US Airways 2005 Annual Report Download - page 236

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
(a) Reflects the discharge or reclassification of estimated liabilities subject to compromise. Most of these obligations are only entitled to receive such
distributions of cash and common stock as provided for under the Plan of Reorganization. A portion of the estimated liabilities subject to compromise
was restructured and will continue, as restructured, to be liabilities of the Successor Company.
(b) Includes adjustments to reflect assets and liabilities at fair value and the write-off of the Predecessor Company's equity accounts.
(c) In conjunction with the merger and application of purchase accounting, US Airways adjusted certain balances to conform its accounting policies to
those of America West Holdings.
(c) Reorganization items, net
SOP 90-7 requires that the financial statements for periods following the Chapter 11 filing through emergence distinguish transactions and events that are
directly associated with the reorganization from the ongoing operations of the business. Accordingly, revenues, expenses, realized gains and losses and
provisions for losses directly associated with the reorganization and restructuring of the business are reported separately as reorganization items, net in the
statements of operations. Reorganization items, net as shown on the statements of operations related to the Chapter 11 proceedings consist of the following
(in millions):
Predecessor Company
Nine Months Three Months
Ended Year Ended Ended
September 30, 2005 December 31, 2004 March 31, 2003
Curtailment of postretirement benefits(a) $ 1,420 $ — $ —
Termination of pension plans(b) 801 — 386
Discharge of liabilities(c) 75 — 3,655
Aircraft order cancellation penalties & reversals(d) 30 (7) —
Interest income on accumulated cash 7 4 2
Damage and deficiency claims(e) 2 (2) (1,892)
Revaluation of assets and liabilities(f) (1,498) — (1,106)
Severance including benefits(g) (96) — —
Professional fees (57) (27) (51)
Airbus equipment deposits and credits, net(h) (35) — —
Restructured aircraft financings(i) (5) — 946
Write-off of deferred compensation (4) — —
Loss on aircraft abandonment(j) — — (9)
Other (4) — (43)
$ 636 $ (32) $ 1,888
(a) In January 2005, the Bankruptcy Court approved settlement agreements between US Airways and its unions and the court-appointed Section 1114
Committee, representing retirees other than those represented by the IAM and TWU, to begin the significant curtailment of postretirement medical
benefits. US Airways recognized a gain of $183 million in connection with this curtailment in the first quarter of 2005. Upon the emergence from
bankruptcy and effectiveness of the Plan of 230