Highlights of the new US Airways Group, Inc. (the Company) fourth quarter and full year 2006 results
- The Company reported a fourth quarter 2006 net profit of $12 million,
or $0.13 per diluted share, which includes special items of
$74 million. Excluding special items, the Company reported a fourth
quarter 2006 net profit of $86 million or $0.91 per diluted share.
- The Company reported a full year 2006 net profit before cumulative
effect of change in accounting principle of $303 million, or $3.32 per
diluted share, which includes special items of $204 million. Excluding
special items, the Company reported a net profit before cumulative
effect of change in accounting principle of $507 million, or $5.47 per
diluted share.
- The Company accrued $11 million for its annual employee profit sharing
program, bringing the full year 2006 employee profit sharing program
accrual to $59 million.
- The Company had $3.0 billion in total cash and investments, of which
$2.4 billion was unrestricted, on Dec. 31, 2006.
TEMPE, Ariz., Jan. 30 /PRNewswire-FirstCall/ — The new US Airways Group, Inc. (NYSE: LCC) today reported its fourth quarter and 2006 results. Net profit for the fourth quarter was $12 million, or $0.13 per share compared to a net loss of $261 million, or $3.27 per share for the same period last year. Excluding special items of $74 million, the Company reported a net profit of $86 million, or $0.91 per diluted share, compared to a net loss of $138 million, or $1.73 per share in the fourth quarter of 2005.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
The fourth quarter 2006 is the first full quarter where the Company’s results for both periods reflect consolidated results for the new US Airways Group. Because the merger of US Airways and America West occurred on Sept. 27, 2005, the results for the full year 2006 are being compared to 2005 results, which consist of 269 days of America West results, and 96 days of consolidated US Airways Group’s results. 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.“
For the full year 2006, the Company reported a net profit before cumulative effect of change in accounting principle of $303 million, or $3.32 per diluted share, which compares to a net loss before cumulative effect of change in accounting principle of $335 million, or $10.65 per share for the full year 2005. Excluding special items of $204 million, the Company reported a net profit before cumulative effect of change in accounting principle of $507 million, or $5.47 per diluted share compared to a net loss before cumulative effect of change in accounting principle of $188 million, or $6.00 per share for the same period last year. 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.
Chairman and CEO Doug Parker stated, „We are extremely pleased to report our fourth quarter earnings, and couldn’t be more proud of our 35,000 employees who will share in these positive results through our profit sharing plan. 2006 marks the first full year of operating and financial results for the new US Airways, and our team has done a remarkable job of integrating our two airlines while taking care of the more than 41 million customers who flew US Airways last year. Few people would have believed, at the time of our merger, that the new US Airways would be the most profitable network airline in 2006. Fortunately, our team believed and we thank them for their great work.
„Looking forward, we anticipate reporting even better results in 2007 with even higher profit sharing payments. This will provide our employees with job stability and the opportunity to share in the financial success of the Company and our customers with the choice and value they deserve,“ continued Parker.
Revenue and Cost Comparisons
The revenue environment during the fourth quarter 2006 remained robust for both mainline and Express operations. Mainline passenger revenue per available seat mile (PRASM) was 10.12 cents, up 8.6 percent over the same period last year. Express PRASM was 17.60 cents, up 14.8 percent over the fourth quarter 2005. On a consolidated basis, PRASM for US Airways Group was 11.33 cents, up 9.7 percent compared to the fourth quarter 2005.
„Although fuel prices have come down significantly from the historically high levels we saw throughout the year, fuel still remains our largest operating expense. If fuel prices had remained at 2005 levels, our total fuel expense would have been $467 million lower for the year,“ said Chief Financial Officer Derek Kerr.
Total operating cost per available seat mile (CASM) for US Airways Group for the quarter was 11.97 cents, down 1.5 percent on reduced capacity of 0.1 percent. Consolidated mainline operating CASM was 10.98 cents, down 1.3 percent compared to the fourth quarter 2005. Excluding fuel, special items, and merger related transition expenses, mainline CASM was 7.64 cents, up 2.8 percent from the same period last year.
Liquidity
As of Dec. 31, 2006, the Company had $3.0 billion in total cash and investments, of which $2.4 billion was unrestricted.
Fourth Quarter Special Items
During its fourth quarter, the Company recognized $74 million of special items, which included a $26 million non-cash charge for unrealized net losses associated with the change in fair value of the Company’s outstanding fuel hedge contracts, $10 million of net merger-related transition expenses and a $12 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, during the fourth quarter, the Company used $26 million of net operating losses acquired from US Airways, which was recognized as a reduction in goodwill rather than a reduction in tax expense. As a result, the Company has a $26 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.
Integration Update
Fourth quarter 2006 accomplishments include:
Operations
* Paid a one-time special $50 bonus to employees, which totaled
approximately $1.8 million, for the airline's operational performance
during the Thanksgiving holiday travel period.
* Finished the month of November with a year-to-date on time performance
of 77.4 percent, ranking US Airways second of the ten largest carriers
as measured by the Department of Transportation.
* The Company achieved significant operational improvements at its
Philadelphia hub. Specifically, customer complaints are down over
30 percent from 2005 levels. In addition, mishandled baggage per
1,000 enplanements is down nearly 15 percent year-over-year, with over
95 percent of all local in-bound baggage now delivered to the baggage
carousel in 19.1 minutes on average.
