US Airways 2004 Annual Report Download - page 68

Table of Contents
AMERICA WEST HOLDINGS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED
The Company expects to make payments related to these special charges through the fourth quarter of 2005.
12. Nonoperating Income (Expenses) — Other, Net
In connection with the term loan refinancing with GECC, the Company wrote off $1.3 million of debt issue costs associated to the term loan with Mizuho
in 2004. This amount was recorded in nonoperating expenses.
The changes in the fair value of the Company's derivative instruments and the net realized gains and losses for the settled hedge transactions was a
$30.5 million credit in 2004, $10.7 million credit in 2003 and $0.6 million expense in 2002.
In April 2003, the Senate and House of Representatives of the United States of America passed, and the President signed, the Emergency Wartime
Supplemental Appropriations Act to provide certain aviation-related assistance. $2.3 billion of the appropriation was for grants by the TSA to U.S. air carriers
based on the proportional share each carrier had paid or collected as of the date of enactment of the legislation for passenger security and air carrier security
fees. In May 2003, AWA received approximately $81.3 million representing its proportional share of passenger security and air carrier security fees paid or
collected as of April 2003, which has been classified as "Federal Government Assistance" in the accompanying consolidated statements of operations. See
Note 17, "Emergency Wartime Supplemental Appropriations Act."
In the fourth quarter of 2003, IAC/InterActiveCorp completed its acquisition of Hotwire.com, a discount travel website. Hotwire was founded by the Texas
Pacific Group, American Airlines, Continental Airlines, Northwest Airlines, United Airlines, US Airways and AWA in October 2000. AWA had an
ownership interest of approximately 1.5% in Hotwire.com with a carrying value of approximately $0.03 million. Upon closing of the transaction, AWA
received cash of $9.8 million. Accordingly, AWA recognized a nonoperating gain of $9.8 million in the fourth quarter of 2003.
In the fourth quarter of 2003, Holdings completed the sale of its 12% interest in National Leisure Group to PAR Capital. The investment in National
Leisure Group was carried on the Company's consolidated balance sheet at cost, which approximated $7.7 million. PAR Capital owned $10.45 million face
value of the Company's 10 3/4% senior unsecured notes. PAR Capital purchased the Company's investment in National Leisure Group in exchange for the
$10.45 million face value of the 10 3/4% notes plus $0.3 million in cash. This resulted in a $3.3 million nonoperating gain. See Note 4, "Financial
Instruments and Risk Management – (a) Fair Value of Financial Instruments – Investments in Equity Securities."
Under the airline compensation provisions of the Air Transportation Safety and System Stabilization Act (the "Act"), each air carrier was entitled to
receive the lesser of: (i) its direct and incremental losses for the period September 11, 2001 to December 31, 2001 or (ii) its proportional available seat mile
allocation (based on available seat miles for August 2001) of the $4.5 billion compensation available under the Act. In 2001, AWA received $98.2 million
under the Act from the United States government and expected to receive, based on its losses and its share of available seat miles, at least an additional
$10.0 million. In accordance with EITF Issue No. 01-10, "Accounting for the Impact of the Terrorist Attacks of September 11, 2001," AWA recognized
$108.2 million of federal government assistance in 2001 as nonoperating income because direct and incremental losses incurred during 2001 exceeded that
amount. In July 2002, AWA received an additional $12.3 million under the Act. Accordingly, $10.0 million was credited against the receivable established in
2001 and $2.3 million was recognized as nonoperating income in the second quarter of 2002. In August 2002, AWA received an additional payment of
$6.2 million under the Act, which was recognized as nonoperating income in the third quarter of 2002.
In March 2002, the Company wrote down its investment in Aeroxchange, an e-commerce entity, which was carried at cost, to net realizable value
recognizing a loss of $2.8 million.
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