US Airways 2004 Annual Report Download - page 58

Table of Contents
AMERICA WEST HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
Year Redemption Price
2005 103.75%
2006 102.50%
2007 101.25%
2008 and thereafter 100.00%
For financial reporting purposes, the Company recorded the convertible senior notes at their fair market value on the date of issuance. The balance at
December 31, 2004 is net of an unamortized discount of $22.2 million.
(f) In July and August of 2003, AWA completed a private placement of approximately $86.8 million issue price of 7.25% Senior Exchangeable Notes due
2023. The notes bear cash interest at 2.49% per year until July 30, 2008. Thereafter, the notes will cease bearing cash interest and begin accruing
original issue discount daily at a rate of 7.25% per year until maturity. Each note was issued at a price of $343.61 and is exchangeable for class B
common stock of Holdings at an exchange ratio of 32.038 shares per $1,000 principal amount at maturity of the notes (subject to adjustment in certain
circumstances). This represents an equivalent conversion price of approximately $10.73 per share. The aggregate amount due at maturity, including
accrued original issue discount from July 31, 2008, will be $252,695,000. The notes are unconditionally guaranteed on a senior unsecured basis by
Holdings.
Holders may exchange their notes for the shares of class B common stock of Holdings in any fiscal quarter commencing after September 30, 2003, if,
as of the last day of the preceding fiscal quarter, the closing sale price of the class B common stock for at least 20 trading days in a period of 30
consecutive trading days ending on the last trading day of such preceding fiscal quarter is more than 110% of the accreted exchange price per share of
Class B common stock on the last day of such preceding fiscal quarter. If the foregoing condition is satisfied, then the notes will be exchangeable at any
time at the option of the holder through maturity. The accreted exchange price per share as of any day will equal the issue price of a note plus accrued
original issue discount to that day divided by 32.038, subject to any adjustments to the exchange rate through that day.
On or before July 30, 2018, a holder also may exchange its notes for shares of the Class B common stock at any time after a 10 consecutive trading-day
period in which the average of the trading prices for the notes for that 10 trading-day period was less than 103% of the average exchange value for the
notes during that period. Exchange value is equal to the product of the closing sale price for the shares of Class B common stock on a given day
multiplied by the then current exchange rate, which is the number of shares of Class B common stock for which each note is then exchangeable.
In addition, the holders may exchange the notes if the notes have been called for redemption or if certain specified corporate transactions have occurred.
Holders of the notes may require AWA to repurchase the notes at a price equal to the original issue price plus accrued cash interest and original issue
discount, if any, on July 30, 2008, 2013 and 2018. The purchase price of such notes may be paid in cash or class B common stock of Holdings, subject
to certain restrictions. In addition, each holder may require AWA to purchase all or a portion of such holder's notes upon the occurrence of certain
change of control events concerning AWA or Holdings. AWA may redeem the notes, in whole or in part, on or after July 30, 2008 at a price equal to
the original issue price plus accrued cash interest and original issue discount, if any.
(g) The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually (April 1 and October 1). The bonds are subject
to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any interest payment date at the following redemption
prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1, 2009; and 100% on April 1, 2010 and thereafter.
Secured financings totaling $186.0 million are collateralized by assets, primarily aircraft, engines, simulators, rotable aircraft parts and AWA's hangar
facility, with a net book value of $268.4 million at December 31, 2004.
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