4th qtr earnings

[700UW]

Here is the language, I believe it is the same for mechanic and related and the rest.

The Company will offer a profit-sharing program for Fleet Serviceemployees subject to the following conditions:

• IAM’s agreement to eliminate the current profit-sharing provisions of the August 2002 and
January 2003 Restructuring Agreements;

• Approval by the US Airways Group, Inc., Board of Directors; and

• Approval as part of the Company’s confirmed plan of reorganization in bankruptcy.
Assuming satisfaction of the conditions set forth above, the profit-sharing plan will be based on the
following terms:

1. Company profit sharing pool to be established at 10% of the pre-tax profit excluding unusual
items (as reported, according to GAAP accounting practices) for pre-tax margins ranging from
0.1% to 5.0%; and at the above, plus 25% of any pre-tax profit excluding unusual items (as
reported, according to GAAP accounting practices) in excess of a pre-tax margin of 5.0%.

2. IAM’s portion of the profit-sharing pool will be proportionate to IAM’s share of the overall cost
savings achieved through the Transformation Plan.

3. An individual Fleet Service employee’s profit-sharing payment will be based on such
employee’s gross W-2 earnings (prior to any elective deferrals) for the prior calendar year
divided by the gross W-2 earnings (prior to any elective deferrals) for all eligible Fleet Service
employees for the prior calendar year. At IAM’s option, “eligible Fleet Service employee†may
include retired or furloughed Fleet Service employees who had gross W-2 earnings (prior to any
elective deferrals) for the prior calendar year, subject to applicable law.

 

[UPNAWAY]

Never heard anything about all 4 quarters have to have a profit, just a dumb rumor.

 

[necigrad]

My understanding was that every quarter the mandated profit went into a "pool". Whatever was in that pool at the end of the year was disbursed as profit sharing. This does not include profit sharing stipulations that weren't addressed int he CBAs.

 

[LGA / 037]

My understanding was that every quarter the mandated profit went into a "pool". Whatever was in that pool at the end of the year was disbursed as profit sharing. This does not include profit sharing stipulations that weren't addressed int he CBAs.

You are correct. There will be a profit check due to the full overall 2007 year. As per upper management, they expect the year to be "flat or slightly lower then the previous."

 

[BoeingBoy]

You are correct.

Or almost. The amount alloted quarterly to profit sharing (assuming a quarterly profit) is not "mandated" in the sense that once "put in" it cannot be reduced. It is merely based on that quarter's profit and is subject to change once the final calculations for profit sharing are made - at the end of the year based on the full year's results.

For example, if the quarterly profits looked like this: $0M, $300M, $0M, -$300M

The amounts alloted to profit sharing would look roughly like this: $0, $30M, $0, $0

Looks like there'd be $30M in the profit sharing pool, doesn't it. However, the annual profit was $0M, and thus no profit sharing would be paid. There isn't a "lock box" that the quarterly profit sharing allotments are placed in, safe and secure and guaranteed to be paid out. There are only estimated amounts of potential profit sharing money, with any contractual guaranteed profit sharing payouts based on only the full year's results.

In short, until the annual numbers are in there is no way to know how much (if any) will be in the profit sharing pool.

Jim