US Airways 2003 Annual Report Download - page 59

Table of Contents
ATSB Loan
As part of its restructuring efforts, US Airways received a $900 million loan guarantee (ATSB Guarantee) under the Air Transportation Safety and
System Stabilization Act (Stabilization Act) from the Stabilization Board in connection with a $1 billion term loan financing (the ATSB Loan). 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 secured by substantially all unencumbered assets of US Airways Group and its subsidiaries and is guaranteed by US
Airway Group and each of US Airways Group's domestic subsidiaries other than US Airways. See Note 6 for more information, including information related
to covenants associated with the ATSB Loan.
Claims Resolution
Pursuant to the bankruptcy process, the Filing Entities' claims agent received approximately 5,300 timely-filed proofs of claims totaling approximately
$65 billion in the aggregate, exclusive of approximately $16 billion in claims from Allegheny County, Pennsylvania (Allegheny County) and Allegheny
County Airport Authority (ACAA) which have been resolved (see "Pittsburgh Leases" below) and approximately 350 proofs of claims timely-filed by
governmental entities totaling approximately $225 million in the aggregate. As of December 31, 2003, the Filing Entities have filed objections totaling
approximately $60 billion. The Plan of Reorganization provides for a disputed claims resolution process. The Plan of Reorganization provides for 4,968,720
shares of Class A Common Stock and 3,048,030 each of Class A-1 Warrants and shares of Class A Preferred Stock to be issued to unsecured creditors.
Distributions of these shares and warrants through December 2003 totaled approximately 1.8 million shares of Class A Common Stock and 1.1 million each
of Class A-1 Warrants and shares of Class A Preferred Stock of reorganized US Airways Group to unsecured creditors. The effects of these distributions were
reflected in the Company's financial statements upon emergence and will not have any further impact on the results of operations. A number of significant
claims, including certain aircraft related claims, remain to be resolved. Accordingly, ultimate allocations and distributions of new equity to claimants in
Reorganized US Airways Group on account thereof, are not presently known.
On December 30, 2003, the Bankruptcy Court allowed the $2.1 billion claim by the PBGC related to the termination of US Airways' pilot pension plan.
Given that this plan met the standards of a distress termination and the PBGC's claim is to be treated as a general unsecured claim, the Company does not
have any additional financial exposure associated with this decision and the PBGC will receive a settlement in the form of stock.
Pittsburgh Leases
Pittsburgh International Airport currently serves as a hub for US Airways. On July 25, 2003, US Airways, Allegheny County and ACAA reached an
agreement resolving and releasing all bankruptcy claims filed by Allegheny County and ACAA against US Airways with regard to Pittsburgh International
Airport. The agreement resolves all bankruptcy claims, including claims relating to the rejections of the airline operating agreements and other related
terminal lease agreements effective January 5, 2004. Under the agreement, in exchange for the release of all claims, Allegheny County and ACAA entered
into a stipulation under which Allegheny County and ACAA will be granted an allowed general unsecured claim in the amount of $211 million to be shared
with claims of other unsecured creditors receiving distributions of equity in accordance with the Plan of Reorganization (see "Claims Resolution" above).
On January 5, 2004, US Airways entered into a long-term lease agreement for 10 gates and related terminal and support facilities at Pittsburgh
International Airport, to replace the lease that was rejected as part of the Company's Chapter 11 reorganization. Under the agreement, US Airways will lease
ten gates and associated operations and ticketing space on a signatory basis through 2018.
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