US Airways Group, Inc. Reports Fourth Quarter and 2009 Financial Results
  • The Company reported a net loss excluding special items for the fourth quarter 2009 of $32 million, or ($0.20) per share. This compares favorably to the fourth quarter 2008 net loss excluding special items of $222 million, or ($1.94) per share.
  • The Company reported a full year 2009 net loss excluding special items of $499 million, or ($3.75) per share, versus a net loss excluding special items of $808 million, or ($8.06) per share, for the full year 2008.
  • Mainline cost per available seat mile (CASM) excluding fuel and special items in the fourth quarter increased year-over-year by less than one percent despite a two percent reduction in mainline capacity (ASMs). This cost containment resulted primarily from efficiencies created by the Company’s industry leading operating reliability performance.
  • The Company’s total cash and investments on Dec. 31, 2009 was $2.0 billion, of which $0.5 billion was restricted. The Company’s unrestricted cash position increased by $261 million versus Dec. 31, 2008.
  •  

    TEMPE, Ariz., Jan 28, 2010 (BUSINESS WIRE) -- US Airways Group, Inc. (NYSE: LCC) today reported its fourth quarter and 2009 results. Net loss for the fourth quarter was $32 million, or ($0.20) per share, which excludes special items totaling $47 million. Net loss excluding special items for the fourth quarter 2008 was $222 million, or ($1.94) per share. On a GAAP basis, the Company reported a net loss of $79 million for its fourth quarter 2009, or ($0.49) per share, compared to a net loss of $543 million, or ($4.76) per share, for the same period in 2008.

    For the full year 2009, the Company reported a net loss of $499 million, or ($3.75) per share, excluding special credits totaling $294 million. Net loss excluding special items for the full year 2008 was $808 million, or ($8.06) per share. On a GAAP basis, the Company reported a net loss of $205 million, or ($1.54) per share for 2009, compared to a net loss of $2.2 billion, or ($22.11) per share, in 2008.

    See the accompanying notes in the Financial Tables section of this press release for a reconciliation of GAAP financial information to non-GAAP financial information.

    US Airways Group, Inc. Chairman and CEO Doug Parker stated, "Our fourth quarter and full year results reflect the extremely difficult environment the industry experienced in 2009. Given that environment, we are particularly pleased with the significant improvement in financial performance versus 2008. The actions we have put in place to address the challenges of the past two years - capacity cuts, a la carte revenues, cost control and a commitment to efficient operating reliability - are working. We enter 2010 with encouraging momentum and well positioned to take advantage of the improving economic environment.

    "We owe this improvement to the terrific US Airways team that has remained focused on our customers through an extremely difficult two years. With more than 80 percent of our flights arriving on-time during 2009, a 36 percent year-over-year improvement in baggage handling and a 34 percent reduction in customer complaints, we couldn't be more proud of our 32,000 fellow employees," concluded Parker.

    Revenue and Cost Comparisons

    Total revenues in the fourth quarter were down 4.9 percent versus the fourth quarter of 2008 due to a 1.8 percent decline in total ASMs and lower passenger yields. Total revenue per available seat mile was 13.02 cents, down 3.1 percent versus the same period last year. Mainline passenger revenue per available seat mile (PRASM) in the fourth quarter was 9.93 cents, down 7.0 percent versus the same period last year. Express PRASM was 18.76 cents, up 1.7 percent versus the fourth quarter 2008. Total mainline and Express PRASM was 11.44 cents, which was down 4.7 percent versus the fourth quarter 2008.

    Total operating expenses in the fourth quarter were down 16.8 percent over the same period last year due principally to a 14.6 percent decrease in mainline and Express fuel expense. Mainline CASM in the fourth quarter was 11.82 cents, down 19.2 percent versus the same period last year. Excluding fuel and special items, mainline CASM was 8.56 cents, up 0.8 percent from the same period last year, on a 1.8 percent decline in mainline ASMs.

