US Airways Reports Highest Quarterly Profit In Company History

TEMPE, Ariz., July 25, 2012 /PRNewswire via COMTEX/ --Highlights of US Airways Group, Inc.'s (the Company) second quarter 2012 results:

  • The Company reported a record second quarter net profit excluding net special charges of $321 million, or $1.61 per diluted share. This is a 203 percent increase versus the Company's second quarter 2011 net profit excluding net special charges of $106 million, or $0.56 per diluted share.
  • On a GAAP basis, the Company reported record net profit for the second quarter 2012 of $306 million, or $1.54 per diluted share. This is 233 percent above the second quarter 2011 net profit of $92 million, or $0.49 per diluted share. It is also the highest quarterly profit in company history.
  • The Company accrued $33 million during the quarter for its annual employee profit sharing program. In addition, through May US Airways' employees earned approximately $10 million in operational incentive payouts related to the Company's outstanding operational performance.

US Airways Group, Inc. (NYSE: LCC) today reported its second quarter 2012 financial results. For the second quarter 2012, net profit excluding net special charges was a record $321 million, or $1.61 per diluted share versus $106 million, or $0.56 per diluted share in the Company's second quarter 2011. On a GAAP basis, the Company reported a record net profit of $306 million for its second quarter 2012, or $1.54 per diluted share, compared to a net profit of $92 million, or $0.49 per diluted share, for the same period in 2011.

(Logo: http://photos.prnewswire.com/prnh/20120103/LA28814LOGO)

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, "We are extremely pleased to report the highest quarterly profit in our company's history. Consumer demand for our product remained strong during the second quarter, resulting in record revenue, passenger yields, and unit revenue performance.

"These results speak volumes about the collective efforts of our 32,000 employees, who continue to run an outstanding airline for our customers. Thanks to their hard work, we have set numerous Company records in operating reliability, including our best-ever year-to-date performance in on-time arrivals, baggage handling and completion factor.

"These financial and operating results are not only the best in US Airways' history but also among the very best in the industry, proving that US Airways is well-positioned for the remainder of 2012 and beyond," concluded Parker.

Revenue and Cost Comparisons

Strong passenger demand and record passenger yields led to improved revenue performance. Total revenues in the second quarter were a record $3.8 billion, up 7.2 percent versus the second quarter 2011 on a 1.0 percent increase in total available seat miles (ASMs). Total revenue per ASM was a record 16.30 cents, up 6.1 percent versus the same period last year, driven by a 7.4 percent increase in passenger yields.

Total operating expenses in the second quarter were $3.4 billion, up 0.7 percent over the same period last year. Mainline cost per available seat mile (CASM) was 13.14 cents, down 0.1 percent on a 1.4 percent increase in mainline ASMs. Total average fuel price per gallon fell 3.5 percent versus last year, to $3.18 per gallon. Excluding special charges, fuel, and profit sharing mainline CASM was 8.25 cents, up 1.1 percent versus the same period last year. Express CASM excluding special charges and fuel was 14.19 cents, down 0.1 percent on a 1.1 percent decrease in Express ASMs.

Liquidity

As of June 30, 2012, the Company had $2.9 billion in total cash and investments, of which $393 million was restricted. That is up from $2.6 billion, of which $388 million was restricted, on June 30, 2011.

During the second quarter, the Company completed an enhanced equipment trust certificate offering in the aggregate face amount of approximately $623 million. The proceeds were used to refinance two Airbus aircraft owned by US Airways and to finance the Company's purchase of twelve Airbus aircraft scheduled to be delivered from Sept. 2012 to March 2013 with the remaining balance used for general corporate purposes.

Special Charges

The Company recognized $15 million of net special charges in the second quarter of 2012. This included $9 million of net operating expense primarily related to corporate transaction and auction rate securities arbitration costs and a gain on a vendor settlement and a $3 million charge associated with the ratification of a new fleet and passenger services contract at Piedmont, a wholly-owned Express subsidiary. In addition, the Company recorded $3 million in nonoperating expense related to debt pre-payment penalties and non-cash write-offs of certain debt issuance costs.

