US Airways 2007 Annual Report Download - page 154

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
evaluation of available information, US Airways believes these investments are of high credit quality, as substantially all of the
investments carry a AAA credit rating, and approximately 30% of the par value of these auction rate securities is insured. In addition, US
Airways has the intent and ability to hold these investments until anticipated recovery in market value occurs. Accordingly, US Airways
has recorded an unrealized loss on these securities of $48 million in other comprehensive income. US Airways concluded that
$10 million of the decline was other than temporary and recorded an impairment charge in other income, net. US Airways' conclusion for
the other than temporary impairment is based on the significant decline in fair value indicated for a certain investment, a portion of which
is collateralized either directly or indirectly by sub-prime mortgages.
As of January 31, 2008, the commercial banks managing the investments provided US Airways with estimated fair market values,
which indicated an additional decline in the aggregate fair market value of US Airways' auction rate securities of approximately
$70 million (from amounts provided as of December 31, 2007). US Airways currently believes that these additional declines in value are
also temporary and are attributed to current credit market events and continued lack of market liquidity in early 2008. Such temporary
declines, if sustained, would be recognized in other comprehensive income in the first quarter of 2008. It is possible that additional
declines in fair value may occur. To the extent the fair market values of the auction rate securities were to subsequently increase, such
increase would reduce the unrealized loss recorded in other comprehensive income.
US Airways continues to monitor the market for auction rate securities and consider its impact (if any) on the fair market value of
its investments. If the current market conditions deteriorate further, or the anticipated recovery in market values does not occur, US
Airways may be required to record additional unrealized losses in other comprehensive income or impairment charges in 2008.
Gross proceeds from sales of marketable securities for the years ended December 31, 2007, 2006 and three months ended
December 31, 2005 were $3.2 billion, $1.79 billion and $112 million, respectively.
Long Term Debt
At December 31, 2007 and 2006, the fair value of long-term debt was approximately $1.55 billion and $1.64 billion, respectively.
US Airways' variable rate long-term debt with a carrying value of $532 million and $694 million at December 31, 2007 and 2006,
respectively, approximates fair value because these borrowings have variable interest rate terms that approximate market interest rates for
similar debt instruments. The fair value of US Airways' other long-term debt is determined based on quoted market prices if available or
market prices for comparable debt instruments.
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