Independent Auditor Problem

[USA320Pilot]

The company obtained a short-term fix for ATSB problem and S&P has not lowered the credit rating yet, but the independent auditor problem has now created additional risk for the airline. On March 22 Bloomberg News reported in an article titled "Appeal of US Airways Express Boosted By New Loan Terms" that KPMG found "substantial doubt about (US Airways’) ability to continue as a going concern." The news agency reported, "If the auditor makes a similar finding again this year, the company said it would be in default on its loan (guarantee)."

Regards,

USA320Pilot

 

[BoeingBoy]

USA320Pilot,

We've been thru this before over on the ALPA board, but for the sake of those here:

Company press release 3/12/04

"US Airways also agreed to a loan covenant that its minimum unrestricted cash balance would not fall below the lower of $700 million and the outstanding balance of the loan at each month until its “going concern paragraphâ€￾ is removed, at which point the unrestricted cash covenant will be reduced to $500 million."

Annual Report

"Finally, in consideration for the ATSB lenders amending the provision related to the going concern paragraph in the independent auditor’s report for the Company’s audited financial statements for the year December 31, 2003, US Airways agreed to change the month end minimum unrestricted cash covenant to exceed the lesser of the outstanding ATSB Loan balance or $700 million and to commit that no intra-month end of day unrestricted cash balance would fall below the lesser of the outstanding ATSB Loan balance or $575 million."

Original ATSB Covents

"an accountant's report thereon of KPMG LLP or other independent certified public accountants of recognized national standing selected by the Borrower or Group, as the case may be, which report (1) shall be unqualified as to scope, (2) for each Fiscal Year commencing with the Fiscal Year ending December 31, 2003, shall not contain a going concern qualification and shall state that in making its examination no knowledge of any Default or Event of Default was obtained (to the extent such statement is not prohibited by, or inconsistent with, applicable accounting literature)"

Jim

 

[USA320Pilot]

BoeingBoy, I understand what you are saying, however, if you want to spend the time reviewing the information go to Edgar Online and look up the SEC filing.

I trust Lynn.

Regards,

USA320Pilot

P.S. The information can also be obtained at the LGA Bloomberg Terminal.