US Airways 2007 Annual Report Download - page 95

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
any portion of the notes, US Airways Group may elect to pay holders surrendering notes for conversion, cash or a combination of
shares and cash.
Holders may require US Airways Group to purchase for cash or shares or a combination thereof, at US Airways Group's election,
all or a portion of their 7% Senior Convertible Notes on September 30, 2010 and September 30, 2015 at a purchase price equal to
100% of the principal amount of the 7% Senior Convertible Notes to be repurchased plus accrued and unpaid interest, if any, to the
purchase date. In addition, if US Airways Group experiences a specified fundamental change, holders may require US Airways
Group to purchase for cash, shares or a combination thereof, at its election, all or a portion of their 7% Senior Convertible Notes,
subject to specified exceptions, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued
and unpaid interest, if any, to the purchase date. Prior to October 5, 2010, the 7% Senior Convertible Notes will not be redeemable
at US Airways Group's option. US Airways Group may redeem all or a portion of the 7% Senior Convertible Notes at any time on
or after October 5, 2010, at a price equal to 100% of the principal amount of the 7% Senior Convertible Notes plus accrued and
unpaid interest, if any, to the redemption date if the closing price of US Airways Group's common stock has exceeded 115% of the
conversion price for at least 20 trading days in the 30 consecutive trading day period ending on the trading day before the date on
which US Airways Group mails the optional redemption notice.
In 2006, $70 million of the $144 million outstanding principal amount was converted into 2,909,636 shares of common stock. In
connection with the conversion, the Company paid a premium of $17 million to the holders of the converted notes, which was
recorded in other nonoperating expenses.
(g) In December 2004, deferred charges under US Airways' maintenance agreements with GE Engine Systems, Inc. were converted
into an unsecured term note. Interest on the note accrues at LIBOR plus 4%, and becomes payable beginning in January 2008, at
which time principal and interest payments are due in 48 monthly installments.
(h) The industrial development revenue bonds are due April 2023. Interest at 6.3% is payable semiannually on April 1 and October 1.
The bonds are subject to optional redemption prior to the maturity date on or after April 1, 2008, in whole or in part, on any
interest payment date at the following redemption prices: 102% on April 1 or October 1, 2008; 101% on April 1 or October 1,
2009; and 100% on April 1, 2010 and thereafter.
(i) In connection with US Airways Group's emergence from bankruptcy in September 2005, it reached a settlement with the Pension
Benefit Guaranty Corporation ("PBGC") related to the termination of three of its defined benefit pension plans. The settlement
included the issuance of a $10 million note which matures in 2012 and bears interest at 6% payable annually in arrears.
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 $ 117
2009 145
2010 121
2011 134
2012 139
Thereafter 2,613
$ 3,269
Certain of US Airways Group's long-term debt agreements contain minimum cash balance requirements and other covenants with
which the Company was in compliance at December 31, 2007. Certain of US Airways Group's long-term debt agreements contain cross-
default provisions, which may be triggered by defaults by US Airways or US Airways Group under other agreements relating to
indebtedness.
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