US Airways 2007 Annual Report Download - page 158

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
During hearings in late 2004 and January 2005, the Bankruptcy Court approved various settlement agreements between US Airways
and certain of its unions, and between US Airways and the court-appointed Section 1114 Committee (representing retirees other than
those represented by unions) to begin the significant curtailments of postretirement benefits. Effective March 1, 2005, those benefits were
significantly reduced. US Airways remeasured its postretirement benefit obligation based on the new terms, which resulted in a reduction
in the postretirement benefit obligation of approximately $1.1 billion and a curtailment gain of $183 million. Since the remeasurement
and reduction of the postretirement benefit obligation created a significant unrecognized prior service gain, US Airways recognized net
periodic other postretirement benefit income until the emergence from bankruptcy on September 27, 2005. In accordance with SOP 90-7,
US Airways revalued its postretirement benefit obligation on emergence and adjusted its liability to $229 million, a reduction of
$1.25 billion. Of this, a $1.24 billion gain, including the recognition of the unamortized portion of the prior service gain created as a
result of the benefit curtailment, is included in reorganization items, net in the statements of operations. Adjustments made subsequent to
September 30, 2005 totaling $10 million were made directly to goodwill.
The following table sets forth changes in the fair value of plan assets, benefit obligations and the funded status of the plans as of the
measurement date of September 30, 2007 and 2006, in addition to the amounts recognized in US Airways' balance sheets as of
December 31, 2007 and 2006 (in millions):
Other Postretirement Benefits
Year Ended Year Ended
December 31, December 31,
2007 2006
Fair value of plan assets at beginning of period $ — $ —
Actual return on plan assets — —
Employer contributions 23 31
Plan participants' contributions 28 30
Gross benefits paid (51) (61)
Fair value of plan assets at end of period — —
Benefit obligation at beginning of period 217 229
Service cost 3 3
Interest cost 12 12
Plan participants' contributions 28 30
Actuarial (gain) loss (47) 4
Gross benefits paid (51) (61)
Benefit obligation at end of period 162 217
Funded status of the plan (162) (217)
Contributions for October to December 6 5
Liability recognized in the consolidated balance sheet $ (156) $ (212)
Net actuarial gain recognized in accumulated other comprehensive income $ 47 $ —
The following table presents the weighted average assumptions used to determine benefit obligations:
Other Postretirement Benefits
Year Ended Year Ended
December 31, December 31,
2007 2006
Discount rate 5.94% 5.67%
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