<PAGE>
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported)
January 21, 1998
US Airways Group, Inc.
(Commission file number: 1-8444)
and
US Airways, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware US Airways Group, Inc. 54-1194634
(State of incorporation US Airways, Inc. 53-0218143
of both registrants) (I.R.S. Employer Identification Nos.)
US Airways Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-5306
(Registrant's telephone number, including area code)
US Airways, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On January 21, 1998, US Airways Group, Inc. (US Airways Group
or the "Company") and US Airways, Inc. (US Airways) issued a news
release disclosing the results of operations for both companies for
the three months and year ended December 31, 1997, and select
operating and financial statistics for US Airways for both periods
(see Exhibit 99 to this report). This news release also included
the announcement that the Company's board of directors had
authorized a common stock repurchase program which allows the
Company to repurchase up to 2.3 million shares of its common stock
from time-to-time in open market or privately negotiated
transactions. This program was authorized in conjunction with
US Airways' agreement to provide up to 2.3 million stock options to
its pilots in 1998.
Rakesh Gangwal, President and Chief Operating Officer of both
the Company and US Airways, Lawrence M. Nagin, Executive Vice
President of Corporate Affairs and General Counsel for both
companies, Robert L. Fornaro, Senior Vice President of Planning for
US Airways, N. Bruce Ashby, Vice President of Financial Analysis
and Planning for US Airways and Thomas A. Fink, acting Chief
Financial Officer and Treasurer of both companies, spoke with
industry analysts on a conference call following the news release.
Mr. Gangwal stated that US Airways' capacity (as measured by
available seat miles or ASMs) is expected to decrease approximately
2.4% and that its unit costs (operating expenses per ASM) are
expected to increase approximately 2% for 1998 as compared to 1997.
On a quarter-over-quarter basis, beginning with the first quarter
of 1998 as compared to the first quarter of 1997, ASMs are expected
to decrease approximately 5.0%, decrease approximately 3.9%,
decrease approximately 3.3% and increase approximately 3.0%,
respectively. Mr. Gangwal noted that the unit cost estimate
includes aviation fuel expenses at an average price of 62.50 cents
per gallon (includes fuel taxes) and excludes one-time and unusual
items as identified in the Company's quarterly news releases. Mr.
Gangwal briefly discussed the tax benefits the Company recognized
during fourth quarter 1997 (as identified in the new release which
is included as Exhibit 99 to this report), adding that the
Company's effective tax rate for financial reporting purposes would
increase to approximately 38% for 1998 from a theoretical rate of
17% for 1997 if the tax benefits were not recognized. The actual
rate at which the Company expects to pay income taxes for 1998 was
estimated at 20% - 25%.
Mr. Gangwal also advised the analysts that the Company's
current forecast for full-year 1998 includes operating income
higher than the Company's operating income for full-year 1997. In
addition, US Airways capital expenditures for 1998 are currently
expected to include approximately $280 million related to the
purchase of new aircraft and approximately $130 million to purchase
non-aircraft assets. Mr. Gangwal added that the Company hopes to
<PAGE>
make a decision related to the purchase of wide-body aircraft by
February 15, 1998 (the Company's estimate of capital expenditures
for 1998 does not include amounts related to a potential wide-body
aircraft purchase agreement).
Certain of the information discussed on the conference call,
including certain of the information set forth above, should be
considered "forward-looking information" which is subject to a
number of risks and uncertainties. The preparation of forward-
looking information requires the use of estimates of future
revenues, expenses, activity levels and economic and market
conditions, many of which are outside of the Company's control.
Among the specific factors that could cause actual results to
differ materially from those set forth in the forward-looking
information are the following: economic conditions, labor costs,
aviation fuel costs, competitive pressures on pricing particularly
from lower-cost competitors, weather conditions, government
legislation, consumer perceptions of the Company's product, demand
for air transportation in the markets in which the Company operates
and the risks listed from time to time in the Company's reports to
the United States Securities and Exchange Commission. Other factors
and assumptions not identified above were also involved in the
preparation of this forward-looking information, and the failure of
such other factors and assumptions to be realized may also cause
actual results to differ materially from those discussed. The
Company assumes no obligation to update such estimates to reflect
actual results, changes in assumptions or changes in other factors
affecting such estimates.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Designation Description
- ----------- -----------
99 News release dated January 21, 1998 of US Airways
Group, Inc. and US Airways, Inc., with consolidated
statements of operations for both companies for the
three months and year ended December 31, 1997, and
select operating and financial statistics for
US Airways, Inc.
