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Contact: Elise Eberwein
FOR IMMEDIATE RELEASE: March 8, 2005
AMERICA WEST UPDATES PREVIOUSLY REPORTED FINANCIAL RESULTS
2004 Net Loss Reduced by $0.9 million; Quarterly Results in 2003 and 2004 and 2003 Balance
PHOENIX America West Holdings Corporation (the Company) (NYSE: AWA), parent company of America West Airlines, Inc. (the airline), today announced that it has revised its previously reported preliminary financial results for the fourth quarter and the year ended 2004, which were reported in its press release dated Jan. 21, 2005. The revision is the result of an accounting change associated with the recognition of gains or losses on derivative instruments that the Company uses as a means for reducing financial exposure to fluctuating jet fuel prices. As a result of this accounting change, the Companys and airlines consolidated statements of operations for the year ended Dec. 31, 2004 will reflect a net loss of $89.0 million and $85.3 million, versus a net loss of $89.9 million and $86.1 million, respectively, as reported in the Companys earnings release and conference call on Jan. 21, 2005. The Company also announced it will be restating the Companys and the airlines previously reported balance sheet and statement of changes in stockholders equity and comprehensive income (loss) as of and for Dec. 31, 2003, and for their previously reported 2003 and 2004 interim (quarterly) financial results.
The Company recently undertook a review of its fuel hedge accounting as part of its preparation to complete its annual report on Form 10-K for the year ended Dec. 31, 2004. During this review, the Company determined that, due to recent business and regulatory developments, its formal hedge documentation did not meet the requirements imposed by the Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (SFAS No. 133) to hedge its fuel purchases as cash flow hedges. SFAS No. 133 provides guidance to companies when accounting for financial derivative instruments. In addition, management also concluded that the accounting entries made at each quarter end in 2003 and 2004 needed to be corrected to properly reflect the fair value of open derivative instruments in the balance sheets and statements of stockholders equity and comprehensive income of Holdings and AWA. Accordingly, the Company will restate the Companys and the airlines balance sheet and statement of changes in stockholders equity and comprehensive income (loss) as of and for the year ended Dec. 31, 2003, as well as their interim financial results during 2003 and 2004. Those restatements will recognize, as part of its net income or loss during these periods, the non-cash gains and losses on these financial derivative instruments. The restatements will not impact the Companys or the airlines cash position at any date.
The following information was filed by America West Airlines Inc on Wednesday, March 9, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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