Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Fannie Mae's new HQ costs rise
http://www.seekingalpha.com/news/3189288
Is Sirius XM For Sale? $SIRI
http://www.seekingalpha.com/article/3982315
AT&T Gives $10 Million to Organizations that Help Students Graduate from High School
Source: PR Newswire (US)
DALLAS, June 15, 2016 /PRNewswire/ -- AT&T selected 18 non-profits to share in $10 million through the Aspire Connect to Success Competition.
Hundreds of organizations applied. It was a rigorous and competitive process. The awardees support and motivate underserved students to stay in school and prepare for their next step in life.
AT&T funds the competition through AT&T Aspire, our signature philanthropic initiative to help students thrive in school and beyond.
Today, about 1-in-5 students don't graduate high school on time. There are persistent gaps for students of color, students with disabilities, English-language learners and low-income students.1
"A high school diploma is a ticket to future success for students and our country," said Nicole Anderson, assistant vice president, AT&T Social Innovation and Philanthropy. "We work with the best-of-the-best organizations, ones that use proven interventions to support students throughout high school."
We chose the 18 non-profits that will serve students in 14 states and Washington D.C. They have demonstrated their effectiveness in helping students graduate ready for college or career. They each use evidence-based approaches and can prove they make an impact for their students.
"We measure the non-profits' impact. We know they're moving the needle on high school graduation rates," said Anderson.
Aspire Connect to Success funding recipients deliver a range of programs. Their focus includes integrated student supports, college or career preparation, and mentoring or peer-to-peer relationships.
For example, the YMCA of Greater New York will receive $250,000 to expand Y Scholars. The college access and success initiative provides services to underserved students in New York City.
Another awardee, Family Connection-Communities In Schools of Athens, Georgia will receive $1 million to place site coordinators in 3 high-poverty high schools. The coordinators will provide targeted and school wide interventions to increase graduation rates and improve student achievement.
Previous AT&T Aspire competitive funding recipients are making a difference.
While the results continue to grow, data from 2014 awardees show positive outcomes. Aspire students had higher attendance in grades 9-12. And they were more likely to graduate in grades 10-12, than their peers.
During graduation season, we encourage people to share advice for this year's graduates. We celebrate learners from all stages of life – from preschool, high school, college, an online training program or a professional certification.
Join hundreds of others by sharing advice on social media. Post on your Twitter, Instagram, Snapchat and Facebook using #GradAdvice.
About Philanthropy & Social Innovation at AT&T
AT&T (NYSE: T) is committed to advancing education, strengthening communities and improving lives. Through its community initiatives, AT&T has a long history of investing in projects that create learning opportunities; promote academic and economic achievement; or address community needs. AT&T Aspire is AT&T's signature philanthropic initiative that drives innovation in education by bringing diverse resources to bear on the issue including funding, technology, employee volunteerism, and mentoring. Through Aspire, we've passed the $250 million mark on our plan to invest $350 million in education from 2008-2017.
© 2016 AT&T Intellectual Property. All rights reserved. AT&T and the Globe logo are registered trademarks of AT&T Intellectual Property.
1 2016 Building a Grad Nation Report
AT&T Inc.
Logo - http://photos.prnewswire.com/prnh/20140408/CG99935LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/att-gives-10-million-to-organizations-that-help-students-graduate-from-high-school-300284771.html
SOURCE AT&T Inc.
Copyright 2016 PR Newswire
Ugly day takes some airline names down to 52-week lows
http://www.seekingalpha.com/news/3188798
Fortune: AT&T, Verizon, and two others are still in the running to buy Yahoo
http://www.seekingalpha.com/news/3188788
Major Airlines Equity Movers and Shakers -- Delta Air Lines, American Airlines Group, United Continental Holdings, and Spirit...
Source: PR Newswire (US)
NEW YORK, June 13, 2016 /PRNewswire/ --
On Friday, June 10, 2016, the NASDAQ Composite ended the trading session at 4,894.55, down 1.29%; the Dow Jones Industrial Average edged 0.67% lower, to finish at 17,865.34; and the S&P 500 closed at 2,096.07, down 0.92%. Stock-Callers.com has initiated coverage on the following equities: Delta Air Lines Inc. (NYSE: DAL), American Airlines Group Inc. (NASDAQ: AAL), United Continental Holdings Inc. (NYSE: UAL), and Spirit Airlines Inc. (NASDAQ: SAVE). Learn more about these stocks by accessing their free trade alerts at:
http://stock-callers.com/
Atlanta, Georgia headquartered Delta Air Lines Inc.'s stock finished Friday's session 0.85% lower at $42.04 with a total volume of 6.79 million shares traded. The Company provides scheduled air transportation for passengers and cargo in the U.S. and internationally. The Company's shares have advanced 4.28% in the past one year. The stock is trading below its 50-day moving average by 4.45%. Delta Air Lines' stock traded at a PE ratio of 7.07 and has a Relative Strength Index (RSI) of 41.91. Sign up and read the free notes on DAL at:
http://stock-callers.com/
Fort Worth, Texas headquartered American Airlines Group Inc.'s stock edged 0.78% lower to close the day at $33.14 with a total volume of 8.25 million shares traded. The Company, through its subsidiaries, operates in the airline industry. The Company's shares have advanced 0.85% in the last one month. The stock is trading 5.97% below its 50-day moving average. Additionally, American Airlines Group's stock traded at a PE ratio of 2.98 and has an RSI of 49.65. The complimentary notes on AAL can be downloaded in PDF format at:
http://stock-callers.com/
On Friday, shares in United Continental Holdings Inc., which together with its subsidiaries, provides air transportation services in North America, the Asia-Pacific, Europe, the Middle East, Africa, and Latin America, ended the session 1.33% lower at $46.08 with a total volume of 4.21 million shares traded. Shares of the Company traded at a PE ratio of 2.42. The Company's shares have advanced 0.61% in the past one month. The stock is trading 6.00% below its 50-day moving average. Moreover, shares of United Continental Holdings have an RSI of 47.35. Register for free on Stock-Callers.com and access the latest research on UAL at:
http://stock-callers.com/
On Friday, shares in Miramar, Florida headquartered Spirit Airlines Inc. which provides low-fare airline services, recorded a trading volume of 1.14 million shares, which was higher than their three months average volume of 1.09 million shares. The stock ended the day 2.07% lower at $45.81. Shares of the Company traded at a PE ratio of 10.64. The Company's shares have gained 12.80% in the last one month. The stock is trading above its 50-day and 200-day moving averages by 2.13% and 3.85%, respectively. Furthermore, shares of Spirit Airlines have an RSI of 59.50. Get free access to your trade alert on SAVE at:
http://stock-callers.com/
--
Stock Callers:
Stock Callers (SC) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. SC has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
SC has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst [for further information on analyst credentials, please email info@stock-callers.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by SC. SC is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
SC, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. SC, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, SC, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither SC nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit
http://stock-callers.com/legal-disclaimer/
CONTACT
For any questions, inquiries, or comments reach out to us directly at:
Office Address: Clyde Offices, Second Floor, 48 West George Street, Glasgow, U.K. -G2 1BP
Email: info@stock-callers.com
Phone number: +44 330 808 3765
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE Chelmsford Park SA
Copyright 2016 PR Newswire
Republic, United Airlines Reach Long-Term Agreement
BY DOW JONES & COMPANY, INC. — 05/31/2016
Republic Airways Holdings Inc. (RJETQ) has reached a codeshare agreement with United Airlines Inc., ensuring its long- term relationship with the larger carrier and completing an integral step in its reorganization.
The accord was announced over the weekend, and Republic said it will improve annual revenue, protect pilots and overall workforce and also attract new employees, according to court papers.
The codeshare agreement comes with settlement calling for Republic to pay a $193 million unsecured pre-bankruptcy claim to United. Republic said in court papers the agreement results from months of complex and "at times contentious" negotiations regarding United's claims.
Republic said in court papers that "the single most important aspect" of its bankruptcy case is the "prompt negotiation and implementation of new agreements with their codeshare partners."
Republic operates 54 United aircraft, and the agreement will keep about 1,700 workers--pilots, flight attendants and technicians--employed. The carrier will ask Judge Sean Lane of the U.S. Bankruptcy Court in New York to sign off on the deal at a hearing set for June 15.
Through codeshare agreements, Republic operates flights for United, Delta Air Lines Inc. and other large carriers. Regional airliners, like Republic, are "subject to a highly competitive process in order to win flying from their codeshare partners," court papers show.
In March, Republic inked a long-term agreement with Delta, which it called "the first major step forward toward emergence" in court papers. In addition to the codeshare agreement, Delta also agreed to provide Republic with a $75 million bankruptcy financing package and settled a lawsuit over the grounding of some Delta flights.
Republic says negotiating an agreement with American Airlines Group Inc. (AAL) will be another important aspect to the restructuring. The airline said in court papers it offers about 1,000 flights each day to cities in 38 states, Canada, the Caribbean and the Bahamas through the fixed-fee codeshare agreements with Delta, United and American Airlines (AAL).
Indianapolis-based Republic sought bankruptcy protection in February, pointing to challenges such as a U.S. pilot shortage that made it difficult to meet obligations in its codeshare agreements.
The airliner has said in court papers due to the pilot shortage it was forced to ground planes and reduce scheduled flying for each of its codeshare partners, which has driven up costs and caused its financial position to take a hit.
(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection. Go to http://dbr.dowjones.com)
Write to Lillian Rizzo at lillian.rizzo@wsj.com
(END) Dow Jones Newswires 05-31-16 1607ET Copyright (c) 2016 Dow Jones & Company, Inc.
BRIEF-Republic Airways reached agreement to restructure codeshare relationship with United Airlines
BY REUTERS — 06/01/2016
June 1 (Reuters) - Republic Airways Holdings Inc (RJETQ):
* On may 27, 2016, co and united airlines reached agreement to restructure parties' codeshare relationship - sec filing
* Claims from reduced flying due to pilot shortage and increased costs from new agreement
* United will receive $193 million allowed prepetition general unsecured claim for settlement of claims from reduced flying Source text for Eikon: (Bengaluru Newsroom: +1-646-223-8780)
(c) Reuters 2016. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
AT&T Orders 2 Additional Seasons of Entertainment One's Comedy Series "You Me Her"
Source: PR Newswire (US)
EL SEGUNDO, Calif., June 9, 2016 /PRNewswire/ -- Coming off the heels of a successful first season, AT&T* has ordered 2 additional seasons of Entertainment One Television's (eOne) comedy series "You Me Her."
Created and written by Executive Producer and showrunner John Scott Shepherd ("Henry's List of Wrongs," "The Days," and "Save Me"), the series was picked up for 10 new episodes each for seasons 2 and 3. It remains exclusive to AUDIENCE Network for DIRECTV and U-verse customers.
The original cast, which includes Greg Poehler ("Welcome to Sweden"), Rachel Blanchard ("Fargo") and Priscilla Faia ("Rookie Blue"), and the show's executive producers, Alta Loma Entertainment's Peter Jaysen and Alan Gasmer ("Vikings"), will return for the 2 new seasons.
"I appreciate AT&T's commitment to 'You Me Her,' ordering not just 1 but 2 more seasons," said Shepherd. "It benefits us creatively, in our storytelling, and allows us to maintain this spectacular family of cast and crew. Every day is a blast because we get to make something daring, funny and truthful, which bonds us with our viewers in a very cool conversation."
"Our viewers have opened their hearts and minds to embrace the unique relationship between Jack, Emma and Izzy," said Chris Long, senior vice president, Original Content and Production, AT&T. "AUDIENCE strives for compelling story lines and intriguing characters. And we believe in the potential for this show to grow even more as we continue our journey with eOne."
"'You Me Her' is a bold, provocative show that grabs your attention immediately," said John Morayniss, CEO, Entertainment One Television. "We're delighted AT&T has signed on for another 2 more seasons which speaks to the strength of these dynamic characters and storytelling. We're looking forward to seeing how this complicated, polyamorous relationship that John Scott Shepherd has brilliantly created will continue to unfold."
eOne will continue to finance, produce and distribute "You Me Her" worldwide, with John Morayniss, CEO, Gerard Bocaccio, SVP US Scripted Development and Debra Curtis, SVP Current Programming, overseeing for the studio and Jonathan Schwartz producing.
About the show
"You Me Her," television's first "polyamorous romantic comedy," infuses the grounded and relatable sensibilities of an indie romantic comedy with a distinctive twist.
What begins as an impulsive "date" between suburban husband Jack (Poehler) and neophyte escort Izzy (Faia) spins into a whirlwind 3-way affair including Jack's wife Emma (Blanchard), who's been keeping secrets of her own.
Their arrangement soon breaks free of its financial bonds to evolve into a meaningful romance with real consequences, posing the question to viewers: What if your best, truest life looked nothing like you imagined? Would you be brave enough to live it?
DIRECTV and U-verse customers can watch "You Me Her" on U-verse Channel 1114 and DIRECTV Channel 239. They can also stream it on the DIRECTV App and U-verse App for smartphones and tablets, directv.com and uverse.com**.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
About AT&T
AT&T Inc. (NYSE:T) helps millions around the globe connect with leading entertainment, mobile, high speed Internet and voice services. We're the world's largest provider of pay TV. We have TV customers in the U.S. and 11 Latin American countries. We offer the best global coverage of any U.S. wireless provider.* And we help businesses worldwide serve their customers better with our mobility and highly secure cloud solutions.
Additional information about AT&T products and services is available at http://about.att.com. Follow our news on Twitter at @ATT, on Facebook at http://www.facebook.com/att and YouTube at http://www.youtube.com/att.
© 2016 AT&T Intellectual Property. All rights reserved. AT&T, the Globe logo and other marks are trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.
*Global coverage claim based on offering discounted voice and data roaming; LTE roaming; voice roaming; and world-capable smartphone and tablets in more countries than any other U.S. based carrier. International service required. Coverage not available in all areas. Coverage may vary per country and be limited/restricted in some countries.
About AUDIENCE Network
Always Original. Always Smart. Always Bold. Never Ordinary. AUDIENCE is a unique and exclusive television experience available only to DIRECTV and AT&T U-verse subscribers. The channel first made its mark by partnering with NBC to produce and air three additional seasons of the Emmy Award-winning series Friday Night Lights and then became the exclusive home of the Emmy Award-winning drama Damages, starring Glenn Close and Rose Byrne. AUDIENCE continues its commitment to original, provocative content with a growing slate of critically acclaimed original series including the MMA drama Kingdom, starring Frank Grillo and Nick Jonas; the industry's first polyamorous romantic comedy You Me Her starring Greg Poehler, Rachel Blanchard and Priscilla Faia; the suspense-drama ROGUE, starring Ashley Greene and Cole Hauser; Full Circle: Miami, written by Jorge Zamacona and starring Dougray Scott, Kim Raver, and Harold Perrineau. AUDIENCE is also home to acclaimed original documentaries including The Fighting Season, a first hand account of the deadliest year in our nation's longest war, Executive Produced by Ricky Schroder. Sports fans will find live, daily sports and entertainment news from renowned sports journalists on The Dan Patrick Show and The Rich Eisen Show, and in-depth interviews with sports icons like Derek Jeter and Michael Phelps on UNDENIABLE with Joe Buck. Plus, viewers can enjoy exclusive concerts by today's hottest artists on AUDIENCE Music and intimate interviews with top talent like Matt Damon and Jessica Chastain on Off Camera with Sam Jones. It's original entertainment you won't see anywhere else. For more info, please visit directv.com/audience.
About Entertainment One
Entertainment One Ltd. is a leading international entertainment company that specializes in the acquisition, production and distribution of film and television content. The company's comprehensive network extends around the globe including Canada, the U.S., the UK, Ireland, Spain, Benelux, France, Germany, Scandinavia, Australia, New Zealand, South Africa and South Korea. Through established Film and Television divisions, the company provides extensive expertise in film distribution, television and music production, family programming, merchandising and licensing, and digital content. Its current rights library is exploited across all media formats and includes more than 40,000 film and television titles, 4,500 hours of television programming and 45,000 music tracks.
