=================================================================
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, 1995
(Commission file number: 1-8444)
USAir, Inc. 401(k) Savings Plan
USAir Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
=================================================================
USAIR, INC.
401(k) SAVINGS PLAN
Financial Statements
and Supplemental Schedules
December 31, 1995 and 1994
(With Independent Auditors'
Report Thereon)
USAIR, INC.
401(k) SAVINGS PLAN
Table of Contents
-----------------
Page
----
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Plan
Benefits as of December 31, 1995 and 1994 2
Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
December 31, 1995 and 1994 3
Notes to Financial Statements 4-14
Schedule I - Item 27a
Schedule of Assets Held for Investment Purposes
as of December 31, 1995 15-16
Schedule II - Item 27d
Schedule of Reportable Transactions for the year
ended December 31, 1995 17
Signature 18
Exhibit 23
Consent of Independent Auditors 19
Independent Auditors' Report
The Plan Administrator and Participants
USAir, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets
available for plan benefits of the USAir, Inc. 401(k) Savings
Plan (the "Plan") as of December 31, 1995 and 1994, 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, 1995
and 1994, 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, 1995 and reportable transactions for the year ended December
31, 1995 are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are
supplementary 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.
Washington, D.C. KPMG Peat Marwick LLP
June 14, 1996
1
USAIR, INC.
401(k) SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
----------------------------------------------------
December 31,
1995 1994
---- ----
Assets:
Investments, at fair value:
Fidelity Magellan Fund $ 196,204,255 $ 123,161,624
Fidelity Equity Income Fund 74,022,540 49,043,705
Fidelity Retirement Government
Money Market Portfolio 32,743,408 23,471,983
USAir Common Stock Fund 22,642,988 7,501,151
Capital Growth Mix Portfolio 21,889,133 8,345,918
Fidelity U.S. Equity Index Portfolio 19,969,296 11,096,211
Fidelity Intermediate Bond Fund 18,922,917 15,485,248
Participant loans receivable 12,791,796 9,423,342
Moderation Mix Portfolio 4,954,946 1,574,272
Income Mix Portfolio 1,102,889 379,652
----------- -----------
405,244,168 249,483,106
Fixed Income Fund,
at contract value 28,440,801 24,054,055
----------- -----------
Total investments 433,684,969 273,537,161
----------- -----------
Receivables:
Participant contributions 1,526,859 1,497,649
Employer contributions 1,099,071 -
----------- -----------
Total receivables 2,625,930 1,497,649
----------- -----------
Total assets 436,310,899 275,034,810
----------- -----------
Liabilities:
Accrued expenses 42,650 38,793
----------- -----------
Net assets available for plan benefits $ 436,268,249 $ 274,996,017
=========== ===========
See accompanying Notes to Financial Statements.
2
USAIR, INC.
401(k) SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
---------------------------------------------------------------
Years ended December 31,
1995 1994
---- ----
Additions to net assets
attributable to:
Net appreciation (depreciation) in
fair value of investments $ 74,874,228 $ (18,147,185)
Investment income 19,980,222 12,565,486
Interest income on participant
loans 807,864 562,455
Participant contributions 63,657,563 60,781,082
Employer contributions 10,466,364 -
Rollover contributions 46,870 180,121
----------- -----------
Total additions 169,833,111 55,941,959
----------- -----------
Deductions from net assets
attributable to:
Benefits paid to participants 7,723,919 6,407,046
Administrative expenses 166,411 153,789
----------- -----------
Total deductions 7,890,330 6,560,835
----------- -----------
Net increase 161,942,781 49,381,124
Net assets available for plan benefits:
Beginning of year 274,996,017 226,104,933
Transfer to the USAir, Inc.
Employee Savings Plan (670,549) (490,040)
----------- -----------
End of year $ 436,268,249 $ 274,996,017
=========== ===========
See accompanying Notes to Financial Statements.
