2014

US Airways Reports Record Third Quarter Pretax Profit Record pretax profit of $367 million excluding special items

Highlights of US Airways Group, Inc.'s (the Company) third quarter 2013 results:

-- Revenue growth of 9 percent led to a record third quarter pretax profit excluding net special items of $367 million - a $174 million, or 90%, year-over-year improvement.

-- The Company continues to make significant progress in its merger integration planning with American Airlines. Both companies are preparing for a vigorous defense of the merger, with the trial scheduled to begin on Nov. 25.

TEMPE, Ariz., Oct. 23, 2013 /PRNewswire/ -- US Airways Group, Inc. (NYSE: LCC) today reported its third quarter 2013 financial results. For the third quarter 2013, pretax profit excluding net special items was a record $367 million, a $174 million, or 90%, year-over-year improvement.

(Logo: http://photos.prnewswire.com/prnh/20120103/LA28814LOGO)

On a GAAP basis, the Company reported a third quarter pretax profit of $336 million, up from $246 million in 2012. The GAAP net profit for the third quarter 2013 was $216 million, or $1.04 per diluted share versus a GAAP net profit of $245 million, or $1.24 per diluted share, for the same period in 2012. The Company's 2013 third quarter results include a provision for income tax of $120 million, comprised principally of non-cash federal income tax expense, while the 2012 provision for income tax was only $1 million.

See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.

US Airways' Chairman and CEO Doug Parker said, "We are extremely pleased to report a record pretax profit in the third quarter. These tremendous results are a testament to our 32,000 team members and their dedication to our millions of customers.

"These outstanding results are occurring as our teams continue intensive integration planning work in preparation for our merger with American Airlines. Our hardworking team members, along with their colleagues at American, remain committed to building a combined airline that can compete in the global marketplace. We are eager to present our case and are grateful for the enthusiasm and support our merger continues to receive."

Revenue and Cost Comparisons

Total revenues in the third quarter were a record $3.9 billion, up 9.1 percent versus the third quarter 2012 on a 4.1 percent increase in total available seat miles (ASMs). Total revenue per ASM was a record 15.97 cents, up 4.9 percent versus the same period last year driven by a 4.4 percent increase in passenger yield and a record load factor of 85.5 percent.

Total operating expenses in the third quarter were $3.4 billion, up 5.0 percent over the same period last year on a 4.1 percent increase in ASMs. Mainline cost per available seat mile (CASM) was 12.94 cents, up 1.9 percent. Excluding special items, fuel and profit sharing, mainline CASM was 8.08 cents, up 1.7 percent versus the same period last year. Express CASM excluding special items and fuel was 14.36 cents, up 2.8 percent on a 0.4 percent decrease in ASMs.

Liquidity

During the third quarter, the Company repaid in full the prepaid miles loan issued in connection with its Barclays affinity credit card program at its face amount of $200 million. As of September 30, 2013, the Company had $3.9 billion in total cash and investments, of which $350 million was restricted. This is up $1.1 billion from the Company's third quarter 2012 total cash and investments balance of $2.8 billion, of which $347 million was restricted.

Special Items

The Company recognized approximately $31 million of net special items before taxes in the third quarter. Mainline operating special items totaled $40 million and consisted primarily of merger related costs. Express operating special items consisted of a $14 million credit resulting from a favorable arbitration ruling related to a vendor contract. The Company also recognized approximately $5 million in nonoperating special items primarily related to non-cash write offs of debt discount associated with conversions of our 7.25% convertible senior notes. The net tax effect of these special items was approximately $6 million.

