US Airways 2008 Annual Report Download - page 144

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
(a) In 2008, in connection with the effort to consolidate functions and integrate organizations, procedures and operations with AWA,
US Airways incurred $35 million of merger related transition expenses. These expenses included $12 million in uniform costs to
transition employees to the new US Airways uniforms; $5 million in applicable employment tax expenses related to contractual
benefits granted to certain current and former employees as a result of the merger; $6 million in compensation expenses for equity
awards granted in connection with the merger to retain key employees through the integration period; $5 million of aircraft livery
costs; $4 million in professional and technical fees related to the integration of airline operations systems and $3 million in other
expenses.
In 2007, US Airways incurred $99 million of merger related transition expenses. These expenses included $13 million in training
and related expenses; $19 million in compensation expenses for equity awards granted in connection with the merger to retain key
employees through the integration period; $20 million of aircraft livery costs; $37 million in professional and technical fees related
to the integration of airline operations systems; $1 million in employee moving expenses; $4 million related to reservation system
migration expenses and $5 million of other expenses.
In 2006, US Airways incurred $131 million of merger related transition expenses. These items included $6 million in training and
related expenses; $41 million in compensation expenses primarily for severance, retention payments and equity awards granted in
connection with the merger to retain key employees through the integration period; $17 million of aircraft livery costs; $38 million
in professional and technical fees, including continuing professional fees associated with US Airways' bankruptcy proceedings and
fees related to the integration of airline operations systems; $7 million of employee moving expenses; $11 million of net costs
associated with the integration of the AWA FlightFund and US Airways Dividend Miles frequent traveler programs; $2 million in
merger related aircraft lease return expenses and $9 million of other expenses.
(b) In 2008, US Airways recorded $18 million in non-cash charges related to the decline in fair value of certain spare parts associated
with its Boeing 737 aircraft fleet. See Note 1(f) and (g) for further discussion of these charges.
(c) In 2008, US Airways recorded $14 million in charges for lease return costs and penalties related to certain Airbus aircraft as a result
of the planned fleet reductions.
(d) In 2008, in connection with planned capacity reductions, US Airways recorded $9 million in charges related to involuntary
furloughs as well as terminations of non-union administrative and management staff. Of this amount, $6 million was paid out in
2008. US Airways expects that the remaining $3 million will be substantially paid by the end of the first quarter of 2009.
(e) In connection with the merger and the Airbus Memorandum of Understanding (the "Airbus MOU") executed between AVSA
S.A.R.L., an affiliate of Airbus S.A.S. ("Airbus"), US Airways Group, US Airways and AWA, certain aircraft firm orders were
restructured. In connection with the Airbus MOU, US Airways and AWA entered into two loan agreements with aggregate
commitments of up to $161 million and $89 million. On March 31, 2006, the outstanding principal and accrued interest on the
$89 million loan was forgiven upon repayment in full of the $161 million loan in accordance with terms of the Airbus loans. As a
result, in 2006, US Airways recognized a gain associated with the return of these equipment deposits upon forgiveness of the loan
totaling $90 million, consisting of the $89 million in equipment deposits and accrued interest of $1 million.
(f) In 2006, US Airways recognized $3 million in gains in connection with the settlement of bankruptcy claims.
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