<PAGE>
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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, 1993
(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)
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<PAGE>
USAIR, INC.
401(k) SAVINGS PLAN
Financial Statements and Schedules
December 31, 1993 and 1992
(With Independent Auditors' Report Thereon)
<PAGE>
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, 1993 and 1992 2
Statements of Changes in Net Assets Available
for Plan Benefits for the years ended
December 31, 1993 and 1992 3
Notes to Financial Statements 4-9
Schedule I - Item 27a
Schedule of Assets Held for Investment Purposes
as of December 31, 1993 10
Schedule II - Item 27d
Schedule of Reportable Transactions for the
year ended December 31, 1993 11
<PAGE>
Independent Auditors' Report
The Plan Administrator and Participants
USAir, Inc. 401(k) Savings Plan:
We have audited the accompanying statements of net assets avail-
able for plan benefits of the USAir, Inc. 401(k) Savings Plan
(the Plan) as of December 31, 1993 and 1992, 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 avail-
able for plan benefits of the Plan as of December 31, 1993 and
1992, 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 sched-
ules of assets held for investment purposes as of December 31,
1993 and reportable transactions for the year ended December 31,
1993 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 supplemen-
tal 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.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Washington, D.C.
June 3, 1994
1
<PAGE>
USAIR, INC.
401(k) SAVINGS PLAN
Statements of Net Assets Available for Plan Benefits
----------------------------------------------------
December 31, 1993 and 1992
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Assets:
Investments, at fair value:
Fidelity Retirement Government
Money Market Fund $ 20,699,194 $ 27,009,235
Fidelity Magellan Fund 105,388,198 87,528,972
Fidelity Intermediate Bond Fund 15,570,417 17,181,806
Fidelity Equity Income Fund 42,150,577 35,137,332
Fidelity U.S. Equity Index Fund 9,758,481 10,825,654
USAir Common Stock Fund 5,390,059 4,301,192
----------- -----------
198,956,926 181,984,191
USAir Guaranteed Investment Fund,
at contract value 18,784,388 20,366,459
Participant loans receivable 6,954,592 4,556,966
----------- -----------
Total investments 224,695,906 206,907,616
Participant contributions
receivable 1,445,595 1,357,530
----------- -----------
Total assets 226,141,501 208,265,146
Liabilities:
Accrued expenses 36,568 -
----------- -----------
Net assets available for plan
benefits $226,104,933 $208,265,146
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
USAIR, INC.
401(k) SAVINGS PLAN
Statements of Changes in Net Assets Available for Plan Benefits
---------------------------------------------------------------
December 31, 1993 and 1992
<TABLE>
<CAPTION>
1993 1992
---- ----
<S> <C> <C>
Additions to net assets attributable
to:
Net appreciation (depreciation) in
the fair value of investments $ 13,999,765 $ (3,168,230)
Investment income 13,709,182 16,104,649
Interest income on participant
loans 334,014 267,603
Participant contributions 49,390,591 51,266,255
Rollover contributions 293,999 244,160
Other income 1,878 882
----------- -----------
Total additions 77,729,429 64,715,319
----------- -----------
Deductions from net assets
attributable to:
Transfer to USAir Employee
Savings Plan 56,592,761 -
Benefits paid to participants 3,003,546 2,663,101
Administrative expenses 139,488 200,090
Other expenses 133,999 -
Transfer to other plans 19,848 -
----------- -----------
Total deductions 59,889,642 2,863,191
----------- -----------
Net increase in net assets
available for plan benefits 17,839,787 61,852,128
Net assets available for plan
benefits:
Beginning of year 208,265,146 146,413,018
----------- -----------
End of year $226,104,933 $208,265,146
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
USAIR, INC.
401(k) SAVINGS PLAN
Notes to Financial Statements
-----------------------------
December 31, 1993 and 1992
(1) Description of Plan
The following brief description of the USAir, Inc. 401(k)
Savings Plan (the Plan) is provided for general information
purposes only. Participants should refer to the Plan docu-
ment for more complete information.
(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.
All permanent employees of USAir, Inc. (USAir or the
Company), with at least three months 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. The Plan is subject to
the provisions of the Employee Retirement Income Act of
1974 (ERISA).