(this space intentionally left blank)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrants have duly caused this report to be signed on
their behalf by the undersigned hereunto duly authorized.
US Airways Group, Inc. (REGISTRANT)
Date: January 21, 1998 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller (Chief Accounting Officer)
US Airways, Inc. (REGISTRANT)
Date: January 21, 1998 By: /s/ James A. Hultquist
---------------------------------
James A. Hultquist
Controller (Chief Accounting Officer)
(this space intentionally left blank)
<PAGE>
Exhibit 99
US AIRWAYS REPORTS RECORD 1997 PRE-TAX PROFIT
OF $672 MILLION, ANNOUNCES 2.3 MILLION SHARE BUY-BACK
ARLINGTON, Va. January 21, 1998 -- US Airways Group, Inc.
reported a record pre-tax profit today of $672.0 million for 1997
on revenues of $8.51 billion, as compared to a 1996 pre-tax
profit of $275.5 million on revenues of $8.14 billion.
US Airways Group also said its board of directors has
authorized a repurchase program covering 2.3 million common
shares, to be effected from time to time in the open market or
privately negotiated transactions. The program was authorized in
connection with the agreement with the Air Line Pilots
Association to provide options on 2.3 million common shares in
1998 to its members.
Including a one-time credit for tax benefits of $466.9
million, the net profit for the year was $1.02 billion. On a per-
share basis, the profit for the year was $9.87 (diluted).
Excluding $125 million in one-time fourth quarter operating
charges and excluding a net $53 million in gains from one-time
items in previous quarters, as well as the tax credit, the profit
per share for 1997 would have been $6.18 (diluted).
The one-time credit recognizes $466.9 million in tax
benefits the company expects to realize in the future. Under
accounting procedures, these benefits must be reflected in
financial reports at the point the company believes it is more
likely than not to be able to use those benefits in the future.
US Airways believes it is now at that point.
For the fourth quarter of 1997, after one-time expenses of
$125 million, the pre-tax profit was $42.9 million on revenues of
$2.08 billion, as compared to a pre-tax profit of $20.7 million
in the fourth quarter of 1996 on revenues of $2.05 billion. The
one-time expense items include $115 million for an early
retirement program for pilots and $10 million relating to a
write-down of facilities leases. Excluding these items, the pre-
tax profit would have been $167.9 million.
-more-
US Airways Reports Record 1997 Pre-Tax Profit
January 21, 1998
Page Two
On a per share basis, the profit for the quarter including
one-time expense and credit items, was $4.66 (diluted) as
compared to $0.08 in the fourth quarter of 1996. Excluding these
one time items, the profit per share was $1.34. Including the
one-time credit relating to taxes and the one-time expenses, the
<PAGE>
net profit for the quarter was $479.4 million.
"US Airways' results for 1997 confirm both its underlying
strength and its potential. Even excluding the one-time items,
there now is clear evidence that a group of committed employees,
operating a strong system, can produce outstanding results," said
US Airways Chairman Stephen M. Wolf. "In terms of strategic
positioning, 1998 will be the most important year in the history
of the company, a year during which a comprehensive, fundamental
platform for growth and market position will be established."
"By the end of this year, we will be flying both our low-
cost competitive response on the East Coast and new routes to
Europe, expanding the US Airways Shuttle, accepting our first
Airbus aircraft, using regional jets in our US Airways Express
operations and integrating SABRE Group technologies. The
opportunities, and the challenges, are significant," Wolf
concluded.
SUMMARY OF FULL YEAR 1997 RESULTS
Operating revenues for the year were $8.51 billion, an
increase of $371.4 million over 1996. Operating expenses were
$7.93 billion, an increase of $224.6 million over 1996. Operating
profit for the year was $584.3 million, an increase of $146.8
million over 1996. Pre-tax earnings of $672.0 million were $396.6
million higher than 1996. Net earnings for 1997 totaled $1.02
billion, an increase of $761.3 million over 1996, including a
one-time benefit of $466.9 million related to income taxes.
