US Airways 2009 Annual Report Download - page 148

Table of Contents
17. Embraer 190 Sale
US Airways sold 10 of its Embraer 190 aircraft to Republic during the fourth quarter of 2009. US Airways is currently leasing back
four of the 10 aircraft from Republic for periods ranging from one to five months. Debt outstanding on the 10 Embraer aircraft was
$216 million prior to the sale. In connection with this transaction, Republic agreed to assume the full amount of this debt and US Airways
was released from its obligations under the assumed debt. Additionally, at the time of sale, US Airways had $35 million outstanding
under a loan from Republic (the "Republic loan"). The Republic loan was scheduled to be repaid starting in January 2010 and fully repaid
in October 2011. The full amount outstanding under the Republic loan was applied to the purchase price of the 10 aircraft. US Airways
incurred non-cash charges of $49 million from the loss on sale of the 10 aircraft and write off of related debt discount and issuance costs
in the fourth quarter of 2009.
18. Selected Quarterly Financial Information (unaudited)
Summarized quarterly financial information for 2009 and 2008 is as follows (in millions):
2009 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Operating revenues $ 2,491 $ 2,696 $ 2,758 $ 2,664
Operating expenses 2,517 2,575 2,757 2,638
Operating income (loss) (26) 121 1 26
Nonoperating expenses, net (69) (52) (69) (110)
Income tax benefit — — — (38)
Net income (loss) (95) 69 (68) (46)
2008
Operating revenues $ 2,867 $ 3,287 $ 3,293 $ 2,797
Operating expenses 3,060 3,825 3,981 3,151
Operating loss (193) (538) (688) (354)
Nonoperating expenses, net (31) (21) (164) (159)
Income tax provision (benefit) — — 3 (3)
Net loss (224) (559) (855) (510)
US Airways' 2009 and 2008 fourth quarter financial results were impacted by recognition of the following items:
Fourth quarter 2009 operating expenses included $33 million of net special charges consisting of $16 million in non-cash impairment
charges due to the decline in fair value of certain indefinite lived intangible assets associated with international routes, $5 million in
aircraft costs as a result of US Airways' previously announced capacity reductions, $6 million in severance charges and $6 million in
costs related to US Airways' liquidity improvement program. Operating expenses also included $3 million in non-cash charges related to
the decline in fair value of certain Express spare parts. Nonoperating expenses, net included $49 million in non-cash charges associated
with the sale of 10 Embraer 190 aircraft and write off of related debt discount and issuance costs. Income tax benefit includes $21 million
of a non-cash income tax benefit related to gains recorded within other comprehensive income, a $14 million tax benefit related to a
legislation change allowing US Airways to carry back 100% of 2008 AMT net operating losses, resulting in the recovery of AMT
amounts paid in prior years and a $3 million tax benefit related to the reversal of the deferred tax liability associated with the indefinite
lived intangible assets that were impaired during 2009.
Fourth quarter 2008 operating expenses included $234 million of net unrealized losses on fuel hedging instruments and $8 million of
net special charges consisting of $7 million in aircraft costs and $1 million in severance charges, both as a result of US Airways' capacity
reductions. Non-operating expenses, net included $74 million in other-than-temporary non-cash impairment charges for US Airways'
investments in auction rate securities as well as $4 million in write offs of debt issuance costs resulting from certain loan prepayments.
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