    Liquidity

    As of Dec. 31, 2009, the Company had approximately $2.0 billion in total cash and investments, of which $0.5 billion was restricted, versus $2.0 billion in total cash of which $0.7 billion was restricted on Dec. 31, 2008. Looking forward, as part of a previously announced liquidity improvement program, the Company has significantly reduced its 2010 and 2011 capital commitments by deferring most new aircraft deliveries and reducing debt amortization.

    Special Items

    During its fourth quarter, the Company recognized special items totaling $47 million. These special items included: $19 million in non-cash asset impairment charges primarily due to the decline in fair value of certain intangible assets associated with international routes, $5 million in aircraft costs as a result of previously announced capacity reductions, $6 million in severance charges, and $6 million in costs related to the Company's liquidity improvement program. In addition, the Company recognized $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. These items were partially offset by $38 million in special tax benefits.

    Other Fourth Quarter Notable Accomplishments

    Strategic Initiatives

    • Announced the realignment of its operations to focus on the airline's core network strengths, which include hubs in Charlotte, N.C., Philadelphia and Phoenix, and a focus city at Washington National Airport. These four cities, as well as the airline's popular hourly Shuttle service between New York, Boston, and Washington, D.C., will serve as the foundation of the airline's network. By the end of 2010, they will represent 99 percent of the ASMs versus roughly 93 percent today.

    New Customer Initiatives

    • Expanded choice for Dividend Miles redemption with the introduction of the new GoAwards program, which began Jan. 6. With these changes, customers have access to last-seat availability, and the ability to combine Coach, First and Envoy cabins and dates at various mileage levels.
    • Began offering customers access to more than 250 airport clubs worldwide, including all US Airways Clubs, Continental's Presidents Clubs, United's Red Carpet Clubs and Star Alliance lounges with the purchase of a single, standard US Airways Club membership. US Airways currently offers 17 Clubs located in 13 cities across the United States and one Envoy Lounge in Philadelphia.
    • In November, US Airways began offering business class travelers improved comfort and privacy on trans-Atlantic flights with the new Envoy Suite, including fully lie-flat business class seats with an advanced on-demand in-flight entertainment system on its fleet of Airbus wide-body aircraft.

    New Destinations and Flights

    • Commenced its first-ever service to South America with year-round daily, nonstop service from its Charlotte, N.C. hub to Rio de Janeiro, Brazil.
    • Initiated new, daily, nonstop service between its largest hub in Charlotte, N.C. and Honolulu, Hawaii on the island of Oahu. The year-round flight complements US Airways' daily nonstop service to Oahu, Maui, Kauai and the Big Island from its Phoenix hub.
    • Announced daily, year-round nonstop service to Rome from Charlotte, N.C. beginning on May 13, 2010. The new flight will complement US Airways' daily nonstop service to Rome from Philadelphia, the airline's international gateway.
    • Inaugurated the airline's first ever service to Montego Bay, Jamaica from its Western U.S. hub at Phoenix Sky Harbor International Airport. This new route complements existing service to Jamaica from US Airways' two East Coast hubs in Charlotte, N.C., and Philadelphia, as well as Boston.
    • Unveiled new seasonal nonstop service to Anchorage, Alaska from its Philadelphia hub to begin June 1, 2010, complementing existing year-round Anchorage service from its Phoenix hub.
    • Announced that the airline will resume three daily flights between Melbourne, Fla. and its Charlotte, N.C. hub beginning Feb. 11, 2010.

    Analyst Conference Call/Webcast Details

    US Airways will conduct a live audio webcast of its earnings call today at 12:30 p.m. ET, which will be available to the public on a listen-only basis at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.usairways.com&esheet=6158140&lan=en_US&anchor=www.usairways.com&index=1&md5=1b9d3438c621c793e90d3ec53a86a9ff under the Company Info >> Investor Relations tab. An archive of the call/webcast will be available in the Public/Investor Relations portion of the Web site through Feb. 28, 2010.