(b) Plan Contributions
USAir employees electing to participate in the Plan
make contributions to the Plan via payroll deductions.
The amount of contribution that may be made by a par-
ticipant to the Plan shall be a whole percentage of a
participant's compensation. Compensation includes base
pay, overtime, shift premiums and shift differentials,
up to a limit of $200,000, as adjusted by Section
401(a)(17) of the Code. The percentage of compensation
contributed may not exceed 15 percent if the partici-
pant's compensation for the preceding year was less
than $50,000, as adjusted by Section 414(q)(1) of the
Code. If the preceding year's compensation was greater
than $50,000, as adjusted by Section 414(q)(1) of the
Code, the percentage may not exceed eight percent.
Contributions for 1993 and 1992 could not exceed the
statutory limits of $8,994 and $8,728, respectively.
The Plan does not provide for any employer contribu-
tions.
(c) Vesting
Participants are immediately vested in their contribu-
tions plus earnings thereon.
4
<PAGE>
(d) 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 invest-
ment fund to another investment fund.
A separate account is established and maintained in the
name of each participant and reflects the participant's
contributions invested in, and the earnings and losses
attributed to, each investment fund less administrative
expenses. Participants are allocated 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 on a
monthly basis.
(e) Loans and Hardship Withdrawals
All participants can borrow from their account but may
have only one loan outstanding at a given point in
time. Loans are to be repaid, with interest, within
five years unless the loan is used by the participant
to acquire a principal residence. Loans are limited to
50 percent of the participant's separate account bal-
ance as of the date of the loan.
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 Code.
(f) Distributions
Distribution to a participant or beneficiary is made as
soon as reasonably practicable after the participant's
separation from service with the Company due to death,
disability, retirement, or other termination of employ-
ment. If the balance due to the participant is greater
than $3,500, the distribution can be deferred until age
65 or provided in cash as a lump sum distribution. If
the balance due to the participant or beneficiary is
less than $3,500, a lump sum distribution is automatic
upon separation.
5
<PAGE>
(g) Administrative Expenses
Certain 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 pre-
pared on an accrual basis and present the net assets
available for plan benefits and changes in those net
assets.
Certain amounts in the 1992 financial statements have
been reclassified to conform with the current year's
presentation.
(b) Investments
The assets of the Plan are maintained in a master trust
arrangement with the assets of other defined contribu-
tion plans sponsored by USAir. The individual assets
of each plan constitute individual master trust invest-
ment 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 Manage-
ment 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. 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 guar-
anteed investment contracts (GICs) are stated at con-
tract value. Purchases and sales of investments are
recorded on a trade-date basis.
6
<PAGE>
<TABLE>
USAIR, INC.
401(k) SAVINGS PLAN
(3) Investment Activity
The following table presents the cash basis investment funds' activities, for the
years ended December 31, 1993 and 1992:
<CAPTION>
Fidelity
Retirement Fidelity Fidelity
USAir Government Magellan Intermediate
GIC Money Market Fund Bond Fund
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1991 $14,311,528 $26,894,300 $ 58,629,046 $13,460,562
---------- ---------- ----------- ----------
Investment income 1,246,790 978,844 11,332,980 1,192,243
Net appreciation
(depreciation)
in fair value - - (5,965,158) (303,264)
Interest income on
participant loans 21,796 48,893 112,157 24,126
Contributions 5,435,392 6,130,394 24,462,142 4,386,453
Net exchanges between
investment funds 13,579 (5,772,964) 1,132,226 (977,931)
Administrative expenses (62,719) (8,712) (105,613) (5,071)
