=================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1994
(Commission file number: 1-8444)
Supplemental Retirement Plan of
Piedmont Aviation, Inc.
USAir Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Financial Statements
and Supplemental Schedules
December 31, 1994 and 1993
(With Independent Auditors'
Report Thereon)
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Table of Contents
-----------------
Page
----
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 1994 and 1993 2
Statements of Changes in Net Assets Available for
Benefits for the years ended
December 31, 1994 and 1993 3
Notes to Financial Statements 4-13
Schedule I - Item 27a
Schedule of Assets Held For Investment Purposes
as of December 31, 1994 14-15
Schedule II - Item 27d
Schedule of Reportable Transactions for the
year ended December 31, 1994 16
Signature 17
Consent of Independent Auditors 18
Independent Auditors' Report
The Plan Administrator and Participants
Supplemental Retirement Plan of
Piedmont Aviation, Inc.:
We have audited the accompanying statements of net assets available
for plan benefits of the Supplemental Retirement Plan of Piedmont
Aviation, Inc. (the "Plan") as of December 31, 1994 and 1993, and
the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan as of December 31, 1994 and 1993, and the
changes in net assets available for plan benefits for the years
then ended in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedules
of assets held for investment purposes as of December 31, 1994 and
reportable transactions for the year ended December 31, 1994 are
presented for the purpose of additional analysis and are not a
required part of the basic financial statements, but are supplemen-
tary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG Peat Marwick LLP
June 16, 1995
1
SUPPLEMENTAL RETIREMENT PLAN
OF PIEDMONT AVIATION, INC.
Statements of Net Assets Available for Plan Benefits
----------------------------------------------------
December 31,
1994 1993
---- ----
Assets:
Investments, at fair value:
Fidelity Retirement Government
Money Market Fund $ 502,021 $ 340,858
Fidelity Magellan Fund 5,661,139 6,074,112
Fidelity Intermediate Bond Fund 1,064,048 1,373,689
Fidelity Equity Income Fund 4,305,405 4,761,205
Fidelity U.S. Equity Index Fund 870,223 1,091,250
Income Mix Fund 100,150 -
Capital Growth Mix Fund 607,619 -
Moderation Mix Fund 317,966 -
USAir Common Stock Fund 496,372 601,634
Pooled separate account -
short-term investment fund - 6,650
---------- ----------
13,924,943 14,249,398
Investments, at contract value:
Fixed Income Fund 22,491,117 23,588,072
---------- ----------
22,491,117 23,588,072
---------- ----------
Net assets available for
plan benefits $36,416,060 $37,837,470
========== ==========
See accompanying notes to financial statements.
2
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Statements of Changes in Net Assets Available for Benefits
----------------------------------------------------------
Years ended December 31,
1994 1993
---- ----
Additions:
Net appreciation (depreciation)
in fair value of investments $ (1,398,976) $ 812,011
Investment income 2,247,823 2,411,690
Interest income from pooled
separate account 55 181
---------- ----------
Total additions 848,902 3,223,882
Deductions:
Benefits paid to participants 2,270,312 1,935,661
---------- ----------
Total deductions 2,270,312 1,935,661
---------- ----------
Net increase (decrease) in net
assets available for benefits (1,421,410) 1,288,221
Net assets available for benefits:
Beginning of year 37,837,470 36,549,249
---------- ----------
End of year $36,416,060 $37,837,470
========== ==========
See accompanying notes to financial statements.
3
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
December 31, 1994 and 1993
(1) Description of Plan
The following brief description of the Supplemental Retirement
Plan of Piedmont Aviation, Inc. (the "Plan") is provided for
general information purposes only. Participants should refer
to the Plan document for more complete information.
(a) General
The Plan is a defined contribution plan covering all
former employees of Piedmont Aviation, Inc. ("Piedmont").
