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US Airways Group, Inc. Reports Second Quarter Profit
Highlights of the US Airways Group, Inc. (the Company) second quarter 2007
results:
- The Company reported a second quarter 2007 net profit of $263 million, or
$2.77 per diluted share.
- Excluding special items, the Company reported a second quarter 2007 net
profit of $261 million, or $2.74 per diluted share.
- The Company accrued approximately $30 million, or 10 percent of its
second quarter 2007 pretax income excluding special items, for its annual
employee profit sharing program. This brings the total amount accrued for
2007 to approximately $34 million.
- The Company had $3.5 billion in total cash and investments, of which $3.0
billion was unrestricted, on June 30, 2007.
A F US AIRWAYS LOGO US AIRWAYS LOGO
US Airways logo. (PRNewsFoto)[AG TK]
PHOENIX, AZ USA
02/23/2005
TEMPE, Ariz., July 26 /PRNewswire-FirstCall/ -- US Airways Group, Inc.
(NYSE: LCC) today reported its second quarter 2007 results. Net profit for
the second quarter was $263 million, or $2.77 per diluted share, compared
to a net profit of $305 million, or $3.25 per diluted share for the same
period last year. Excluding net special items of $2 million, the Company
reported a net profit of $261 million, or $2.74 per diluted share. This
compares to a net profit of $315 million, or $3.35 per diluted share in the
second quarter of 2006, which excludes a net credit for special items of
$10 million. See the accompanying notes in the Financial Tables section of
this press release for a reconciliation of Generally Accepted Accounting
Principles (GAAP) financial information to non-GAAP financial information.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
US Airways Group Chairman and CEO Doug Parker stated, "We are very
pleased to report our sixth consecutive quarter of profitability. We are
especially pleased with our performance relative to our industry. Our first
half 2007 pretax profit margins excluding special charges are the highest
among the major network airlines that have reported thus far.
"While our earnings were lower than last year's second quarter, this
was largely related to increased expenses associated with the operational
improvement plan we announced last quarter and put into place this summer.
That plan is working as our second quarter operational reliability has
improved versus the first quarter and has continued to improve into the
third quarter.
"Key to those operational improvements, of course, are our employees
who have done an outstanding job of taking care of our customers. We're
delighted to have accrued $34 million for profit sharing in the first half
of this year and look forward to adding to that amount as the year
progresses.
"Although high fuel prices will continue to have a material financial
impact on our company, we are encouraged by the strengthening revenue
environment and industry capacity outlook. Looking forward, we maintain our
projections of profitability for the third quarter and full-year 2007,"
concluded Parker.
Revenue and Cost Comparisons
Mainline passenger revenue per available seat mile (PRASM) was 11.24
cents, up 1.0 percent over the same period last year. Express PRASM was
20.72 cents, down 0.1 percent over the second quarter 2006. Total mainline
and Express PRASM for US Airways Group was 12.70 cents, which was up 0.2
percent over the second quarter 2006 on a 1.4% decline in total available
seat miles (ASMs).
Mainline cost per available seat mile (CASM) at US Airways Group was
11.34 cents, up 2.6 percent versus the same period last year on a decrease
in mainline capacity of 0.6 percent versus the second quarter of 2006.
Excluding fuel, unrealized and realized gains/losses on fuel hedging
instruments, and merger related transition expenses, mainline CASM was 8.00
cents, up 5.1 percent from the same period last year.
Chief Financial Officer Derek Kerr stated, "In the second quarter we
faced higher maintenance costs associated with the return of leased
aircraft and engine overhaul timing, and increased expenses driven by
investments in our operation. As our operational improvements continue to
gain traction, we expect our costs to normalize."
In April, US Airways announced an operational improvement plan, which
included hiring more than 1,000 additional airport personnel, upgrading the
Company's kiosk equipment and expanding connect times at critical hubs.
Those actions have had a positive impact on operational reliability. The
second quarter on-time performance was much improved versus the first
quarter. This trend has continued into the third quarter with July's
on-time performance currently running ahead of June.