Notable Accomplishments

Awards and Recognition

  • Was the only airline named one of the top 40 Best for Vets employers for 2012 among 1,000 major corporations surveyed by Military Times Edge. For the second year in a row, the magazine recognized US Airways for its policies and programs to recruit and retain military veterans and to accommodate and support deployments by employees who serve in the National Guard and on reserve duty.
  • Shared more than $260,000 with employees in the Company's "Above and Beyond" program. The program allows US Airways' most frequent flyers and its employees at the manager level and above to submit coupons recognizing employees for providing excellent customer service in the air and on the ground. Since launching the program in 2006, the airline has received nearly 270,000 A&B coupons and has awarded more than $6 million to more than 8,000 employees.

Marketing and Customer Enhancements

  • Began connecting its customers in San Diego, Cincinnati and Des Moines, Iowa with the launch of new daily, nonstop flights to Washington, D.C.'s Reagan National Airport. Business, government and leisure travelers in all three communities have nonstop access to the nation's capital's downtown airport and connections to other destinations throughout the East Coast with the new flights.
  • Announced its "30 Days for D.C." campaign, which is the airline's way of thanking its customers for embracing its new service between Washington's downtown airport and 22 new communities in the U.S. and Canada. Service to 17 new communities began last spring and on July 11, the airline began service between Reagan National and Augusta, Ga., Minneapolis, Fayetteville, Ark., Montreal, Quebec and Toronto, Ontario. To support the expanded service, US Airways has added 100 new jobs at Reagan National, is adding three new gates on the Center Pier and will open a new US Airways Club, its second in the airport, conveniently located near the new departure gates.
  • Launched the PreferredAccess program, which offers customers the option to breeze through the airport and onto the aircraft. Customers checking in online can purchase PreferredAccess and receive priority check-in, security lanes and boarding, where available. The same benefits continue to be complimentary to Preferred members of Dividend Miles, US Airways' frequent flyer program.
  • Started TSA PreCheck(TM) operations at Washington's Reagan National Airport. Select US Airways frequent flyers and members of U.S. Customs and Border Protection (CBP) Trusted Traveler program are now eligible to participate in the expedited screening initiative. TSA PreCheck(TM) recently launched in the airline's Charlotte, N.C. hub and will expand to its Philadelphia and Phoenix hubs in the third quarter.
  • Completed installation of the Envoy Suite on all wide-body Airbus aircraft. Every fully adjustable seat in US Airways' trans-Atlantic business class, Envoy, reclines into a comfortable fully flat bed. Also, each seat has direct aisle access and is angled away from the aisle for privacy.
  • Resumed seasonal service from Philadelphia to Athens, Greece; Barcelona, Spain, Glasgow, Scotland, and Lisbon, Portugal and Charlotte to Dublin, Ireland and Madrid, Spain. The airline also added an additional daily flight this summer to Frankfurt, Germany from Philadelphia and Charlotte.

Labor Relations

  • Announced that the Company's fleet and passenger service employees at Piedmont Airlines, a wholly owned subsidiary of US Airways, voted to ratify a new collective bargaining agreement. The new four-and-a-half year agreement was ratified by Piedmont Airlines' more than 3,000 employees, who are represented by the Communications Workers of America (CWA).

Corporate Citizenship

  • Welcomed a new partner to its "Miles of Hope" program with the addition of the national nonprofit organization Keep America Beautiful. Miles of Hope gives Dividend Miles members the opportunity to donate their unused miles to five nonprofit organizations. Nearly 900 million miles have been donated since the Miles of Hope program began in 1998.
  • Awarded a total of $325,000 in grants from the US Airways Community Foundation to four nonprofit organizations for the spring funding period. Grants were provided to nonprofit organizations located in and providing services in the airline's hub and focus cities of Charlotte, Phoenix, Philadelphia and Washington, D.C.
  • Honored, along with firm Urban Engineers, with an Engineering Excellence Award from the American Council of Engineering Companies for the airline's state-of-the-art ground service equipment maintenance facility at Philadelphia. The building opened in September and is the only LEED (Leadership in Energy and Environmental Design) Silver-certified building at Philadelphia International Airport.

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 www.usairways.com under the Company Info >>Investor Relations tab. An archive of the call/webcast will be available in the Investor Relations portion of the Web site through August 25.