Marketing
* Continued reducing fares to more cities including Wilmington, N.C.,
Augusta Ga. and Huntington W.Va. In total the new US Airways has
reduced fares in more than 1,100 markets.
* Began testing the combined SHARES reservations system at both Tempe,
Ariz. and Winston-Salem, N.C. reservations locations, which will help
move the airline to a combined reservations system scheduled to occur
in the first half of 2007.
Labor
* Reached a final labor agreement, including transition items, with the
Transport Workers Union (TWU), representing about 150 dispatchers.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 11 a.m. EST, 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 Feb. 28, 2007.
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 2007 and estimated capital spending for 2007.
About US Airways
US Airways is the fifth largest domestic airline employing nearly 35,000 aviation professionals worldwide. 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. The new US Airways — the product of a merger between America West and US Airways in September 2005 — is a member of the Star Alliance, which provides connections for our customers to 841 destinations in 157 countries worldwide. This press release and additional information on US Airways can be found at www.usairways.com. (LCCF)
Forward Looking Statements
Certain of the statements contained herein should be considered „forward-looking statements“ within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as „may,“ „will,“ „expect,“ „intend,“ „indicate,“ „anticipate,“ „believe,“ „forecast,“ „estimate,“ „plan,“ „guidance,“ „outlook,“ „could,“ „should,“ „continue“ and similar terms used in connection with statements regarding the outlook of US Airways Group, Inc. (the „Company“). Such statements include, but are not limited to, statements about expected fuel costs, the revenue and pricing environment, the Company’s expected financial performance and operations, future financing plans and needs, overall economic conditions and the benefits of the business combination transaction involving America West Holdings Corporation and US Airways Group, including future financial and operating results and the combined companies‘ plans, objectives, expectations and intentions. Other forward-looking statements that do not relate solely to historical facts include, without limitation, statements that discuss the possible future effects of current known trends or uncertainties or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties that could cause the Company’s actual results and financial position to differ materially from the Company’s expectations. Such risks and uncertainties include, but are not limited to, the following: the impact of high fuel costs, significant disruptions in the supply of aircraft fuel and further significant increases to fuel prices; our high level of fixed obligations and our ability to obtain and maintain financing for operations and other purposes; our ability to achieve the synergies anticipated as a result of the merger and to achieve those synergies in a timely manner; our ability to integrate the management, operations and labor groups of US Airways Group and America West Holdings; labor costs and relations with unionized employees generally and the impact and outcome of labor negotiations; the impact of global instability, including the current instability in the Middle East, the continuing impact of the military presence in Iraq and Afghanistan and the terrorist attacks of September 11, 2001 and the potential impact of future hostilities, terrorist attacks, infectious disease outbreaks or other global events that affect travel behavior; reliance on automated systems and the impact of any failure or disruption of these systems; the impact of future significant operating losses; changes in prevailing interest rates; our ability to obtain and maintain commercially reasonable terms with vendors and service providers and our reliance on those vendors and service providers; security-related and insurance costs; changes in government legislation and regulation; our ability to use pre-merger NOLs and certain other tax attributes; competitive practices in the industry, including significant fare restructuring activities, capacity reductions and in court or out of court restructuring by major airlines; continued existence of prepetition liabilities; interruptions or disruptions in service at one or more of our hub airports; weather conditions; our ability to obtain and maintain any necessary financing for operations and other purposes; our ability to maintain adequate liquidity; our ability to maintain contracts that are critical to our operations; our ability to operate pursuant to the terms of our financing facilities (particularly the financial covenants); our ability to attract and retain customers; the cyclical nature of the airline industry; our ability to attract and retain qualified personnel; economic conditions; and other risks and uncertainties listed from time to time in our reports to the Securities and Exchange Commission. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. All forward-looking statements are based on information currently available to the Company. The Company assumes no obligation to publicly update or revise any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates. Additional factors that may affect the future results of the Company are set forth in the section entitled „Risk Factors“ in the Company’s Quarterly Report on Form 10-Q for the period ended Sept. 30, 2006, which is available at www.usairways.com.
Financial Tables to Follow
US Airways Group, Inc.
