-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L9BkKgHvPqmJ+pZKnLrlaS7M0hbugoMzUK+8QcklqhlPsoTmmagxzK8RL3PCu4Xq JypoCcY1apgR/hZWIa4dwA== 0000950124-06-006137.txt : 20061026 0000950124-06-006137.hdr.sgml : 20061026 20061026080250 ACCESSION NUMBER: 0000950124-06-006137 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061026 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061026 DATE AS OF CHANGE: 20061026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICA WEST AIRLINES INC CENTRAL INDEX KEY: 0000706270 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 860418245 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12337 FILM NUMBER: 061164261 BUSINESS ADDRESS: STREET 1: 4000 E SKY HARBOR BLVD STREET 2: STE 2100 CITY: PHOENIX STATE: AZ ZIP: 85034 BUSINESS PHONE: 6026930800 MAIL ADDRESS: STREET 1: 4000 EAST SKY HARBOR BLVD STREET 2: STE 2100 CITY: PHOENIX STATE: AZ ZIP: 85034 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US AIRWAYS GROUP INC CENTRAL INDEX KEY: 0000701345 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 541194634 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08444 FILM NUMBER: 061164260 BUSINESS ADDRESS: STREET 1: 2345 CRYSTAL DR CITY: ARLINGTON STATE: VA ZIP: 22227 BUSINESS PHONE: 7038727000 MAIL ADDRESS: STREET 1: 2345 CRYSTAL DRIVE CITY: ARLINGTON STATE: VA ZIP: 22227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: US AIRWAYS INC CENTRAL INDEX KEY: 0000714560 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, SCHEDULED [4512] IRS NUMBER: 530218143 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08442 FILM NUMBER: 061164262 BUSINESS ADDRESS: STREET 1: 2345 CRYSTAL DRIVE CITY: ARLINGTON STATE: VA ZIP: 22227 BUSINESS PHONE: 7038725306 MAIL ADDRESS: STREET 1: 2345 CRYSTAL DRIVE CITY: ARLINGTON STATE: VA ZIP: 22227 8-K 1 p73045e8vk.htm 8-K e8vk
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2006
US AIRWAYS GROUP, INC.
(Exact name of registrant as specified in its charter)
         
Delaware   1-8444   54-1194634
(State of jurisdiction)   (Commission File No.)   (IRS Employer Identification No.)
111 West Rio Salado Parkway
Tempe, Arizona 85281
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (480) 693-0800
US AIRWAYS, INC.
(Exact name of registrant as specified in its charter)
         
Delaware   1-8442   53-0218143
(State of jurisdiction)   (Commission File No.)   (IRS Employer Identification No.)
111 West Rio Salado Parkway
Tempe, Arizona 85281
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (480) 693-0800
AMERICA WEST AIRLINES, INC.
(Exact name of registrant as specified in its charter)
         
Delaware   0-12337   86-0418245
(State of jurisdiction)   (Commission File No.)   (IRS Employer Identification No.)
4000 E. Sky Harbor Boulevard
Phoenix, Arizona 85034-3899
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (480) 693-0800
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


TABLE OF CONTENTS

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
SIGNATURES
EXHIBIT INDEX
EX-99.1


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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
      On October 26, 2006, US Airways Group, Inc. (the “Company”) announced via press release the Company’s results for the three and nine months ended September 30, 2006, provided an update to its financial and operational outlook for 2006, and conducted a publicly-available conference call discussing those results. A copy of the Company’s press release is furnished pursuant to Item 2.02 as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
  (c)   Exhibits.
         
Exhibit No.   Description
       
 
  99.1    
Press Release, dated October 26, 2006.

 


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SIGNATURES
      Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, US Airways Group, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  US Airways Group, Inc.
 
 
Dated: October 26, 2006  By:   /s/ Derek J. Kerr    
    Derek J. Kerr   
    Senior Vice President and Chief Financial Officer   
 
      Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, US Airways, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  US Airways, Inc.
 
 
Dated: October 26, 2006  By:   /s/ Derek J. Kerr    
    Derek J. Kerr   
    Senior Vice President and Chief Financial Officer   
 
      Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, America West Airlines, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  America West Airlines, Inc.
 
 
Dated: October 26, 2006  By:   /s/ Derek J. Kerr    
    Derek J. Kerr   
    Senior Vice President and Chief Financial Officer   
 

 


Table of Contents

EXHIBIT INDEX
         
Exhibit No.   Description
       
 
  99.1    
Press Release, dated October 26, 2006.

 

EX-99.1 2 p73045exv99w1.htm EX-99.1 exv99w1
 

(NEWS RELEASE)
Contact:  Elise Eberwein
480/693-5574
FOR IMMEDIATE RELEASE
US AIRWAYS GROUP, INC. REPORTS THIRD QUARTER RESULTS
Highlights of the new US Airways Group, Inc. third quarter 2006 results:
    The Company reported a third quarter 2006 net loss of $78 million or $0.88 per diluted share, which includes special items of $179 million.
 
    Excluding special items, the Company reported a third quarter 2006 net profit of $101 million or $1.09 per diluted share, which compares to First Call’s mean estimate of $1.01.
 
    The Company accrued $12 million, or 10 percent of its third quarter 2006 pretax income excluding special items, for its annual employee profit sharing program. This brings the year-to-date 2006 employee profit sharing program accrual to $48 million.
 
