US Airways 2008 Annual Report Download - page 135

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
recognized as a result of the contribution of shares. The accompanying consolidated financial statements in this annual report on
Form 10-K are presented as though the transfer had occurred at the time of US Airways emergence from bankruptcy in September 2005.
The accompanying consolidated financial statements include the accounts of US Airways and its wholly owned subsidiaries. US
Airways Group has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are
recognized as intercompany transactions. In the accompanying consolidated statements of cash flows, these intercompany transactions
are designated as payables to related parties, net and are classified as operating or financing activities depending upon the nature of the
transaction. All significant intercompany accounts and transactions between US Airways and its wholly owned subsidiaries have been
eliminated.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. The principal areas of judgment relate to passenger revenue
recognition, impairment of goodwill, impairment of long-lived and intangible assets, valuation of investments in marketable securities,
the frequent traveler program and the deferred tax valuation allowance.
Certain prior year amounts have been reclassified to conform with the 2008 presentation.
(c) Cash and Cash Equivalents
Cash equivalents consist primarily of cash in money market securities and highly liquid debt instruments. All highly liquid
investments purchased within three months of maturity are classified as cash equivalents. Cash equivalents are stated at cost, which
approximates fair value due to the highly liquid nature and short-term maturities of the underlying securities.
As of December 31, 2008 and 2007, US Airways' cash and cash equivalents are as follows (in millions):
2008 2007
Cash and money market funds $ 1,016 $ 1,850
Corporate bonds 10 90
Total cash and cash equivalents $ 1,026 $ 1,940
(d) Investments in Marketable Securities
All highly liquid investments with maturities greater than three months but less than one year are classified as current investments in
marketable securities. Investments in marketable securities classified as noncurrent assets on US Airways' balance sheet represent
investments expected to be converted to cash after 12 months. Debt securities, other than auction rate securities, are classified as held to
maturity in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities." Held to maturity investments are carried at amortized cost, which approximates fair value. Investments in
auction rate securities are classified as available for sale and recorded at fair value.
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