    Immediately following the conference call, the airline will also provide its investor relations guidance on its Web site (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.usairways.com&esheet=6158140&lan=en_US&anchor=www.usairways.com&index=2&md5=bf418050645e5a102f3efb9a5ac60da4). Information that could be provided includes cost per available seat mile (CASM) excluding fuel and special items, fuel prices and hedging positions, other revenues and estimated interest expense/income. The investor relations update page also includes the airline's capacity, fleet plan, and estimated capital spending for 2010.

    About US Airways

    US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. The airline employs more than 32,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 19,700 daily flights to 1,077 airports in 175 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix, and a focus city at Ronald Reagan Washington National Airport. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration for its Charlotte hub line maintenance facility. For more company information, visit usairways.com (LCCF)

    Forward Looking Statements

    Certain of the statements contained or referred to herein should be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements may be identified by words such as "may," "will," "expect," "intend," "anticipate," "believe," "estimate," "plan," "could," "should," and "continue" and similar terms used in connection with statements regarding the outlook, expected fuel costs, revenue and pricing environment, and expected financial performance and liquidity position of US Airways Group (the "Company"). Such statements include, but are not limited to, statements about future financial and operating results, the Company's plans, objectives, expectations and intentions, and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties that could cause the Company's actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the impact of future significant operating losses; the impact of downturns in economic conditions and their impact on passenger demand and related revenues; a reduction in the availability of financing, changes in prevailing interest rates and increased costs of financing; the Company's high level of fixed obligations and the ability of the Company to obtain and maintain any necessary financing for operations and other purposes and operate pursuant to the terms of its financing facilities (particularly the financial covenants); the impact of fuel price volatility, significant disruptions in fuel supply and further significant increases to fuel prices; the ability of the Company to maintain adequate liquidity including in respect of credit card processing agreements; labor costs, relations with unionized employees generally and the impact and outcome of the labor negotiations, including the ability of the Company to complete the integration of the labor groups of the Company and America West Holdings; reliance on vendors and service providers and the ability of the Company to obtain and maintain commercially reasonable terms with those vendors and service providers; reliance on automated systems and the impact of any failure or disruption of these systems; the impact of the integration of the Company's business units; the impact of changes in the Company's business model; competitive practices in the industry, including significant fare restructuring activities, capacity reductions or other restructuring or consolidation activities by major airlines; the impact of industry consolidation; the ability to attract and retain qualified personnel; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; government legislation and regulation, including environmental regulation; the Company's inability to maintain labor costs at competitive levels; the Company's ability to obtain and maintain adequate facilities and infrastructure to operate and grow the Company's route network; costs of ongoing data security compliance requirements and the impact of any data security breach; interruptions or disruptions in service at one or more of the Company's hub airports; the impact of any accident involving the Company's aircraft; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; weather conditions and seasonality of airline travel; the cyclical nature of the airline industry; the impact of insurance costs and disruptions to insurance markets; the impact of foreign currency exchange rate fluctuations; the ability to use NOLs and certain other tax attributes; the ability to maintain contracts critical to the Company's operations; the ability of the Company to attract and retain customers; the ability of external parties, including independent express carriers, to meet their obligations to the Company; and other risks and uncertainties listed from time to time in the Company's reports to the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled "Risk Factors" in the Company's Report on Form 10-Q for the quarter ended September 30, 2009 and in the Company's other filings with the SEC, which are available at http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww.usairways.com&esheet=6158140&lan=en_US&anchor=www.usairways.com&index=3&md5=50913c949f83c263493d2b17bf571189.