In November 1987, Piedmont Aviation, Inc. was acquired by
USAir Group, Inc. ("Group"). Group merged Piedmont into
USAir, Inc. ("USAir" or the "Company"), a wholly-owned
subsidiary of Group, in August 1989. As part of the
merger, the Plan was frozen as to additional contribu-
tions effective July 31, 1989 with the exception of
rollover contributions from the terminated Piedmont
Aviation, Inc. Pilot Variable Annuity Trust. The Plan is
subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
(b) Vesting
Participants are fully vested in their account at all
times. Adjustments to each account for interest,
distributions, etc. are made at the end of each month.
(c) Investment Options
The Company selects the number and type of investment
options available. The investment options are held and
administered as separate, common funds by Fidelity
Investments.
Each participant elects the percentage, in increments of
five percent, in which his/her account balance is
invested in the various investment funds. The partici-
pant may transfer his/her investments from one investment
fund to another.
4
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
A separate account is established and maintained in the
name of each participant and reflects the participants'
balance invested in, and the earnings and losses attrib-
uted to, each investment fund. Participants are allocat-
ed a share of each fund's net investment earnings based
upon their account balance as a percentage of the total
fund balance. Net investment earnings are allocated to
participants.
Participants can invest their account balance and/or
future contributions in any combination of seven individ-
ual investment options or three Diversified Portfolio
Mixes, which are pre-selected combinations of mutual
funds. The ten investment options are:
Money Market - A fund comprised of investments in
Fidelity Retirement Government Money
Market Portfolio. Investments are
made in high-quality money market
instruments offered primarily by
U.S. and foreign corporations.
Fixed Income - This Fixed Income Fund buys high-
quality investment contracts, a type
of investment product offered to
retirement and savings plans by
insurance companies, banks, and
other financial institutions. Money
transferred out of the Fixed Income
Fund cannot be invested in the Fi-
delity Retirement Government Money
Market Portfolio, the Fidelity In-
termediate Bond Fund and the Income
Mix for a period of 90 days because
these funds are considered competi-
tive by the insurance industry.
5
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
Bond - A fund comprised of investments in
Fidelity Intermediate Bond Fund.
Investments are made primarily in
investment-grade fixed income secu-
rities, including bonds, notes,
mortgage securities, government and
government agency obligations and
convertible securities. The average
maturity ranges from three to ten
years.
Equity Index - A fund comprised of investments in
the Fidelity U.S. Equity Index Port-
folio. The Portfolio seeks growth
and income by matching the composi-
tion and total return of the Stan-
dard & Poor's Daily Stock Price
Index of 500 common stocks.
Equity Income - A fund comprised of investments in
the Fidelity Equity Income Fund.
The Fund normally invests at least
80% of its assets in income-produc-
ing common and preferred stocks with
the remaining 20% generally invested
in debt securities, like bonds.
Magellan - A fund comprised of investments in
the Fidelity Magellan Fund. The
Fund primarily invests in common
stocks and securities convertible to
common stocks.
Stock - A fund comprised primarily of USAir
Group, Inc. common stock purchased
on the open market or directly from
the Company at market prices. A
small percentage of the Fund is
invested in short-term liquid in-
vestments.
6
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
Income Mix - A diversified portfolio mix com-
prised of 20% equity securities and
80% fixed income securities. The
20% equity securities are invested
50% in the Fidelity Equity Income
Fund and 50% in the Fidelity U.S.
Equity Index Portfolio. The fixed
income securities are invested ap-
proximately 19% in the Fidelity
Retirement Government Money Market
Portfolio, approximately 44% in the
Fidelity Short-Term Bond Fund and
approximately 37% in the Fidelity
Intermediate Bond Fund.
Moderation Mix - A diversified portfolio mix com-
prised of 60% equity securities and
40% fixed income securities. The
60% equity securities are invested
approximately 33% in the Fidelity
Equity Income Fund, approximately
33% in the Fidelity U.S. Equity
Index Portfolio, 25% in the Fidelity
Magellan Fund and approximately 9%
in the Fidelity Overseas Fund. The
40% fixed income securities are
invested approximately 38% in the
Fidelity Short-Term Bond Fund and
approximately 62% in the Fidelity
Intermediate Bond Fund.
