US Airways Group, Inc. Reports Significantly Improved Third Quarter Earnings Highlights of the US Airways Group, Inc. (the Company) third quarter 2007

results:

- Net profit for the third quarter 2007 was $177 million, or $1.87 per

diluted share versus a net loss of $78 million, or ($0.88) per share for

the third quarter 2006.

- Excluding special items, third quarter 2007 net profit was $185 million

or $1.96 per diluted share versus a net profit of $101 million or $1.09 per

share in 2006.

- On a year to date basis, US Airways has accrued $55 million for its

annual employee profit sharing program.

- The Company had $3.1 billion in total cash and investments, of which $0.5

billion was restricted, on September 30, 2007.



    TEMPE, Ariz., Oct. 25 /PRNewswire-FirstCall/ -- US Airways Group, Inc.
 (NYSE:   LCC) today reported its third quarter 2007 results. Net profit for
 the third quarter was $177 million, or $1.87 per diluted share, compared to
 a net loss of $78 million, or ($0.88) per share for the same period last
 year. Excluding net special items of $8 million, the Company reported a net
 profit of $185 million, or $1.96 per diluted share for its third quarter
 2007. This compares to a net profit excluding special items of $101
 million, or $1.09 per diluted share for the third quarter of 2006, which
 included $179 million of special items. 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 a sharp improvement in our third quarter earnings.
 Customer demand has kept pace with supply and the revenue environment has
 held up well in spite of the credit market challenges and economic
 uncertainty experienced during the quarter. We are particularly pleased to
 note that overall industry capacity has remained in check during this
 period of recovery for our industry, which is a notable change from the
 past.
     "We are especially pleased with the improvement we've seen in operating
 reliability as the result of our operational improvement plan. During
 September 2007, more than 80 percent of our flights arrived on time and we
 completed 99 percent of our flights as scheduled. This was our best on-time
 performance so far in 2007 and the second best month since our merger in
 September 2005. We have begun the fourth quarter well and are optimistic
 that we are on track to regain our position as an industry leader in
 operational reliability.
     "Also during the third quarter, we completed the merger of our
 operating certificates and US Airways now operates under a single operating
 certificate. This accomplishment reflects two years of effort on the part
 of many employees to combine policies, procedures, flight operating systems
 and maintenance standards with the end goal to become one airline in the
 eyes of the Federal Aviation Administration (FAA). Our team did a fantastic
 job, and we applaud and recognize their accomplishment of making the
 cutover seamless for our passengers.
     "These results are due to the great work of our 37,000 employees who
 remain committed to their airline while we complete our integration work
 and transition back to consistent operating fundamentals. As a result of
 their efforts, we are producing one of the top profit margins in our
 industry and have accrued $55 million year-to-date for our employee profit
 sharing program.
     "Looking into the current quarter, demand remains robust and the yield
 environment also remains strong. Recent fuel price increases remain
 problematic, but so long as our industry continues its recent capacity
 restraint we are optimistic about prospects for 2008," concluded Parker.
     Revenue and Cost Comparisons
     Mainline passenger revenue per available seat mile (PRASM) was 10.85
 cents, up 6.5 percent over the same period last year. Express PRASM was
 19.31 cents, up 4.0 percent over the third quarter 2006. Total mainline and
 Express PRASM for US Airways Group was 12.15 cents, which was up 5.6
 percent over the third quarter 2006 on a 2.9 decline in total available
 seat miles (ASMs).
     Mainline cost per available seat mile (CASM) at US Airways Group was
 11.11 cents, down 2.6 percent versus the same period last year on a
 decrease in mainline capacity of 2.4 percent versus the third quarter of
 2006. Excluding fuel, unrealized and realized gains/losses on fuel hedging
 instruments, and merger related transition expenses, mainline CASM was 7.68
 cents, up 5.7 percent from the same period last year.
     Chief Financial Officer Derek Kerr stated, "Our increase in CASM
 excluding fuel and special items was largely associated with the
 implementation of our operational improvement plan. We also pulled capacity
 down slightly to help ease some of the northeast air traffic control issues
 and other operational challenges. Because of the short-term nature of this
 capacity reduction, we were not able to pull out all of the corresponding
 fixed costs and as a result, experienced an increase in unit costs during
 the third quarter.
     "While clearly not satisfied with our cost performance during the third
 quarter, we took the steps necessary to improve our operational
 reliability. We have seen a significant improvement in our operation and
 anticipate the rate of increase in CASM (excluding fuel and special items)
 to be lower as we move forward."
     Liquidity
     As of Sept. 30, 2007, the Company had $3.1 billion in total cash and
 investments, of which $0.5 billion was restricted.
     Second Quarter Special Items
     During its third quarter, the Company recognized $8 million of net
 special items. Expenses for the quarter included $17 million of
 merger-related transition expenses and $4 million of special non-cash state
 tax provision from the utilization of pre-acquisition net operating losses
 (NOL). These expenses were offset by a $13 million non-cash credit for
 unrealized net gains associated with the change in fair value of the
 Company's outstanding fuel hedge contracts.
     Other Notable Accomplishments
 
