US Airways 2003 Annual Report Download - page 35

Table of Contents
Government Compensation–In April 2003, President George W. Bush signed into law the 2003 Emergency Wartime Supplemental Appropriations Act
(Emergency Wartime Act), which included $2.4 billion for reimbursement to the airlines for certain aviation-related security expenses. The Emergency
Wartime Act included the following key provisions: (1) $2.3 billion of the appropriation was for grants to be made by the Transportation Security
Administration (TSA) to U.S. air carriers based on the proportional share each carrier paid or collected as of the date of enactment of the legislation for
passenger security and air carrier security fees; (2) the TSA would not impose passenger security fees during the period beginning June 1, 2003 and ending
September 30, 2003; (3) $100 million of the appropriation would be available to compensate air carriers for the direct costs associated with the strengthening
of flight deck doors and locks on aircraft; (4) aviation war risk insurance provided by the federal government was extended until August 2004; and (5) certain
airlines that receive the aviation-related assistance must agree to limit the total cash compensation for certain executive officers during the 12-month period
beginning April 1, 2003 to an amount equal to the annual salary paid to that officer during the air carrier's fiscal year 2002. Any violation of this agreement
will require the carrier to repay to the government the amount reimbursed for airline security fees. The Company does not anticipate any difficulties in
complying with this limitation on executive compensation and believes the likelihood of repaying the government for the amount of the security fee
reimbursement is remote. The Company's security fee reimbursement was $212 million, net of $4 million due to certain affiliates, and was recorded as a
reduction to operating expenses during the second quarter of 2003. In September 2003, the Company received approximately $6 million of compensation
associated with flight deck door expenditures which was recorded as an offset to capital costs.
On September 22, 2001, President Bush signed into law the Stabilization Act which provides, among other things, for $5 billion in payments to
compensate U.S. air carriers for losses incurred as a result of the September 11, 2001 terrorist attacks. US Airways received $306 million from the U.S.
Government under the Stabilization Act. The rules governing the distribution were finalized during 2002 and an adjustment of $3 million was recognized in
2002 to reduce the amount of compensation received. The payments partially compensated the Company for its direct and incremental losses incurred
beginning on September 11, 2001 and ending on December 31, 2001.
Gain on Sale of Hotwire, Inc.–During the fourth quarter of 2003, US Airways recorded a $30 million gain on the sale of its investment in Hotwire, Inc. The
gain is reflected in Other, net on the Company's Consolidated Statement of Operations.
Merger Termination Fees–In connection with the merger termination agreement in June 2001, UAL Corporation paid $50 million to US Airways. Separately,
US Airways paid a merger termination fee of approximately $2 million to Robert L. Johnson, a member of the Board of Directors of the Company and US
Airways, representing reimbursement for his expenses in connection with his activities to establish a new airline which would have addressed certain potential
competitive issues surrounding the proposed merger transaction, and supported regulatory approval of the new airline. These amounts are included in Other,
net on the Company's Consolidated Statements of Operations.
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