    US Airways Group, Inc.
    Condensed Consolidated Statements of Operations
    (In millions, except share and per share amounts)
    (Unaudited)
    3 Months Ended

    December 31,


    Percent

    12 Months Ended

    December 31,


    Percent

    2009 2008 Change 2009 2008 Change
    Operating revenues:
    Mainline passenger $ 1,660 $ 1,819 (8.7 ) $ 6,752 $ 8,183 (17.5 )
    Express passenger 647 649 (0.3 ) 2,503 2,879 (13.1 )
    Cargo 33 33 - 100 144 (30.3 )
    Other 286 260 9.9 1,103 912 20.9
    Total operating revenues 2,626 2,761 (4.9 ) 10,458 12,118 (13.7 )
    Operating expenses:
    Aircraft fuel and related taxes 511 600 (14.8 ) 1,863 3,618 (48.5 )
    Loss (gain) on fuel hedging instruments, net:
    Realized - 202 nm 382 (140 ) nm
    Unrealized - 234 nm (375 ) 496 nm
    Salaries and related costs 512 530 (3.4 ) 2,165 2,231 (3.0 )
    Express expenses:
    Fuel 171 199 (14.0 ) 609 1,137 (46.4 )
    Other 465 450 3.4 1,910 1,912 (0.1 )
    Aircraft rent 173 180 (4.1 ) 695 724 (4.0 )
    Aircraft maintenance 168 182 (7.8 ) 700 783 (10.6 )
    Other rent and landing fees 138 138 - 560 562 (0.5 )
    Selling expenses 91 98 (7.7 ) 382 439 (13.0 )
    Special items, net 33 8 nm 55 76 (27.3 )
    Depreciation and amortization 57 56 2.5 242 215 12.5
    Goodwill impairment - - nm - 622 nm
    Other 293 262 12.1 1,152 1,243 (7.4 )
    Total operating expenses 2,612 3,139 (16.8 ) 10,340 13,918 (25.7 )
    Operating income (loss) 14 (378 ) nm 118 (1,800 ) nm
    Nonoperating income (expense):
    Interest income 6 15 (57.1 ) 24 83 (71.5 )
    Interest expense, net (75 ) (82 ) (8.0 ) (304 ) (258 ) 17.9
    Other, net (62 ) (101 ) (36.6 ) (81 ) (240 ) (66.5 )
    Total nonoperating expense, net (131 ) (168 ) (21.0 ) (361 ) (415 ) (13.1 )
    Loss before income taxes (117 ) (546 ) (78.4 ) (243 ) (2,215 ) (89.0 )
    Income tax benefit (38 ) (3 ) nm (38 ) - nm
    Net loss $ (79 ) $ (543 ) (85.3 ) $ (205 ) $ (2,215 ) (90.8 )
    Loss per common share:
    Basic $ (0.49 ) $ (4.76 ) $ (1.54 ) $ (22.11 )
    Diluted $ (0.49 ) $ (4.76 ) $ (1.54 ) $ (22.11 )
    Shares used for computation (in thousands):
    Basic 161,103 114,106 133,000 100,168
    Diluted 161,103 114,106 133,000 100,168
    US Airways Group, Inc.
    Operating Statistics
    3 Months Ended

    December 31,


    Percent

    12 Months Ended

    December 31,


    Percent

    2009

    2008

    Change

    2009

    2008

    Change

    Mainline

    Revenue passenger miles (millions) 13,336 13,618 (2.1 ) 57,889 60,570 (4.4 )
    Available seat miles (ASM) (millions) 16,718 17,027 (1.8 ) 70,725 74,151 (4.6 )
    Passenger load factor (percent) 79.8 80.0 (0.2 ) pts 81.9 81.7 0.2 pts
    Yield (cents) 12.45 13.36 (6.8 ) 11.66 13.51 (13.7 )
    Passenger revenue per ASM (cents) 9.93 10.68 (7.0 ) 9.55 11.04 (13.5 )
    Passenger enplanements (thousands) 12,117 12,806 (5.4 ) 51,016 54,820 (6.9 )
    Departures (thousands) 110 119 (6.8 ) 461 496 (7.1 )
    Aircraft at end of period 349 354 (1.4 ) 349 354 (1.4 )
    Block hours (thousands) 290 303 (4.4 ) 1,224 1,300 (5.8 )
    Average stage length (miles) 957 923 3.7 972 955 1.8
    Average passenger journey (miles) 1,595 1,462 9.1 1,637 1,554 5.4
    Fuel consumption (gallons in millions) 251 260 (3.6 ) 1,069 1,142 (6.4 )
    Average aircraft fuel price including related taxes (dollars per gallon) 2.04 2.30 (11.7 ) 1.74 3.17 (45.0 )

