<PAGE>
=================================================================
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)
Supplemental Retirement Plan of Piedmont Aviation, Inc.
USAir Group, Inc.
2345 Crystal Drive, Arlington, VA 22227
(Address of principal executive offices)
=================================================================
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Financial Statements
and Supplemental Schedules
December 31, 1995 and 1994
(With Independent Auditors'
Report Thereon)
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
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 4-12
Schedule I - Item 27a
Schedule of Assets Held for Investment Purposes
as of December 31, 1995 13-14
Schedule II - Item 27d
Schedule of Reportable Transactions for the year
ended December 31, 1995 15
Signature 16
Exhibit 23
Consent of Independent Auditors 17
<PAGE>
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, 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
<PAGE
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Statements of Net Assets Available for Plan Benefits
----------------------------------------------------
December 31,
1995 1994
---- ----
Assets:
Investments, at fair value:
Fidelity Magellan Fund $ 8,324,718 $ 5,661,139
Fidelity Equity Income Fund 5,214,166 4,305,405
Fidelity U.S. Equity Index Fund 1,570,333 870,223
USAir Common Stock Fund 1,544,333 496,372
Capital Growth Mix Portfolio 1,269,519 607,619
Fidelity Intermediate Bond Fund 1,035,584 1,064,048
Moderation Mix Portfolio 697,924 317,966
Fidelity Retirement Government
Money Market Portfolio 603,000 502,021
Income Mix Portfolio 26,584 100,150
----------- -----------
20,286,161 13,924,943
Fixed Income Fund,
at contract value 20,883,503 22,491,117
----------- -----------
Net assets available for plan benefits $ 41,169,664 $ 36,416,060
=========== ===========
See accompanying Notes to Financial Statements.
2
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
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 $ 4,215,108 $ (1,398,976)
Investment income 2,334,303 2,247,823
Interest income from pooled
separate account - 55
----------- -----------
Total additions 6,549,411 848,902
----------- -----------
Deductions from net assets
attributable to:
Benefits paid to participants 1,795,807 2,270,312
----------- ----------
Total deductions 1,795,807 2,270,312
----------- ----------
Net increase (decrease) 4,753,604 (1,421,410)
Net assets available for plan benefits:
Beginning of year 36,416,060 37,837,470
----------- -----------
End of year $ 41,169,664 $ 36,416,060
=========== ===========
See accompanying Notes to Financial Statements.
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
December 31, 1995 and 1994
1. Description of Plan
The following description of the Supplemental Retirement Plan
of Piedmont Aviation, Inc. (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 qualify
as a profit sharing plan under Section 401(a) of the Code.
All former employees of Piedmont Aviation, Inc. ("Piedmont")
are covered by the Plan. In November 1987, Piedmont
Aviation, Inc. was acquired by USAir Group, Inc. ("USAir
Group"). In August 1989, Piedmont was merged into USAir,
Inc. ("USAir" or the "Company"), a wholly owned subsidiary of
USAir Group. 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. The
Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974("ERISA"), as amended.
(b) Vesting
Participants are fully vested in their contributions plus
earnings thereon.
(c) Investment Options
USAir 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.
The Recordkeeper values account balances daily. Each account
balance is based on the value of the underlying investments
in each account. Generally, participants 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.
Each participant may invest their account balance in any
combination of the seven individual investment options and
three diversified portfolio mixes in increments of five
percent. The ten investment options are as follows:
4
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
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 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.
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 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.
Fidelity Retirement Government Money Market Portfolio -
Investments are made in high-quality money market instruments
offered primarily by U.S. and foreign corporations.
5
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
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.
Fixed Income Fund - 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 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
(d) Withdrawals
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 (i) alleviate a financial
hardship; (ii) reduce non-mortgage debt; or (iii) make
improvements to his/her residence which are determined by the
Company to be necessary.
(e) Payment of Benefits
Upon termination of service, a participant may elect to
receive one of the following: (i) a lump-sum equal to the
value of his/her account; (ii) 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); or (iii) installment payments.