Condensed Consolidated Statements of Operations
(in millions except share and per share amounts)
(unaudited)
3 Months 3 Months 12 Months 12 Months
Ended Ended Ended Ended
Dec. 31, Dec. 31, Percent Dec. 31, Dec. 31,
2006 2005 Change 2006 2005
Operating revenues
Mainline passenger $1,918 $1,757 9.2 $7,966 $3,695
Express passenger 650 584 11.3 2,744 976
Cargo 39 33 18.2 153 58
Other 179 187 (4.3) 694 340
Total operating
revenues 2,786 2,561 8.8 11,557 5,069
Operating expenses
Aircraft fuel and
related taxes 575 603 (4.6) 2,518 1,214
Loss (gain) on fuel
hedging instruments,
net:
Realized 20 (20) nm 9 (71)
Unrealized 26 69 (62.3) 70 (4)
Salaries and related
costs 516 505 2.2 2,090 1,046
Express expenses:
Fuel 179 193 (7.3) 764 327
Other 451 463 (2.6) 1,795 746
Aircraft rent 186 182 2.2 732 429
Aircraft maintenance 150 153 (2.0) 582 349
Other rent and landing
fees 136 147 (7.5) 568 281
Selling expenses 99 103 (3.9) 446 232
Special items, net 10 36 (72.2) 27 121
Depreciation and
amortization 43 49 (12.2) 175 88
Other 320 270 18.5 1,223 528
Total operating
expenses 2,711 2,753 (1.5) 10,999 5,286
Operating income (loss) 75 (192) nm 558 (217)
Nonoperating income
(expenses)
Interest income 42 22 90.9 153 30
Interest expense, net (73) (87) (16.1) (295) (147)
Other, net 1 (4) nm (12) (1)
Nonoperating expenses,
net (30) (69) (56.5) (154) (118)
Income (loss) before income
taxes and cumulative effect
of change in accounting
principle 45 (261) nm 404 (335)
Income tax provision 33 -- nm 101 --
Income (loss) before
cumulative effect of change
in accounting principle 12 (261) nm 303 (335)
Cumulative effect of change
in accounting principle -- -- nm 1 (202)
Net income (loss) $12 $(261) nm $304 $(537)
Income (loss) per share
before cumulative effect
of change in accounting
principle:
Basic $0.13 $(3.27) $3.50 $(10.65)
Diluted $0.13 $(3.27) $3.32 $(10.65)
Net income (loss) per
share:
Basic $0.13 $(3.27) $3.51 $(17.06)
Diluted $0.13 $(3.27) $3.33 $(17.06)
Shares used for
computation
(in thousands):
Basic 89,892 80,145 86,447 31,488
Diluted 91,872 80,145 93,821 31,488
US Airways Group, Inc.
Operating Statistics
3 Months 3 Months 12 Months
Ended Ended Ended
Dec. 31, Dec. 31, Percent Dec. 31,
2006 2005 Change 2006**
Mainline
Revenue passenger miles (in
millions) 14,630 14,136 3.5% 60,689
Available seat miles (ASM)
(in millions) 18,963 18,861 0.5% 76,983
Passenger load factor
(percent) 77.2 74.9 2.2 pts 78.8
Yield (cents) 13.11 12.43 5.5% 13.13
Passenger revenue per ASM
(cents) 10.12 9.32 8.6% 10.35
Passenger enplanements (in
thousands) 14,156 13,917 1.7% 57,345
Aircraft (end of period) 359 373 -3.8% 359
Block Hours 339,297 340,257 -0.3% 1,364,895
Average stage length
(miles) 910 877 3.8% 927
Fuel consumption (gallons
in millions) 297.7 289.6 2.8% 1,210
Average fuel price (dollars
per gallon) with related
taxes 1.93 2.08 -7.2% 2.08
Average fuel price
including related taxes
and realized gains
(losses) on fuel hedging
instruments, net (dollars) 2.00 2.01 -0.5% 2.09
Full-time equivalent
employees (end of period) 32,459 32,210 0.8% 32,459
Operating cost per ASM
(cents) 10.98 11.12 -1.3% 10.96
Operating cost per ASM
excluding special items
(cents) 10.78 10.52 2.5% 10.84
Operating cost per ASM
excluding special items,
fuel and realized gains
(losses) on fuel hedging
instruments, net (cents) 7.64 7.43 2.8% 7.55
Express*
Revenue passenger miles (in
millions) 2,559 2,514 1.8% 10,635
Available seat miles (in
millions) 3,694 3,809 -3.0% 14,911
Passenger load factor
(percent) 69.3 66.0 3.3 pts 71.3
Passenger revenue per ASM
(cents) 17.60 15.32 14.8% 18.40
Passenger enplanements (in
thousands) 6,259 5,848 7.0% 25,836
Operating cost per ASM
(cents) 17.05 17.23 -1.0% 17.17
TOTAL - Mainline & Express
Revenue passenger miles (in
millions) 17,189 16,650 3.2% 71,324
Available seat miles (in
millions) 22,657 22,670 -0.1% 91,894
Passenger load factor
(percent) 75.9 73.4 2.5 pts 77.6
Passenger revenue per ASM
(cents) 11.33 10.33 9.7% 11.66
Total revenue per ASM
(cents) 12.30 11.30 8.9% 12.58
Passenger enplanements (in
thousands) 20,415 19,765 3.3% 83,181
Operating cost per ASM
(cents) 11.97 12.14 -1.5% 11.97
* 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.
** The 2006 Full-Year Operating Statistics reflects the consolidated
results for the new US Airways Group. The 2005 Full-Year Operating
Statistics, which would consist of 269 days of America West results
and 96 days of consolidated US Airways Group results do not provide
a meaningful comparison and have been omitted.
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information and Operating Cost per ASM Excluding Special Items, Aircraft Fuel, Realized (Gains) Losses 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 3 Months 12 Months 12 Months
Ended Ended Ended Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2006 2005 2006 2005
(in millions, except share
and per share amounts)
Reconciliation of Income (loss)
before Cumulative Effect of
Change in Accounting Principle
Excluding Special Items for
US Airways Group, Inc.
Income (loss) before cumulative
effect of change in accounting
principle as reported $12 $(261) $303 $(335)
Special items:
Unrealized (gains) losses on
fuel hedging instruments,
net (1) 26 69 70 (4)
Non-cash tax provision from
utilization of pre-acquisition
NOL (2) 26 -- 85 --
Special items, net (3) 10 36 27 121
Other special charges (4) 12 18 22 30
Income (loss) before cumulative
effect of change in accounting
principle, as adjusted for
special items $86 $(138) $507 $(188)
Shares used for computation
(in thousands):
Basic 89,892 80,145 86,447 31,488
Diluted 96,045 80,145 94,876 31,488
Income (loss) per share before
cumulative effect of change in
accounting principle, as
adjusted for special items:
Basic $0.96 $(1.73) $5.86 $(6.00)
Diluted (8) $0.91 $(1.73) $5.47 $(6.00)
Reconciliation of Income (loss)
before Cumulative Effect of
Change in Accounting Principle
Excluding Special Items for
America West Airlines, Inc.