About Alta Loma Entertainment
Alta Loma Entertainment is a wholly owned subsidiary of Playboy Enterprises, Inc., a media and lifestyle company that markets the brand through a wide range of media properties and licensing initiatives. Playboy is one of the most recognized and popular consumer brands in the world. The company publishes Playboy magazine in the United States and licenses foreign editions of Playboy around the world; operates Playboy.com, a leading men's lifestyle and entertainment site; and creates content for distribution via feature films, television networks, websites, mobile platforms and radio. Through licensing agreements, the Playboy brand appears on a wide range of consumer products in more than 180 countries, as well as retail stores and entertainment venues. For more information about Playboy Enterprises, please visit www.PlayboyEnterprises.com.
AT&T Inc. (PRNewsFoto/AT&T Inc.)
Logo - http://photos.prnewswire.com/prnh/20140408/CG99935LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/att-orders-2-additional-seasons-of-entertainment-ones-comedy-series-you-me-her-300282368.html
SOURCE AT&T Inc.
Copyright 2016 PR Newswire
Vodafone's New Zealand Unit to Merge With Sky Network Television
Source: Dow Jones News
Vodafone Group PLC plans to add pay TV to its New Zealand operations through a 3.44 billion New Zealand dollar (US$2.44 billion) merger of its local unit with Sky Network Television, as the world's big telecommunications companies continue to pivot toward TV and online video.
Sky said Thursday it will issue new shares to Vodafone at NZ$5.40 a share—a 21% premium to its last closing price before trading was halted Wednesday—and pay NZ$1.25 billion in cash, giving Vodafone a 51% stake in the combined entity. Russell Stanners, currently chief executive of Vodafone New Zealand Ltd., will head the new business.
The move follows a trend by telecommunications companies to do deals that will help them bundle media content into their offerings to differentiate themselves from competitors and reduce customer churn.
Last year, AT&T Inc. acquired U.S. satellite-television company DirecTV for US$49 billion, and Verizon Communications Inc. acquired AOL Inc., for US$4.4 billion, gaining technology that plays videos and serves up ads.
While U.K.-based Vodafone, the world's second-largest mobile carrier, behind China Mobile Ltd., once focused on selling only mobile-phone subscriptions, it has been investing heavily in recent years in adding fixed lines for cable television and broadband, enabling it to sell combo packages with both wireless and fixed line services.
Last year it announced plans to launch television services in the U.K. to boost revenues amid greater competition from incumbent players who had been strengthened by a round of industry consolidation.
For Sky, the deal with Vodafone comes as it struggles to battle competition from on-demand and streaming content providers such as Netflix Inc.
"It's a real survival strategy," said Morningstar analyst Brian Hann. "By going down this route they have basically admitted that as a stand-alone pay-TV single product company, we simply can't compete."
Sky is the leading pay TV operator in New Zealand with more than 830,000 subscribers serving almost half of all New Zealand households.
However, profits fell last financial year as it ramped up investment in content deals to try to compete with rivals, and the company surprised the market in May by forecasting subscribers will be down the second half of this fiscal year as many customers who had signed up for last year's Rugby World Cup decided not to renew their contracts.
Its efforts to move into new areas such as on-demand TV and over-mobile streaming have lagged behind competitors and been marred with technological glitches.
Basketball fans hoping to watch New Zealander Steven Adams and his Oklahoma City Thunder team take on National Basketball Association reigning champions the Golden State Warriors in San Francisco via the Sky Go app were disappointed last month. Live streaming on the app stopped working around tip-off and was down for the majority of the game -- one of the biggest of the year for New Zealand basketball fans.
Analysts said Vodafone can provide Sky with much-needed technology investment and expertise to ensure its content is available at all times, across multiple devices.
Vodafone is the biggest provider of mobile-phone services in New Zealand with more than 2.35 million connections and is the No. 2 fixed-line competitor with more than 500,000 broadband and home-phone connections. Already, it provides Sky TV packages to customers via a wholesale relationship between the two companies.
The combined group will be one of the largest companies listed on the NZX Main Board, and will have a revenue of NZ$2.914 billion in the year ending June 2017, Sky said.
Still, some analysts are questioning how long Vodafone will remain in the market.
"New Zealand is a very marginal, mature market for Vodafone to parent, so questions can always be asked" about what Vodafone is doing in New Zealand," said Morningstar's Mr. Hann. "That's now in a ready-made exit vehicle and later on down the track they can sell it more easily."
Sky shareholders will vote on the deal in a meeting scheduled for early July.
Write to Rebecca Thurlow at rebecca.thurlow@wsj.com and Kate Geenty at kate.geenty@wsj.com
(END) Dow Jones Newswires
June 09, 2016 01:35 ET (05:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
American Airlines Group Reports May Traffic
Source: GlobeNewswire Inc.
American Airlines Group (NASDAQ:AAL) today reported May and year-to-date 2016 traffic results.
American Airlines Group’s total revenue passenger miles (RPMs) were 19.4 billion, up 0.5 percent versus May 2015. Total capacity was 23.7 billion available seat miles (ASMs), up 1.7 percent versus May 2015. Total passenger load factor was 81.9 percent, down 0.9 percentage points versus May 2015.
The Company continues to expect its second quarter 2016 consolidated passenger revenue per available seat mile (PRASM) to be down approximately 6 to 8 percent year-over-year. In addition, the Company continues to expect its second quarter pretax margin excluding special items to be between 14 and 16 percent.
The following summarizes American Airlines Group traffic results for the month and year-to-date ended May 31, 2016, and 2015, consisting of mainline-operated flights, wholly owned regional subsidiaries and operating results from capacity purchase agreements.
American Airlines Group Traffic Results
May Year to Date
2016 2015 Change
2016 2015 Change
Revenue Passenger Miles (000)
Domestic 11,090,514 10,934,167 1.4 % 51,876,578 51,186,003 1.3 %
Atlantic 2,711,012 2,840,245 (4.6 ) % 9,677,622 9,808,100 (1.3 ) %
Latin America 2,415,155 2,496,913 (3.3 ) % 12,924,231 13,120,016 (1.5 ) %
Pacific 1,084,526 960,895 12.9 % 5,037,397 4,039,761 24.7 %
International 6,210,693 6,298,053 (1.4 ) % 27,639,250 26,967,877 2.5 %
Mainline 17,301,207 17,232,220 0.4 % 79,515,828 78,153,880 1.7 %
Regional 2,135,092 2,101,173 1.6 % 9,720,140 9,431,822 3.1 %
Total Revenue Passenger Miles 19,436,299 19,333,393 0.5 % 89,235,968 87,585,702 1.9 %
Available Seat Miles (000)
Domestic 12,886,209 12,728,664 1.2 % 61,705,281 60,857,947 1.4 %
Atlantic 3,785,471 3,703,639 2.2 % 13,743,173 13,496,991 1.8 %
Latin America 3,036,614 3,289,511 (7.7 ) % 16,746,815 17,110,601 (2.1 ) %
Pacific 1,316,055 1,102,902 19.3 % 6,173,051 4,895,256 26.1 %
International 8,138,140 8,096,052 0.5 % 36,663,039 35,502,848 3.3 %
Mainline 21,024,349 20,824,716 1.0 % 98,368,320 96,360,795 2.1 %
Regional 2,710,834 2,519,417 7.6 % 12,855,364 11,903,537 8.0 %
Total Available Seat Miles 23,735,183 23,344,133 1.7 % 111,223,684 108,264,332 2.7 %
Load Factor (%)
Domestic 86.1 85.9 0.2 pts 84.1 84.1 - pts
Atlantic 71.6 76.7 (5.1 ) pts 70.4 72.7 (2.3 ) pts
Latin America 79.5 75.9 3.6 pts 77.2 76.7 0.5 pts
Pacific 82.4 87.1 (4.7 ) pts 81.6 82.5 (0.9 ) pts
International 76.3 77.8 (1.5 ) pts 75.4 76.0 (0.6 ) pts
Mainline 82.3 82.7 (0.4 ) pts 80.8 81.1 (0.3 ) pts
Regional 78.8 83.4 (4.6 ) pts 75.6 79.2 (3.6 ) pts
Total Load Factor 81.9 82.8 (0.9 ) pts 80.2 80.9 (0.7 ) pts
Enplanements
Mainline 12,648,957 12,549,287 0.8 % 59,066,442 58,699,695 0.6 %
Regional 4,782,978 4,900,334 (2.4 ) % 21,682,515 21,762,840 (0.4 ) %
Total Enplanements 17,431,935 17,449,621 (0.1 ) % 80,748,957 80,462,535 0.4 %
System Cargo Ton Miles (000) 204,390 199,609 2.4 % 950,280 944,947 0.6 %
Notes:
1) Canada, Puerto Rico and U.S. Virgin Islands are included in the domestic results.
2) Latin America numbers include the Caribbean.
3) Regional includes wholly owned subsidiaries and operating results from capacity purchase carriers.
About American Airlines Group
American Airlines and American Eagle offer an average of nearly 6,700 flights per day to nearly 350 destinations in more than 50 countries. American has hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. American is a founding member of the oneworld alliance, whose members and members-elect serve nearly 1,000 destinations with 14,250 daily flights to 150 countries. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL. In 2015, its stock joined the S&P 500 index. Connect with American on Twitter @AmericanAir and at Facebook.com/AmericanAirlines.
Cautionary Statement Regarding Forward-Looking Statements and Information
This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about future financial and operating results, statements about the expected second quarter pretax margin, the expected change in PRASM, the Company’s plans, objectives, estimates, expectations and intentions, and other statements that are not historical facts. These forward-looking statements are based on the Company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to the following: significant operating losses in the future; downturns in economic conditions that adversely affect the Company’s business; the impact of continued periods of high volatility in fuel costs, increased fuel prices and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of low-cost carriers, airline alliances and industry consolidation; the challenges and costs of integrating operations and realizing anticipated synergies and other benefits of the merger transaction with US Airways Group, Inc.; costs of ongoing data security compliance requirements and the impact of any significant data security breach; the Company’s substantial indebtedness and other obligations and the effect they could have on the Company’s business and liquidity; an inability to obtain sufficient financing or other capital to operate successfully and in accordance with the Company’s current business plan; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the effect the Company’s high level of fixed obligations may have on its ability to fund general corporate requirements, obtain additional financing and respond to competitive developments and adverse economic and industry conditions; the Company’s significant pension and other postretirement benefit funding obligations; the impact of any failure to comply with the covenants contained in financing arrangements; provisions in credit card processing and other commercial agreements that may materially reduce the Company’s liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; any inability to maintain labor costs at competitive levels; interruptions or disruptions in service at one or more of the Company’s hub airports; any inability to obtain and maintain adequate facilities, infrastructure and slots to operate the Company’s flight schedule and expand or change its route network; the Company’s reliance on third-party regional operators or third-party service providers that have the ability to affect the Company’s revenue and the public’s perception about its services; any inability to effectively manage the costs, rights and functionality of third-party distribution channels on which the Company relies; extensive government regulation, which may result in increases in the Company’s costs, disruptions to the Company’s operations, limits on the Company’s operating flexibility, reductions in the demand for air travel, and competitive disadvantages; the impact of the heavy taxation on the airline industry; changes to the Company’s business model that may not successfully increase revenues and may cause operational difficulties or decreased demand; the loss of key personnel or inability to attract and retain additional qualified personnel; the impact of conflicts overseas, terrorist attacks and ongoing security concerns; the global scope of the Company’s business and any associated economic and political instability or adverse effects of events, circumstances or government actions beyond its control, including the impact of foreign currency exchange rate fluctuations and limitations on the repatriation of cash held in foreign countries; the impact of environmental and noise regulation; the impact associated with climate change, including increased regulation to reduce emissions of greenhouse gases; the Company’s reliance on technology and automated systems and the impact of any failure of these technologies or systems; challenges in integrating the Company’s computer, communications and other technology systems; losses and adverse publicity stemming from any accident involving any of the Company’s aircraft or the aircraft of its regional or codeshare operators; delays in scheduled aircraft deliveries, or other loss of anticipated fleet capacity, and failure of new aircraft to perform as expected; the Company’s dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the impact of changing economic and other conditions beyond the Company’s control, including global events that affect travel behavior such as an outbreak of a contagious disease, and volatility and fluctuations in the Company’s results of operations due to seasonality; the effect of a higher than normal number of pilot retirements and a potential shortage of pilots; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the effect on the Company’s financial position and liquidity of being party to or involved in litigation; an inability to use net operating losses carried forward from prior taxable years (NOL Carryforwards); any impairment in the amount of the Company’s goodwill and an inability to realize the full value of the Company’s intangible or long-lived assets and any material impairment charges that would be recorded as a result; price volatility of the Company’s common stock; the effects of the Company’s capital deployment program and the limitation, suspension or discontinuation of the Company’s share repurchase programs or dividend payments thereunder; delay or prevention of stockholders’ ability to change the composition of the Company’s board of directors and the effect this may have on takeover attempts that some of the Company’s stockholders might consider beneficial; the effect of provisions of the Company’s Restated Certificate of Incorporation and Amended and Restated Bylaws that limit ownership and voting of its equity interests, including its common stock; the effect of limitations in the Company’s Restated Certificate of Incorporation on acquisitions and dispositions of its common stock designed to protect its NOL Carryforwards and certain other tax attributes, which may limit the liquidity of its common stock; and other economic, business, competitive, and/or regulatory factors affecting the Company’s business, including those set forth in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (especially in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 1A, Risk Factors) and other risks and uncertainties listed from time to time in the Company’s other filings with the SEC. There may be other factors of which the Company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements. The Company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law.
Corporate Communications
817-967-1577
mediarelations@aa.com
Investor Relations
817-931-3423
investor.relations@aa.com
Primary Logo
Wells Fargo to Offer Low-Down-Payment Mortgages Without FHA Backing
Source: Dow Jones News
Wells Fargo & Co. is rolling out a new mortgage for borrowers making minimal down payments, an offering that could allow the bank to step back significantly from a controversial Federal Housing Administration program.
The move comes as most of the country's main banks exit from any substantial role making loans guaranteed by the FHA. The agency insures mortgages made to buyers who would otherwise have a hard time getting loans, but it has been shunned by banks following a wave of lawsuits by the Justice Department that alleged poor underwriting.
Wells Fargo, which made $6.3 billion in FHA-backed loans last year, is the only mainstream bank in the FHA's top 20 originators, according to trade publication Inside Mortgage Finance.
?The bank's new mortgage allows borrowers?with credit scores?as low as 620 on a scale of 300 to 850?to make down payments of as little as 3%, while also allowing them to use income from family members or renters to qualify. The requirements don't represent a significant expansion of mortgage access, but will allow Wells Fargo to make more loans to low- and middle-income borrowers without going through the?FHA.
The bank's new program, which was launched through a partnership with mortgage-finance giant Fannie Mae, could replace about of half the bank's current FHA volume and increase its market share, a person familiar with the matter said.
In April, Wells Fargo and the government wrapped up a $1.2 billion settlement in which the lender admitted it submitted ineligible?loans for FHA backing and failed to notify the government when it became aware of the problems. With the settlement, Wells Fargo joined J.P. Morgan Chase & Co., Bank of America Corp., SunTrust Banks Inc. and many other lenders that have been penalized or threatened with penalties for FHA-related problems.
Some executives have said the penalties are too harsh for what they describe as minor errors, while government lawyers have said they have been appropriately high and that some lenders' actions amounted to fraud.
Wells Fargo, like other banks, has scaled back on FHA-backed mortgage lending in recent years. The bank's loans accounted for just 2.5% of total FHA mortgage dollars originated in 2015, down from 9% in 2013 and 13% in 2010, according to Inside Mortgage Finance.
Banks including J.P. Morgan and Bank of America were in the top 20 lenders under the program as recently as 2014, before they curtailed their participation. Nonbank lenders have rushed in to fill the void.
Bank of America in February unveiled a new low-down-payment mortgage of its own without FHA backing. The Self-Help Ventures Fund, a Durham, N.C.-based nonprofit, agreed to absorb some losses in the event a borrower defaults, to reduce the cost of that product. Self-Help said the Bank of America product is on pace to make between $300 million and $500 million in mortgages within the first year.
Self-Help, which comprises a state and a federally chartered credit union as well as the ventures loan fund and has a total of $1.6 billion in assets, also teamed up with Wells Fargo to take on the risk of a borrower defaulting on some mortgages in its program.
