US Airways 2009 Annual Report Download - page 137

Table of Contents
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) 10% of the annual profits of US Airways Group (excluding unusual
items) for pre-tax profit margins up to 10%, plus (ii) 15% of the annual profits of US Airways Group (excluding unusual items) for pre-
tax profit margins greater than 10%. Awards are paid as a lump sum no later than March 15 after the end of each fiscal year. US Airways
recorded no amounts in 2009 and 2008 for profit sharing as US Airways had a net loss in these years excluding special items and
recorded $49 million for profit sharing in 2007, which is recorded in salaries and related costs.
8. Commitments and Contingencies
(a) Commitments to Purchase Flight Equipment and Maintenance Services
Aircraft and Engine Purchase Commitments
US Airways has definitive purchase agreements with Airbus for the acquisition of 134 aircraft, including 97 single-aisle A320 family
aircraft and 37 widebody aircraft (comprised of 22 A350 XWB aircraft and 15 A330-200 aircraft), of which 30 aircraft have been
delivered through December 31, 2009. Deliveries of the A320 family aircraft commenced during 2008 with the delivery of five A321
aircraft. During 2009, US Airways took delivery of 18 Airbus A321 aircraft, five A330-200 aircraft and two Airbus A320 aircraft. Of the
20 A320 family aircraft, 11 were financed using manufacturer backstop financing, eight were financed through existing financing
facilities and one was financed through a leasing transaction. Of the five A330-200 aircraft, three were financed through leasing
transactions and two were financed through new loan agreements.
In November 2009, US Airways amended its purchase agreements with Airbus to defer 54 Airbus aircraft originally scheduled for
delivery between 2010 and 2012 to 2013 and beyond. These deferral arrangements will reduce US Airways' aircraft capital expenditures
over the next three years by approximately $2.5 billion and reduce near- and medium-term obligations to Airbus and others by
approximately $132 million. US Airways now plans to take delivery of 28 Airbus aircraft between 2010 and 2012, consisting of four
aircraft in 2010 (two A320 aircraft and two A330 aircraft) and 24 A320 family aircraft in 2011-2012. In addition, commencement of US
Airways' Airbus A350 XWB operations, with aircraft deliveries originally scheduled to start in 2015, will now be postponed to 2017.
US Airways has agreements for the purchase of eight new IAE V2500-A5 spare engines scheduled for delivery through 2014 for use
on the Airbus A320 family fleet, three new Trent 700 spare engines scheduled for delivery through 2013 for use on the Airbus A330-200
fleet and three new Trent XWB spare engines scheduled for delivery in 2017 through 2019 for use on the Airbus A350 XWB aircraft. US
Airways has taken delivery of two of the Trent 700 spare engines and one of the V2500-A5 spare engines, which were financed through
leasing transactions.
Under all of US Airways' aircraft and engine purchase agreements, US Airways' total future commitments as of December 31, 2009
are expected to be approximately $6.09 billion through 2019 as follows: $296 million in 2010, $504 million in 2011, $579 million in
2012, $1.15 billion in 2013, $932 million in 2014 and $2.63 billion thereafter, which includes predelivery deposits and payments. US
Airways has financing commitments for all Airbus aircraft scheduled for delivery during 2010 to 2012.
(b) Leases
US Airways leases certain aircraft, engines, and ground equipment, in addition to the majority of its ground facilities and terminal
space. As of December 31, 2009, US Airways had 305 aircraft under operating leases, with remaining terms ranging from one month to
approximately 14 years. Ground facilities include maintenance facilities and ticket, corporate and administrative offices. Public airports
are utilized for flight operations under lease arrangements with the municipalities or agencies owning or controlling such airports.
Substantially all leases provide that the lessee must pay taxes, maintenance, insurance and certain other operating expenses applicable to
the leased property. Some leases also include renewal and purchase options.
135