Loss before cumulative effect
of change in accounting
principle as reported $(63) $(139) $(38) $(195)
Special items:
Unrealized (gains) losses
on fuel hedging instruments,
net (1) 26 69 70 (4)
Special items, net (5) 9 21 17 106
Other special charges (10) (1) 18 3 30
Income (loss) before cumulative
effect of change in accounting
principle, as adjusted for
special items $(29) $(31) $52 $(63)
Reconciliation of Net Income
(Loss)
Excluding Special Items for
US Airways, Inc.
Net income (loss) as reported $61 $(120) $345 $160
Special items:
Non-cash tax provision
from utilization of
pre-acquisition NOL (2) 26 -- 85 --
Special items, net (6) 12 15 21 15
Reorganization items,
net (7) -- -- -- (636)
Net income (loss), as adjusted
for special items $99 $(105) $451 $(461)
3 Months 3 Months 12 Months 12 Months
Ended Ended Ended Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2006 2005 2006 2005
Reconciliation of Operating
Cost per ASM Excluding Special
Items, Fuel, Realized Gains
(Losses) on Fuel Hedging
Instruments, Net - Mainline
only
US Airways Group, Inc.
(in millions)
Total operating expenses $2,711 $2,753 $10,999 $5,286
Less Express expenses:
Fuel (179) (193) (764) (327)
Other (451) (463) (1,795) (746)
Total mainline operating
expenses 2,081 2,097 8,440 4,213
Special items:
Unrealized gains (losses)
on fuel hedging instruments,
net (1) (26) (69) (70) 4
Special items, net (3) (10) (36) (27) (121)
Other special charges (9) -- (7) -- (19)
Mainline operating expenses,
excluding special items 2,045 1,985 8,343 4,077
Aircraft fuel (575) (603) (2,518) (1,214)
Realized gains (losses) on fuel
hedging instruments, net (20) 20 (9) 71
Mainline operating expenses,
excluding special items, fuel
and realized gains (losses)
on fuel hedging instruments,
net $1,450 $1,402 $5,816 $2,934
(in cents)
Mainline operating expenses per
ASM 10.98 11.12 10.96 9.95
Special items per ASM
Unrealized gains (losses) on
fuel hedging instruments,
net (1) (0.14) (0.37) (0.09) 0.01
Special items, net (3) (0.05) (0.19) (0.04) (0.29)
Other special charges (9) -- (0.04) -- (0.04)
Mainline operating expenses per
ASM, excluding special items 10.78 10.52 10.84 9.63
Aircraft fuel (3.03) (3.20) (3.27) (2.87)
Realized gains (losses) on fuel
hedging instruments, net (0.11) 0.11 (0.01) 0.17
Mainline operating expenses per
ASM, excluding special items,
fuel and realized gains (losses)
on fuel hedging instruments, net 7.64 7.43 7.55 6.93
3 Months 3 Months 12 Months 12 Months
Ended Ended Ended Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
2006 2005 2006 2005
America West Airlines Inc.
(in millions)
Total operating expenses $944 $946 $3,671 $3,383
Less Express expenses:
Fuel (47) (53) (210) (182)
Other (100) (97) (401) (363)
Total mainline operating
expenses 797 796 3,060 2,838
Special items:
Unrealized gains (losses)
on fuel hedging
instruments, net (1) (26) (69) (70) 4
Special items, net (5) (9) (21) (17) (106)
Other special charges (9) -- (7) -- (19)
Mainline operating expenses,
excluding special items 762 699 2,973 2,717
Aircraft fuel (208) (228) (911) (812)
Realized gains (losses) on
fuel hedging instruments,
net (20) 20 (9) 71
Mainline operating expenses,
excluding special items, fuel
and realized (gains) losses
on fuel hedging instruments,
net $534 $491 $2,053 $1,976
(in cents)
Mainline Operating expenses
per ASM 11.05 10.51 10.35 9.30
Special items per ASM:
Unrealized gains (losses)
on fuel hedging
instruments, net (1) (0.37) (0.91) (0.24) 0.01
Special items, net (5) (0.12) (0.28) (0.06) (0.35)
Other special charges (9) -- (0.09) -- (0.06)
Mainline operating expenses
per ASM, excluding special
items 10.56 9.23 10.06 8.91
Aircraft fuel (2.89) (3.00) (3.08) (2.66)
Realized gains (losses) on fuel
hedging instruments, net (0.28) 0.26 (0.03) 0.23
Mainline operating expenses per
ASM, excluding special items,
fuel and realized gains (losses)
on fuel hedging instruments, net 7.39 6.49 6.94 6.48
US Airways, Inc.