Notable Accomplishments

  • As part of the Company's fleet renewal program, the Company took delivery of five new A321 aircraft and one new A330-200 aircraft. These aircraft replaced 737-400 aircraft.
  • Standard & Poor's (S&P) raised the Company's credit rating by one notch from "B-" to "B." S&P cited the Company's improved financial results and strong cash position as part of its upgrade.
  • As part of the Company's operational incentive program, employees have earned approximately $10 million in year-to-date operational incentive payouts.
  • Pilots at PSA Airlines, a wholly-owned subsidiary of US Airways, represented by the Air Line Pilots Association (ALPA), ratified a Letter of Agreement that amends their existing collective bargaining agreement originally reached with the airline on March 27, 2013.
  • Introduced US Airways' Track Your Bag, a free service allowing customers with a smartphone, tablet or laptop connected to the internet access to real-time information on the status of their checked luggage. Customers can check when their luggage is loaded and offloaded on their flight.
  • Announced agreement with Bags VIP delivery service that allows customers to schedule luggage delivery directly to their home, hotel or business. Travelers can schedule and pay for Bags VIP delivery up to one hour prior to their scheduled departure by visiting maketraveleasier.com/usairways.
  • US Airways' Education Foundation awarded $270,000 in educational grants to 21 nonprofit organizations in the airline's hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. as part of its 2013 Community Education Grant Program.
  • In partnership with the American Cancer Society's Making Strides Against Breast Cancer (MSABC), the Company has launched its second annual "BE PINK" campaign. As part of the campaign, thousands of employees have purchased and are wearing pink uniform items in October, which is National Breast Cancer Awareness Month. Proceeds from the sale of uniform items are donated to the American Cancer Society. In addition, employees will show their support of breast cancer programs through the sponsorship of MSABC walks in the airline's hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C.
  • As part of the Company's "Hope Takes Flight" campaign, which benefits United Way, US Airways' employees raised more than $1.4 million. Money raised will go to support the communities in which US Airways' employees live and work.

Analyst Conference Call/Webcast Details

US Airways will conduct a live audio webcast of its earnings call today at 12:30 p.m. ET, which will be available to the public on a listen-only basis at www.usairways.com under the Company Info >>Investor Relations tab. An archive of the call/webcast will be available in the Investor Relations portion of the website.

2013 Investor Guidance

The Company will provide its investor relations guidance on its website (www.usairways.com) immediately following its 12:30 p.m. ET conference call. The Company typically provides guidance related to cost per available seat mile (CASM) excluding special charges, fuel and profit sharing, fuel prices, other revenues and estimated interest expense/income on its investor relations update page on its web site. This update will also include the airline's capacity, fleet plan and estimated capital spending for the remainder of 2013.

About US Airways

US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves 203 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, and Central and South America. The airline employs more than 32,000 aviation professionals worldwide, operates the world's largest fleet of Airbus aircraft and is a member of the Star Alliance network, which offers its customers more than 21,900 daily flights to 1,328 airports in 195 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. Aviation Week and Overhaul & Maintenance magazine presented US Airways with the 2012 Aviation Maintenance, Repair and Overhaul (MRO) of the Year Award for demonstrating outstanding achievement and innovation in the area of technical operations. Military Times Edge magazine named US Airways as a Best for Vets employer for the past three years. US Airways was, for the third year in a row, the only airline included as one of the 50 best companies to work for in the U.S. by LATINA Style magazine's 50 Report. The airline also earned a 100 percent rating on the Human Rights Campaign Corporate Equality index for six consecutive years. The Corporate Equality index is a leading indicator of companies' attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers. For more company information visit usairways.com, follow on Twitter @USAirways or at Facebook.com/USAirways. (LCCF)