    The Company had $3.0 billion in total cash and investments, of which $2.3 billion was unrestricted, on Sept. 30, 2006.
TEMPE, Ariz., Oct. 26, 2006 — The new US Airways Group, Inc. (NYSE: LCC) today reported a third quarter 2006 net loss of $78 million or $0.88 per diluted share, which compares to a net loss of $99 million or $5.74 per diluted share for the same period last year. Excluding special items, the Company reported a third quarter 2006 net profit of $101 million or $1.09 per diluted share. First Call’s mean estimate for US Airways was $1.01. 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.
Results for the new US Airways Group’s third quarter 2006 are being compared to America West’s standalone results for third quarter 2005 due to the former US Airways Group and America West Holdings Corporation merger on Sept. 27, 2005. Although the merger was structured so that America West became a wholly owned subsidiary of the new US Airways Group, America West was treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141, “Business Combinations.” This is the last quarter of new US Airways Group comparison to America West’s standalone results as the Company’s merger between the former US Airways Group and former America West closed on Sept. 27, 2005.

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On a standalone basis, America West reported a net profit excluding special items of $3 million for the third quarter 2006 as compared to a net loss of $19 million for the same period last year, excluding special items. Including special items, America West posted a loss of $100 million for the third quarter 2006 as compared to a loss of $83 million during the same period in 2005.
US Airways reported a net profit excluding special items of $109 million on a standalone basis for the third quarter 2006 as compared to a net loss of $80 million, excluding special items, for the same period last year. Including special items, US Airways posted a profit of $38 million for the third quarter 2006 as compared to a profit of $584 million during the same period in 2005.
US Airways Group Chairman and CEO Doug Parker stated, “We are pleased to report our third consecutive profitable quarter excluding special items, especially given the new security regulations put into place in August, which we estimate negatively impacted revenue by $30 million to $40 million during August and September. Those security directives also caused a spike in checked baggage and our team worked particularly hard to take care of our customers.
“We are one year into our merger and these financial results are further evidence of its success. We still have much work to do, but our employees are doing a great job and we are confident that we are on the right course. We are particularly pleased to have accrued another $12 million for our employee profit sharing program, bringing our year-to-date accrual to $48 million.
“Looking forward, given our current fuel and revenue forecasts for the remainder of the year, we anticipate reporting a profit in the seasonally difficult fourth quarter.”
Revenue and Cost Comparisons
In spite of restrictions to carry-on luggage and subsequent declines in short haul business traffic as a result, the revenue environment remained strong during the third quarter 2006. For the America West standalone network, total (mainline and express) revenue per available seat mile (RASM) increased 13.1 percent during the third quarter 2006 to 10.51 cents. For the US Airways standalone network, total RASM increased 15.8 percent to 13.68 cents.
On a standalone basis, America West’s mainline operating costs per available seat mile (CASM) increased 17.4 percent from 9.78 cents for the third quarter of 2005 to 11.47 cents for the third quarter 2006, largely due to special items and an 18.4 percent increase in the price of fuel in the same period from $1.92 to $2.27 per gallon. Excluding fuel and special items, America West’s mainline CASM increased 3.9 percent from 6.48 cents for the third quarter 2005 to 6.73 cents for the third quarter 2006 on a 3.9 percent decrease in available seat miles (ASMs).
US Airways’ standalone mainline CASM for the third quarter 2006 increased 6.1 percent from 10.76 cents for the third quarter 2005 to 11.42 cents also largely due to higher fuel prices, which increased 20.4 percent versus the same period last year. On the US Airways’ standalone network, mainline CASM excluding fuel and special items

Page 2 of 5


 

decreased 0.4 percent in the same period to 7.63 cents for the third quarter 2006 on a 4.8 percent decrease in ASMs.
The cost of fuel remained high during the third quarter. The Company paid $179 million more for mainline and express combined fuel in this period than it would have paid had fuel prices remained at third quarter 2005 levels. With the recent decreases in the cost of fuel, the Company has reduced its projected fourth quarter 2006 fuel cost by approximately $90 million. The Company now anticipates paying $2.00 to $2.05 per gallon for fuel including taxes in the fourth quarter 2006, which includes the Company’s mainline hedge position of approximately 46 percent.
During the third quarter 2006, the recent declines in the cost of fuel resulted in an $88 million non-cash unrealized loss to reduce the book value of certain outstanding fuel hedge contracts as required by Statement of Financial Accounting Standard 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133). On a year-to-date basis, the Company has recognized a net unrealized loss of $44 million on its fuel hedging contracts. Overall the Company’s fuel hedging program has reduced fuel expense by more than $109 million since 2003. US Airways has continued its strategy of using costless collars to dampen the impact of volatile fuel prices.
Liquidity
As of Sept. 30, 2006, the Company had $3.0 billion in total cash and investments, of which $2.3 billion was unrestricted.
Third Quarter 2006 Special Items
The Company recognized $179 million of special items during its third quarter 2006, which included an $88 million non-cash charge to reduce the book value of certain outstanding fuel hedge contracts, $27 million of merger related transition expenses and a $5 million payment in connection with an inducement to the note holders to convert a portion of the Company’s seven percent Senior Convertible Notes to common stock. In addition, the Company used $59 million of net operating losses acquired from US Airways during the 2006 third quarter, which was recognized as a reduction in goodwill rather than a reduction in tax expense. As a result, the Company has a $59 million non-cash expense for income taxes for the quarter. 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.
Other Milestones and Integration Accomplishments
The Company made several leadership changes during the third quarter 2006, including naming Scott Kirby to the position of president. The Company also announced additional executive reassignments, which resulted in two fewer officer-level positions, effective Nov. 15, 2006, and a resulting decline in officer salary expense.
The Company continued its integration plans during the third quarter 2006, and accomplishments during the quarter include the following:

Page 3 of 5


 

    Combined ground operations at Dallas/Fort Worth International, Washington Dulles International Airports and Louis Armstrong New Orleans International Airport. Only Chicago O’Hare remains to be integrated.
 
