US Airways 2005 Annual Report Download - page 79

Table of Contents
$649 million in 2005 and included a $394 million reduction in aircraft-related debt as a result of the flight equipment asset sale leaseback transactions. The
2004 period included proceeds from the issuance of debt of $240 million and debt repayments of $425 million.
Commitments
As of December 31, 2005, the Company had $3.12 billion of long-term debt (including current maturities and before discount on debt), which consisted
primarily of the items discussed below.
New Convertible Notes
US Airways Group received net proceeds of $139 million related to the 7% Senior Convertible Notes due 2020 that were issued on September 30, 2005.
The 7% notes are US Airways Group's senior unsecured obligations, rank equally in right of payment to its other senior unsecured and unsubordinated
indebtedness, and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing such indebtedness. The 7% notes are
fully and unconditionally guaranteed, jointly and severally and on a senior unsecured basis, by US Airways and AWA. The guarantees are the guarantors'
unsecured obligations, rank equally in right of payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively
subordinated to the guarantors' secured indebtedness to the extent of the value of assets securing such indebtedness.
The 7% notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and September 30 of each year, beginning
March 30, 2006. The 7% notes mature on September 30, 2020. 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 7% 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 7% 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 7% notes, US Airways Group may elect to pay holders surrendering
7% notes for conversion cash or a combination of shares and cash.
Holders of the 7% notes 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 notes on September 30, 2010 and September 30, 2015 at a purchase price equal to 100% of the principal amount of the notes to be repurchased
plus accrued and unpaid interest, if any, to the purchase date. In addition, if US Airways Group experiences a fundamental change (as defined in the indenture
governing the notes), holders may require US Airways Group to purchase for cash, shares or a combination thereof, at its election, all or a portion of their
notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest, if any, to the purchase
date. Prior to October 5, 2010, the notes will not be redeemable at US Airways Group's option. US Airways Group may redeem all or a portion of the notes at
any time on or after October 5, 2010, at a price equal to 100% of the principal amount of the 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 redemption notice.
GE
Of the $139 million net proceeds from the 7% notes, $125 million was paid in September 2005 to GE. Under certain agreements among GE and
US Airways Group, GE agreed, in consideration for the early return of 51 aircraft and six engines, the assumption of certain modified leases and the payment
of $125 million in cash by September 30, 2005, to (1) retire an existing bridge loan facility, (2) complete a
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