US Airways 2007 Annual Report Download - page 41

Table of Contents
off of debt issuance costs associated with the exchange of the 7.25% Senior Exchangeable Notes due 2023 and retirement of a portion of
the loan formerly guaranteed by the ATSB.
As of December 31, 2007, we have approximately $761 million of gross net operating loss carryforwards ("NOL") to reduce future
federal taxable income. Of this amount, approximately $649 million is available to reduce federal taxable income in the calendar year
2008. Our deferred tax asset, which includes the $649 million of NOL discussed above, has been subject to a full valuation allowance.
For the year ended December 31, 2007, we utilized NOL to reduce our income tax obligation. Utilization of this NOL results in a
corresponding decrease in the valuation allowance. In accordance with SFAS No. 109, "Accounting for Income Taxes," as this valuation
allowance was established through the recognition of tax expense, the decrease in valuation allowance offsets our tax provision dollar for
dollar. We recognized $7 million of non-cash state income tax expense for the year ended December 31, 2007, as we used NOL that was
generated by US Airways prior to the merger. In accordance with SFAS No. 109, as this was acquired NOL, the decrease in the valuation
allowance associated with this NOL reduced goodwill instead of the provision for income taxes. At December 31, 2007, the remaining
federal valuation allowance is $32 million, all of which was established through the recognition of tax expense. In addition, we have
$37 million and $4 million, respectively, of unrealized federal and state tax benefit related to amounts recorded in other comprehensive
income. At December 31, 2007, the remaining state valuation allowance is $45 million, of which $21 million was established through the
recognition of tax expense and $24 million is associated with acquired NOL.
For the year ended December 31, 2006, we recognized $85 million of non-cash income tax expense, as we utilized NOL that was
generated by US Airways prior to the merger. In accordance with SFAS No. 109, as this valuation allowance was established through the
recognition of tax expense, the decrease in valuation allowance offsets our tax provision dollar for dollar. We also recorded Alternative
Minimum Tax liability ("AMT") tax expense of $10 million. In most cases, the recognition of AMT does not result in tax expense.
However, as discussed above, since our NOL was subject to a full valuation allowance, any liability for AMT is recorded as tax expense.
We also recorded $2 million of state income tax provision in 2006 related to certain states where NOL was not available to be used.
For the year ended December 31, 2005, we did not record an income tax benefit and recorded a full valuation allowance on any
future tax benefits generated during that period as we had yet to achieve several consecutive quarters of profitable results coupled with an
expectation of continued profitability.
The table below sets forth our selected mainline operating data. The 2005 full year operating statistics, which consist of 269 days of
AWA results and 96 days of consolidated US Airways Group results, do not provide a meaningful comparison and have been omitted.
Percent
Year Ended December 31, Change
2007 2006 2007-2006
Revenue passenger miles (millions)(a) 61,262 60,689 0.9
Available seat miles (millions)(b) 75,842 76,983 (1.5)
Load factor (percent)(c) 80.8 78.8 2.0 pts
Yield (cents)(d) 13.28 13.13 1.2
Passenger revenue per available seat mile (cents)(e) 10.73 10.35 3.7
Cost per available seat mile (cents)(f) 11.30 10.96 3.1
Passenger enplanements (thousands)(g) 57,871 57,345 0.9
Departures (thousands) 524.8 541.7 (3.1)
Aircraft at end of period 356 359 (0.8)
Block hours (thousands)(h) 1,343 1,365 (1.6)
Average stage length (miles)(i) 925 927 (0.3)
Average passenger journey (miles)(j) 1,489 1,478 0.7
Gallons of aircraft fuel consumed (millions) 1,195 1,210 (1.3)
Average aircraft fuel price including tax (dollars per gallon) 2.20 2.08 5.8
Full time equivalent employees (end of period) 34,437 34,077 1.1
(a) Revenue passenger mile ("RPM") — A basic measure of sales volume. A RPM represents one passenger flown one mile.
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