US Airways 2007 Annual Report Download - page 179

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
The total intrinsic value of stock options and SARs exercised during the years ended December 31, 2007, 2006 and 2005 was
$4 million, $68 million and $13 million, respectively. Cash received from stock option and SAR exercises during the years ended
December 31, 2007 and 2006 totaled $13 million and $51 million, respectively. The tax benefit realized from stock options and SARs
exercised during the years ended December 31, 2007 and 2006 was $2 million and $25 million, respectively. US Airways recognized no
tax expense for exercises with book expense exceeding the tax deduction for 2007 and $0.2 million was recognized for 2006.
Agreements with ALPA — US Airways Group and US Airways have a letter of agreement with the ALPA that provides that US
Airways' pilots designated by ALPA receive stock options to purchase 1.1 million shares of US Airways Group's common stock. The first
tranche of 500,000 stock options was granted on January 31, 2006 with an exercise price of $33.65. The second tranche of 300,000 stock
options was granted on January 31, 2007 with an exercise price of $56.90. The third and final tranche of 300,000 stock options was
granted on January 31, 2008 with an exercise price of $12.29. The stock options granted to ALPA pilots do not reduce the shares
available for grant under any equity incentive plan. Any of these ALPA stock options that are forfeited or that expire without being
exercised will not become available for grant under any of US Airways' plans.
The per share fair value of the ALPA pilot stock options and assumptions used for the January 31, 2007 and 2006 grants were as
follows:
January 31, January 31,
2007 2006
Per share fair value $ 18.02 $ 17.11
Risk free interest rate 4.9% 4.4%
Expected dividend yield — —
Contractual term 2.0 years 5.0 years
Volatility 53% 69.8%
As of December 31, 2007 there were no unrecognized compensation costs related to stock options granted to ALPA pilots as the
stock options were fully vested on the grant date. There were 25,029 and 315,390 stock options exercised during 2007 and 2006,
respectively, pursuant to this agreement. The total intrinsic value of options exercised during 2007 and 2006 was $0.6 million and
$5 million, respectively. Cash received from stock options exercised during the years ended December 31, 2007 and 2006 totaled
$1 million and $12 million, respectively. The tax benefit realized from stock options exercised during the years ended December 31, 2007
and 2006 was $0.2 million and $2 million, respectively. US Airways recognized no tax expense for exercises with book expense
exceeding the tax deduction for 2007 and $0.5 million was recognized for 2006.
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