Cautionary Statement Regarding Forward-Looking Statements

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," "forecast" and other similar words.  These forward-looking statements are based on AMR's and US Airways' 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.  The following factors, among others, could cause actual results and financial position and timing of certain events to differ materially from those described in the forward-looking statements:  the lawsuit filed by the Antitrust Division of the U.S. Department of Justice and certain states seeking to enjoin the planned merger of AMR and US Airways on antitrust grounds and the intention of AMR and US Airways to contest such lawsuit vigorously; the challenges and costs of the proposed transaction, including integrating operations and achieving anticipated synergies; the price of, market for and potential market price volatility of common stock of the ultimate parent entity following the closing of the proposed transaction; significant liquidity requirements and substantial levels of indebtedness of the combined company following the closing; potential limitations on the use of certain tax attributes following the closing; failure of the proposed transaction to be completed; and other economic, business, competitive, and/or regulatory factors affecting the business of the combined company after the closing and the businesses of US Airways and AMR generally, including those set forth in the filings of US Airways and AMR with the SEC, especially in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of their respective annual reports on Form 10-K and quarterly reports on Form 10-Q, their current reports on Form 8-K and other SEC filings, including the registration statement and the proxy statement/prospectus related to the proposed transaction.  Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements.  Neither AMR nor US Airways assumes 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 except as required by law.

US Airways Group, Inc.

 Condensed Consolidated Statements of Operations 

(In millions, except share and per share amounts)

(Unaudited)














3 Months Ended

September 30,


Percent


9 Months Ended

September 30,


Percent


2013


2012


Change


2013


2012


Change













Operating revenues:












    Mainline passenger

$           2,601


$           2,319


12.2


$             7,364


$             6,881


7.0

    Express passenger

857


844


1.6


2,497


2,523


(1.0)

    Cargo

37


35


5.5


114


114


0.3

    Other

360


335


7.3


1,125


1,035


8.6

    Total operating revenues

3,855


3,533


9.1


11,100


10,553


5.2













Operating expenses:












    Aircraft fuel and related taxes

915


893


2.4


2,648


2,659


(0.4)

    Salaries and related costs

681


609


11.7


2,018


1,888


6.9

    Express expenses:












         Fuel

265


272


(2.5)


797


830


(4.0)

         Other

507


509


(0.3)


1,553


1,556


(0.2)

    Aircraft rent

150


160


(6.2)


457


483


(5.4)

    Aircraft maintenance

170


171


(0.8)


512


506


1.1

    Other rent and landing fees

166


148


12.5


467


419


11.3

    Selling expenses

129


122


5.6


366


359


2.1

    Special items, net

40


14


 nm 


103


25


 nm 

    Depreciation and amortization

73


60


22.7


210


182


15.2

    Other

331


307


7.8


957


915


4.8

    Total operating expenses

3,427


3,265


5.0


10,088


9,822


2.7













    Operating income

428


268


59.6


1,012


731


38.4













Nonoperating income (expense):












    Interest income

-


-


24.2


1


1


36.0

    Interest expense, net

(88)


(89)


(0.8)


(263)


(256)


2.5

    Other, net

(4)


67


 nm 


(16)


125


 nm 

    Total nonoperating expense, net

(92)


(22)


 nm 


(278)


(130)


 nm 













Income before income taxes

336


246


36.4


734


601


22.1













Income tax provision

120


1


 nm 


187


1


 nm 













    Net income

$              216


$              245


(11.9)


$                547


$                600


(8.8)

























Earnings per common share:












    Basic 

$             1.12


$             1.51




$               3.10


$               3.70



    Diluted

$             1.04


$             1.24




$               2.69


$               3.06















Shares used for computation (in thousands):












    Basic

193,416


162,418




176,511


162,286



    Diluted

208,403


204,603




207,760


203,532















Note: Percent change may not recalculate due to rounding.



US Airways Group, Inc.

