US Airways 2007 Annual Report Download - page 173

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
US Airways purchases a portion of its aviation fuel from US Airways Group's wholly owned subsidiary, MSC, which acts as a fuel
wholesaler to US Airways in certain circumstances. US Airways' aviation fuel purchases from MSC for the years ended December 31,
2007 and 2006, the three months ended December 31, 2005 and the nine months ended September 30, 2005 were $839 million,
$680 million, $120 million and $191 million, respectively.
12. Operating segments and related disclosures
US Airways is managed as a single business unit that provides air transportation for passengers and cargo. This allows it to benefit
from an integrated revenue pricing and route network that includes US Airways, Piedmont, PSA and third-party carriers that fly under
capacity purchase agreements as part of US Airways' Express operations. The flight equipment of all these carriers is combined to form
one fleet that is deployed through a single route scheduling system. When making resource allocation decisions, the chief operating
decision maker evaluates flight profitability data, which considers aircraft type and route economics, but gives no weight to the financial
impact of the resource allocation decision on an individual carrier basis. The objective in making resource allocation decisions is to
maximize consolidated financial results, not the individual results of US Airways and US Airways Express.
Information concerning operating revenues in principal geographic areas is as follows (in millions):
Successor Company Predecessor Company
Year Ended Year Ended Three Months Ended Nine Months Ended
December 31, December 31, December 31, September 30,
2007 2006 2005 2005
United States $ 9,675 $ 9,504 $ 2,275 $ 4,508
Foreign 2,138 2,188 314 944
Total $ 11,813 $ 11,692 $ 2,589 $ 5,452
US Airways attributes operating revenues by geographic region based upon the origin and destination of each flight segment. US
Airways' tangible assets consist primarily of flight equipment, which are mobile across geographic markets and, therefore, have not been
allocated.
13. Stockholder's equity and dividend restrictions
US Airways Group owns all of US Airways' outstanding common stock, par value $1 per share. US Airways' board of directors has
not authorized the payment of dividends on the common stock since 1988.
US Airways, organized under the laws of the State of Delaware, is subject to Sections 160 and 170 of the Delaware General
Corporation Law with respect to the payment of dividends on or the repurchase or redemption of its capital stock. US Airways is
restricted from engaging in any of these activities unless it maintains a capital surplus. In addition, US Airways may not pay dividends in
accordance with provisions contained in the Citicorp credit facility.
14. Stock-based compensation
The Predecessor Company recorded stock-based employee compensation in accordance with SFAS 123 during 2005 until the
merger. Effective with the merger on September 27, 2005, US Airways Group applied the provisions of APB 25 and related
interpretations. Effective January 1, 2006, US Airways Group adopted 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 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.
171