3
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
December 31, 1995 and 1994
1. Description of Plan
The following description of the USAir, Inc. 401(k) Savings
Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(a) General
The Plan is a defined contribution plan intended to be a
qualified cash or deferred arrangement under Section 401(k)
of the Internal Revenue Code, as amended (the "Code") and to
qualify under Section 401(a) of the Code. The Plan was
established effective September 1, 1988 to provide retirement
income to employees of USAir, Inc. ("USAir" or the
"Company"). In general, employees of USAir, who are covered
by a collective bargaining agreement which provides for their
participation in the Plan, with at least 90 days of service,
are eligible to participate except for those individuals not
covered under the United States income tax laws and those
individuals who are participants in another 401(k) plan
sponsored by USAir. Effective August 1, 1994, and December
31, 1995, the assets and liabilities related to flight
simulator engineers and ground school training instructors,
respectively, were transferred from the Plan to the USAir,
Inc. Employee Savings Plan. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of
1974 ("ERISA"), as amended.
(b) Contributions
Eligible USAir employees electing to participate in the Plan
make contributions to the Plan via payroll deductions. Each
year Plan participants may contribute up to 15 percent of
pretax annual compensation, as defined in the Plan, unless
the participant is a highly compensated employee. If the
participant is a highly compensated employee, as defined by
the Code, the contribution percentage may not exceed eight
percent of pre-tax annual compensation. The amount of
contribution that may be made by a participant to the Plan
shall be a whole percentage of a participant's compensation.
Participant contributions for both 1995 and 1994 could not
exceed the statutory limit of $9,240 per year. During 1995,
the Company made a special one-time contribution pursuant to
an award settlement by an arbitrator with one of the employee
groups covered by a collective bargaining agreement (Note 9).
4
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
(c) Vesting
Participants are immediately vested in their contributions
plus earnings thereon. Vesting in the matching contributions
made by USAir, plus actual earnings thereon, is based on
years of continuous service. A participant is 100% vested
after two years of continuous service in the Company's
matching contributions.
(d) Investment Options
The Company selects the number and type of investment options
available. Fidelity Institutional Retirement Services
Company, the Plan's Recordkeeper, is responsible for
maintaining an account balance for each participant. Each
participant instructs the Recordkeeper how to allocate their
participant and company contributions. Participants may
invest their contributions in any combination among the
investment options available in increments of five percent.
If a participant fails to instruct the Recordkeeper on how to
allocate the contributions, then their contributions will be
invested in a cash equivalent fund, such as the Fidelity
Retirement Government Money Market Portfolio.
The Recordkeeper values account balances daily. Each account
balance is based on the value of the underlying investments
in each account. Generally, participants may elect to change
how future contributions are allocated or may transfer
current account balances among investment options.
At December 31, 1995 and 1994, the Company offered seven
individual investment options and three diversified portfolio
mixes, which are pre-selected combinations of mutual funds.
The ten investment options are as follows:
Fidelity Magellan Fund - The Fund primarily invests in common
stocks and securities convertible to common stocks.
Fidelity Equity Income Fund - The Fund normally invests at
least 80% of its assets in income-producing common and
preferred stocks with the remaining 20% generally invested in
debt securities, like bonds.
Fidelity Retirement Government Money Market Portfolio -
Investments are made in high-quality money market instruments
offered primarily by U.S. and foreign corporations.
5
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
USAir Common Stock Fund - A fund comprised primarily of USAir
Group, Inc. ("Group") common stock purchased on the open market
or directly from Group at market prices. A small percentage of
the fund is invested in short-term liquid investments.
Capital Growth Mix Portfolio - A diversified portfolio mix
comprised of 80% equity securities and 20% fixed income
securities. The equity securities are invested 25% in the
Fidelity Equity Income Fund, approximately 19% in the Fidelity
OTC Portfolio, approximately 37% in the Fidelity Magellan Fund
and approximately 19% in the Fidelity Overseas Fund. The fixed
income securities are invested in the Fidelity Intermediate
Bond Fund.
Fidelity U.S. Equity Index Portfolio - The Portfolio seeks
growth and income by matching the composition and total return
of the Standard & Poor's Daily Stock Price Index of 500 common
stocks.
Fidelity Intermediate Bond Fund - Investments are made
primarily in investment-grade fixed income securities,
including bonds, notes, mortgage securities, government and
government agency obligations and convertible securities. The
average maturity ranges from three to ten years.
Moderation Mix Portfolio - A diversified portfolio mix
comprised of 60% equity securities and 40% fixed income
securities. The 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 fixed income securities are invested approximately
38% in the Fidelity Short-Term Bond Fund and approximately 62%
in the Fidelity Intermediate Bond Fund.