Operating Statistics





















3 Months Ended

September 30,




9 Months Ended

September 30,







2013


2012


Change


2013


2012


Change

















Mainline














Revenue passenger miles (millions)


17,809


16,860


5.6

%

50,068


47,564


5.3

%

Available seat miles (ASM) (millions)


20,513


19,560


4.9

%

58,667


56,665


3.5

%

Passenger load factor (percent)


86.8


86.2


0.6

pts

85.3


83.9


1.4

pts

Yield (cents)


14.61


13.75


6.2

%

14.71


14.47


1.7

%

Passenger revenue per ASM (cents)


12.68


11.85


7.0

%

12.55


12.14


3.4

%















Passenger enplanements (thousands)


14,543


13,739


5.9

%

42,781


40,927


4.5

%

Departures (thousands)


115


112


3.1

%

345


341


1.0

%

Aircraft at end of period


344


338


1.8

%

344


338


1.8

%















Block hours (thousands)


320


310


3.4

%

944


922


2.5

%

Average stage length (miles)


1,050


1,051


(0.1)

%

1,021


1,010


1.2

%

Average passenger journey (miles)


1,821


1,829


(0.4)

%

1,724


1,726


(0.1)

%

Fuel consumption (gallons in millions)


304


291


4.3

%

868


841


3.2

%

Average aircraft fuel price including related taxes (dollars per gallon) 


3.01


3.06


(1.8)

%

3.05


3.16


(3.5)

%

Full-time equivalent employees at end of period


31,964


30,845


3.6

%

31,964


30,845


3.6

%















Operating cost per ASM (cents)


12.94


12.70


1.9

%

13.19


13.12


0.5

%

Operating cost per ASM excluding special items (cents)


12.75


12.63


0.9

%

13.01


13.08


(0.5)

%

Operating cost per ASM excluding special items and fuel (cents)


8.29


8.06


2.8

%

8.50


8.39


1.4

%

Operating cost per ASM excluding special items, fuel and profit sharing (cents)


8.08


7.95


1.7

%

8.34


8.29


0.6

%















Express*














Revenue passenger miles (millions)


2,837


2,850


(0.5)

%

8,343


8,112


2.8

%

Available seat miles (millions)


3,630


3,644


(0.4)

%

10,723


10,722


-

%

Passenger load factor (percent)


78.1


78.2


(0.1)

pts

77.8


75.7


2.1

pts

Yield (cents)


30.22


29.59


2.1

%

29.93


31.10


(3.8)

%

Passenger revenue per ASM (cents)


23.61


23.15


2.0

%

23.29


23.54


(1.1)

%















Passenger enplanements (thousands)


7,252


7,326


(1.0)

%

21,285


21,166


0.6

%

Aircraft at end of period


281


282


(0.4)

%

281


282


(0.4)

%

Fuel consumption (gallons in millions)


88


89


(0.5)

%

260


261


(0.1)

%

Average aircraft fuel price including related taxes (dollars per gallon) 


3.00


3.07


(2.1)

%

3.06


3.18


(3.9)

%















Operating cost per ASM (cents)


21.27


21.42


(0.7)

%

21.91


22.25


(1.5)

%

Operating cost per ASM excluding special items (cents)


21.65


21.42


1.1

%

22.03


22.22


(0.9)

%

Operating cost per ASM excluding special items and fuel (cents)


14.36


13.97


2.8

%

14.60


14.48


0.8

%















Total Mainline & Express














Revenue passenger miles (millions)


20,646


19,710


4.7

%

58,411


55,676


4.9

%

Available seat miles (millions)


24,143


23,204


4.1

%

69,390


67,387


3.0

%

Passenger load factor (percent)


85.5


84.9


0.6

pts

84.2


82.6


1.6

pts

Yield (cents)


16.75


16.04


4.4

%

16.88


16.89


(0.1)

%

Passenger revenue per ASM (cents)


14.32


13.63


5.1

%

14.21


13.96


1.8

%

Total revenue per ASM (cents)


15.97


15.22


4.9

%

16.00


15.66


2.1

%















Passenger enplanements (thousands)


21,795


21,065


3.5

%

64,066


62,093


3.2

%

Aircraft at end of period


625


620


0.8

%

625


620


0.8

%

Fuel consumption (gallons in millions)


392


380


3.2

%

1,128


1,102


2.4

%

Average aircraft fuel price including related taxes (dollars per gallon) 


