US Airways 2008 Annual Report Download - page 142

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
(q) Stock-based Compensation
US Airways accounts for its stock-based compensation plans in accordance with SFAS No. 123(R), "Share-Based Payment."
Compensation expense is based on the fair value of the stock award at the time of grant and is recognized ratably over the respective
vesting period of the stock award. The fair value of stock options and stock appreciation rights is estimated using a Black-Scholes option
pricing model. The fair value of restricted stock units is based on the market price of the underlying shares of common stock on the date
of grant. See Note 13 for further discussion of stock-based compensation.
(r) Express Expenses
Expenses associated with US Airways Group's wholly owned regional airlines, affiliate regional airlines operating as US Airways
Express and US Airways' former MidAtlantic division are 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 consist of the following (in millions):
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
2008 2007 2006
Aircraft fuel and related taxes $ 1,137 $ 765 $ 764
Salaries and related costs 21 20 36
Capacity purchases 1,621 1,599 1,551
Aircraft rent — — 9
Aircraft maintenance — — 2
Other rent and landing fees 96 93 97
Selling expenses 163 157 148
Other expenses 101 93 63
Express expenses $ 3,139 $ 2,727 $ 2,670
(s) Variable Interest Entities
US Airways determined that certain entities with which US Airways has capacity purchase agreements are considered variable
interest entities under Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46(R), "Consolidation of Variable
Interest Entities — An Interpretation of ARB No. 51." US Airways 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 8(d)
for further discussion.
(t) Recent Accounting Pronouncements
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. As such, US Airways did not apply the fair value measurement requirements of
SFAS No. 157 for nonfinancial assets and liabilities when performing its goodwill and other assets impairment test as discussed in
Note 1(i). US Airways adopted SFAS No. 157 on January 1, 2008,
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