US Airways 2003 Annual Report Download - page 86

Table of Contents
on average will approximate the targeted allocation. US Airways regularly reviews its actual asset allocation and periodically rebalances its investments to its
targeted allocation when considered appropriate.
(b) Defined contribution pension plans
US Airways sponsors several defined contribution pension plans for certain employees. The US Airways makes cash contributions to certain plans
based on the employee's age, compensation and elected contributions. US Airways also participates in a multi-employer plan for certain employees. Cash
contributions are a function of hours worked times a negotiated contribution rate. The US Airways' contributions generally range up to 12% of the employee's
compensation. Expenses related to these plans, excluding expenses related to the US Airways Employee Stock Ownership Plan (ESOP) and the US Airways
pilot defined contribution plans – see below, were approximately $38 million, $12 million, $64 million and $77 million for the nine months ended December
31, 2003, three months ended March 31, 2003 and years ended December 31, 2002 and 2001, respectively. See Note 7(d) for information related to US
Airways' ESOP.
In connection with its reorganization under Chapter 11 of the Bankruptcy Code, US Airways terminated the Retirement Income Plan for Pilots of US
Airways, Inc. and the related nonqualified pilot plan effective March 31, 2003. US Airways implemented a qualified and nonqualified defined contribution
plan for pilots effective April 1, 2003. The defined contribution amount is individually determined based on a target normal retirement date balance of
approximately $1 million for a career US Airways pilot. The target balance includes the estimated value of other retirement benefits including, but not limited
to, the estimated benefit pilots are expected to receive from the PBGC, the trustee for the terminated pilot defined benefit plan. For the nine months ended
December 31, 2003, US Airways recognized expenses related to the pilot defined contribution plans of $134 million.
(c) Postemployment benefits
US Airways provides certain postemployment benefits to its employees. Such benefits include disability-related and workers' compensation benefits
and severance payments for certain employees (See Note 16). US Airways accrues for the cost of such benefit expenses once an appropriate triggering event
has occurred.
(d) Employee stock ownership plan (ESOP)
In August 1989, US Airways established an ESOP. US Airways Group sold 2,200,000 shares of its common stock to an Employee Stock Ownership
Trust (the Trust) to hold on behalf of US Airways' employees, exclusive of officers, in accordance with the terms of the Trust and the ESOP. The trustee
placed those shares in a suspense account pending their release and allocation to employees. US Airways provided financing to the Trust in the form of a
9 3/4% loan for $111 million for its purchase of shares and US Airways contributed an additional $2 million to the Trust. US Airways made a yearly
contribution to the Trust sufficient to cover the Trust's debt service requirement. The contributions were made in amounts equal to the periodic loan payments
as they came due, less dividends available for loan payment. Since US Airways Group did not pay dividends on any shares held by the Trust for the three
months ended March 31, 2003 or years ended December 31, 2002 and 2001, the Trust did not utilize dividends to service its debt during those periods. The
initial maturity of the loan was 30 years. As the loan was repaid over time, the trustee systematically released shares of the common stock from the suspense
account and allocated them to participating employees. Each participant's allocation was based on the participant's compensation, the total compensation of all
ESOP participants and the total number of shares being released. For each year after 1989, a minimum of 71,933 shares were released from the suspense
account and allocated to participant accounts. Annual contributions made by US Airways, and therefore loan repayments made by the Trust, were $9 million
in each of 2003, 2002 and 2001. The interest portion of these contributions was $7 million in each of 2003, 2002 and 2001. US Airways
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