3.01


3.07


(1.9)

%

3.05


3.17


(3.6)

%















Operating cost per ASM (cents)


14.20


14.07


0.9

%

14.54


14.58


(0.3)

%

Operating cost per ASM excluding special items (cents)


14.09


14.01


0.5

%

14.41


14.53


(0.9)

%

Operating cost per ASM excluding special items and fuel (cents)


9.20


8.99


2.3

%

9.44


9.36


0.9

%

Operating cost per ASM excluding special items, fuel and profit sharing (cents)


9.03


8.90


1.5

%

9.31


9.27


0.3

%































* Express includes US Airways Group's wholly owned regional airline subsidiaries, Piedmont Airlines and PSA Airlines, as well as operating and financial results from capacity purchase agreements with Republic Airlines, Mesa Airlines, Air Wisconsin Airlines, Chautauqua Airlines and SkyWest Airlines.
















Note: Amounts may not recalculate due to rounding.



Reconciliation of GAAP Financial Information to Non-GAAP Financial Information 













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 and profit sharing, 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 and express CASM excluding fuel is useful to investors because both the cost and availability of fuel are subject to many economic and political factors beyond the Company's control. Management uses mainline and express CASM excluding special items, fuel and profit sharing to evaluate the Company's operating performance.





3 Months Ended

September 30,


9 Months Ended

September 30,



2013


2012


2013


2012

Reconciliation of Income Before Income Taxes Excluding Special Items


(In millions, except share and per share amounts)


(In millions, except share and per share amounts)










Income before income taxes as reported


$      336


$      246


$      734


$      601

Special items:









   Special items, net (1)


40


14


103


25

   Express operating special items, net (2)


(14)


-


(12)


3

   Nonoperating special items, net (3)


5


(67)


6


(137)

Income before income taxes as adjusted for special items


$      367


$      193


$      831


$      492





















3 Months Ended

September 30,


9 Months Ended

September 30,

Reconciliation of Net Income Excluding Special Items


2013


2012


2013


2012










Net income as reported


$      216


$      245


$      547


$      600

Special items:









   Special items, net (1)


40


14


103


25

   Express operating special items, net (2)


(14)


-


(12)


3

   Nonoperating special items, net (3)


5


(67)


6


(137)

   Net tax effect of special items


(6)


-


(25)


-

Net income as adjusted for special items


$      241


$      192


$      619


$      491





















3 Months Ended

September 30,


9 Months Ended

September 30,

Reconciliation of Basic and Diluted Earnings Per Share As Adjusted for Special Items


2013


2012


2013


2012










Net income as adjusted for special items


$      241


$      192


$      619


$      491










Shares used for computation (in thousands):









   Basic


193,416


162,418


176,511


162,286

   Diluted


208,403


204,603


207,760


203,532










Earnings per share as adjusted for special items:









   Basic


$     1.24


$     1.18


$     3.51


$     3.03

   Diluted (4)


$     1.16


$     0.98


$     3.04


$     2.53





















3 Months Ended

September 30,


9 Months Ended

September 30,

Reconciliation of Operating Income Excluding Special Items


2013


2012


2013


2012










Operating income as reported


$      428


$      268


$   1,012


$      731










Special items:









   Special items, net (1)


40


14


103


25

   Express operating special items, net (2)


(14)


-


(12)


3

Operating income as adjusted for special items


$      454


$      282


$   1,103


$      759





















3 Months Ended

September 30,


9 Months Ended

September 30,

Reconciliation of Operating Cost per ASM Excluding Special Items, Fuel and Profit Sharing - Mainline only


2013


2012


2013


2012










Total operating expenses


$   3,427


$   3,265


$  10,088


$   9,822

Less express expenses:









   Fuel


(265)


(272)


(797)


(830)

   Other


(507)


(509)


(1,553)


(1,556)

