<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report: January 27, 1995
USAir Group, Inc.
(Commission file number: 1-8444)
and
USAir, Inc.
(Commission file number: 1-8442)
(Exact names of registrants as specified in their charters)
Delaware USAir Group, Inc. 54-1194634
(State of incorporation USAir, Inc. 53-0218143
of both registrants) (I.R.S. Employer Identification Nos.)
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 418-5306 (USAir Group, Inc.)
(703) 418-7000 (USAir, Inc.)
(Registrants' telephone numbers, including area code)
<PAGE>
Item 5. Other Events
On January 27, 1995, USAir Group, Inc. (the "Company") and
USAir, Inc. disseminated a press release disclosing results of
operations for both companies for the three and twelve months ended
December 31, 1994.
The Chairman and Chief Executive Officer of the Company,
Seth E. Schofield, and other senior executives of the Company
participated in a conference call with financial analysts on
January 27, 1995 to discuss the Company's results for fiscal year
1994, among other issues.
During the call, Schofield estimated that the Company expects
to end the first quarter of 1995 with over $200 million in cash.
He noted that such estimate does not include any proceeds from the
potential sale of assets nor any cash that might become available
should the Company arrange a receivables facility with banks.
Schofield reported that USAir's traffic levels have recovered
from the effect of the 1994 accidents and have returned to normal.
The Company expects yields to be flat to slightly up for 1995,
Schofield told the analysts.
In response to an analyst's question, Schofield stated that
the Company has not hired bankruptcy counsel, nor does it intend to
do so.
Item 7. Financial Statements and Exhibits
(c) Exhibits
<TABLE>
<CAPTION>
Designation Description
----------- -----------
<C> <S>
99 Press Release dated Janu-
ary 27, 1995 of USAir
Group, Inc. and USAir,
Inc., with consolidated
statements of operations
for each company.
</TABLE>
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the registrants have duly caused this report to be
signed on their behalf by the undersigned thereunto duly autho-
rized.
USAir Group, Inc.
Date: January 27, 1995 By: /s/ Ann Greer-Rector
------------------------------
Ann Greer-Rector
Vice President and Controller
(Principal Accounting Officer)
USAir, Inc.
Date: January 27, 1995 By: /s/ Ann Greer-Rector
------------------------------
Ann Greer-Rector
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
Exhibit 99
ARLINGTON, Va., Jan. 27, 1995 -- USAir Group Inc. reported a
year-end net loss today of $458.8 million before one-time, non-
recurring charges. Including one-time charges of $226.1 million,
net losses for the year were $684.9 million.
For the fourth quarter of 1994, the company reported a net
loss of $135.2 million before one-time, non-recurring charges.
Including one-time charges of $186.8 million, net losses for the
quarter were $322.0 million.
"We have been talking with our labor groups for 10 months
attempting to reduce labor costs. During that time management has
implemented almost $400 million in annual cost savings toward its
target of $500 million, but there is no agreement on the essential
companion cuts in labor costs," said USAir Chairman and CEO Seth E.
Schofield.
"Everyone acknowledges that lower costs are essential to the
future of this airline and the service it provides to hundreds of
communities. We are extremely disappointed that we have been unable
to reach an agreement with our labor groups. Consequently, we are
moving ahead on other fronts.
"We will take additional steps immediately to cut operating
costs sharply, including a downsizing of the airline's operations.
This will result in a USAir with fewer planes and fewer people. As
the first of these actions, the company intends to defer eight
Boeing 757 aircraft that were scheduled for 1996 delivery. There
also is a tentative agreement on the disposal of our Indianapolis
hangar.
Schofield indicated that USAir remains open to further
discussions with labor groups toward the target of more than $1
billion in annual cost savings. He took special notice of the
efforts to date of former Virginia Gov. Gerald Baliles in bringing
the company and its pilots back to the table after discussions had
broken off late last year.
"While the financial results and failure to get a labor
agreement are disappointing, we are encouraged that traffic has
returned to normal levels and by our expectation of double-digit
traffic growth for the month of January. Nevertheless, we must get
our costs down. It is a fact of life in this industry that
something always happens to cut deeply into projected earnings.
High-cost carriers simply will not survive, and this is one airline
that intends to survive. We believe most of our employees share
that determination."
<PAGE>
FULL-YEAR RESULTS
USAir Group's net 1994 loss of $684.9 million came on revenues
of $7.0 billion and compared to a 1993 loss of $393.1 million on
revenues of $7.1 billion. Operating losses for the year before one-
time adjustments were $236.9 million as compared to operating
income before one-time adjustments of $4.9 million for 1993. After
the requirement for preferred dividends of $78.0 million, the net
loss for 1994 was $763.0 million. The comparable numbers for 1993
were $73.7 million in preferred dividends and a net loss of $466.8
million.