2012 Investor Guidance

The Company will also update its investor relations guidance on its Web site (www.usairways.com) immediately following its 12:30 p.m. ET conference call. The Company typically provides guidance related to cost per available seat mile (CASM) excluding special charges, fuel and profit sharing, fuel prices, other revenues and estimated interest expense/income on its investor relations update page on its web site. This update will also include the airline's capacity, fleet plan and estimated capital spending for the remainder of 2012.

About US Airways

US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,200 flights per day and serves more than 200 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, operates the world's largest fleet of Airbus aircraft and is a member of the Star Alliance network, which offers its customers more than 20,500 daily flights to 1,293 airports in 190 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 in Washington, D.C. at Ronald Reagan Washington National Airport. Aviation Week and Overhaul & Maintenance magazine presented US Airways with the 2012 Aviation Maintenance, Repair and Overhaul (MRO) of the Year Award for demonstrating outstanding achievement and innovation in the area of technical operations. Military Times Edge magazine named US Airways as a Best of Vets employer in 2011 and 2012. US Airways was the only airline included as one of the 50 best companies to work for in the U.S. by LATINA Style magazine's 50 Report for 2010 and 2011. The airline also earned a 100 percent rating on the Human Rights Campaign Corporate Equality index for six consecutive years. The Corporate Equality index is a leading indicator of companies' attitudes and policies toward lesbian, gay, bisexual and transgender employees and customers. For more company information visit usairways.com, follow on Twitter @USAirways or at Facebook.com/USAirways. (LCCF)

Forward Looking Statements

Certain of the statements contained or referred to herein are "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," "project," "could," "should," "would," "continue" and similar terms used in connection with statements regarding, among others, the outlook, expected fuel costs, revenue and pricing environment, and expected financial performance and liquidity position of 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 significant operating losses in the future; downturns in economic conditions and their impact on passenger demand, booking practices and related revenues; the impact of the price and availability of fuel and significant disruptions in the supply of aircraft fuel; competitive practices in the industry, including the impact of industry consolidation; increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates; the Company's high level of fixed obligations and ability to fund general corporate requirements, obtain additional financing and respond to competitive developments; any failure to comply with the liquidity covenants contained in financing arrangements; provisions in credit card processing and other commercial agreements that may affect the Company's liquidity; the impact of union disputes, employee strikes and other labor-related disruptions; the inability to maintain labor costs at competitive levels; interruptions or disruptions in service at one or more of the Company's hub airports or focus city; regulatory changes affecting the allocation of slots; the Company's reliance on third-party regional operators or third-party service providers; the Company's reliance on and costs, rights and functionality of third-party distribution channels, including those provided by global distribution systems, conventional travel agents and online travel agents; changes in government regulation; the impact of changes to the Company's business model the loss of key personnel or inability to attract and retain qualified personnel; the impact of conflicts overseas or terrorist attacks, and the impact of ongoing security concerns; the Company's ability to operate and grow its route network; the impact of environmental regulation; the Company's reliance on technology and automated systems and the impact of any failure or disruption of, or delay in, these technologies or systems; costs of ongoing data security compliance requirements and the impact of any significant data security breach; the impact of any accident involving the Company's aircraft or the aircraft of its regional operators; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; the Company's dependence on a limited number of suppliers for aircraft, aircraft engines and parts; the Company's ability to operate profitably out of Philadelphia International Airport; the impact of weather conditions and seasonality of airline travel; the impact of possible future increases in insurance costs or reductions in available insurance coverage; the impact of global events that affect travel behavior, such as an outbreak of a contagious disease; the impact of foreign currency exchange rate fluctuations; the Company's ability to use NOLs and certain other tax attributes; and other risks and uncertainties listed from time to time in the Company's reports to and filings with the Securities and Exchange Commission ("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 or supplement 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 June 30, 2012 and in the Company's other filings with the SEC, which are available at www.usairways.com.

US Airways Group, Inc.