     Operations
     -- Marked a significant milestone by obtaining a single operating
        certificate from the FAA.  The single certificate allows US Airways to
        operate as a single airline with one set of policies, procedures,
        computer systems, maintenance and flight control systems.
     -- Hired a new Chief Operating Officer (COO), Robert Isom, who has 15
        years of airline experience and most recently served as Chief
        Restructuring Officer of GMAC, LLC.  As COO, Isom oversees the
        airline's operations, including flight operations, inflight services,
        maintenance and engineering, airport customer service, reservations,
        cargo and the Express operation.
     -- For the ninth consecutive year, Charlotte's line maintenance facility
        earned the FAA's highest award for excellence in maintenance -- the
        AMT Diamond Award.
     -- The airline maintenance and reliability groups set a new V2500 engine
        operating hours performance record with the completion of more than
        30,000 flight hours.
     -- Announced plans to offer recall to all pilots furloughed by pre-merger
        US Airways, move some 140 pilots at regional partners as part of the
        jets for jobs program back to mainline, and hire an additional 350
        pilots by the end of 2008.
 
 
     Marketing
     -- Awarded the right to fly the first ever route between Philadelphia and
        the Chinese capital city of Beijing by the U.S. Department of
        Transportation (DOT). The daily service to China will begin in 2009.
        The flight will originate at the airline's hub in Charlotte, N.C.
     -- Announced new codeshare agreement with Air New Zealand, which gives
        passengers the ability to connect seamlessly between the United
        States, New Zealand, Australia, and the Pacific Islands from Los
        Angeles and San Francisco.
     -- Launched a mobile-device friendly version of usairways.com allowing
        customers to search for flights, purchase tickets, check flight
        status, make changes to an existing reservation, and access their
        Dividend Miles account conveniently with a handheld mobile device.
     Analyst Conference Call/Webcast Details
     US Airways will conduct a live audio webcast of its earnings call today
 at 12:30 p.m. EDT, which will be available to the public on a listen-only
 basis at http://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 Nov. 25, 2007.
     The airline will also update its investor relations guidance on its Web
 site (http://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
 37,000 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 http://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 September 30,
 2007, which is available at http://www.usairways.com.
                             US Airways Group, Inc.
                Condensed Consolidated Statements of Operations
                (in millions except share and per share amounts)
                                  (unaudited)
 
                         3 Months  3 Months          9 Months  9 Months
                           Ended    Ended    Percent  Ended      Ended  Percent
                         September September Change  September September Change
                          30, 2007 30, 2006          30, 2007   30, 2006
 
     Operating revenues
         Mainline
          passenger         $2,133   $2,052     4.0    $6,233    $6,048    3.1
         Express passenger     692      703    (1.5)    2,039     2,095   (2.7)
         Cargo                  32       40   (19.7)      102       114  (10.1)
         Other                 179      173     2.9       550       514    6.8
         Total operating
          revenues           3,036    2,968     2.3     8,924     8,771    1.7
 
     Operating expenses
         Aircraft fuel and
          related taxes        692      719    (3.8)    1,900     1,943   (2.2)
         Loss (gain) on fuel
          hedging instruments,
          net:
              Realized         (20)       -      nm        17       (12)    nm
              Unrealized       (13)      88      nm      (128)       44     nm
         Salaries and
          related costs        555      529     5.1     1,659     1,574    5.4
         Express expenses:
              Fuel             199      210    (5.2)      539       585   (7.8)
              Other            450      443     1.4     1,382     1,345    2.8
         Aircraft rent         182      181     0.7       542       546   (0.7)
         Aircraft
          maintenance          144      142     1.4       479       432   10.7
         Other rent and
          landing fees         141      146    (4.0)      408       432   (5.6)
         Selling expenses      116      120    (3.4)      347       348   (0.3)
         Special items, net     17       27   (36.7)       83        18     nm
         Depreciation and
          amortization          47       42    11.9       137       132    3.9
         Other                 324      305     7.0       952       901    5.4
         Total operating
          expenses           2,834    2,952    (4.0)    8,317     8,288    0.3
 
