1 SUPPLEMENT DATED NOVEMBER 15, 1994 TO AMERICA WEST AIRLINES, INC. COMBINED PROSPECTUS DATED OCTOBER 20, 1994 Capitalized terms used but not defined herein have the meanings assigned to such terms in the Prospectus. Due to its emergence from Chapter 11 protection on August 25, 1994, and the adoption of "fresh start reporting" pursuant to generally accepted accounting principles, the Company's operating results for the third quarter 1994 are being reported for two separate periods within the quarter. As a result of adopting fresh start reporting, results for periods after August 25, 1994 are not comparable to prior periods. For the period July 1 through August 25, 1994, America West realized net income of $19.1 million after nonrecurring charges and one-time gains related to the Reorganization. In the period August 26 through September 30, 1994, the Company reported net income of $1.2 million. The Company had net income of $14.4 million for the third quarter 1993. Operating income for the periods July 1 through August 25 and August 26 through September 30, 1994, were $25.6 million and $8.3 million, respectively. On a combined basis, operating income was $33.9 million for the 1994 quarter as compared to $33.0 million for the third quarter 1993. The operating results for the period through August 25, 1994 include operating expense adjustments amounting to $5.1 million consisting principally of additional reserves for bad debt and inventories. For the nine months ended September 30, 1994, operating income amounted to $115.8 million (combined basis), an increase of 53.8% from the $75.3 million reported for the nine months ended September 30, 1993. The following tables outline the third quarter and nine-month 1994 and 1993 financial and statistical results for America West Airlines, Inc. (the "Company"). 2 AMERICA WEST AIRLINES, INC. CONDENSED BALANCE SHEETS (IN THOUSANDS OF DOLLARS) ASSETS REORGANIZED | PREDECESSOR COMPANY | COMPANY ------------- | ------------ SEPTEMBER 30, | DECEMBER 31, 1994 | 1993 ------------- | ------------ (UNAUDITED) | | Current assets: | Cash and cash equivalents..................................... $ 204,069 | $ 99,631 Accounts receivable, less allowance for doubtful accounts of | $3,012 in 1994 and $3,030 in 1993.......................... 72,317 | 65,744 Expendable spare parts and supplies, less allowance for | obsolescence of $120 in 1994 and $7,231 in 1993............ 25,929 | 28,111 Prepaid expenses.............................................. 36,342 | 34,939 ------------- | ------------ Total current assets.................................. 338,657 | 228,425 ------------- | ------------ Property and equipment: | Flight equipment.............................................. 440,206 | 872,104 Other property and equipment.................................. 91,303 | 180,607 ------------- | ------------ 531,509 | 1,052,711 Less accumulated depreciation and amortization............. 3,913 | 385,776 ------------- | ------------ 527,596 | 666,935 Equipment purchase deposits................................... 32,915 | 51,836 ------------- | ------------ 560,511 | 718,771 ------------- | ------------ Restricted cash................................................. 30,578 | 46,296 Reorganization value in excess of amounts allocable to | identifiable assets, net...................................... 665,915 | -- Other assets, net............................................... 23,514 | 23,251 ------------- | ------------ $ 1,619,175 | $1,016,743 =========== | ========== 3 AMERICA WEST AIRLINES, INC. CONDENSED BALANCE SHEETS (IN THOUSANDS OF DOLLARS) REORGANIZED | PREDECESSOR COMPANY | COMPANY ------------- | ------------ SEPTEMBER 30, | DECEMBER 31, LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) 1994 | 1993 - ------------------------------------------------------------------- ------------- | ------------ (UNAUDITED) | | Current liabilities: | Current maturities of long-term debt............................. $ 54,110 | $ 125,271 Accounts payable................................................. 95,364 | 62,957 Air traffic liability............................................ 156,013 | 118,479 Accrued compensation and vacation benefits....................... 13,317 | 11,704 Accrued interest................................................. 8,598 | 8,295 Accrued taxes.................................................... 36,611 | 14,114 Other accrued liabilities........................................ 25,290 | 11,980 ------------- | ------------ Total current liabilities................................ 389,303 | 352,800 ------------- | ------------ Estimated liabilities subject to Chapter 11 proceedings............ -- | 381,114 Long-term debt, less current maturities............................ 492,056 | 396,350 Manufacturers' and deferred credits................................ 120,747 | 73,592 Other liabilities.................................................. 28,351 | 67,149 Commitments and contingencies | Stockholders' equity (deficiency): | Preferred stock, $.25 par value. Authorized 50,000,000 shares; | Series C 9.75% convertible preferred stock, issued and | outstanding | 73,099 shares; $1.33 per share cumulative dividend | (liquidation | preference $1,000,000)........................................ -- | 18 Common stock, $.25 par value. Authorized 90,000,000 shares; | issued and outstanding 25,291,102 at December 31, 1993........ -- | 6,323 Preferred stock, $.01 par value. Authorized 48,800,000 shares; | issued and outstanding 0 at September 30, 1994................ -- | -- Class A common stock, $.01 par value. Authorized 1,200,000 | shares; issued and outstanding 1,200,000 shares at September | 30, 1994...................................................... 12 | -- Class B common stock, $.01 par value. Authorized 100,000,000 | shares; issued and outstanding 43,925,000 shares at September | 30, 1994...................................................... 439 | -- Additional paid-in capital....................................... 587,049 | 197,010 Retained earnings (deficit)...................................... 1,218 | (438,626) ------------- | ------------ 588,718 | (235,275) Less deferred compensation and notes receivable -- employee stock | purchase plans................................................ -- | 18,987 ------------- | ------------ Total stockholders' equity (deficiency).................. 588,718 | (254,262) ------------- | ------------ $ 1,619,175 | $1,016,743 ========== | ========== 4 AMERICA WEST AIRLINES, INC. CONDENSED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) (UNAUDITED) REORGANIZED | PREDECESSOR COMPANY COMPANY | ---------------------------- ------------- | THREE MONTHS PERIOD FROM | PERIOD FROM ENDED AUGUST 26 TO | JULY 1 TO SEPTEMBER SEPTEMBER 30, | AUGUST 25, 30, 1994 | 1994 1993 ------------- | ----------- ------------ | Operating revenues: | Passenger........................................... $ 118,592 | $ 217,096 $ 315,779 Cargo............................................... 4,258 | 6,156 9,487 Other............................................... 4,465 | 7,161 9,847 ------------- | ----------- ------------ Total operating revenues.................... 127,315 | 230,413 335,113 ------------- | ----------- ------------ Operating expenses: | Salaries and related costs.......................... 33,047 | 51,238 77,496 Rentals and landing fees............................ 25,823 | 40,875 67,416 Aircraft fuel....................................... 15,694 | 24,852 40,572 Agency commissions.................................. 10,508 | 19,057 27,094 Aircraft maintenance materials and repairs.......... 4,768 | 9,207 7,718 Depreciation and amortization....................... 6,699 | 13,496 20,606 Other............................................... 22,440 | 46,078 61,230 ------------- | ----------- ------------ Total operating expenses.................... 118,979 | 204,803 302,132 ------------- | ----------- ------------ Operating income............................ 8,336 | 25,610 32,981 ------------- | ----------- ------------ Nonoperating income (expenses): | Interest income..................................... 1,083 | 126 166 Interest expense, net of capitalized interest....... (6,358) | (7,930) (13,483) Loss on disposition of property and equipment....... (53) | (389) (1,215) Reorganization expense, net......................... -- | (255,401) (3,726) Other, net.......................................... 35 | (7) (27) ------------- | ----------- ------------ Total nonoperating expenses, net............ (5,293) | (263,601) (18,285) ------------- | ----------- ------------ Income (loss) before income taxes and | extraordinary item.................................. 3,043 | (237,991) 14,696 ------------- | ----------- ------------ Income taxes.......................................... 1,825 | 588 293 ------------- | ----------- ------------ Income (loss) before extraordinary item............... 1,218 | (238,579) 14,403 ------------- | ----------- ------------ Extraordinary gain on elimination of debt............. -- | 257,660 -- ------------- | ----------- ------------ Net income............................................ 1,218 | 19,081 14,403 Retained earnings (deficit) at beginning of period.... -- | (403,315) (463,397) Fresh start adjustments............................. -- | 384,234 -- ------------- | ----------- ------------ Retained earnings (deficit) at end of period.......... $ 1,218 | $ -- $ (448,994) ========== | ========= ========== Earnings (loss) per share: | Primary: | Income (loss) before extraordinary item.......... $ .03 | $ (8.43) $ .54 Extraordinary item............................... -- | 9.12 -- ------------- | ----------- ------------ Net income.................................. $ .03 | $ .69 $ .54 ========== | ========= ========== Fully Diluted: | Income (loss) before extraordinary item............. $ .03 | $ (5.93) $ .38 Extraordinary item.................................. -- | 6.42 -- ------------- | ----------- ------------ Net income.................................. $ .03 | $ .49 $ .38 ========== | ========= ========== Shares used for computation: | Primary............................................. 45,125 | 28,242 29,062 Fully diluted....................................... 45,125 | 40,144 42,041 5 AMERICA WEST AIRLINES, INC. CONDENSED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED) REORGANIZED | COMPANY | PREDECESSOR COMPANY ------------- | ------------------------------ PERIOD FROM | PERIOD FROM NINE MONTHS AUGUST 26 TO | JANUARY 1 TO ENDED SEPTEMBER 30, | AUGUST 25, SEPTEMBER 30, ------------- | ------------ ------------- 1994 | 1994 1993 ------------- | ------------ ------------- | Operating revenues: | Passenger........................................... $ 118,592 | $ 882,140 $ 919,569 Cargo............................................... 