US Airways 2006 Annual Report Download - page 89

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
quarter of 2006, at which time the Company concluded that no impairment exists. The Company will perform its next annual impairment
test on October 1, 2007.
SFAS 142 requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairments in accordance with SFAS 144. The following table provides information relating
to the Company's intangible assets subject to amortization as of December 31, 2006 and 2005 (in millions):
2006 2005
Airport take-off and landing slots $ 453 $ 453
Airport gate leasehold rights 52 52
Accumulated amortization (36) (8)
Total $ 469 $ 497
The intangible assets subject to amortization generally are amortized over 25 years for airport take-off and landing slots and over
the term of the lease for airport gate leasehold rights on a straight-line basis and are included in depreciation and amortization on the
statements of operations. For the years ended December 31, 2006 and 2005, the Company recorded amortization expense of $28 million
and $8 million, respectively, related to its intangible assets. The Company expects to record annual amortization expense of $25 million
in 2007, $25 million in year 2008, $25 million in year 2009, $24 million in year 2010, and $22 million in year 2011 related to these
intangible assets.
(i) Other Assets, Net
Other assets, net consists of the following as of December 31, 2006 and 2005:
2006 2005
Deposits $ 49 $ 73
Debt issuance costs 29 11
Long term investments 38 22
Deferred rent 49 24
Aircraft leasehold interest 101 101
Other 4 3
Subtotal 270 234
Less: accumulated amortization (11) —
Total other assets, net $ 259 $ 234
In connection with fresh-start reporting for US Airways, aircraft operating leases were adjusted to fair value and $101 million of
assets were established for leasehold interests in aircraft for aircraft leases with rental rates deemed to be below market rates. These
leasehold interests are amortized on a straight-line basis as an increase to aircraft rent expense over the applicable remaining lease
periods, which range from one month to 17 years.
(j) Frequent Traveler Program
At the time of the merger, US Airways Group's principal operating subsidiaries, AWA and US Airways maintained separate
frequent travel award programs known as "Flight Fund" and "Dividend Miles," respectively. Following the merger, the two frequent flyer
programs were modified to allow customers of each airline to earn and use miles on the other airline, and in May 2006, the two programs
were merged into the new Dividend Miles
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