         Operating income      202       16      nm       607       483   25.8
 
     Nonoperating income
      (expense)
         Interest income        43       45    (2.8)      131       111   18.4
         Interest expense,
          net                  (66)     (74)  (10.8)     (206)     (221)  (7.0)
         Other, net              2       (4)     nm       (11)      (14) (15.9)
         Total nonoperating
          expense, net         (21)     (33)  (34.9)      (86)     (124) (30.6)
 
     Income (loss) before
      income taxes and
      cumulative effect of
      change in accounting
      principle                181      (17)     nm       521       359   45.3
 
     Income tax provision        4       61   (93.8)       15        68  (78.2)
 
     Income (loss) before
      cumulative effect of
      change in accounting
      principle                177      (78)     nm       506       291   74.1
 
     Cumulative effect of
      change in accounting
      principle                  -        -      nm         -         1     nm
 
         Net income (loss)    $177     $(78)     nm      $506      $292   74.1
 
     Income (loss) per
      share before
      cumulative effect of
      change in accounting
      principle:
         Basic               $1.93   $(0.88)            $5.54     $3.41
         Diluted             $1.87   $(0.88)            $5.33     $3.20
 
     Net income (loss) per
      share:
         Basic               $1.93   $(0.88)            $5.54     $3.42
         Diluted             $1.87   $(0.88)            $5.33     $3.21
 
     Shares used for
      computation
      (in thousands):
         Basic              91,542   88,212            91,461    85,286
         Diluted            95,492   88,212            95,776    94,474
 
 
 
 
                             US Airways Group, Inc.
                              Operating Statistics
 
                     3 Months 3 Months            9 Months  9 Months
                      Ended    Ended               Ended     Ended
                    September September  Percent  September September Percent
                    30, 2007  30, 2006   Change   30, 2007  30, 2006  Change
 
     Mainline
     Revenue
      passenger
      miles
      (in millions)    16,395    15,950    2.8     47,106     46,058     2.3
     Available seat
      miles (ASM)
      (in millions)    19,669    20,156   (2.4)    57,748     58,020    (0.5)
     Passenger load
      factor (percent)   83.4      79.1    4.3pts    81.6       79.4     2.2pts
     Yield (cents)      13.01     12.86    1.2      13.23      13.13     0.8
     Passenger revenue
      per ASM (cents)   10.85     10.18    6.5      10.79      10.42     3.6
 
     Passenger
      enplanements
      (in thousands)   14,962    14,425    3.7     44,317     43,189     2.6
     Aircraft
      (end of period)     359       357    0.6        359        357     0.6
 
     Block Hours      340,146   352,316   (3.5) 1,019,840  1,025,598    (0.6)
     Average stage
      length (miles)      945       956   (1.1)       929        933    (0.5)
     Average passenger
      journey (miles)   1,558     1,576   (1.1)     1,505      1,497     0.5
     Fuel consumption
      (gallons in
      millions)         311.3     318.5   (2.3)     909.8      912.5    (0.3)
     Average fuel price
      (dollars per
      gallon) with
      related taxes      2.22      2.26   (1.6)      2.09       2.13    (1.9)
     Average fuel price
      including related
      taxes and realized
      loss (gain) on
      fuel hedging
      instruments, net
      (dollars)          2.16      2.26   (4.6)      2.11       2.12    (0.5)
     Full-time
      equivalent
      employees
      (end of period)  34,321    33,252    3.2     34,321     33,252     3.2
 
     Operating cost
      per ASM (cents)   11.11     11.40   (2.6)     11.07      10.96     1.1
     Operating cost
      per ASM excluding
      special items
      (cents)           11.09     10.83    2.4      11.17      10.85     2.9
     Operating cost
      per ASM excluding
      special items,
      fuel and realized
      gain (loss) on
      fuel hedging
      instruments,
      net (cents)        7.68      7.26    5.7       7.85       7.52     4.3
 
