US Airways 2009 Annual Report Download - page 59

Table of Contents
of certain investments in auction rate securities, as well as $10 million in other-than-temporary impairment charges recorded in other
nonoperating expense, net related to the decline in fair value of certain investments in auction rate securities.
We continue to monitor the market for auction rate securities and consider its impact (if any) on the fair value of our investments. If
the current market conditions deteriorate, we may be required to record additional impairment charges in other nonoperating expense, net
in future periods.
We believe that, based on our current unrestricted cash and cash equivalents balance at December 31, 2009, the current lack of
liquidity in our investments in auction rate securities will not have a material impact on our liquidity, our cash flow or our ability to fund
our operations.
Sources and Uses of Cash
US Airways Group
2009 Compared to 2008
Net cash provided by operating activities was $59 million in 2009 as compared to net cash used in operating activities of $980 million
in 2008, a period-over-period improvement of $1.04 billion. Operating cash flows significantly improved in 2009 due to the substantial
reduction in the cost of fuel offset by declines in revenues as a result of the global economic recession. Our mainline and Express fuel
expense was $2.28 billion, or 48%, lower in 2009 as compared to 2008 on 4.5% lower capacity. The weak demand environment caused
by the global economic recession resulted in a $1.66 billion, or 13.7%, decline in total operating revenues. In addition, operating cash
flows in 2009 improved by $321 million principally as a result of the wind down of our fuel hedging program. In the latter part of 2008,
we recognized unrealized losses on certain open fuel hedge transactions as the price of heating oil fell below the lower limit of our collar
transactions and caused us to use cash from operations to collateralize our counterparties. Since the third quarter of 2008, we have not
entered into any new fuel hedging transactions and, as of December 31, 2009, we had no remaining outstanding fuel hedging contracts.
Accordingly, our 2009 operating cash flows were not significantly impacted by fuel hedging transactions as any hedges settling in 2009
had been fully collateralized through the cash deposits posted during 2008.
Net cash used in investing activities was $495 million and $915 million in 2009 and 2008, respectively. Principal investing activities in
2009 included expenditures for property and equipment totaling $683 million primarily related to the purchase of Airbus aircraft. These
expenditures were offset by $76 million in proceeds from the disposition of property and equipment, a $60 million decrease in restricted
cash and $52 million of net proceeds from sales of investments in marketable securities. Proceeds from the disposition of property and
equipment are comprised of proceeds from the swap of one of our owned aircraft in exchange for the leased aircraft involved in the Flight
1549 accident and sale-leaseback transactions involving four aircraft and five engines. Restricted cash decreased during 2009 due to
changes in the amount of holdback held by certain credit card processors for advance ticket sales for which we had not yet provided air
transportation. Principal investing activities in 2008 included expenditures for property and equipment totaling $1.07 billion, including
the purchase of 14 Embraer aircraft, five Airbus aircraft and a $139 million net increase in equipment purchase deposits for aircraft on
order, as well as a $74 million increase in restricted cash, all of which were offset in part by net sales of investments in marketable
securities of $206 million. The change in the 2008 restricted cash balance was due to changes in the amount of holdback held by certain
credit card processors.
Net cash provided by financing activities was $701 million and $981 million for 2009 and 2008, respectively. Principal financing
activities in 2009 included proceeds from the issuance of debt of $919 million, which primarily included the financing associated with the
purchase of Airbus aircraft, as well as the issuance of $172 million of convertible notes, additional loans under a spare parts loan
agreement, a loan secured by certain airport landing slots and an unsecured financing with one of our third-party Express carriers. Debt
repayments totaled $407 million in 2009. Financing activities in 2009 also included net proceeds from the issuance of common stock of
$66 million from a May 2009 public stock offering of 17.5 million shares and $137 million from a September 2009 public stock offering
of 29 million shares. Principal financing activities in 2008 included proceeds from the issuance of debt of $1.59 billion, of which
$800 million was from the series of financing transactions completed in October 2008,
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