US Airways 2011 Annual Report Download - page 64

Table of Contents
Liquidity and Capital Resources
As of December 31, 2011, our total cash, cash equivalents and restricted cash was $2.31 billion, of which $365 million was restricted. Our final
investment in auction rate securities was liquidated in July 2011. Refer to Note 6(b) to US Airways Group's and Note 5(b) to US Airways' consolidated
financial statements in Part II, Items 8A and 8B, respectively, of this report for additional information.
Sources and Uses of Cash
US Airways Group
2011 Compared to 2010
Operating Activities
Net cash provided by operating activities was $472 million and $804 million in 2011 and 2010, respectively, a year-over-year decrease of $332 million.
The decline in operating cash flows was driven by lower net income in 2011 as mainline and Express fuel costs increased $1.28 billion, or 40.5%, on a 1.0%
increase in total system capacity. The increase in fuel costs was offset in part by growth in total operating revenues of $1.15 billion, or 9.6%, due principally
to the strong pricing environment resulting from ongoing industry capacity discipline and robust consumer demand. A $99 million increase in Express
maintenance costs related to the PSA CRJ-200 fleet also contributed to the decline in 2011 operating cash flows.
Investing Activities
Net cash used in investing activities was $472 million in 2011 as compared to net cash provided by investing activities of $63 million in 2010. Principal
investing activities in 2011 included expenditures of $493 million for property and equipment, including the purchase of eight new Airbus aircraft, and
$100 million for aircraft pre-delivery deposits, as well as purchases of marketable securities of $30 million. These cash outflows were offset in part by cash
proceeds of $82 million from sales of marketable securities, which included $52 million related to the liquidation of our remaining investments in auction rate
securities, and net cash proceeds of $63 million obtained in the slot transaction with Delta.
Principal investing activities in 2010 included net proceeds from sales of marketable securities of $325 million, including sales of certain auction rate
securities of $145 million, and a $116 million decrease in restricted cash. These cash inflows were offset in part by expenditures for property and equipment
totaling $201 million and purchases of marketable securities of $180 million. Expenditures for property and equipment in 2010 related primarily to the
purchase of new Airbus aircraft and payments of aircraft pre-delivery deposits. Changes in restricted cash in 2010 reflect adjustments to the amount of
holdback held by certain credit card processors for advance ticket sales for which US Airways has not yet provided air transportation.
Financing Activities
Net cash provided by financing activities was $88 million in 2011 as compared to net cash used in financing activities of $307 million in 2010.
Principal financing activities in 2011 included proceeds from the issuance of debt of $764 million, which included $471 million of proceeds from the issuance
of the Series 2011-1 Class A, Class B and Class C Enhanced Equipment Trust Certificates in connection with the refinancing of five Airbus aircraft owned by
US Airways and the financing of four new Airbus aircraft delivered in 2011 (the "2011 EETCs") as well as the issuance of Class C certificates in the
aggregate principal amount of $53 million under the Series 2010-1 EETCs. The 2010-1 Class A and B certificates originally closed in December 2010 in
connection with the refinancing of owned Airbus aircraft (the "2010 EETCs"). Debt repayments were $675 million, which included the repayment of existing
debt associated with five Airbus aircraft refinanced using cash provided in the 2011 EETC issuance described above.
Principal financing activities in 2010 included debt repayments of $764 million, which included the repayment of existing debt associated with eight
Airbus aircraft refinanced using cash provided in the 2010 EETC issuance and the repurchase of $69 million aggregate principal amount of our 7% senior
convertible notes. Proceeds from the issuance of debt were $467 million, which included $340 million of proceeds from the issuance of equipment notes
associated with the 2010 EETCs as well as the financing associated with the purchase of new Airbus aircraft.
61