Capital Growth
Mix - A diversified portfolio mix com-
prised of 80% equity securities and
20% fixed income securities. The
80% equity securities are invested
25% in the Fidelity Equity Income
Fund, approximately 19% in the Fi-
delity OTC Portfolio, approximately
37% in the Fidelity Magellan Fund
and approximately 19% in the Fideli-
ty Overseas Fund. The 20% fixed
income securities are invested in
the Fidelity Intermediate Bond Fund.
7
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(d) Distributions
On termination of service, a participant may elect to
receive either a lump-sum amount equal to the value of
his or her account or to apply such amount to the
purchase of an immediate noncashable and nontransferable
contract from a legal reserve life insurance company
providing any one of several annuities (as elected by the
participant).
(e) Administrative Expenses
Substantially all of the administrative expenses of the
Plan are paid by USAir.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared
on an accrual basis and present the net assets available
for pension benefits and changes in those net assets.
(b) Investments
Most of the assets of the Plan are maintained in a master
trust arrangement with the assets of other defined
contribution plans sponsored by USAir. The investment
assets of each plan constitute individual master trust
investment accounts. Form 5500 instructions provide that
plan assets held in this type of arrangement need not be
presented as investments in a master trust. As a result,
investment assets are classified by type of asset in
these financial statements and a master trust filing is
not required.
The trustee, Fidelity Management Trust Company, maintains
the master trust under the terms of an agreement with the
Plan. The Plan's share of assets and changes in its
share of the master trust have been reported to the Plan
by the trustee as having been determined through the use
of fair values of all assets. Fair values for assets
were determined by quoted market values, when available.
8
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
The USAir Fixed Income Fund represents the Plan's
investments in guaranteed investment contracts ("GICs").
Such investments are stated at contract value. The Plan
presents in the statement of changes in net assets the
net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or
losses and the unrealized appreciation (depreciation) on
those investments. Purchases and sales of investments
are recorded on a trade-date basis.
At December 31, 1993, the Plan held investments in a
pooled separate account. The carrying amount of these
investments was based on fair market value as determined
by Aetna Life Insurance Company.
(this space intentionally left blank)
9
USAIR, INC.
SUPPLEMENTAL RETIREMENT PLAN OF PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(3) Investment Activity
The following table presents the cash basis investment funds' activities excluding the pooled separate account,
for the years ended December 31, 1994 and 1993:
Fidelity
Retirement Fidelity Fidelity Fidelity
Fixed Income SRP Government Magellan Intermediate Equity
Fund GIC Money Market Fund Bond Fund Income Fund
---------- ------------ ----------- ---------- ----------- -----------
Balance at 12/31/92 $19,252,920 1) $ 17,289,860 1) $ - $ - $ - $ -
---------- ----------- ----------- ---------- ---------- ----------
Investment income 1,589,802 45,951 10,521 499,625 93,672 135,349
Net appreciation (deprecia-
tion) in fair value - - - 373,029 28,581 501,270
Net exchanges between
investment funds 4,468,190 (17,327,977) 330,337 5,209,734 1,320,225 4,216,957
Benefits paid to
participants (1,722,840) (7,834) - (8,276) (68,789) (92,371)
---------- ----------- ----------- ---------- ---------- ----------
Net change in investment
funds 4,335,152 (17,289,860) 340,858 6,074,112 1,373,689 4,761,205
---------- ----------- ----------- ---------- ---------- ----------
Balance at 12/31/93 23,588,072 1) - 340,858 6,074,112 1) 1,373,689 4,761,205 1)
---------- ----------- ----------- ---------- ---------- ----------
Investment income 1,443,480 - 18,447 238,838 83,965 433,163
Net appreciation (deprecia-
tion) in fair value - - - (382,105) (112,618) (427,457)
Net exchanges between
investment funds (1,051,206) - 182,310 (8,823) (240,379) (65,772)
Benefits paid to
participants (1,489,229) - (39,594) (260,883) (40,609) (395,734)
---------- ----------- ----------- ---------- --------- ----------
Net change in investment
funds (1,096,955) - 161,163 (412,973) (309,641) (455,800)
---------- ----------- ----------- ---------- --------- ----------
Balance at 12/31/94 $22,491,117 1) $ - $ 502,021 1) $5,661,139 1) $1,064,048 $ 4,305,405 1)
========== =========== =========== ========= ========= ==========
1) Investment fund balance represents greater than five percent of net assets available for plan benefits.
