US Airways 2008 Annual Report Download - page 35

Table of Contents
transition expenses, $18 million in non-cash charges related to the decline in fair value of certain spare parts associated with our
Boeing 737 aircraft fleet and as a result of our capacity reductions, $14 million in lease return costs and penalties related to certain
Airbus aircraft and $9 million in charges related to involuntary furloughs as well as terminations of non-union administrative and
management staff.
The 2007 period included $187 million of net unrealized gains on fuel hedging instruments, $7 million in tax credits due to an IRS
rule change allowing us to recover tax amounts for years 2003-2006 for certain fuel usage, $9 million of insurance settlement
proceeds related to business interruption and property damages incurred as a result of Hurricane Katrina in 2005 and a $5 million
Piedmont pilot pension curtailment gain related to the FAA mandated pilot retirement age change. These credits were offset by
$99 million of merger related transition expenses, a $99 million charge for an increase to long-term disability obligations for US
Airways' pilots as a result of the FAA mandated pilot retirement age change and $5 million in charges for certain separation packages
and lease termination costs related to reduced flying from Pittsburgh.
The 2006 period included $131 million of merger related transition expenses and $70 million of net unrealized losses on fuel hedging
instruments, offset by 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.
The 2005 period included $28 million of merger related transition expenses, a $27 million loss on the sale-leaseback of six Boeing
737-300 aircraft and two Boeing 757 aircraft, $7 million of power by the hour program penalties associated with the return of certain
leased aircraft, $1 million of severance for terminated employees resulting from the merger, a $1 million charge related to aircraft
removed from service and a $50 million charge related to an amended Airbus purchase agreement, along with the write off of
$7 million in capitalized interest. The $50 million charge was paid by means of set-off against existing equipment purchase deposits
held by Airbus. The 2005 period also included $4 million of net unrealized gains on fuel hedging instruments.
The 2004 period included a $16 million net credit associated with the termination of the rate per engine hour agreement with General
Electric Engine Services for overhaul maintenance services on V2500-A1 engines. This credit was partially offset by $2 million of
net charges related to the return of certain Boeing 737-200 aircraft, which included termination payments of $2 million, the write
down of leasehold improvements and deferred rent of $3 million, offset by the net reversal of maintenance reserves of $3 million
related to the returned aircraft. The 2004 period also included $2 million of net unrealized losses on fuel hedging instruments.
(b) The 2008 period included $214 million in non-cash charges to record other than temporary impairments for our investments in
auction rate securities primarily driven by the length of time and extent to which the fair values have been less than cost as well as
$7 million in write offs of debt discount and debt issuance costs in connection with the refinancing of certain aircraft equipment notes
and certain loan prepayments in connection with our 2008 financing transactions, offset by $8 million in gains on forgiveness of debt.
The 2007 period included a non-cash expense for income taxes of $7 million related to the utilization of net operating loss
carryforwards ("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. In addition, the period also included an $18 million write off of debt
issuance costs in connection with the refinancing of the $1.25 billion senior secured credit facility with General Electric Capital
Corporation ("GECC"), referred to as the GE loan, in March 2007 and a $10 million non-cash charge to record other than temporary
impairment for our investments in auction rate securities, offset by a $17 million gain recognized on the sale of stock in ARINC
Incorporated.
The 2006 period included a non-cash expense for income taxes of $85 million related to the utilization of NOL acquired from US
Airways. In addition, the period included $6 million of prepayment penalties and $5 million in accelerated amortization of debt
issuance costs in connection with the refinancing of the loan previously guaranteed by the Air Transportation Stabilization Board
("ATSB") and two loans previously provided to AWA by GECC, $17 million in payments in connection with the inducement to
convert $70 million of US Airways Group's 7% Senior Convertible Notes to common stock and a $2 million write off of debt
issuance costs associated with those converted notes, offset by $8 million of interest income earned by AWA on certain prior year
federal income tax refunds.
The 2005 period included an $8 million charge related to the write off of the unamortized value of the ATSB warrants upon their
repurchase in October 2005 and an aggregate $2 million write off of debt issuance costs
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