US Airways 2005 Annual Report Download - page 238

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
deferred gains and credits, net, a $54 million increase to other intangibles, net, a $15 million decrease to employee benefit liabilities and other and a
$6 million decrease to accounts payable. In addition, a $6 million adjustment was made to paid-in capital reflecting a reallocation of US Airways Group
equity as a result of additional fair value adjustments to assets at certain US Airways Group subsidiaries other than US Airways.
(g) In connection with filing for bankruptcy on September 12, 2004, US Airways achieved cost-savings agreements with its principal collective bargaining
groups. In connection with the new labor agreements, approximately 5,000 employees across several of US Airways' labor groups were involuntarily
terminated or participated in voluntary furlough and termination programs.
(h) In connection with the Airbus MOU, US Airways was required to pay a restructuring fee of $39 million, which was paid by means of offset against
existing equipment deposits held by Airbus. US Airways also received credits from Airbus totaling $4 million in 2005, primarily related to equipment
deposits. See also Note 1.
(i) The GE Merger MOU provided for the continued use of certain leased Airbus, Boeing and regional jet aircraft, the modification of monthly lease rates
and the return of certain other leased Airbus and Boeing aircraft. The GE Merger MOU also provided for the sale-leaseback of assets securing various
GE obligations. In connection with these transactions, US Airways recorded a net loss of $5 million.
In connection with the first bankruptcy, US Airways restructured aircraft debt and lease agreements related to 119 aircraft including the conversion of
52 mortgages to operating leases. The restructured terms generally provide for shorter lease periods and lower lease rates.
(j) For the three months ended March 31, 2003, reorganization items includes expenses related to seven aircraft that were legally abandoned as part of the
first bankruptcy. Related aircraft liabilities were adjusted for each aircraft's expected allowed collateral value.
(d) Liabilities subject to compromise
SOP 90-7 also requires that prepetition liabilities subject to compromise should be distinguished from both prepetition liabilities that are not subject to
compromise and postpetition liabilities. Liabilities subject to compromise are reported at the amounts expected to be allowed by the Bankruptcy Court, even if
they are settled for lesser amounts. The following table summarizes the components of liabilities subject to compromise included in the balance sheet as of
December 31, 2004 (in millions):
Debt and capital leases $ 2,400
Postretirement and other employee related expenses 2,858
Other accrued expenses 565
Accounts payable 162
Aircraft-related accruals and deferrals 93
Total Liabilities Subject to Compromise $ 6,078
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