     Express*
     Revenue passenger
      miles (in
      millions)         2,704     2,722   (0.7)     7,827      8,058    (2.9)
     Available seat
      miles (in
      millions)         3,587     3,785   (5.2)    10,592     11,204    (5.5)
     Passenger load
      factor (percent)   75.4      71.9    3.5pts    73.9       71.9     2.0pts
     Passenger revenue
      per ASM (cents)   19.31     18.57    4.0      19.25      18.70     3.0
     Passenger
      enplanements
      (in thousands)    6,662     6,556    1.6     19,474     19,527    (0.3)
     Fuel consumption
      (gallons in
      millions)          86.3      91.6   (5.8)     256.6      267.2    (4.0)
     Average fuel
      price (dollars
      per gallon) with
      related taxes      2.30      2.29    0.5       2.10       2.19    (4.0)
     Operating cost
      per ASM (cents)   18.09     17.27    4.8      18.14      17.22     5.3
 
     TOTAL - Mainline
      & Express
     Revenue passenger
      miles (in
      millions)        19,099    18,672    2.3     54,933     54,116     1.5
     Available seat
      miles (in
      millions)        23,256    23,941   (2.9)    68,340     69,224    (1.3)
     Passenger load
      factor (percent)   82.1      78.0    4.1pts    80.4       78.2     2.2pts
     Passenger revenue
      per ASM (cents)   12.15     11.51    5.6      12.10      11.76     2.9
     Total revenue
      per ASM (cents)   13.06     12.40    5.3      13.06      12.67     3.1
     Passenger
      enplanements
      (in thousands)   21,624    20,981    3.1     63,791     62,716     1.7
     Operating cost
      per ASM (cents)   12.19     12.33   (1.2)     12.17      11.97     1.6
 
     * 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  9 Months  9 Months
                                            Ended     Ended     Ended     Ended
                                        September September September September
                                         30, 2007  30, 2006  30, 2007  30, 2006
 
                                       (in millions, except share and per share
                                                       amounts)
       Reconciliation of Income (loss)
        before Cumulative Effect of
        Change in Accounting Principle
        Excluding Special Items for
        US Airways Group, Inc.
 
       Income (loss) before cumulative
        effect of change in accounting
        principle as reported                 $177    $(78)     $506     $291
 
       Special items:
          Unrealized gain (loss) on fuel
           hedging instruments, net (1)        (13)     88      (128)      44
          Non-cash tax provision from
           utilization of pre-acquisition
           NOL (2)                               4      59        10       59
          Special items, net (3)                17      27        83       18
          Other operating special items (4)      -       -        (9)       -
          Nonoperating special items (5)         -       5        18        9
 
       Income before cumulative effect of
        change in accounting principle, as
        adjusted for special items            $185    $101      $480     $421
 
       Shares used for computation (in
        thousands):
          Basic                             91,542  88,212    91,461   85,286
          Diluted                           95,492  95,307    95,776   94,474
 
       Income per share before cumulative
        effect of change in accounting
        principle, as adjusted for special
        items:
          Basic                              $2.02   $1.15     $5.25    $4.93
          Diluted (6)                        $1.96   $1.09     $5.06    $4.57
 
 
                                         3 Months  3 Months  9 Months  9 Months
                                            Ended     Ended     Ended     Ended
                                        September September September September
                                         30, 2007  30, 2006  30, 2007  30, 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             $2,834  $2,952    $8,317   $8,288
       Less Express expenses:
                Fuel                          (199)   (210)     (539)    (585)
                Other                         (450)   (443)   (1,382)  (1,345)
       Total mainline operating expenses     2,185   2,299     6,396    6,358
 
       Special items:
          Unrealized gain (loss) on fuel
           hedging instruments, net (1)         13     (88)      128      (44)
          Special items, net (3)               (17)    (27)      (83)     (18)
          Other operating special items (4)      -       -         9        -
        Mainline operating expenses,
         excluding special items             2,181   2,184     6,450    6,296
 
        Aircraft fuel                         (692)   (719)   (1,900)  (1,943)
        Realized gain (loss) on fuel
         hedging instruments, net               20       -       (17)      12
        Mainline operating expenses,
         excluding special items, fuel and
         realized gain (loss)
         on fuel hedging instruments, net   $1,509  $1,465    $4,533   $4,365
 
        (in cents)
        Mainline operating expenses per
         ASM                                 11.11   11.40     11.07    10.96
 
       Special items per ASM
          Unrealized gain (loss) on fuel
           hedging instruments, net (1)       0.07   (0.44)     0.22    (0.08)
          Special items, net (3)             (0.09)  (0.13)    (0.14)   (0.03)
          Other operating special
           items (4)                           -       -        0.02        -
        Mainline operating expenses per
         ASM, excluding special items        11.09   10.83     11.17    10.85
 
