US Airways 2008 Annual Report Download - page 103

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
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.
(j) In December 2004, deferred charges under US Airways' maintenance agreements with GE Engine Services, Inc. were converted into
an unsecured term note. Interest on the note accrues at LIBOR plus 4%, and became payable beginning in January 2008, with principal
and interest payments due in 48 monthly installments through 2011. The outstanding balance on the note at December 31, 2008 was
$39 million at an interest rate of 6.6%.
In October 2008, US Airways entered into a promissory note with GE Engine Services, Inc. pursuant to which maintenance
payments up to $40 million due from October 2008 through March 2009 under US Airways' Engine Service Agreement are
deferred. Interest on the note accrues at 14%, and becomes payable beginning in April 2009, at which time principal and interest
payments are due in 12 monthly installments. The deferred balance on the note at December 31, 2008 was $33 million.
(k) 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.
(l) 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, 2008, the estimated maturities of long-term debt and capital leases are as follows (in millions):
2009 $ 372
2010 254
2011 373
2012 345
2013 208
Thereafter 2,601
$ 4,153
Certain of the Company's long-term debt agreements contain minimum cash balance requirements and other covenants with which
the Company was in compliance at December 31, 2008. Certain of the Company'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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