US Airways 2006 Annual Report Download - page 189

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
(a) Reflects the discharge or reclassification of estimated liabilities subject to compromise. Most of these obligations are only entitled
to receive such distributions of cash and common stock as provided for under the Plan of Reorganization. A portion of the
estimated liabilities subject to compromise was restructured and will continue, as restructured, to be liabilities of the Successor
Company.
(b) Includes adjustments to reflect assets and liabilities at fair value and the write-off of the Predecessor Company's equity accounts.
(c) In conjunction with the merger and application of purchase accounting, US Airways adjusted certain balances to conform its
accounting policies to those of America West Holdings.
In accordance with SFAS 141, the allocation of equity values is subject to adjustment within 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 September 30, 2006 $ 732
Utilization of pre-merger NOL (85)
Materials and supplies, net 32
Accounts receivable (22)
Other assets (22)
Noncurrent employee benefits and other 12
Related party payables (9)
Property and equipment 6
Long-term debt (6)
Accrued compensation and vacation (4)
Other accrued expenses (3)
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 pre-merger NOL utilization related to NOL utilized that was
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 employee benefits for refinements of estimated liabilities for US Airways' long term
disability plans.
(c) Reorganization Items, Net
SOP 90-7 requires that the financial statements for periods following the Chapter 11 filing through emergence distinguish
transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly,
revenues, expenses, realized gains and losses and provisions for losses directly associated with the reorganization and restructuring of the
business are reported separately as reorganization items,
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