Liquidity
As of June 30, 2007, the Company had $3.5 billion in total cash and
investments, of which $3.0 billion was unrestricted.
Second Quarter Special Items
During its second quarter, the Company recognized $2 million of net
special items. Expenses for the quarter included $27 million of
merger-related transition expenses and $5 million of special non-cash state
tax provision from the utilization of pre-acquisition NOL. These expenses
were offset by a $25 million non-cash credit for unrealized net gains
associated with the change in fair value of the Company's outstanding fuel
hedge contracts and $9 million of insurance settlement proceeds related to
business interruption and property damage incurred as a result of Hurricane
Katrina.
Other Notable Accomplishments
Operations
-- Hired approximately 1,000 additional airport employees in support of
the airline's operational improvement plan.
-- The airline's flight attendant workgroup completed all integration
training items identified by the Federal Aviation Administration (FAA)
to certify as one carrier in preparation for a single operating
certificate later this year.
-- Began installing the first wave of the 600 replacement kiosks in the
airline's East Coast operation.
-- Completed the International Air Transport Association's (IATA)
International Operational Safety Audit (IOSA), which covered flight
operations, operations control, maintenance, inflight services, ground
operations, cargo and security. The final results show that US Airways
conformed to every IOSA standard.
-- Adjusted the airline's schedule to lengthen the operating day by 30
minutes and added four operational spare aircraft to the US Airways
system as part of the operational improvement plan.
Labor
-- Reached final single labor transition agreements covering the flight
crew training instructors and the flight simulator engineers, each
represented by the Transport Workers Union (TWU).
-- Announced plans to recall approximately 225 furloughed flight
attendants and 130 furloughed pilots through year's end.
Marketing
-- Agreed to terms on a replacement aircraft order with Airbus S.A.S. for
60 A320 family narrowbody airplanes and 32 A330 and A350 XWB widebody
aircraft. Deliveries are expected to begin in 2009. This transaction
will position US Airways with one of the youngest and most fuel
efficient fleets in the U.S. airline industry. It will also allow us
to continue growing our international capacity at a faster rate than
any other major carrier.
-- Inaugurated new service from Philadelphia to Athens, Brussels and
Zurich, rounding out the airline's European presence to 19 cities in 12
countries.
-- Awarded an industry-coveted Freddie Award in the Best Promotion
category for Dividend Miles' popular "Everything Counts" program,
which allows members to accrue miles through a variety of partners.
-- Submitted an application to the U.S. Department of Transportation to
fly Charlotte-Philadelphia-Beijing beginning in March 2009, receiving
support from government officials and business leaders in, among other
places, North Carolina, Pennsylvania, and Delaware. Philadelphia is
the second-largest metropolitan area in the United States without non-
stop service to China. We anticipate operating the route with Airbus
A340 aircraft. Support for US Airways' bid can be expressed by signing
the online petition at www.usairways.com/china.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today
at 1 p.m. EDT, which will be available to the public on a listen-only basis
at www.usairways.com under the About US >> Investor Relations tab. An
archive of the call/webcast will be available in the Public/Investor
Relations portion of the Web site through Aug. 26, 2007.
The airline will also update its investor relations guidance on its Web
site (www.usairways.com). Information that could be updated includes cost
per available seat mile (CASM) excluding fuel and transition expenses, fuel
prices and hedging positions, other revenues, estimated interest
expense/income and merger related transition expense guidance. The investor
relations update page also includes the airline's capacity, fleet plan for
2007 and estimated capital spending for 2007.
About US Airways
US Airways is the fifth largest domestic airline employing nearly
36,000 aviation professionals worldwide. US Airways, US Airways Shuttle and
US Airways Express operate approximately 3,600 flights per day and serve
more than 230 communities in the U.S., Canada, Europe, the Caribbean and
Latin America. The new US Airways -- the product of a merger between
America West and US Airways in September 2005 -- is a member of the Star
Alliance network, which offers our customers 16,000 daily flights to 855
destinations in 155 countries worldwide. This press release and additional
information on US Airways can be found at www.usairways.com. (LCCF)
Forward-Looking Statements
Certain of the statements contained herein should be considered
"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," "indicate,"
"anticipate," "believe," "forecast," "estimate," "plan," "guidance,"
"outlook," "could," "should," "continue" and similar terms used in
connection with statements regarding the outlook of US Airways Group, Inc.