Benefits paid to participants (365,714) (774,318) (1,270,885) (338,483)
Loan activity (234,193) (487,202) (797,923) (256,829)
---------- ---------- ----------- ----------
Net change in investment
funds 6,054,931 114,935 28,899,926 3,721,244
---------- ---------- ----------- ----------
Balance, December 31, 1992 20,366,459 1) 27,009,235 1) 87,528,972 1) 17,181,806 1)
---------- ---------- ----------- ----------
Transfer to USAir 401(k)
Savings Plan (6,843,206) (7,024,752) (22,705,571) (4,734,769)
Investment income 1,050,881 580,654 9,187,306 1,114,551
Net appreciation
(depreciation)
in fair value - - 8,478,398 445,997
Interest income on
participant loans 22,500 43,332 148,943 25,568
Contributions 3,714,865 4,399,055 24,830,576 3,617,962
Net exchanges between
investment funds 969,687 (2,915,235) 605,423 (1,362,192)
Administrative expenses (27,073) (4,058) (58,190) (1,821)
Benefits paid to participants (225,759) (771,354) (921,458) (435,238)
Transfers to other plans (1,714) (14) (15,699) (715)
Loan activity (242,252) (617,669) (1,690,502) (280,732)
---------- ---------- ----------- ----------
Net change in investment
funds (1,582,071) (6,310,041) 17,859,226 (1,611,389)
---------- ---------- ----------- ----------
Balance, December 31, 1993 $18,784,388 1) $20,699,194 1) $105,388,198 1) $15,570,417 1)
========== ========== =========== ==========
<CAPTION>
Fidelity Fidelity U.S. USAir
Equity Equity Index Common
Income Fund Fund Stock Fund Total
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Balance, December 31, 1991 $22,821,594 $ 7,119,538 $ - $143,236,568
---------- ---------- ---------- -----------
Investment income 1,111,543 242,249 - 16,104,649
Net appreciation
(depreciation)
in fair value 2,842,148 454,384 (196,340) (3,168,230)
Interest income on
participant loans 41,355 12,991 6,286 267,604
Contributions 7,789,026 2,986,824 560,279 51,750,510
Net exchanges between
investment funds 1,358,909 270,299 3,975,882 -
Administrative expenses (12,250) (722) (5,003) (200,090)
Benefits paid to participants (464,389) (148,223) (7,168) (3,369,180)
Loan activity (350,604) (111,686) (32,744) (2,271,181)
---------- ---------- ---------- -----------
Net change in investment
funds 12,315,738 3,706,116 4,301,192 59,114,082
---------- ---------- ---------- -----------
Balance, December 31, 1992 35,137,332 1) 10,825,654 1) 4,301,192 202,350,650
---------- ---------- ---------- -----------
Transfer to USAir 401(k)
Savings Plan (10,001,963) (3,299,537) (788,365) (55,398,163)
Investment income 1,418,584 357,206 - 13,709,182
Net appreciation
(depreciation)
in fair value 4,964,107 441,067 (329,804) 13,999,765
Interest income on
participant loans 63,885 17,191 12,595 334,014
Contributions 9,371,645 2,688,887 975,413 49,598,403
Net exchanges between
investment funds 2,328,757 (1,001,512) 1,375,072 -
Administrative expenses (6,198) (234) (5,346) (102,920)
Benefits paid to participants (551,156) (88,058) (10,523) (3,003,546)
Transfers to other plans (1,658) (19) (29) (19,848)
Loan activity (572,758) (182,164) (140,146) (3,726,223)
---------- ---------- ---------- -----------
Net change in investment
funds 7,013,245 (1,067,173) 1,088,867 15,390,664
---------- ---------- ---------- -----------
Balance, December 31, 1993 $42,150,577 1)$ 9,758,481 $ 5,390,059 $217,741,314
========== ========== ========== ===========
1) Investment fund balance represents greater than five percent of net assets available
for plan benefits.
</TABLE>
7
<PAGE>
<PAGE>
(4) Concentration of Credit Risk
The Plan's assets include certain investments in GICs. The
issuers of the GICs are all insurance companies. The Plan's
ultimate realization of amounts invested in GICs is depen-
dent on the continued financial stability of the insurance
companies that are issuers of the GICs. The Plan's benefi-
cial interest in amounts invested in GICs was $18,784,388
and $20,366,459 at December 31, 1993 and 1992, respectively.
(5) Federal Tax Status
Although the Plan has not requested a letter of determina-
tion from the Internal Revenue Service as to its qualifica-
tion, the Company and its general counsel believe the Plan
meets the requirement of Section 401(a) of the Internal
Revenue Code, as amended. The Plan is therefore believed to
be exempt from federal income taxes.
