US Airways 2006 Annual Report Download - page 122

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
adjusts its balance sheet to reflect changes in the current fair market value of the stock options and warrants according to SFAS 133.
In the first quarter of 2006, the Company recorded $6 million in prepayment penalties and wrote off $5 million of debt issuance
costs related to the March 31, 2006 repayment of the AWA Citibank Loan (formerly ATSB Loan) and the GECC loan that were paid off
with the proceeds of the GE Loan.
In the fourth quarter of 2005, the Company repurchased warrants issued to the ATSB. In connection with this repurchase, the
Company recorded $8 million of nonoperating expense. This amount represented the unamortized balance recorded as an other asset,
which was being amortized over the life of the government guaranteed loan as an increase to interest expense.
In the fourth quarter of 2005, the Company wrote off $2 million in issuance costs in connection with the conversion of the 7.25%
exchangeable notes.
In connection with the term loan refinancing with GECC, the Company wrote off $1 million of debt issuance costs associated to the
term loan with Mizuho in 2004. This amount was recorded in nonoperating expense.
12. Supplemental Cash Flow Information
Supplemental disclosure of cash flow information and non-cash investing and financing activities were as follows (in millions):
Year Ended December 31,
2006 2005 2004
Non-cash transactions:
Reclassification of investments in debt securities to short-term $ — $ 30 $ 26
Fair value of assets acquired in business combination — 5,568 —
Liabilities assumed in business combination, net of cash acquired — 5,451 —
Conversion of 7% convertible notes into common stock of US Airways Group 70 — —
Conversion of 7.5% convertible senior notes, net of discount of $17 million to common stock 95 — —
Notes payable issued for equipment purchase deposits — 9 17
Notes payable canceled under the aircraft purchase agreement 4 21 7
Payment in kind notes issued, net of returns — — 9
Equipment purchases financed by capital lease 3 — —
Acquisition of shares due to loan default — — 2
Cash transactions:
Interest paid, net of amounts capitalized 264 88 24
Income taxes paid 12 — 1
13. Related Party Transactions
Richard A. Bartlett, a member of the board of directors of US Airways Group, is a greater than 10% minority owner and director of
Eastshore. In February 2005, Eastshore entered into an agreement with US Airways Group to provide a $125 million financing
commitment to provide equity funding for a plan of reorganization, in the form of a debtor-in-possession term loan. Under the terms of
US Airways Group's plan of reorganization, Eastshore received a cash payment in the amount of all accrued interest on the loan, and the
principal amount of $125 million was satisfied by the delivery of 8,333,333 shares of US Airways Group common stock, representing a
price of
119