Earnings per common share were $9.87 (diluted), based on
103.2 million shares, an increase of $7.52 over the 1996 figure
of $2.35, based on 94.8 million shares.
-more-
US Airways Reports Record 1997 Pre-Tax Profit
January 21, 1998
Page Three
The net income and per-share figures reflect a one-time
benefit of $466.9 million that recognizes tax benefits the
company expects to realize in the future. Under accounting
procedures, these benefits must be reflected at the point the
company believes it is more likely than not to utilize those
benefits going forward. Excluding the one-time items from the
fourth quarter and a net $53 million gain from one-time items in
previous quarters, the net profit for the year would have been
$637.3 million and the profit per common share would have been
$6.18 (diluted).
US Airways flew 41.6 billion revenue passenger miles and
58.3 billion available seat miles in 1997, an increase of 6.8
<PAGE>
percent in RPMs and 2.5 percent in ASMs over 1996. The average
load factor for the year was 71.3 percent, up 2.8 percentage
points, while the break-even load factor for the year was 66.4
percent. The average passenger journey increased 3.1 percent to
709 miles. US Airways mainline services carried 58.7 million
passengers last year, an increase of 3.6 percent over 1996.
SUMMARY OF FOURTH QUARTER 1997 RESULTS
Operating revenues for the fourth quarter of 1997 were $2.08
billion, an increase of $33.0 million over the comparable 1996
figure. Operating expenses for the quarter were $2.02 billion, up
$12.5 million from the comparable figure in 1996, including one-
time expense items of $125 million. There was a one-time expense
item in 1996 of $39.2 million relating to profit sharing.
Operating profit for the quarter was $69.9 million, an increase
of $20.5 million over 1996. The net profit for the quarter was
$479.4 million, an increase of $452.3 million over 1996,
including the one-time credit of $466.9 million for taxes.
Excluding the one-time expense items of $125 million and the
one-time credit of $466.9 million for taxes, net profit for the
quarter would have been $137.5 million.
Earnings per common share for the fourth quarter were $4.66
(diluted), based on 103 million shares, an increase of $4.58 over
1996, based on 65.4 million shares. Excluding one-time items,
earnings per common share would have been $1.34 (diluted).
-more-
US Airways Reports Record 1997 Pre-Tax Profit
January 21, 1998
Page Four
US Airways flew 9.79 billion revenue passenger miles and
14.0 billion available seat miles in the fourth quarter of 1997,
a decrease of 2.0 percent in RPMs and 4.2 percent in ASMs over
comparable figures for 1996. The average load factor for the
quarter was 69.7 percent, up 1.6 percentage points over 1996,
while the break-even load factor was 65.3 percent. The average
passenger journey decreased 0.4 percent to 690 miles. US Airways
mainline carried 14.2 million passengers for the quarter, down
1.6 percent from 1996.
- 30 -
NUMBER: 3355
<PAGE>
US Airways Group, Inc. NEWS RELEASE
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts and notes)
Three Months Ended December 31,
1997 1996(Note) % Change
--------- ----------- --------
Operating Revenues
Passenger transportation $1,885,564 $1,850,386 1.9
Cargo and freight 46,246 44,760 3.3
Other 153,154 156,791 (2.3)
--------- ---------
Total Operating Revenues 2,084,964 2,051,937 1.6
Operating Expenses
Personnel costs 757,435 804,392 (5.8)
Early retirement program 115,000 -- --
Profit sharing -- 39,245 --
Aviation fuel 187,714 236,612 (20.7)
Commissions 134,068 146,001 (8.2)
Aircraft rent 115,328 115,232 0.1
Other rent and landing fees 104,522 100,736 3.8
Aircraft maintenance 122,809 107,094 14.7
Depreciation and amortization 73,710 77,971 (5.5)
Other, net 404,444 375,244 7.8
--------- ---------
Total Operating Expenses 2,015,030 2,002,527 0.6
--------- ---------
Operating Income 69,934 49,410 41.5
Other Income (Expense)
Interest income 32,833 23,410 40.3
Interest expense (63,413) (65,713) (3.5)
Interest capitalized 3,823 2,696 41.8
Equity in earnings of
affiliates 191 5,500 (96.5)
Other, net (424) 5,383 --
--------- ---------
Other Income (Expense), Net (26,990) (28,724) (6.0)
--------- ---------
Income Before Taxes 42,944 20,686 --
Provision (Credit) for
Income Taxes (436,481) (6,467) --
--------- ---------
Net Income 479,425 27,153 --
Preferred Dividend Requirement (8,279) (21,641) (61.7)
<PAGE>
--------- ---------
Net Income Applicable to
Common Stockholders $ 471,146 $ 5,512 --
========= =========
Income per Common Share
Basic $ 5.16 $ 0.09 --
Diluted $ 4.66 $ 0.08 --
Shares Used for Computation (000)
Basic 91,356 64,242
Diluted 102,979 65,410
Note: Certain 1996 amounts have been reclassified to conform
with 1997 classifications.
