US Airways 2006 Annual Report Download - page 124

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
The net assets acquired and liabilities assumed in connection with the merger and initial allocation of purchase price is as follows
(in millions):
Current assets $ 1,098
Property and equipment 2,367
Other intangible assets 592
Other assets 779
Goodwill 732
Liabilities assumed (5,451)
Total purchase price $ 117
In connection with US Airways Group's emergence from bankruptcy, significant prepetition liabilities were discharged. The
surviving liabilities and the assets acquired in the merger are shown at estimated fair value. The Company used an outside appraisal firm
to assist in determining the fair value of long-lived tangible and identifiable intangible assets. Significant assets and liabilities adjusted to
fair market value include expendable spare parts and supplies, property and equipment, airport take-off and landing slots, aircraft leases,
deferred revenue and continuing debt obligations. In connection with the merger, primarily due to the relocation of the corporate
headquarters from Arlington, Virginia to Tempe, Arizona, US Airways accrued in purchase accounting $24 million of severance and
benefits related to planned reductions in force for its non-union employees. The Company expects to incur additional severance and
benefits for reductions in force related to the merger; however, due to requirements for continued service during the integration period,
these severance and benefits will not be an adjustment to the purchase price allocation but will be expensed in future periods. See Note 5
for discussion of amounts expensed for severance and benefits in the fourth quarter of 2005 and 2006.
In accordance with SFAS 141, the allocation of equity values is subject to adjustment for up to one year after the date of acquisition
when additional information on asset and liability valuations becomes available.
Adjustments made in the year ended December 31, 2006 to previously recorded fair values are as follows (in millions):
Goodwill reported as of December 31, 2005 $ 732
Utilization of pre-merger NOL (85)
Materials and supplies, net 40
Accounts receivable (22)
Other assets (22)
Other accrued expenses (12)
Property and equipment 6
Long-term debt (6)
Accrued compensation and vacation (4)
Non current employee benefits and other 4
Accrued taxes (2)
Accounts payable (1)
Other intangibles, net 1
Goodwill reported as of December 31, 2006 $ 629
Adjustments recorded in 2006 resulted as further refinement of information became available on assets and liabilities that existed as
of the acquisition date. Significant adjustments included an adjustment for the utilization of
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