(table continued on next page)
10
USAIR, INC.
SUPPLEMENTAL RETIREMENT PLAN OF PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(3) Investment Activity (Continued)
Fidelity U.S. Capital USAir
Equity Index Income Mix Growth Moderation Common
Fund Fund Mix Fund Mix Fund Stock Fund Total
------------ ----------- ----------- ---------- ---------- -----------
Balance at 12/31/92 $ - $ - $ - $ - $ - $36,542,780
---------- ----------- ----------- --------- --------- ----------
Investment income 36,770 - - - - 2,411,690
Net appreciation (deprecia-
tion) in fair value 37,724 - - - (128,593) 812,011
Net exchanges between
investment funds 1,045,606 - - - 736,928 -
Benefits paid to
participants (28,850) - - - (6,701) (1,935,661)
---------- ----------- ----------- ---------- --------- ----------
Net change in investment
funds 1,091,250 - - - 601,634 1,288,040
---------- ----------- ----------- ---------- --------- ----------
Balance at 12/31/93 1,091,250 - - - 601,634 37,830,820
---------- ----------- ----------- ---------- --------- ----------
Investment income 29,930 - - - - 2,247,823
Net appreciation (deprecia-
tion) in fair value (23,942) (227) (4,241) (1,336) (447,050) (1,398,976)
Net exchanges between
investment funds (197,196) 100,377 611,860 319,302 349,527 -
Benefits paid to
participants (29,819) - - - (7,739) (2,263,607)
---------- ----------- ----------- ---------- --------- ----------
Net change in investment
funds (221,027) 100,150 607,619 317,966 (105,262) (1,414,760)
---------- ----------- ----------- ---------- --------- ----------
Balance at 12/31/94 $ 870,223 $ 100,150 $ 607,619 $ 317,966 $ 496,372 $36,416,060
========== =========== =========== ========== ========= ==========
1) Investment fund balance represents greater than five percent of net assets available for plan benefits.
11
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(4) Concentration of Credit Risk
The Plan's assets include certain investments in GICs pur-
chased from insurance companies. The Plan's realization of
amounts invested in GICs is dependent on the continued
financial stability of the insurance companies that issued all
of the GICs. The total amount invested in the GICs at
December 31, 1994 and 1993 is $22,491,117 and $23,588,072,
respectively.
(5) Federal Tax Status
The Internal Revenue Service ("IRS") issued a letter of
determination in March 1987 which stated that the Plan
qualifies under the applicable provisions of the Internal
Revenue Code (the "Code"). The Plan has been amended since
that time to conform to the Tax Reform Act of 1986 and
subsequent legislation. The Plan Administrator has requested,
but has not yet received from the IRS, an updated letter of
determination. However, the Plan Administrator and its legal
counsel believe that the Plan is designed and is currently
being operated in compliance with the applicable requirements
of the Code.
(6) Plan Termination
The Company reserves the right to terminate the Plan at any
time. In the event of termination, all participant contri-
butions will cease and no additional participants shall enter
the Plan. USAir shall provide for the assets under the Plan
to be distributed in lump sums to the participants, beneficia-
ries or other successors in interest, the balance of their
account at the time of termination.
