US Airways 2007 Annual Report Download - page 51

Table of Contents
• Depreciation and amortization increased 8.1% due to an increase in capital expenditures in 2007, specifically the acquisition of
Embraer 190 aircraft and equipment to support flight operations.
Total Express expenses increased 2.1% in the 2007 period to $2.73 billion from $2.67 billion in the 2006 period, as other Express
operating expenses increased $56 million. Fuel costs remained consistent period over period as the average fuel price per gallon increased
4.2% from $2.14 in the 2006 period to $2.23 in the 2007 period, which was offset by a 4% decrease in gallons consumed as block hours
were down 6.2% in the 2007 period due to planned reductions in Express flying. The increase in other Express operating expenses is a
result of higher rates paid under certain capacity purchase agreements due to contractually scheduled rate changes.
Nonoperating Income (Expense):
Percent
2007 2006 Change
(In millions)
Nonoperating income (expense):
Interest income $ 172 $ 153 12.6
Interest expense, net (229) (268) (14.4)
Other, net 18 4 nm
Total nonoperating expense, net $ (39) $ (111) (64.7)
US Airways had net nonoperating expense of $39 million in 2007 as compared to $111 million in 2006. Interest income increased
$19 million to $172 million in 2007 due to higher average cash balances and higher average rates of returns on investments. Interest
expense decreased to $229 million from $268 million due to the full year effect in 2007 of the refinancing in March 2006 by US Airways
Group of the loan formerly guaranteed by the ATSB. The refinanced debt is no longer held by US Airways. Also contributing to lower
interest expense was the conversion of the 7.5% Convertible Senior Notes in April 2006 into equity of US Airways Group and the
repayment by US Airways Group of the Barclays Bank of Delaware prepaid miles loan in March 2007.
The 2007 period includes other nonoperating income of $18 million primarily related to a $17 million gain on the sale of stock in
ARINC Incorporated as well as $7 million in foreign currency gains related to sales transactions denominated in foreign currencies, offset
by a $10 million impairment on auction rate securities considered to be other than temporary. The 2006 period includes other
nonoperating expense of $6 million related to prepayment penalties and an aggregate of $5 million in accelerated amortization of debt
issuance costs in connection with the refinancing of the loan formerly guaranteed by the ATSB and two loans previously provided to
AWA by GECC, offset by $11 million of derivative gains attributable to stock options in Sabre and warrants in a number of companies.
2006 Compared With 2005
As discussed above, the Successor Company consolidated statement of operations for US Airways for the three month period ended
December 31, 2005 in this report is comprised of the results of US Airways and America West
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