    Average aircraft fuel price including related taxes and realized loss (gain) on fuel hedging instruments, net (dollars per gallon)

    2.04 3.08 (33.9 ) 2.10 3.04 (31.0 )
    Full-time equivalent employees at end of period 31,333 32,671 (4.1 ) 31,333 32,671 (4.1 )
    Operating cost per ASM (cents) 11.82 14.62 (19.2 ) 11.06 14.66 (24.6 )
    Operating cost per ASM excluding special items (cents) 11.62 13.20 (12.0 ) 11.51 13.05 (11.8 )
    Operating cost per ASM excluding special items and fuel (cents) 8.56 8.49 0.8 8.34 8.36 (0.3 )

    Express*

    Revenue passenger miles (millions) 2,515 2,522 (0.3 ) 10,570 10,855 (2.6 )
    Available seat miles (millions) 3,450 3,519 (2.0 ) 14,367 14,953 (3.9 )
    Passenger load factor (percent) 72.9 71.7 1.2 pts 73.6 72.6 1.0 pts
    Yield (cents) 25.73 25.74 - 23.68 26.52 (10.7 )
    Passenger revenue per ASM (cents) 18.76 18.45 1.7 17.42 19.26 (9.5 )
    Passenger enplanements (thousands) 6,684 6,350 5.3 26,949 26,732 0.8
    Aircraft at end of period 283 296 (4.4 ) 283 296 (4.4 )
    Fuel consumption (gallons in millions) 82 83 (0.9 ) 338 352 (3.8 )
    Average aircraft fuel price including related taxes (dollars per gallon) 2.08 2.40 (13.3 ) 1.80 3.23 (44.3 )
    Operating cost per ASM (cents) 18.45 18.45 - 17.53 20.39 (14.0 )
    Operating cost per ASM excluding special items (cents) 18.36 18.45 (0.4 ) 17.51 20.39 (14.1 )
    Operating cost per ASM excluding special items and fuel (cents) 13.40 12.79 4.8 13.27 12.78 3.8

    TOTAL - Mainline & Express

    Revenue passenger miles (millions) 15,851 16,140 (1.8 ) 68,459 71,425 (4.2 )
    Available seat miles (millions) 20,168 20,546 (1.8 ) 85,092 89,104 (4.5 )
    Passenger load factor (percent) 78.6 78.6 - pts 80.5 80.2 0.3 pts
    Yield (cents) 14.56 15.29 (4.8 ) 13.52 15.49 (12.7 )
    Passenger revenue per ASM (cents) 11.44 12.01 (4.7 ) 10.88 12.42 (12.4 )
    Total revenue per ASM (cents) 13.02 13.44 (3.1 ) 12.29 13.60 (9.6 )
    Passenger enplanements (thousands) 18,801 19,156 (1.8 ) 77,965 81,552 (4.4 )
    Aircraft at end of period 632 650 (2.8 ) 632 650 (2.8 )
    Fuel consumption (gallons in millions) 333 343 (2.9 ) 1,407 1,494 (5.8 )
    Average aircraft fuel price including related taxes (dollars per gallon) 2.05 2.33 (12.0 ) 1.76 3.18 (44.8 )
    Operating cost per ASM (cents) 12.95 15.28 (15.2 ) 12.15 15.62 (22.2 )
    * Express includes US Airways Group's wholly owned regional airline subsidiaries, Piedmont Airlines and PSA Airlines, as well as operating and financial results from capacity purchase agreements with Republic Airlines, Mesa Airlines, Air Wisconsin Airlines and Chautauqua Airlines.
    Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
    US Airways Group, Inc. (the "Company") is providing disclosure of the reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The Company believes that the non-GAAP financial measures provide investors the ability to measure financial performance excluding special items, which is more indicative of the Company's ongoing performance and is more comparable to measures reported by other major airlines. The Company believes that the presentation of mainline and Express CASM excluding special items and fuel is useful to investors as both the cost and availability of fuel are subject to many economic and political factors beyond the Company's control.
    3 Months Ended

    December 31,

    12 Months Ended

    December 31,

    Reconciliation of Net Loss Excluding Special Items for US Airways Group, Inc.