The new Wells Fargo product might save money for some borrowers who would have otherwise taken out an FHA-backed loan. For example, a borrower who buys a $200,000 home and has a credit score of 715 would pay about $1,040 a month with an FHA loan from Wells Fargo, assuming the borrower includes the FHA program's upfront costs in the loan amount and makes a 3.5% down payment, the minimum the agency requires. The same borrower under the new program would pay about $994 a month with a 3% down payment.
By taking a housing-education course, the borrower could reduce the mortgage rate by an additional one-eighth of a percentage point, making the payment about $979 a month.
The FHA in recent months has attempted to clarify lenders' responsibilities in making FHA-backed loans to keep them from withdrawing from the program, but many lenders believe the program's legal risk is still too high.
"There's clearly a disincentive to use the FHA for first-time home buyers in the way it's been done in the past," said David Stevens, CEO of the Mortgage Bankers Association, a lender trade group.
An FHA spokesman in an email said, "We believe our efforts to clarify policies and streamline processes are helpful for lenders looking to do business with FHA and serve a critical part of the home buying population."
Fannie Mae and competitor Freddie Mac have backed loans with down payments of as little as 3% for more than a year, though the programs' volume is still small. In the past five quarters, Fannie has backed about 30,000 mortgages with down payments of less than 5%, which is about 1% of its business.
Fannie Mae Vice President of Product Development Jonathan Lawless said programs similar to Wells Fargo's could be developed by other lenders and that he expects the volume of low-down-payment mortgages that Fannie backs to grow.
(END) Dow Jones Newswires
May 26, 2016 01:15 ET (05:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Behind the Veil of the Government's Plan to Wind Down Fannie and Freddie
Font size: A | A | A
4:57 PM ET 5/20/16 | Dow Jones
By John Carney
When the government changed the bailout terms of Fannie Mae and Freddie Mac in 2012, the U.S. Treasury Department announced that its purpose was to "expedite" the wind down of the companies and "make sure every dollar of earnings" went to taxpayers.
Newly unsealed court documents show that White House officials were worried that the change would be seen as stepping back from winding them down. In emails, the officials assured outsiders that the change meant that Fannie and Freddie "can't repay their debt and escape."
The documents also include projections by Fannie executives that the company would continue to need bailout money through 2013 but would be profitable for the following decade. The Fannie executives in the summer of 2012 didn't foresee the giant profits that the company would post the next year.
There is almost nothing in the documents, which were produced as part of a lawsuit filed against the government by hedge funds and other investors in Fannie and Freddie, that was not already in the public record. This suggests that the efforts of plaintiffs to uncover evidence of wrongdoing or that undermines the government's position have been largely frustrated.
The case is one of several involving the decision by the Federal Housing Finance Agency, which regulates Fannie and Freddie, and the U.S. Treasury Department to modify the companies' bailout agreements.
The government took control of Fannie and Freddie in 2008, eventually providing $187.5 billion of new capital. Under the bailout's original terms, the Treasury received warrants to acquire nearly 80% of the companies' common stock, along with a new class of "senior" preferred shares that initially paid a 10% dividend.
However, in August 2012, the FHFA and the Treasury Department changed the terms. When Fannie and Freddie made a profit, the companies would send almost all of it to the government. When they had a loss, they wouldn't need to pay a dividend.
Private shareholders of Fannie and Freddie common and preferred stock sued, challenging the change in terms. A federal judge dismissed one major case in September of 2014, which is now under appeal.
A judge in a similar case in the Court of Federal Claims granted shareholders discovery. That judge last month unsealed other documents, which sent Fannie's and Freddie's shares soaring. The new documents were produced as part of that discovery and unsealed by an agreement between the government and plaintiffs in yet another case, this one in a Kentucky federal court.
At the time that the sweep was implemented, the Treasury Department's concerns were centered around conservative critics, who they feared would see the move toward a variable dividend as a hidden bailout, the documents show. The Treasury publicly said the sweep would "help expedite the wind down of Fannie Mae and Freddie Mac, make sure that every dollar of earnings each firm generates is used to benefit taxpayers, and support the continued flow of mortgage credit during a responsible transition to a reformed housing finance market."
A newly released document marked "sensitive and pre-decisional" lays out talking points for officials discussing the changes with lawmakers and the public. In a section labelled "Most Challenging Questions," the very first question is "Aren't you giving up a 10 percent dividend owed to taxpayers to prop up the GSEs?"
"This is wrong. We are putting in place a better deal for taxpayers," is the first bullet point. The second: "This is because, going forward, each of these entities pays the taxpayer back all the profit they make -- not just a 10 percent dividend."
By ending a set quarterly dividend, the Treasury said the sweep would also make it so Fannie and Freddie wouldn't have to draw on bailout money merely to pay the dividend, a circular practice that they said could threaten investor confidence in the companies' guarantees of mortgage-backed securities. If that broke down, mortgage rates could rise sharply.
Not everyone was convinced that this was good for taxpayers. Congressman Scott Garrett, the New Jersey Republican, accused the Obama administration of prolonging their bailout and keeping taxpayers on the hook. In an email exchange with a Republican Congressional staffer, Jim Parrott, then a top White House officials, points out that keeping in place the 10% dividend would allow the companies to build capital in good quarters and cause them to lose capital in bad quarters.
"In regards to them keeping additional profits, in my mind that is only an accounting issue, gov recoups now (per new method) or later when we liquidate them and then realize those gains for the taxpayers," the staffer responds.
There's nothing in the government documents likely to undermine the judgement of Royce C. Lamberth, the federal district court judge that dismissed one of the cases in September 2014. In dismissing the complaint, Judge Lamberth wrote that "FHFA's underlying motives or opinions -- i.e., whether the net worth sweep would arrest a downward spiral of dividend payments), increase payments to Treasury, or keep the GSEs in a holding pattern...do not matter" as far as the law is concerned.
The documents also make clear that officials at Treasury and FHFA as well as company executives did not foresee the large profits that were to come in 2013, in part because they did not anticipate the restoration of Fannie's sizeable deferred tax assets. One of the contentions of shareholders is that the government instituted the profit sweep knowing big profits were coming.
Among the unsealed documents are projections by Fannie Mae on its future profitability that were presented to its board in July 2012, a month before the sweep occurred. Fannie officials expected the company to continue posting positive income through 2022. With the 10% dividend in place, they thought Fannie would pay more to the government than it took in bailout money by 2020.
In a management meeting shortly before the forecast was presented, David Benson, who is now Fannie's chief financial officer, said the next eight years would likely be "the golden years of [government-sponsored enterprise] earnings," according to an email summarizing the meeting, which was also unsealed. Fannie officials viewed the positive earnings as a way to build public support for Fannie and Freddie.
Noting that Fannie's profit projections had improved rapidly, Fannie CEO Timothy Mayopoulos wondered whether the company's board would view the forecast as credible, according to the email summary of the board meeting.
According to the financial forecast and the meeting summary, executives expected Fannie to take small draws on the Treasury's credit line throughout 2013. They forecast "comprehensive" income of $7.5 billion in 2013, short of the $11.7 billion required to pay the dividend. As it turns out, the company had comprehensive income of $84.8 billion that year, as Fannie released a huge chunk of value from deferred tax assets.
The "golden years" were short-lived. Profits at the companies last year fell short of what would have been necessary to pay the 10% dividend. Freddie Mac has reported a loss in two of the last four quarter.
"The recent economic performance of both enterprises further undermines any complaints about the Third Amendment as the required dividends to taxpayers would have exceeded their income in five of the past six quarters," Treasury Department spokesman Adam Hodge said in a statement.
The documents demonstrate that far from acting in secrecy or cloaking its true agenda, the Obama administration's actions in 2012 when the changes were made were entirely consistent publicly and privately. While the ultimate judgment of their legality will turn on the opinion of judges, the administration itself had no sense that what it was doing was contrary to law or good policy.
> Dow Jones Newswires
May 20, 2016 16:57 ET (20:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Sirius XM Radio Inc. Intends To Offer $750 Million Of Senior Notes due 2026
Source: PR Newswire (US)
NEW YORK, May 18, 2016 /PRNewswire/ -- SiriusXM announced today that its subsidiary, Sirius XM Radio Inc., intends to offer $750 million of Senior Notes due 2026 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and outside the United States in compliance with Regulation S of the Securities Act.
SIRIUS XM logo.
The company intends to use a portion of the net proceeds from the offering to repay all borrowings outstanding under its revolving credit facility. The company intends to use the remaining net proceeds from the offering for general corporate purposes, which may include, from time to time and as market conditions warrant, the repayment, repurchase, redemption, defeasance or tender of its outstanding indebtedness, including any future borrowings outstanding under its revolving credit facility, dividends or loans to SiriusXM, its parent corporation, to fund share repurchases of SiriusXM common stock and the payment of the cash consideration for, and fees related to, SiriusXM's previously announced recapitalization of Sirius XM Canada Holdings Inc. Pending application of these amounts, the company currently expects to maintain any excess amount as cash on hand.
The securities have not been and will not be registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration, except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.
This announcement is neither an offer to sell nor a solicitation to buy any of these securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful.
About SiriusXM
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world's largest radio company measured by revenue and has more than 30 million subscribers. SiriusXM creates and offers commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment, and a wide-range of Latin music, sports and talk programming. SiriusXM is available in vehicles from every major car company in the U.S. and on smartphones and other connected devices as well as online at siriusxm.com. SiriusXM radios and accessories are available from retailers nationwide and online at SiriusXM. SiriusXM also provides premium traffic, weather, data and information services for subscribers through SiriusXM Traffic™, SiriusXM Travel Link, NavTraffic®, NavWeather™. SiriusXM delivers weather, data and information services to aircraft and boats through SiriusXM Aviation, SiriusXM Marine™, Sirius Marine Weather, XMWX Aviation™, XMWX Weather, and XMWX Marine™. In addition, SiriusXM Music for Business provides commercial-free music to a variety of businesses. SiriusXM holds a minority interest in SiriusXM Canada which has approximately 2.7 million subscribers. SiriusXM is also a leading provider of connected vehicles services to major automakers, giving customers access to a suite of safety, security, and convenience services including automatic crash notification, stolen vehicle recovery assistance, enhanced roadside assistance and turn-by-turn navigation.
This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
The following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: our substantial competition, which is likely to increase over time; our ability to attract and retain subscribers, which is uncertain; consumer protection laws and their enforcement; the unfavorable outcome of pending or future litigation; the market for music rights, which is changing and subject to uncertainties; our dependence upon the auto industry; general economic conditions; the security of the personal information about our customers; existing or future government laws and regulations could harm our business; failure of our satellites would significantly damage our business; the interruption or failure of our information technology and communications systems; our failure to realize benefits of acquisitions or other strategic initiatives; rapid technological and industry changes; failure of third parties to perform; harmful interference to our service from new and existing wireless operations; our failure to comply with FCC requirements; modifications to our business plan; our indebtedness; our principal stockholder has significant influence over our affairs and over actions requiring stockholder approval and its interests may differ from interests of other holders of our common stock; and impairment of our business by third-party intellectual property rights. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the year ended December 31, 2015, which is filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication.
Source: SiriusXM
Contact for SiriusXM:
Hooper Stevens
212-901-6718
Hooper.stevens@siriusxm.com
Patrick Reilly
212-901-6646
patrick.reilly@siriusxm.com
Logo - http://photos.prnewswire.com/prnh/20101014/NY82093LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sirius-xm-radio-inc-intends-to-offer-750-million-of-senior-notes-due-2026-300270771.html
SOURCE SiriusXM
Copyright 2016 PR Newswire
Absolutely. All considering, I feel fairly optimistic about the outcome.
Current Report Filing (8-k)
Source: Edgar (US Regulatory)
UNITED STATES
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 (Date of earliest event reported): May 13, 2016 (May 12, 2016)
SIRIUS XM HOLDINGS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 001-34295 38-3916511
(State or other Jurisdiction
of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
1221 Avenue of the Americas, 36 th Fl., New York, NY 10020
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (212) 584-5100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events
On May 12, 2016, our subsidiary, Sirius XM Radio Inc. (“Sirius XM”), entered into an arrangement agreement (the “Arrangement Agreement”) with Sirius XM Canada Holdings Inc. (“Sirius XM Canada”), an entity in which Sirius XM currently holds an approximate 37% economic interest and 25% voting interest. Pursuant to the Arrangement Agreement, Sirius XM and certain Canadian shareholders will form a new company to acquire shares of Sirius XM Canada not already owned by them pursuant to a plan of arrangement (the “Transaction”). In connection with the Transaction, Sirius XM Canada’s shareholders will be entitled to elect to receive, for each share of Sirius XM Canada held, C$4.50 (U.S.$3.50 as of May 12, 2016) in (i) cash, (ii) shares of our common stock, (iii) a security exchangeable for shares of our common stock, or (iv) a combination thereof; provided that no more than 35.0 million shares of our common stock will be issued in the Transaction. All of the obligations of Sirius XM under the Arrangement Agreement are guaranteed by us.
Following the Transaction, Sirius XM is expected to hold a 70% economic interest and 33% voting interest in Sirius XM Canada, with the remainder of the voting power and economic interest held by Slaight Communications and Obelysk Media, two of Sirius XM Canada’s current Canadian shareholders. Sirius XM expects to contribute to Sirius XM Canada approximately U.S.$275 million in connection with the Transaction (assuming that all shareholders elect to receive cash in connection with the Transaction), which amount is expected to be used to pay the cash consideration to Sirius XM Canada’s shareholders and will be decreased proportionately if shareholders elect to receive consideration in shares of our common stock or securities exchangeable for our common stock.
The Transaction is subject to the approval of two-thirds of the shareholders of Sirius XM Canada, as well as a majority of the minority shareholders of Sirius XM Canada. The Transaction is also subject to receipt of court and Canadian Radio-Television and Telecommunications Commission approval. Pending receipt of all necessary approvals, the Transaction is expected to close no later than end of the fourth quarter of 2016.
On May 13, 2016, we issued a press release announcing the Transaction. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS
This current report (including the exhibits and attachments hereto) contains 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. These statements include, but are not limited to, statements related to our expectations to complete the Transaction, expectations regarding our ownership interest in Sirius XM Canada and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “forecasts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including risks related to
consummating the Transaction and those risks described under the section entitled “Part I — Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov . Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this current report, the exhibits and attachments hereto and in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
Item 9.01. Statements and Exhibits
(d) Exhibits.
Exhibit Number Description of Exhibit
99.1 Press Release dated May 13, 2016
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 hereunto duly authorized.
SIRIUS XM HOLDINGS INC.
By: /s/ Patrick L. Donnelly
Patrick L. Donnelly
Executive Vice President, General
Counsel and Secretary
Dated: May 13, 2016
EXHIBITS
Exhibit Description of Exhibit
99.1 Press Release dated May 13, 2016
SiriusXM Enters into Agreement to Back Sirius XM Canada's Going Private Transaction
Source: PR Newswire (US)
NEW YORK, May 13, 2016 /PRNewswire/ -- SiriusXM (NASDAQ: SIRI) today announced it and Sirius XM Radio Inc., its operating subsidiary, have entered into agreements with Sirius Canada Holdings Inc. (Sirius XM Canada) to recapitalize Sirius XM Canada (TSX: XSR). SiriusXM and certain Canadian shareholders will form a new company to acquire shares of Sirius XM Canada not already owned by them pursuant to a plan of arrangement.
SIRIUS XM logo. (PRNewsFoto/SIRIUS XM Radio)
In connection with the transaction, Sirius XM Canada's shareholders will be entitled to elect to receive, for each share of Sirius XM Canada held, consideration of C$4.50 in cash, shares of SiriusXM common stock, a security exchangeable for shares of SiriusXM common stock, or a combination thereof. No more than 35.0 million shares of SiriusXM's common stock will be issued in connection with the transaction.
Following the closing of the recapitalization, Sirius XM Canada will continue to operate under Canadian voting control. Slaight Communications and Obelysk Media will, on a combined basis, own 67% of the voting shares of Sirius XM Canada and 30% of the economic interest in the recapitalized business. SiriusXM will increase its economic ownership of Sirius XM Canada from 37% to 70% and own 33% of the voting shares.
