US Airways 2009 Annual Report Download - page 131

Table of Contents
Income tax expense (benefit) differs from amounts computed at the federal statutory income tax rate as follows (in millions):
Year Ended December 31,
2009 2008 2007
Income tax expense (benefit) at the federal statutory income tax rate $ (62) $ (752) $ 170
Book expenses not deductible for tax purposes 17 229 12
State income tax expense, net of federal income tax expense (benefit) (4) (38) 7
Change in valuation allowance 49 560 (180)
AMT provision (benefit) (14) 1 1
Allocation to other comprehensive income (21) — —
Long-lived intangibles (3) — —
Other, net — — (3)
Total $ (38) $ — $ 7
Effective tax rate (21.5)% —% 1.4%
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of
December 31, 2009 and 2008 are as follows (in millions):
2009 2008
Deferred tax assets:
Net operating loss carryforwards $ 748 $ 515
Property, plant and equipment 28 21
Investments 63 95
Financing transactions 41 25
Employee benefits 335 338
Dividend Miles awards 126 144
AMT credit carryforward 25 38
Other deferred tax assets 24 197
Valuation allowance (653) (643)
Net deferred tax assets 737 730
Deferred tax liabilities:
Depreciation and amortization 541 522
Sale and leaseback transactions and deferred rent 137 144
Leasing transactions 45 47
Long-lived intangibles 25 31
Other deferred tax liabilities 4 4
Total deferred tax liabilities 752 748
Net deferred tax liabilities 15 18
Less: current deferred tax liabilities — —
Non-current deferred tax liabilities $ 15 $ 18
The reason for significant differences between taxable and pre-tax book income primarily relates to depreciation on fixed assets,
employee pension and postretirement benefit costs, employee-related accruals and leasing transactions.
US Airways files tax returns in the U.S. federal jurisdiction, and in various states and foreign jurisdictions. All federal and state tax
filings for US Airways and AWA for fiscal years through December 31, 2008 have been timely filed. US Airways' federal income tax
year 2005 was closed by operation of the statute of limitations expiring, and there were no extensions filed. US Airways is not currently
under IRS examination. US Airways files tax returns in 44 states, and its major state tax jurisdictions are Arizona, California,
Pennsylvania and North Carolina. Tax years up to 2004 for these state tax jurisdictions are closed by operation of the statute of
limitations expiring. Extensions for two states have been filed.
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