US Airways 2003 Annual Report Download - page 39

Table of Contents
Prior to the bankruptcy filing, the Company made scheduled principal repayments of long-term debt in the amount of $77 million. Subsequent to the
bankruptcy filing, the Company made principal repayments of debt of $56 million including $38 million to the engine manufacturer credit facility.
Net cash provided by financing activities during 2001 was $1.03 billion. This included proceeds of $344 million from the sale-leaseback of eight A320-
family aircraft, $389 million from the engine manufacturer credit facility and $562 million from the mortgages of ten A320-family aircraft and three A330
aircraft. In addition, US Airways received $22 million from special facility revenue bond financings. These proceeds were partially offset by the scheduled
principal repayments of long-term debt in the amount of $290 million including the February 1, 2001 repayment of US Airways' $175 million 9 5/8% Senior
Notes.
Financings During Chapter 11 and Post Effective Date Financings
As part of its reorganization, US Airways received a $900 million loan guarantee under the Stabilization Act from the Stabilization Board in connection
with a $1 billion term loan financing. The Company required this loan and related guarantee in order to provide the additional liquidity necessary to carry out
its restructuring plan. The ATSB Loan was funded on the Effective Date. The ATSB Loan is guaranteed by US Airways Group and by each of US Airways
Group's domestic subsidiaries (other than reorganized US Airways). The ATSB Loan is secured by first priority liens on substantially all of the unencumbered
present and future assets of the reorganized Filing Entities (including certain cash and investments accounts, previously unencumbered aircraft, aircraft
engines, spare parts, flight simulators, real property, takeoff and landing slots, ground equipment and accounts receivable), other than certain specified assets,
including assets which are subject to other financing agreements. The ATSB Loan bears interest as follows: (i) 90% of the ATSB Loan bears interest (a) if
funded through a participating lender's commercial paper conduit program, at a rate of interest equal to the conduit provider's weighted average cost related to
the issuance of certain commercial paper notes and other short-term borrowings plus 0.30% or (b) if not funded through such commercial paper conduit
program, at a rate of interest equal to LIBOR plus 0.40% and (ii) 10% of the ATSB Loan bears interest at LIBOR plus 4.0%. In addition, US Airways is
charged an annual guarantee fee in respect of the ATSB Guarantee equal to 4.0% of the Stabilization Board's guaranteed amount (initially $900 million) under
the ATSB Guarantee, with such guarantee fee increasing by ten basis points annually. In addition, the Stabilization Board received 7,635,000 warrants that
enable it to purchase shares of Reorganized US Airways Group's Class A Common Stock at $7.42 per share.
The maturity date of the ATSB Loan is October 1, 2009. Prior to entering into the March 2004 amendment (see below), the ATSB Loan required semi-
annual amortization payments commencing in October 2006, each amortization payment to be in the amount of $125 million, with a final principal payment
of $226 million, less any prepayments, due on the maturity date of the ATSB Loan.
The ATSB Loan is subject to acceleration upon the occurrence of an event of default, after expiration of applicable notice and/or cure periods. The
ATSB Loan contains certain mandatory prepayment events including, among other things, (i) the occurrence of certain asset sales (except as provided for in
the amendment described below) and the issuance of certain debt or equity securities and (ii) the value of the collateral pledged in respect of the ATSB Loan
decreasing below specified coverage levels.
The ATSB Loan contains covenants that require the Company to satisfy ongoing financial requirements, including debt ratio, fixed charge coverage
ratio and minimum liquidity levels. The ATSB Loan also contains covenants that limit, among other things, the Company's ability to
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