"This proposed transaction shows SiriusXM's and Sirius XM Canada's commitment to serving the Canadian market with our leading bundle of premium content, much of which will continue to be created in Canada. The existing Canada-led governance structure will be preserved while vastly improving cooperation between the two companies on next generation products and services that will ensure a healthy future for satellite radio in Canada," said Jim Meyer, Chief Executive Officer, SiriusXM. "While the Canadian Broadcasting Corporation will cease to be a shareholder in Sirius XM Canada following the transaction, it will continue to support the company as a programming provider."
SiriusXM expects to contribute approximately US$275 million to facilitate the transaction. Additionally, the licensing and services agreements between SiriusXM and Sirius XM Canada will be renewed and extended upon the consummation of the proposed transaction.
The proposed recapitalization is subject to approval of the Sirius XM Canada shareholders, receipt of Canadian regulatory approvals, and other customary closing conditions. SiriusXM expects the recapitalization to close no later than the end of the fourth quarter of 2016. Upon closing of the recapitalization, Sirius XM Canada will no longer be a publicly traded stock.
SiriusXM's financial and legal advisors, respectively, were J.P. Morgan Securities LLC and Norton Rose Fulbright Canada LLP.
About SiriusXM
Sirius XM Holdings Inc. (NASDAQ: SIRI) is the world's largest radio company measured by revenue and has more than 30 million subscribers. SiriusXM creates and offers commercial-free music; premier sports talk and live events; comedy; news; exclusive talk and entertainment, and a wide-range of Latin music, sports and talk programming. SiriusXM is available in vehicles from every major car company in the U.S. and on smartphones and other connected devices as well as online at siriusxm.com. SiriusXM radios and accessories are available from retailers nationwide and online at SiriusXM. SiriusXM also provides premium traffic, weather, data and information services for subscribers through SiriusXM Traffic™, SiriusXM Travel Link, NavTraffic®, NavWeather™. SiriusXM delivers weather, data and information services to aircraft and boats through SiriusXM Aviation, SiriusXM Marine™, Sirius Marine Weather, XMWX Aviation™, XMWX Weather, and XMWX Marine™. In addition, SiriusXM Music for Business provides commercial-free music to a variety of businesses. SiriusXM holds a minority interest in SiriusXM Canada which has approximately 2.7 million subscribers. SiriusXM is also a leading provider of connected vehicles services to major automakers, giving customers access to a suite of safety, security, and convenience services including automatic crash notification, stolen vehicle recovery assistance, enhanced roadside assistance and turn-by-turn navigation.
To download SiriusXM logos and artwork, visit http://www.siriusxm.com/LogosAndPhotos.
This communication contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "believe," "intend," "plan," "projection," "outlook" or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
The following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: our substantial competition, which is likely to increase over time; our ability to attract and retain subscribers, which is uncertain; consumer protection laws and their enforcement; the unfavorable outcome of pending or future litigation; the market for music rights, which is changing and subject to uncertainties; our dependence upon the auto industry; general economic conditions; the security of the personal information about our customers; existing or future government laws and regulations could harm our business; failure of our satellites would significantly damage our business; the interruption or failure of our information technology and communications systems; our failure to realize benefits of acquisitions or other strategic initiatives; rapid technological and industry changes; failure of third parties to perform; harmful interference to our service from new and existing wireless operations; our failure to comply with FCC requirements; modifications to our business plan; our indebtedness; our principal stockholder has significant influence over our affairs and over actions requiring stockholder approval and its interests may differ from interests of other holders of our common stock; and impairment of our business by third-party intellectual property rights. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our Annual Report on Form 10-K for the year ended December 31, 2015, which is filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and we disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this communication.
Source: SiriusXM
Contact for SiriusXM:
Hooper Stevens
212-901-6718
Hooper.stevens@siriusxm.com
Patrick Reilly
212-901-6646
patrick.reilly@siriusxm.com
Logo - http://photos.prnewswire.com/prnh/20101014/NY82093LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/siriusxm-enters-into-agreement-to-back-sirius-xm-canadas-going-private-transaction-300268261.html
SOURCE Sirius XM Holdings Inc.
Copyright 2016 PR Newswire
I didn't see anything that pointed to chapter 7 bankruptcy or the doing away with common shares.
I didn't see anything that pointed to chapter 7 bankruptcy or the doing away with common shares.
AT&T Awarded Contract Worth Up To $74.6 Million to Support U.S. Defense
Source: PR Newswire (US)
VIENNA, Va., May 11, 2016 /PRNewswire/ -- AT&T* is the sole awardee of a contract worth up to $74.6 million over five years, if all options are exercised, from the Defense Information Systems Agency.
AT&T will provide highly secure telecom services that support U.S. senior leadership communications between select Department of Defense aircraft and ground stations across the continental U.S. and around the world.
"We're proud to provide communications services to help defend our country," said Kay Kapoor, president, AT&T Global Business – Public Sector Solutions. "When the mission is vital and national security is at stake, our nation's leaders count on the AT&T network."
AT&T will provide long-haul telecommunications and related transmission circuits. These support the government's restricted-use, ultra-high frequency communications platform. The services are highly reliable and resilient to keep continuous communications under duress.
*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.
About AT&T
AT&T Inc. (NYSE:T) helps millions around the globe connect with leading entertainment, mobile, high-speed Internet and voice services. We're the world's largest provider of pay TV. We have TV customers in the U.S. and 11 Latin American countries. We offer the best global coverage of any U.S. wireless provider*. And we help businesses worldwide serve their customers better with our mobility and highly secure cloud solutions.
Additional information about AT&T products and services is available at http://about.att.com. Follow our news on Twitter at @ATT, on Facebook at http://www.facebook.com/att and YouTube at http://www.youtube.com/att.
© 2016 AT&T Intellectual Property. All rights reserved. AT&T, the Globe logo and other marks are trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.
*Global coverage claim based on offering discounted voice and data roaming; LTE roaming; voice roaming; and world-capable smartphone and tablets in more countries than any other U.S. based carrier. International service required. Coverage not available in all areas. Coverage may vary per country and be limited/restricted in some countries.
AT&T Inc. (PRNewsFoto/AT&T Inc.)
Logo - http://photos.prnewswire.com/prnh/20140408/CG99935LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/att-awarded-contract-worth-up-to-746-million-to-support-us-defense-300266308.html
SOURCE AT&T Inc.
Copyright 2016 PR Newswire
Liberty Media And Its SiriusXM Stake - Tracking The Trackers $LSXMA
http://www.seekingalpha.com/article/3973608
American Airlines Group: About That $20 Billion Debt $AAL
http://www.seekingalpha.com/article/3973526
American Airlines reports slight dip in April traffic
http://www.seekingalpha.com/news/3181721
Quarterly Report (10-q)
Source: Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED March 31, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 000-49697
REPUBLIC AIRWAYS HOLDINGS INC.
(Exact name of registrant as specified in its charter)
DELAWARE
06-1449146
(State or other jurisdiction of
(I.R.S. Employer Identification Number)
incorporation or organization)
8909 Purdue Road, Suite 300, Indianapolis, Indiana 46268
(Address of principal executive offices) (Zip Code)
(317) 484-6000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
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.
þ Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
þ Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes þ No
Number of shares of Common Stock outstanding as of the close of business on May 9, 2016 : 50,955,051 .
TABLE OF CONTENTS
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
DEBTORS AND DEBTORS IN POSSESSION
Part I - Financial Information
Item 1.
Financial Statements:
Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2016 and December 31, 2015
3
Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2016 and 2015
4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three Months Ended March 31, 2016 and 2015
5
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2016 and 2015
6
Notes to Condensed Consolidated Financial Statements (Unaudited)
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
17
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
24
Item 4.
Controls and Procedures
24
Part II - Other Information
Item 1A.
Risk Factors
25
Item 6.
Exhibits
25
Signatures
26
Exhibit Index
27
All other items of this report are inapplicable.
2
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions, except share and per share amounts)
March 31, 2016
December 31, 2015
ASSETS
Current Assets:
Cash and cash equivalents
$
175.8
$
173.5
Restricted cash
9.0
4.5
Receivables - net of allowance for doubtful accounts of $1.9 and $1.8, respectively
83.7
77.4
Inventories
53.9
53.4
Prepaid expenses and other current assets
19.1
10.4
Assets held for sale
23.9
45.4
Total current assets
365.4
364.6
Aircraft and other equipment, net
3,051.0
3,006.3
Maintenance deposits
51.0
49.9
Intangible and other assets, net
168.0
175.6
Total assets
$
3,635.4
$
3,596.4
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Debt
$
2,250.2
$
2,443.5
Accounts payable
2.8
22.8
Accrued liabilities
101.8
183.5
Total current liabilities
2,354.8
2,649.8
Deferred credits and other non-current liabilities
40.4
86.9
Deferred income taxes
170.6
259.6
Liabilities subject to compromise
616.4
—
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.001 par value; 5,000,000 shares authorized; no shares issued or outstanding
—
—
Common stock, $.001 par value; one vote per share;150,000,000 shares authorized; 60,521,616 and 60,521,616 shares issued and 50,955,051 and 50,948,385 shares outstanding, respectively
—
—
Additional paid-in capital
435.3
434.1
Treasury stock, 9,546,147 shares at cost
(183.9
)
(183.9
)
Accumulated other comprehensive loss
(2.2
)
(2.2
)
Accumulated earnings
204.0
352.1
Total stockholders' equity
453.2
600.1
Total liabilities and stockholders' equity
$
3,635.4
$
3,596.4
See accompanying notes to the condensed consolidated financial statements (unaudited).
3
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In millions, except per share amounts)
Three Months Ended March 31,
2016
2015
OPERATING REVENUES:
Fixed-fee service
$
295.8
$
335.5
Other
5.9
5.5
Total operating revenues
301.7
341.0
OPERATING EXPENSES:
Wages and benefits
104.7
94.1
Aircraft fuel
0.2
3.7
Landing fees and airport rents
5.6
5.9
Aircraft and engine rent
21.8
31.2
Maintenance and repair
67.8
67.2
Insurance and taxes
5.1
4.9
Depreciation and amortization
51.8
46.0
Other
36.4
46.8
Total operating expenses
293.4
299.8
OPERATING INCOME
8.3
41.2
OTHER INCOME (EXPENSE):
Interest expense
(30.2
)
(30.0
)
INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES
(21.9
)
11.2
REORGANIZATION ITEMS, NET
(215.1
)
—
INCOME (LOSS) BEFORE INCOME TAXES
(237.0
)
11.2
INCOME TAX EXPENSE (BENEFIT)
(88.9
)
4.8
NET INCOME (LOSS)
$
(148.1
)
$
6.4
NET INCOME (LOSS) PER COMMON SHARE - BASIC
$
(2.91
)
$
0.13
NET INCOME (LOSS) PER COMMON SHARE - DILUTED
$
(2.91
)
$
0.13
See accompanying notes to the condensed consolidated financial statements (unaudited).
4
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(In millions)
Three Months Ended March 31,
2016
2015
NET INCOME (LOSS)
$
(148.1
)
$
6.4
Other comprehensive income, net:
Reclassification adjustment for income realized on derivatives, net of tax
—
—
TOTAL COMPREHENSIVE INCOME (LOSS), NET
$
(148.1
)
$
6.4
See accompanying notes to the condensed consolidated financial statements (unaudited).
5
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
DEBTORS AND DEBTORS IN POSSESSION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In millions)
Three Months Ended March 31,
2016
2015
NET CASH FROM OPERATING ACTIVITIES
$
64.3
$
57.2
INVESTING ACTIVITIES:
Purchase of aircraft and other equipment
(106.2
)
(147.2
)
Proceeds from sale of aircraft and other assets
29.5
47.9
Aircraft deposits returned (paid)
2.0
(5.0
)
Change in restricted cash
(4.4
)
2.9
NET CASH USED IN INVESTING ACTIVITIES
(79.1
)
(101.4
)
FINANCING ACTIVITIES:
Payments on debt
(49.3
)
(77.5
)
Proceeds from debt issuance and refinancing
101.4
147.5
Payments on early extinguishment of debt and refinancing
(34.4
)
(50.5
)
Proceeds from exercise of stock options
—
3.0
Other, net
(0.6
)
(1.5
)
NET CASH PROVIDED FROM FINANCING ACTIVITIES
17.1
21.0
NET CHANGES IN CASH AND CASH EQUIVALENTS
2.3
(23.2
)
CASH AND CASH EQUIVALENTS—Beginning of period
173.5
223.9
CASH AND CASH EQUIVALENTS—End of period
$
175.8
$
200.7
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAID FOR INTEREST AND INCOME TAXES:
Interest paid
$
25.6
$
26.4
Income taxes paid
0.2
0.2
NON-CASH INVESTING & FINANCING TRANSACTIONS:
Other equipment acquired through manufacturer credits
1.6
5.8
Manufacturer credit applied to the purchase of aircraft
4.8
5.2
See accompanying notes to the condensed consolidated financial statements (unaudited).
6
REPUBLIC AIRWAYS HOLDINGS INC. AND SUBSIDIARIES
DEBTORS AND DEBTORS IN POSSESSION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Chapter 11 and Going Concern
On February 25, 2016 (the “Petition Date”), Republic Airways Holdings Inc. and certain of its wholly-owned direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Chapter 11 cases are being administered under the caption "In re Republic Airways Holdings Inc., et al.," Case Number 16-10429.
The Condensed Consolidated Financial Statements of the Debtors are substantially the same as the Condensed Consolidated Financial Statements of Republic Airways Holdings Inc. and Subsidiaries except the Debtors’ consolidated balance sheet includes an intra-entity payable of $202.8 million and the debt is reduced by $202.8 million as of March 31, 2016. The Debtors’ consolidated balance sheet also includes an intra-entity receivable of $7.0 million as of March 31, 2016. The remaining differences in the consolidated balance sheet relate to the investment in Non-Debtor entities, stockholders’ equity and deferred income taxes and are not material. The Debtors’ and Republic Airways Holdings Inc.’s consolidated statements of operations are the same for the three months ended March 31, 2016.
The Debtors are currently operating as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and the applicable provisions of the Bankruptcy Code. In general, as debtors-in-possession under the Bankruptcy Code, the Company is authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Bankruptcy Court has granted a variety of motions that allow the Company to continue to operate its business in the ordinary course without interruption, covering, among other things, obligations to employee wages, salaries and benefits, taxes and certain vendors in the ordinary course for goods and services received after the Petition Date.
While operating as debtors-in-possession under Chapter 11 of the Bankruptcy Code, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or otherwise as permitted in the ordinary course of business, in amounts other than those reflected in the Condensed Consolidated Financial Statements. Moreover, the Debtors have not yet prepared or filed with the Bankruptcy Court a plan of reorganization. The ultimate plan of reorganization, which must be approved by the Bankruptcy Court, could materially change the amounts and classifications in the historical Condensed Consolidated Financial Statements and potentially dilute equity stockholders.
The Company's Chapter 11 cases followed an extended effort by the Company to restructure its business to strengthen its competitive and financial position. However, due to a growing national shortage of qualified pilots in the United States it made it increasingly difficult to maintain the necessary pilot staffing levels to sustain reliable performance requirements under the agreements with United Continental Holdings, Inc. ("United"), Delta Air Lines, Inc. ("Delta"), and American Airlines Group, Inc. ("American") (collectively referred to as our "Partners").
As a result of the pilot shortage, the Company has been forced to ground operating aircraft and reduce scheduled flying for each of its Partners, which has adversely affected the Company's financial position and cash flows from operations. Although a new three year collective bargaining agreement reached with its pilots in late 2015 has enabled the Company to stem the rate of attrition and significantly increase new pilot hiring, the Company needs time to be able to train new pilots, return more of its idled aircraft to revenue service, and restore higher levels of scheduled service for its Partners.
General Information
Notices to Creditors; Effect of Automatic Stay. The Debtors have begun the process of seeking to notify all known current or potential creditors that the Chapter 11 cases have been filed. Subject to certain exceptions under the Bankruptcy Code, the filing of the Debtors’ Chapter 11 cases automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date. Thus, for example, most creditor actions to obtain possession of property from the Debtors, or to create, perfect or enforce any lien against the property of the Debtors, or to collect on monies owed or otherwise exercise rights or remedies with respect to a prepetition claim, are enjoined unless and until the Bankruptcy Court lifts the automatic stay as to any such claim. Vendors are being paid for goods furnished and services provided after the Petition Date in the ordinary course of business.
