US Airways 2005 Annual Report Download - page 268

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
12. Stockholder's equity and dividend restrictions
US Airways Group owns all of US Airways' outstanding common stock, par value $1 per share. US Airways' board of directors has not authorized the
payment of dividends on the common stock since 1988.
US Airways, organized under the laws of the State of Delaware, is subject to Sections 160 and 170 of the Delaware General Corporation Law with respect
to the payment of dividends on or the repurchase or redemption of its capital stock. US Airways is restricted from engaging in any of these activities unless it
maintains a capital surplus. In addition, US Airways may not pay dividends in accordance with provisions contained in the US Airways Citibank Loan.
13. Operating segments and related disclosures
US Airways Group is managed as a single business unit that provides air transportation for passengers and cargo. This allows it to benefit from an
integrated revenue pricing and route network that includes US Airways, AWA, Piedmont, PSA and third-party carriers that fly under capacity purchase
agreements as part of US Airways Express. The flight equipment of all these carriers is combined to form one fleet that is deployed through a single route
scheduling system. When making resource allocation decisions, the chief operating decision maker evaluates flight profitability data, which considers aircraft
type and route economics, but gives no weight to the financial impact of the resource allocation decision on an individual carrier basis. The objective in
making resource allocation decisions is to maximize consolidated financial results, not the individual results of US Airways, AWA, Piedmont and PSA.
Information concerning operating revenues in principal geographic areas is 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
United States $ 1,502 $ 4,513 $ 5,225 $ 4,456 $ 1,314
Foreign 254 944 1,848 794 198
Total $ 1,756 $ 5,457 $ 7,073 $ 5,250 $ 1,512
14. Stock-based compensation
Upon confirmation of the Plan of Reorganization, existing shares of US Airways Group's common stock were cancelled. The plan of reorganization
resulted in holders of US Airways Group's common stock and related equity securities receiving no distribution on account of their interest.
After emerging from the first bankruptcy, the Predecessor Company adopted the fair value method of recording stock-based employee compensation
contained in SFAS 123 and accounted for this change in accounting principle using the "prospective method" as described by SFAS 148. Accordingly, the fair
value of all Predecessor Company stock option and warrant grants, as determined on the date of grant, were amortized as compensation expense (an element
of Personnel costs) in the Statement of Operations over the vesting period. The Company has disclosed in Note 2(m) the effect on net income (loss) and net
earnings (loss) per common share as if the fair value based recognition provisions of SFAS 123 had been applied to all outstanding and unvested stock option
awards in each Predecessor Company period presented. 262