US Airways 2005 Annual Report Download - page 256

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
The following table is a summary of pretax book income and taxable income prior to net operating loss carryforwards for the three months ended
December 31, 2005, the nine months ended September 30, 2005, the year ended December 31, 2004, the nine months ended December 31, 2003 and the three
months ended March 31, 2003 (in millions):
Predecessor Company
Three Months Nine Months Year Nine Months Three Months
Ended Ended Ended Ended Ended
DSuccessor1, September 30, December 31, December 31, March 31,
Company 2005 2004 2003 2003
Pretax book income (loss) $ (120) $ 278 $ (585) $ (154) $ 1,613
Taxable income (loss) 226 (418) (558) 149 262
The reason for significant differences between taxable and pretax book income primarily relates to discharge of indebtedness income, bankruptcy-related
charges, employee pension and postretirement benefit costs, employee-related accruals and leasing transactions.
9. Commitments and contingencies
(a) Commitments to purchase flight equipment and maintenance services
Airbus Purchase Commitments
On September 27, 2005, US Airways Group, US Airways and AWA entered into an Airbus A350 Purchase Agreement with Airbus. This agreement
provides for the delivery of 20 A350 aircraft during the period 2011 through 2014. The agreement contains terms and conditions with respect to aircraft price,
escalation, payment terms and pre-delivery payments, inspection and certification, technical acceptance, excusable and inexcusable delays, warranties and
service life policy, patent and copyright indemnity, technical data and training aids, training, supplier product support, indemnities and insurance, assignments
and transfers, and termination events. Airbus also agreed to provide backstop financing with respect to a substantial number of these A350 aircraft.
On September 27, 2005, US Airways Group entered into Amendment 16 to the A319/A320/A321 Purchase Agreement dated as of October 31, 1997
among US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of 19 firm order A320-family aircraft for delivery during the
period 2009 and 2010. The amendment also modifies other provisions of the Purchase Agreement relating to the deletion of certain aircraft cancellation rights
and the rescheduling of aircraft.
On September 27, 2005, US Airways Group entered into Amendment 10 to the A330/340 Purchase Agreement dated as of November 24, 1998 among
US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of ten firm order A330-200 aircraft for delivery during the period
2009 and 2010 and allows for cancellation in the event that US Airways takes certain deliveries under the A350 Purchase Agreement described above. Other
provisions of the Purchase Agreement which have been modified by the amendment relate to the application of existing pre-delivery payments, adjustments to
various cancellation rights and the cancellation of the right for additional A330 aircraft.
Embraer Purchase Commitments
On February 16, 2006, the Bankruptcy Court approved a settlement and assumption term sheet between US Airways Group and Embraer, executed by
US Airways Group on February 9, 2006, which amends the purchase agreement dated as of May 9, 2003, as amended, between US Airways Group and
Embraer and contemplates an amended and restated financing letter with Embraer. The Bankruptcy Court
250