US Airways 2007 Annual Report Download - page 110

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
total investment of $160 million. As of December 31, 2007, PAR has sold substantially all of its investment in US Airways Group.
Richard P. Schifter, a member of the board of directors of US Airways Group until November 15, 2006, is a partner of Texas
Pacific Group, which was a controlling stockholder of America West Holdings prior to the completion of the merger. An affiliate of
Texas Pacific Group received $6.4 million as an advisory fee for providing financial advisory services in 2005, in connection with the
merger and in contribution for and reimbursement for certain expenses incurred by Texas Pacific Group and its affiliates in connection
with the merger.
14. Merger accounting and pro forma information
(a) Purchase Price Allocation
The value of the merger consideration was determined based upon America West Holdings' traded market price per share due to the
fact that US Airways Group was operating under bankruptcy protection prior to the merger. The outstanding shares in America West
Holdings at September 27, 2005 were valued at $4.82 per share, resulting in an aggregate value assigned to the shares of $175 million.
The $4.82 per share value was based on the five-day average share price of America West Holdings common stock, with May 19, 2005,
the merger announcement date, as the midpoint. The outstanding shares of America West Holdings Class A and Class B common stock
were converted into shares of US Airways Group common stock at a conversion rate of 0.5362 and 0.4125, respectively. Certain
unsecured creditors of US Airways Group have been or will be issued an aggregate of approximately 8.2 million shares of US Airways
Group common stock in settlement of their claims, including stock issued to the PBGC and ALPA. The fair value of that common stock
valued at an equivalent price based on the $4.82 value of the America West Holdings stock is $96 million. America West Holdings
incurred $21 million of direct acquisition costs in connection with the merger. The following table summarizes the components of the
purchase price (in millions):
Fair value of common shares issued to US Airways Group's unsecured creditors $ 96
Estimated merger costs 21
Total purchase price $ 117
The net assets acquired and liabilities assumed in connection with the merger and initial allocation of purchase price is as follows
(in millions):
Current assets $ 1,098
Property and equipment 2,367
Other intangible assets 592
Other assets 779
Goodwill 732
Liabilities assumed (5,451)
Total purchase price $ 117
In connection with US Airways Group's emergence from bankruptcy, significant prepetition liabilities were discharged. The
surviving liabilities and the assets acquired in the merger are shown at estimated fair value. The Company used an outside appraisal firm
to assist in determining the fair value of long-lived tangible and identifiable intangible assets. Significant assets and liabilities adjusted to
fair market value include expendable spare parts and supplies, property and equipment, airport take-off and landing slots, aircraft leases,
deferred revenue and continuing debt obligations. In connection with the merger, primarily due to the relocation of the corporate
headquarters from Arlington, Virginia to Tempe, Arizona, US Airways accrued in purchase accounting $24 million of severance and
benefits related to planned reductions in force for its non-union employees. The Company expects to incur
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