Expects to End Third Quarter with Approximately $4.4 Billion in Cash; Additional Proceeds from $450 Million Private Debt Sale Expected to be Received in October
FORT WORTH, Texas, Sept. 29 /PRNewswire-FirstCall/ -- AMR Corporation (NYSE: AMR), the parent company of American Airlines and American Eagle Airlines, announced the completion of its offerings of 48,484,849 shares of its common stock and $460,000,000 principal amount of its 6.25% convertible senior notes due 2014. Completion of the offerings, which closed yesterday, together with a number of other recent transactions, has improved the company's liquidity position as it seeks to weather the current global financial downturn and build a financial foundation for the future. The aggregate net proceeds from the offerings, after underwriting discounts and expenses, were approximately $830 million.
All told, AMR and American have announced approximately $4.2 billion in additional liquidity and new aircraft financing in September. All of this financing is in addition to the more than $1.2 billion the Company raised earlier this year through both private and public financings of owned aircraft and the financing of new 737s to be delivered through 2011.
"We believe AMR has been able to secure these strong votes of confidence from our strategic partners and the investment community by honoring our financial obligations in the past and looking out for the long-term interests of our stakeholders - and we believe these recent financings reflect that history," said Gerard Arpey, AMR's Chairman and CEO. "As we strive for sustained profitability, the new liquidity and long-term financing we were able to obtain amid challenging credit markets have buttressed our financial foundation and added flexibility to our near-term and future plans."
AMR also announced that American has repaid in full American's $432 million secured bank term loan facility, which will be refinanced using the proceeds of American's private sale of $450 million principal amount of senior secured notes, the pricing of which was announced Sept. 25. This transaction is expected to be completed on Oct. 9, 2009.
The September financing and liquidity announcements consist of:
- $1 billion in cash from the advance sale of AAdvantage™ frequent flyer miles to Citi
- $281.5 million loan facility from GE Capital Aviation Services (GECAS) secured by owned aircraft (all but $55 million will be included in the Company's third quarter 2009 cash and short-term investment balance)
- $1.6 billion in sale-leaseback financing commitments from GECAS for Boeing 737s previously ordered by the Company and to be delivered in 2010 and 2011
- $830 million in cash from the sale of AMR common stock and its 6.25% convertible senior notes
- $450 million principal amount of senior secured notes (expected to be completed Oct. 9, 2009)
AMR also announced that the full amount of the reserve previously held by American's credit card processor has been released to American today. Giving effect to the release of this money, the repayment of American's bank term loan facility, and cash received from the financing transactions referred to above, the company expects to end the third quarter with approximately $4.4 billion in cash and short-term investments, including approximately $460 million in restricted cash. The $450 million associated with the senior secured notes is expected to be received in October and reflected in the company's year-end cash balance.
AMR expects third quarter average shares outstanding to total approximately 285 million shares, and a full year average share count for 2009 of approximately 293 million shares.
Statements in this release contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events. When used in this document, the words "expects", "plans," "anticipates," "indicates," "believes," "forecast," "guidance," "outlook", "may," "will," "should", "seeks", "targets" and similar expressions are intended to identify forward-looking statements. Similarly, statements that describe our objectives, plans or goals are forward-looking statements. Forward-looking statements include, without limitation, the Company's expectations concerning operations and financial conditions, including changes in capacity, revenues, and costs; future financing plans and needs; the amounts of the Company's unencumbered assets and other sources of liquidity; fleet plans; overall economic and industry conditions; plans and objectives for future operations; regulatory approvals and actions, including the Company's application for antitrust immunity with other one world alliance members; and the impact on the Company of its results of operations in recent years and the sufficiency of its financial resources to absorb that impact. Other forward-looking statements include statements which do not relate solely to historical facts, such as, without limitation, statements which discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. This document includes forecasts of unit cost and revenue performance, fuel prices and fuel hedging, capacity and traffic estimates, other income/expense estimates, share count, statements regarding the Company's liquidity, and statements regarding expectations of regulatory approval of our application for antitrust immunity with other oneworld members, each of which is a forward-looking statement. Forward-looking statements are subject to a number of factors that could cause the Company's actual results to differ materially from the Company's expectations. The following factors, in addition to other possible factors not listed, could cause the Company's actual results to differ materially from those expressed in forward-looking statements: the materially weakened financial condition of the Company, resulting from its significant losses in recent years; weaker demand for air travel and lower investment asset returns resulting from the severe global economic downturn; the Company's need to raise substantial additional funds and its ability to do so on acceptable terms; the ability of the Company to generate additional revenues and reduce its costs; continued high and volatile fuel prices and further increases in the price of fuel, and the availability of fuel; the Company's substantial indebtedness and other obligations; the ability of the Company to satisfy existing financial or other covenants in certain of its credit agreements; changes in economic and other conditions beyond the Company's control, and the volatile results of the Company's operations; the fiercely and increasingly competitive business environment faced by the Company; potential industry consolidation and alliance changes; competition with reorganized carriers; low fare levels by historical standards and the Company's reduced pricing power; changes in the Company's corporate or business strategy; government regulation of the Company's business; conflicts overseas or terrorist attacks; uncertainties with respect to the Company's international operations; outbreaks of a disease (such as SARS, avian flu or the H1N1 virus) that affects travel behavior; labor costs that are higher than those of the Company's competitors; uncertainties with respect to the Company's relationships with unionized and other employee work groups; increased insurance costs and potential reductions of available insurance coverage; the Company's ability to retain key management personnel; potential failures or disruptions of the Company's computer, communications or other technology systems; losses and adverse publicity resulting from any accident involving the Company's aircraft; changes in the price of the Company's common stock; and the ability of the Company to reach acceptable agreements with third parties. Additional information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to the Company's Annual Report on Form 10-K for the year ended December 31, 2008 (as updated by the Company's Current Report on Form 8-K filed on April 21, 2009), and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2009.
SOURCE: American Airlines
Web site: http://www.aa.com/