US Airways 2008 Annual Report Download - page 136

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
As of December 31, 2008 and 2007, US Airways' investments in marketable securities are classified as follows (in millions):
2008 2007
Held to maturity securities:
Corporate bonds $ 20 $ 125
U.S. government sponsored enterprises — 81
Certificates of deposit — 20
Total investments in marketable securities-current $ 20 $ 226
Available for sale securities:
Auction rate securities 187 353
Total investments in marketable securities-noncurrent $ 187 $ 353
See Note 5(b) for more information on US Airways' investments in marketable securities.
(e) Restricted Cash
Restricted cash includes deposits in trust accounts primarily to fund certain taxes and fees and workers' compensation claims,
deposits securing certain letters of credit and surety bonds and deposits held by institutions that process credit card sales transactions.
Restricted cash is stated at cost, which approximates fair value.
(f) Materials and Supplies, Net
Inventories of materials and supplies are valued at the lower of cost or fair value. Costs are determined using average costing
methods. An allowance for obsolescence is provided for flight equipment expendable and repairable parts. These items are generally
charged to expense when issued for use. During 2008, US Airways recorded a $5 million write down related to its Boeing 737 spare parts
inventory to reflect lower of cost or fair value. See Note 1(g) below for further discussion of the decline in value of Boeing 737 parts.
(g) Property and Equipment
Property and equipment are recorded at cost. Interest expense related to the acquisition of certain property and equipment is
capitalized as an additional cost of the asset or as a leasehold improvement if the asset is leased. Interest capitalized for the years ended
December 31, 2008, 2007 and 2006 was $6 million, $4 million and $2 million, respectively. Property and equipment is depreciated and
amortized to residual values over the estimated useful lives or the lease term, whichever is less, using the straight-line method. Costs of
major improvements that enhance the usefulness of the asset are capitalized and depreciated over the estimated useful life of the asset or
the modifications, whichever is less.
The estimated useful lives of owned aircraft, jet engines, flight equipment and rotable parts range from five to 30 years. Leasehold
improvements relating to flight equipment and other property on operating leases are amortized over the life of the lease or the life of the
asset, whichever is shorter, on a straight-line basis. The estimated useful lives for other owned property and equipment range from three
to 12 years and range from 18 to 30 years for training equipment and buildings.
US Airways records impairment losses on long-lived assets used in operations when events and circumstances indicate that the
assets might be impaired as defined by SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net
cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying
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