Total mainline operating expenses


2,655


2,484


7,738


7,436










   Special items, net (1)


(40)


(14)


(103)


(25)

Mainline operating expenses, excluding special items


2,615


2,470


7,635


7,411










   Aircraft fuel and related taxes 


(915)


(893)


(2,648)


(2,659)

Mainline operating expenses, excluding special items and fuel 


1,700


1,577


4,987


4,752










Profit sharing


(42)


(21)


(95)


(54)

Mainline operating expenses, excluding special items, fuel and profit sharing


$   1,658


$   1,556


$   4,892


$   4,698










 (In cents) 









Mainline operating expenses per ASM


$   12.94


$   12.70


$   13.19


$   13.12










   Special items, net per ASM (1)


(0.20)


(0.07)


(0.18)


(0.04)

Mainline operating expenses per ASM, excluding special items


12.75


12.63


13.01


13.08










   Aircraft fuel and related taxes per ASM


(4.46)


(4.57)


(4.51)


(4.69)

Mainline operating expenses per ASM, excluding special items and fuel


8.29


8.06


8.50


8.39










Profit sharing per ASM


(0.20)


(0.11)


(0.16)


(0.10)

Mainline operating expenses per ASM, excluding special items, fuel and profit sharing


$     8.08


$     7.95


$     8.34


$     8.29










Note: Amounts may not recalculate due to rounding.











3 Months Ended

September 30,


9 Months Ended

September 30,

Reconciliation of Operating Cost per ASM Excluding Special Items and Fuel - Express only


2013


2012


2013


2012










Total express operating expenses


$      772


$      781


$   2,350


$   2,386










   Express operating special items, net (2)


14


-


12


(3)

Express operating expenses, excluding special items


786


781


2,362


2,383










   Aircraft fuel and related taxes


(265)


(272)


(797)


(830)

Express operating expenses, excluding special items and fuel


$      521


$      509


$   1,565


$   1,553










 (In cents) 









Express operating expenses per ASM


$   21.27


$   21.42


$   21.91


$   22.25










   Express operating special items, net per ASM (2)


0.38


-


0.11


(0.03)

Express operating expenses per ASM, excluding special items


21.65


21.42


22.03


22.22










   Aircraft fuel and related taxes per ASM


(7.29)


(7.45)


(7.43)


(7.74)

Express operating expenses per ASM, excluding special items and fuel


$   14.36


$   13.97


$   14.60


$   14.48










Note: Amounts may not recalculate due to rounding.




















3 Months Ended

September 30,


9 Months Ended

September 30,

Reconciliation of Operating Cost per ASM Excluding Special Items, Fuel and Profit Sharing - Total Mainline and Express


2013


2012


2013


2012










Total operating expenses


$   3,427


$   3,265


$  10,088


$   9,822










Special items:









   Special items, net (1)


(40)


(14)


(103)


(25)

   Express operating special items, net (2)


14


-


12


(3)

Total operating expenses, excluding special items


3,401


3,251


9,997


9,794










Fuel:









   Aircraft fuel and related taxes - mainline


(915)


(893)


(2,648)


(2,659)

   Aircraft fuel and related taxes - express


(265)


(272)


(797)


(830)

Total operating expenses, excluding special items and fuel 


2,221


2,086


6,552


6,305










Profit sharing


(42)


(21)


(95)


(54)

Total operating expenses, excluding special items, fuel and profit sharing


$   2,179


$   2,065


$   6,457


$   6,251










 (In cents) 









Total operating expenses per ASM


$   14.20


$   14.07


$   14.54


$   14.58










Special items per ASM:









   Special items, net (1)


(0.17)


(0.06)


(0.15)


(0.04)

   Express operating special items, net (2)


0.06


-


0.02


(0.01)

Total operating expenses per ASM, excluding special items


14.09


14.01


14.41


14.53










Fuel per ASM:









   Aircraft fuel and related taxes - mainline


(3.79)


(3.85)


(3.82)


(3.95)

   Aircraft fuel and related taxes - express


(1.10)


(1.17)


(1.15)


(1.23)

Total operating expenses per ASM, excluding special items and fuel


9.20


8.99


9.44


9.36










Profit sharing per ASM


(0.17)


(0.09)


(0.14)


(0.08)

Total operating expenses per ASM, excluding special items, fuel and profit sharing


$     9.03


$     8.90


$     9.31


$     9.27










Note: Amounts may not recalculate due to rounding.




