7
Appointment of Creditors’ Committee. On March 4, 2016, the U.S. Trustee for the Southern District of New York appointed an official committee of unsecured creditors (the “Creditors’ Committee”) for the Chapter 11 cases. The Bankruptcy Code provides for the U.S. Trustee to appoint a statutory committee of creditors holding unsecured claims as soon as practicable after the commencement of a Chapter 11 case. The statutory creditors’ committee ordinarily consists of holders of the seven largest unsecured claims who are willing to serve. Generally, an official creditors’ committee represents the interests of all unsecured creditors in a bankruptcy case.
On April 4, 2016, the Company submitted a letter to the Office of the United States Trustee of the Southern District of New York to oppose the creation of an official committee of equity security holders. After careful consideration of the facts of the case and analysis of the requests, the United States Trustee declined to form an Official Equity Committee.
Executory Contracts and Unexpired Leases. Under Section 365 and other relevant sections of the Bankruptcy Code, the Debtors may assume, assume and assign, or reject certain executory contracts and unexpired leases, including, without limitation, certain aircraft, aircraft engines, appliances and spare parts (each, as defined in section 1110(a)(3)(A)(i) of the Bankruptcy Code), and collectively with all records and documents relating thereto, the ("Aircraft Equipment") and leases of real property, subject to the approval of the Bankruptcy Court and certain other conditions. Under the Bankruptcy Code, the Debtors’ rights to assume, assume and assign, or reject unexpired leases of non-residential real estate expire on June 25, 2016 (subject to further extension by the Bankruptcy Court). In general, rejection of an executory contract or unexpired lease is treated as a prepetition breach of the executory contract or unexpired lease in question and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases have the right to file claims against the Debtors’ estate for such damages. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing defaults under such executory contract or unexpired lease.
Any description of an executory contract or unexpired lease elsewhere in these Notes, including where applicable the Debtors’ express termination rights or a quantification of their obligations, must be read in conjunction with, and is qualified by, any rights the Debtors have under Section 365 of the Bankruptcy Code.
The Debtors expect that liabilities subject to compromise and resolution in the Chapter 11 cases will arise in the future as a result of damage claims created by the Debtors’ rejection of various executory contracts and unexpired leases.
Special Protection Applicable to Leases and Secured Financing of Aircraft Equipment. Notwithstanding the general discussion above of the impact of the automatic stay, under Section 1110 of the Bankruptcy Code (“Section 1110”), beginning 60 days after filing a petition under Chapter 11, certain secured parties, lessors and conditional sales vendors may have a right to take possession of certain qualifying Aircraft Equipment that is leased or subject to a security interest or conditional sale contract, unless the Debtors, subject to approval by the Bankruptcy Court, agree to perform under the applicable agreement, and cure any defaults as provided in Section 1110 (other than defaults of a kind specified in Section 365(b)(2) of the Bankruptcy Code). Taking such action does not preclude the Debtors from later rejecting the applicable lease or surrendering and returning the Aircraft Equipment subject to the related security agreement.
The Debtors may extend the 60 -day period by agreement of the relevant financing party, with Bankruptcy Court approval. In the absence of an agreement and cure as described above or such an extension, following written demand for possession, the financing party may take possession of the Aircraft Equipment and enforce any of its contractual rights or remedies to sell, lease or otherwise retain or dispose of such Aircraft Equipment.
The 60 -day period under Section 1110 in the Chapter 11 cases expired on April 25, 2016. In accordance with the Bankruptcy Court’s Order Authorizing the Debtors to (i) Enter into Agreements Under 11 U.S.C. 1110(a), (ii) Enter into Stipulations to Extend the Time to Comply with 11 U.S.C. 1110 and (iii) File Redacted Section 1110 Notices and 1110(b) Stipulations, dated March 23, 2016, the Debtors have entered into agreements to extend the automatic stay or agreed to perform and cure defaults under financing agreements with respect to certain Aircraft Equipment. While the Debtors have reached agreements on, or agreements on key aspects of, renegotiated terms with respect to certain of their Aircraft Equipment and are continuing to negotiate terms with respect to many of their other Aircraft Equipment financings, the ultimate outcome of these negotiations cannot be predicted with certainty. To the extent the Debtors are unable to reach definitive agreements with Aircraft Equipment financing parties, those parties may seek to repossess the subject Aircraft Equipment pursuant to Section 1110(c) of the Bankruptcy Code. The loss of a significant number of operating aircraft could result in a material adverse effect on the Debtors’ financial and operating performance.
8
Magnitude of Potential Claims The Debtors will file with the Bankruptcy Court schedules and statements of financial affairs setting forth, among other things, the assets and liabilities of the Debtors, subject to the assumptions filed in connection therewith. All of the schedules may be subject to further amendment or modification.
Bankruptcy Rule 3003(c)(3) requires the Bankruptcy Court to fix the time within which proofs of claim must be filed in a Chapter 11 case pursuant to section 501 of the Bankruptcy Code. This Bankruptcy Rule also provides that any creditor who asserts a claim against the Debtors that arose prior to the Petition Date and whose claim (i) is not listed on the Debtors’ schedules or (ii) is listed on the schedules as disputed, contingent, or unliquidated, must file a proof of claim. The Bankruptcy Court has not yet established a date and time by which such proofs of claim must be filed.
Differences between liabilities the Debtors have estimated and the claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 proceedings and adjust amounts as necessary. Such adjustments may be material. In light of the expected number of creditors, the claims resolution process may take considerable time to complete. At this time, the Debtors estimate that the ultimate amount of allowed claims to be between $585.0 million and $1.0 billion .
Impact of Chapter 11 Filing on Availability and Utilization of Net Operating Losses —The availability and utilization of net operating losses after the Company’s emergence from Chapter 11 is uncertain at this time and will be highly influenced by the composition of the plan of reorganization that is ultimately pursued. However, the Company’s net operating losses (“NOLs”) could be utilized in the near term to offset gains on the expected disposition of aircraft. On February 25, 2016 , we filed the motion to request the Bankruptcy Court to establish Notification Procedures on Certain Transfers of Claims Against and Interests in the Debtors’ Estates, which restricts trading in the Company’s common stock and claims. The order is intended to prevent certain transfers of the Company’s common stock and certain transfers of claims against the Debtors that could impair the ability of one or more of the Debtors’ estates to use their net operating loss carryovers and certain other tax attributes currently or on a reorganized basis. Any acquisition, disposition, or other transfer of equity or claims on or after February 25, 2016 in violation of the restrictions set forth in the order will be null and void ab initio and/or subject to sanctions as an act in violation of the automatic stay under sections 105(a) and 362 of the Bankruptcy Code. The order applies to (i) “Substantial Equity holders,” i.e., persons who are, or as a result of a transaction would become, the beneficial owner of approximately 4.75% percent of the outstanding shares of the Company’s common stock and (ii) “Substantial Claimholders,” i.e., persons who are, or as a result of a transaction become, the beneficial owner of unsecured claims in excess of a threshold amount of unsecured claims (initially $4.9 million of unsecured claims, but which may be subsequently increased or decreased under certain circumstances in connection with the Debtors’ filing of a Chapter 11 plan). In the case of Substantial Equity holders, the order imposes current restrictions with respect to the acquisition or disposition of the Company’s stock, and certain notifications may be required. In the case of Substantial Claimholders, the order imposes a procedure pursuant to which, under certain circumstances, the claims acquired during the Chapter 11 cases may have to be resold, and certain notifications may be required.
Liabilities Subject to Compromise
The following table summarizes the components of liabilities subject to compromise included on the Condensed Consolidated Balance Sheet as of March 31, 2016 :
(in millions)
Debt and accrued interest
$
216.4
Deferred credits and other liabilities
44.0
Accounts payable and other accrued liabilities
167.3
Partner liabilities
188.7
Total liabilities subject to compromise
$
616.4
9
Debt, including undersecured debt, classified as subject to compromise as of March 31, 2016 :
(in millions)
Promissory notes payable, collateralized by aircraft, bearing interest at fixed rates
$
128.5
Promissory notes payable, collateralized by eligible spare parts and equipment, bearing interest at variable rates
1.6
Line of credit, collaterialized by eligible spare parts and equipment, bearing interest at variable rates
83.0
Other
1.0
Total debt subject to compromise
$
214.1
Liabilities subject to compromise refers to prepetition obligations which may be impacted by the Chapter 11 reorganization process. These amounts represent the Debtors’ current estimate of known or potential prepetition obligations to be resolved in connection with the Chapter 11 cases.
Reorganization Items, net
Reorganization items refer to revenues, expenses (including professional fees), realized gains and losses and provisions for losses that are realized or incurred in the Chapter 11 proceedings related to the reorganization and restructuring of the business. The following table summarizes the components included in reorganization items, net on the Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 :
(in millions)
Aircraft settlement and rejections
$
40.9
Partner settlement and rejections
170.7
Professional fees
3.5
Total reorganization items, net
$
215.1
Claims related to reorganization items are reflected in liabilities subject to compromise on the Condensed Consolidated Balance Sheet and were all non-cash items for the three months ended March 31, 2016 .
Going Concern
These Condensed Consolidated Financial Statements have also been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business. Accordingly, the Condensed Consolidated Financial Statements do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary should the Debtors be unable to continue as a going concern.
As a result of the Chapter 11 proceedings, the satisfaction of the Company’s liabilities and funding of ongoing operations are subject to uncertainty and, accordingly, there is a substantial doubt of the Company’s ability to continue as a going concern. There is no assurance that the Company will be able to emerge successfully from Chapter 11. Additionally, there is no assurance that long-term funding of any type would be available to the Company, or that it would be available at rates and on terms and conditions that would be financially acceptable and viable to the Company in the long term. If the Company is unable to generate additional working capital and or raise additional financing when needed, it may be required to suspend operations, sell assets or enter into a merger or other combination with a third party, any of which could adversely affect the value of the Company’s common stock, or render it worthless. If the Company issues additional debt or equity securities, such securities may enjoy rights, privileges and priorities superior to those enjoyed by holders of the Company’s common stock, thereby diluting the value of the Company’s common stock. Additionally, in connection with the Chapter 11 Filing, material modifications could be made to the Company’s fleet and capacity purchase agreements. These modifications could materially affect the Company’s financial results going forward and could result in future impairment charges.
10
2. Organization and Business
We are a Delaware holding company organized in 1996 that offers scheduled passenger services through our wholly-owned operating air carrier subsidiaries: Shuttle America Corporation ("Shuttle") and Republic Airline Inc. ("Republic"). Unless the context indicates otherwise, the terms the "Company," "we," "us," or "our" refer to Republic Airways Holdings Inc. and our subsidiaries.
In accordance with Generally Accepted Accounting Principles ("GAAP"), the Debtors have applied Accounting Standard Codification ("ASC") 852 Reorganizations (ASC 852), in preparing the Condensed Consolidated Financial Statements. ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 cases, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses (including professional fees), realized gains and losses and provisions for losses that are realized or incurred in the Chapter 11 cases are recorded in reorganization items, net on the accompanying Condensed Consolidated Statement of Operations. In addition, prepetition obligations that may be impacted by the Chapter 11 reorganization process have been classified on the Condensed Consolidated Balance Sheet in liabilities subject to compromise. These liabilities are reported at the amounts expected to be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.
In the opinion of management, these financial statements reflect all adjustments that are necessary to present fairly the results of operations for the interim periods presented. All adjustments are of a normal, recurring nature unless otherwise disclosed. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 , filed March 11, 2016.
3. Summary of Significant Accounting Policies
Rental Income – Under the Company’s fixed-fee code-share and fixed-fee charter agreements, the Company is reimbursed an amount per aircraft designed to compensate the Company for certain aircraft ownership costs. The Company has concluded that a component of its fixed-fee service revenue under the agreements discussed above is rental income, inasmuch as the agreements identify the “right of use” of a specific type and number of aircraft over a stated period of time. The amounts deemed to be rental income during the three months ended March 31, 2016 and 2015 , were $95.5 million and $112.9 million , respectively.
Other Revenue – Other revenue primarily consists of revenue related to lease revenue for aircraft leased under operating leases.
Interest Expense – In accordance with ASC 852, the Debtors record interest expense only to the extent (1) interest will be paid during the Chapter 11 Cases or (2) it is probable that the Bankruptcy Court will allow a claim in respect of such interest. Interest expense recorded in the Condensed Consolidated Statements of Operations totaled $30.2 million for the three months ended March 31, 2016 . Contractual interest expense (including interest expense that is associated with obligations in liabilities subject to compromise) during this period totaled $30.7 million .
Reorganization Items - Reorganization items primarily consists of the expected amount of allowed claims related to aircraft settlement and rejections, partner settlement and rejections and professional fees.
Restricted Cash – Restricted cash primarily consists of balances in escrow for restricted amounts for satisfying debt and lease payments due within the next year, certificate of deposit that secure certain letters of credit issued for workers' compensation claim reserves and certain airport authorities and funds held by a third party owner/trustee in trust for the satisfaction of certain contingent tax obligations. The Company has no interest in the funds held in trust. Restricted cash is carried at cost, which management believes approximates fair value.
Liabilities Subject to Compromise - Liabilities subject to compromise primarily consist of prepetition liabilities, including claims that became known after the petition was filed as a result of contract settlements or rejections, and are recorded on the basis of the expected amount of the allowed claim.
Stockholders’ Equity – For the period from December 31, 2015 through March 31, 2016 , additional paid-in capital increased to $435.3 million from $434.1 million due to $1.2 million of stock compensation expense, accumulated other comprehensive loss remained at $2.2 million and accumulated earnings decreased to $204.0 million from $352.1 million based on current year-to-date net loss.
11
Net Income (Loss) Per Common Share – The following table is based on the weighted average number of common shares outstanding during the period. The following is a reconciliation of the weighted average common shares for the basic and diluted per share computations (in millions, except per share information):
Three Months Ended March 31,
2016
2015
Basic and diluted income (loss) per share:
Net income (loss)
$
(148.1
)
$
6.4
Weighted-average common shares outstanding for basic net income (loss) per common share
50.9
50.2
Effect of dilutive employee stock options and restricted stock
—
0.5
Adjusted weighted-average common shares outstanding for diluted net income (loss) per common share
50.9
50.7
Net income (loss) per share - Basic
$
(2.91
)
$
0.13
Net income (loss) per share - Diluted
$
(2.91
)
$
0.13
The Company excluded 2.1 million and 1.4 million employee stock options from the calculation of diluted net income (loss) per share due to its anti-dilutive impact for the three months ended March 31, 2016 and 2015 , respectively.
Fair Value Measurements – ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosures about how fair value is determined for assets and liabilities and sets forth a hierarchy for which these assets and liabilities must be grouped. The Topic establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1
quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2
quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3
unobservable inputs for the asset or liability.
The following table sets forth information regarding the Company's assets measured at fair value on a recurring basis (in millions):
Fair Value of Assets on a Recurring Basis
March 31, 2016
Level 1
Level 2
Level 3
Chautauqua restructuring asset
$
53.6
$
—
$
—
$
53.6
Fair Value of Assets on a Recurring Basis
December 31, 2015
Level 1
Level 2
Level 3
Chautauqua restructuring asset
$
59.1
$
—
$
—
$
59.1
Chautauqua restructuring asset – In October 2012, the Company restructured certain aircraft ownership obligations related to its 50 -seat regional jet platform, Chautauqua. In connection with the restructuring, the Company issued a convertible note payable with a face value of $25.0 million , provided call rights on 28 of its owned aircraft and agreed to parent company guarantees related to future minimum lease payments, among other commitments.
The Company elected the fair value option under ASC 825-10, " Financial Instruments " for the agreement related to its 28 owned aircraft because management believes the fair value option provides the most accurate representation of the economic benefit of this agreement to Chautauqua in the Company's financial statements. Under the fair value option, the Company recorded an $86.4 million asset representing the combined fair value of expected future cash inflows under the agreement, net of the value of the Company's obligations attributable to the call rights on the 28 aircraft. The recurring fair value measurement of this agreement has been calculated using an income approach, which requires the use of subjective assumptions that are considered level 3 inputs. Fair values have been estimated by discounting the cash flows expected to be received over the term of the agreement, using a
12
discount rate based on observable yields on instruments bearing comparable risks and credit worthiness of the counterparty. Critical assumptions used in the fair value measurement primarily include the amount and timing of cash inflows, the discount rate and the probability of whether the call option on the restructured aircraft will be exercised by the counterparty. A change in these assumptions could result in a significantly higher or lower fair value measurement, which would result in a gain or loss during the period in which the assumption changes. A 100 basis point change in the discount rate used would not have a significant impact on the change in fair value of the restructuring asset as of March 31, 2016 . Similarly, a change in the assumed probability of whether the call option on the restructured aircraft will be exercised could result in either a gain or loss of up to $3.2 million per aircraft during the period in which that assumption changed.