    Amended an agreement with Republic Airline, which resulted in adding 30 86-seat EMB 175 aircraft to the US Airways Express fleet to be operated by Chautauqua Airlines.
 
    Restructured and increased the airline’s Airbus order to 15 A321 aircraft, which includes seven additional A321 aircraft and converts eight prior A319 and A320 aircraft to A321 aircraft.
 
    The airline has experienced a 21 percent increase in online revenue year-over-year from the new Web site in the third quarter 2006 — the first full quarter after conversion; in addition, new enrollments in Dividend Miles during the third quarter 2006 increased 13 percent over the third quarter 2005.
 
    Realigned the combined airline’s fare class structure to simplify and establish an identical fare hierarchy across all US Airways- and America West-operated flights.
 
    Continued to identify cities where fare reductions would stimulate traffic, including
    43 cities from Syracuse, N.Y.
 
    24 cities from Huntsville, Ala.
 
    16 cities from Washington National
 
    5 cities from New York LaGuardia
 
    4 cities from Charlotte, N.C.
 
    4 cities from Phoenix
 
    3 cities from Philadelphia
 
    3 cities from Boston
    As of Sept. 30, 2006, 41 percent of the former America West mainline fleet has been painted in the new US Airways livery.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 9 a.m. ET, which will be available to the public on a listen-only basis at www.usairways.com under 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. 27, 2006.
The airline will also update its investor relations guidance on its Web site (www.usairways.com). Information to 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 2006 and estimated capital spending for 2006.
About US Airways
US Airways and America West’s recent merger creates the fifth largest domestic airline employing nearly 35,000 aviation professionals. US Airways, US Airways Shuttle and US Airways Express operate approximately 3,800 flights per day and serve more than 230 communities in the U.S., Canada, Europe, the Caribbean and Latin America. US Airways is a member of Star Alliance, which provides connections for our customers to

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842 destinations in 152 countries worldwide. This press release and additional information on US Airways can be found at www.usairways.com. (LCCF)
Financial Tables to Follow
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 Sept. 30, 2006, which is available at www.usairways.com.

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US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(in millions except share and per share amounts)
(unaudited)
                                 
    3 Months Ended     3 Months Ended     9 Months Ended     9 Months Ended  
    September 30, 2006     September 30, 2005     September 30, 2006     September 30, 2005  
Operating revenues
                               
Mainline passenger
  $ 2,052     $ 704     $ 6,048     $ 1,939  
Express passenger
    703       155       2,095       388  
Cargo
    40       9       114       25  
Other
    173       61       514       157  
 
                       
Total operating revenues
    2,968       929       8,771       2,509  
 
                       
 
Operating expenses
                               
Aircraft fuel and related taxes
    719       252       1,943       611  
Loss (gain) on fuel hedging instruments, net:
                               
Realized
          (29 )     (12 )     (51 )
Unrealized
    88       (27 )     44       (73 )
Salaries and related costs
    529       193       1,574       542  
Express expenses
                               
Fuel
    210       56       585       132  
Other
    443       112       1,345       282  
Aircraft rent
    181       88       546       246  
Aircraft maintenance
    142       76       432       196  
Other rent and landing fees
    146       50       432       137  
Selling expenses
    120       48       348       129  
Special items, net
    27       84       18       85  
Depreciation and amortization
    42       16       132       39  
Other
    305       93       901       259  
 
                       
Total operating expenses
    2,952       1,012       8,288       2,534  
 
                       
Operating income (loss)
    16       (83 )     483       (25 )
 
                       
 
Nonoperating income (expenses)
                               
Interest income
    45       4       111       8  
Interest expense, net
    (74 )     (21 )     (221 )     (60 )
Other, net
    (4 )     1       (14 )     3  
 
                       
Nonoperating expenses, net
    (33 )     (16 )     (124 )     (49 )
 
                       
 
Income (loss) before income taxes and cumulative effect of change in accounting principle
    (17 )     (99 )     359       (74 )
Income tax provision
    61             68        
 
                       
 
Income (loss) before cumulative effect of change in accounting principle
    (78 )     (99 )     291       (74 )
 
                       
Cumulative effect of change in accounting principle
                1       (202 )
 
                       
 
Net income (loss)
  $ (78 )   $ (99 )   $ 292     $ (276 )
 
                       
Income (loss) per share before cumulative effect of change in accounting principle:
                               
Basic
  $ (0.88 )   $ (5.74 )   $ 3.41     $ (4.70 )
 
                       
Diluted
  $ (0.88 )   $ (5.74 )   $ 3.20     $ (4.70 )
 
                       
Net income (loss) per share:
                               
Basic
  $ (0.88 )   $ (5.74 )   $ 3.42     $ (17.54 )
 
                       
Diluted
  $ (0.88 )   $ (5.74 )   $ 3.21     $ (17.54 )
 
                       
Shares used for computation (in thousands):
                               
Basic
    88,212       17,262       85,286       15,737  
 
                       
Diluted
    88,212       17,262       94,474       15,737  
 
                       

 


 

US Airways Group, Inc.
Operating Statistics
                                 
    3 Months Ended     3 Months Ended     9 Months Ended     9 Months Ended  
    September 30, 2006     September 30, 2005     September 30, 2006     September 30, 2005  
Mainline
                               
Revenue passenger miles (in millions)
    15,950       6,716       46,054       18,773  
Available seat miles (ASM) (in millions)
    20,156       8,403       58,020       23,460  
Passenger load factor (percent)
    79.1       79.9       79.4       80.0  
Yield (cents)
    12.86       10.48       13.13       10.33  
Passenger revenue per ASM (cents)
    10.18       8.38       10.42       8.27  
 
                               
Passenger enplanements (in thousands)
    14,425       6,190       43,187       17,113  
Aircraft (end of period)
    357       393       357       393  
 