(the "Company"). Such statements include, but are not limited to,
statements about expected fuel costs, the revenue and pricing environment,
the Company's expected financial performance and operations, future
financing plans and needs, overall economic conditions and the benefits of
the business combination transaction involving America West Holdings
Corporation and US Airways Group, including future financial and operating
results and the combined companies' plans, objectives, expectations and
intentions. Other forward-looking statements that do not relate solely to
historical facts include, without limitation, statements that discuss the
possible future effects of current known trends or uncertainties or which
indicate that the future effects of known trends or uncertainties cannot be
predicted, guaranteed or assured. Such statements are based upon the
current beliefs and expectations of the Company's management and are
subject to significant risks and uncertainties that could cause the
Company's actual results and financial position to differ materially from
the Company's expectations. Such risks and uncertainties include, but are
not limited to, the following: the impact of high fuel costs, significant
disruptions in the supply of aircraft fuel and further significant
increases to fuel prices; our high level of fixed obligations and our
ability to obtain and maintain financing for operations and other purposes;
our ability to achieve the synergies anticipated as a result of the merger
and to achieve those synergies in a timely manner; our ability to integrate
the management, operations and labor groups of US Airways Group and America
West Holdings; labor costs and relations with unionized employees generally
and the impact and outcome of labor negotiations; the impact of global
instability, including the current instability in the Middle East, the
continuing impact of the military presence in Iraq and Afghanistan and the
terrorist attacks of September 11, 2001 and the potential impact of future
hostilities, terrorist attacks, infectious disease outbreaks or other
global events that affect travel behavior; reliance on automated systems
and the impact of any failure or disruption of these systems; the impact of
future significant operating losses; changes in prevailing interest rates;
our ability to obtain and maintain commercially reasonable terms with
vendors and service providers and our reliance on those vendors and service
providers; security-related and insurance costs; changes in government
legislation and regulation; our ability to use pre-merger NOLs and certain
other tax attributes; competitive practices in the industry, including
significant fare restructuring activities, capacity reductions and in court
or out of court restructuring by major airlines; continued existence of
prepetition liabilities; interruptions or disruptions in service at one or
more of our hub airports; weather conditions; our ability to obtain and
maintain any necessary financing for operations and other purposes; our
ability to maintain adequate liquidity; our ability to maintain contracts
that are critical to our operations; our ability to operate pursuant to the
terms of our financing facilities (particularly the financial covenants);
our ability to attract and retain customers; the cyclical nature of the
airline industry; our ability to attract and retain qualified personnel;
economic conditions; and other risks and uncertainties listed from time to
time in our reports to the Securities and Exchange Commission. There may be
other factors not identified above 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. All forward-looking statements are based on information
currently available to the Company. The Company assumes no obligation to
publicly update or revise any forward-looking statement to reflect actual
results, changes in assumptions or changes in other factors affecting such
estimates. Additional factors that may affect the future results of the
Company are set forth in the section entitled "Risk Factors" in the
Company's Quarterly Report on Form 10-Q for the period ended June 30, 2007,
which is available at www.usairways.com.