In March 2013 the agreement was amended, which resulted in a $12.0 million increase in the restructuring asset under the fair value option. The $12.0 million increase represents the fair value of expected future cash inflows under the amendment. In addition, this amendment resulted in a $12.0 million deferred credit that amortized as a reduction to the basis of future aircraft deliveries through the first quarter of 2015.
On February 11, 2014, the Company announced the early termination of its 44 to 50 seat fixed-fee agreements with United Airlines and American Airlines, which were scheduled to terminate in 2014. These agreements began to wind-down in March 2014 and resulted in the grounding of 27 small jet aircraft. The Company notified the counterparty that 15 of the 27 aircraft to be grounded are subject to this agreement and callable by the counterparty. The Company was notified by the counterparty during the first quarter of 2014 that it did not intend to exercise its call option on these aircraft. The Company recorded a fair value gain of $18.4 million for the three months ended March 31, 2014, which represents the fair value of the increase in cash flows expected to be received over the remaining term of the agreement, due to the counterparty's obligation to increase its payment to the Company for aircraft that cease to have applicable capacity purchase agreement ("CPA") reimbursement rates.
D uring the three months ended March 31, 2016 , the Company recorded a fair value loss of $5.0 million which represents the decrease in fair value due primarily to the change in the assumption that the counterparty would exercise all of its call rights on the aircraft covered by the agreement offset by the decrease in cash outflows related to certain return conditions of the aircraft.
As of March 31, 2016 , the Company would owe approximately $59.9 million under certain circumstances of non-performance or voluntary repayment, however; the Company estimated the probability of non-performance or repayment as remote.
The following is a reconciliation of the beginning and ending balances for the periods indicated of recurring fair value measurements using Level 3 inputs (in millions):
Three Months Ended
Chautauqua Restructuring Asset
March 31, 2016
March 31, 2015
Beginning Balance
$
59.1
$
81.2
Cash received or other
(5.5
)
(2.7
)
Ending Balance
$
53.6
$
78.5
Fair Value of Debt – Market risk associated with our fixed and variable rate long-term debt primarily relates to the potential change in fair value and impact to future earnings, respectively, from a change in interest rates. In the table below, the aggregate fair value of debt was based primarily on recently completed market transactions and estimates based on interest rates, maturities, credit risk, and underlying collateral and is classified primarily as Level 3 within the fair value hierarchy.
($ in millions)
March 31,
December 31,
2016
2015
Net carrying amount
$
2,250.2
$
2,460.7
Estimated fair value
2,179.8
2,222.7
13
New Accounting Pronouncements – In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Shared-Based Payment Accounting . The objective of the update is to identify, evaluate and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. It is effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year which includes that interim period. An entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the impact that this amended guidance will have on its consolidated financial statements and related disclosures.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amends the FASB Accounting Standards Codification. The objective of the update is to improve financial reporting by increasing transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. It is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for (1) a public business entity, (2) a not-for-profit entity that has issued, or is a conduit bond obligor for securities that are traded, listed, or quoted on an exchange or an over-the-counter market or (3) an employee benefit plan that files financial statements with the U.S. Securities and Exchange Commission (SEC). For all other entities, the update is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application of the amendments is permitted for all entities. The Company is currently evaluating the impact that this amended guidance will have on its consolidated financial statements and related disclosures.
In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs . The objective of this update is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to the users of financial statements. It is effective for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. The Company has adopted this standard as of January 1, 2016 and has appropriately reflected the impact in the consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40):
Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The update is intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity's ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The definition of substantial doubt within the new standard incorporates a likelihood threshold of "probable" similar to the use of that term under current GAAP for loss contingencies. It is effective for annual periods ending after December 15, 2016 and interim periods thereafter. Early adoption is permitted. The Company is currently evaluating the impact that this amended guidance will have on its consolidated financial statements and related disclosures.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The objective of the update is to require the recognition of revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the transfer of promised goods or services to customers. It is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. On April 1, 2015, the FASB voted to propose a one-year deferral of the effective date. On July 9, 2015, the FASB voted to approve this deferral, permitting public organizations to apply the new revenue standard to annual reporting periods beginning after December 15, 2017. In April 2016, FASB issued ASU 2016-10, updating ASU 2014-09 to provide guidance in Topic 606 that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those services. The amendments do not change the core principle of the guidance, rather they clarify the aspects of identifying performance obligations and the licensing implementation guidance. Public organizations may adopt the new revenue standard early, but not before the original public organization effective date. The Company is currently evaluating the impact that this amended guidance will have on its consolidated financial statements.
14
4. Debt
During the three months ended March 31, 2016 , the Company took delivery of four aircraft and borrowed $87.7 million secured by the aircraft. In addition, the Company sold one E190 aircraft for proceeds of $21.9 million . The proceeds from the sale of this aircraft were used to extinguish the debt associated with the aircraft of $20.1 million .
During April 2015, the FASB issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”, which simplifies the presentation of debt issuance costs. This ASU requires that debt issue costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from that debt liability. We adopted ASU 2015-03 effective January 1, 2016. Adoption of this ASU resulted in a retrospective reclassification of our debt issuance costs from other assets to debt on the Condensed Consolidated Balance Sheet of $17.2 million as of December 31, 2015.
The Bankruptcy Filing constituted an event of default for certain of the Company's debt and lease obligations and therefore the debt has been reflected as current on the Company's condensed consolidated balance sheet as of March 31, 2016 and December 31, 2015. Payment obligations under the debt and lease agreements are temporarily stayed as a result of the Bankruptcy Filing and the creditors' and lessors' rights of enforcement of the debt and lease agreements are subject to the applicable provisions of the Bankruptcy Code.
Debtor-in-Possession Financing
In connection with the Company's Chapter 11 cases, on March 24, 2016, the Company and Delta entered into a debtor-in-possession credit agreement pursuant to which Delta agreed to provide $75.0 million in secured debtor-in-possession financing (the "DIP Financing") to the Company, guaranteed by the Company's subsidiaries. Such DIP Financing was approved by the court on Friday, May 6, 2016, the Company expects to close the DIP Financing no later than May 16, 2016.
15
5. Commitments and Contingencies
Commitments
As of March 31, 2016 , the Company has firm orders to purchase 40 CS300 aircraft that have scheduled delivery dates beginning in early 2015 and continuing through 2017. In 2015, Bombardier announced that the aircraft would not be expected into service until late 2016. The Company has stopped making pre-delivery deposit payments on these aircraft.
The Company also has a commitment for 40 Embraer E175 aircraft under the United brand that have scheduled delivery dates currently and through the third quarter of 2017. As of March 31, 2016 , 16 of these aircraft have been delivered and placed into service with United and the remaining 24 E175 aircraft are scheduled to be placed into service with United through the third quarter of 2017. The Company can provide no assurance that it will be able to accept and finance these aircraft and place the aircraft into service for United during the pendency of the bankruptcy case.
The Company also has a commitment to acquire 19 spare aircraft engines (of which six have been delivered as of March 31, 2016 ). The Company expects to take delivery of the engines as follows: five engines in 2016, seven engines in 2017, and one engine in 2018. The Company can provide no assurance that it will be able to accept and finance these engines during the pendency of the bankruptcy case.
The following table displays the Company's future contractual obligations for aircraft and other equipment under firm order (in millions):
Payments Due by Period
Beyond
2016
2017
2018
2019
2020
2021
Total
Debt or lease financed aircraft under purchase obligations (1)
$
1,099.6
$
1,471.0
$
778.4
$
—
$
—
$
—
$
3,349.0
Engines under firm orders
33.7
48.7
7.0
—
—
—
89.4
Total contractual obligations for aircraft and engines
$
1,133.3
$
1,519.7
$
785.4
$
—
$
—
$
—
$
3,438.4
(1) Represents delivery of CS300s based on estimated service beginning in late 2016 and E175 aircraft through the third quarter of 2017.
The information in the table above reflects a purchase price of the aircraft at projected delivery dates.
The assumption of agreements related to the Company’s aircraft commitments is subject to collaboration with the Company’s key stakeholders and, in some instances, approval of the Bankruptcy Court. The Company cannot predict what the outcome of these discussions and the Bankruptcy Court process will be.
The Company had aircraft return costs of $1.8 million and $4.8 million for the three months ended March 31, 2016 and 2015, respectively. These costs were associated with the transition of Q400 and E190 aircraft, which is included in other operating expense in the Condensed Consolidated Statements of Operations.
Contingencies
We are subject to certain legal and administrative actions which the Company considers routine to the Company's business activities. Except for the bankruptcy proceeding, management believes that the ultimate outcome of any pending legal matters will not have a material adverse effect on our financial position, liquidity or results of operations.
As of March 31, 2016 , approximately 69% of the Company's workforce is employed under union contracts. Although we have never had a work interruption or stoppage, we are subject to risks of work interruption or stoppage and/or may incur additional administrative expenses associated with union representation of our employees. If we are unable to reach agreement with any of our unionized work groups on the amended terms of their collective bargaining agreements, we may be subject to work interruptions and/or stoppages. Any sustained work stoppages could adversely affect our ability to fulfill our obligations under our fixed-fee agreements and could have a material adverse effect on our financial condition and results of operations.
16
6. Subsequent Events
On May 6, 2016, the Bankruptcy court approved the Company to amend our flying agreements with Delta Air Lines. The amendments to the agreements will result in the following items; consensual wind-down of our single-class flying, full settlement of litigation and related claims, full restoration of 30 E170 and E175 aircraft, increased reimbursement rates in the single- and dual-class agreements, compensation for certain slots. The Company also entered a DIP Financing Agreement that will provide incremental liquidity in the form of $75.0 million .
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements. Republic Airways Holdings Inc. (the “Company”) may, from time to time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements encompass our beliefs, expectations, hopes or intentions regarding future events. Words such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” the negative of such terms or other terminology are used to identify forward-looking statements. All forward-looking statements included in this report are made as of the date hereof and are based on information available to the Company as of such date. The Company assumes no obligation to update any forward-looking statement. Actual results may vary, and may vary materially, from those anticipated, estimated, projected or expected for a number of reasons, including, among others, the risks discussed in our Annual Report on Form 10-K and our other filings made with the Securities and Exchange Commission.
Overview
We are a Delaware holding company organized in 1996 that offers scheduled passenger services through our wholly-owned operating air carrier subsidiaries: Shuttle America Corporation ("Shuttle") and Republic Airline Inc. ("Republic Airline"). Unless the context indicates otherwise, the terms the "Company," "we," "us," or "our" refer to Republic Airways Holdings Inc. and our subsidiaries.
As of March 31, 2016 , our operating subsidiaries offered scheduled passenger service on 996 flights daily to 108 cities in 39 states, Canada, Mexico and the Caribbean under scheduled passenger service through our fixed-fee code-share agreements with United Continental Holdings, Inc. ("United"), Delta Air Lines, Inc. ("Delta"), and American Airlines Group, Inc. ("American") (collectively referred to as our "Partners"). Currently, we provide our Partners with fixed-fee regional airline services, operating as United Express, Delta Connection, or American Eagle, including service out of their hubs and focus cities. During the three months ended March 31, 2016 , our operational fleet decreased from 242 to 222 aircraft. During the three months ended March 31, 2016 , the Company took delivery of four E175 aircraft and temporarily parked 11 E145 aircraft and 13 Q400 aircraft.
On February 25, 2016 (the “Petition Date”), Republic Airways Holdings Inc. and certain of its wholly-owned direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Chapter 11 cases are being administered under the caption "In re Republic Airways Holdings Inc., et al.," Case Number 16-10429.
The Debtors are currently operating as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and the applicable provisions of the Bankruptcy Code. In general, as debtors-in-possession under the Bankruptcy Code, the Company is authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. The Bankruptcy Court has granted a variety of motions that allow the Company to continue to operate its business in the ordinary course without interruption, covering, among other things, obligations to employee wages, salaries and benefits, taxes and certain vendors in the ordinary course for goods and services received after the Petition Date.
While operating as debtors-in-possession under Chapter 11 of the Bankruptcy Code, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or otherwise as permitted in the ordinary course of business, in amounts other than those reflected in the Condensed Consolidated Financial Statements. Moreover, the Debtors have not yet prepared or filed with the Bankruptcy Court a plan of reorganization. The ultimate plan of reorganization, which must be approved by the Bankruptcy Court, could materially change the amounts and classifications in the historical Condensed Consolidated Financial Statements.
17
The Company's Chapter 11 cases followed an extended effort by the Company to restructure its business to strengthen its competitive and financial position. However, due to a growing national shortage of qualified pilots in the United States it made it increasingly difficult to maintain the necessary pilot staffing levels to sustain reliable performance requirements under the agreements with the Company's Partners. As a result of the pilot shortage, the Company has been forced to ground operating aircraft and reduce scheduled flying for each of its Partners, which has adversely affected the Company's financial position and cash flows from operations. Although a new three year collective bargaining agreement reached with its pilots in late 2015 has enabled the Company to stem the rate of attrition and significantly increase new pilot hiring, the Company needs time to be able to train new pilots, return more of its idled aircraft to revenue service, and restore higher levels of scheduled service for its Partners.
Business Plan Initiatives
Prior to the Bankruptcy Filing, the Company developed and commenced implementation of the following four-pronged business plan, which the Company plans to continue to implement through the Chapter 11 process:
•
Develop a culture that attracts and retains qualified airline professionals. Working together with its employees, the Company will provide the safest, most reliable, and most convenient travel experience for its passengers and a positive work environment for its associates. The Company strives to make its company the employer of choice for regional airline professionals, enabling them to develop mutually beneficial working relationships with their business partners.
•
Continue to operate a high-quality fleet of aircraft across an efficient network. The Company intends to maintain a modern, high-quality fleet of regional aircraft that meets or exceeds stringent industry operating standards and complies with the terms of its fixed-fee regional code-share agreements. The Company’s operations are concentrated in the Northeast and Midwest and it staffs its crew and maintenance bases to leverage its resources across its network.
•
Continue to provide efficient and effective solutions to its Partners. The Company has long-term relationships with each of its Partners and historically has worked together with them to meet their operational and network needs. Historically, the Company has provided safe, reliable, and cost-efficient solutions for its Partners. The Company remains focused on anticipating and continuing to assist its Partners with their business strategies.
•
Continue to simplify its operating fleet by operating only larger regional jets. Network carrier consolidation, along with historically high fuel prices, have limited the economic use of smaller regional jets. The Company is actively seeking opportunities to transition out of its 50-seat regional jet and has transitioned out of its turboprop operational fleet with the ultimate objective of operating a single fleet type.
In furtherance of the Company’s plan to simplify its businesses by operating fewer fleet types on fewer certificates, on January 1, 2015, the Company completed the consolidation of the operations of its 50-seat regional jet platform, Chautauqua Airlines, into the Shuttle America operating certificate. All operating aircraft and related employees were transferred to Shuttle America’s operations. Consistent with its business plan, the Company also increased the number of larger aircraft, and through the Chapter 11 process, expects to sell the remaining related assets and wind down the number of its smaller regional jet and turboprop aircraft.
Through the Chapter 11 process, the Company intends to continue to work with its constituents to grow back its business by restructuring its flight schedules, divesting itself of burdensome, underutilized aircraft and equipment, and simplifying its operational fleet by transitioning to a single, larger regional jet fleet and a single operating certificate and assuring sufficient liquidity to support its operations and future growth.
General Information
Notices to Creditors; Effect of Automatic Stay. The Debtors have begun the process of seeking to notify all known current or potential creditors that the Chapter 11 cases had been filed. Subject to certain exceptions under the Bankruptcy Code, the filing of the Debtors’ Chapter 11 cases automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date. Thus, for example, most creditor actions to obtain possession of property from the Debtors, or to create, perfect or enforce any lien against the property of the Debtors, or to collect on monies owed or otherwise exercise rights or remedies with respect to a prepetition claim, are enjoined unless and until the Bankruptcy Court lifts the automatic stay as to any such claim. Vendors are being paid for goods furnished and services provided after the Petition Date in the ordinary course of business.