US Airways Group, Inc. NEWS RELEASE
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts and notes)
Twelve Months Ended December 31,
1997 1996(Note 1) % Change
--------- ----------- --------
Operating Revenues
Passenger transportation $7,711,501 $7,370,888 4.6
Cargo and freight 181,484 162,704 11.5
Other 620,839 608,821 2.0
--------- ---------
Total Operating Revenues 8,513,824 8,142,413 4.6
Operating Expenses
Personnel costs 3,063,782 3,073,860 (0.3)
Early retirement program 115,000 -- --
Profit sharing -- 121,603 --
Aviation fuel 804,768 824,745 (2.4)
Commissions 594,914 586,226 1.5
Aircraft rent 474,760 436,873 8.7
Other rent and landing fees 420,427 412,275 2.0
Aircraft maintenance 451,311 372,997 21.0
Depreciation and amortization 400,506 316,043 26.7
Other, net 1,604,087 1,560,298 2.8
--------- ---------
Total Operating Expenses 7,929,555 7,704,920 2.9
--------- ---------
Operating Income 584,269 437,493 33.5
Other Income (Expense)
Interest income 108,074 74,819 44.4
Interest expense (256,055) (267,122) (4.1)
Interest capitalized 12,648 8,398 50.6
Equity in earnings of
<PAGE>
affiliates 30,614 36,602 (16.4)
Gains on sales of interests
in affiliates 179,625 -- --
Other, net 12,861 (14,708) --
--------- ---------
Other Income (Expense), Net 87,767 (162,011) --
--------- ---------
Income Before Taxes 672,036 275,482 --
Provision (Credit) for
Income Taxes (352,663) 12,109 --
--------- ---------
Net Income 1,024,699 263,373 --
Preferred Dividend Requirement (63,262) (88,775) (28.7)
--------- ---------
Net Income Applicable to
Common Stockholders $ 961,437 $ 174,598 --
========= =========
Income per Common Share
Basic $ 12.32 $ 2.73 --
Diluted $ 9.87 $ 2.35 --
Shares Used for Computation (000)
Basic (Note 2) 78,054 64,021
Diluted 103,180 94,834
Note 1. Certain 1996 amounts have been reclassified to conform
with 1997 classifications.
Note 2. During the third quarter of 1997, most of the Series B
Preferred Stock was converted into 10.6 million shares
of Common Stock. During the second quarter of 1997,
most of the Series F Preferred Stock was converted into
14.5 million shares of Common Stock. On a weighted
average basis, these transactions had the effect of
increasing Common Shares outstanding by approximately
12.6 million shares for full-year 1997.
