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US Airways Group, Inc. Reports Fourth Quarter and Full Year 2006 Profit
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US Airways Group, Inc. Reports Fourth Quarter and Full Year 2006 Profit
Tuesday January 30, 8:00 am ET
Highlights of the new US Airways Group, Inc. (the Company) fourth quarter and full year 2006 results:
- The Company reported a fourth quarter 2006 net profit of $12 million, or $0.13 per diluted share, which includes special items of $74 million. Excluding special items, the Company reported a fourth quarter 2006 net profit of $86 million or $0.91 per diluted share.
- The Company reported a full year 2006 net profit before cumulative effect of change in accounting principle of $303 million, or $3.32 per diluted share, which includes special items of $204 million. Excluding special items, the Company reported a net profit before cumulative effect of change in accounting principle of $507 million, or $5.47 per diluted share.
- The Company accrued $11 million for its annual employee profit sharing program, bringing the full year 2006 employee profit sharing program accrual to $59 million.
- The Company had $3.0 billion in total cash and investments, of which $2.4 billion was unrestricted, on Dec. 31, 2006.
TEMPE, Ariz., Jan. 30 /PRNewswire-FirstCall/ -- The new US Airways Group, Inc. (NYSE: LCC - News) today reported its fourth quarter and 2006 results. Net profit for the fourth quarter was $12 million, or $0.13 per share compared to a net loss of $261 million, or $3.27 per share for the same period last year. Excluding special items of $74 million, the Company reported a net profit of $86 million, or $0.91 per diluted share, compared to a net loss of $138 million, or $1.73 per share in the fourth quarter of 2005.
The fourth quarter 2006 is the first full quarter where the Company's results for both periods reflect consolidated results for the new US Airways Group. Because the merger of US Airways and America West occurred on Sept. 27, 2005, the results for the full year 2006 are being compared to 2005 results, which consist of 269 days of America West results, and 96 days of consolidated US Airways Group's results. Although the merger was structured so that America West became a wholly owned subsidiary of the new US Airways Group, America West was treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141, "Business Combinations."
For the full year 2006, the Company reported a net profit before cumulative effect of change in accounting principle of $303 million, or $3.32 per diluted share, which compares to a net loss before cumulative effect of change in accounting principle of $335 million, or $10.65 per share for the full year 2005. Excluding special items of $204 million, the Company reported a net profit before cumulative effect of change in accounting principle of $507 million, or $5.47 per diluted share compared to a net loss before cumulative effect of change in accounting principle of $188 million, or $6.00 per share for the same period last year. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of Generally Accepted Accounting Principles (GAAP) financial information to non-GAAP financial information.
Chairman and CEO Doug Parker stated, "We are extremely pleased to report our fourth quarter earnings, and couldn't be more proud of our 35,000 employees who will share in these positive results through our profit sharing plan. 2006 marks the first full year of operating and financial results for the new US Airways, and our team has done a remarkable job of integrating our two airlines while taking care of the more than 41 million customers who flew US Airways last year. Few people would have believed, at the time of our merger, that the new US Airways would be the most profitable network airline in 2006. Fortunately, our team believed and we thank them for their great work.
"Looking forward, we anticipate reporting even better results in 2007 with even higher profit sharing payments. This will provide our employees with job stability and the opportunity to share in the financial success of the Company and our customers with the choice and value they deserve," continued Parker.
Revenue and Cost Comparisons
The revenue environment during the fourth quarter 2006 remained robust for both mainline and Express operations. Mainline passenger revenue per available seat mile (PRASM) was 10.12 cents, up 8.6 percent over the same period last year. Express PRASM was 17.60 cents, up 14.8 percent over the fourth quarter 2005. On a consolidated basis, PRASM for US Airways Group was 11.33 cents, up 9.7 percent compared to the fourth quarter 2005.
"Although fuel prices have come down significantly from the historically high levels we saw throughout the year, fuel still remains our largest operating expense. If fuel prices had remained at 2005 levels, our total fuel expense would have been $467 million lower for the year," said Chief Financial Officer Derek Kerr.
Total operating cost per available seat mile (CASM) for US Airways Group for the quarter was 11.97 cents, down 1.5 percent on reduced capacity of 0.1 percent. Consolidated mainline operating CASM was 10.98 cents, down 1.3 percent compared to the fourth quarter 2005. Excluding fuel, special items, and merger related transition expenses, mainline CASM was 7.64 cents, up 2.8 percent from the same period last year.
Liquidity
As of Dec. 31, 2006, the Company had $3.0 billion in total cash and investments, of which $2.4 billion was unrestricted.