Income Mix Portfolio - A diversified portfolio mix comprised of
20% equity securities and 80% fixed income securities. The
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
approximately 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.
6
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
Fixed Income Fund - This 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 Fidelity Retirement
Government Money Market Portfolio, the Fidelity Intermediate
Bond Fund or the Income Mix Portfolio for a period of 90 days
because these funds are considered competitive by the insurance
industry.
(e) Participant Loans Receivable and Hardship Withdrawals
All participants can borrow from their account but may have
only one loan outstanding at a given point in time.
Participants may borrow from their fund accounts a minimum of
$1,000 up to a maximum equal to the lesser of $50,000
(reduced by the highest outstanding loan balance from the
Plan or any other plan maintained by the Company during the
preceeding twelve month period) or 50 percent of their
separate account balance as of the date of the loan. Loan
transactions are treated as transfers between the investment
funds and the participant loan fund. Loan terms cannot
exceed 5 years except for the purchase of a primary
residence. The loans are secured by the balance in the
participant's account and bear interest at a rate
commensurate with local prevailing market rates for loans
made under similar circumstances. Principal and interest are
paid ratably through payroll deductions.
Upon approval from the Company, a participant may withdraw
his or her contributions from the account if it is determined
that the withdrawal is necessary to meet an immediate and
heavy financial need of the participant under the deemed
hardship standards set forth in the Plan.
(f) Payment of Benefits
Upon termination of service due to death, disability,
retirement or other termination of employment, distributions
to a participant or beneficiary is made as soon as reasonably
practicable. If the participant's account balance is less
than $3,500, a lump sum distribution is automatic upon
separation. If the participant's account balance is greater
than $3,500, the distribution can be deferred until age 70-
1/2 or provided in cash as a lump sum distribution.
(g) Administrative Expenses
Certain administrative expenses of the Plan are paid by
USAir.
7
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
2. Summary of Accounting Policies
(a) Basis of Accounting
The financial statements of the Plan are prepared under the
accrual method of accounting.
(b) Investment Valuation and Income Recognition
The assets of the USAir Common Stock Fund, Capital Growth Mix
Portfolio, Moderation Mix Portfolio, and Fixed Income Fund
are commingled with certain assets of other defined
contribution plans sponsored by USAir. The Plan's
Recordkeeper separately identifies the assets of each plan
participant who has an interest in the commingled funds.
Fair values for assets were determined by quoted market
values, when available. 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. The Plan's investments
in guaranteed investment contracts ("GICs") are stated at
contract value (Note 4). Purchases and sales of investments
are recorded on a trade-date basis.
(c) Payment of Benefits
Benefits are recorded as deductions when paid.
(d) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect
certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
(e) Certain 1994 amounts have been reclassified to conform with
1995 classifications.
8
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
3. Investment Activity
The following table presents the investment funds' activities, for the years ended December 31, 1995 and 1994:
Fidelity
Retirement Fidelity
Fixed Government Fidelity Fidelity Fidelity U.S. Equity Income
Income Money Market Magellan Intermediate Equity Index Mix
Fund Portfolio Fund Bond Fund Income Fund Portfolio Portfolio
----------- ----------- ------------ ----------- ----------- ---------- -----------
Balance at December 31, 1993 $18,784,388 $20,699,194 $105,388,198 $15,570,417 $42,150,577 $ 9,758,481 $ -
Investment income 1,364,490 880,830 4,378,677 1,093,722 4,522,489 325,278 -
Net appreciation (depreciation)
in fair value - - (6,595,902) (1,414,394) (4,540,993) (207,289) (168)
Interest income on participant loans - - - - - - -
Contributions 3,964,735 4,385,743 31,788,373 3,589,050 11,066,747 2,766,216 71,158
Net exchanges between investment funds 1,112,241 (1,523,562) (9,091,128) (3,014,226) (2,785,935) (1,305,174) 308,824
Administrative expenses (37,662) (5,413) (86,160) (2,023) (6,987) (334) (162)
Benefits paid to participants (1,086,059) (974,834) (2,385,168) (274,941) (1,276,301) (184,835) -
Transfers from (to) other plans (48,078) 10,025 (235,266) (62,357) (85,892) (56,132) -
----------- ----------- ----------- ----------- ----------- ---------- -----------
