US Airways 2006 Annual Report Download - page 202

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
the year ended December 31, 2006. US Airways also recorded $3 million of state income tax related to certain states where NOL was not
available or limited, for the year ended December 31, 2006.
US Airways is part of the US Airways Group consolidated income tax return for the tax year ended December 31, 2006. The current
tax provision for the 12 months 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):
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
Current provision:
Federal $ 5 $ — $ — $ (3)
State 1 — (2) (3)
Total current 6 — (2) (6)
Deferred provision:
Federal 114 — — (1)
State 9 — — —
Total deferred 123 — — (1)
Provision (credit) for income taxes $ 129 $ — $ (2) $ (7)
A reconciliation of taxes computed at the statutory federal tax rate on income (loss) before income taxes to the provision (credit) for
income taxes is provided below (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
Tax provision (credit) computed at federal statutory rate $ 166 $ (42) $ 97 $ (205)
Book expenses not deductible for tax purposes (8) (3) 615 1
State income tax provision, net of federal benefit 13 — (1) (2)
Increase (decrease) in the federal valuation allowance (50) 45 (753) 181
Reduction in net operating losses from discharge of indebtedness — — 40 —
Expiration of investment and foreign tax credits — — — 5
Other 8 — — 13
Provision (credit) for income taxes $ 129 $ — $ (2) $ (7)
Effective tax rate 27.2% —% (1)% 1%
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