US Airways 2004 Annual Report Download - page 67

Table of Contents
AMERICA WEST HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
In April 2003, as part of a cost reduction program, the Company implemented a plan to reduce management, professional and administrative payroll costs
which resulted in 179 fewer employees within these workgroups. As a result, the Company recorded a special charge of $2.3 million related to this reduction-
in-force.
In June 2003, the Company recorded an impairment loss of $2.6 million related to three owned Boeing 737-200 aircraft that were grounded and
subsequently sold.
In the third quarter of 2003, the Company recorded an additional $0.5 million of special charges associated with the elimination of our hub operations in
Columbus, Ohio. These special charges were offset by a $0.5 million reduction in special charges related to the revision of estimated costs associated with the
sale and leaseback of certain aircraft.
In the first quarter of 2002, the Company recorded a special charge of $21.1 million, primarily related to the restructuring completed on January 18, 2002,
resulting from the events of September 11, 2001. Components of the special charge are as follows:
Special Charges
(in thousands)
Fleet restructuring costs $ 9,915
Losses on sale-leaseback transactions 6,328
Professional fees 4,745
Write-off of computer system and security equipment 3,411
Severance 656
Revision of estimate for second quarter 2001 special charge (4,000)
Total $ 21,055
Of this amount, approximately $10.3 million, principally related to losses on sale-leaseback transactions, fleet restructuring costs, professional fees and
severance was accrued.
In the third quarter of 2002, the Company recorded a $2.0 million reduction in special charges due to a revision of the estimated costs related to the early
termination of certain aircraft leases.
The following table presents the payments and other settlements made during 2002, 2003 and 2004 and the remaining special charge accruals as of
December 31, 2004.
Contract
Sale- Fleet Professional Reductions- Termination/
Leaseback Restructuring Fees in-force Other Costs Total
(in thousands)
Balance at December 31, 2001 $ — $ 16,786 $ — $ 83 $ — $ 16,869
Special charges 6,328 10,582 1,489 631 — 19,030
Reclassification of aircraft rent due to restructuring — 4,696 — — — 4,696
Payments — (14,516) (1,489) (714) — (16,719)
Issuance of convertible notes — (5,000) — — — (5,000)
Forfeiture of security deposits — (2,289) — — — (2,289)
Loss on sale-leasebacks (3,852) — — — — (3,852)
Reclassification of capitalized maintenance for parked aircraft — (902) — — — (902)
Revision of estimate — (6,000) — — — (6,000)
Balance at December 31, 2002 2,476 3,357 — — — 5,833
Special charges (510) 1,545 — 2,701 10,634 14,370
Payments — (896) — (2,344) (7,446) (10,686)
Loss on sale-leasebacks (1,361) — — — — (1,361)
Write-off of leasehold improvements due to Columbus hub closure — — — — (539) (539)
Impairment loss — (2,617) — — — (2,617)
Balance at December 31, 2003 605 1,389 — 357 2,649 5,000
Special charges (600) 1,913 — — — 1,313
Payments (5) (2,908) — (292) (2,528) (5,733)
Revision of estimate — — — (65) — (65)
Reversal of maintenance reserves — 3,000 — — — 3,000
Write-off of leasehold improvements, engine overhauls and deferred rent — (2,751) — — — (2,751)
Balance at December 31, 2004 $ — $ 643 $ — $ — $ 121 $ 764
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