US Airways, Inc. NEWS RELEASE
(A Wholly-Owned Subsidiary of US Airways Group, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands)
Three Months Ended December 31,
1997 1996(Note) % Change
--------- --------- --------
Operating Revenues
Passenger transportation $1,734,664 $1,706,245 1.7
US Airways Express
transportation revenues 152,052 145,118 4.8
<PAGE>
Cargo and freight 45,278 43,833 3.3
Other 155,361 151,592 2.5
--------- ---------
Total Operating Revenues 2,087,355 2,046,788 2.0
Operating Expenses
Personnel costs 714,316 764,123 (6.5)
Early retirement program 115,000 -- --
Profit sharing -- 39,245 --
Aviation fuel 177,168 223,560 (20.8)
Commissions 124,691 136,194 (8.4)
Aircraft rent 100,544 101,381 (0.8)
Other rent and landing fees 99,988 96,014 4.1
Aircraft maintenance 107,708 89,191 20.8
Depreciation and amortization 69,805 74,100 (5.8)
US Airways Express capacity
purchases 120,927 93,042 30.0
Other, net 389,188 355,694 9.4
--------- ---------
Total Operating Expenses 2,019,335 1,972,544 2.4
--------- ---------
Operating Income 68,020 74,244 (8.4)
Other Income (Expense)
Interest income 35,017 24,383 43.6
Interest expense (63,392) (70,613) (10.2)
Interest capitalized 2,757 2,696 2.3
Equity in earnings of
affiliates 191 5,500 (96.5)
Other, net (419) 5,708 --
--------- ---------
Other Income (Expense), Net (25,846) (32,326) (20.0)
--------- ---------
Income Before Taxes 42,174 41,918 0.6
Provision (Credit) for
Income Taxes (477,664) (7,629) --
--------- ---------
Net Income $ 519,838 $ 49,547 --
========= =========
Note: Certain 1996 amounts have been reclassified to conform with
1997 classifications.
US Airways, Inc. NEWS RELEASE
(A Wholly-Owned Subsidiary of US Airways Group, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(dollars in thousands)
Twelve Months Ended December 31,
<PAGE>
1997 1996(Note) % Change
--------- --------- --------
Operating Revenues
Passenger transportation $7,112,029 $6,799,420 4.6
US Airways Express
transportation revenues 604,505 145,118 --
Cargo and freight 177,404 158,899 11.6
Other 607,547 600,620 1.2
--------- ---------
Total Operating Revenues 8,501,485 7,704,057 10.4
Operating Expenses
Personnel costs 2,897,175 2,919,079 (0.8)
Early retirement program 115,000 -- --
Profit Sharing -- 121,603 --
Aviation fuel 761,020 780,597 (2.5)
Commissions 554,018 547,048 1.3
Aircraft rent 415,728 387,312 7.3
Other rent and landing fees 401,830 394,431 1.9
Aircraft maintenance 387,323 311,901 24.2
Depreciation and amortization 384,943 300,608 28.1
US Airways Express capacity
purchases 485,873 93,042 --
Other, net 1,512,425 1,479,768 2.2
--------- ---------
Total Operating Expenses 7,915,335 7,335,389 7.9
--------- ---------
Operating Income 586,150 368,668 59.0
Other Income (Expense)
Interest income 112,270 75,905 47.9
Interest expense (260,029) (283,936) (8.4)
Interest capitalized 11,582 8,398 37.9
Equity in earnings of
affiliates 30,614 36,602 (16.4)
Gains on sales of interests
in affiliates 179,625 -- --
Other, net 13,017 (14,594) --
--------- ---------
Other Income (Expense), Net 87,079 (177,625) --
--------- ---------
Income Before Taxes 673,229 191,043 --
Provision (Credit) for
Income Taxes (378,930) 7,811 --
--------- ---------
Net Income $1,052,159 $ 183,232 --
========= =========
Note: Certain 1996 amounts have been reclassified to conform with
1997 classifications.
<PAGE>
US Airways, Inc. NEWS RELEASE
(A Wholly-Owned Subsidiary of US Airways Group, Inc.)
SELECT AIRLINE OPERATING AND FINANCIAL STATISTICS
(unaudited)
Three Months Ended December 31,
1997 1996 % Change
------- ------- --------
Revenue passengers (thousands)* 14,178 14,412 (1.6)
Total revenue passenger miles
(millions) 9,818 10,033 (2.1)
Revenue passenger miles
(millions)* 9,786 9,989 (2.0)
Total available seat miles
(millions) 14,082 14,717 (4.3)
Available seat miles(millions)* 14,040 14,660 (4.2)
Passenger load factor* 69.7% 68.1% 1.6 pts.
