US Airways 2008 Annual Report Download - page 102

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
February 2009, with the unrestricted cash balance in all cases including certain fuel hedge collateral. The reductions addressed the
impact on the Company's unrestricted cash of its obligations to post significant amounts of collateral with its fuel hedging
counterparties due to recent rapid declines in fuel prices.
Prior to the second anniversary of the date of the amendment, the $200 million cap on Barclays' pre-purchase obligation may be
reduced if certain conditions are not met. Commencing on that second anniversary, the $200 million cap will be reduced over a
period of approximately two years until such time as no pre-purchased miles remain; however, the time of reduction of the cap may
be accelerated if certain conditions are not met. The Company may repurchase any or all of the pre-purchased miles at any time,
from time to time, without penalty.
Pursuant to the amendment to the co-branded credit card agreement, the expiration date of the agreement was extended to 2017.
(h) On October 20, 2008, US Airways and Airbus entered into amendments to the A320 Family Aircraft Purchase Agreement, the A330
Aircraft Purchase Agreement, and the A350 XWB Purchase Agreement. In exchange for US Airways' agreement to enter into these
amendments, Airbus advanced US Airways $200 million in consideration of aircraft deliveries under the various related purchase
agreements. Under the terms of each of the amendments, US Airways has agreed to maintain a level of unrestricted cash in the same
amount required by the Citicorp credit facility. This transaction was treated as a financing transaction for accounting purposes using
an effective interest rate commensurate with US Airways' credit rating. There are no stated interest payments.
(i) On September 30, 2005, US Airways Group issued $144 million aggregate principal amount of 7% Senior Convertible Notes due 2020
(the "7% Senior Convertible Notes") for proceeds, net of expenses, of approximately $139 million. The 7% Senior Convertible Notes
are US Airways Group's senior unsecured obligations and rank equally in right of payment to its other senior unsecured and
unsubordinated indebtedness and are effectively subordinated to its secured indebtedness to the extent of the value of assets securing
such indebtedness. The 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior
subordinated basis, by US Airways and AWA. The guarantees are the guarantors' unsecured obligations and rank equally in right of
payment to the other senior unsecured and unsubordinated indebtedness of the guarantors and are effectively subordinated to the
guarantors' secured indebtedness to the extent of the value of assets securing such indebtedness.
The 7% Senior Convertible Notes bear interest at the rate of 7% per year payable in cash semiannually in arrears on March 30 and
September 30 of each year, beginning March 30, 2006. The 7% Senior Convertible Notes mature on September 30, 2020.
Holders may convert, at any time on or prior to maturity or redemption, any outstanding notes (or portions thereof) into shares of
US Airways Group's common stock, initially at a conversion rate of 41.4508 shares of US Airways Group's common stock per
$1,000 principal amount of notes (equivalent to an initial conversion price of approximately $24.12 per share of US Airways
Group's common stock). If a holder elects to convert its notes in connection with certain specified fundamental changes that occur
prior to October 5, 2015, the holder will be entitled to receive additional shares of US Airways Group's common stock as a make
whole premium upon conversion. In lieu of delivery of shares of US Airways Group's common stock upon conversion of all or 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
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