US Airways 2006 Annual Report Download - page 125

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
pre-merger NOL generated by US Airways prior to the merger, which in accordance with SFAS No. 109, the associated decrease in the
valuation allowance reduced goodwill; an adjustment to accounts receivable to reflect credits due from Republic related to pre-merger
aircraft lease assumptions; adjustments to materials and supplies for the refinement of fair market value information available at the time
of the acquisition; adjustments to other assets for the application of pre-merger airport operating expense and rent credits and a fair
market value adjustment to an investment; and adjustments to other accrued expenses to refine estimates for remaining pending
bankruptcy claim matters.
(b) Pro Forma Information
The following information is presented assuming the merger and the conversion of America West Holdings' Class A and Class B
common stock had been completed as of January 1, 2004. The pro forma consolidated results of operations include purchase accounting
adjustments, such as fair market value adjustments of the assets and liabilities of US Airways Group, adjustments to reflect the
disposition of prepetition liabilities upon US Airways Group's emergence from bankruptcy, and adjustments to conform certain
accounting policies of US Airways Group and America West Holdings, together with related income tax effects. Certain other
transactions critical to US Airways Group's emergence from bankruptcy and the completion of the merger that became effective either
before, at or immediately following the merger have also been reflected in the pro forma financial information. These transactions include
the new equity investments, the comprehensive agreements with GECC, the comprehensive agreement with Airbus, the restructuring of
the ATSB loans, and the restructuring of the credit card partner and credit card processing agreements. The unaudited pro forma
information presented below is not necessarily indicative of the results of operations that would have occurred had the purchase been
made at the beginning of the periods presented or of future results of the combined operations (in millions, except share and per share
amounts).
Year Ended Year Ended
December 31, 2005 December 31, 2004
Operating revenues $ 10,440 $ 9,456
Operating expenses 10,799 9,858
Operating loss (359) (402)
Net loss $ (891) $ (652)
Basic and fully diluted loss per share $ (12.59) $ (10.93)
Basic and diluted shares (in thousands) 70,689 59,654
15. 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 the Company's Express operations. 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.
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