Condensed Consolidated Statements of Operations

(In millions, except share and per share amounts)

(Unaudited)














3 Months Ended

June 30,


Percent


6 Months Ended

June 30,


Percent


2012


2011


Change


2012


2011


Change













Operating revenues:












Mainline passenger

$ 2,446


$ 2,280


7.3


$ 4,562


$ 4,180


9.1

Express passenger

916


835


9.6


1,680


1,520


10.5

Cargo

39


43


(10.7)


79


86


(8.4)

Other

353


345


2.7


700


678


3.1

Total operating revenues

3,754


3,503


7.2


7,021


6,464


8.6













Operating expenses:












Aircraft fuel and related taxes

906


948


(4.4)


1,766


1,682


5.0

Salaries and related costs

674


577


16.8


1,279


1,149


11.3

Express expenses:












Fuel

282


287


(2.0)


558


530


5.4

Other

521


524


(0.5)


1,047


1,053


(0.5)

Aircraft rent

161


163


(1.1)


323


327


(1.2)

Aircraft maintenance

172


181


(4.6)


336


344


(2.5)

Other rent and landing fees

132


145


(9.1)


272


274


(0.8)

Selling expenses

126


120


4.5


237


220


7.4

Special items, net

9


6


34.6


11


9


20.9

Depreciation and amortization

61


59


4.2


122


119


3.0

Other

306


316


(3.1)


607


619


(1.9)

Total operating expenses

3,350


3,326


0.7


6,558


6,326


3.7













Operating income

404


177


nm


463


138


nm













Nonoperating income (expense):












Interest income

-


1


(75.1)


1


2


(73.9)

Interest expense, net

(85)


(79)


7.2


(167)


(156)


7.0

Other, net

(13)


(7)


66.0


58


(7)


nm

Total nonoperating expense, net

(98)


(85)


13.9


(108)


(161)


(32.9)













Income (loss) before income taxes

306


92


nm


355


(23)


nm













Income tax provision

-


-


-


-


-


-













Net income (loss)

$ 306


$ 92


nm


$ 355


$ (23)


nm

























Earnings (loss) per common share












Basic

$ 1.89


$ 0.57




$ 2.19


$ (0.14)



Diluted

$ 1.54


$ 0.49




$ 1.82


$ (0.14)















Shares used for computation (in thousands):












Basic

162,310


162,016




162,220


161,953



Diluted

203,981


202,106




202,997


161,953















Note: Percent change may not recalculate due to rounding.





US Airways Group, Inc.


Operating Statistics


















3 Months Ended

June 30,




6 Months Ended

June 30,





2012


2011


Change


2012


2011


Change















Mainline













Revenue passenger miles (millions)

16,403


16,260


0.9

%

30,704


29,830


2.9

%

Available seat miles (ASM) (millions)

19,387


19,116


1.4

%

37,105


36,151


2.6

%

Passenger load factor (percent)

84.6


85.1


(0.5)

pts

82.7


82.5


0.2

pts

Yield (cents)

14.91


14.02


6.3

%

14.86


14.01


6.0

%

Passenger revenue per ASM (cents)

12.62


11.93


5.8

%

12.30


11.56


6.3

%














Passenger enplanements (thousands)

13,902


13,799


0.8

%

27,188


26,303


3.4

%

Departures (thousands)

115


116


(0.7)

%

229


228


0.6

%

Aircraft at end of period

339


338


0.3

%

339


338


0.3

%














Block hours (thousands)

313


320


(2.2)

%

612


614


(0.3)

%

Average stage length (miles)

1,025


1,017


0.8

%

990


982


0.8

%

Average passenger journey (miles)

1,738


1,722


0.9

%

1,674


1,661


0.8

%

Fuel consumption (gallons in millions)

286


288


(0.5)

%

550


543


1.2

%

Average aircraft fuel price including related taxes (dollars per gallon)

3.17


3.29


(3.9)

%

3.21


3.10


3.7

%

Full-time equivalent employees at end of period

31,467


31,321


0.5

%

31,467


31,321


0.5

%














Operating cost per ASM (cents)

13.14


13.15


(0.1)

%

13.35


13.12


1.7

%

Operating cost per ASM excluding special items (cents)

13.09


13.12


(0.2)

%

13.32


13.10


1.7

%

Operating cost per ASM excluding special items and fuel (cents)

8.42


8.16


3.1

%

8.56


8.44


1.4

%

Operating cost per ASM excluding special items, fuel and profit













sharing (cents)

8.25


8.16


1.1

%

8.47


8.44


0.3

%














Express*













Revenue passenger miles (millions)

2,803


2,850


(1.6)

%

5,262


5,288


(0.5)

%

Available seat miles (millions)

3,649


3,688


(1.1)

%

7,078


7,180


(1.4)

