US Airways 2005 Annual Report Download - page 252

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
estimated benefit pilots are expected to receive from the PBGC, the trustee for the terminated pilot defined benefit plan. Effective October 15, 2004, each
pilot's contribution rate became the lessor of the original rate or 10% of eligible compensation. Expenses for this plan were $10 million, $32 million,
$134 million and $134 million for the three months ended December 31, 2005, the nine months ended September 30, 2005, the year ended December 31,
2004 and for the nine months ended December 31, 2003.
(c) Postemployment benefits
US Airways provides certain postemployment benefits to its employees. These benefits include disability-related benefits for certain employees.
US Airways accrues for the cost of these 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 93/4% 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, 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 2003. The interest portion of these contributions was
$7 million in 2003. 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 first bankruptcy in March 2003. Effective March 31, 2003, the ESOP was terminated as
provided in the 2003 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.
(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 2005, 2004, or
2003.
Since the emergence from bankruptcy in September 2005, most non-executive employees of US Airways are eligible to participate in the 2005 Profit
Sharing Plan, an annual bonus program. Annual bonus awards are paid from a profit-sharing pool equal to (i) ten percent of the annual profits of US Airways
Group (excluding unusual items) for pre-tax profit margins up to ten percent, plus (ii) 15% of the annual profits of US Airways Group (excluding unusual
items) for pre-tax profit margins greater than ten percent. Awards are paid as a lump sum no later than March 15 after the end of the fiscal year.
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