US Airways 2005 Annual Report Download - page 234

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
Adjustments made in the fourth quarter of 2005 to recorded fair values reported as of September 30, 2005 are as follows (in millions):
Goodwill reported as of September 30, 2005 $ 584
Property and equipment 23
Other assets 23
Air traffic liability 11
Other accrued expenses 49
Deferred gains and credits 50
Postretirement benefits other than pensions (10)
Employee benefit liabilities and other 2
Goodwill reported as of December 31, 2005 $ 732
Adjustments to other assets and deferred gains and credits primarily represent fair market value adjustments for above and below market aircraft leases.
Adjustments to other accrued expenses primarily represent adjustments to the acquired frequent traveler liability and identified pre-acquisition liabilities for
return conditions liabilities and related power by the hour program penalties associated with the return of certain aircraft, and a retroactive Transportation
Security Administration ("TSA") assessment received in the fourth quarter.
As a result of the adoption of fresh-start reporting, US Airways' post-emergence financial statements are not comparable with its pre-emergence financial
statements, because they are, in effect, those of a new entity. US Airways also recorded certain purchase accounting adjustments specifically related to the
merger with America West Holdings. The purchase accounting adjustments include those made to conform the accounting policies of US Airways to those of
America West Holdings, including an adjustment to reduce the air traffic liability by $124 million to conform its accounting policies for recognizing revenue
from forfeited tickets, and an increase to noncurrent employee benefit liabilities and other of $16 million to conform to America West Holdings' policy of not
discounting its workers compensation liability. Adjustments to conform accounting policies were recorded as direct adjustments to goodwill. The accrual of
$24 million of severance and benefits related to planned reductions in force was also recorded in purchase accounting directly to goodwill.
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