US Airways 2006 Annual Report Download - page 92

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
US Airways Group purchases capacity, or ASMs, generated by US Airways Group's wholly owned regional air carriers and the
capacity of Air Wisconsin Airlines Corp. ("Air Wisconsin"), Republic Airways Holdings ("Republic"), Mesa and Chautauqua Airlines,
Inc. ("Chautauqua") in certain markets. Air Wisconsin, Republic, Mesa and Chautauqua operate regional jet aircraft in these markets as
part of US Airways Express and AWA Express. AWA, US Airways Group classifies revenues related to capacity purchase arrangements
as Express passenger revenues. Liabilities related to tickets sold for travel on these air carriers are also included in US Airways Group's
air traffic liability and are subsequently relieved in the same manner as described above.
Most of the Company's receivables related to tickets sold to individual passengers through the use of major credit cards or to tickets
sold by other airlines and used by passengers on AWA, US Airways or its regional airline affiliates. These receivables are short-term,
mostly being settled within seven days after sale. Bad debt losses, which have been minimal in the past, have been considered in
establishing allowances for doubtful accounts.
See Note 1(j) above for information on the revenue recognition for the sale of Dividend Miles.
Cargo Revenue
Cargo revenue is recognized when shipping services for mail and other cargo are provided.
Other Revenue
Other revenue includes excess baggage charges, ticket change and service fees, commissions earned on tickets sold for flights on
other airlines, sales of tour packages by the US Airways Vacations division and the marketing component earned from selling mileage
credits to partners, as discussed in Note 1(j) "Frequent Traveler Program".
(n) Stock-based Compensation
Prior to January 1, 2006, the Company accounted for stock-based compensation plans in accordance with Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations. Effective January 1, 2006,
the Company adopted SFAS No. 123R, "Share-Based Payment" ("SFAS 123R"), using the modified prospective transition method.
Under the modified prospective transition method, compensation cost is recognized in the financial statements beginning with the
effective date based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the
requirements of SFAS No. 123, "Accounting for Stock Based Compensation" ("SFAS 123") for all unvested awards granted prior to the
effective date of SFAS 123R. Results for prior periods are not restated using the modified prospective transition method.
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