Fourth Quarter Special Items
During its fourth quarter, the Company recognized $74 million of special items, which included a $26 million non-cash charge for unrealized net losses associated with the change in fair value of the Company's outstanding fuel hedge contracts, $10 million of net merger-related transition expenses and a $12 million payment in connection with an inducement to the note holders to convert a portion of the Company's seven percent senior convertible notes to common stock. In addition, during the fourth quarter, the Company used $26 million of net operating losses acquired from US Airways, which was recognized as a reduction in goodwill rather than a reduction in tax expense. As a result, the Company has a $26 million non-cash expense for income taxes for the quarter. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of Generally Accepted Accounting Principles (GAAP) financial information to non-GAAP financial information.
Integration Update
Fourth quarter 2006 accomplishments include:
Operations
* Paid a one-time special $50 bonus to employees, which totaled
approximately $1.8 million, for the airline's operational performance
during the Thanksgiving holiday travel period.
* Finished the month of November with a year-to-date on time performance
of 77.4 percent, ranking US Airways second of the ten largest carriers
as measured by the Department of Transportation.
* The Company achieved significant operational improvements at its
Philadelphia hub. Specifically, customer complaints are down over
30 percent from 2005 levels. In addition, mishandled baggage per
1,000 enplanements is down nearly 15 percent year-over-year, with over
95 percent of all local in-bound baggage now delivered to the baggage
carousel in 19.1 minutes on average.
Marketing
* Continued reducing fares to more cities including Wilmington, N.C.,
Augusta Ga. and Huntington W.Va. In total the new US Airways has
reduced fares in more than 1,100 markets.
* Began testing the combined SHARES reservations system at both Tempe,
Ariz. and Winston-Salem, N.C. reservations locations, which will help
move the airline to a combined reservations system scheduled to occur
in the first half of 2007.
Labor
* Reached a final labor agreement, including transition items, with the
Transport Workers Union (TWU), representing about 150 dispatchers.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 11 a.m. EST, which will be available to the public on a listen-only basis at www.usairways.com under About US >> 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, 2007.
The airline will also update its investor relations guidance on its Web site (www.usairways.com). Information to be updated includes cost per available seat mile (CASM) excluding fuel and transition expenses, fuel prices and hedging positions, other revenues, estimated interest expense/income and merger related transition expense guidance. The investor relations update page also includes the airline's capacity, fleet plan for 2007 and estimated capital spending for 2007.
Tuesday January 30, 8:00 am ET
Highlights of the new US Airways Group, Inc. (the Company) fourth quarter and full year 2006 results:
- The Company reported a fourth quarter 2006 net profit of $12 million, or $0.13 per diluted share, which includes special items of $74 million. Excluding special items, the Company reported a fourth quarter 2006 net profit of $86 million or $0.91 per diluted share.
- The Company reported a full year 2006 net profit before cumulative effect of change in accounting principle of $303 million, or $3.32 per diluted share, which includes special items of $204 million. Excluding special items, the Company reported a net profit before cumulative effect of change in accounting principle of $507 million, or $5.47 per diluted share.
- The Company accrued $11 million for its annual employee profit sharing program, bringing the full year 2006 employee profit sharing program accrual to $59 million.
- The Company had $3.0 billion in total cash and investments, of which $2.4 billion was unrestricted, on Dec. 31, 2006.
TEMPE, Ariz., Jan. 30 /PRNewswire-FirstCall/ -- The new US Airways Group, Inc. (NYSE: LCC - News) today reported its fourth quarter and 2006 results. Net profit for the fourth quarter was $12 million, or $0.13 per share compared to a net loss of $261 million, or $3.27 per share for the same period last year. Excluding special items of $74 million, the Company reported a net profit of $86 million, or $0.91 per diluted share, compared to a net loss of $138 million, or $1.73 per share in the fourth quarter of 2005.
The fourth quarter 2006 is the first full quarter where the Company's results for both periods reflect consolidated results for the new US Airways Group. Because the merger of US Airways and America West occurred on Sept. 27, 2005, the results for the full year 2006 are being compared to 2005 results, which consist of 269 days of America West results, and 96 days of consolidated US Airways Group's results. Although the merger was structured so that America West became a wholly owned subsidiary of the new US Airways Group, America West was treated as the acquiring company for accounting purposes under Statement of Financial Accounting Standards No. 141, "Business Combinations."
For the full year 2006, the Company reported a net profit before cumulative effect of change in accounting principle of $303 million, or $3.32 per diluted share, which compares to a net loss before cumulative effect of change in accounting principle of $335 million, or $10.65 per share for the full year 2005. Excluding special items of $204 million, the Company reported a net profit before cumulative effect of change in accounting principle of $507 million, or $5.47 per diluted share compared to a net loss before cumulative effect of change in accounting principle of $188 million, or $6.00 per share for the same period last year. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of Generally Accepted Accounting Principles (GAAP) financial information to non-GAAP financial information.