Financial Tables to Follow
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(in millions except share and per share amounts)
(unaudited)
3 Months 3 Months
Ended Ended
June 30, June 30, Percent
2007 2006 Change
Operating revenues
Mainline passenger $2,194 $2,186 0.4
Express passenger 737 780 (5.6)
Cargo 34 37 (7.7)
Other 190 168 12.7
Total operating revenues 3,155 3,171 (0.5)
Operating expenses
Aircraft fuel and related taxes 658 669 (1.7)
Loss (gain) on fuel hedging
instruments, net:
Realized 2 (11) nm
Unrealized (25) (18) 36.4
Salaries and related costs 576 542 6.3
Express expenses:
Fuel 187 203 (8.0)
Other 465 457 1.8
Aircraft rent 180 180 --
Aircraft maintenance 170 153 10.8
Other rent and landing fees 139 145 (3.9)
Selling expenses 125 121 4.4
Special items, net 27 35 (22.3)
Depreciation and amortization 46 45 3.0
Other 316 308 1.8
Total operating expenses 2,866 2,829 1.3
Operating income 289 342 (15.3)
Nonoperating income (expenses)
Interest income 48 41 16.6
Interest expense, net (69) (72) (4.9)
Other, net 3 -- nm
Nonoperating expenses, net (18) (31) (39.2)
Income before income taxes and
cumulative effect of change in
accounting principle 271 311 (12.9)
Income tax provision 8 6 19.7
Income before cumulative effect of
change in accounting principle 263 305 (13.6)
Cumulative effect of change in
accounting principle -- -- nm
Net income $263 $305 (13.6)
Income per share before cumulative effect
of change in accounting principle:
Basic $2.88 $3.55
Diluted $2.77 $3.25
Net income per share:
Basic $2.88 $3.55
Diluted $2.77 $3.25
Shares used for computation
(in thousands):
Basic 91,477 85,886
Diluted 95,613 94,673
6 Months 6 Months
Ended Ended
June 30, June 30, Percent
2007 2006 Change
Operating revenues
Mainline passenger $4,100 $3,996 2.6
Express passenger 1,346 1,392 (3.3)
Cargo 70 74 (4.9)
Other 371 341 8.8
Total operating revenues 5,887 5,803 1.5
Operating expenses
Aircraft fuel and related taxes 1,208 1,223 (1.3)
Loss (gain) on fuel hedging
instruments, net:
Realized 37 (12) nm
Unrealized (115) (44) nm
Salaries and related costs 1,104 1,045 5.6
Express expenses:
Fuel 340 375 (9.3)
Other 932 901 3.5
Aircraft rent 360 365 (1.3)
Aircraft maintenance 335 291 15.2
Other rent and landing fees 267 285 (6.5)
Selling expenses 231 228 1.8
Special items, net 66 (9) nm
Depreciation and amortization 90 90 --
Other 627 598 4.6
Total operating expenses 5,482 5,336 2.7
Operating income 405 467 (13.2)
Nonoperating income (expenses)
Interest income 88 66 32.5
Interest expense, net (140) (147) (5.0)
Other, net (13) (11) 22.4
Nonoperating expenses, net (65) (92) (29.1)
Income before income taxes and
cumulative effect of change in
accounting principle 340 375 (9.3)
Income tax provision 11 6 69.1
Income before cumulative effect of
change in accounting principle 329 369 (10.6)
Cumulative effect of change in
accounting principle -- 1 nm
Net income $329 $370 (10.9)
Income per share before cumulative effect
of change in accounting principle:
Basic $3.60 $4.40
Diluted $3.46 $4.02
Net income per share:
Basic $3.60 $4.41
Diluted $3.46 $4.03
Shares used for computation
(in thousands):
Basic 91,420 83,794
Diluted 95,918 94,012
US Airways Group, Inc.