(this space intentionally left blank)
12
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(7) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for
plan benefits per the financial statements to the Form 5500:
December 31,
--------------------------
1994 1993
---- ----
Net assets available for
plan benefits per the
financial statements $36,416,060 $37,837,470
Amounts allocated to with-
drawing participants (167,553) (175,751)
---------- ----------
Net assets available for
benefits per the Form
5500 $36,248,507 $37,661,719
========== ==========
The following is a reconciliation of benefits paid to par-
ticipants per the financial statements to the Form 5500:
Year ended
December 31, 1994
-----------------
Benefits paid to participants per the
financial statements $2,270,312
Add: Amounts allocated to withdrawing
participants at December 31, 1994 167,553
Less: Amounts allocated to withdrawing
participants at December 31, 1993 (175,751)
---------
Benefits paid to participants per the
Form 5500 $2,262,114
=========
Amounts allocated to withdrawing participants are recorded on
the Form 5500 for benefit claims that have been processed and
approved for payment prior to December 31 but not yet paid as
of that date.
13
SUPPLEMENTAL RETIREMENT PLAN OF Schedule I
PIEDMONT AVIATION, INC. Page 1 of 2
Item 27a - Schedule of Assets Held for Investment Purposes
----------------------------------------------------------
December 31, 1994
Identity of Issue Description of Investment Cost Current Value
- ----------------- ------------------------- ---- -------------
Fidelity Retirement Money market fund $ 502,021 $ 502,021
Government Money
Market Fund
Fidelity Magellan Shares in registered 5,708,922 5,661,139
Fund investment companies
Fidelity Intermediate Shares in registered 1,143,796 1,064,048
Bond Fund investment companies
Fidelity Equity Shares in registered 4,316,374 4,305,405
Income Fund investment companies
Fidelity U.S. Equity Shares in registered 860,930 870,223
Index Fund investment companies
Income Mix Fund Shares in registered 100,377 100,150
investment companies
Capital Growth Mix Fund Shares in registered 608,578 607,619
investment companies
14
SUPPLEMENTAL RETIREMENT PLAN OF Schedule I
PIEDMONT AVIATION, INC. Page 2 of 2
Item 27a - Schedule of Assets Held for Investment Purposes
----------------------------------------------------------
(Continued)
December 31, 1994
Identity of Issue Description of Investment Cost Current Value
- ----------------- ------------------------- ---- -------------
Moderation Mix Fund Shares in registered $ 319,302 $ 317,966
investment companies
USAir Common Stock Common stock of employer's 1,039,237 496,372
Fund* parent company, USAir Group,
Inc.
Fixed Income Fund Guaranteed investment 22,491,117 22,491,117
contract, interest rates
range from 5.07 percent
to 8.80 percent per annum ---------- ----------
Total investments $37,090,654 $36,416,060
========== ==========
* Party in interest.
15
Schedule II
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Item 27d - Schedule of Reportable Transactions
----------------------------------------------
Year ended December 31, 1994
Aggregate transactions during the year ended December 31, 1994, with securities of the same
issue, accounting for five percent of the value of plan assets at the beginning of the year
were as follows:
Number Number
Total of of Realized
Purchases Purchases Total Sales Sales Gain
--------- --------- ----------- ------ --------
Fidelity Magellan Fund $1,587,676 117 $1,618,543 86 $ 6,397
Fidelity Equity Income 1,115,105 88 1,143,448 59 60,168
Fund
Fixed Income Fund 2,023,240 63 3,120,195 44 -
16
SIGNATURE
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the trustees (or other persons who administer the
employee benefit plan) have duly caused this annual report to be
signed on their behalf by the undersigned thereunto duly autho-
rized.
Supplemental Retirement Plan
of Piedmont Aviation, Inc.
By: /s/Ann Greer-Rector
-----------------------------
Ann Greer-Rector
Vice President and Controller
of USAir Group, Inc. and
USAir, Inc.
July 10, 1995
17