Chairman and CEO Doug Parker stated, "We are extremely pleased to report our fourth quarter earnings, and couldn't be more proud of our 35,000 employees who will share in these positive results through our profit sharing plan. 2006 marks the first full year of operating and financial results for the new US Airways, and our team has done a remarkable job of integrating our two airlines while taking care of the more than 41 million customers who flew US Airways last year. Few people would have believed, at the time of our merger, that the new US Airways would be the most profitable network airline in 2006. Fortunately, our team believed and we thank them for their great work.
"Looking forward, we anticipate reporting even better results in 2007 with even higher profit sharing payments. This will provide our employees with job stability and the opportunity to share in the financial success of the Company and our customers with the choice and value they deserve," continued Parker.
Revenue and Cost Comparisons
The revenue environment during the fourth quarter 2006 remained robust for both mainline and Express operations. Mainline passenger revenue per available seat mile (PRASM) was 10.12 cents, up 8.6 percent over the same period last year. Express PRASM was 17.60 cents, up 14.8 percent over the fourth quarter 2005. On a consolidated basis, PRASM for US Airways Group was 11.33 cents, up 9.7 percent compared to the fourth quarter 2005.
"Although fuel prices have come down significantly from the historically high levels we saw throughout the year, fuel still remains our largest operating expense. If fuel prices had remained at 2005 levels, our total fuel expense would have been $467 million lower for the year," said Chief Financial Officer Derek Kerr.
Total operating cost per available seat mile (CASM) for US Airways Group for the quarter was 11.97 cents, down 1.5 percent on reduced capacity of 0.1 percent. Consolidated mainline operating CASM was 10.98 cents, down 1.3 percent compared to the fourth quarter 2005. Excluding fuel, special items, and merger related transition expenses, mainline CASM was 7.64 cents, up 2.8 percent from the same period last year.
Liquidity
As of Dec. 31, 2006, the Company had $3.0 billion in total cash and investments, of which $2.4 billion was unrestricted.
Fourth Quarter Special Items
During its fourth quarter, the Company recognized $74 million of special items, which included a $26 million non-cash charge for unrealized net losses associated with the change in fair value of the Company's outstanding fuel hedge contracts, $10 million of net merger-related transition expenses and a $12 million payment in connection with an inducement to the note holders to convert a portion of the Company's seven percent senior convertible notes to common stock. In addition, during the fourth quarter, the Company used $26 million of net operating losses acquired from US Airways, which was recognized as a reduction in goodwill rather than a reduction in tax expense. As a result, the Company has a $26 million non-cash expense for income taxes for the quarter. See the accompanying notes in the Financial Tables section of this press release for a reconciliation of Generally Accepted Accounting Principles (GAAP) financial information to non-GAAP financial information.
Integration Update
Fourth quarter 2006 accomplishments include:
Operations
* Paid a one-time special $50 bonus to employees, which totaled
approximately $1.8 million, for the airline's operational performance
during the Thanksgiving holiday travel period.
* Finished the month of November with a year-to-date on time performance
of 77.4 percent, ranking US Airways second of the ten largest carriers
as measured by the Department of Transportation.
* The Company achieved significant operational improvements at its
Philadelphia hub. Specifically, customer complaints are down over
30 percent from 2005 levels. In addition, mishandled baggage per
1,000 enplanements is down nearly 15 percent year-over-year, with over
95 percent of all local in-bound baggage now delivered to the baggage
carousel in 19.1 minutes on average.
Marketing
* Continued reducing fares to more cities including Wilmington, N.C.,
Augusta Ga. and Huntington W.Va. In total the new US Airways has
reduced fares in more than 1,100 markets.
* Began testing the combined SHARES reservations system at both Tempe,
Ariz. and Winston-Salem, N.C. reservations locations, which will help
move the airline to a combined reservations system scheduled to occur
in the first half of 2007.
Labor
* Reached a final labor agreement, including transition items, with the
Transport Workers Union (TWU), representing about 150 dispatchers.
Analyst Conference Call/Webcast Details
US Airways will conduct a live audio webcast of its earnings call today at 11 a.m. EST, which will be available to the public on a listen-only basis at www.usairways.com under About US >> 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, 2007.
The airline will also update its investor relations guidance on its Web site (www.usairways.com). Information to be updated includes cost per available seat mile (CASM) excluding fuel and transition expenses, fuel prices and hedging positions, other revenues, estimated interest expense/income and merger related transition expense guidance. The investor relations update page also includes the airline's capacity, fleet plan for 2007 and estimated capital spending for 2007.
EricLv2Fish
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- Aug 25, 2005
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Congratulations Folks! Job well done! 
rsv4ever
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- Nov 5, 2005
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thanks...
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