Net Change in Investment Funds 5,269,667 2,772,789 17,773,426 (85,169) 6,893,128 1,337,730 379,652
----------- ----------- ----------- ----------- ----------- ---------- -----------
Balance at December 31, 1994 24,054,055 23,471,983 123,161,624 15,485,248 49,043,705 11,096,211 379,652
Investment income 1,814,979 1,558,028 10,960,027 1,103,221 4,103,698 440,269 -
Net appreciation (depreciation)
in fair value - - 36,331,018 979,773 12,490,106 4,165,036 98,013
Interest income on participant loans - - - - - - -
Contributions 4,026,615 7,894,731 34,104,511 3,188,554 11,484,650 3,313,508 275,600
Net exchanges between investment funds (661,838) 1,180,051 (5,071,804) (1,305,409) (1,633,905) 1,255,360 496,136
Administrative expenses (39,225) (5,858) (81,905) (1,620) (6,267) (361) (601)
Benefits paid to participants (719,233) (1,489,480) (2,739,723) (497,881) (1,344,344) (252,051) (135,598)
Transfers from (to) other plans (34,552) 133,953 (459,493) (28,969) (115,103) (48,676) (10,313)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net Change in Investment Funds 4,386,746 9,271,425 73,042,631 3,437,669 24,978,835 8,873,085 723,327
----------- ----------- ------------ ----------- ----------- ----------- -----------
Balance at December 31, 1995 $28,440,801 $32,743,408 $196,204,255 $18,922,917 $74,022,540 $19,969,296 $ 1,102,889
=========== =========== ============ =========== =========== =========== ===========
(table continued on next page)
9
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
Capital USAir
Growth Moderation Common Participant
Mix Mix Stock Loan
Portfolio Portfolio Fund Fund Other Total
----------- ----------- ----------- ----------- ---------- ------------
Balance at December 31, 1993 $ - $ - $ 5,390,059 $ 6,954,592 $1,409,027 $226,104,933
Investment income - - - - - 12,565,486
Net appreciation (depreciation)
in fair value 5,199 2,473 (5,396,111) - - (18,147,185)
Interest income on participant loans - - - 562,455 - 562,455
Contributions 1,789,561 328,596 1,158,970 - 52,054 60,961,203
Net exchanges between investment funds 6,612,638 1,274,068 6,380,469 2,031,785 - -
Administrative expenses (2,571) (327) (9,925) - (2,225) (153,789)
Benefits paid to participants (57,277) (29,015) (13,126) (125,490) - (6,407,046)
Transfers from (to) other plans (1,632) (1,523) (9,185) - - (490,040)
----------- ----------- ----------- ---------- ---------- ------------
Net Change in Investment Funds 8,345,918 1,574,272 2,111,092 2,468,750 49,829 48,891,084
----------- ----------- ----------- ----------- ---------- ------------
Balance at December 31, 1994 8,345,918 1,574,272 7,501,151 9,423,342 1,458,856 274,996,017
Investment income - - - - - 19,980,222
Net appreciation (depreciation)
in fair value 3,175,530 596,273 17,038,479 - - 74,874,228
Interest income on participant loans - - - 807,864 - 807,864
Contributions 5,782,841 1,239,086 1,732,420 - 1,128,281 74,170,797
Net exchanges between investment funds 4,661,576 1,775,862 (3,505,492) 2,809,463 - -
Administrative expenses (9,461) (1,505) (15,751) - (3,857) (166,411)
Benefits paid to participants (31,978) (212,704) (52,054) (248,873) - (7,723,919)
Transfers from (to) other plans (35,293) (16,338) (55,765) - - (670,549)
----------- ----------- ----------- ----------- ---------- ------------
Net Change in Investment Funds 13,543,215 3,380,674 15,141,837 3,368,454 1,124,424 161,272,232
----------- ----------- ----------- ----------- ---------- ------------
Balance at December 31, 1995 $21,889,133 $ 4,954,946 $22,642,988 $12,791,796 $2,583,280 $436,268,249
=========== =========== =========== =========== ========== ============
10
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
4. Investment Contracts with Insurance Companies
The Plan has an interest in a portfolio of guaranteed
investment contracts with certain insurance companies of
$28,440,801 and $24,054,055 as of December 31, 1995 and
1994, respectively. The investment contracts are benefit
responsive because they provide reasonable access to the
funds by the Plan participants. Therefore, in accordance
with the American Institute of Certified Public Accountant's
Statement of Position 94-4, the interest in these contracts
is disclosed in the financial statements at contract value
which equals contributions made, plus accrued interest at
the specified rate, less plan withdrawals and administrative
expenses. The portfolio's contract value as of December 31,
1995 and 1994 was $73,426,290 and $65,656,595. The average
portfolio crediting interest rate was approximately 5.7% and
6.2% as of December 31, 1995 and 1994, respectively. The
portfolio average yield was approximately 6.5% for the years
ended December 31, 1995 and 1994. No valuation reserves
were recognized related to the portfolio as all insurance
companies in the portfolio had received an investment grade
rating from nationally recognized rating agencies as of
December 31, 1995 and 1994. The fair value of the portfolio
was $74,818,203 and $63,463,514 as of December 31, 1995 and
1994.
