US Airways 2007 Annual Report Download - page 79

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
exceeds the fair value of the reporting unit, then a second step must be performed in order to determine the implied fair value of the
goodwill and compare it to the carrying value of the goodwill. If the carrying value of goodwill exceeds its implied fair value, then an
impairment loss is recorded equal to the difference. The Company tested its goodwill for impairment during the fourth quarter of 2007, at
which time it concluded that fair value of the reporting units was in excess of the carrying value. The Company assessed the fair value of
the reporting units considering both the income approach and market approach. Under the market approach, the fair value of the reporting
units is based on quoted market prices for US Airways Group common stock and the number of shares outstanding of US Airways Group
common stock. Under the income approach, the fair value of the reporting unit is based on the present value of estimated future cash
flows.
Other intangible assets consist primarily of trademarks, international route authorities and airport take-off and landing slots and
airport gates. As of each of December 31, 2007 and 2006, the Company had $55 million of international route authorities on its balance
sheets. The carrying value of the trademarks was $30 million as of December 31, 2007 and 2006. International route authorities and
trademarks are classified as indefinite lived assets under SFAS 142. Indefinite lived assets are not amortized but instead are reviewed for
impairment annually and more frequently if events or circumstances indicate that the asset may be impaired. International route
authorities and trademarks were tested for impairment during the fourth quarter of 2007, at which time the Company concluded that no
impairment exists. The Company will perform its next annual impairment test on October 1, 2008.
SFAS 142 requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairments in accordance with SFAS 144. The following table provides information relating
to the Company's intangible assets subject to amortization as of December 31, 2007 and 2006 (in millions):
2007 2006
Airport take-off and landing slots $ 478 $ 454
Airport gate leasehold rights 52 52
Accumulated amortization (62) (37)
Total $ 468 $ 469
The intangible assets subject to amortization generally are amortized over 25 years for airport take-off and landing slots and over
the term of the lease for airport gate leasehold rights on a straight-line basis and are included in depreciation and amortization on the
statements of operations. For the years ended December 31, 2007, 2006 and 2005, the Company recorded amortization expense of
$25 million, $28 million and $8 million, respectively, related to its intangible assets. The Company expects to record annual amortization
expense of $26 million in 2008, $26 million in year 2009, $25 million in year 2010, $23 million in year 2011, and $21 million in year
2012 related to these intangible assets.
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