6
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(f) Administrative Expenses
Certain administrative expenses of the Plan are paid by
USAir.
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, Income 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.
7
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
(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
current year presentation.
(This space intentionally left blank)
8
<PAGE>
<TABLE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC
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:
<CAPTION>
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
----------- ----------- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993 $23,588,072 $ 340,858 $6,074,112 $1,373,689 $ 4,761,205 $1,091,250 $ -
Investment income 1,443,480 18,447 238,838 83,965 433,163 29,930 -
Net appreciation (depreciation)
in fair value - - (382,105) (112,618) (427,457) (23,942) (227)
Net exchanges between investment funds (1,051,206) 182,310 (8,823) (240,379) (65,772) (197,196) 100,377
Benefits paid to participants (1,489,229) (39,594) (260,883) (40,609) (395,734) (29,819) -
----------- ----------- ---------- ---------- ----------- ---------- ----------
Net Change in Investment Funds (1,096,955) 161,163 (412,973) (309,641) (455,800) (221,027) 100,150
----------- ----------- ---------- ---------- ----------- ---------- ----------
Balance at December 31, 1994 22,491,117 502,021 5,661,139 1,064,048 4,305,405 870,223 100,150
Investment income 1,437,266 40,065 454,788 68,111 300,993 33,080 -
Net appreciation (depreciation)
in fair value - - 1,581,271 61,219 961,588 301,503 4,408
Net exchanges between investment funds (1,865,419) 128,525 836,887 (108,415) (139,054) 440,374 (77,974)
Benefits paid to participants (1,179,461) (67,611) (209,367) (49,379) (214,766) (74,847) -
----------- ----------- ---------- ---------- ----------- ---------- ----------
Net Change in Investment Funds (1,607,614) 100,979 2,663,579 (28,464) 908,761 700,110 (73,566)
----------- ----------- ---------- ---------- ----------- ---------- ----------
Balance at December 31, 1995 $20,883,503 $ 603,000 $8,324,718 $1,035,584 $ 5,214,166 $1,570,333 $ 26,584
=========== =========== ========== ========== =========== ========== ==========
(table continued on next page)
9
</TABLE>
<PAGE>
<TABLE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
Notes to Financial Statements
-----------------------------
(Continued)
<CAPTION>
USAir
Capital Moderation Common
Growth Mix Mix Stock
Portfolio Portfolio Fund Other Total
----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 $ - $ - $ 601,634 $ 6,650 $ 37,837,470
Investment income - - - - 2,247,823
Net appreciation (depreciation)
in fair value (4,241) (1,336) (447,050) - (1,398,976)
Net exchanges between investment funds 611,860 319,302 349,527 - -
Benefits paid to participants - - (7,739) (6,705) (2,270,312)
----------- ----------- ----------- ----------- ------------
Net Change in Investment Funds 607,619 317,966 (105,262) (6,705) (1,421,465)
----------- ----------- ----------- ----------- ------------
Balance at December 31, 1994 607,619 317,966 496,372 (55) 36,416,005
Investment income - - - - 2,334,303
Net appreciation (depreciation)
in fair value 201,667 100,684 1,002,768 - 4,215,108
Net exchanges between investment funds 460,348 279,274 45,454 - -
Benefits paid to participants (115) - (261) - (1,795,807)
----------- ----------- ----------- ----------- ------------
Net Change in Investment Funds 661,900 379,958 1,047,961 - 4,753,604
----------- ----------- ----------- ----------- ------------
Balance at December 31, 1995 $ 1,269,519 $ 697,924 $ 1,544,333 $ - $ 41,169,664
=========== ============ =========== =========== ============
10
</TABLE
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
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
$20,883,503 and $22,491,117 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, USAir shall provide for the assets
under the Plan to be distributed in lump sums to the
participants, beneficiaries or other successors in
interest, the balance of their account at the time of
termination.