FOOTNOTES:



















1)

The 2013 third quarter consisted primarily of merger related costs. The 2013 nine month period consisted primarily of merger related costs and charges related to the ratification of the US Airways flight attendant collective bargaining agreement.

The 2012 third quarter and nine month periods consisted primarily of merger related costs and auction rate securities arbitration costs.











2)

The 2013 third quarter and nine month periods consisted primarily of a credit due to a favorable arbitration ruling related to a vendor contract.











3)

The 2013 third quarter consisted of $5 million in charges primarily related to non-cash write offs of debt discount in connection with conversions of 7.25% convertible senior notes. The 2013 nine month period consisted of $36 million in charges primarily related to non-cash write offs of debt discount and debt issuance costs in connection with conversions of 7.25% convertible senior notes and repayment of the former Citicorp North America term loan, offset in part by a $30 million credit in connection with an award received in an arbitration related to previous investments in auction rate securities.

The 2012 third quarter consisted primarily of a $69 million gain related to the slot transaction with Delta Air Lines, Inc. ("Delta"). The 2012 nine month period consisted primarily of a $142 million gain related to the slot transaction with Delta, offset in part by $3 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft.











4)

The 2013 third quarter and nine month period diluted EPS excludes $1 million and $12 million of interest expense, net of profit sharing and income tax effects, respectively, related to 7.25% convertible notes. The 2012 third quarter and nine month period diluted EPS excludes $8 million and $23 million of interest expense, net of profit sharing, respectively, related to 7.25% and 7% convertible notes. 



US Airways Group, Inc.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)










September 30, 2013


December 31, 2012

Assets








Current assets




   Cash, cash equivalents and investments in marketable securities

$                  3,521


$                 2,376

   Accounts receivable, net

412


298

   Materials and supplies, net

360


300

   Prepaid expenses and other

1,033


608

      Total current assets

5,326


3,582





Property and equipment




   Flight equipment

6,202


5,188

   Ground property and equipment

1,070


1,005

   Less accumulated depreciation and amortization

(1,932)


(1,733)


5,340


4,460

   Equipment purchase deposits

252


244

      Total property and equipment

5,592


4,704





Other assets




   Other intangibles, net

521


539

   Restricted cash

350


336

   Other assets

277


235

      Total other assets

1,148


1,110





      Total assets

$                12,066


$                 9,396





Liabilities and Stockholders' Equity








Current liabilities




   Current maturities of debt and capital leases

$                     405


$                    417

   Accounts payable

361


366

   Air traffic liability

1,356


1,054

   Accrued compensation and vacation

328


258

   Accrued taxes

191


181

   Other accrued expenses

1,013


1,027

      Total current liabilities

3,654


3,303





Noncurrent liabilities and deferred credits




   Long-term debt and capital leases, net of current maturities

5,506


4,376

   Deferred gains and credits, net

258


290

   Employee benefit liabilities and other

1,144


637

      Total noncurrent liabilities and deferred credits

6,908


5,303





Stockholders' equity




   Common stock

2


2

   Additional paid-in capital

2,301


2,134

   Accumulated other comprehensive loss

(7)


(7)

   Accumulated deficit

(792)


(1,339)

      Total stockholders' equity

1,504


790





      Total liabilities and stockholders' equity

$                12,066


$                 9,396

SOURCE US Airways



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