(6) Plan Termination
The Company reserves the right to terminate the Plan at any
time. Upon termination of the Plan, the following actions
shall 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 invest-
ment 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 shall then be disposed of, to,
or for each participant in single lump-sum payments.
All distributions shall be made in cash.
[This space intentionally left blank]
8
<PAGE>
(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:
<TABLE>
<CAPTION>
December 31,
--------------------------
1993 1992
---- ----
<S> <C> <C>
Net assets available for
plan benefits per the
financial statements $226,104,933 $208,265,146
Amounts allocated to
withdrawing participants (76,094) -
----------- -----------
Net assets available
for benefits per
the Form 5500 $226,028,839 $208,265,146
=========== ===========
</TABLE>
The following is a reconciliation of benefits paid to par-
ticipants per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
Year ended
December 31, 1993
-----------------
<S> <C>
Benefits paid to participants per the
financial statements $3,003,546
Add: Amounts allocated to withdrawing
participants at December 31, 1993 76,094
Less: Amounts allocated to withdrawing
participants at December 31, 1992 -
---------
Benefits paid to participants per the
Form 5500 $3,079,640
=========
</TABLE>
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.
9
<PAGE>
<TABLE>
USAIR, INC. Schedule I
401(k) SAVINGS PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1993
<CAPTION>
Description
Identity of Issue of Investment Cost Current Value
- - ------------------ --------------------- ----------- -------------
<S> <C> <C> <C>
USAir Guaranteed Guaranteed investment $ 18,784,388 $ 18,784,388
Investment Fund contract, interest rates
range from 3.25 percent
to 8.80 percent per annum
Fidelity Retirement Money market fund 20,699,194 20,699,194
Government Money
Market Fund
Fidelity Magellan Shares in registered 97,407,415 105,388,198
Fund investment companies
Fidelity Intermediate Shares in registered 15,020,108 15,570,417
Bond Fund investment companies
Fidelity Equity Shares in registered 35,037,963 42,150,577
Income Fund investment companies
Fidelity U.S. Equity Shares in registered 8,596,717 9,758,481
Index Fund investment companies
USAir Common Stock Employer securities 6,466,109 5,390,059
Fund
Participant loans Interest rates range - 6,954,592
from seven percent to
11 percent per annum
----------- -----------
Total Investments $202,011,894 $224,695,906
=========== ===========
10
</TABLE>
<PAGE>
<TABLE>
Schedule II
USAIR, INC.
401(k) SAVINGS PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1993
Aggregate transactions during the year ended December 31, 1993, 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:
<CAPTION>
Number Number
Total of of Realized
Purchases Purchases Total Sales Sales Gain
--------- --------- ----------- ------ ---------
<S> <C> <C> <C> <C> <C>
USAir Guaranteed
Investment Fund $ 7,918,193 158 $ 2,657,058 77 $ -
Fidelity Retirement
Government Money
Market Fund 17,296,641 257 16,581,930 250 -
Fidelity Magellan Fund 46,653,231 253 14,564,602 233 1,013,983
Fidelity Intermediate
Bond Fund 7,430,271 253 4,752,889 222 158,946
Fidelity Equity Income
Fund 17,691,819 253 5,640,719 225 644,681
USAir Common Stock Fund 9,557,252 240 7,350,217 195 554,553
11
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities 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.
USAir, Inc. 401(k) Savings Plan
By: /s/ Ann Greer-Rector
_____________________________
Ann Greer-Rector
Vice President and Controller
of USAir Group, Inc. and
USAir, Inc.
June 29, 1994
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
USAir Group, Inc.
We consent to the use of our report dated June 3, 1994, on the
statement of net assets available for plan benefits as of Decem-
ber 31, 1993, and the related statement of changes in net assets
available for plan benefits for the year ended December 31, 1993
for the USAir, Inc. 401(k) Savings Plan (the "Plan") included in
the Annual Report on Form 11-K relating to the Plan filed by USAir
Group, Inc. for the year ended December 31, 1993 and to the
incorporation by reference of such report in the Registration
Statement, as amended, on Form S-8 pertaining to the Plan (File No.
33-44835).
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Washington, D. C.
June 29, 1994
