US Airways 2003 Annual Report Download - page 34

Table of Contents
Company recognized a pretax impairment charge of $22 million in connection with the planned retirement of five B737-200 aircraft due to a third-
party's early return of certain leased B737-200 aircraft, and early retirement of certain other B737-200s during the first quarter of 2001.
(g) During the fourth quarter of 2002, US Airways recognized an impairment charge of $21 million related to capitalized gates at certain airports in
accordance with SFAS 142. The carrying values of the affected gates were reduced to fair value based on a third party appraisal. During the third
quarter of 2001, US Airways recognized a pretax charge of $13 million representing the unamortized leasehold improvement balance for facilities to be
abandoned and aircraft to be parked as of the facility abandonment date or aircraft park date. In addition, US Airways recognized a pretax charge of $3
million representing the present value of future noncancelable lease commitments beyond the facility abandonment date.
Reorganization Items, Net–Reorganization items, net represent amounts incurred as a direct result of the Company's Chapter 11 filing and are presented
separately in the Company's Consolidated Statements of Operations. Such items consist of the following (dollars in millions):
Three Months
Ended
March 31, 2003
Year Ended
December 31, 2002
Discharge of liabilities (a) $ 3,655 $ —
Restructured aircraft financings (b) 946 —
Termination of pension plans (c) 386 —
Damage and deficiency claims (d) (1,892) —
Revaluation of assets and liabilities (a) (1,106) —
Professional fees (51) (61)
Loss on aircraft abandonment (e) (9) (68)
Severance including benefits (f) — (89)
Write-off of ESOP deferred compensation — (50)
Other (41) (26)
$ 1,888 $ (294)
(a) See Note 3(a) to the Consolidated Financial Statements.
(b) As of March 31, 2003, the Company had restructured aircraft debt and lease agreements related to 119 aircraft in connection with its Chapter 11
reorganization including the conversion of 52 mortgages to operating leases. The restructured terms generally provide for shorter lease periods and
lower lease rates.
(c) Effective March 31, 2003, US Airways terminated its qualified and nonqualified pilot defined benefit pension plans. The PBGC was appointed trustee
of the qualified plan effective with the termination. The Company recognized a gain in connection with the termination which is partially offset by the
Company's estimate of the PBGC claim. See Part I, Item 3, "Legal Proceedings" for more information.
(d) Damage and deficiency claims largely arose as a result of the Company electing to either restructure, abandon or reject aircraft debt and leases during
the bankruptcy proceedings.
(e) Includes aircraft (seven A319s for 2003 and 34 F-100s, two B757-200s and one B737-400 for 2002) that were legally abandoned as part of US Airways'
Chapter 11 reorganization. Related aircraft liabilities were adjusted for each aircraft's expected allowed collateral value.
(f) As a result of schedule reductions made in connection with the Company's Chapter 11 reorganization, US Airways terminated or furloughed
approximately 6,600 employees across all employee groups. Substantially all affected employees were terminated or furloughed prior to March 31,
2003. US Airways' headcount reduction was largely accomplished through involuntary terminations/furloughs. In connection with this headcount
reduction, US Airways offered a voluntary leave program to certain employee groups. Voluntary leave program participants generally received
extended benefits (e.g. medical, dental, life insurance) but did not receive any furlough pay benefit.
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