        Aircraft fuel                        (3.52)  (3.57)    (3.29)   (3.35)
        Realized gain (loss) on fuel
         hedging instruments, net             0.10     -       (0.03)    0.02
        Mainline operating expenses per
         ASM, excluding special items, fuel
         and realized gain (loss)
         on fuel hedging instruments, net     7.68    7.26      7.85     7.52
 
       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 third quarter and the 2007 nine month periods include $13
        million and $128 million of unrealized gain, respectively. The 2006
        third quarter and the 2006 nine month periods include $88 million and
        $44 million of unrealized loss, resulting from mark-to-market
        accounting for changes in the fair value of the Company's fuel hedging
        instruments.
 
     2) For the three months and nine months ended September 30, 2007, the
        Company utilized $4 million and $10 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 $4 million and $10 million, respectively,
        in the three and nine months ended September 30, 2007.  For the three
        months and nine months ended September 30, 2006, the Company utilized
        $59 million of NOL acquired from US Airways.  Similar to 2007, this
        resulted in 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 $59 million in the three and nine months ended September 30,
        2006.
 
     3) The 2007 third quarter and nine month periods include $17 million and
        $83 million, respectively, of merger related transition expenses.  The
        2006 third quarter includes $27 million of merger related transition
        expenses.  The 2006 nine month period includes a $90 million gain
        associated with the return of equipment deposits upon forgiveness of a
        loan, offset by $108 million of merger related transition expenses.
 
     4) The 2007 nine 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 nine 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 third quarter includes $5 million payment in
        connection with the inducement to convert $21 million of the 7% Senior
        Convertible Notes to common stock.  The 2006 nine 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, a $5 million payment in connection with the inducement to
        convert $21 million of the 7% Senior Convertible Notes to common stock
        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 $4 million for the three and
        nine month periods, respectively. The 2006 EPS computation excludes
        interest associated with the 7.0% senior convertible notes of
        $2 million and $7 million for the three and nine months ended September
        30, 2006, respectively and the 7.5% convertible senior notes of
        $4 million for the nine months ended September 30, 2006.
 
 
 
                             US Airways Group, Inc.
                     Condensed Consolidated Balance Sheets
                                 (in millions)
                                  (unaudited)
 
                                                   September 30,   December 31,
                                                       2007            2006
     Assets
 
     Current assets
        Cash, cash equivalents and
         short-term investments                       2,680             2,365
        Restricted cash                                   2                 1
        Accounts receivable, net                        494               388
        Materials and supplies, net                     256               223
        Prepaid expenses and other                      516               377
           Total current assets                       3,948             3,354
 
     Property and equipment
        Flight equipment                              2,298             2,051
        Ground property and equipment                   672               598
        Less accumulated depreciation and
         amortization                                  (714)             (583)
                                                      2,256             2,066
        Equipment purchase deposits                      78                48
           Total property and equipment               2,334             2,114
 
     Other assets
        Goodwill                                        619               629
        Other intangibles, net                          535               554
        Restricted cash                                 449               666
        Other assets                                    219               259
           Total other assets                         1,822             2,108
 
           Total assets                              $8,104            $7,576
 
     Liabilities and Stockholders' Equity
 
     Current liabilities
        Current maturities of debt and capital
         leases                                         109                95
        Accounts payable                                391               454
        Air traffic liability                           944               847
        Accrued compensation and vacation               214               262
        Accrued taxes                                   132               181
        Other accrued expenses                          937               873
           Total current liabilities                  2,727             2,712
 
     Noncurrent liabilities and deferred credits
        Long-term debt and capital leases, net of
         current maturities                           2,980             2,907
        Deferred gains and credits                      177               205
        Employment benefit liabilities and other        754               782
           Total noncurrent liabilities and
            deferred credits                          3,911             3,894
 
     Stockholders' equity
        Common stock                                      1                 1
        Additional paid-in capital                    1,529             1,501
        Accumulated deficit                             (16)             (522)
        Treasury stock                                  (13)              (13)
        Accumulated other comprehensive income
         (loss)                                         (35)                3
           Total stockholders' equity                 1,466               970
 
        Total liabilities and stockholders' equity   $8,104            $7,576
 
 

SOURCE US Airways Group, Inc.
RELATED LINKS
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