(in millions)
Total operating expenses $1,799 $1,826 $7,464 $7,420
Less: Express expenses (504) (490) (2,060) (1,862)
Total mainline operating expenses 1,295 1,336 5,404 5,558
Special items:
Special items, net (6) (12) (15) (21) (15)
Mainline operating expenses,
excluding special items 1,283 1,321 5,383 5,543
Aircraft fuel (367) (375) (1,607) (1,486)
Mainline operating expenses,
excluding special items and fuel $916 $946 $3,776 $4,057
(in cents)
Mainline operating expenses per
ASM (excluding Express expenses) 11.02 11.83 11.39 10.79
Special items per ASM:
Special items, net (6) (0.10) (0.13) (0.04) (0.03)
Mainline operating expenses per
ASM, excluding special items 10.92 11.70 11.35 10.76
Aircraft fuel (3.12) (3.32) (3.39) (2.88)
Mainline operating expenses per
ASM excluding special items and
fuel 7.79 8.38 7.96 7.87
Note: Amounts may not recalculate due to rounding.
FOOTNOTES:
1) The 2006 fourth quarter and the 2006 twelve month period include a
$26 million and $70 million unrealized loss respectively, and the 2005
fourth quarter and the 2005 twelve month period include a $69 million
unrealized loss and a $4 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 twelve month periods ended December 31, 2006 the
Company utilized $26 million and $85 million, respectively, of NOL
acquired from US Airways, the valuation allowance associated with
these acquired NOL was recognized as a reduction of goodwill rather
than a reduction in tax expense. As a result, US Airways had a
non-cash expense for income taxes of $26 million and $85 million in
the three month and twelve month periods, respectively.
3) The 2006 fourth quarter includes $14 million of gains associated with
the settlement of bankruptcy claims, offset by $24 million of merger
related transition expenses. The 2006 twelve month period includes a
$90 million gain associated with the return of equipment deposits upon
forgiveness of a loan and $14 million of gains associated with the
settlement of bankruptcy claims, offset by $131 million of merger
related transition expenses.
The 2005 fourth quarter includes $28 million of merger related
transition expenses, $7 million related to power by the hour program
penalties associated with the return of certain leased aircraft and
$1 million of severance for terminated employees resulting from the
merger. The 2005 twelve month period includes the above mentioned
fourth quarter items plus 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 fourth quarter includes a $12 million payment in connection
with the inducement to convert $49 million of the 7% Senior
Convertible Notes to common stock and a $1 million write off of debt
issuance costs associated with the converted notes, less $1 million of
interest income earned by AWA on certain prior year Federal income tax
refunds. The 2006 twelve month period includes $6 million of
prepayment penalties and $5 million write off of debt issuance costs
in connection with the $1.25 billion debt refinancing in the first
quarter of 2006, $17 million in payments in connection with the
inducement to convert $70 million of the 7% Senior Convertible Notes
to common stock and $2 million write off of debt issuance costs
associated with the converted notes, less $8 million of interest
income earned by AWA on certain prior year Federal income tax refunds.
The 2005 fourth quarter includes $8 million related to the write off
of the unamortized value of the ATSB warrants, upon their repurchase
in the fourth quarter of 2005, $4 million related to the acceleration
of depreciation expense for certain leasehold improvements, $3 million
out-of-period expense related to the retroactive TSA assessment,
$2 million write off of debt issuance costs in connection with the
conversion of the 7.25% senior notes and $1 million write off of debt
issuance costs for the Debis portion of the ATSB loan. The 2005
twelve month period includes the above mentioned fourth quarter items
excluding the out-of-period $3 million TSA assessment, an $8 million
loss on the sale and leaseback of two new Airbus A320 aircraft
acquired during the first and second quarters and $7 million in fees
related to the early return of ten aircraft in connection to the GE
MOU.
5) The 2006 fourth quarter includes $9 million of merger related
transition expenses. The 2006 twelve month period includes a
$51 million gain associated with the return of equipment deposits upon
forgiveness of a loan, offset by $68 million of merger related
transition expenses.
The 2005 fourth quarter includes $13 million of merger related
transition expenses, $7 million related to power by the hour program
penalties associated with the return of certain leased aircraft and
$1 million of severance for terminated employees resulting from the
merger. The 2005 twelve month period includes the above mentioned
fourth quarter items plus 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.
6) The 2006 fourth quarter includes $3 million of gains associated with
the settlement of bankruptcy claims, offset by $15 million of merger
related transition expenses, and the 2006 twelve month period includes
a $40 million gain associated with the return of equipment deposits
upon forgiveness of a loan and $3 million of gains associated with the
settlement of bankruptcy claims, offset by $64 million of merger
related transition expenses. The 2005 fourth quarter and twelve month
periods include $15 million of merger related transition expenses.
7) During the twelve months ended December 31, 2005, US Airways
recognized $636 million 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 $9 million for the three and
twelve months ended December 31, 2006, respectively, and the 7.5%
convertible senior notes of $4 million for the twelve months ended
December 31, 2006.
9) The 2005 fourth quarter includes $4 million related to the
acceleration of depreciation expense for certain leasehold
improvements and $3 million out-of-period expense related to the
retroactive TSA assessment. The 2005 twelve month period includes the
above mentioned fourth quarter items excluding the out-of-period
$3 million TSA assessment, an $8 million loss on the sale and
leaseback of two new Airbus A320 aircraft acquired during the first
and second quarters and $7 million in fees related to the early return
of ten aircraft in connection to the GE MOU.
