US Airways 2006 Annual Report Download - page 97

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
and holders of America West Holdings Class B common stock received 0.4125 of a share of new US Airways Group common stock for
each share of America West Holdings Class B common stock they owned, according to the terms specified in the merger agreement.
On September 27, 2005, US Airways Group received new equity investments of $565 million in the aggregate from ACE Aviation
Holdings Inc. ("ACE"); Par Investment Partners, L.P. ("Par"); Peninsula Investment Partners, L.P. ("Peninsula"); a group of investors
under the management of Wellington Management Company, LLP ("Wellington"); Tudor Proprietary Trading, L.L.C. and certain
investors advised by Tudor Investment Corp. ("Tudor"); and Eastshore Aviation, LLC ("Eastshore"). In connection with the equity
investments, each of the equity investors received an option to purchase additional shares at $15.00 per share. Par purchased the options
granted to ACE and Eastshore, and each option holder exercised the first two-thirds of its option on September 28, 2005, for aggregate
proceeds to US Airways Group of approximately $75 million. On October 13, 2005, each of the equity investors exercised the remaining
portion of its option for aggregate proceeds to US Airways Group of approximately $38 million. Proceeds from these new equity
investments, including the option exercises, totaled approximately $678 million. The new equity investors acquired an aggregate of
approximately 44 million shares of common stock, including the shares acquired upon exercise of their options.
3. Change in accounting policy for maintenance costs
As discussed in Note 1(o), AWA changed its accounting policy from the deferral method to the direct expense method during the
fourth quarter of 2005. The effect of this change in accounting for aircraft maintenance and repairs is recorded as a cumulative effect of a
change in accounting principle. The effect of the change in 2005 was to increase net loss by approximately $48 million (or $1.52 per
share). The increase in the 2005 net loss of $202 million is the cumulative effect on retained earnings of the adoption as of January 1,
2005. The cumulative effect of the change in accounting principle is not presented net of tax as any tax effects resulting from the change
have been immediately offset by the recording of a valuation allowance through the same financial statement caption.
The pro forma net loss shown on the consolidated statements of operations have been adjusted for the effects of retroactive
application of the impact of maintenance costs. The following pro forma loss per share amounts show the effect of the retroactive
application of the change in accounting principle.
2004
Loss per share
Basic — As Reported before cumulative effect of change in accounting principle $ (5.99)
Basic — Pro Forma (9.53)
Diluted — As Reported before cumulative effect of change in accounting principle $ (5.99)
Diluted — Pro Forma (9.53)
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