US Airways 2007 Annual Report Download - page 85

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
Effective December 31, 2006, the Company adopted the recognition provisions of SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)." This
statement requires employers to recognize in their balance sheets the overfunded or underfunded status of defined benefit postretirement
plans, measured as the difference between the fair value of plan assets and the benefit obligation (the projected benefit obligation for
pension plans and the accumulated postretirement benefit obligation for other postretirement plans). The impact on the Company's
consolidated financial statements of adopting the recognition provisions of SFAS No. 158 was not material. The Company recognized a
nominal amount of prior changes in the funded status of its postretirement benefit plans through accumulated other comprehensive
income. The adoption of the recognition provisions of SFAS No. 158 had no effect on the Company's statement of operations for the year
ended December 31, 2006 or for any prior period presented.
SFAS No. 158 also requires plan assets and obligations to be measured as of the employer's balance sheet date. The Company
currently uses a measurement date of September 30 for its other postretirement benefits. The measurement provisions of this statement
are required to be adopted no later than fiscal years beginning after December 15, 2008. The Company will adopt the measurement
provisions of this statement in 2008. The impact on the Company's consolidated financial statements of adoption of the measurement
provisions will not be material.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities."
SFAS No. 159 allows entities the option to measure eligible financial instruments at fair value as of specified dates. Such election, which
may be applied on an instrument by instrument basis, is typically irrevocable once elected. SFAS No. 159 is effective for fiscal years
beginning after November 15, 2007. The Company adopted SFAS No. 159 on January 1, 2008, but has not yet elected the fair value
option for any items permitted under SFAS No. 159.
2. New equity structure and conversion
Pursuant to US Airways Group's plan of reorganization, all securities of US Airways Group outstanding prior to September 27,
2005 were canceled upon emergence from Chapter 11. In connection with the merger, US Airways Group adopted an Amended and
Restated Certificate of Incorporation and Amended and Restated Bylaws effective September 27, 2005. US Airways Group's authorized
capital stock, following the merger, consists of 200 million shares of common stock, par value $0.01 per share. Holders of the new US
Airways Group common stock are entitled to one vote per share on all matters submitted to a vote of common shareholders, except that
voting rights of non-U.S. citizens are limited to the extent that the shares of common stock held by such non-U.S. persons would
otherwise be entitled to more than 24.9% of the aggregate votes of all outstanding equity securities of US Airways Group.
In the merger, holders of America West Holdings Class A common stock received 0.5362 of a share of new US Airways Group
common stock for each share of America West Holdings Class A common stock they owned, 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
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