10) The 2006 fourth quarter includes $1 million of interest income earned
by AWA on certain prior year Federal income tax refunds. The 2006
twelve month period includes $6 million of prepayment penalties and a
$5 million write off of debt issuance costs in connection with the
$1.25 billion debt refinancing in the first quarter of 2006 less
$8 million of interest income earned by AWA on certain prior year
Federal income tax refunds.
The 2005 fourth quarter includes $8 million related to the write off
of the unamortized value of the ATSB warrants, upon their repurchase
in the fourth quarter 2005, $4 million related to the acceleration of
depreciation expense for certain leasehold improvements, $3 million
out-of-period expense related to the retroactive TSA assessment,
$2 million write off of debt issuance costs in connection with the
conversion of the 7.25% senior notes and $1 million write off of debt
issuance costs for the Debis portion of the ATSB loan. The 2005
twelve month period includes the above mentioned fourth quarter items
excluding the out-of-period $3 million TSA assessment, an $8 million
loss on the sale and leaseback of two new Airbus A320 aircraft
acquired during the first and second quarters and $7 million in fees
related to the early return of ten aircraft in connection to the GE
MOU.
America West Airlines, Inc.
Consolidated Statements of Operations
(in millions)
(unaudited)
3 Months 3 Months 12 Months 12 Months
Ended Ended Ended Ended
Dec. 31, Dec. 31, Percent Dec. 31, Dec. 31, Percent
2006 2005 Change 2006 2005 Change
Operating revenues
Mainline
passenger $659 $634 3.9 $2,761 $2,521 9.5
Express
passenger 158 145 9.0 660 512 28.9
Cargo 7 9 (22.2) 31 33 (6.1)
Other 48 47 2.1 184 197 (6.6)
Total operating
revenues 872 835 4.4 3,636 3,263 11.4
Operating expenses
Aircraft fuel and
related taxes 208 228 (8.8) 911 812 12.2
Loss (gain) on
fuel hedging
instruments,
net:
Realized 20 (20) nm 9 (71) nm
Unrealized 26 69 (62.3) 70 (4) nm
Salaries and
related costs 189 175 8.0 735 701 4.9
Express expenses:
Fuel 47 53 (11.3) 210 182 15.4
Other 100 97 3.1 401 363 10.5
Aircraft rent 83 86 (3.5) 339 327 3.7
Aircraft
maintenance 53 67 (20.9) 242 259 (6.6)
Other rent and
landing fees 47 44 6.8 175 176 (0.6)
Selling expenses 42 35 20.0 162 161 0.6
Special items, net 9 21 (57.1) 17 106 (84.0)
Depreciation and
amortization 12 16 (25.0) 46 53 (13.2)
Other 108 75 44.0 354 318 11.3
Total operating
expenses 944 946 (0.2) 3,671 3,383 8.5
Operating loss (72) (111) (35.1) (35) (120) (70.8)
Nonoperating income
(expenses)
Interest income 19 13 46.2 68 25 nm
Interest expense,
net (10) (32) (68.8) (57) (94) (39.4)
Other, net -- (9) nm (9) (6) 50.0
Nonoperating income
(expenses), net 9 (28) nm 2 (75) nm
Loss before income
taxes and
cumulative effect
of change of
accounting principle (63) (139) (54.7) (33) (195) (83.1)
Income tax provision -- -- nm 5 -- nm
Loss before cumulative
effect of change in
accounting principle (63) (139) (54.7) (38) (195) (80.5)
Cumulative effect of
change in accounting
principle -- -- nm 1 (202) nm
Net loss $(63) $(139) (54.7) $(37) $(397) (90.7)
America West Airlines, Inc.
Operating Statistics
3 Months 3 Months
Ended Ended
Dec. 31, Dec. 31, Percent
2006 2005 Change
Mainline
Revenue passenger miles (in millions) 5,620 5,870 -4.3%
Available seat miles (ASM) (in millions) 7,208 7,571 -4.8%
Passenger load factor (percent) 78.0 77.5 0.4 pts
Yield (cents) 11.72 10.81 8.4%
Passenger revenue per ASM (cents) 9.14 8.38 9.0%
Passenger enplanements (in thousands) 5,161 5,404 -4.5%
Aircraft (end of period) 133 141 -5.7%
Block hours 134,504 140,329 -4.2%
Average stage length (miles) 1,013 1,022 -0.9%
Average passenger journey (miles) 1,499 1,598 -6.2%
Fuel consumption (gallons in millions) 106.4 110.9 -4.1%
Average fuel price (dollars per gallon)
with related taxes 1.96 2.05 -4.4%
Average fuel price including related taxes
and realized gains (losses) on fuel
hedging instruments, net (dollars) 2.15 1.87 15.1%
Full-time equivalent employees (end
of period) 13,038 12,100 7.8%
Operating cost per ASM (cents) 11.05 10.51 5.1%
Operating cost per ASM excluding special
items (cents) 10.56 9.23 14.4%
Operating cost per ASM excluding special
