US Airways 2006 Annual Report Download - page 59

Table of Contents
five Airbus A330 aircraft; and sales of other property and equipment. Restricted cash increased by $112 million in 2005 primarily due to
an increase in reserves required under an agreement for processing credit card transactions.
Net cash provided by financing activities was $276 million and $531 million in 2006 and 2005, respectively. Principal financing
activities in 2006 includes proceeds from the issuance of new debt totaling $1.4 billion, which included borrowings of $1.25 billion under
the new GE loan, a $64 million draw on one of the Airbus loans and $92 million of equipment notes issued to finance the acquisition of
three Boeing 757-200 and two Embraer 190 aircraft. Debt repayments totaled $1.2 billion and using the proceeds from the new GE loan,
included the repayment in full of the balances outstanding on our ATSB loans of $801 million, Airbus loans of $161 million, and two
GECC term loans of $110 million. We also made a $17 million payment related to the partial conversion of the 7% Senior Convertible
Notes. Principal financing activities in 2005 included the issuance of US Airways Group common stock for $732 million, and proceeds
from the issuance of debt totaling $655 million, which included a $325 million loan from an affinity credit card partner, $186 million
from the Airbus loans and $144 million from the issuance of the 7% Senior Convertible Notes. The debt repayments totaled $741 million
in 2005 and included a $433 million reduction in aircraft-related debt as a result of flight equipment asset sales and sale and leaseback
transactions, the GE debt repayment of $125 million, approximately $125 million in ATSB loan repayments, and the redemption of
AWA's 10.75% senior unsecured notes totaling $40 million.
AWA
At December 31, 2006, AWA's total cash, cash equivalents, short-term investments and restricted cash balance was $1.3 billion, of
which $1.1 billion was unrestricted. Net cash provided by operating activities in 2006 was $293 million compared to net cash used in
operating activities of $24 million in 2005. The year-over-year increase in cash flows from operations of $317 million is primarily the
result of the decrease in net loss from $397 million in 2005, which included the non-cash cumulative effect of change in accounting
principle of $202 million, to $37 million in 2006. In addition, AWA air traffic liability (ticket sales for transportation that has not yet
been provided) increased $141 million in 2006 as compared to an increase of $23 million in 2005. The significant increase in air traffic
liability during 2006 is due principally to the integration of the AWA and US Airways web sites, as a result of which AWA incurs
additional air traffic liability by selling tickets for travel on US Airways.
Net cash used in investing activities was $249 million and $283 million in 2006 and 2005, respectively. Principal investing
activities during 2006 included net purchases of short-term investments totaling $186 million and purchases of property and equipment
totaling $76 million, which includes costs to convert nine Boeing 757 aircraft to allow long-range over-water service and information
technology infrastructure costs such as upgraded computer equipment and software. Restricted cash decreased by $18 million during
2006 primarily due to a decrease in reserves required under agreements for processing AWA's credit card transactions. The 2005 period
included net purchases of short-term investments totaling $163 million, purchases of property and equipment totaling $37 million,
$74 million of net proceeds from the sale and leaseback of aircraft including six Boeing 737-300 and two Boeing 757-200 aircraft; and
sales of other property and equipment. Restricted cash increased by $157 million during 2005 due to an increase in cash reserves required
under an agreement for processing credit card transactions.
In 2006, net cash used in financing activities was $56 million, consisting principally of a decrease in the payable to affiliates
(primarily US Airways) of $52 million and $4 million of debt repayments. In 2005, net cash provided by financing activities was
$811 million, consisting principally of an increase in payable to related parties of $998 million. The increase in payable to related parties
reflects proceeds received in 2005 on behalf of US Airways Group from the merger-related financing transactions including the initial
equity investments, the public stock offering, the exercise of options by equity investors, the issuance of 7% Senior Convertible Notes
and the Airbus loans, net of cash retained by US Airways Group. Other 2005 financing activities included debt repayments of
$183 million, including principal repayments of $94 million for the government guaranteed loan, the redemption of 10.75% senior
unsecured notes totaling $40 million and the retirement of $39 million of equipment notes payable with the proceeds from the aircraft
sale and leaseback transaction discussed above.
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