                               
Operating cost per ASM (cents)
    11.40       10.04       10.96       9.04  
Operating cost per ASM excluding special items (cents)
    10.83       9.28       10.85       8.92  
Operating cost per ASM excluding special items, aircraft fuel and realized gains on fuel hedging instruments, net (cents)
    7.26       6.63       7.52       6.53  
 
                               
Express
                               
Revenue passenger miles (in millions)
    2,774       992       8,123       2,566  
Available seat miles (in millions)
    3,851       1,383       11,280       3,589  
Passenger load factor (percent)
    72.0       71.7       72.0       71.5  
Passenger revenue per ASM (cents)
    18.26       11.21       18.57       10.81  
Operating cost per ASM (cents)
    16.95       12.15       17.12       11.54  
Operating cost per ASM excluding aircraft fuel (cents)
    11.52       8.10       11.93       7.86  
 
                               
TOTAL — Mainline & Express
                               
Revenue passenger miles (in millions)
    18,723       7,708       54,177       21,339  
Available seat miles (in millions)
    24,006       9,786       69,300       27,049  
Passenger load factor (percent)
    78.0       78.8       78.2       78.9  
Passenger revenue per ASM (cents)
    11.47       8.78       11.75       8.60  
Total revenue per ASM (cents)
    12.36       9.49       12.66       9.28  
Operating cost per ASM (cents)
    12.29       10.34       11.96       9.37  
 
***   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 Gains 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 gains or losses 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 Ended     3 Months Ended     9 Months Ended     9 Months Ended  
    September 30, 2006     September 30, 2005     September 30, 2006     September 30, 2005  
    (in millions)  
 
                               
Reconciliation of Income 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
  $ (78 )   $ (99 )   $ 291     $ (74 )
 
                               
Special items
                               
Unrealized (gains) losses on fuel hedging instruments, net (1)
    88       (27 )     44       (73 )
Non-cash tax provision from utilization of pre-acquisitions NOL (2)
    59             59        
Special items, net (3)
    27       84       18       85  
Other special charges (4)
    5       7       9       15  
 
                       
 
                               
Income (loss) before cumulative effect of change in accounting principle, as adjusted for special items
  $ 101     $ (35 )   $ 421     $ (47 )
 
                       
 
                               
Shares used for computation (in thousands):
                               
Basic
    88,212       17,262       85,286       15,737  
 
                       
Diluted
    95,307       17,262       94,474       15,737  
 
                       
 
                               
Income (loss) per share before cumulative effect of change in accounting principle, as adjusted for special items
                               
Basic
  $ 1.15     $ (2.01 )   $ 4.93     $ (3.03 )
 
                       
Diluted (8)
  $ 1.09     $ (2.01 )   $ 4.57     $ (3.03 )
 
                       
 
                               
Reconciliation of Income before Cumulative Effect of Change in Accounting Principle Excluding Special Items for America West Airlines, Inc.
                               
 
                               
Income (loss) before cumulative effect of change in accounting principle as reported
  $ (100 )   $ (83 )   $ 25     $ (56 )
 
                               
Special items:
                               
Unrealized (gains) losses on fuel hedging instruments, net (1)
    88       (27 )     44       (73 )
Special items, net (5)
    15       84       8       85  
Other special charges (10)
          7       4       15  
 
                       
 
                               
Income (loss) before cumulative effect of change in accounting principle, as adjusted for special items
  $ 3     $ (19 )   $ 81     $ (29 )
 
                       
 
                               
Reconciliation of Net Income (Loss) Excluding Special Items for US Airways, Inc.
                               
 
                               
Net income (loss) as reported
  $ 38     $ 584     $ 285     $ 280  
 
                               
Special items:
                               
Non-cash tax provision from utilization of pre-acquisitions NOL (2)
    59             59        
Special items, net (6)
    12             9        
Reorganization items, net (7)
          (664 )           (636 )
 
                       
 
                               
Net income (loss), as adjusted for special items
  $ 109     $ (80 )   $ 353     $ (356 )
 
                       

 


 

Reconciliation of GAAP Financial Information to Non-GAAP Financial Information and Operating Cost per ASM Excluding Special Items, Aircraft Fuel, Realized Gains on Fuel Hedging Instruments, Net — Mainline only
                                 
    3 Months Ended     3 Months Ended     9 Months Ended     9 Months Ended  
    September 30, 2006     September 30, 2005     September 30, 2006     September 30, 2005  
 
                               
Reconciliation of Operating Cost per ASM Excluding Special Items, Fuel, Realized Gains on Fuel Hedging Instruments, Net — Mainline only
                               
 
                               
US Airways Group, Inc.
                               
(in millions)
                               
 
                               
Total operating expenses
  $ 2,952     $ 1,012     $ 8,288     $ 2,534  
Less Express expenses:
                               
Fuel
    (210 )     (56 )     (585 )     (132 )
Other
    (443 )     (112 )     (1,345 )     (282 )
 
                       
Total mainline operating expenses
    2,299       844       6,358       2,120  
 
                               
Special items
                               
Unrealized (gains) losses on fuel hedging instruments, net (1)
    (88 )     27       (44 )     73  
Special items, net (3)
    (27 )     (84 )     (18 )     (85 )
Other special charges (9)
          (7 )           (15 )
 
                       
Mainline operating expenses, excluding special items
    2,184       780       6,296       2,093  
 
                               
Aircraft fuel
    (719 )     (252 )     (1,943 )     (611 )
Realized gains on fuel hedging instruments, net
          29       12       51  
 
                       
Mainline operating expenses, excluding special items, aircraft fuel and realized gains on fuel hedging instruments, net
  $ 1,465     $ 557     $ 4,365     $ 1,533  
 
                       
 