items, fuel and realized gains (losses)
on fuel hedging instruments, net (cents) 7.39 6.49 13.9%
Express
Revenue passenger miles (in millions) 842 807 4.3%
Available seat miles (in millions) 1,133 1,122 1.0%
Passenger load factor (percent) 74.3 71.9 2.4 pts
Passenger revenue per ASM (cents) 13.97 12.88 8.5%
Passenger enplanements (in thousands) 1,672 1,400 19.4%
Operating cost per ASM (cents) 12.97 13.43 -3.4%
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 6,462 6,677 -3.2%
Available seat miles (in millions) 8,341 8,693 -4.0%
Passenger load factor (percent) 77.5 76.8 0.7 pts
Passenger revenue per ASM (cents) 9.79 8.96 9.3
Total revenue per ASM (cents) 10.45 9.61 8.8%
Passenger enplanements (in thousands) 6,833 6,804 0.4%
Operating cost per ASM (cents) 11.31 10.88 3.9%
12 Months 12 Months
Ended Ended
Dec. 31, Dec. 31, Percent
2006 2005 Change
Mainline
Revenue passenger miles (in millions) 23,559 24,260 -2.9%
Available seat miles (ASM) (in
millions) 29,555 30,503 -3.1%
Passenger load factor (percent) 79.7 79.5 0.2 pts
Yield (cents) 11.72 10.39 12.8%
Passenger revenue per ASM (cents) 9.34 8.27 12.9%
Passenger enplanements (in thousands) 21,260 22,130 -3.9%
Aircraft (end of period) 133 141 -5.7%
Block hours 547,348 564,523 -3.0%
Average stage length (miles) 1,026 1,028 -0.2%
Average passenger journey (miles) 1,576 1,659 -5.0%
Fuel consumption (gallons in
millions) 435.4 449.5 -3.1%
Average fuel price (dollars per
gallon) with related taxes 2.09 1.80 16.5%
Average fuel price including related taxes
and realized gains (losses) on fuel
hedging instruments, net (dollars) 2.11 1.65 28.2%
Full-time equivalent employees (end
of period) 13,038 12,100 7.8%
Operating cost per ASM (cents) 10.35 9.30 11.3%
Operating cost per ASM excluding
special items (cents) 10.06 8.91 12.9%
Operating cost per ASM excluding special
items, fuel and realized gains (losses)
on fuel hedging instruments, net (cents) 6.94 6.48 7.2%
Express
Revenue passenger miles (in millions) 3,559 3,300 7.8%
Available seat miles (in millions) 4,714 4,589 2.7%
Passenger load factor (percent) 75.5 71.9 3.6 pts
Passenger revenue per ASM (cents) 14.01 11.16 25.5%
Passenger enplanements (in thousands) 6,870 5,600 22.7%
Operating cost per ASM (cents) 12.97 11.90 9.0%
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 27,118 27,560 -1.6%
Available seat miles (in millions) 34,269 35,091 -2.3%
Passenger load factor (percent) 79.1 78.5 0.6 pts
Passenger revenue per ASM (cents) 9.98 8.64 15.5%
Total revenue per ASM (cents) 10.61 9.30 14.1%
Passenger enplanements (in thousands) 28,130 27,730 1.4%
Operating cost per ASM (cents) 10.71 9.64 11.1%
US Airways, Inc.
Statements of Operations
(in millions)
(unaudited)
Predecessor
Successor Company Company
3 Months 3 Months 12 Months 3 Months 9 Months
Ended Ended Ended Ended Ended
Dec. 31, Dec. 31, Percent Dec. 31, Dec. 31, Sept. 30,
2006 2005 Change 2006 2005 2005
Operating revenues
Mainline
passenger $1,260 $1,123 12.2 $5,205 $1,123 $3,738
Express
passenger 491 442 11.1 2,084 442 1,178
Cargo 32 25 28.0 122 25 71
Other 161 165 (2.4) 645 165 465
Total operating
revenues 1,944 1,755 10.8 8,056 1,755 5,452
Operating expenses
Aircraft fuel
and related
taxes 367 375 (2.1) 1,607 375 1,111
Salaries and
related
costs 328 330 (0.6) 1,354 330 1,073
Express expenses 504 490 2.9 2,060 490 1,372
Aircraft rent 103 98 5.1 393 98 293
Aircraft
maintenance 96 86 11.6 340 86 253
Other rent and
landing fees 89 101 (11.9) 393 101 319
Selling expenses 57 68 (16.2) 284 68 258
Special items,
net 12 15 (20.0) 21 15 --
Depreciation and
amortization 33 37 (10.8) 138 37 152
Other 210 226 (7.1) 874 226 763
Total operating
expenses 1,799 1,826 (1.5) 7,464 1,826 5,594
Operating
income
(loss) 145 (71) nm 592 (71) (142)
Nonoperating income
(expenses)
Interest income 23 11 nm 84 11 15
Interest expense,
net (53) (65) (18.5) (215) (65) (222)
Reorganization
items, net -- -- nm -- -- 636
Other, net 14 5 nm 13 5 (9)
Nonoperating income
(expenses), net (16) (49) (67.3) (118) (49) 420
Income (loss) before
income taxes 129 (120) nm 474 (120) 278
Income tax provision
(benefit) 68 -- nm 129 -- (2)
Net income (loss) $61 $(120) nm $345 $(120) $280
US Airways, Inc.
