US Airways 2007 Annual Report Download - page 109

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
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,
2007 2006 2005
Non-cash transactions:
Unrealized loss on available for sale securities $ 48 $ — $ —
Reclassification of investments in debt securities to short-term — — 30
Fair value of assets acquired in business combination — — 5,568
Liabilities assumed in business combination, net of cash acquired — — 5,451
Conversion of 7.25% notes into common stock of US Airways Group — — 87
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
Notes payable canceled under the aircraft purchase agreement — 4 21
Equipment purchases financed by capital lease — 3 —
Cash transactions:
Interest paid, net of amounts capitalized 248 264 88
Income taxes paid 4 12 —
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 $15.00 per share. As of December 31, 2007, Eastshore has sold all of its investment in US Airways Group. Mr. Bartlett is also a
greater than 10% owner of Air Wisconsin. US Airways and Air Wisconsin also entered into a regional jet services agreement under
which Air Wisconsin may, but is not required to, provide regional jet service under a US Airways Express code share arrangement. On
April 8, 2005, Air Wisconsin notified US Airways Group of its intention to deploy 70 regional jets, the maximum number provided for in
the agreement, into the US Airways Express network. The amount paid to Air Wisconsin in 2007 was approximately $320 million.
Robert A. Milton, a member of the board of directors of US Airways Group until April 19, 2006, is the Chairman, President and
Chief Executive Officer of ACE. ACE purchased 5,000,000 shares of US Airways Group common stock at a purchase price of $15.00 per
share, for a total investment of $75 million. ACE or its subsidiaries entered into commercial agreements with US Airways Group and
America West Holdings for various services including maintenance and airport handling. The amount paid in 2005 for these commercial
agreements was approximately $2 million. As of December 31, 2006, ACE has sold all of its investment in US Airways Group.
Edward L. Shapiro, a member of the board of directors of US Airways Group, is a Vice President and partner of PAR Capital
Management, the general partner of PAR. PAR received 10,768,485 shares of US Airways Group common stock, including shares
received pursuant to Participation Agreements with America West Holdings, for a
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