US Airways 2006 Annual Report Download - page 161

Table of Contents
America West Airlines, Inc.
Notes to Consolidated Financial Statements — (Continued)
AWA is subject to Alternative Minimum Tax liability ("AMT") for the full year 2006. In most cases, the recognition of AMT does
not result in tax expense. However, since AWA's NOL was subject to a full valuation allowance, any liability for AMT is recorded as tax
expense. AWA recorded AMT expense of $5 million for the year ended December 31, 2006.
AWA and the Internal Revenue Service ("IRS") favorably reached an agreement to carry forward all pre-1994 NOL that were
restricted, as a result of a statutory "ownership change" (as defined for purposes of Section 382 of the Internal Revenue Code) that
occurred as a result of AWA's reorganization in 1994. In June 2006, as a result of that agreement, the IRS notified AWA that the
Congressional Joint Committee on Taxation approved the IRS settlement with AWA, which resulted in the recognition of $8 million of
interest income earned on certain prior year federal income tax refunds.
AWA is included in America West Holdings' consolidated income tax returns for the periods ending December 31, 2004 and for the
period beginning January 1, 2005 ending on September 27, 2005. On September 27, 2005, US Airways Group consummated the
transactions contemplated by its plan of reorganization, including the merger transaction with America West Holdings. As a result of the
merger, America West Holdings became a wholly owned subsidiary of US Airways Group. America West Holdings and AWA, as part of
the merger, became members of the consolidated US Airways Group on September 28, 2005. AWA is included in the US Airways Group
consolidated income tax return for the period ended December 31, 2006. The current tax provision for the year ended December 31, 2006
was prepared in accordance with this tax return methodology.
The components of the provision (credit) for income taxes are as follows (in millions):
Year Ended
December 31, 2006
Current provision:
Federal $ 5
State —
Total current 5
Deferred provision:
Federal —
State —
Total deferred —
Provision (credit) for income taxes $ 5
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