                               
(in cents)
                               
Mainline operating expenses per ASM
    11.40       10.04       10.96       9.04  
 
                               
Special items per ASM
                               
Unrealized (gains) losses on fuel hedging instruments, net (1)
    (0.44 )     0.32       (0.08 )     0.31  
Special items, net (3)
    (0.13 )     (1.00 )     (0.03 )     (0.36 )
Other special charges (9)
          (0.08 )           (0.06 )
 
                       
Mainline operating expenses per ASM, excluding special items
    10.83       9.28       10.85       8.92  
 
                               
Aircraft fuel
    (3.57 )     (3.00 )     (3.35 )     (2.60 )
Realized gains on fuel hedging instruments, net
          0.35       0.02       0.22  
 
                       
Mainline operating expenses per ASM, excluding special items, aircraft fuel and realized gains on fuel hedging instruments, net
    7.26       6.63       7.52       6.53  
 
                       

 


 

Reconciliation of GAAP Financial Information to Non-GAAP Financial Information and Operating Cost per ASM Excluding Special Items, Aircraft Fuel, Realized Gains on Fuel Hedging Instruments, Net — Mainline only
                                 
    3 Months Ended     3 Months Ended     9 Months Ended     9 Months Ended  
    September 30, 2006     September 30, 2005     September 30, 2006     September 30, 2005  
 
                               
America West Airlines Inc.                                  
(in millions)
                               
 
                               
Total operating expenses
  $ 1,028     $ 918     $ 2,727     $ 2,438  
Less Express expenses:
                               
Fuel
    (60 )     (53 )     (163 )     (129 )
Other
    (100 )     (96 )     (301 )     (266 )
 
                       
Total mainline operating expenses
    868       769       2,263       2,043  
 
                               
Special items:
                               
Unrealized (gains) losses on fuel hedging instruments, net (1)
    (88 )     27       (44 )     73  
Special items, net (5)
    (15 )     (84 )     (8 )     (85 )
Other special charges (9)
          (7 )           (15 )
 
                       
Mainline operating expenses, excluding special items
    765       705       2,211       2,016  
 
                               
Aircraft fuel
    (256 )     (224 )     (703 )     (584 )
Realized gains on fuel hedging instruments, net
          29       12       51  
 
                       
Mainline operating expenses, excluding special items, aircraft fuel and realized gains on fuel hedging instruments, net
  $ 509     $ 510     $ 1,520     $ 1,483  
 
                       
 
                               
(in cents)
                               
Mainline Operating expenses per ASM
    11.47       9.78       10.13       8.91  
 
                               
Special items per ASM:
                               
Unrealized (gains) losses on fuel hedging instruments, net (1)
    (1.17 )     0.35       (0.20 )     0.32  
Special items, net (5)
    (0.19 )     (1.07 )     (0.04 )     (0.37 )
Other special charges (9)
          (0.09 )           (0.07 )
 
                       
Mainline operating expenses per ASM, excluding special items
    10.11       8.96       9.89       8.79  
 
                               
Aircraft fuel
    (3.38 )     (2.84 )     (3.15 )     (2.55 )
Realized gains on fuel hedging instruments, net
    (0.01 )     0.37       0.05       0.22  
 
                       
Mainline operating expenses per ASM, excluding special items, aircraft fuel and realized gains on fuel hedging instruments, net
    6.73       6.48       6.80       6.47  
 
                       
 
                               
US Airways, Inc.
                               
(in millions)
                               
 
                               
Total operating expenses
  $ 1,960     $ 1,900     $ 5,665     $ 5,594  
Less: Express expenses
    (523 )     (477 )     (1,556 )     (1,372 )
 
                       
Total mainline operating expenses
    1,437       1,423       4,109       4,222  
 
                               
Special items:
                               
Special items, net (6)
    (12 )           (9 )      
 
                       
Mainline operating expenses, excluding special items
    1,425       1,423       4,100       4,222  
 
                               
Aircraft fuel
    (464 )     (409 )     (1,239 )     (1,111 )
 
                       
 
                               
Mainline operating expenses, excluding special items and aircraft fuel
  $ 961     $ 1,014     $ 2,861     $ 3,111  
 
                       
 
                               
(in cents)
                               
Mainline operating expenses per ASM (excluding Express expenses)
    11.42       10.76       11.52       10.50  
 
                               
Special items per ASM:
                               
Special items, net (6)
    (0.10 )           (0.03 )      
 
                       
 
                               
Mainline operating expenses per ASM, excluding special items
    11.32       10.76       11.49       10.50  
 
                               
Aircraft fuel
    (3.69 )     (3.09 )     (3.47 )     (2.76 )
 
                       
 
                               
Mainline operating expenses per ASM excluding special items and aircraft fuel
    7.63       7.67       8.02       7.73  
 
                       
 
