US Airways 2008 Annual Report Download - page 167

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
The per share weighted-average grant-date fair value of stock options and SARs granted and the weighted-average assumptions
used for the years ended December 31, 2008, 2007 and 2006 were as follows:
Year Ended
December 31, December 31, December 31,
2008 2007 2006
Weighted average fair value $ 3.28 $ 16.57 $ 16.77
Risk free interest rate 2.5% 4.5% 4.8%
Expected dividend yield — — —
Expected life 3.0 years 3.0 years 2.9 years
Volatility 62% 52% 57%
As of December 31, 2008, there were $20 million of total unrecognized compensation costs related to stock options and SARs.
These costs are expected to be recognized over a weighted average period of 1.3 years.
The total intrinsic value of stock options and SARs exercised during the years ended December 31, 2008, 2007 and 2006 was
$0.1 million, $4 million and $68 million, respectively. Cash received from stock option and SAR exercises during the years ended
December 31, 2008, 2007 and 2006 was $0.1 million, $2 million and $31 million, respectively.
Agreements with the Air Line Pilots Association ("ALPA") — US Airways Group and US Airways have a letter of agreement with
ALPA, the US Airways' pilot union through April 18, 2008, that provides that US Airways' pilots designated by ALPA receive stock
options to purchase 1.1 million shares of US Airways Group's common stock. The first tranche of 500,000 stock options was granted on
January 31, 2006 with an exercise price of $33.65. The second tranche of 300,000 stock options was granted on January 31, 2007 with an
exercise price of $56.90. The third and final tranche of 300,000 stock options was granted on January 31, 2008 with an exercise price of
$12.50. The stock options granted to ALPA pilots do not reduce the shares available for grant under any equity incentive plan. Any of
these ALPA stock options that are forfeited or that expire without being exercised will not become available for grant under any of US
Airways' plans.
The per share fair value of the ALPA pilot stock options and assumptions used for the January 31, 2008, 2007 and 2006 grants were
as follows:
January 31, January 31, January 31,
2008 2007 2006
Per share fair value $ 3.02 $ 18.02 $ 17.11
Risk free interest rate 2.2% 4.9% 4.4%
Expected dividend yield — — —
Contractual term 2.0 years 2.0 years 5.0 years
Volatility 55% 53% 70%
As of December 31, 2008, there were no unrecognized compensation costs related to stock options granted to ALPA pilots as the
stock options were fully vested on the grant date. No ALPA stock options were exercised in 2008. There were 25,029 and 315,390 ALPA
stock options exercised during 2007 and 2006, respectively, pursuant to this agreement. The total intrinsic value of ALPA stock options
exercised during 2007 and 2006 was $1 million and $5 million, respectively. Cash received from ALPA stock options exercised during
the years ended December 31, 2007 and 2006 totaled $1 million and $10 million, respectively.
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