US Airways 2005 Annual Report Download - page 253

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
The profit-sharing pool is shared among eligible employee groups in proportion to each group's share of overall cost savings achieved through US Airways
2005 Transformation Plan; however, the represented pilots' and flight attendants' portions of the pool shall not be less than 36% and 14.5%, respectively. An
employee's share of the pool is based on the ratio that the employee's compensation bears to the respective employee group's aggregate compensation.
Because of significant losses, no benefits accrued under the plan in 2005.
8. Income Taxes
US Airways accounts for income taxes according to the provisions in SFAS No. 109, "Accounting for Income Taxes." US Airways files a consolidated
federal income tax return with its parent company, US Airways Group. US Airways Group and its wholly owned subsidiaries allocate tax and tax items, such
as net operating losses ("NOL") and net tax credits, between members of the group based on their proportion of taxable income and other items. Accordingly,
US Airways' tax expense is based on its taxable income, taking into consideration its allocated tax loss carryforwards/carrybacks and tax credit carryforwards.
In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax
assets will be realized. US Airways has recorded a valuation allowance against its net deferred tax asset. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which those temporary
differences will become deductible.
The components of the provision (credit) for income taxes are as follows (in millions):
Successor
Company Predecessor Company
Three Months Nine Months Nine Months Three Months
Ended Ended Year Ended Ended Ended
December 31, September 30, December 31, December 31, March 31,
2005 2005 2004 2003 2003
Current provision:
Federal $ — $ — $ (3) $ 3 $ —
State — (2) (3) 3 —
Total current — (2) (6) 6 —
Deferred provision:
Federal — — (1) — —
State — — — — —
Total deferred — — (1) — —
Provision (credit) for income taxes $ — $ (2) $ (7) $ 6 $ —
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