US Airways 2008 Annual Report Download - page 149

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
this was acquired NOL, the decrease in the valuation allowance associated with this NOL reduced goodwill instead of the provision for
income taxes.
US Airways is subject to Alternative Minimum Tax liability ("AMT"). In most cases, the recognition of AMT does not result in tax
expense. However, since US Airways' net deferred tax asset is subject to a full valuation allowance, any liability for AMT is recorded as
tax expense. US Airways recorded AMT expense of $1 million and $10 million for the years ended December 31, 2007 and 2006,
respectively. US Airways also recorded $1 million and $2 million of state income tax related to certain states where NOL was not
available or limited, for the years ended December 31, 2007 and 2006, respectively.
The components of the provision for income taxes are as follows (in millions):
Year Ended December 31,
2008 2007 2006
Current provision:
Federal $ 1 $ 1 $ 10
State — 1 2
Total current 1 2 12
Deferred provision:
Federal — (1) 77
State (1) 6 9
Total deferred (1) 5 86
Provision for income taxes $ — $ 7 $ 98
Income tax expense (benefit) differs from amounts computed at the federal statutory income tax rate as follows (in millions):
Year Ended December 31,
2008 2007 2006
Income tax expense (benefit) at the federal statutory income tax rate $ (752) $ 170 $ 155
Book expenses not deductible for tax purposes 229 12 (5)
State income tax expense, net of federal income tax expense (benefit) (38) 7 10
Change in valuation allowance 560 (180) (73)
AMT provision 1 1 10
Other, net — (3) 1
Total $ — $ 7 $ 98
Effective tax rate —% 1.4% 22.1%
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