and 2004, respectively. These increases are primarily a result of revenue and network productivity improvements, in-court restructuring initiatives and labor cost reductions implemented in connection with our restructuring business plan during our Chapter 11 proceedings and an improved revenue environment. For additional information regarding our restructuring business plan and operational performance, see “Our Business Plan,” “Results of Operations - 2006 Compared to 2005,” and “Results of Operations — 2005 Compared to 2004, ” respectively.



Our 2006 cash flows from operating activities also includes a $116 million decrease in our restricted cash balance primarily due to a release of cash from restricted to operating as a result of agreements we reached with certain vendors.  In 2005, our restricted cash balance increased significantly primarily due to cash holdbacks associated with our Visa/MasterCard credit card processing agreement.  For the year ended December 31, 2006, we classified changes to our restricted cash balances primarily associated with credit card holdbacks to cash flows from operating activities to better reflect the nature of restricted cash activities.  Prior to 2006, we presented such changes as an investing activity.  For additional information regarding this reclassification, see Note 2 of the Notes to the Consolidated Financial Statements. 

 

Cash flows from investing activities

 

Cash used in investing activities totaled $361 million for the year ended December 31, 2006, compared to cash provided by investing activities of $22 million for the year ended December 31, 2005. This change reflects a $401 million decrease in cash used for the purchase of flight and ground equipment in 2006.  Our 2005 cash flows from investing activities also includes $842 million in proceeds from our sale of ASA and certain flight equipment.

 

Cash provided by investing activities totaled $22 million for the year ended December 31, 2005, compared to cash used in investing activities of  $320 million for the year ended December 31, 2004. This change reflects $570 million of flight equipment additions in 2005, including $417 million we paid to purchase 11 B-737-800 aircraft that we sold to a third party immediately after these aircraft were delivered to us by the manufacturer. Our 2005 cash flows from investing activities also include $842 million in proceeds from our sale of ASA and certain flight equipment discussed above.

 

Cash flows from financing activities

 

Cash used in financing activities totaled $606 million for the year ended December 31, 2006, compared to cash provided by financing activities of $830 million for the year ended December 31, 2005. This change is primarily due to the net proceeds we received under our Secured Super-Priority Debtor-In-Possession Credit Agreement (the “DIP Credit Facility”) shortly after our Chapter 11 filing in 2005. As a result of our Chapter 11 filing, we ceased making payments on our unsecured debt. For additional information regarding our Chapter 11 proceedings and long-term debt, see Notes 1 and 6, respectively, of the Notes to the Consolidated Financial Statements.

 

Cash