US Airways 2009 Annual Report Download - page 62

Table of Contents
prices in the latter part of 2008, while a significant positive development, had the near-term liquidity impact of reducing US Airways'
operating cash flow as US Airways was required to use cash from operations to collateralize its counterparties in connection with US
Airways' fuel hedging positions. The increase in fuel costs and fuel hedge collateral was partially offset by an increase in revenue of
$431 million due to a 3.1% increase in mainline and Express PRASM and US Airways' new revenue initiatives that went into effect in
2008.
Net cash used in investing activities was $889 million in 2008 as compared to net cash provided by investing activities of $306 million
in 2007. Principal investing activities in 2008 included expenditures for property and equipment totaling $1.04 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, 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 for
advance ticket sales for which US Airways had not yet provided air transportation. Principal investing activities in 2007 included net
sales of investments in marketable securities of $612 million, a decrease in restricted cash of $200 million and $56 million in proceeds
from the sale of investments in ARINC and Sabre, offset in part by expenditures for property and equipment totaling $566 million,
including the purchase of nine Embraer aircraft and a net increase in equipment purchase deposits of $80 million. The net sales of
investments in marketable securities in 2007 were primarily certain auction rate securities sold at par value in the third quarter of 2007.
The change in the 2007 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 $1 billion and $90 million in 2008 and 2007, respectively. Principal financing activities
in 2008 included proceeds from the issuance of debt of $1.39 billion, of which $600 million was from the series of financing transactions
completed in October 2008, including the Airbus advance and spare parts and engine loans. Proceeds also included the financing
associated with the purchase of 14 Embraer aircraft and five Airbus aircraft and $145 million in proceeds from the refinancing of certain
aircraft equipment notes. Debt repayments were $318 million, including a $100 million prepayment of certain indebtedness incurred as
part of US Airways' October 2008 financing transactions and $97 million related to the $145 million aircraft equipment note refinancing
discussed above. Principal financing activities in 2007 included proceeds from the issuance of debt of $198 million to finance the
acquisition of property and equipment and total debt repayments of $105 million.
Commitments
As of December 31, 2009, we had $4.79 billion of long-term debt and capital leases (including current maturities and before discount
on debt).
Citicorp Credit Facility
On March 23, 2007, US Airways Group entered into a term loan credit facility with Citicorp North America, Inc., as administrative
agent, and a syndicate of lenders pursuant to which US Airways Group borrowed an aggregate principal amount of $1.6 billion. US
Airways, AWA and certain other subsidiaries of US Airways Group are guarantors of the Citicorp credit facility.
The Citicorp credit facility bears interest at an index rate plus an applicable index margin or, at our option, LIBOR plus an applicable
LIBOR margin for interest periods of one, two, three or six months. The applicable index margin, subject to adjustment, is 1.00%, 1.25%
or 1.50% if the adjusted loan balance is less than $600 million, between $600 million and $1 billion, or greater than $1 billion,
respectively. The applicable LIBOR margin, subject to adjustment, is 2.00%, 2.25% or 2.50% if the adjusted loan balance is less than
$600 million, between $600 million and $1 billion, or greater than $1 billion, respectively. In addition, interest on the Citicorp credit
facility may be adjusted based on the credit rating for the Citicorp credit facility as follows: (i) if the credit ratings of the Citicorp credit
facility by Moody's and S&P in effect as of the last day of the most recently ended fiscal quarter are both at least one subgrade better than
the credit ratings in effect on March 23, 2007, then (A) the applicable LIBOR margin will be the lower of 2.25% and the rate otherwise
applicable based upon the adjusted Citicorp credit facility balance and (B) the applicable index margin will be the lower of 1.25% and the
rate otherwise applicable based upon the Citicorp credit facility principal balance, and (ii) if the credit ratings of the Citicorp credit
facility by Moody's and S&P in effect as of the last day of the most recently ended fiscal quarter are both at least two subgrades
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