4,258 | 27,645 28,458 Other............................................... 4,465 | 29,243 28,601 ------------- | ------------ ------------- Total operating revenues.................... 127,315 | 939,028 976,628 ------------- | ------------ ------------- Operating expenses: | Salaries and related costs.......................... 33,047 | 213,722 227,486 Rentals and landing fees............................ 25,823 | 173,710 207,971 Aircraft fuel....................................... 15,694 | 100,646 124,125 Agency commissions.................................. 10,508 | 78,988 79,187 Aircraft maintenance materials and repairs.......... 4,768 | 28,109 22,337 Depreciation and amortization....................... 6,699 | 56,694 60,485 Other............................................... 22,440 | 179,653 179,709 ------------- | ------------ ------------- Total operating expenses.................... 118,979 | 831,522 901,300 ------------- | ------------ ------------- Operating income............................ 8,336 | 107,506 75,328 ------------- | ------------ ------------- Nonoperating income (expenses): | Interest income..................................... 1,083 | 470 577 Interest expense, net of capitalized interest....... (6,358) | (33,998) (41,046) Loss on disposition of property and equipment....... (53) | (1,659) (1,828) Reorganization expense, net......................... -- | (273,659) (5,618) Other, net.......................................... 35 | 131 (70) ------------- | ------------ ------------- Total nonoperating expenses, net............ (5,293) | (308,715) (47,985) ------------- | ------------ ------------- Income (loss) before income taxes and | extraordinary item.................................. 3,043 | (201,209) 27,343 ------------- | ------------ ------------- Income taxes.......................................... 1,825 | 2,059 546 ------------- | ------------ ------------- Income (loss) before extraordinary item............... 1,218 | (203,268) 26,797 ------------- | ------------ ------------- Extraordinary gain on elimination of debt............. -- | 257,660 -- ------------- | ------------ ------------- Net income............................................ 1,218 | 54,392 26,797 Retained earnings (deficit) at beginning of period.... -- | (438,626) (475,791) Fresh start adjustments............................. -- | 384,234 -- ------------- | ------------ ------------- Retained earnings (deficit) at end of period.......... $ 1,218 | $ -- $(448,994) ========== | ========= ========== Earnings (loss) per share: | Primary: | Income (loss) before extraordinary item.......... $ .03 | $ (7.03) $ 1.08 Extraordinary item............................... -- | 9.02 -- ------------- | ------------ ------------- Net income.................................. $ .03 | $ 1.99 $ 1.08 ========== | ========= ========== Fully Diluted: | Income (loss) before extraordinary item.......... $ .03 | $ (4.96) $ .73 Extraordinary item............................... -- | 6.37 -- ------------- | ------------ ------------- Net income.................................. $ .03 | $ 1.41 $ .73 ========== | ========= ========== Shares used for computation: | Primary.......................................... 45,125 | 28,550 27,580 ========== | ========= ========== Fully diluted.................................... 45,125 | 40,452 42,550 ========== | ========= ========== 6 AMERICA WEST AIRLINES OPERATING STATISTICS THIRD QUARTER 1994 FINANCIAL RESULTS COMBINED THIRD QUARTER 1994 --------------------------------------------------------------- REORGANIZED COMPANY PREDECESSOR ------------------- COMPANY PERIOD FROM ---------------- COMBINED BASIS REORGANIZATION PERIOD FROM THREE MONTHS (AUGUST 26, 1994, JULY 1, 1994, ENDED TO TO SEPTEMBER 30, 1994 SEPTEMBER 30, 1994) AUGUST 25, 1994 ------------------ ------------------- ---------------- Passenger Enplanements.................... 4,112,141 1,421,231 2,690,910 Available Seat Miles (000)................ 4,635,168 1,803,184 2,831,984 Revenue Passenger Miles (000)............. 3,221,987 1,099,285 2,122,702 Load Factor (%)........................... 69.5 61.0 75.0 Average Passenger Revenue Per Passenger Mile (Yield)(Cents)..................... 10.42 10.79 10.23 Total Operating Revenue Per Available Seat Mile (RASM)(Cents)...................... 7.72 7.06 8.14 Operating Cost Per Available Seat Mile (Cents)....................... 6.99 6.60 7.23 COMBINED NINE MONTHS ENDED SEPTEMBER 30, 1994 --------------------------------------------------------------- REORGANIZED COMPANY PREDECESSOR ------------------- COMPANY PERIOD FROM ---------------- COMBINED BASIS REORGANIZATION PERIOD FROM NINE MONTHS (AUGUST 26, 1994, JANUARY 1, 1994, ENDED TO TO SEPTEMBER 30, 1994 SEPTEMBER 30, 1994) AUGUST 25, 1994 ------------------ ------------------- ---------------- Passenger Enplanements.................... 11,926,510 1,421,231 10,505,279 Available Seat Miles (000)................ 13,439,121 1,803,184 11,635,937 Revenue Passenger Miles (000)............. 9,360,636 1,099,285 8,261,351 Load Factor (%)........................... 69.6 61.0 71.0 Average Passenger Revenue Per Passenger Mile (Yield)(Cents)..................... 10.69 10.79 10.68 Total Operating Revenue Per Available Seat Mile (RASM)(Cents)...................... 7.93 7.06 8.07 Operating Cost Per Available Seat Mile (Cents)....................... 7.07 6.60 7.15