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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Financial Statements and Supplemental Schedules
December 31, 1992 and 1991
(With Independent Auditors' Report Thereon)
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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Table of Contents
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Page
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Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits
as of December 31, 1992 and 1991 2
Statements of Changes in Net Assets Available for
Benefits for the years ended
December 31, 1992 and 1991 3
Notes to Financial Statements 4-6
Schedule I - Item 27a - Assets Held For Investment Purposes 7
Schedule II - Item 27d - Reportable Transactions 8
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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,
1992 and 1991, 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 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, 1992 and
1991, 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, 1992 and reportable transactions for the year ended December 31, 1992 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.
December 17, 1993
1
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SUPPLEMENTAL RETIREMENT PLAN
OF PIEDMONT AVIATION, INC.
Statements of Net Assets Available for Benefits
-----------------------------------------------
December 31, 1992 and 1991
<CAPTION>
1992 1991
---- ----
<S> <C> <C>
Assets:
Beneficial interest in master trust (note 2) $ 36,542,780 $ 35,460,400
Pooled separate account - short-term invest-
ment fund 6,469 337,589
---------- ----------
36,549,249 35,797,989
Accrued benefits payable - 450,212
---------- ----------
Net assets available for benefits $ 36,549,249 $ 35,347,777
========== ==========
See accompanying notes to financial statements.
2
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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Statements of Changes in Net Assets Available for Benefits
----------------------------------------------------------
Years ended December 31, 1992 and 1991
<CAPTION>
1992 1991
---- ----
<S> <C> <C>
Additions:
Interest income from pooled separate
account $ 11,944 $ 23,296
Net investment gain from master trust
(note 2) 2,757,977 2,840,254
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Total additions 2,769,921 2,863,550
Deductions:
Distributions to participants 1,567,818 2,476,035
Administrative expense 631 765
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Total deductions 1,568,449 2,476,800
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Increase in net assets available for benefits 1,201,472 386,750
Net assets available for benefits:
Beginning of year 35,347,777 34,961,027
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End of year $ 36,549,249 $ 35,347,777
========== ==========
See accompanying notes to financial statements.
3
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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
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December 31, 1992 and 1991
(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), a wholly-owned subsidiary of Group, in August 1989. As
part of the merger, the Plan was frozen as to additional contributions effective
July 31, 1989 with the exception of rollover contributions from the terminated
Piedmont Aviation, Inc. Pilot Variable Annuity Trust. These rollovers were
reflected in the 1990 activity as transfers from other plans. 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) Benefits
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).
(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.
4
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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
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(Continued)
(b) Investments
* Beneficial Interest in Master Trust
-----------------------------------
Most of the assets of the Plan are maintained in a master trust with the assets
of another defined contribution plan sponsored by USAir, Inc. The trustee,
Fidelity Management Trust Company, maintains the master trust under the
terms of an agreement with the Plan. The Plan's share of changes in the
master trust has been reported to the Plan by the trustee as having been
determined through the use of contract value for the guaranteed investment
contracts (GICs).
* Pooled Separate Account
-----------------------
These amounts are carried at fair value as determined and certified by Aetna
Life Insurance Company (Aetna).
(c) Allocations
Individual accounts are maintained for each participant. Investment earnings and
losses are allocated to participants based on their proportionate share of the total.
(3) Concentration of Credit Risk
The assets of the Plan included in the master trust consist of GICs purchased from an
insurance company. The Plan's ultimate realization of amounts invested in GICs is
dependent on the continued financial stability of Aetna, the insurance company that
issued all of the GICs. The total amount invested in the Aetna GICs is $36,542,780 and
$35,460,400 at December 31, 1992 and 1991, respectively.
(4) Tax Status
The Internal Revenue Service issued a letter of determination which stated that the Plan
qualifies under the applicable provisions of the Internal Revenue Code. The Plan has
been amended since then. In the opinion of the Plan Administrator and the Plan's legal
counsel, the Plan has operated within the terms of the Plan and remains qualified under
the applicable provisions of the Internal Revenue Code. Accordingly, the Plan is entitled
to exemption under the provisions of Section 401(a), and no provision for federal or state
income tax has been made in the accompanying financial statements.
5
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SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(5) Plan Termination
The Company reserves the right to terminate the Plan at any time. In the event of
termination, all participant contributions will cease and no additional participants shall
enter the Plan. USAir shall provide for the assets under the Plan to be distributed in
lump sum to the participants, beneficiaries or other successors in interest, the balance of
their account at the time of termination.
6
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Schedule I
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Item 27a - Assets Held for Investment Purposes
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December 31, 1992
<CAPTION>
Description Current
Issue of Investment Cost Value
----- ------------- ---- -------
<S> <C> <C> <C>
Aetna Life Insurance
Company Money market account $ 6,469 $ 6,469
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7
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Schedule II
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Item 27d - Reportable Transactions
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January 1, 1992 to December 31, 1992
Aggregate transactions during the year ended December 31, 1992 with securities of the same issue accounting for five percent of
the value of Plan assets at the beginning of the period were as follows:
<CAPTION>
Current
Expenses Value of
Number Incurred Cost the Asset on
Purchase Selling of With of the Transaction Net Gain
Identity Description Price Price Transactions Transaction Asset Date or (Loss)
- ----------------- --------------- -------- ----------- ------------ ----------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pooled separate Sale of money - $342,432 11 - $342,432 $342,432 -
account short- market account
term investment
fund
8
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CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
USAir Group, Inc.:
We consent to the use of our reports dated February 26, 1993 included in the
Annual Report on Form 10-K filed by USAir Group, Inc. and USAir, Inc. for the
year ended December 31, 1992, incorporated herein by reference. Our reports
covering the December 31, 1992 consolidated financial statements refer to a
change in the method of accounting for postretirement benefits other than
pensions.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Washington, D.C.
January 28, 1994
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