US Airways 2003 Annual Report Download - page 50

Table of Contents
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
The Stockholder and Board of Directors
US Airways, Inc.:
We have audited the accompanying consolidated balance sheets of US Airways, Inc. and subsidiary as of December 31, 2003 (Successor Company) and 2002
(Predecessor Company), and the related consolidated statements of operations, stockholder's equity (deficit) and cash flows for the nine months ended
December 31, 2003 (Successor Company), the three months ended March 31, 2003 and each of the years in the two-year period ended December 31, 2002
(Predecessor Company). These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of US Airways, Inc. and
subsidiary as of December 31, 2003 (Successor Company) and 2002 (Predecessor Company), and the results of their operations and their cash flows for the
nine months ended December 31, 2003 (Successor Company), the three months ended March 31, 2003 and each of the years in the two-year period ended
December 31, 2002 (Predecessor Company), in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2
to the consolidated financial statements, the Company's significant recurring losses and other matters regarding, among other things, the Company's ability to
maintain compliance with covenants contained in various financing agreements as well as its ability to finance and operate regional jet aircraft and reduce its
operating costs in order to successfully compete with low cost airlines, raise substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are described in Note 2 to the consolidated financial statements. The accompanying consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
As discussed in Note 1 to the consolidated financial statements, on March 18, 2003, the United States Bankruptcy Court for the Eastern District of Virginia
confirmed the Company's Plan of Reorganization (the Plan). The Plan became effective on March 31, 2003 and the Company emerged from Chapter 11. In
connection with its emergence from Chapter 11, the Company adopted fresh-start reporting pursuant to Statement of Position 90-7, "Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code" as of March 31, 2003 as further described in Notes 1, 2 and 3 to the consolidated financial statements.
As a result, the consolidated financial statements of the Successor Company are presented on a different basis than those of the Predecessor Company and,
therefore, are not comparable in all respects. Furthermore, as discussed in Notes 2 and 10 to the consolidated financial statements, effective April 1, 2003, the
Company changed its method of accounting for stock-based compensation as described by Statement of Financial Accounting Standards No. 148 "Accounting
for Stock-Based Compensation—Transition and Disclosure"; and effective January 1, 2002, the Company changed its method of accounting for its goodwill
and other intangible assets as required by Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets."
KPMG LLP
McLean, Virginia
March 12, 2004
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