    2009

    2008

    2009

    2008

    (In millions, except share and per share amounts)
    Net loss as reported $ (79 ) $ (543 ) $ (205 ) $ (2,215 )
    Special items:
    Unrealized loss (gain) on fuel hedging instruments, net (1) - 234 (375 ) 496
    Special items, net (2) 33 8 55 76
    Goodwill impairment (3) - - - 622
    Express operating special items, net (4) 3 - 3 -
    Nonoperating special items, net (5) 49 79 61 213
    Income tax benefits (6) (38 ) - (38 ) -
    Net loss as adjusted for special items $ (32 ) $ (222 ) $ (499 ) $ (808 )
    3 Months Ended

    December 31,

    12 Months Ended

    December 31,

    Reconciliation of Basic and Diluted Loss Per Share AsAdjusted for Special Items for US Airways Group, Inc.

    2009

    2008

    2009

    2008

    Net loss as adjusted for special items $ (32 ) $ (222 ) $ (499 ) $ (808 )
    Shares used for computation (in thousands):
    Basic 161,103 114,106 133,000 100,168
    Diluted 161,103 114,106 133,000 100,168
    Loss per share as adjusted for special items:
    Basic $ (0.20 ) $ (1.94 ) $ (3.75 ) $ (8.06 )
    Diluted $ (0.20 ) $ (1.94 ) $ (3.75 ) $ (8.06 )
    3 Months Ended

    December 31,

    12 Months Ended

    December 31,

    Reconciliation of Operating Income (Loss) ExcludingSpecial Items for US Airways Group, Inc.

    2009

    2008

    2009

    2008

    Operating income (loss) as reported $ 14 $ (378 ) $ 118 $ (1,800 )
    Special items:
    Unrealized loss (gain) on fuel hedging instruments, net (1) - 234 (375 ) 496
    Special items, net (2) 33 8 55 76
    Goodwill impairment (3) - - - 622
    Express operating special items, net (4) 3 - 3 -
    Operating income (loss) as adjusted for special items $ 50 $ (136 ) $ (199 ) $ (606 )
    3 Months Ended

    December 31,

    12 Months Ended

    December 31,

    Reconciliation of Operating Cost per ASM Excluding SpecialItems and Fuel - Mainline only for US Airways Group, Inc.

    2009

    2008

    2009

    2008

    Total operating expenses $ 2,612 $ 3,139 $ 10,340 $ 13,918
    Less Express expenses:
    Fuel (171 ) (199 ) (609 ) (1,137 )
    Other (465 ) (450 ) (1,910 ) (1,912 )
    Total mainline operating expenses 1,976 2,490 7,821 10,869
    Special items:
    Unrealized gain (loss) on fuel hedging instruments, net (1) - (234 ) 375 (496 )
    Special items, net (2) (33 ) (8 ) (55 ) (76 )
    Goodwill impairment (3) - - - (622 )
    Mainline operating expenses, excluding special items 1,943 2,248 8,141 9,675
    Fuel:
    Aircraft fuel and related taxes (511 ) (600 ) (1,863 ) (3,618 )
    Realized gain (loss) on fuel hedging instruments, net (7) - (202 ) (382 ) 140
    Mainline operating expenses, excluding special items and fuel $ 1,432 $ 1,446 $ 5,896 $ 6,197
    (in cents)
    Mainline operating expenses per ASM $ 11.82 $ 14.62 $ 11.06 $ 14.66
    Special items per ASM:
    Unrealized gain (loss) on fuel hedging instruments, net (1) - (1.37 ) 0.53 (0.67 )
    Special items, net (2) (0.20 ) (0.05 ) (0.08 ) (0.10 )
    Goodwill impairment (3) - - - (0.84 )
    Mainline operating expenses per ASM, excluding special items 11.62 13.20 11.51 13.05
    Fuel per ASM:
    Aircraft fuel and related taxes (3.06 ) (3.52 ) (2.63 ) (4.88 )
    Realized gain (loss) on fuel hedging instruments, net (7) - (1.18 ) (0.54 ) 0.19