Operating Statistics
3 Months 3 Months
Ended Ended
June 30, June 30, Percent
2007 2006 Change
Mainline
Revenue passenger miles (in millions) 16,294 16,152 0.9
Available seat miles (ASM) (in millions) 19,523 19,634 (0.6)
Passenger load factor (percent) 83.5 82.3 1.2 pts
Yield (cents) 13.47 13.53 (0.5)
Passenger revenue per ASM (cents) 11.24 11.13 1.0
Passenger enplanements (in thousands) 15,375 15,173 1.3
Aircraft (end of period) 358 359 (0.3)
Block Hours 344,736 345,703 (0.3)
Average stage length (miles) 930 941 (1.3)
Average passenger journey (miles) 1,494 1,491 0.2
Fuel consumption (gallons in millions) 306.6 308.4 (0.7)
Average fuel price (dollars per
gallon) with related taxes 2.15 2.17 (1.1)
Average fuel price including related
taxes and realized loss (gain) on fuel
hedging instruments, net (dollars) 2.15 2.13 0.8
Full-time equivalent employees (end
of period) 35,485 33,535 5.8
Operating cost per ASM (cents) 11.34 11.05 2.6
Operating cost per ASM excluding
special items (cents) 11.37 10.96 3.7
Operating cost per ASM excluding
special items, fuel and realized gain
(loss) on fuel hedging instruments,
net (cents) 8.00 7.61 5.1
Express*
Revenue passenger miles (in millions) 2,740 2,909 (5.8)
Available seat miles (in millions) 3,558 3,765 (5.5)
Passenger load factor (percent) 77.0 77.3 (0.3)pts
Passenger revenue per ASM (cents) 20.72 20.73 (0.1)
Passenger enplanements (in thousands) 6,857 7,066 (3.0)
Fuel consumption (gallons in millions) 86.1 89.4 (3.7)
Average fuel price (dollars per
gallon) with related taxes 2.17 2.27 (4.5)
Operating cost per ASM (cents) 18.34 17.54 4.6
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 19,034 19,061 (0.1)
Available seat miles (in millions) 23,081 23,399 (1.4)
Passenger load factor (percent) 82.5 81.5 1.0 pts
Passenger revenue per ASM (cents) 12.70 12.68 0.2
Total revenue per ASM (cents) 13.67 13.55 0.9
Passenger enplanements (in thousands) 22,232 22,239 (0.0)
Operating cost per ASM (cents) 12.42 12.09 2.7
6 Months 6 Months
Ended Ended
June 30, June 30, Percent
2007 2006 Change
Mainline
Revenue passenger miles (in millions) 30,712 30,109 2.0
Available seat miles (ASM)
(in millions) 38,079 37,864 0.6
Passenger load factor (percent) 80.7 79.5 1.2 pts
Yield (cents) 13.35 13.27 0.6
Passenger revenue per ASM (cents) 10.77 10.55 2.0
Passenger enplanements (in thousands) 29,355 28,765 2.1
Aircraft (end of period) 358 359 (0.3)
Block Hours 679,693 673,280 1.0
Average stage length (miles) 921 922 (0.1)
Average passenger journey (miles) 1,478 1,459 1.4
Fuel consumption (gallons in millions) 598.5 596.0 0.4
Average fuel price (dollars per
gallon) with related taxes 2.02 2.05 (1.7)
Average fuel price including related
taxes and realized loss (gain) on fuel
hedging instruments, net (dollars) 2.08 2.03 2.4
Full-time equivalent employees
(end of period) 35,485 33,535 5.8
Operating cost per ASM (cents) 11.06 10.72 3.1
Operating cost per ASM excluding
special items (cents) 11.21 10.86 3.2
Operating cost per ASM excluding
special items, fuel and realized gain
(loss) on fuel hedging instruments,
net (cents) 7.94 7.67 3.6
Express*
Revenue passenger miles (in millions) 5,123 5,336 (4.0)
Available seat miles (in millions) 7,006 7,419 (5.6)
Passenger load factor (percent) 73.1 71.9 1.2 pts
Passenger revenue per ASM (cents) 19.22 18.76 2.4
Passenger enplanements (in thousands) 12,812 12,971 (1.2)
Fuel consumption (gallons in millions) 170.3 175.6 (3.0)
Average fuel price (dollars per
gallon) with related taxes 2.00 2.14 (6.4)
Operating cost per ASM (cents) 18.16 17.20 5.6
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 35,835 35,445 1.1
Available seat miles (in millions) 45,085 45,283 (0.4)
Passenger load factor (percent) 79.5 78.3 1.2 pts
Passenger revenue per ASM (cents) 12.08 11.90 1.5
Total revenue per ASM (cents) 13.06 12.81 1.9
Passenger enplanements (in thousands) 42,167 41,736 1.0
Operating cost per ASM (cents) 12.16 11.78 3.2
* Express includes US Airways Group's wholly owned regional airline
subsidiaries, Piedmont Airlines and PSA Airlines, US Airways'
MidAtlantic regional jet division, through May 27, 2006, as well as
operating and financial results from capacity purchase agreements
with Mesa Airlines, Chautauqua Airlines, Air Wisconsin Airlines and
Republic Airlines.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information and Operating Cost per ASM Excluding Special Items, Aircraft
Fuel, Realized Gain (Loss) on Fuel Hedging Instruments, Net - Mainline only
US Airways Group, Inc. (the "Company") is providing disclosure of the
reconciliation of reported non-GAAP financial measures to their comparable
financial measures on a GAAP basis. The Company believes that the non-GAAP
financial measures provide investors the ability to measure financial
performance excluding special items which is more indicative of the
Company's ongoing performance and is more comparable to measures reported
by other major airlines. The Company believes that the presentation of
mainline CASM excluding fuel and gain or loss on fuel hedging instruments
is useful to investors as both the cost and availability of fuel are
subject to many economic and political factors beyond the Company's
control.