Appointment of Creditors’ Committee. On March 4, 2016, the U.S. Trustee for the Southern District of New York appointed an official committee of unsecured creditors (the “Creditors’ Committee”) for the Chapter 11 cases. The Bankruptcy Code provides
18
for the U.S. Trustee to appoint a statutory committee of creditors holding unsecured claims as soon as practicable after the commencement of a Chapter 11 case. The statutory creditors’ committee ordinarily consists of holders of the seven largest unsecured claims who are willing to serve. Generally, an official creditors’ committee represents the interests of all unsecured creditors in a bankruptcy case.
On April 4, 2016, the Company submitted a letter to the Office of the United States Trustee of the Southern District of New York to oppose the creation of an official committee of equity security holders. After careful consideration of the facts of the case and analysis of the requests, the United States Trustee declined to form an Official Equity Committee.
Executory Contracts and Unexpired Leases. Under Section 365 and other relevant sections of the Bankruptcy Code, the Debtors may assume, assume and assign, or reject certain executory contracts and unexpired leases, including, without limitation, certain aircraft, aircraft engines, appliances and spare parts (each, as defined in section 1110(a)(3)(A)(i) of the Bankruptcy Code), and collectively with all records and documents relating thereto, the ("Aircraft Equipment") and leases of real property, subject to the approval of the Bankruptcy Court and certain other conditions. Under the Bankruptcy Code, the Debtors’ rights to assume, assume and assign, or reject unexpired leases of non-residential real estate expire on June 25, 2016 (subject to further extension by the Bankruptcy Court). In general, rejection of an executory contract or unexpired lease is treated as a prepetition breach of the executory contract or unexpired lease in question and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Counterparties to such rejected contracts or leases have the right to file claims against the Debtors’ estate for such damages. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing defaults under such executory contract or unexpired lease.
Any description of an executory contract or unexpired lease, including where applicable the Debtors’ express termination rights or a quantification of their obligations, must be read in conjunction with, and is qualified by, any rights the Debtors have under Section 365 of the Bankruptcy Code.
The Debtors expect that liabilities subject to compromise and resolution in the Chapter 11 Cases will arise in the future as a result of damage claims created by the Debtors’ rejection of various executory contracts and unexpired leases.
Special Protection Applicable to Leases and Secured Financing of Aircraft Equipment. Notwithstanding the general discussion above of the impact of the automatic stay, under Section 1110 of the Bankruptcy Code (“Section 1110”), beginning 60 days after filing a petition under Chapter 11, certain secured parties, lessors and conditional sales vendors may have a right to take possession of certain qualifying Aircraft Equipment that is leased or subject to a security interest or conditional sale contract, unless the Debtors, subject to approval by the Bankruptcy Court, agree to perform under the applicable agreement, and cure any defaults as provided in Section 1110 (other than defaults of a kind specified in Section 365(b)(2) of the Bankruptcy Code). Taking such action does not preclude the Debtors from later rejecting the applicable lease or surrendering and returning the Aircraft Equipment subject to the related security agreement.
The Debtors may extend the 60-day period by agreement of the relevant financing party, with Bankruptcy Court approval. In the absence of an agreement and cure as described above or such an extension, following written demand for possession, the financing party may take possession of the Aircraft Equipment and enforce any of its contractual rights or remedies to sell, lease or otherwise retain or dispose of such Aircraft Equipment.
The 60-day period under Section 1110 in the Chapter 11 Cases expired on April 26, 2016. In accordance with the Bankruptcy Court’s Order Authorizing the Debtors to (i) Enter into Agreements Under 11 U.S.C. 1110(a), (ii) Enter into Stipulations to Extend the Time to Comply with 11 U.S.C. 1110 and (iii) File Redacted Section 1110 Notices and 1110(b) Stipulations, dated March 23, 2016, the Debtors have entered into agreements to extend the automatic stay or agreed to perform and cure defaults under financing agreements with respect to certain Aircraft Equipment. While the Debtors have reached agreements on, or agreements on key aspects of, renegotiated terms with respect to certain of their Aircraft Equipment and are continuing to negotiate terms with respect to many of their other Aircraft Equipment financings, the ultimate outcome of these negotiations cannot be predicted with certainty. To the extent the Debtors are unable to reach definitive agreements with Aircraft Equipment financing parties, those parties may seek to repossess the subject Aircraft Equipment pursuant to section 1110(c) of the Bankruptcy Code. The loss of a significant number of aircraft could result in a material adverse effect on the Debtors’ financial and operating performance.
Magnitude of Potential Claims The Debtors will file with the Bankruptcy Court schedules and statements of financial affairs setting forth, among other things, the assets and liabilities of the Debtors, subject to the assumptions filed in connection therewith. All of the schedules are subject to further amendment or modification.
19
Bankruptcy Rule 3003(c)(3) requires the Bankruptcy Court to fix the time within which proofs of claim must be filed in a Chapter 11 case pursuant to section 501 of the Bankruptcy Code. This Bankruptcy Rule also provides that any creditor who asserts a claim against the Debtors that arose prior to the Petition Date and whose claim (i) is not listed on the Debtors’ schedules or (ii) is listed on the schedules as disputed, contingent, or unliquidated, must file a proof of claim. The Bankruptcy Court has not yet established a date and time by which such proofs of claim must be filed.
Differences between amounts scheduled by the Debtors and claims by creditors will be investigated and resolved in connection with the claims resolution process. In light of the expected number of creditors, the claims resolution process may take considerable time to complete. At this time, the Debtors estimate that the ultimate amount of allowed claims to be between $585.0 million and $1.0 billion. However, the actual allowed amount may differ.
Impact of Chapter 11 Filing on Availability and Utilization of Net Operating Losses —The availability and utilization of net operating losses after the Company’s emergence from Chapter 11 is uncertain at this time and will be highly influenced by the composition of the plan of reorganization that is ultimately pursued. However, the Company’s net operating losses (“NOLs”) could be utilized in the near term to offset gains on the expected disposition of aircraft. On February 25, 2016, we filed the motion to request the Bankruptcy Court to establish Notification Procedures on Certain Transfers of Claims Against and Interests in the Debtors’ Estates, which restricts trading in the Company’s common stock and claims. The order is intended to prevent certain transfers of the Company’s common stock and certain transfers of claims against the Debtors that could impair the ability of one or more of the Debtors’ estates to use their net operating loss carryovers and certain other tax attributes currently or on a reorganized basis. Any acquisition, disposition, or other transfer of equity or claims on or after February 25, 2016 in violation of the restrictions set forth in the order will be null and void ab initio and/or subject to sanctions as an act in violation of the automatic stay under sections 105(a) and 362 of the Bankruptcy Code. The order applies to (i) “Substantial Equity holders,” i.e., persons who are, or as a result of a transaction would become, the beneficial owner of approximately 4.75 percent of the outstanding shares of the Company’s common stock and (ii) “Substantial Claimholders,” i.e., persons who are, or as a result of a transaction become, the beneficial owner of unsecured claims in excess of a threshold amount of unsecured claims (initially $4.9 million of unsecured claims, but which may be subsequently increased or decreased under certain circumstances in connection with the Debtors’ filing of a Chapter 11 plan). In the case of Substantial Equity holders, the order imposes current restrictions with respect to the acquisition or disposition of the Company’s stock, and certain notifications may be required. In the case of Substantial Claimholders, the order imposes a procedure pursuant to which, under certain circumstances, the claims acquired during the Chapter 11 cases may have to be resold, and certain notifications may be required.
Liabilities Subject to Compromise. The Debtors have incurred and will continue to incur significant costs associated with their reorganization. The amount of these costs, which are being expensed as incurred, are expected to significantly affect the Debtors’ results of operations. Claims related to reorganization items are reflected in liabilities subject to compromise on the Condensed Consolidated Balance Sheet as of March 31, 2016. For additional information, see Note 1 to the Condensed Consolidated Financial Statements.
20
Results of Operations
Three Months Ended March 31, 2016 Compared to Three Months Ended March 31, 2015
The following table sets forth operational statistics and the percentage-of-change for the periods identified below:
Operating Highlights
Three Months Ended March 31,
2016
2015
Change
Fixed-fee service revenues
$
295.8
$
335.5
(11.8
)%
Other revenues
5.9
5.5
7.3
%
Total operating revenues (millions)
$
301.7
$
341.0
(11.5
)%
Total operating and interest expense (millions)
$
323.6
$
329.8
(1.9
)%
Operating aircraft at period end:
44-50 seats 1
30
41
(26.8
)%
69-99 seats 2
192
201
(4.5
)%
Block hours 3
151,984
177,568
(14.4
)%
Departures
81,426
96,627
(15.7
)%
Passengers carried
4,266,539
5,018,862
(15.0
)%
Revenue passenger miles ("RPM") (millions) 4
2,345
2,618
(10.4
)%
Available seat miles ("ASM") (millions) 5
3,126
3,490
(10.4
)%
Passenger load factor 6
75.0
%
75.0
%
0.0 pts
Cost per ASM, including interest expense (cents)
10.35
9.45
9.5
%
Cost per ASM, including interest expense and excluding fuel expense (cents)
10.35
9.34
10.8
%
Average daily utilization of each aircraft (hours) 7
9.5
9.0
5.6
%
Average length of aircraft flight (miles)
512
511
0.2
%
1.
Excludes 11 owned E140 aircraft that were abandoned and four leased E140 aircraft that were permanently parked, 16 owned and 14 leased E145 aircraft that were temporarily parked while we negotiate the disposition of aircraft in bankruptcy, and five owned E145 aircraft that were leased to other operators, as of March 31, 2016 . Excludes 11 owned that were abandoned and four leased E140 aircraft that were permanently parked, four owned and nine leased E145 aircraft that were temporarily parked, and one owned E135 aircraft and 11 owned E145 aircraft that were leased to other operators, as of March 31, 2015 .
2.
Excludes one owned E190 aircraft that is held for sale, 24 leased Q400 aircraft of which; 19 were temporarily parked and five that were transitioned to Flybe and three owned E170 aircraft that were leased to other operators, as of March 31, 2016 . Excludes five leased Q400 aircraft that were temporarily parked that transition to Flybe and three owned E170 aircraft that were leased to other operators, as of March 31, 2015 .
3.
Hours from takeoff to landing, including taxi time.
4.
Revenue passenger miles are the number of scheduled miles flown by revenue passengers.
5.
Available seat miles are the number of seats available for passengers multiplied by the number of scheduled miles those seats are flown.
6.
Passenger load factor is revenue passenger miles divided by available seat miles.
7.
Average number of hours per day that an aircraft flown in revenue service is operated (from gate departure to gate arrival).
21
The following table sets forth information regarding the Company’s revenues and expenses for the three months ended March 31, 2016 and 2015 (in millions).
Three Months Ended March 31,
2016
2015
$ Variance
% Variance
Fixed-fee service revenues
$
295.8
$
335.5
$
(39.7
)
(11.8
)%
Other revenues
5.9
5.5
0.4
7.3
%
TOTAL OPERATING REVENUES
301.7
341.0
(39.3
)
(11.5
)%
OPERATING EXPENSES:
Wages and benefits
104.7
94.1
10.6
11.3
%
Aircraft fuel
0.2
3.7
(3.5
)
(94.6
)%
Landing fees and airport rents
5.6
5.9
(0.3
)
(5.1
)%
Aircraft and engine rent
21.8
31.2
(9.4
)
(30.1
)%
Maintenance and repair
67.8
67.2
0.6
0.9
%
Insurance and taxes
5.1
4.9
0.2
4.1
%
Depreciation and amortization
51.8
46.0
5.8
12.6
%
Other
36.4
46.8
(10.4
)
(22.2
)%
Total operating expenses
293.4
299.8
(6.4
)
(2.1
)%
OPERATING INCOME
8.3
41.2
Total non-operating expense, net
(30.2
)
(30.0
)
0.2
0.7
%
Income (Loss) Before Reorganization Items, Net and Income Taxes
(21.9
)
11.2
Reorganization Items, Net
(215.1
)
—
$
215.1
100.0
%
INCOME (LOSS) BEFORE INCOME TAXES
$
(237.0
)
$
11.2
$
(248.2
)
(2,216.1
)%
Operating Revenues
Operating revenues decreased $39.3 million , or 11.5% , during the first quarter of 2016 to $301.7 million . Fixed-fee service revenue decreased $39.7 million , or 11.8% , to $295.8 million primarily due to a decrease in block hours and reduced revenues associated with the non-reimbursed aircraft ownership costs associated with aircraft removed from revenue service during the first quarter, primarily due to lack of pilots and wind-down of Q400 operations.
Factors relating to significant changes in operating expenses are discussed below.
Wages and benefits expenses increased 11.3% , or $10.6 million , primarily due to an increase in expense related to the ratification of the pilot contract, coupled with an increase in cost of benefits we provide to our employees. The Company expects wages and benefits expense to continue to increase through the end of 2016 as a result of the new collective bargaining agreement which was implemented in the fourth quarter of 2015, coupled with the retention bonus of $14.0 million expected to be paid in November 2016.
Aircraft and engine rent expense decreased 30.1% , or $ 9.4 million , due primarily to the Company's wind-down of Q400 and E190 operations year over year.
Depreciation and amortization expense increased 12.6% , or $5.8 million , due primarily to the increase in the number of owned aircraft.
Other expenses decreased 22.2% , or $10.4 million , primarily due to a reduction in aircraft return costs, severance costs and loss on asset disposals.
Charges to reorganization items, net, of $215.1 million for the first quarter of 2016 are primarily from estimated claims associated with restructuring certain capacity purchase agreements and lessor agreements.
We recorded an income tax benefit of $88.9 million at a 37.5% effective tax rate during 2016, compared with an income tax expense of $4.8 million at a 42.9% effective tax rate during 2015. The 2016 and 2015 effective tax rates were different than the statutory rate, primarily due to miscellaneous non-deductible expenses.
22
Liquidity and Capital Resources
The matters described herein, to the extent that they relate to future events or expectations, may be significantly affected by the Chapter 11 cases. Those proceedings will involve, or may result in, various restrictions on our activities, limitations on financing, the need to consult with the Creditors' Committee and other key stakeholders and to obtain Bankruptcy Court approval for various matters, and uncertainty as to relationships with vendors, suppliers, customers, labor and others with whom we may conduct or seek to conduct business. The Debtors cannot predict the impact, if any, that its Chapter 11 cases might have on these obligations. For further information regarding the Chapter 11 cases, see Note 1 to the Condensed Consolidated Financial Statements.
The Bankruptcy Filing constituted an event of default for certain of the Company's debt and lease obligations and therefore the debt has been reflected as current on the Company's consolidated balance sheet as of March 31, 2016 and December 31, 2015. However, payment obligations under the debt and lease agreements are stayed as a result of the Bankruptcy Filing and the creditors' and lessors' rights of enforcement of the debt and lease agreements are subject to the applicable provisions of the Bankruptcy Code.
As of March 31, 2016 , we had a total cash balance of $184.8 million , of which $9.0 million was restricted. At March 31, 2016, we have classified the Company's debt as current on the condensed consolidated balance sheet, therefore we had a working capital deficit of $1,989.4 million . Excluding the debt that was reclassified to current we had a working capital deficit of $27.9 million. Unrestricted cash on hand and the cash generated from operations may not be sufficient to cover our capital expenditures and debt repayments for the next 12 months.
Net cash provided by operating activities for the three months ended March 31, 2016 was $64.3 million compared to $57.2 million in the first three months of 2015 . The $7.1 million increase was primarily attributable to the change in working capital, offset by the decrease in income before taxes. Claims related to reorganization items were all non-cash items for the three months ended March 31, 2016 .
Net cash used by investing activities for the three months ended March 31, 2016 was $79.1 million compared to $101.4 million in the first three months of 2015 . The $22.3 million decrease was primarily due to a decrease in the number of aircraft deliveries year over year, offset by the proceeds from the sale of one E190 aircraft in 2016 compared to proceeds from the sale of three E190 aircraft in 2015.
