevant Trust Indenture, the relevant Participation Agreement or the relevant Equipment Note in which such Guaranteed Obligation is contained.
Section 6. Integration; Counterparts; Successors and Assigns; Headings . This Guarantee (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, among the Guarantors and the Parties, with respect to the subject matter hereof, (b) may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and (c) shall be binding upon the successors and assigns of the Guarantors and shall inure to the benefit of, and shall be enforceable by, each of the Parties to the fullest extent permitted by applicable laws. The headings in this Guarantee are for purposes of reference only, and shall not limit or otherwise affect the meanings hereof.
Section 7. Notices . All requests, notices or other communications hereunder shall be in writing, addressed as follows:
If to USAG:
US Airways Group, Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to AAG:
American Airlines Group Inc.
4333 Amon Carter Blvd.
Fort Worth, Texas 76155
Attn: Treasurer
Facsimile: 817-967-4318
If to a Party:
to the address or telecopy number set forth in the Participation Agreements
All requests, notices or other communications shall be given in the manner, and shall be effective at the times and under the terms, set forth in Section 12.7 of the Participation Agreements.
Section 8. No Waivers . No failure on the part of any Party to exercise, no delay in exercising, and no course of dealing with respect to, any right or remedy hereunder will operate as a waiver thereof; nor will any single or partial exercise of any right or remedy hereunder preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.
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Section 9. Severability . To the fullest extent permitted by applicable law, any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or any provision in any other Operative Agreement, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 10. GOVERNING LAW . THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW)). THIS GUARANTEE IS BEING DELIVERED IN NEW YORK, NEW YORK.
Section 11. Consent . By agreeing, acknowledging and consenting to this Guarantee by their signatures below, each Party hereby consents to the amendment and restatement effected by this Guarantee.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed as of the day and year first written above.
US AIRWAYS GROUP, INC. | ||
By: |
/s/ Thomas T. Weir |
|
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer | ||
AMERICAN AIRLINES GROUP INC. | ||
By: |
/s/ Thomas T. Weir |
|
Name: Thomas T. Weir | ||
Title: Vice President & Treasurer |
ACKNOWLEDGED, AGREED AND CONSENTED: | ||
WILMINGTON TRUST COMPANY, as Indenture Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Pass Through Trustee | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President | ||
WILMINGTON TRUST COMPANY, as Subordination Agent | ||
By: |
/s/ Robert P. Hines, Jr. |
|
Name: Robert P. Hines, Jr. | ||
Title: Assistant Vice President |
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SCHEDULE I
TO GUARANTEE
PARTIES
Wilmington Trust Company, as Indenture Trustee
Wilmington Trust Company, as Pass Through Trustee
Wilmington Trust Company, as Subordination Agent
SCHEDULE I
Page 1
SCHEDULE II
TO GUARANTEE
AIRCRAFT
U.S. Registration Mark |
MSN # | Aircraft Type | Engine Model Type | |||
N568UW |
5751 | Airbus A321-231 | V2533-A5 | |||
N569UW |
5763 | Airbus A321-231 | V2533-A5 | |||
N570UW |
5795 | Airbus A321-231 | V2533-A5 | |||
N571UW |
5800 | Airbus A321-231 | V2533-A5 | |||
N572UW |
5899 | Airbus A321-231 | V2533-A5 | |||
N573UW |
5939 | Airbus A321-231 | V2533-A5 | |||
N575UW |
5980 | Airbus A321-231 | V2533-A5 | |||
N576UW |
6027 | Airbus A321-231 | V2533-A5 | |||
N578UW |
6035 | Airbus A321-231 | V2533-A5 | |||
N579UW |
TBD | Airbus A321-231 | V2533-A5 | |||
N580UW |
TBD | Airbus A321-231 | V2533-A5 | |||
N581UW |
TBD | Airbus A321-231 | V2533-A5 | |||
N582UW |
TBD | Airbus A321-231 | V2533-A5 | |||
N583UW |
TBD | Airbus A321-231 | V2533-A5 | |||
N290AY |
1480 | Airbus A330-243 | Trent 772B-60 | |||
N291AY |
1502 | Airbus A330-243 | Trent 772B-60 | |||
N292AY |
1512 | Airbus A330-243 | Trent 772B-60 | |||
N293AY |
TBD | Airbus A330-243 | Trent 772B-60 |
SCHEDULE II
Page 1
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Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Income (loss) before income taxes
|
$
|
493
|
|
|
$
|
(363
|
)
|
Add: Total fixed charges (per below)
|
504
|
|
|
519
|
|
||
Less: Interest capitalized
|
13
|
|
|
12
|
|
||
Total earnings before income taxes
|
984
|
|
|
144
|
|
||
Fixed charges:
|
|
|
|
||||
Interest
(1)
|
256
|
|
|
266
|
|
||
Portion of rental expense representative of the interest factor
|
248
|
|
|
253
|
|
||
Total fixed charges
|
504
|
|
|
519
|
|
||
Ratio of earnings to fixed charges
|
1.95
|
|
|
—
|
|
||
Coverage deficiency
|
$
|
—
|
|
|
$
|
375
|
|
(1)
|
The three months ended March 31, 2014 includes non-cash interest accretion related to outstanding Mandatorily Convertible Preferred Stock and Other Bankruptcy Settlement Obligations.
|
|
Three Months Ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Income (loss) before income taxes
|
$
|
412
|
|
|
$
|
(283
|
)
|
Add: Total fixed charges (per below)
|
354
|
|
|
431
|
|
||
Less: Interest capitalized
|
10
|
|
|
12
|
|
||
Total earnings before income taxes
|
756
|
|
|
136
|
|
||
Fixed charges:
|
|
|
|
||||
Interest
|
178
|
|
|
181
|
|
||
Portion of rental expense representative of the interest factor
|
176
|
|
|
250
|
|
||
Total fixed charges
|
354
|
|
|
431
|
|
||
Ratio of earnings to fixed charges
|
2.14
|
|
|
—
|
|
||
Coverage deficiency
|
$
|
—
|
|
|
$
|
295
|
|
Date: April 23, 2014
|
|
/s/ W. Douglas Parker
|
|
|
Name: W. Douglas Parker
|
|
|
Title: Chief Executive Officer
|
Date: April 23, 2014
|
|
/s/ Derek J. Kerr
|
|
|
Name: Derek J. Kerr
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
Date: April 23, 2014
|
|
/s/ W. Douglas Parker
|
|
|
Name: W. Douglas Parker
|
|
|
Title: Chief Executive Officer
|
Date: April 23, 2014
|
|
/s/ Derek J. Kerr
|
|
|
Name: Derek J. Kerr
|
|
|
Title: Executive Vice President and Chief Financial Officer
|
|
|
/s/ W. Douglas Parker
|
|
|
Name: W. Douglas Parker
|
|
|
Title: Chief Executive Officer
|
|
|
Date: April 23, 2014
|
|
|
/s/ Derek J. Kerr
|
|
|
Name: Derek J. Kerr
|
|
|
Title: Executive Vice President and
Chief Financial Officer
|
|
|
Date: April 23, 2014
|
|
|
/s/ W. Douglas Parker
|
|
|
Name: W. Douglas Parker
|
|
|
Title: Chief Executive Officer
|
|
|
Date: April 23, 2014
|
|
|
/s/ Derek J. Kerr
|
|
|
Name: Derek J. Kerr
|
|
|
Title: Executive Vice President and
Chief Financial Officer
|
|
|
Date: April 23, 2014
|