    Mainline operating expenses per ASM, excluding special items and fuel

    $ 8.56 $ 8.49 $ 8.34 $ 8.36
    3 Months Ended

    December 31,

    12 Months Ended

    December 31,

    Reconciliation of Operating Cost per ASM Excluding SpecialItems and Fuel - Express only for US Airways Group, Inc.

    2009

    2008

    2009

    2008

    Total Express operating expenses $ 636 $ 649 $ 2,519 $ 3,049
    Special items:
    Express operating special items, net (4) (3 ) - (3 ) -
    Express operating expenses, excluding special items 633 649 2,516 3,049
    Aircraft fuel and related taxes (171 ) (199 ) (609 ) (1,137 )
    Express operating expenses, excluding special items and fuel $ 462 $ 450 $ 1,907 $ 1,912
    (in cents)
    Express operating expenses per ASM $ 18.45 $ 18.45 $ 17.53 $ 20.39
    Special items per ASM:
    Express operating special items, net (4) (0.09 ) - (0.02 ) -
    Express operating expenses per ASM, excluding special items 18.36 18.45 17.51 20.39
    Aircraft fuel and related taxes (4.96 ) (5.66 ) (4.24 ) (7.60 )

    Express operating expenses per ASM, excluding special items and fuel

    $ 13.40 $ 12.79 $ 13.27 $ 12.78
    Note: Amounts may not recalculate due to rounding.

    FOOTNOTES:

    1 ) The 2009 twelve month period included $375 million of net unrealized gains and the 2008 fourth quarter and twelve month periods included $234 million and $496 million of net unrealized losses, respectively, resulting from mark-to-market accounting for changes in the fair value of the Company's fuel hedging instruments. The application of mark-to-market accounting resulted in unrealized gains in 2009 due primarily to the reversal of unrealized losses recognized in prior periods as hedge transactions settled in the current year.
    2 )

    The 2009 fourth quarter included $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 previously announced capacity reductions, $6 million in severance charges and $6 million in costs related to the Company's liquidity improvement program. The 2009 twelve month period included the $16 million non-cash impairment charges and $6 million liquidity improvement costs, as well as $22 million in aircraft costs and $11 million in severance and other charges. The 2008 fourth quarter included $7 million in aircraft costs and $1 million in severance charges, both as a result of the Company's capacity reductions. The 2008 twelve month period included $35 million of merger related transition expenses, $18 million in non-cash charges related to the decline in fair value of certain spare parts associated with the Company's Boeing 737 aircraft fleet and as a result of the Company's capacity reductions, $14 million in aircraft costs and $9 million in severance charges.

    3 ) The 2008 twelve month period included a non-cash charge of $622 million to write off all the goodwill created by the merger of US Airways Group, Inc. and America West Holdings Corporation in September 2005.
    4 ) The 2009 fourth quarter and twelve month periods included $3 million in non-cash charges related to the decline in fair value of certain Express spare parts.
    5 )

    The 2009 fourth quarter 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. The 2009 twelve month period included the $49 million in losses associated with the sale of 10 Embraer 190 aircraft, $10 million in other-than-temporary non-cash impairment charges for the Company's investments in auction rate securities and a $2 million non-cash asset impairment charge. The 2008 fourth quarter included $74 million in other-than-temporary non-cash impairment charges for the Company's investments in auction rate securities as well as $5 million in write offs of debt issuance costs resulting from certain loan prepayments. The 2008 twelve month period included $214 million in other-than-temporary non-cash impairment charges for the Company's investments in auction rate securities as well as $7 million in write offs of debt discount and debt issuance costs due to the refinancing of certain aircraft equipment notes and certain loan prepayments, offset by $8 million in gains on forgiveness of debt.

