US Airways 2007 Annual Report Download - page 102

Table of Contents
US Airways Group, Inc.
Notes to Consolidated 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, 2007 and 2006 are as follows (in millions):
2007 2006
Deferred tax assets:
Net operating loss carryforwards $ 282 $ 364
Property, plant and equipment 22 21
Investments 19 3
Aircraft leases — 11
Financing transactions 18 —
Employee benefits 347 297
Dividend Miles awards 153 205
Restructuring reserve — 2
AMT credit carryforward 38 37
Other deferred tax assets 16 48
Valuation allowance (77) (263)
Net deferred tax assets 818 725
Deferred tax liabilities:
Depreciation and amortization 519 502
Sale and leaseback transactions and deferred rent 146 123
Leasing transactions 59 20
Financing transactions — 41
Long-lived intangibles 31 31
Other deferred tax liabilities 84 30
Total deferred tax liabilities 839 747
Net deferred tax liabilities 21 22
Less: current deferred tax liabilities — —
Non-current deferred tax liabilities $ 21 $ 22
The reason for significant differences between taxable and pretax book income primarily relates to depreciation on fixed assets,
employee pension and postretirement benefit costs, employee-related accruals and leasing transactions.
The Company files tax returns in the U.S. federal jurisdiction, and in various states and foreign jurisdictions. As part of US Airways'
bankruptcy filings, the Internal Revenue Service and various state jurisdictions filed proofs of claim. Upon its emergence from
bankruptcy, US Airways had established reserves for all IRS claims and state income tax claims as of the date of the bankruptcy filing on
September 12, 2004. All creditors, including the IRS and state and local taxing jurisdictions, had to timely file a proof of claim to support
any tax deficiencies per the tax authority records. On February 15, 2007, US Airways and the IRS agreed to settle the IRS's outstanding
proofs of claim for $7 million.
All federal and state tax filings for US Airways Group and its subsidiaries for fiscal years through December 31, 2006 have been
timely filed. There are currently no federal or state audits in process. US Airways' last federal income tax audit closed all tax years
through December 31, 2002. AWA's tax year 2002 was closed by operation of the statute of limitations expiring, and there were no
extensions filed. The Company is not currently under examination.
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