Net cash provided by financing activities was $17.1 million for the three months ended March 31, 2016 , compared to $21.0 million for the first three months of 2015. The $3.9 million decrease in cash provided by financing activities primarily relates to the decrease from the proceeds from debt issuance and other refinancing for the four E175 aircraft of $87.7 million during the first three months of 2016 compared to the proceeds from debt issuance and other refinancing for the six E175 aircraft of $132.5 million during the first three months of 2015, offset by lower debt and early extinguishment payments due to the filing of Chapter 11 on February 25, 2016.
Other Liquidity
In connection with the Company's Chapter 11 cases, on March 24, 2016, the Company and Delta entered into a debtor-in-possession credit agreement pursuant to which Delta agreed to provide $75.0 million in secured debtor-in-possession financing (the "DIP Financing") to the Company, guaranteed by the Company's subsidiaries. Such DIP Financing was approved by the court on Friday May 6, 2016, the Company expects to close the DIP Financing no later than May 16, 2016.
Aircraft Leases and Other Leases
We have significant obligations for aircraft and engines that are classified as operating leases, and therefore are not reflected as liabilities on our balance sheet. Our aircraft leases expire between 2016 and 2023. As of March 31, 2016 , our total mandatory payments under operating leases for aircraft aggregated to approximately $389.5 million and total minimum aircraft rental payments for the next 12 months under all non-cancelable aircraft operating leases is approximately $113.8 million .
Other non-cancelable operating leases consist of engines, terminal space, operating facilities, office space and office equipment. These leases expire from 2016 through 2033. As of March 31, 2016 , our total mandatory payments under other non-cancelable operating leases aggregated to approximately $101.6 million . Total minimum other rental payments for the next 12 months are approximately $19.2 million .
23
Purchase Commitments
As of March 31, 2016 , the Company has firm orders to purchase 40 CS300 aircraft that have scheduled delivery dates beginning in early 2015 and continuing through 2017. In 2015, Bombardier announced that the aircraft would not be expected into service until late 2016. The Company has stopped making pre-delivery deposit payments on these aircraft.
The Company also has a commitment for 40 Embraer E175 aircraft under the United brand that have scheduled delivery dates currently and through the third quarter of 2017. As of March 31, 2016 , 16 of these aircraft have been delivered and placed into service with United and the remaining 24 E175 aircraft are scheduled to be placed into service with United through the third quarter of 2017. The Company can provide no assurance that it will be able to accept and finance these aircraft and place the aircraft into service for United during the pendency of the bankruptcy case.
The Company also has a commitment to acquire 19 spare aircraft engines (of which six have been delivered as of March 31, 2016 ). The Company expects to take delivery of the engines as follows: five engines in 2016, seven engines in 2017, and one engine in 2018. The Company can provide no assurance that it will be able to accept and finance these engines during the pendency of the bankruptcy case.
The following table displays the Company's future contractual obligations for aircraft and other equipment under firm order (in millions):
Payments Due by Period
Beyond
2016
2017
2018
2019
2020
2021
Total
Debt or lease financed aircraft under purchase obligations (1)
$
1,099.6
$
1,471.0
$
778.4
$
—
$
—
$
—
$
3,349.0
Engines under firm orders
33.7
48.7
7.0
—
—
—
89.4
Total contractual obligations for aircraft and engines
$
1,133.3
$
1,519.7
$
785.4
$
—
$
—
$
—
$
3,438.4
(1) Represents delivery of CS300s based on estimated service beginning in late 2016 and E175 aircraft through the third quarter of 2017.
The information in the table above reflects a purchase price of the aircraft at projected delivery dates.
The assumption of agreements related to the Company’s aircraft commitments is subject to collaboration with the Company’s key stakeholders and, in some instances, approval of the Bankruptcy Court. The Company cannot predict what the outcome of these discussions and the Bankruptcy Court process will be.
Critical Accounting Estimates
There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates included in our Annual Report on Form 10-K for the year ended December 31, 2015 .
For detailed information regarding recently issued accounting pronouncements and the expected impact on our annual financial statements, see Note 2 "Summary of Significant Accounting Policies" in the accompanying notes to Condensed Consolidated Financial Statements.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
We have been and are subject to market risks and interest rate risk.
Interest Rates
Our earnings can be affected by changes in interest rates due to the amount of cash and securities held and variable rate debt. At March 31, 2016 , approximately $1.7 million of our outstanding debt was at variable interest rates. A one hundred basis point change in the LIBOR rate would not materially increase or decrease interest expense for the three months ended March 31, 2016 .
We currently intend to finance the acquisition of aircraft through the manufacturer, third-party leases or long-term borrowings. Changes in interest rates may impact the actual cost to us to acquire these aircraft. To the extent that we place these aircraft in service under our code-share agreements, our reimbursement rates may not be adjusted higher or lower to reflect any changes in our aircraft rental rates.
Item 4: Controls and Procedures
We maintain "disclosure controls and procedures", as such term is defined under Securities Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our Securities Exchange Act of 1934 reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation, as of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation and subject to the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.
Changes in Internal Control
During the three months ended March 31, 2016 , we did not make any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
24
Part II. OTHER INFORMATION
ITEM 1A. Risk Factors
In addition to the other information set forth in this report, the reader should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015 (the “10-K”), which could materially affect our business, financial condition or future results. The risks described in our Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
ITEM 6. Exhibits
(a)
Exhibits
31.1
Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
31.2
Certification by Joseph P. Allman, Senior Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
32.1
Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
32.2
Certification by Joseph P. Allman, Senior Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
101
Interactive data file (furnished electronically herewith pursuant to Rule 406T of Regulation S-T)
25
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.
REPUBLIC AIRWAYS HOLDINGS INC.
(Registrant)
Dated:
May 9, 2016
By:
/s/ Bryan K. Bedford
Name: Bryan K. Bedford
Title: Chairman of the Board, Chief Executive Officer and President
(Principal Executive Officer)
Dated:
May 9, 2016
By:
/s/ Joseph P. Allman
Name: Joseph P. Allman
Title: Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
26
Exhibit Index
(a)
Exhibits
31.1
Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
31.2
Certification by Joseph P. Allman, Senior Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
32.1
Certification by Bryan K. Bedford, Chairman of the Board, Chief Executive Officer and President of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
32.2
Certification by Joseph P. Allman, Senior Vice President and Chief Financial Officer of Republic Airways Holdings Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with Republic Airways Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016.
101
Interactive data file (furnished electronically herewith pursuant to Rule 406T of Regulation S-T)
27
Calm Down American Airlines Investors $AAL
http://www.seekingalpha.com/article/3973452
AT&T: A Risky But Bold Indian Move $T
http://www.seekingalpha.com/article/3973361
Market Keeps Pressure On Sirius XM Share Price $SIRI
http://www.seekingalpha.com/article/3973237
AT&T Kicks Off Aspire Accelerator With 6 Leading Ed-Tech Startups
Source: PR Newswire (US)
SAN FRANCISCO, May 9, 2016 /PRNewswire/ -- AT&T (NYSE: T) is working with 6 innovative ed-tech startups for the 2016 AT&T Aspire Accelerator class. The program is in its second year and is part of our $350 million commitment to help students succeed in school and beyond. The Accelerator supports for- and non-profit organizations driving student success and career readiness. The primary measure of success for the Aspire Accelerator is societal impact that the participating organizations create.
The participating organizations are from around the country. They have unique stories and diverse leadership. Women founded and lead 4 of the 6 companies.
Bitsbox (Boulder, Colo.) – monthly subscription to coding projects that teach grade-schoolers to program apps
Cogent Education (Athens, Ga.) – this interactive case study software has students acting like scientists, learning science concepts and honing problem solving skills
CommonLit (501(c)3 / Washington, D.C.) – a free digital platform that helps teachers find and plan engaging lessons and track student progress in reading
Couragion (Denver, Colo.) – an engaging app that exposes students to STEM careers using videos, games and self-reflection quizzes
TalkingPoints (501(c)3 / San Francisco, Calif.) – a multilingual texting platform that connects teachers, families and students via mobile technology
The Graide Network (Chicago, Ill.) – an online platform connecting teachers with on-demand teaching assistants to grade and provide thorough feedback on student work
"Tech is our business. And by applying it to challenges in education, anything becomes possible. This year's Accelerator class is doing just that," said Nicole Anderson, Assistant Vice President of Social Innovation, AT&T. "We're eager to start working with them to help scale their solutions. We're seeing the growth of last year's class, and that builds excitement for this year."
The participants receive financial investment, mentorship and access to expert services from AT&T and others.
The external advisory board includes:
Charles Best, founder and CEO, DonorsChoose.org
Kimberly Bryant, founder, Black Girls CODE
Betsy Corcoran, co-founder and CEO, EdSurge
Ben Jealous, partner, Kapor Center for Social Impact
Nancy Poon Lue, executive director of GSV Summit
Daniel Lurie, founder and CEO, Tipping Point Community
Ramona Pierson, co-founder and CEO, Declara
Sebastian Thrun, president and chairman, Udacity
"The Aspire Accelerator's approach intrigued me. Their unique focus on the social impact of ed-tech innovations and the ability for both for- or non-profit organizations to participate was exciting," said Charles Best, founder and CEO of DonorsChoose.org. "I look forward to meeting this year's class and seeing how they use technology in new ways to help students thrive."
Launched in 2015, Aspire Accelerator's customized 6-month program includes:
Aspire Investment – $100,000 AT&T investment and an additional $25,000 for each venture to cover costs of the program. For non-profit companies, the investment will be a general contribution. They receive this in exchange for participating in the Aspire Accelerator and meeting certain requirements, including submitting impact measurements.
Mentorship – access to AT&T and other education and tech mentors.
National Platform – inclusion in the broader AT&T Aspire initiative, which is committed to driving innovation in education.
Flexible Location – organizations can participate from their location.
The Aspire Accelerator builds on our investment in ed-tech. From launching the Nanodegree program with the Massive Open Online Course (MOOC) leader Udacity, to committing to provide $100 million of mobile Internet as part of the White House ConnectED initiative, AT&T is using its tech expertise to transform learning and open a new world of opportunities to students everywhere.
About Philanthropy & Social Innovation at AT&T
AT&T Inc. is committed to advancing education, strengthening communities and improving lives. Through its community initiatives, AT&T has a long history of investing in projects that create learning opportunities; promote academic and economic achievement; or address community needs. AT&T Aspire is AT&T's signature philanthropic initiative that drives innovation in education by bringing diverse resources to bear on the issue including funding, technology, employee volunteerism, and mentoring. Through Aspire, we've passed the $250 million mark on our plan to invest $350 million in education from 2008-2017.
AT&T Inc.
Logo - http://photos.prnewswire.com/prnh/20140408/CG99935LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/att-kicks-off-aspire-accelerator-with-6-leading-ed-tech-startups-300264623.html
SOURCE AT&T Inc.
Copyright 2016 PR Newswire
Fannie Mae's (FNMA) CEO Timothy Mayopoulos on Q1 2016 Results - Earnings Call Transcript $FNMA
http://www.seekingalpha.com/article/3972670
Atlantic Power's (AT) CEO Jim Moore on Q1 2016 Results - Earnings Call Transcript $AT
http://www.seekingalpha.com/article/3972367
Report: AT&T, Virgin Media may rejoin hot India telecom market
http://www.seekingalpha.com/news/3180908
Fannie Mae to Pay $919 Million Dividend to U.S. as Profit Falls
Source: Dow Jones News
Fannie Mae said it would send a $919 million dividend payment to the U.S. Treasury Department in June, while reporting its profit that fell in latest quarter amid low interest rates.
The mortgage-finance company reported a profit of $1.14 billion for the first quarter, down from $1.89 billion a year ago and $2.47 billion in the fourth quarter.
Fannie Mae said the decrease was driven by lower long-term interest rates, which hurt the value of the derivatives it uses to manage risk. The decline was partially offset by increases in credit-related income.
Fannie Mae booked $2.81 billion in fair-value losses in the quarter, compared with losses of $1.92 billion in the prior-year period.
Fannie Mae's revenue slipped 7.5% to $4.97 billion.
On Tuesday, rival Freddie Mac reported a loss for the first quarter and said it wouldn't pay a dividend for the quarter. Freddie cited lower interest rates and a widening credit spread for the results.
Fannie and Freddie don't make mortgages. The companies buy loans from lenders, wrap them into securities and provide guarantees to make investors whole if the loans default.
The price of their portfolios rise and fall as interest rates change. They use derivatives in an effort to counteract that effect, but because of accounting rules, the derivatives can make large profits or losses appear over short periods.
The results come amid uncertainty over Fannie and Freddie's futures. The government took control of Fannie and Freddie through a conservatorship during the financial crisis in 2008, eventually injecting $71.3 billion into Freddie and $116.1 billion into Fannie. The companies now pay nearly all of their profits to the U.S. Treasury and are required to wind down their capital buffers over time until they reach zero by 2018.
When the deal was put in place, Congress was considering housing-finance legislation that would replace Fannie and Freddie with a new system. However, a bipartisan effort to replace the companies died in 2014, and legislators in an election year have shown little willingness to consider that or another bill.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
May 05, 2016 08:25 ET (12:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Fannie Mae reports Q1 results
http://www.seekingalpha.com/news/3179972
AT&T breaks hosting partnership with Yahoo, teaming with small Synacor
http://www.seekingalpha.com/news/3179644
AT&T Has Surprised Again $T
http://www.seekingalpha.com/article/3971284
The Grabbing Hand, Expropriation And Nationalization, Paths Of Appeal, Truth, Justice, And The American Way $FMCC
http://www.seekingalpha.com/article/3970809
The Grabbing Hand, Expropriation And Nationalization, Paths Of Appeal, Truth, Justice, And The American Way $FMCC
http://www.seekingalpha.com/article/3970809
Judge Approves Republic Airways Settlement With Delta
Source: Dow Jones News
A bankruptcy judge has approved a settlement between Republic Airways Holdings Inc. and Delta Air Lines Inc. that includes a crucial code-share agreement, according to people with knowledge of the matter.
Judge Sean Lane of the U.S. Bankruptcy Court in New York approved the settlement as well as the $75 million bankruptcy financing provided by Delta, the people told The Wall Street Journal.
Representatives for Delta and Republic didn't respond to requests for comment.
The decision comes less than two weeks after the settlement was put before Judge Lane, who needed additional time to decide on it and the financing, which were met with objections from a group of shareholders.
The code-share deal and financing also received objections from the U.S. attorney and unsecured creditors, but these were resolved before the April 21 hearing.
Still, the shareholders group wouldn't budge in negotiations before the hearing.
At a hearing last month, Republic's lawyer said the code-share deal with Delta was vital to the survival of the carrier and would pave the way for negotiations over similar agreements with American Airlines Group Inc. and United Continental Holdings Inc.
The code-share agreements allow Republic to operate flights for Delta and other large carriers.
The settlement with Delta was tied to the $75 million in financing, and the rejection of one would have doomed the other. Republic's bankruptcy lawyer said last month that the Delta loan had the most favorable terms. The shareholder group opposed the pact with Delta.
The shareholders, who own more than 40% of Republic's equity, had asked the court to deny the financing package and settlement, saying would give Delta enormous power in Republic's bankruptcy proceedings.
Tension between Republic and the shareholders arose shortly after the carrier filed for bankruptcy protection in late February. The airline says shareholders are out of the money and likely won't see any recovery on their claims.
The Indianapolis-based Republic's woes stem from a pilot shortage brought on by relatively low starting salaries and new U.S. regulators' rules requiring aviators to have additional training.
Republic, in particular, suffered because of an outdated pilot contract that made it less attractive than its rivals to prospective hires.
Because of the pilot shortage, Republic was forced to ground some of its planes, leading to a lawsuit from Delta that claimed damages because of the loss of service for some Delta flights that had been operated by Republic.
Republic and Delta reached a settlement in March, which resulted in the code-share agreement and bankruptcy loan.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
(END) Dow Jones Newswires
May 03, 2016 14:55 ET (18:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Assessing The Liberty SiriusXM Vs. SiriusXM Ratio $SIRI
http://www.seekingalpha.com/article/3970439
Fannie Mae Would Presently Owe $17.6 Billion Under The Original 10% Arrangement $FNMA
http://www.seekingalpha.com/article/3970309