US Airways 2007 Annual Report Download - page 157

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
Secured financings are collateralized by assets, primarily aircraft, engines, simulators, rotable aircraft parts and hangar and
maintenance facilities. At December 31, 2007, the estimated maturities of long-term debt and capital leases are as follows (in millions):
2008 $ 101
2009 129
2010 105
2011 118
2012 123
Thereafter 1,019
$ 1,595
Certain of US Airways' long-term debt agreements contain minimum cash balance requirements and other covenants with which US
Airways was in compliance at December 31, 2007. Certain of US Airways' long-term debt agreements contain cross-default provisions,
which may be triggered by defaults by US Airways under other agreements relating to indebtedness.
Interest rates on $532 million principal amount of long-term debt as of December 31, 2007 are subject to adjustment to reflect
changes in floating interest rates. As of December 31, 2007, the weighted average effective interest rate was 7.55% for the variable
interest rate debt.
6. Employee pension and benefit plans
Substantially all of US Airways' employees meeting certain service and other requirements are eligible to participate in various
pension, medical, dental, life insurance, disability and survivorship plans.
(a) Defined Benefit and Other Postretirement Benefit Plans
On November 12, 2004, US Airways filed a motion requesting a determination from the Bankruptcy Court that US Airways
satisfied the financial requirement for a "distress termination" under section 4041(c)(2)(B)(ii)(IV) of ERISA of the AFA Plan, the IAM
Plan and the CE Plan, as well as approval of each plan's termination. These plans had aggregate benefit obligations of $2.71 billion and
aggregate plan assets of $1.76 billion, as of the plans' termination dates in January 2005. On January 6, 2005, the Bankruptcy Court
entered an order (i) finding that the financial requirements for distress terminations of the plans had been met and (ii) approving
termination of the plans. The AFA Plan and the IAM Plan were terminated effective January 10, 2005, which was the date agreed to by
the PBGC and US Airways. The CE Plan was terminated effective January 17, 2005, which was the date agreed to by the PBGC and US
Airways. Effective February 1, 2005, the PBGC was appointed trustee for each of the three plans.
Upon termination of the plans, US Airways recognized a curtailment gain of $24 million and a $91 million charge related to the
minimum pension liability, which was previously recorded in other comprehensive income. These amounts are included in reorganization
items, net in the statements of operations. Upon emergence from bankruptcy on September 27, 2005, the Bankruptcy Court approved a
settlement agreement between US Airways and the PBGC which required the PBGC to release all claims against US Airways in return
for US Airways issuing (i) a $13.5 million cash payment, paid in October 2005, (ii) a 6.00% note payable for $10 million, and (iii) 70%,
or 4,873,485 shares, of the unsecured creditors stock, net of the shares allocated to ALPA, valued at $57 million. Accordingly, US
Airways eliminated the $948 million liability related to the three terminated plans, including the minimum liability adjustment, and
recognized a net settlement gain of $868 million. This gain is included in reorganization items, net in the statements of operations.
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