Operating Statistics
3 Months 3 Months
Ended Ended
Dec. 31, Dec. 31, Percent
2006 2005 Change
Mainline
Revenue passenger miles (in millions) 9,011 8,266 9.0%
Available seat miles (ASM) (in millions) 11,755 11,290 4.1%
Passenger load factor (percent) 76.7 73.2 3.4 pts
Yield (cents) 13.98 13.59 2.9%
Passenger revenue per ASM (cents) 10.72 9.95 7.7%
Passenger enplanements (in thousands) 8,995 8,513 5.7%
Aircraft (end of period) 226 232 -2.6%
Block hours 204,793 199,928 2.4%
Average stage length (miles) 850 792 7.3%
Average passenger journey (miles) 1,002 971 3.2%
Fuel consumption (gallons in millions) 191.3 178.7 7.1%
Average fuel price (dollars per gallon)
with related taxes 1.92 2.10 -8.5%
Full-time equivalent employees
(end of period) 19,421 20,110 -3.4%
Operating cost per ASM (cents) 11.02 11.83 -6.9%
Operating cost per ASM excluding special
items (cents) 10.92 11.70 -6.7%
Operating cost per ASM excluding
special items and fuel (cents) 7.79 8.38 -7.0%
Express
Revenue passenger miles (in millions) 1,717 1,707 0.6%
Available seat miles (in millions) 2,561 2,687 -4.7%
Passenger load factor (percent) 67.0 63.5 3.5 pts
Passenger revenue per ASM (cents) 19.18 16.45 16.6%
Passenger enplanements (in thousands) 4,587 4,448 3.1%
Operating cost per ASM (cents) 19.66 18.24 7.8%
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 10,727 9,973 7.6%
Available seat miles (in millions) 14,316 13,977 2.4%
Passenger load factor (percent) 74.9 71.3 3.6 pts
Passenger revenue per ASM (cents) 12.23 11.20 9.2
Total revenue per ASM (cents) 13.58 12.56 8.1%
Passenger enplanements (in thousands) 13,582 12,961 4.8%
Operating cost per ASM (cents) 12.56 13.06 -3.8%
12 Months 12 Months
Ended Ended
Dec. 31, Dec. 31, Percent
2006 2005 Change
Mainline
Revenue passenger miles (in millions) 37,130 38,895 -4.5%
Available seat miles (ASM) (in
millions) 47,428 51,518 -7.9%
Passenger load factor (percent) 78.3 75.5 2.8 pts
Yield (cents) 14.02 12.50 12.2%
Passenger revenue per ASM (cents) 10.97 9.44 16.3%
Passenger enplanements (in thousands) 36,085 39,977 -9.7%
Aircraft (end of period) 226 232 -2.6%
Block hours 817,547 928,362 -11.9%
Average stage length (miles) 869 791 9.8%
Average passenger journey (miles) 1,029 973 5.8%
Fuel consumption (gallons in
millions) 774.8 841.9 -8.0%
Average fuel price (dollars per
gallon) with related taxes 2.07 1.77 16.8%
Full-time equivalent employees (end
of period) 19,421 20,110 -3.4%
Operating cost per ASM (cents) 11.39 10.79 5.6%
Operating cost per ASM excluding
special items (cents) 11.35 10.76 5.5%
Operating cost per ASM excluding
special items and fuel (cents) 7.96 7.87 1.1%
Express
Revenue passenger miles (in millions) 7,076 6,640 6.6%
Available seat miles (in millions) 10,197 10,369 -1.7%
Passenger load factor (percent) 69.4 64.0 5.4 pts
Passenger revenue per ASM (cents) 20.44 15.62 30.8%
Passenger enplanements (in thousands) 18,966 17,520 8.3
Operating cost per ASM (cents) 20.20 17.96 12.5%
TOTAL - Mainline & Express
Revenue passenger miles (in millions) 44,206 45,535 -2.9%
Available seat miles (in millions) 57,625 61,887 -6.9%
Passenger load factor (percent) 76.7 73.6 3.1 pts
Passenger revenue per ASM (cents) 12.65 10.47 20.8
Total revenue per ASM (cents) 13.98 11.65 20.0%
Passenger enplanements (in thousands) 55,051 57,997 -4.3%
Operating cost per ASM (cents) 12.95 11.99 8.0%
US Airways Group, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
Dec. 31, 2006 Dec. 31, 2005
Assets
Current assets
Cash equivalents and short-term
investments 2,366 1,577
Restricted cash 1 8
Accounts receivable, net 388 353
Materials and supplies, net 223 229
Prepaid expenses and other 377 392
Total current assets 3,355 2,559
Property and equipment, net
Flight equipment 2,051 1,920
Ground property and equipment 598 532
Less accumulated depreciation and
amortization (583) (431)
2,066 2,021
Equipment purchase deposits 48 43
Total property and equipment 2,114 2,064
Other assets
Goodwill 629 732
Other intangibles, net 554 583
Restricted cash 666 792
Other assets 258 234
Total other assets 2,107 2,341
Total assets $7,576 $6,964
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of debt and
capital leases 95 $211
Accounts payable 454 457
Air traffic liability 847 788
Accrued compensation and vacation 262 210
Accrued taxes 181 146
Other accrued expenses 873 847
Total current liabilities 2,712 2,659
Noncurrent liabilities and deferred
credits
Long-term debt and capital leases,
net of current maturities 2,863 2,749
Deferred gains and credits 205 254
Employment benefit liabilities and
other 826 882
Total noncurrent liabilities
and deferred credits 3,894 3,885
Stockholders' equity
Preferred stock -- --
Common stock 1 1
Additional paid-in capital 1,502 1,258
Accumulated deficit (522) (826)
Treasury stock (13) (13)
Other comprehensive income 2 --
Total stockholders' equity 970 420
Total liabilities and
stockholders' equity $7,576 $6,964
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