US Airways 2006 Annual Report Download - page 203

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of
December 31, 2006 and 2005 are as follows (in millions):
2006 2005
Deferred tax assets:
Net operating loss carryforwards $ 206 $ 314
Property, plant and equipment 7 15
Employee benefits 257 268
Dividend miles awards 138 131
AMT credit carryforward 30 24
Other deferred tax assets 20 39
Valuation allowance (23) (159)
Net deferred tax assets 635 632
Deferred tax liabilities:
Depreciation and amortization 430 390
Sale and leaseback transactions and deferred rent 145 144
Leasing transactions 21 22
Financing transactions 41 44
Long-lived intangibles 31 31
Other deferred tax liabilities 25 32
Total deferred tax liabilities 693 663
Net deferred tax liabilities 58 31
Less: current deferred tax liabilities — —
Non-current deferred tax liabilities $ 58 $ 31
Included in the employee benefit deferred tax assets at December 31, 2006 and 2005, among other items, are $100 million and
$90 million, respectively, related to obligations of postretirement medical benefits.
The reason for significant differences between taxable and pretax book income primarily relates to depreciation of fixed assets,
employee pension and postretirement benefit costs, employee-related accruals and leasing transactions.
The federal income tax returns of US Airways through 2002 have been examined and settled with the Internal Revenue Service.
US Airways is not currently under examination.
8. Commitments and contingencies
(a) Commitments to Purchase Flight Equipment and Maintenance Services
Airbus Purchase Commitments
To modernize US Airways Group's international product and improve the efficiency of its international network, US Airways Group
was scheduled to begin accepting deliveries of Airbus A350 aircraft in 2011 pursuant to a purchase agreement that US Airways Group,
US Airways and AWA entered into in September 2005 with Airbus. US Airways Group has been notified that the A350 will be
undergoing significant design changes and will be delivered several years beyond the originally scheduled delivery dates. US Airways
Group is currently evaluating the revised technical and commercial aspects of the A350 program.
200