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
(in millions, except share and per
share amounts)
Reconciliation of Income before
Cumulative Effect of Change in
Accounting Principle Excluding
Special Items for US Airways
Group, Inc.
Income before cumulative effect of
change in accounting principle as
reported $263 $305 $329 $369
Special items:
Unrealized gain on fuel hedging
instruments, net (1) (25) (18) (115) (44)
Non-cash tax provision from
utilization of pre-acquisition
NOL (2) 5 -- 6 --
Special items, net (3) 27 35 66 (9)
Other operating special items (4) (9) -- (9) --
Nonoperating special items (5) -- (7) 18 4
Income before cumulative effect of
change in accounting principle, as
adjusted for special items $261 $315 $295 $320
Shares used for computation (in
thousands):
Basic 91,477 85,886 91,420 83,794
Diluted 95,613 94,673 95,918 94,012
Income per share before cumulative
effect of change in accounting
principle, as adjusted for
special items:
Basic $2.85 $3.66 $3.23 $3.81
Diluted (6) $2.74 $3.35 $3.11 $3.49
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Reconciliation of Operating Cost per
ASM Excluding Special Items, Fuel,
Realized Gain (Loss) on Fuel
Hedging Instruments, Net - Mainline
only
US Airways Group, Inc.
(in millions)
Total operating expenses $2,866 $2,829 $5,482 $5,336
Less Express expenses:
Fuel (187) (203) (340) (375)
Other (465) (457) (932) (901)
Total mainline operating expenses 2,214 2,169 4,210 4,060
Special items:
Unrealized gain on fuel hedging
instruments, net (1) 25 18 115 44
Special items, net (3) (27) (35) (66) 9
Other operating special items (4) 9 -- 9 --
Mainline operating expenses,
excluding special items 2,222 2,152 4,269 4,113
Aircraft fuel (658) (669) (1,208) (1,223)
Realized gain (loss) on fuel
hedging instruments, net (2) 11 (37) 12
Mainline operating expenses,
excluding special items, fuel and
realized gain (loss) on fuel
hedging instruments, net $1,562 $1,494 $3,024 $2,902
(in cents)
Mainline operating expenses
per ASM 11.34 11.05 11.06 10.72
Special items per ASM
Unrealized gain on fuel hedging
instruments, net (1) 0.13 0.09 0.30 0.12
Special items, net (3) (0.14) (0.18) (0.17) 0.02
Other operating special
items (4) 0.05 -- 0.03 --
Mainline operating expenses per
ASM, excluding special items 11.37 10.96 11.21 10.86
Aircraft fuel (3.37) (3.41) (3.17) (3.23)
Realized gain (loss) on fuel
hedging instruments, net (0.01) 0.06 (0.10) 0.03
Mainline operating expenses per
ASM, excluding special items, fuel
and realized gain (loss) on fuel
hedging instruments, net 8.00 7.61 7.94 7.67
Note: Amounts may not recalculate due to rounding.