                               
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 Gains on Fuel Hedging Instruments, Net — Mainline only
FOOTNOTES:
1) The 2006 third quarter and the 2006 nine-month period include an $88 million and $44 million unrealized loss respectively, and the 2005 third quarter and the 2005 nine month period include a $27 million and $73 million unrealized gain respectively, resulting from mark-to-market accounting for changes in the fair value of AWA’s fuel hedging instruments.
2) For the three and nine months September 30, 2006 the Company utilized $59 million of NOL acquired from US Airways which was recognized as a reduction in goodwill rather then a reduction in tax expense. As a result, US Airways has a $59 million noncash expense for income taxes.
3) The 2006 third quarter period 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. The 2005 third quarter period includes a $57 million charge related to the restructuring of an agreement with Airbus and a $27 million loss on the sale-leaseback of 8 aircraft. The 2005 nine month period includes a $57 million charge related to the restructuring of an agreement with Airbus, a $27 million loss on the sale-leaseback of 8 aircraft and a $1 million charge related to aircraft removed from service.
4) The 2006 third quarter includes a $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 $5 million write-off of debt issue costs incurred with the extinguishment of debt in connection with the $1.25 billion debt refinancing in the first quarter of 2006, a $5 million payment in connection with the 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. The 2005 third quarter includes a $7 million loss related to the early return of 10 aircraft in connection with the GE Memorandum of Understanding (MOU). The 2005 nine month period includes a $8 million loss on the sale and leaseback of two new Airbus A320 aircraft acquired during the period as well as a $7 million fee related to the early return of 10 aircraft in connection to the GE MOU.
5) The 2006 third quarter period includes $15 million of merger related transition expenses. The 2006 nine month period includes $51 million gain associated with the return of equipment deposits upon forgiveness of a loan, offset by $59 million of merger related transition expenses. The 2005 third quarter period includes a $27 million loss on the sale-leaseback of 8 aircraft and a $57 million charge related to the restructuring of an agreement with Airbus. The 2005 nine month period includes a $27 million loss related on the sale-leaseback of 8 aircraft and a $57 million charge related to the restructuring of an agreement with Airbus and a $1 million charge related to aircraft removed from service.
6) The 2006 third quarter includes $12 million of merger related transition expenses, and the 2006 nine month period includes a $40 million gain associated with the return of equipment deposits upon forgiveness of a loan, offset by $49 million of merger related transition expenses.
7) During the 2005 third quarter and 2005 nine month period, US Airways recognized $664 million and $636 million, respectively, in reorganization items incurred as a result of its Chapter 11 filing.
8) 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.
9) The third quarter of 2005 includes a $7 million loss related to the early return of 10 aircraft in connection with the GE Memorandum of Understanding (MOU). The 2005 nine month period includes a $8 million loss on the sale-leaseback of two new Airbus A320 aircraft acquired during the period as well as a $7 million fee related to the early return of 10 aircraft in connection with the GE MOU.
10) The 2006 nine month period includes $6 million of prepayment penalties and a $5 million write-off of debt issue costs incurred with the extinguishment of debt in connection with the $1.25 billion debt refinancing in the first quarter of 2006 less $7 million of interest income earned by AWA on certain prior year Federal income tax refunds. The 2005 third quarter includes a $7 million loss related to the early return of 10 aircraft in connection with the GE Memorandum of Understanding (MOU). The 2005 nine month period includes a $8 million loss on the sale-leaseback of two new Airbus A320 aircraft acquired during the period as well as a $7 million fee related to the early return of 10 aircraft in connection with the GE MOU.

 


 

America West Airlines, Inc.
Consolidated Statements of Operations
(in millions)
(unaudited)
                                                 
    3 Months Ended     3 Months Ended     Percent     9 Months Ended     9 Months Ended     Percent  
    September 30, 2006     September 30, 2005     Change     September 30. 2006     September 30. 2005     Change  
Operating revenues
                                               
Mainline passenger
  $ 704     $ 653       7.8     $ 2,103     $ 1,887       11.4  
Express passenger
    165       135       22.3       502       367       36.7  
Cargo
    8       7       7.3       24       24       (1.0 )
Other
    45       54       (16.1 )     135       151       (10.1 )
 
                                       
Total operating revenues
    922       849       8.6       2,764       2,429       13.8  
 
                                       
 
Operating expenses
                                               
Aircraft fuel and related taxes
    256       224       14.1       703       584       20.5  
Loss (gain) on fuel hedging instruments, net:
                                               
Realized
          (29 )   nm     (12 )     (51 )     (77.3 )
Unrealized
    88       (27 )   nm     44       (73 )   nm
Salaries and related costs
    181       178       1.9       547       526       3.9  
Express expenses
                                               
Fuel
    60       53       14.8       163       129       26.1  
Other
    100       96       4.2       301       266       13.2  
Aircraft rent
    85       83       1.7       256       241       6.3  
Aircraft maintenance
    64       72       (11.5 )     188       192       (1.7 )
Other rent and landing fees
    38       45       (15.7 )     128       132       (3.3 )
Selling expenses
    40       45       (11.8 )     121       126       (3.6 )
Special items, net
    15       84       (82.6 )     8       85       (90.8 )
Depreciation and amortization
    12       14       (12.4 )     33       37       (10.5 )
Other
    89       80       11.9       247       244       0.6  
 
                                       
Total operating expenses
    1,028       918       12.0       2,727       2,438       11.9  
 
                                       
Operating income (loss)
    (106 )     (69 )     53.6       37       (9 )   nm
 
                                       
 
Nonoperating income (expenses)
                                               
Interest income
    17       5     nm     50       12     nm
Interest expense, net
    (10 )     (20 )     (50.7 )     (47 )     (62 )     (23.9 )
Other, net
          1       (79.0 )     (10 )     3     nm
 
                                       
Nonoperating income (expenses), net
    7       (14 )   nm     (7 )     (47 )     (85.1 )
 
                                       
 
Income (loss) before income taxes and cumulative effect of change of accounting principle
    (99 )     (83 )     18.9       30       (56 )   nm
Income tax provision
    1           nm     5           nm
 
                                       
 
Income (loss) before cumulative effect of change in accounting principle
    (100 )     (83 )     20.1       25       (56 )   nm
 
Cumulative effect of change in accounting principle
              nm     1       (202 )   nm
 
                                       
 
Net income (loss)
  $ (100 )   $ (83 )     20.1     $ 26     $ (258 )   nm
 
                                       

 


 

America West Airlines, Inc.
Operating Statistics
                                                 
    3 Months Ended     3 Months Ended     Percent     9 Months Ended     9 Months Ended     Percent  
    September 30, 2006     September 30, 2005     Change     September 30, 2006     September 30, 2005     Change  
Mainline
                                               