5. Plan Termination
Although it has not expressed any intent to do so, the
Company reserves the right to terminate the Plan at any
time. Upon termination of the Plan, participants would
become 100 percent vested in their accounts. In addition,
the following actions would be taken for the benefit of
participants.
(a) As of the termination date, each investment fund
shall be valued. In determining the net worth of the
investment funds there shall be included as a liability
such amounts as shall be necessary to pay all expenses
in connection with the termination of the investment
funds and the liquidation and distribution of the
property of the funds, as well as other expenses,
whether or not accrued, and shall include as an asset
all accrued income.
(b) All participant accounts must be disposed of, to, or
for each participant in single lump-sum payments.
11
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
6. 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,
-------------------
1995 1994
---- ----
Net assets available for plan benefits
per the financial statements $436,268,249 $274,996,017
Amounts allocated to withdrawing
participants (260,152) (1,200,107)
----------- -----------
Net assets available for plan
benefits per the Form 5500 $436,008,097 $273,795,910
=========== ===========
The following is a reconciliation of benefits paid to
participants per the financial statements to the Form 5500:
Year Ended
December 31, 1995
-----------------
Benefits paid to participants per the
financial statements $ 7,723,919
Add: Amounts allocated to withdrawing
participants at December 31, 1995 260,152
Less: Amounts allocated to withdrawing
participants at December 31, 1994 (1,200,107)
---------
Benefits paid to participants per the
Form 5500 $ 6,783,964
=========
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.
12
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
7. Tax Status
The Internal Revenue Service has determined and informed the
Company by a letter dated July 22, 1995, that the Plan and
related trust qualifies for exemption from Federal income
taxes under the applicable provisions of the Code. The Plan
has been amended since receiving the tax determination
letter. However, the Plan administrator and the Plan's
legal counsel believe that the Plan is designed and is
currently being operated in compliance with the applicable
requirements of the Code.
8. Legal Proceedings
During the fourth quarter of 1995, the Association of Flight
Attendants ("AFA") filed a grievance against USAir
contending that the Company has violated certain sections of
the collective bargaining agreement between the AFA and
USAir. USAir's flight attendants are eligible to participate
in the Plan pursuant to their collective bargaining
agreement with the Company. The AFA maintains that USAir's
flight attendants are entitled to receive company matching
contributions based on certain provisions of their
collective bargaining agreement. The Company recently lost
a similar grievance filed by the International Association
of Machinists and Aerospace Workers ("IAM"), which
represents USAir's mechanics and related workers, which
resulted in the Company matching the contributions made to
the Plan by IAM participants. If the Company and the Plan
are unsuccessful in their defense of the AFA's claim, USAir
may be required to make a contribution to the Plan for
benefits which would have accrued as of December 31, 1995,
and match the future contributions of AFA employees who
participate in the Plan up to a certain amount. Due to the
uncertainties related to this grievance, management is not
able to estimate the amount of Company contributions that
may be due to the Plan upon resolution of the dispute.
