The new American is arriving

investors

Investor FAQ

More About The New American For Investors

1. Why is the US Airways-American merger in the best interests of American Airlines stakeholders? US Airways shareholders?

  • Through their respective ownership stakes, American Airlines stakeholders and US Airways shareholders are expected to benefit from the significant upside potential of the new airline, which will have a combined equity value of approximately $11 billion.
  • The US Airways-American merger is expected to deliver enhanced value to American Airlines stakeholders and is projected to be significantly accretive to EPS for US Airways shareholders in 2014.
  • The transaction is expected to generate more than $1 billion in annual net synergies in 2015, including $900 million in network revenue synergies.

2. What are the terms of the merger?

  • Under the terms of the merger agreement, at the time of closing each outstanding share of common stock of US Airways will be exchanged for one newly issued share of common stock of AMR Corporation and stakeholders of AMR Corporation and its debtor subsidiaries will receive newly issued shares of AMR Corporation’s common stock.
  • US Airways shareholders will own 28 percent, and stakeholders of AMR Corporation and its debtor subsidiaries will own 72 percent, of the fully-diluted common stock of the combined company.

3. When is the transaction accretive?

  • The combination is expected to deliver enhanced value to American Airlines stakeholders and is projected to be significantly accretive to EPS for US Airways shareholders in 2014.

4. What are the projected revenues for the combined company?

  • American Airlines stakeholders and US Airways shareholders are expected to benefit from the significant upside potential of the new combined airline, which is expected to have approximately $40 billion in revenues based upon the combination of each company’s projected 2013 performance.

5. What are the synergies (cost savings and revenue) resulting from this transaction?

  • The transaction is expected to generate more than $1 billion in annual net synergies in 2015, including $900 million in network revenue synergies.
  • Of the over $1.0 billion in annual synergies, $900 million are from network revenue synergies, $550 million are from cost synergies, which are offset by $400 million in labor harmonization costs.
  • These synergies would mainly come from increased passenger traffic taking advantage of the combined carrier’s improved schedule and connectivity, an improved mix of high-yield business, and redeploying the combined fleet to better match capacity to customer demand—not from cost cuts.
  • Our synergy targets are conservative relative to comparable transactions, and we are confident that these are achievable.

6. Who will run the new American Airlines?

  • Doug Parker will serve as Chief Executive Officer of the merged company and a member of the Board of Directors.
  • Tom Horton, Chairman, President and Chief Executive Officer of American Airlines, will serve as Chairman of the Board through its first annual meeting of shareholders, at which time Doug will assume the additional position of Chairman of the Board.

7. Why has US Airways adopted a tax benefit preservation plan in connection with the merger?

  • The plan designed to help preserve the value of the net operating losses and other deferred tax benefits of US Airways and the combined enterprise resulting from the merger with AMR.
  • The plan, which is effective immediately, is also designed to reduce the likelihood that changes in the US Airways investor base would limit the future use of the tax benefits by US Airways or the combined enterprise, which would significantly impair the value of the benefits to all shareholders.
  • Further details about the plan will be contained in a Form 8-K to be filed with the Securities and Exchange Commission.

8. When is the merger expected to close?

  • The US Airways merger with American Airlines is conditioned on the approval by the U.S. Bankruptcy Court for the Southern District of New York, regulatory approvals, approval by US Airways shareholders and other customary closing conditions.
  • The US Airways-American merger is expected to be completed in the third quarter of 2013.
  • During the period between the signing and closing of the transaction, a transition-planning team comprised of leaders from both companies will develop a carefully constructed integration plan to help assure a smooth and sustainable transition.