US Airways 2007 Annual Report Download - page 84

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
(r) Express Expenses
Expenses associated with US Airways' former MidAtlantic division, US Airways Group's wholly owned regional airlines and
affiliate regional airlines operating as US Airways Express have been classified as Express expenses on the consolidated statements of
operations. Effective May 27, 2006, the transfer of certain MidAtlantic assets to Republic was complete, and Republic assumed the
operations of the aircraft as a US Airways affiliate Express carrier. Express expenses on the consolidated statements of operations consist
of the following (in millions):
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2007 2006 2005
Aircraft fuel and related taxes $ 765 $ 764 $ 327
Salaries and related costs 245 266 67
Capacity purchases 987 972 459
Other rent and landing fees 112 117 41
Aircraft rent 51 59 22
Selling expenses 157 148 57
Aircraft maintenance 76 71 16
Depreciation and amortization 23 24 7
Other expenses 178 138 77
Express expenses $ 2,594 $ 2,559 $ 1,073
(s) Variable Interest Entities
The Company determined that certain entities with which the Company has capacity purchase agreements are considered variable
interest entities under Financial Accounting Standards Board ("FASB") Interpretation No. 46 "Consolidation of Variable Interest
Entities," as revised ("FIN 46(R)"). The Company has determined that it is not the primary beneficiary of any of these variable interest
entities and, accordingly, does not consolidate any of the entities with which it has jet service agreements. See Note 10(d) for further
discussion.
(t) Recent Accounting Pronouncements
In June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109" ("FIN 48"), which clarifies the accounting for uncertainty in income taxes recognized in a company's financial
statements. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted the
provisions of FIN 48 on January 1, 2007. The implementation of FIN 48 did not have a material impact on the Company's consolidated
financial statements.
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This standard defines fair value, establishes a
framework for measuring fair value in accounting principles generally accepted in the United States of America, and expands disclosure
about fair value measurements. This pronouncement applies to other accounting standards that require or permit fair value measurements.
Accordingly, this statement does not require any new fair value measurement. This statement is effective for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. In December of 2007, the FASB agreed to a one year deferral of
SFAS No. 157's fair value measurement requirements for nonfinancial assets and liabilities that are not required or permitted to be
measured at fair value on a recurring basis. Management is currently evaluating the requirements of SFAS No. 157, but does not expect it
to have a material impact on the Company's 2008 consolidated financial statements.
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