US Airways 2008 Annual Report Download - page 90

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
The following table reflects the change in the carrying amount of goodwill from December 31, 2007 (in millions):
Goodwill
Balance at December 31, 2007 $ 622
Impairment charge (622)
Balance at December 31, 2008 $ —
Other intangible assets
Other intangible assets consist primarily of trademarks, international route authorities and airport take-off and landing slots and
airport gates.
SFAS No. 142 requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to
their estimated residual values, and reviewed for impairments in accordance with SFAS No. 144. The following table provides
information relating to the Company's intangible assets subject to amortization as of December 31, 2008 and 2007 (in millions):
2008 2007
Airport take-off and landing slots $ 495 $ 478
Airport gate leasehold rights 52 52
Accumulated amortization (87) (62)
Total $ 460 $ 468
The intangible assets subject to amortization generally are amortized over 25 years for airport take-off and landing slots and over
the term of the lease for airport gate leasehold rights on a straight-line basis and are included in depreciation and amortization on the
consolidated statements of operations. For the years ended December 31, 2008, 2007 and 2006, the Company recorded amortization
expense of $25 million, $25 million and $28 million, respectively, related to its intangible assets. The Company expects to record annual
amortization expense of $26 million in 2009, $26 million in year 2010, $23 million in year 2011, $22 million in year 2012, $22 million in
year 2013 and $341 million thereafter related to these intangible assets.
Under SFAS No. 142, indefinite lived assets are not amortized but instead are reviewed for impairment annually and more
frequently if events or circumstances indicate that the asset may be impaired. As of December 31, 2008 and 2007, the Company had
$55 million of international route authorities and $30 million of trademarks on its balance sheets, which are classified as indefinite lived
assets.
In connection with completing step two of the Company's goodwill impairment analysis in the second quarter of 2008, the
Company assessed the fair values of its significant intangible assets. The Company considered the potential impairment of these other
intangible assets in accordance with SFAS No. 142 and SFAS No. 144, as applicable. The fair values of airport take-off and landing slots
and international route authorities were assessed using the market approach. The market approach took into consideration relevant supply
and demand factors at the related airport locations as well as available market sale and lease data. For trademarks, the Company utilized a
form of the income approach known as the relief-from-royalty method. As a result of these assessments, no impairment was indicated.
In addition, the Company performed the annual impairment test on its international route authorities and trademarks during the
fourth quarter of 2008, at which time it concluded that no impairment exists. The Company will perform its next annual impairment test
on October 1, 2009.
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