Preferred stock dividends currently are not being paid but
financial accounting principles require that they be reflected in
statements of operations.
The one-time charges for the year of $226.1 million included
establishment in the fourth quarter of a reserve of $132.8 million
for aircraft which the company no longer operates. It also includes
a fourth quarter write-down of $54.0 million for obsolete
inventory.
Loss per common share including the one-time changes was
$12.73 for the year on approximately 59.9 million shares
outstanding. This compares to a loss per common share after
accounting change of $8.48 in 1993 on 55.1 million shares
outstanding.
Year-end liquidity was approximately $450 million, in excess
of original projections of $400 million.
FOURTH-QUARTER RESULTS
For the fourth quarter of 1994, the net loss of $322.0 million
came on revenues of $1.7 billion. This compares to a net loss of
$116.5 million on revenues of $1.8 billion in the fourth quarter of
1993. Operating losses for the quarter before one-time adjustments
were $83.4 million compared to $6.7 million in operating income
before one-time adjustments for the fourth quarter of 1993.
After the requirement for preferred dividends, the net loss
for the quarter was $342.0 million compared with a $135.7 million
loss in 1993.
Operating losses for the quarter were adversely affected by
the continuing impact of two accidents in the third quarter.
Estimates of fourth-quarter revenue losses related to the accidents
are $110 million. The fourth quarter revenue figure of $1.7 billion
also includes a $50 million positive adjustment to revise prior
estimates.
<PAGE>
The one-time charges for the quarter of $186.6 million include
the establishment of a reserve for aircraft no longer in use and
for obsolete inventory.
The per share loss for the fourth quarter of 1994 was $5.63
based on 60.7 million shares outstanding. This compares to a per-
share loss of $2.29 in the fourth quarter of 1993 based on 59.2
million shares outstanding.
NUMBER: 2866
<PAGE>
<TABLE>
USAir Group, Inc. PRESS RELEASE
Consolidated Statements of Operations
Adjusted for One-Time Items
(Unaudited)
(dollars in millions)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, Better (Worse) December 31, Better (Worse)
------------------ -------------- ------------------- --------------
1994 1993 Amount % 1994 1993 Amount %
---- ---- ------ --- ---- ---- ------ ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues $1,681.0 $1,802.5 $(121.5) (6.7)% $6,997.2 $7,083.2 $ (86.0) (1.2)%
Operating Expenses 1,951.2 1,844.1 (107.1) (5.8)% 7,488.6 7,179.0 (309.6) (4.3)%
------- ------- ------ ------- ------- ------
Operating Income
(Loss) (270.2) (41.7) (228.5) NM (491.4) (95.8) (395.6) NM
One-Time - Add (Deduct)* (186.8) (48.4) (254.5) (100.7)
Adjusted Operating
Income (Loss) (83.4) 6.7 (90.1) NM (236.9) 4.9 (241.8) NM
Non-Operating Income
(Expense) (51.8) (74.9) 23.1 30.8 % (193.6) (253.6) 60.0 23.7 %
------- ------- ------ ------- ------- ------
Pre-Tax Income (Loss) (322.0) (116.5) (205.5) NM (684.9) (349.4) (335.5) (96.0)%
One-Time Non-Op - Add
(Deduct)** - (8.8) 28.3 (8.8)
Adjusted Pre-Tax
Income (Loss) (135.2) (59.4) (75.8) NM (458.8) (239.9) (218.9) (91.2)%
Accounting Change
Transition Expense - - - 43.7
Tax Provision (Credit) - - - -
------- ------- ------ ------- ------- ------
Net Income (Loss) $ (322.0) $ (116.5) (205.5) NM $ (684.9) $ (393.1) (291.8) (74.2)%
======= ======= ====== ======= ======= ======
_______________________
* One-Time Items - Operating Expenses:
Reserve for Non-
Operating Aircraft $(132.8) $ - $ (172.9) $ 18.4
Obsolete Inventory (54.0) - (54.0) -
1993 Furlough and
Early Retirement
Costs - 1.9 - (68.8)
Employee Payback - (36.8) - (36.8)
1994 West Coast
Realignment - - (25.9) -
Reserve for Airport
Facilities - (13.5) - (13.5)
Other - - (1.7) -
------- ------- ------- -------
Total $ (186.8) $ (48.4) $ (254.5) $ (100.7)
======= ======= ======= =======
** One-Time Items - Non-Operating Gains (Expenses):
Asset Dispositions $ - $ - $ 28.3 $ -
Loss on Investment
in Galileo - (8.8) - (8.8)
------- ------- ------- -------
Total $ - $ (8.8) $ 28.3 $ (8.8)
======= ======= ======= =======
Note 1: Numbers may not add due to rounding.
