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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q/A
NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-7815
TRANS WORLD AIRLINES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 43-1145889
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
ONE CITY CENTRE
515 N. SIXTH STREET
ST. LOUIS, MISSOURI 63101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
(314) 589-3000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes /X/ No / /
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
OUTSTANDING AS OF
CLASS AUGUST 1, 1996
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Common Stock, par value 38,794,820
$0.01 per share
In addition, as of August 1, 1996 there were 6,400,006 shares of Employee
Preferred Stock outstanding.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements made in this Form 10-Q relating to plans, conditions,
objectives and economic performance go beyond historical information and may
provide an indication of future results. To that extent, they are forward-
looking statements within the meaning of Section 21E of the Exchange Act, and
each of them is therefore subject to risks, uncertainties, and assumptions that
could cause actual results to differ from those in the forward-looking
statement. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those anticipated, estimated or projected. Some of the
uncertainties that might adversely impact TWA's future results of operations
include, but are not limited to, those described below.
During the early 1990s, the Company experienced significant losses. Factors
contributing to these losses included, among other things, excess financial
leverage; adverse publicity associated with the Company's financial
difficulties; excessive labor costs; the continuing impact of a relatively weak
economy, which resulted in weak air travel demand; and domestic pricing
policies of other airlines, which decreased industry revenue yields and
generated intense competition.
As a result of these losses, TWA underwent two separate Chapter 11
reorganizations, the first in 1992-93 and the second in 1995. In connection
with the '95 Reorganization, TWA has applied fresh start reporting in
accordance with SOP 90-7, which has resulted in the creation of a new reporting
entity for accounting purposes and the Company's assets and liabilities being
adjusted to reflect fair values on the effective date of the '95
Reorganization. A description of the adjustments to the financial statements
arising from the consummation of the '95 Reorganization and the application of
fresh start reporting is contained in Note 17 to the 1995 Consolidated
Financial Statements. For accounting purposes, the effective date of the '95
Reorganization is deemed to be September 1, 1995. Because of the application of
fresh start reporting, the financial statements for periods after the '95
Reorganization are not comparable in all respects to the financial statements
for periods prior to the reorganization.
As discussed below under ``--Liquidity and Capital Resources,'' pursuant to
the '95 Reorganization and the Company's current business strategy, the Company
has improved its financial condition and operating performance by, among other
things, reducing labor and other operating and financing costs, rescheduling
debt payments, recapitalizing the Company's equity securities and certain of
its debt, revising the Company's route structure to capitalize further on its
strength in St. Louis and developing enhanced marketing systems. Pursuant to
the '95 Reorganization, the Company eliminated approximately $500 million in
face amount (approximately $300 million book value) of debt from its balance
sheet. In addition, the maturity of the Icahn Loans was extended from January
8, 1995 to January 8, 2001, and the Company negotiated an aggregate of $91
million of aircraft lease and conditional sale agreement deferrals for various
periods of time, with a weighted average life of approximately two years.
GENERAL
The airline industry is cyclical in nature. The demand for air
transportation is closely related to general U.S. and worldwide economic
conditions. The Company's operating results are also significantly affected by
competitive factors in the airline industry. Significant variations in annual
operating revenues and operating expenses have been experienced historically by
TWA and are expected to continue in the future. Numerous uncertainties
concerning the level of revenues and expenses always exist and it is not
possible to predict the potential impact of such uncertainties upon TWA's
results of operations. Among the uncertainties that might adversely impact
TWA's future results of operations are: (i) competitive pricing and scheduling
initiatives; (ii) the availability and cost of capital; (iii) increases in fuel
and other operating costs; (iv) insufficient levels of air passenger traffic
resulting from, among other things, war, threat of war, terrorism or changes in
the economy; (v) governmental limitations on the ability of TWA to service
certain airports and/or foreign markets; (vi) regulatory requirements requiring
additional capital expenditures and (vii) the possible reduction in yield due
to a discount ticket program entered into by the Company with Karabu
Corporation (``Karabu''), a Delaware corporation controlled by Mr. Carl C.
Icahn, in connection with the '95 Reorganization. See ``--Liquidity and Capital
Resources--Contingencies.''
On July 17, 1996, TWA Flight 800 crashed shortly after departure from JFK
en route to Paris, France. There were no survivors among the 230 passengers and
crew members aboard the Boeing 747 aircraft. The Company is cooperating fully
with all federal, state and local regulatory and investigatory agencies to
ascertain the cause of the crash. TWA is unable to predict the amount of
claims, if any, relating to the crash which may ultimately be made against
the Company and how those claims might be resolved. TWA maintains substantial
insurance coverage and, at this time, management has no reason to believe
that such insurance coverage will not be sufficient to cover any claims
arising from the crash. Therefore, TWA believes that the resolution of any
claims will not have a material adverse effect on its financial condition or
results of operations. The Company is unable to predict the extent of any
adverse effect on its revenues, yields or results of operations which may
result from the public perception of the crash of Flight 800. Due to, among
other things,
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRANS WORLD AIRLINES, INC.
Dated: August 16, 1996 By: /s/ JODY A. RUTH
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Jody A. Ruth
Vice President and Controller
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