US Airways 2008 Annual Report Download - page 114

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
eligible earnings and employee group. Expenses related to these plans were $96 million, $81 million and $92 million for the years ended
December 31, 2008, 2007, and 2006, respectively.
(c) Postemployment Benefits
The Company provides certain postemployment benefits to its employees. These benefits include disability-related and workers'
compensation benefits for certain employees. The Company accrues for the cost of such benefit expenses once an appropriate triggering
event has occurred. In 2007, the Company recorded a $99 million charge to increase long-term disability obligations for US Airways'
pilots as a result of a change in the FAA mandated retirement age for pilots from 60 to 65.
(d) Profit Sharing Plans
Most non-executive employees of US Airways are eligible to participate in the 2005 Profit Sharing Plan, an annual bonus program.
Annual bonus awards are paid from a profit-sharing pool equal to (i) ten percent of the annual profits of US Airways Group (excluding
unusual items) for pre-tax profit margins up to ten percent, plus (ii) 15% of the annual profits of US Airways Group (excluding unusual
items) for pre-tax profit margins greater than ten percent. Awards are paid as a lump sum no later than March 15 after the end of each
fiscal year. The Company recorded no amounts in 2008 for profit sharing as the Company had a net loss in 2008 excluding unusual items
and recorded $49 million and $59 million for profit sharing in 2007 and 2006, respectively, which is recorded in salaries and related
costs.
9. Commitments and contingencies
(a) Commitments to Purchase Flight Equipment and Maintenance Services
Aircraft and Engine Purchase Commitments
During 2008, the Company took delivery of 14 Embraer 190 aircraft under its Amended and Restated Purchase Agreement with
Embraer, which it financed through an existing facility agreement. As of December 31, 2008, the Company has no remaining firm orders
with Embraer. Under the terms of the Amended and Restated Purchase Agreement, the Company has 32 additional Embraer 190 aircraft
on order, which are conditional and subject to its notification to Embraer. In 2008, the Company amended the Amended and Restated
Purchase Agreement to revise the delivery schedule for these 32 additional Embraer 190 aircraft.
In 2007, US Airways and Airbus executed definitive purchase agreements for the acquisition of 97 aircraft, including 60 single-aisle
A320 family aircraft and 37 widebody aircraft (comprised of 22 A350 XWB aircraft and 15 A330-200 aircraft). These were in addition to
orders for 37 single-aisle A320 family aircraft from a previous Airbus purchase agreement. In 2008, US Airways and Airbus entered into
Amendment No. 1 to the Amended and Restated Airbus A320 Family Aircraft Purchase Agreement. The amendment provides for the
conversion of 13 A319 aircraft to A320 aircraft, one A319 aircraft to an A321 aircraft and 11 A320 aircraft to A321 aircraft for deliveries
during 2009 and 2010.
Deliveries of the A320 family aircraft commenced during 2008 with the delivery of five A321 aircraft, which were financed through
an existing facility agreement. Deliveries of the A320 family aircraft will continue in 2009 through 2012. Deliveries of the A330-200
aircraft will begin in 2009. In 2008, US Airways amended the terms of the A350 XWB Purchase Agreement for deliveries of the 22 firm
order A350 XWB aircraft to begin in 2015 rather than 2014 and extending through 2018.
In 2007, US Airways agreed to terms with an aircraft lessor to lease two used A330-200 aircraft. In 2008, US Airways terminated
the two leases and did not take delivery of the two used A330-200 aircraft. Related to this termination, US Airways recorded a $2 million
lease cancellation charge.
112