US Airways 2003 Annual Report Download - page 87

Table of Contents
recognized compensation expense related to the ESOP of $4 million in each of 2002 and 2001 based on shares allocated to employees (the "shares allocated"
method). In June 2002, US Airways Group engaged Aon Fiduciary Counselors (Aon) as an independent fiduciary of the ESOP, with the authority to make all
decisions related to sale of the stock held in the ESOP. In September 2002, Aon sold all shares that were allocated to participant accounts. All unallocated
shares in the ESOP were cancelled in accordance with the Company's Plan of Reorganization. As a result, the Company recognized a charge of $50 million in
2002 representing the remaining unamortized deferred compensation to Reorganization items, net on the Company's Consolidated Statement of Operations.
Effective March 31, 2003, the ESOP was terminated as provided in the Bankruptcy Court approved Plan of Reorganization. The note payable to US Airways
was cancelled under the provisions of the Plan of Reorganization. Participant accounts were distributed by December 31, 2003.
See Note 2(m) with respect to the Company's accounting policies for stock-based compensation.
(e) Profit sharing plans
Under the Defined Contribution Retirement Program, US Airways makes additional contributions to participant accounts for certain employees when
US Airways Group achieves certain prescribed pre-tax margin levels. US Airways did not make any profit sharing contributions relating to 2003, 2002 or
2001.
8. Commitments and Contingencies
(a) Commitments to purchase flight equipment
As of December 31, 2003, US Airways Group has 19 A320-family aircraft on firm order scheduled for delivery in the years 2007 through 2009. US
Airways Group also has 10 A330-200 aircraft on firm order scheduled for delivery in the years 2007 through 2009. In addition, US Airways Group has firm
orders for 53 CRJ Series 200, 50-seat single-class aircraft and 25 CRJ 701, 70-seat single-class aircraft. All firm-order CRJ aircraft are scheduled to be
delivered by April 2005. US Airways Group also has firm orders for 85 Embraer ERJ-170, 72-seat aircraft, with the first delivery scheduled for March 2004.
US Airways Group has the option to convert the ERJ-170s to ERJ-175s with 76 seats. All ERJ-170 deliveries are scheduled to be received by September
2006. As of December 31, 2003, the minimum determinable payments associated with these acquisition agreements for all firm-order aircraft (including
progress payments, payments at delivery, spares, capitalized interest, penalty payments, cancellation fees and/or nonrefundable deposits) were estimated to be
$1.93 billion in 2004, $854 million in 2005, $414 million in 2006, $31 million in 2007 and $2 million in 2008. As a result of the recent regional jet aircraft
orders, the Company believes it is probable it will not take delivery of certain previously ordered narrow-body aircraft and recorded an accrual of $35 million
for related penalties during the three months ended June 30, 2003.
(b) Leases
US Airways leases certain aircraft, engines and ground equipment, in addition to the majority of its ground facilities. Ground facilities include
executive offices, maintenance facilities and ticket and administrative offices. Public airports are utilized for flight operations under lease arrangements with
the municipalities or agencies owning or controlling such airports. Substantially all leases provide that the lessee shall pay taxes, maintenance, insurance and
certain other operating expenses applicable to the leased property. Some leases also include renewal and purchase options. US Airways subleases certain
leased aircraft and ground facilities under noncancelable operating leases expiring in various years through the year 2021.
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