%

Passenger load factor (percent)

76.8


77.3


(0.5)

pts

74.3


73.6


0.7

pts

Yield (cents)

32.68


29.32


11.5

%

31.92


28.75


11.1

%

Passenger revenue per ASM (cents)

25.10


22.65


10.8

%

23.73


21.17


12.1

%














Passenger enplanements (thousands)

7,304


7,410


(1.4)

%

13,840


13,757


0.6

%

Aircraft at end of period

288


281


2.5

%

288


281


2.5

%

Fuel consumption (gallons in millions)

88


88


0.2

%

172


171


0.7

%

Average aircraft fuel price including related taxes (dollars per gallon)

3.20


3.28


(2.2)

%

3.25


3.10


4.6

%














Operating cost per ASM (cents)

22.01


22.01


-

%

22.68


22.04


2.9

%

Operating cost per ASM excluding special items (cents)

21.91


22.01


(0.4)

%

22.63


22.02


2.8

%

Operating cost per ASM excluding special items and fuel (cents)

14.19


14.21


(0.1)

%

14.74


14.64


0.7

%














Total Mainline & Express













Revenue passenger miles (millions)

19,206


19,110


0.5

%

35,966


35,118


2.4

%

Available seat miles (millions)

23,036


22,804


1.0

%

44,183


43,331


2.0

%

Passenger load factor (percent)

83.4


83.8


(0.4)

pts

81.4


81.0


0.4

pts

Yield (cents)

17.50


16.30


7.4

%

17.36


16.23


6.9

%

Passenger revenue per ASM (cents)

14.59


13.66


6.8

%

14.13


13.15


7.4

%

Total revenue per ASM (cents)

16.30


15.36


6.1

%

15.89


14.92


6.5

%














Passenger enplanements (thousands)

21,206


21,209


-

%

41,028


40,060


2.4

%

Aircraft at end of period

627


619


1.3

%

627


619


1.3

%

Fuel consumption (gallons in millions)

374


376


(0.4)

%

722


714


1.1

%

Average aircraft fuel price including related taxes (dollars per gallon)

3.18


3.29


(3.5)

%

3.22


3.10


3.9

%














Operating cost per ASM (cents)

14.54


14.59


(0.3)

%

14.84


14.60


1.7

%

Operating cost per ASM excluding special items (cents)

14.49


14.56


(0.5)

%

14.81


14.58


1.6

%

Operating cost per ASM excluding special items and fuel (cents)

9.33


9.14


2.1

%

9.55


9.47


0.8

%

Operating cost per ASM excluding special items, fuel and profit













sharing (cents)

9.19


9.14


0.5

%

9.47


9.47


-

%



























* 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, Chautauqua Airlines and SkyWest Airlines.


Note: Amounts may not recalculate due to rounding.


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 and profit sharing, 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 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. Management uses mainline and express CASM excluding special items, fuel and profit sharing to evaluate the Company's operating performance.










3 Months Ended

June 30,


6 Months Ended

June 30,




2012


2011


2012


2011


Reconciliation of Net Income (Loss) Excluding Special Items


(In millions, except share and per share amounts)


(In millions, except share and per share amounts)












Net income (loss) as reported


$ 306


$ 92


$ 355


$ (23)


Special items:










Special items, net (1)


9


6


11


9


Express operating special items, net (2)


3


-


3


1


Nonoperating special items, net (3)


3


8


(70)


8


Net income (loss) as adjusted for special items


$ 321


$ 106


$ 299


$ (5)
























3 Months Ended

June 30,


6 Months Ended

June 30,


Reconciliation of Basic and Diluted Earnings (Loss) Per Share As Adjusted for Special Items


2012


2011


2012


2011












Net income (loss) as adjusted for special items


$ 321


$ 106


$ 299


$ (5)












Shares used for computation (in thousands):










Basic


162,310


162,016


162,220


161,953


Diluted


203,981


202,106


202,997


161,953












Earnings (loss) per share as adjusted for special items:










Basic


$ 1.98


$ 0.65


$ 1.85


$ (0.03)


Diluted (4)


$ 1.61


$ 0.56


$ 1.55


$ (0.03)
























