US Airways 2010 Annual Report Download - page 60

Table of Contents
2009 Compared to 2008
Net cash provided by operating activities was $326 million in 2009 as compared to net cash used in operating activities of $1.03 billion
in 2008, a year-over-year improvement of $1.35 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. US Airways' 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 $1.64 billion, or 13.4%, 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 US Airways' fuel hedging
program. In the latter part of 2008, US Airways recognized unrealized losses on certain open fuel hedge transactions as the price of
heating oil fell below the lower limit of US Airways' collar transactions and caused it to use cash from operations to collateralize US
Airways' counterparties. Since the third quarter of 2008, US Airways has not entered into any new transactions to hedge its fuel
consumption, and US Airways has not had any fuel hedging contracts outstanding since the third quarter of 2009. Accordingly, US
Airways' 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. In addition, US Airways' 2009 operating cash flows also benefited from
$257 million of net intercompany cash transfers received from US Airways Group.
Net cash used in investing activities was $489 million and $889 million in 2009 and 2008, respectively. Principal investing activities in
2009 included expenditures for property and equipment totaling $677 million, primarily related to the purchase of Airbus aircraft. These
cash outflows were offset in part by $76 million in proceeds from dispositions of property and equipment, a $60 million decrease in
restricted cash and proceeds from sales of investments in marketable securities of $52 million. The $76 million in proceeds from
dispositions of property and equipment was the result of the swap of one of US Airways' 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 a change in the amount of holdback held by certain credit card processors for advance ticket sales for which
US Airways has not yet provided air transportation. 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, 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 $346 million and $1 billion in 2009 and 2008, respectively. Principal financing activities
in 2009 included proceeds from the issuance of debt of $747 million, which primarily included the financing associated with the purchase
of Airbus aircraft, as well as additional loans under a spare parts loan agreement, a loan secured by certain airport landing slots and an
unsecured financing with one of US Airways' third party Express carriers. These cash inflows were offset in part by debt repayments that
totaled $391 million in 2009. 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. These cash inflows were offset in part by debt
repayments that totaled $318 million in 2008, 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.
Commitments
As of December 31, 2010, we had $4.62 billion of long-term debt and capital leases (including current maturities and before discount
on debt).
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