13
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
(Continued)
9. Arbitration Remedy Settlement
As the result of a decision and award by an arbitrator who
ruled that the Company was required to match 401(k)
contributions made by mechanics and related personnel
represented by the International Association of Machinists
and Aerospace Workers (the "IAM") as of September 30, 1995,
the Company entered into an agreement with the IAM for USAir
employees whose coverage in this Plan is provided pursuant
to a collective bargaining agreement with the IAM (hereafter
"IAM employees"). Key points in this agreement are as
follows: (i) in December 1995, the Company made a special
one-time contribution of $9.4 million to the accounts of IAM
employees who were covered under the agreement as of
September 30, 1995 and who made payroll contributions to the
Plan during the period April 1, 1993 through September 30,
1995 equal to 50% of such contributions up to a maximum of 2
percent of the employees compensation for each payroll
period; (ii) during the first quarter of 1996, the Company
made another special one-time contribution of $1.1 million
to the accounts of IAM employees who made payroll
contributions to the Plan during the period October 1, 1995
through December 31, 1995 equal to 50% of such contributions
up to a maximum of 2 percent of compensation for each
payroll period; and (iii) effective January 1, 1996, the
Company amended the Plan to provide for 50% company matching
contributions each payroll period up to 2 percent of
compensation for IAM employee participants.
(this space intentionally left blank)
14
Schedule I
USAIR, INC. Page 1 of 2
401(k) SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
----------------------------------------------------------
December 31, 1995
Identity Description Current
of Issue of Investment Cost Value
-------- ------------- ---- -------
Fidelity Retirement Shares in money $ 32,743,408 $ 32,743,408
Government Money market fund
Market Portfolio
Fidelity Magellan Fund Shares in registered 163,868,489 196,204,255
investment company
Fidelity Intermediate Shares in registered 18,673,520 18,922,917
Bond Fund investment company
Fidelity Equity Shares in registered 61,002,876 74,022,540
Income Fund investment company
Fidelity U.S. Equity Shares in registered 15,484,638 19,969,296
Index Portfolio investment company
USAir Common Stock Fund* Common stock of employer's 19,066,169 22,642,988
parent company, USAir
Group, Inc., and short-
term investments
Income Mix Portfolio Shares in registered 1,029,010 1,102,889
investment companies
Capital Growth Mix Shares in registered 19,075,629 21,889,133
Portfolio investment companies
(table continued on next page)
15
Schedule I
USAIR, INC. Page 2 of 2
401(k) SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
----------------------------------------------------------
(Continued)
December 31, 1995
Identity Description Current
of Issue of Investment Cost Value
-------- ------------- ---- -------
Moderation Mix Portfolio Shares in registered $ 4,468,158 $ 4,954,946
investment companies
Participant Loans Interest rates range 12,791,796 12,791,796
from 7 percent to
10 percent per annum
Fixed Income Fund Guaranteed Investment 28,440,801 28,440,801
contracts, interest rates
range from 4.05 percent
to 8.68 percent per annum
------------ ------------
Total Investments $376,644,494 $433,684,969
============ ============
*Party in interest.
16
Schedule II
USAIR, INC.
401(k) SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
----------------------------------------------
Year Ended December 31, 1995
Aggregate transactions during the year ended December 31, 1995, with securities of the same issue,
accounting for greater than five percent of the value of Plan assets at the beginning of the period
were as follows:
Total Number of Total Number Realized
Purchases Purchases Sales of Sales Gain(Loss)
--------- --------- --------- -------- ----------
Fidelity Retirement $48,996,314 255 $39,724,889 252 $ -
Government Money
Market Portfolio
Fidelity Magellan Fund 84,594,020 252 47,882,407 252 5,035,113
Fidelity Equity 27,568,211 251 15,079,482 249 1,276,326
Income Fund
Capital Growth 15,263,758 245 4,896,073 201 366,781
Mix Portfolio
USAir Common Stock 47,276,518 252 49,173,160 247 7,953,475
Fund
Fixed Income Fund 12,375,474 223 7,988,728 111 -
17
</TABLE
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
authorized.
USAir, Inc.
401(k) Savings Plan
By: /s/ James A. Hultquist
----------------------
James A. Hultquist
Controller
USAir, Inc.
June 27, 1996
18