    6 ) The 2009 fourth quarter and twelve month periods included $38 million in tax benefits. Of this amount, $21 million was due to a non-cash income tax benefit related to gains recorded within other comprehensive income during 2009. Generally accepted accounting principles ("GAAP") requires all items be considered (including items recorded in other comprehensive income) in determining the amount of tax benefit that results from a loss from continuing operations that should be allocated to continuing operations. In accordance with GAAP, the Company recorded a tax benefit on the loss from continuing operations, which was exactly offset by income tax expense on other comprehensive income as follows:

    Net Loss
    Income Statement

    Change in Other
    Comprehensive Income

    Pre Allocation

    ($226)

    $46

    Tax Allocation 21

    (21)

    As Presented

    (205)

    25
    As the income tax expense on other comprehensive income is equal to the income tax benefit recognized in continuing operations, the Company's total comprehensive loss is unchanged. In addition, the Company's net deferred tax position at December 31, 2009 is not impacted by this tax allocation.
    The remaining tax benefits included $14 million related to a legislation change allowing the Company to recover certain Alternative Minimum Tax liability ("AMT") amounts paid in prior years and $3 million related to the tax benefit of the non-cash impairment charge on indefinite lived intangible assets discussed in footnote 2) above.
    7 ) The 2009 twelve month period included $382 million of net realized losses on settled fuel hedge transactions. The 2008 fourth quarter and twelve month periods included $202 million of net realized losses and $140 million of net realized gains, respectively, on settled fuel hedge transactions.
    US Airways Group, Inc.
    Condensed Consolidated Balance Sheets
    (In millions)
    (Unaudited)
    December 31, 2009 December 31, 2008
    Assets
    Current assets
    Cash, cash equivalents and investments in marketable securities $ 1,299 $ 1,054
    Restricted cash - 186
    Accounts receivable, net 285 293
    Materials and supplies, net 227 201
    Prepaid expenses and other 520 684
    Total current assets 2,331 2,418
    Property and equipment
    Flight equipment 3,852 3,157
    Ground property and equipment 883 816
    Less accumulated depreciation and amortization (1,151 ) (954 )
    3,584 3,019
    Equipment purchase deposits 112 267
    Total property and equipment 3,696 3,286
    Other assets
    Other intangibles, net 503 545
    Restricted cash 480 540
    Investments in marketable securities 203 187
    Other assets 241 238
    Total other assets 1,427 1,510
    Total assets $ 7,454 $ 7,214
    Liabilities and Stockholders' Deficit
    Current liabilities
    Current maturities of debt and capital leases $ 502 $ 362
    Accounts payable 337 797
    Air traffic liability 778 698
    Accrued compensation and vacation 178 158
    Accrued taxes 141 142
    Other accrued expenses 853 887
    Total current liabilities 2,789 3,044
    Noncurrent liabilities and deferred credits
    Long-term debt and capital leases, net of current maturities 4,024 3,623
    Deferred gains and credits, net 377 383
    Employee benefit liabilities and other 619 658
    Total noncurrent liabilities and deferred credits 5,020 4,664
    Stockholders' deficit
    Common stock 2 1
    Additional paid-in capital 2,107 1,789
    Accumulated other comprehensive income 90 65
    Accumulated deficit (2,541 ) (2,336 )
    Treasury stock (13 ) (13 )
    Total stockholders' deficit (355 ) (494 )
    Total liabilities and stockholders' deficit $ 7,454 $ 7,214

    SOURCE: US Airways

    US Airways
    Dan Cravens
    480-693-5729