UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q.—QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark one)
| x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2003
or
| ¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
US Airways, Inc.
(Exact name of registrant as specified in its charter)
State of Incorporation: Delaware
2345 Crystal Drive, Arlington, Virginia 22227
(Address of principal executive offices)
(703) 872-7000
(Registrant’s telephone number, including area code)
(Commission file number: 1-8442)
(I.R.S. Employer Identification No: 53-0218143)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by court. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of April 30, 2003 there were outstanding 1,000 shares of common stock of US Airways, Inc.
US Airways, Inc.
Form 10-Q
Quarterly Period Ended March 31, 2003
| Page | ||||
| Part I. |
Financial Information |
|||
| Item 1. |
Financial Statements—US Airways, Inc. |
|||
| Condensed Consolidated Statements of Operations—Three Months Ended March 31, 2003 and 2002 |
1 | |||
| Condensed Consolidated Balance Sheets—March 31, 2003 and December 31, 2002 |
2 | |||
| Condensed Consolidated Statements of Cash Flows—Three Months Ended March 31, 2003 and 2002 |
3 | |||
| 4 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 | ||
| Item 3. |
26 | |||
| Item 4. |
27 | |||
| Part II. |
Other Information |
|||
| Item 1. |
27 | |||
| Item 2. |
29 | |||
| Item 5. |
30 | |||
| Item 6. |
30 | |||
| 31 | ||||
| 32 |
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2003 and 2002 (unaudited)
(in millions)
| Predecessor Company |
||||||||
| 2003 |
2002 |
|||||||
| Operating Revenues |
||||||||
| Passenger transportation |
$ |
1,117 |
|
$ |
1,307 |
| ||
| US Airways Express transportation revenues |
|
242 |
|
|
232 |
| ||
| Cargo and freight |
|
35 |
|
|
33 |
| ||
| Other |
|
118 |
|
|
123 |
| ||
| Total Operating Revenues |
|
1,512 |
|
|
1,695 |
| ||
| Personnel costs |
|
562 |
|
|
821 |
| ||
| Aviation fuel |
|
197 |
|
|
168 |
| ||
| Aircraft rent |
|
101 |
|
|
121 |
| ||
| Other rent and landing fees |
|
99 |
|
|
98 |
| ||
| Selling expenses |
|
83 |
|
|
131 |
| ||
| Aircraft maintenance |
|
70 |
|
|
71 |
| ||
| Depreciation and amortization |
|
63 |
|
|
73 |
| ||
| US Airways Express capacity purchases |
|
251 |
|
|
258 |
| ||
| Other |
|
288 |
|
|
323 |
| ||
| Total Operating Expenses |
|
1,714 |
|
|
2,064 |
| ||
| Operating Loss |
|
(202 |
) |
|
(369 |
) | ||
| Other Income (Expense) |
||||||||
| Interest income |
|
2 |
|
|
9 |
| ||
| Interest expense, net |
|
(73 |
) |
|
(80 |
) | ||
| Reorganization items, net |
|
1,888 |
|
|
— |
| ||
| Other, net |
|
(2 |
) |
|
7 |
| ||
| Other Income (Expense), Net |
|
1,815 |
|
|
(64 |
) | ||
| Income (Loss) Before Income Taxes |
|
1,613 |
|
|
(433 |
) | ||
| Provision (Credit) for Income Taxes |
|
— |
|
|
(135 |
) | ||
| Net Income (Loss) |
$ |
1,613 |
|
$ |
(298 |
) | ||
See accompanying Notes to Condensed Consolidated Financial Statements.
1
US Airways, Inc.
Condensed Consolidated Balance Sheets
March 31, 2003 (unaudited) and December 31, 2002
(in millions)
| Successor Company |
Predecessor Company |
|||||||
| ASSETS |
March 31, 2003 |
December 31, 2002 |
||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ |
1,195 |
|
$ |
580 |
| ||
| Short-term investments |
|
68 |
|
|
49 |
| ||
| Restricted cash |
|
188 |
|
|
150 |
| ||
| Receivables, net |
|
280 |
|
|
220 |
| ||
| Receivables from related parties, net |
|
— |
|
|
92 |
| ||
| Materials and supplies, net |
|
164 |
|
|
176 |
| ||
| Prepaid expenses and other |
|
112 |
|
|
83 |
| ||
| Total Current Assets |
|
2,007 |
|
|
1,350 |
| ||
| Property and Equipment |
||||||||
| Flight equipment |
|
2,728 |
|
|
5,137 |
| ||
| Ground property and equipment |
|
352 |
|
|
1,108 |
| ||
| Less accumulated depreciation and amortization |
|
— |
|
|
(2,495 |
) | ||
| Total Property and Equipment |
|
3,080 |
|
|
3,750 |
| ||
| Other Assets |
||||||||
| Goodwill |
|
2,413 |
|
|
531 |
| ||
| Other intangibles, net |
|
515 |
|
|
307 |
| ||
| Receivable from parent company |
|
56 |
|
|
66 |
| ||
| Restricted cash |
|
383 |
|
|
364 |
| ||
| Other assets, net |
|
34 |
|
|
96 |
| ||
| Total Other Assets |
|
3,401 |
|
|
1,364 |
| ||
| $ |
8,488 |
|
$ |
6,464 |
| |||
| LIABILITIES & STOCKHOLDER’S EQUITY (DEFICIT) |
||||||||
| Current Liabilities |
||||||||
| Current maturities of long-term debt |
$ |
70 |
|
$ |
300 |
| ||
| Accounts payable |
|
426 |
|
|
217 |
| ||
| Payables to related parties, net |
|
37 |
|
|
— |
| ||
| Traffic balances payable and unused tickets |
|
923 |
|
|
784 |
| ||
| Accrued aircraft rent |
|
76 |
|
|
164 |
| ||
| Accrued salaries, wages and vacation |
|
238 |
|
|
281 |
| ||
| Other accrued expenses |
|
434 |
|
|
438 |
| ||
| Total Current Liabilities |
|
2,204 |
|
|
2,184 |
| ||
| Noncurrent Liabilities and Deferred Credits |
||||||||
| Long-term debt, net of current maturities |
|
2,948 |
|
|
18 |
| ||
| Deferred gains and credits, net |
|
487 |
|
|
— |
| ||
| Postretirement benefits other than pensions |
|
1,589 |
|
|
1,443 |
| ||
| Employee benefit liabilities and other |
|
1,085 |
|
|
2,272 |
| ||
| Total Noncurrent Liabilities |
|
6,109 |
|
|
3,733 |
| ||
| Liabilities Subject to Compromise |
|
— |
|
|
5,503 |
| ||
| Commitments and Contingencies |
||||||||
| Stockholder’s Equity (Deficit) |
||||||||
| Common stock |
|
— |
|
|
— |
| ||
| Paid-in capital |
|
344 |
|
|
2,661 |
| ||
| Accumulated deficit |
|
— |
|
|
(4,485 |
) | ||
| Deferred compensation |
|
(169 |
) |
|
— |
| ||
| Receivable from parent company |
|
— |
|
|
(2,262 |
) | ||
| Accumulated other comprehensive loss |
|
— |
|
|
(870 |
) | ||
| Total Stockholder’s Equity (Deficit) |
|
175 |
|
|
(4,956 |
) | ||
| $ |
8,488 |
|
$ |
6,464 |
| |||
See accompanying Notes to Condensed Consolidated Financial Statements.
2
US Airways, Inc.
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2003 and 2002 (unaudited)
(in millions)