(This space intentionally left blank)
11
<PAGE>
SUPPLEMENTAL RETIREMENT PLAN OF
PIEDMONT AVIATION, INC.
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 $ 41,169,664 $ 36,416,060
Amounts allocated to withdrawing
participants (58,935) (167,553)
----------- -----------
Net assets available for plan benefits
per the Form 5500 $ 41,110,729 $ 36,248,507
=========== ===========
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 $ 1,795,807
Add: Amounts allocated to withdrawing
participants at December 31, 1995 58,935
Less: Amounts allocated to withdrawing
participants at December 31, 1994 (167,553)
---------
Benefits paid to participants per the
Form 5500 $ 1,687,189
=========
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.
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.
12
<PAGE>
</TABLE>
<TABLE>
SUPPLEMENTAL RETIREMENT PLAN OF Schedule I
PIEDMONT AVIATION, INC. Page 1 of 2
Item 27a - Schedule of Assets Held for Investment Purposes
----------------------------------------------------------
December 31, 1995
<CAPTION>
Identity Description Current
of Issue of Investment Cost Value
-------- ------------- ---- -------
<S> <C> <C> <C>
Fidelity Retirement Shares in money $ 603,000 $ 603,000
Government Money market fund
Market Portfolio
Fidelity Magellan Fund Shares in registered 6,963,966 8,324,718
investment company
Fidelity Intermediate Shares in registered 1,047,609 1,035,584
Bond Fund investment company
Fidelity Equity Shares in registered 4,348,962 5,214,166
Income Fund investment company
Fidelity U.S. Equity Shares in registered 1,289,765 1,570,333
Index Portfolio investment company
USAir Common Stock Fund* Common stock of employer's 1,581,107 1,544,333
parent company, USAir
Group, Inc., and short-
term investments
Income Mix Portfolio Shares in registered 23,682 26,584
investment companies
Capital Growth Mix Shares in registered 1,070,918 1,269,519
Portfolio investment companies
13
</TABLE>
<PAGE>
<TABLE>
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, 1995
<CAPTION>
Identity Description Current
of Issue of Investment Cost Value
-------- ------------- ---- -------
<S> <C> <C> <C>
Moderation Mix Portfolio Shares in registered $ 600,443 $ 697,924
investment companies
Fixed Income Fund Guaranteed Investment 20,883,503 20,883,503
contracts, interest rates
range from 4.05 percent
to 8.68 percent per annum
------------ ------------
Total Investments $ 38,412,955 $ 41,169,664
============ ============
*Party in interest.
14
</TABLE>
<PAGE>
<TABLE>
SUPPLEMENTAL RETIREMENT PLAN OF Schedule II
PIEDMONT AVIATION, INC.
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:
<CAPTION>
Total Number of Total Number Realized
Purchases Purchases Sales of Sales Gain
--------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Fidelity Retirement $ 3,624,581 115 $ 3,523,602 86 $ -
Government Money
Market Fund
Fidelity Magellan Fund 2,658,255 142 1,575,947 96 172,736
Fidelity Equity 1,056,182 105 1,109,010 80 85,415
Income Fund
USAir Common Stock 3,823,439 121 3,778,245 69 496,676
Fund
Fixed Income Fund 1,812,455 53 3,420,068 41 -
15
</TABLE
<PAGE>
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.
Supplemental Retirement Plan
of Piedmont Aviation, Inc.
By: /s/ James A. Hultquist
----------------------
James A. Hultquist
Controller
USAir, Inc.
June 27, 1996
16
</TABLE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
USAir Group, Inc.:
We consent to the use of our report dated June 14, 1996, on the
statements of net assets available for plan benefits 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 for the Supplemental Retirement Plan for Piedmont Aviation,
Inc. (the "Plan") included in the Annual Report on Form 11-K
relating to the Plan filed by USAir Group, Inc. for the years
ended December 31, 1995 and 1994, 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).
KPMG Peat Marwick LLP
Washington, D.C.
June 27, 1996
17