Revenue passenger miles (in millions)
    6,041       6,333       -4.6 %     17,939       18,390       -2.5 %
Available seat miles (ASM) (in millions)
    7,567       7,875       -3.9 %     22,347       22,932       -2.6 %
Passenger load factor (percent)
    79.8       80.4       -0.6 pts     80.3       80.2       0.1 pts
Yield (cents)
    11.65       10.31       13.0 %     11.72       10.26       14.3 %
Passenger revenue per ASM (cents)
    9.30       8.29       12.2 %     9.41       8.23       14.4 %
Passenger enplanements (in thousands)
    5,463       5,802       -5.8 %     16,099       16,725       -3.7 %
Aircraft (end of period)
    133       142       -6.3 %     133       142       -6.3 %
Block hours
    139,691       144,332       -3.2 %     412,844       424,194       -2.7 %
Average stage length (miles)
    1,024       1,030       -0.6 %     1,030       1,030       0.0 %
Average passenger journey (miles)
    1,619       1,733       -6.6 %     1,548       1,680       -7.8 %
Fuel consumption (gallons in millions)
    112.7       117.0       -3.6 %     329.0       338.6       -2.8 %
Average fuel price (dollars per gallon)
    2.27       1.92       18.4 %     2.14       1.72       24.0 %
Average fuel price including realized gains on fuel hedging instruments, net (dollars)
    2.27       1.67       35.9 %     2.10       1.57       33.7 %
Full-time equivalent employees (end of period)
    12,365       11,769       5.1 %     12,365       11,769       5.1 %
Operating cost per ASM (cents)
    11.47       9.78       17.4 %     10.13       8.91       13.7 %
Operating cost per ASM excluding special items (cents)
    10.11       8.96       12.9 %     9.89       8.79       12.6 %
Operating cost per ASM excluding special items, fuel and realized gains on fuel hedging instruments, net (cents)
    6.73       6.48       3.9 %     6.80       6.47       5.1 %
 
                                               
Express
                                               
Revenue passenger miles (in millions)
    907       919       -1.3 %     2,717       2,493       9.0 %
Available seat miles (in millions)
    1,205       1,261       -4.4 %     3,581       3,467       3.3 %
Passenger load factor (percent)
    75.3       72.9       2.4 pts     75.9       71.9       4.0 pts
Passenger revenue per ASM (cents)
    13.66       10.67       28.0 %     14.02       10.60       32.3 %
Passenger enplanements (in thousands)
    1,727       1,531       12.8 %     5,198       4,199       23.8 %
Operating cost per ASM (cents)
    13.30       11.77       13.0 %     12.97       11.41       13.7 %
 
                                               
Total
                                               
Revenue passenger miles (in millions)
    6,947       7,252       -4.2 %     20,656       20,883       -1.1 %
Available seat miles (in millions)
    8,772       9,137       -4.0 %     25,928       26,399       -1.8 %
Passenger load factor (percent)
    79.2       79.4       (0.2 )pts     79.7       79.1       0.6 pts
Total revenue per ASM (cents)
    10.51       9.29       13.1 %     10.66       9.20       15.9 %
Passenger enplanements (in thousands)
    7,190       7,333       -2.0 %     21,298       20,925       1.8 %
Operating cost per ASM (cents)
    11.72       10.05       16.6 %     10.52       9.23       13.9 %

 


 

US Airways, Inc.
Statements of Operations
(in millions)
(unaudited)
                                                 
    Successor Company     Predecessor Company             Successor Company     Predecessor Company        
    3 Months Ended     3 Months Ended     Percent     9 Months Ended     9 Months Ended     Percent  
    September 30, 2006     September 30, 2005     Change     September 30, 2006     September 30, 2005     Change  
Operating revenues
                                               
Mainline passenger
  $ 1,348     $ 1,273       5.9     $ 3,945     $ 3,737       5.6  
Express passenger
    538       430       25.1       1,593       1,182       34.8  
Cargo
    32       24       33.3       90       68       32.4  
Other
    166       154       7.8       484       465       4.1  
 
                                       
Total operating revenues
    2,084       1,881       10.8       6,112       5,452       12.1  
 
                                       
 
                                               
Operating expenses
                                               
Aircraft fuel and related taxes
    464       409       13.4       1,239       1,111       11.5  
Salaries and related costs
    347       332       4.5       1,027       1,073       (4.3 )
Express expenses
    523       477       9.6       1,556       1,372       13.4  
Aircraft rent
    96       98       (2.0 )     290       293       (1.0 )
Aircraft maintenance
    78       90       (13.3 )     244       253       (3.6 )
Other rent and landing fees
    108       104       3.8       304       319       (4.7 )
Selling expenses
    81       78       3.8       227       258       (12.0 )
Special items, net
    12           nm     9           nm
Depreciation and amortization
    32       46       (30.4 )     105       152       (30.9 )
Other
    219       266       (17.7 )     664       763       (13.0 )
 
                                       
Total operating expenses
    1,960       1,900       3.2       5,665       5,594       1.3  
 
                                       
Operating income (loss)
    124       (19 )   nm     447       (142 )   nm
 
                                       
 
                                               
Nonoperating income (expenses)
                                               
Interest income
    27       6     nm     61       15     nm
Interest expense, net
    (55 )     (66 )     (16.7 )     (162 )     (222 )     (27.0 )
Reorganization items, net
          664     nm           636     nm
Other, net
    2       (1 )   nm     1       (9 )   nm
 
                                       
Nonoperating income (expenses), net
    (26 )     603     nm     (100 )     420     nm
 
                                       
 
