US Airways 2006 Annual Report Download - page 182

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
expenses" on the statements of operations. Express expenses on the statements of operations consist of the following (in millions):
Successor Company Predecessor Company
Three Months Nine Months
Year Ended Ended Ended Year Ended
December 31, December 31, September 30, December 31,
2006 2005 2005 2004
Aircraft fuel and related taxes $ 554 $ 140 $ 328 $ 206
Salaries and related costs 50 18 63 37
Capacity purchases 1,018 222 659 908
Other rent and landing fees 128 30 88 28
Aircraft rent 12 10 21 15
Selling expenses 109 24 66 72
Aircraft maintenance 2 3 9 1
Depreciation and amortization — — 7 3
Other expenses 187 43 131 302
Express expenses $ 2,060 $ 490 $ 1,372 $ 1,572
(r) Variable Interest Entities
US Airways determined that certain entities with which it has capacity purchase agreements are considered variable interest entities
under Financial Accounting Standards Board ("FASB") Interpretation No. 46 "Consolidation of Variable Interest Entities," as revised
("FIN 46(R)"). US Airways has determined that it is not the primary beneficiary of any of these variable interest entities, and accordingly,
does not consolidate any of the entities with which it has jet service agreements. (See also Note 8(c)).
(s) Recent Accounting Pronouncements
In June 2006, the Financial Accounting Standards Board ("FASB") ratified Emerging Issues Task Force Issue No. 06-3 ("EITF
06-3"), "How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross versus Net Presentation)." The scope of EITF 06-3 includes any tax assessed by a governmental authority that is directly
imposed on a revenue-producing transaction between a seller and a customer. This issue provides that a company may adopt a policy of
presenting taxes either gross within revenue or net. If taxes subject to this issue are significant, a company is required to disclose its
accounting policy for presenting taxes and the amount of such taxes that are recognized on a gross basis. This statement is effective to
financial reports for interim and annual reporting periods beginning after December 15, 2006. US Airways adopted EITF 06-3 on
January 1, 2007. US Airways collects various excise taxes on its ticket sales, which are accounted for on a net basis. The adoption of
EITF 06-3 will not have a material impact on US Airways' financial statements.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This standard defines fair value, establishes a
framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosure
about fair value measurements. This pronouncement applies to other accounting standards that require or permit fair value measurements.
Accordingly, this statement does not require any new fair value measurement. This statement is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. US Airways will be required to adopt SFAS No. 157 in the first quarter
of fiscal year 2008. Management is currently evaluating the requirements of SFAS No. 157 and has not yet determined the impact on
US Airways' financial statements.
Effective December 31, 2006, US Airways adopted the recognition provisions of SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements
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