Note 2: Certain 1993 adjustments have been reclassified to conform
with 1994 classifications.
NM = Not Meaningful
</TABLE>
<PAGE>
<TABLE>
USAir Group, Inc. PRESS RELEASE
Consolidated Statements of Operations
(Unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------ ------------------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating Revenues
Passenger Transportation $1,515,087 $1,656,920 $6,357,547 $6,554,926
Cargo and Freight 41,631 46,135 163,598 173,824
Other 124,251 99,436 476,049 354,458
--------- --------- --------- ---------
Total Operating Revenues 1,680,969 1,802,491 6,997,194 7,083,208
Operating Expenses
Personnel Costs 701,197 736,355 2,889,764 2,841,344
Aviation Fuel 172,497 178,341 671,926 710,109
Commissions 137,696 154,823 583,158 596,779
Other Rent and Landing Fees 108,394 118,691 436,540 445,797
Aircraft Rent 213,066 116,378 563,572 472,622
Aircraft Maintenance 88,397 98,401 392,181 374,084
Depreciation and Amortization 121,434 99,532 407,638 352,467
Other, Net 408,488 341,627 1,543,771 1,385,798
--------- --------- --------- ---------
Total Operating Expenses 1,951,169 1,844,148 7,488,550 7,179,000
--------- --------- --------- ---------
Operating Income (Loss) (270,200) (41,657) (491,356) (95,792)
Other Income (Expense)
Interest Income 9,006 4,814 27,088 12,632
Interest Expense (74,014) (63,823) (284,034) (249,916)
Interest Capitalized 5,213 3,546 13,760 17,763
Other, Net 7,977 (19,420) 49,619 (34,054)
--------- --------- --------- ---------
Other Income (Expense), Net (51,818) (74,883) (193,567) (253,575)
--------- --------- --------- ---------
Income (Loss) Before Taxes and Cumulative
Effect of Accounting Change (322,018) (116,540) (684,923) (349,367)
Income Tax Provision (Credit) - - - -
--------- --------- --------- ---------
Income (Loss) Before Cumulative Effect
of Accounting Change (322,018) (116,540) (684,923) (349,367)
Cumulative Effect of Change in Method of
Accounting for Postemployment Benefits - - - (43,749)
--------- --------- --------- ---------
Net Income (Loss) (322,018) (116,540) (684,923) (393,116)
Preferred Dividend Requirement (19,968) (19,157) (78,036) (73,651)
--------- --------- --------- ---------
Net Income (Loss) Applicable to Common
Stockholders $ (341,986) $ (135,697) $ (762,959) $ (466,767)
========= ========= ========= =========
Income (loss) per common share
Before Accounting Change $ (5.63) $ (2.29) $ (12.73) $ (7.68)
Effect of Accounting Change - - - (0.80)
--------- --------- --------- ---------
Income (Loss) Per Share $ (5.63) $ (2,29) $ (12.73) $ (8.48)
========= ========= ========= =========
Shares Used For Computation (000) 60,690 59,190 59,915 55,070
Note: Certain 1993 amounts have been reclassified to conform with 1994 classifications.
</TABLE>
<PAGE>
<TABLE>
USAir, Inc. PRESS RELEASE
(A Wholly-Owned Subsidiary of USAir Group, Inc.)