3 Months Ended

June 30,


6 Months Ended

June 30,


Reconciliation of Operating Income Excluding Special Items


2012


2011


2012


2011












Operating income as reported


$ 404


$ 177


$ 463


$ 138












Special items:










Special items, net (1)


9


6


11


9


Express operating special items, net (2)


3


-


3


1


Operating income as adjusted for special items


$ 416


$ 183


$ 477


$ 148
























3 Months Ended

June 30,


6 Months Ended

June 30,


Reconciliation of Operating Cost per ASM Excluding Special


2012


2011


2012


2011


Items and Fuel - Mainline only




















Total operating expenses


$ 3,350


$ 3,326


$ 6,558


$ 6,326


Less express expenses:










Fuel


(282)


(287)


(558)


(530)


Other


(521)


(524)


(1,047)


(1,053)


Total mainline operating expenses


2,547


2,515


4,953


4,743












Special items, net (1)


(9)


(6)


(11)


(9)


Mainline operating expenses, excluding special items


2,538


2,509


4,942


4,734












Aircraft fuel and related taxes


(906)


(948)


(1,766)


(1,682)


Mainline operating expenses, excluding special items and fuel


1,632


1,561


3,176


3,052












Profit sharing


(33)


-


(33)


-


Mainline operating expenses, excluding special items, fuel and










profit sharing


$ 1,599


$ 1,561


$ 3,143


$ 3,052












(In cents)










Mainline operating expenses per ASM


$ 13.14


$ 13.15


$ 13.35


$ 13.12












Special items, net per ASM (1)


(0.05)


(0.03)


(0.03)


(0.03)


Mainline operating expenses per ASM, excluding special items


13.09


13.12


13.32


13.10












Aircraft fuel and related taxes per ASM


(4.67)


(4.96)


(4.76)


(4.65)


Mainline operating expenses per ASM, excluding special items










and fuel


8.42


8.16


8.56


8.44












Profit sharing per ASM


(0.17)


-


(0.09)


-


Mainline operating expenses per ASM, excluding special items,










fuel and profit sharing


$ 8.25


$ 8.16


$ 8.47


$ 8.44












Note: Amounts may not recalculate due to rounding.












3 Months Ended

June 30,


6 Months Ended

June 30,


Reconciliation of Operating Cost per ASM Excluding Special


2012


2011


2012


2011


Items and Fuel - Express only




















Total express operating expenses


$ 803


$ 811


$ 1,605


$ 1,583












Express operating special items, net (2)


(3)


-


(3)


(1)


Express operating expenses, excluding special items


800


811


1,602


1,582












Aircraft fuel and related taxes


(282)


(287)


(558)


(530)


Express operating expenses, excluding special items and fuel


$ 518


$ 524


$ 1,044


$ 1,052












(In cents)










Express operating expenses per ASM


$ 22.01


$ 22.01


$ 22.68


$ 22.04












Express operating special items, net per ASM (2)


(0.09)


-


(0.05)


(0.01)


Express operating expenses per ASM, excluding special items


21.91


22.01


22.63


22.02












Aircraft fuel and related taxes per ASM


(7.72)


(7.80)


(7.89)


(7.38)


Express operating expenses per ASM, excluding special items and fuel


$ 14.19


$ 14.21


$ 14.74


$ 14.64












Note: Amounts may not recalculate due to rounding.






















3 Months Ended

June 30,


6 Months Ended

June 30,


Reconciliation of Operating Cost per ASM Excluding Special


2012


2011


2012


2011


Items and Fuel - Total Mainline and Express




















Total operating expenses


$ 3,350


$ 3,326


$ 6,558


$ 6,326












Special items:










Special items, net (1)


(9)


(6)


(11)


(9)


Express operating special items, net (2)


(3)


-


(3)


(1)


Total operating expenses, excluding special items


3,338


3,320


6,544


6,316












Fuel:










Aircraft fuel and related taxes - mainline


(906)


(948)


(1,766)


(1,682)


Aircraft fuel and related taxes - express


(282)


(287)


(558)


(530)


Total operating expenses, excluding special items and fuel


2,150


2,085


4,220


4,104












Profit sharing


(33)


-


(33)


-


Total operating expenses, excluding special items, fuel










and profit sharing


$ 2,117


$ 2,085


$ 4,187


$ 4,104












(In cents)