Break-even load factor (Note 1) 65.3% 68.7% (3.4)pts.
Yield* 17.73c 17.08c 3.8
Passenger revenue per available
seat mile* 12.36c 11.64c 6.2
Revenue per available seat mile
(Note 1) 13.74c 12.92c 6.3
Cost per available seat mile
(Note 1) 12.66c 12.77c (0.9)
Average passenger journey (miles)* 690 693 (0.4)
Average stage length (miles)* 588 580 1.4
Revenue aircraft miles (millions)* 105 109 (3.7)
Cost of aviation fuel per gallon
(Note 2) 65.32c 78.90c (17.2)
Cost of aviation fuel per gallon
(excluding fuel taxes) 59.08c 72.28c (18.3)
Gallons of aviation fuel consumed
(millions) 272 283 (3.9)
Number of aircraft in operating
fleet at period-end 376 390 (3.6)
Full-time equivalent employees at
period-end 38,533 40,160 (4.1)
* Scheduled service only (excludes charter service).
c cents
Note 1. Financial statistics exclude the effects of a
nonrecurring item and the revenues and expenses
associated with the US Airways Express capacity purchase
program. Nonrecurring expenses of $115.0 million have
been excluded from the financial results for fourth
quarter 1997 for purposes of calculating financial
statistics.
Note 2. Results for periods in 1996 have been restated to include
fuel taxes (which were previously recognized as an
element of the operating expense Other, net).
<PAGE>
US Airways, Inc. NEWS RELEASE
(A Wholly-Owned Subsidiary of US Airways Group, Inc.)
SELECT AIRLINE OPERATING AND FINANCIAL STATISTICS (Note 1)
(unaudited)
Twelve Months Ended December 31,
1997 1996 % Change
------- ------- --------
Revenue passengers (thousands)* 58,659 56,640 3.6
Total revenue passenger miles
(millions) 41,749 39,220 6.4
Revenue passenger miles
(millions)* 41,579 38,943 6.8
Total available seat miles
(millions) 58,500 57,208 2.3
Available seat miles(millions)* 58,294 56,885 2.5
Passenger load factor* 71.3% 68.5% 2.8 pts.
Break-even load factor (Note 2) 66.4% 67.9% (1.5)pts.
Yield* 17.10c 17.46c (2.1)
Passenger revenue per available
seat mile* 12.20c 11.95c 2.1
Revenue per available seat mile
(Note 2) 13.50c 13.19c 2.4
Cost per available seat mile
(Note 2) 12.33c 12.69c (2.8)
Average passenger journey (miles)* 709 688 3.1
Average stage length (miles)* 591 578 2.2
Revenue aircraft miles (millions)* 435 426 2.1
Cost of aviation fuel per gallon
(Note 3) 67.47c 70.51c (4.3)
Cost of aviation fuel per gallon
(excluding fuel taxes) 61.26c 64.09c (4.4)
Gallons of aviation fuel consumed
(millions) 1,129 1,107 2.0
Number of aircraft in operating
fleet at period-end 376 390 (3.6)
Full-time equivalent employees at
period-end 38,533 40,160 (4.1)
* Scheduled service only (excludes charter service).
c cents
Note 1. Operating statistics exclude flights operated by
US Airways, Inc. under a wet lease arrangement with
British Airways Plc. (the "wet lease arrangement," which
ended May 31, 1996).
Note 2. Financial statistics exclude the effects of nonrecurring
items and the revenues and expenses associated with the
US Airways Express capacity purchase program and the wet
lease arrangement. Net nonrecurring expenses of $214.1
million and nonrecurring expense credits of $29.5 million
<PAGE>
have been excluded from the financial results for full-
year 1997 and full-year 1996, respectively, for purposes
of calculating financial statistics. Revenues of $12.6
million and expenses of $12.6 million associated with the
wet lease arrangement have also been excluded from the
financial results for full-year 1996 for purposes of
calculating financial statistics. In addition, the
calculation of Break-even load factor excludes Gains on
sales of interests in affiliates.
Note 3. Results for periods in 1996 have been restated to include
fuel taxes (which were previously recognized as an
element of the operating expense Other, net).