Consolidated Statements of Operations
(Unaudited)
(dollars in thousands)
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
------------------------------- -------------------------------
1993 % 1993 %
1994 (Note 1) Change 1994 (Note 1) Change
---- -------- ------ ---- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
Passenger Transportation $1,415,564 $1,539,921 (8.1) $5,922,223 $6,081,788 (2.6)
Cargo and Freight 40,781 45,295 (10.0) 160,364 170,500 (5.9)
Other 127,836 105,055 21.7 496,006 370,760 33.8
--------- --------- --------- ---------
Total Operating Revenues 1,584,181 1,690,271 (6.3) 6,578,593 6,623,048 (0.7)
Operating Expenses
Personnel Costs 668,928 699,040 (4.3) 2,753,269 2,698,039 2.0
Aviation Fuel 165,355 170,262 (2.9) 642,305 677,859 (5.2)
Commissions 130,073 145,802 (10.8) 549,192 559,793 (1.9)
Other Rent and Landing Fees 104,772 114,908 (8.8) 422,190 431,591 (2.2)
Aircraft Rent 204,336 105,344 94.0 521,395 431,616 20.8
Aircraft Maintenance 77,592 79,602 (2.5) 335,791 308,890 8.7
Depreciation and Amortization 117,399 93,088 26.1 386,262 325,214 18.8
Other, Net 393,274 329,069 19.5 1,485,160 1,339,152 10.9
--------- --------- --------- ---------
Total Operating Expenses 1,861,729 1,737,115 7.2 7,095,564 6,772,154 4.8
--------- --------- --------- ---------
Operating Income (Loss) (277,548) (46,844) NM (516,971) (149,106) NM
Other Income (Expense)
Interest Income 9,269 5,223 77.5 28,044 24,794 13.1
Interest Expense (76,083) (63,490) 19.8 (285,846) (238,628) 19.8
Interest Capitalized 5,213 3,546 47.0 13,760 17,754 (22.5)
Other, Net 7,612 (18,302) NM 44,830 (29,862) NM
--------- --------- --------- ---------
Other Income (Expense), Net (53,989) (73,023) (26.1) (199,212) (225,942)(11.8)
--------- --------- --------- ---------
Income (Loss) Before Taxes and
Cumulative Effect of Accounting
Change (331,537) (119,867) NM (716,183) (375,048) 91.0
Income Tax Provision (Credit) - - NM - - NM
--------- --------- --------- ---------
Income (Loss) Before Cumulative
Effect of Accounting Change (331,537) (119,867) NM (716,183) (375,048) 91.0
Cumulative Effect of Change in
Method of Accounting for Post-
employment Benefits - - NM - (43,749) NM
--------- --------- --------- ---------
Net Income (Loss) $ (331,537) $ (119,867) NM $ (716,183) $ (418,797) 71.0
========= ========= ========= =========
Airline Operating and Financial Statistics (Note 2)
(* denotes scheduled service only) (c = cents)
Revenue Passengers (Thousands)* 14,671 14,210 3.2 59,495 53,678 10.8
Total Revenue Passenger Miles
(Millions) 9,417 9,126 3.2 38,395 35,529 8.1
Revenue Passenger Miles (Millions)* 9,315 9,055 2.9 37,941 35,221 7.7
Total Available Seat Miles
(Millions) 15,678 15,176 3.3 61,540 59,841 2.8
Available Seat Miles (Millions)* 15,561 15,088 3.1 61,027 59,485 2.6
Passenger Load Factor* 59.9 % 60.0 % (0.1)pts 62.2 % 59.2 % 3.0 pts
Breakeven Load Factor (Net)
(Note 3) 65.8 % 62.1 % 3.7 pts 67.3 % 61.7 % 5.6 pts
Yield* 15.20 c 17.01 c (10.6) 15.61 c 17.27 c(9.6)
Passenger Revenue per Available
Seat Mile* 9.10 c 10.21 c (10.9) 9.70 c 10.22 c (5.1) Revenue per Available Seat Mile
(Note 3) 10.00 c 11.07 c (9.7) 10.59 c 11.04 c (4.1)
Cost per Available Seat Mile
(Note 3) 10.58 c 11.06 c (4.3) 11.02 c 11.12 c (0.9)
Average Passenger Journey (Miles)* 635 637 (0.3) 638 656 (2.7)
Average Stage Length (Miles)* 536 534 0.4 536 536 NM
Revenue Aircraft Miles (Millions)* 121 117 3.4 473 462 2.4
Cost of Fuel Per Gallon 54.24 c 57.72 c (6.0) 53.28 c 58.40 c (8.8)
Gallons of Fuel Consumed (Millions) 305 295 3.4 1,205 1,161 3.8
Note 1. Certain 1993 amounts have been reclassified to conform with 1994 classifications.
Note 2. All operating statistics exclude flights operated by USAir under a wet lease arrangement
with British Airways ("wet lease").
Note 3. Financial statistics exclude non-recurring charges. Financial statistics also exclude
the revenue and expense (which amounts net to zero) generated under the wet lease
arrangement. Wet lease amounts of $15.7 and $60.7 million have been excluded from the
fourth quarter and year-to-date results for 1994, respectively and $10.2 and $17.1
million have been excluded from the fourth quarter and year-to-date results for 1993,
respectively, from both Other Revenue and Other Expense for purposes of financial statistic
calculation.
</TABLE>