Total operating expenses per ASM


$ 14.54


$ 14.59


$ 14.84


$ 14.60












Special items per ASM:










Special items, net (1)


(0.04)


(0.03)


(0.03)


(0.02)


Express operating special items, net (2)


(0.01)


-


(0.01)


-


Total operating expenses per ASM, excluding special items


14.49


14.56


14.81


14.58












Fuel per ASM:










Aircraft fuel and related taxes - mainline


(3.93)


(4.16)


(4.00)


(3.88)


Aircraft fuel and related taxes - express


(1.22)


(1.26)


(1.26)


(1.22)


Total operating expenses per ASM, excluding special items










and fuel


9.33


9.14


9.55


9.47












Profit sharing per ASM


(0.14)


-


(0.07)


-


Total operating expenses per ASM, excluding special items,










fuel and profit sharing


$ 9.19


$ 9.14


$ 9.47


$ 9.47












Note: Amounts may not recalculate due to rounding.




















FOOTNOTES:



1)

The 2012 second quarter and six month periods consisted of $9 million and $11 million, respectively, in net special charges primarily related to corporate transaction and auction rate securities arbitration costs and a gain on a vendor settlement.

The 2011 second quarter and six month periods consisted of $6 million and $9 million, respectively, in net special charges primarily related to corporate transaction and auction rate securities arbitration costs.










2)

The 2012 second quarter and six month periods each consisted of $3 million in net special charges related to the ratification of a new Piedmont fleet and passenger services contract.











3)

The 2012 second quarter consisted of $3 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of two Airbus aircraft. The 2012 six month period consisted of a $73 million gain associated with the slot transaction with Delta Air Lines, Inc., partially offset by the $3 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs discussed above. The Company closed the slot transaction in December 2011, which resulted in a gain of approximately $147 million that the Company fully deferred as of December 31, 2011 due to the DOT operating restrictions. The gain on the transaction is being recognized as the DOT operating restrictions lapse (March 2012 and July 2012). The Company will recognize the remaining gain (expected to approximate $74 million) in the third quarter of 2012.

The 2011 second quarter and six month periods each consisted of $6 million in debt prepayment penalties and non-cash write offs of certain debt issuance costs related to the refinancing of five Airbus aircraft as well as $2 million of losses related to investments in auction rate securities.










4)

The 2012 second quarter and six month period diluted EPS excludes $8 million and $15 million of interest, net of profit sharing, respectively, related to the Company's 7.25% and 7% convertible notes. The 2011 second quarter diluted EPS excludes $7 million of interest related to the Company's 7.25% and 7% convertible notes.



US Airways Group, Inc.

Condensed Consolidated Balance Sheets

(In millions)

(Unaudited)










June 30, 2012


December 31, 2011

Assets








Current assets




Cash and cash equivalents

$ 2,515


$ 1,947

Accounts receivable, net

428


327

Materials and supplies, net

258


235

Prepaid expenses and other

663


540

Total current assets

3,864


3,049





Property and equipment




Flight equipment

4,623


4,591

Ground property and equipment

962


907

Less accumulated depreciation and amortization

(1,617)


(1,501)


3,968


3,997

Equipment purchase deposits

245


153

Total property and equipment

4,213


4,150





Other assets




Other intangibles, net

533


543

Restricted cash

393


365

Other assets

232


228

Total other assets

1,158


1,136





Total assets

$ 9,235


$ 8,335





Liabilities and Stockholders' Equity








Current liabilities




Current maturities of debt and capital leases

$ 449


$ 436

Accounts payable

375


386

Air traffic liability

1,403


910

Accrued compensation and vacation

237


176

Accrued taxes

225


163

Other accrued expenses

1,067


1,089

Total current liabilities

3,756


3,160





Noncurrent liabilities and deferred credits




Long-term debt and capital leases, net of current maturities

4,034


4,130

Deferred gains and credits, net

310


307

Employee benefit liabilities and other

624


588

Total noncurrent liabilities and deferred credits

4,968


5,025





Stockholders' equity




Common stock

2


2

Additional paid-in capital

2,128


2,122

Accumulated other comprehensive income

2


2

Accumulated deficit

(1,621)


(1,976)

Total stockholders' equity

511


150





Total liabilities and stockholders' equity

$ 9,235


$ 8,335

SOURCE US Airways