Income before income taxes
    98       584       (83.2 )     347       278       24.8  
Income tax provision (benefit)
    60           nm     62       (2 )   nm
 
                                       
 
Net income
  $ 38     $ 584       (93.5 )   $ 285     $ 280       1.8  
 
                                       

 


 

US Airways, Inc.
Operating Statistics
                                                 
    3 Months Ended     3 Months Ended     Percent     9 months Ended     9 months Ended     Percent  
    September 30, 2006     September 30, 2005     Change     September 30, 2006     September 30, 2005     Change  
Mainline
                                                 
Revenue passenger miles (in millions)
    9,909       10,255       -3.4 %     28,116       30,629       -8.2 %
Available seat miles (ASM) (in millions)
    12,589       13,225       -4.8 %     35,674       40,228       -11.3 %  
Passenger load factor (percent)
    78.7       77.5       1.2  pts   78.8       76.1       2.7  pts
Yield (cents)
    13.60       12.41       9.6 %     14.03       12.20       15.0 %  
Passenger revenue per ASM (cents)
    10.71       9.63       11.2 %     11.06       9.29       19.0 %
 
                                               
Passenger enplanements (in thousands)
    8,962       10,110       -11.4 %     27,088       31,465       -13.9 %  
Aircraft (end of period)
    224       251       -10.8 %     224       251       -10.8 %
Block hours
    212,625       232,797       -8.7 %     612,279       730,298       -16.2 %  
Average stage length (miles)
    915       802       14.1 %     875       793       10.4 %
Average passenger journey (miles)
    1,106       1,014       9.0 %     1,038       973       6.6 %  
Fuel consumption (gallons in millions)
    205.7       218.6       -5.9 %     583.5       663.2       -12.0 %
Average fuel price (dollars per gallon) with related taxes
    2.25       1.87       20.4 %     2.12       1.68       26.8 %  
Full-time equivalent employees (end of period)
    19,180       20,663       -7.2 %     19,180       20,663       -7.2 %
 
                                               
Operating cost per ASM (cents)
    11.42       10.76       6.1 %     11.52       10.50       9.7 %  
Operating cost per ASM excluding special items (cents)
    11.32       10.76       5.2 %     11.49       10.50       9.5 %
Operating cost per ASM excluding special items and fuel (cents)
    7.63       7.67       -0.4 %     8.02       7.73       3.7 %  
 
                                               
Express
                                               
Revenue passenger miles (in millions)
    1,867       1,744       7.1 %     5,406       4,949       9.2 %  
Available seat miles (in millions)
    2,646       2,694       -1.8 %     7,699       7,708       -0.1 %
Passenger load factor (percent)
    70.6       64.7       5.8  pts   70.2       64.2       6.0  pts
Passenger revenue per ASM (cents)
    20.33       15.96       27.4 %     20.69       15.33       34.9 %
Passenger enplanements (in thousands)
    4,991       4,268       16.9 %     14,499       12,323       17.7    
Operating cost per ASM (cents)
    19.77       17.71       11.6 %     20.21       17.80       13.5 %
 
                                               
TOTAL — Mainline & Express
                                                 
Revenue passenger miles (in millions)
    11,776       11,999       -1.9 %     33,521       35,578       -5.8 %
Available seat miles (in millions)
    15,234       15,919       -4.3 %     43,372       47,936       -9.5 %  
Passenger load factor (percent)
    77.3       75.4       1.9  pts   77.3       74.2       3.1  pts
Total revenue per ASM (cents)
    13.68       11.82       15.8 %     14.09       11.37       23.9 %  
Operating cost per ASM (cents)
    12.87       11.94       7.8 %     13.06       11.67       11.9 %


 

US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
                 
    September 30, 2006     December 31, 2005  
Assets
               
 
               
Current assets
               
Cash equivalents and short-term investments
    2,316       1,577  
Restricted cash
    1       8  
Accounts receivable, net
    394       353  
Materials and supplies, net
    231       229  
Prepaid expenses and other
    469       392  
 
           
Total current assets
    3,411       2,559  
 
               
Property and equipment, net
               
Flight equipment
    1,982       1,920  
Ground property and equipment
    570       532  
Less accumulated depreciation and amortization
    (537 )     (431 )
 
           
 
    2,015       2,021  
Equipment purchase deposits
    48       43  
 
           
Total property and equipment
    2,063       2,064  
 
               
Other assets
               
Goodwill
    655       732  
Other intangibles, net
    560       583  
Restricted cash
    637       792  
Other assets
    250       234  
 
           
Total other assets
    2,102       2,341  
 
               
Total assets
  $ 7,576     $ 6,964  
 
           
 
               
Liabilities and Stockholders’ Equity
               
 
               
Current liabilities
               
Current maturities of debt and capital leases
  $ 91     $ 211  
Accounts payable
    543       457  
Air traffic liability
    875       788  
Accrued compensation and vacation
    217       210  
Accrued taxes
    165       146  
Other accrued expenses
    854       847  
 
           
Total current liabilities
    2,745       2,659  
 
               
Noncurrent liabilities and deferred credits
               
Long-term debt and capital leases, net of current maturities
    2,879       2,749  
Deferred gains and credits
    217       254  
Employment benefit liabilities and other
    843       882  
 
           
Total noncurrent liabilities and deferred credits
    3,939       3,885  
 
               
Stockholders’ equity
               
Preferred stock
           
Common stock
    1       1  
Additional paid-in capital
    1,438       1,258  
Accumulated deficit
    (534 )     (839 )
Treasury stock
    (13 )      
 
           
Total stockholders’ equity
    892       420  
 
               
Total liabilities and stockholders’ equity
  $ 7,576     $ 6,964  
 
           

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-----END PRIVACY-ENHANCED MESSAGE-----