Reconciliation of GAAP Financial Information to Non-GAAP Financial
Information and Operating Cost per ASM Excluding Special Items, Aircraft
Fuel, Realized Gain (Loss) on Fuel Hedging Instruments, Net - Mainline only
FOOTNOTES:
1) The 2007 second quarter and the 2007 six month periods include
$25 million and $115 million of unrealized gain, respectively. The 2006
second quarter and the 2006 six month periods include $18 million and
$44 million of unrealized gain, resulting from market-to-market
accounting for changes in the fair value of the Company's fuel hedging
instruments.
2) For the three months and six months ended June 30, 2007, the Company
utilized $5 million and $6 million, respectively, of NOL acquired from
US Airways. The valuation allowance associated with the acquired NOL
was recognized as a reduction of goodwill rather than a reduction in
tax expense. As a result, US Airways had a non-cash expense for income
taxes of $5 million and $6 million, respectively, in the three and six
months ended June 30, 2007.
3) The 2007 second quarter and six month periods include $27 million and
$66 million, respectively, of merger related transition expenses. The
2006 second quarter includes $35 million of merger related transition
expenses. The 2006 six month period includes a $90 million gain
associated with the return of equipment deposits upon forgiveness of a
loan, offset by $81 million of merger related transition expenses.
4) The 2007 second quarter and six month period includes $9 million of
insurance settlement proceeds related to business interruption and
property damages incurred as a result of Hurricane Katrina.
5) The 2007 six month period includes a $18 million write-off of debt
issuance costs in connection with the refinancing of the $1.25 billion
GE debt. The 2006 second quarter includes $7 million of interest
income earned by AWA on certain prior year federal income tax refunds.
The 2006 six month period includes $6 million of prepayment penalties
and a $5 million write-off of debt issuance costs in connection with
the refinancing of the loan previously guaranteed by the ATSB and two
loans previously provided to AWA by GECC less $7 million of interest
income earned by AWA on certain prior year federal income tax refunds.
6) The 2007 EPS computation excludes interest associated with the 7.0%
senior convertible notes of $1 million and $3 million for the three and
six month periods, respectively. The 2006 EPS computation excludes
interest associated with the 7.0% senior convertible notes and the 7.5%
senior convertible notes of $3 million and $9 million for the three
and six month periods, respectively.
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
June 30, December 31,
2007 2006
Assets
Current assets
Cash, cash equivalents and short-
term investments 3,021 2,365
Restricted cash 2 1
Accounts receivable, net 541 388
Materials and supplies, net 242 223
Prepaid expenses and other 498 377
Total current assets 4,304 3,354
Property and equipment
Flight equipment 2,189 2,051
Ground property and equipment 646 598
Less accumulated depreciation and
amortization (668) (583)
2,167 2,066
Equipment purchase deposits 65 48
Total property and equipment 2,232 2,114
Other assets
Goodwill 623 629
Other intangibles, net 542 554
Restricted cash 497 666
Other assets 222 259
Total other assets 1,884 2,108
Total assets $8,420 $7,576
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of debt and
capital leases 107 95
Accounts payable 439 454
Air traffic liability 1,267 847
Accrued compensation and vacation 204 262
Accrued taxes 218 181
Other accrued expenses 971 873
Total current liabilities 3,206 2,712
Noncurrent liabilities and deferred
credits
Long-term debt and capital leases,
net of current maturities 2,942 2,907
Deferred gains and credits 190 205
Employment benefit liabilities and other 762 782
Total noncurrent liabilities
and deferred credits 3,894 3,894
Stockholders' equity
Common stock 1 1
Additional paid-in capital 1,522 1,501
Accumulated deficit (193) (522)
Treasury stock (13) (13)
Other comprehensive income 3 3
Total stockholders' equity 1,320 970
Total liabilities and
stockholders' equity $8,420 $7,576
SOURCE US Airways Group, Inc.
RELATED LINKShttp://www.americawest.com
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