US Airways 2005 Annual Report Download - page 135

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
Holders may convert, at any time on or prior to maturity or redemption, any outstanding notes (or portions thereof) into shares of US Airways Group's
common stock, initially at a conversion rate of 41.4508 shares of US Airways Group's common stock per $1,000 principal amount of notes (equivalent
to an initial conversion price of approximately $24.12 per share of US Airways Group's common stock). If a holder elects to convert its notes in
connection with certain specified fundamental changes that occur prior to October 5, 2015, the holder will be entitled to receive additional shares of
US Airways Group's common stock as a make whole premium upon conversion. In lieu of delivery of shares of US Airways Group's common stock
upon conversion of all or any portion of the notes, US Airways Group may elect to pay holders surrendering notes for conversion cash or a combination
of shares and cash.
Holders may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways Group's election, all or a portion of
their 7% Senior Convertible Notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the principal amount of the
7% Senior Convertible Notes to be repurchased plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways Group
experiences a specified fundamental change, holders may require US Airways Group to purchase for cash, shares or a combination thereof, at its
election, all or a portion of their 7% Senior Convertible Notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the
7% Senior Convertible Notes plus accrued and unpaid interest, if any, to the purchase date. Prior to October 5, 2010, the 7% Senior Convertible Notes
will not be redeemable at US Airways Group's option. US Airways Group may redeem all or a portion of the 7% Senior Convertible Notes at any time
on or after October 5, 2010, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued and unpaid interest, if
any, to the redemption date if the closing price of US Airways Group's common stock has exceeded 115% of the conversion price for at least 20 trading
days in the 30 consecutive trading day period ending on the trading day before the date on which US Airways Group mails the optional redemption
notice.
(j) In August 1995, AWA issued $75 million principal amount of 103/4% senior unsecured notes due 2005, of which $40 million remained outstanding at
December 31, 2004. Interest on the 103/4% senior unsecured notes was payable semi-annually in arrears on March 1 and September 1 of each year. On
December 27, 2004, AWA called for the redemption on January 26, 2005 of all of the senior unsecured notes at a redemption price of 100% of the
principal amount thereof plus accrued and unpaid interest through the redemption date. In addition, AWA irrevocably deposited the $31 million raised
through the maintenance facility and flight training center financing, as discussed in note (c) above, together with an additional $11 million from its
operating cash flow, with the trustee for the senior unsecured notes. The senior notes were subsequently redeemed on January 26, 2005.
(k) In January 2002, in connection with the closing of the original AWA ATSB loan and the related transactions, America West Holdings issued
$105 million of 7.5% convertible senior notes due 2009, of which approximately $112 million remained outstanding at December 31, 2005 (including
$22 million of interest paid through December 31, 2004 as a deemed loan added to the initial principal thereof). Beginning January 18, 2005, these
notes are convertible into shares of common stock of US Airways Group, at the option of the holders, at an initial conversion price of $29.09 per share
or a conversion ratio of approximately 34.376 shares per $1,000 principal amount of such notes, subject to standard anti-dilution adjustments. Interest
on the 7.5% convertible senior notes is payable semiannually in arrears on June 1 and December 1 of each year. At America West Holdings' option, the
first six interest payments were payable in the form of a deemed loan added to the principal amount of these notes. The 7.5% convertible senior notes
will mature on January 18, 2009 unless earlier converted or redeemed. The payment of principal, premium and interest on the 7.5% convertible senior
notes is fully and unconditionally guaranteed by AWA and US Airways Group. For financial reporting purposes, America West Holdings recorded the
convertible senior notes at their fair 129