US Airways 2009 Annual Report Download - page 147

Table of Contents
14. Valuation and Qualifying Accounts (in millions)
Balance at Balance
Beginning at End
Description of Period Additions Deductions of Period
Allowance for doubtful receivables:
Year ended December 31, 2009 $ 6 $ 7 $ 5 $ 8
Year ended December 31, 2008 $ 4 $ 10 $ 8 $ 6
Year ended December 31, 2007 $ 8 $ 9 $ 13 $ 4
Allowance for inventory obsolescence:
Year ended December 31, 2009 $ 48 $ 12 $ 2 $ 58
Year ended December 31, 2008 $ 38 $ 18 $ 8 $ 48
Year ended December 31, 2007 $ 29 $ 10 $ 1 $ 38
Valuation allowance on deferred tax asset, net:
Year ended December 31, 2009 $ 643 $ 29 $ 19 $ 653
Year ended December 31, 2008 $ 83 $ 560 $ — $ 643
Year ended December 31, 2007 $ 263 $ — $ 180 $ 83
15. Flight 1549
On January 15, 2009, US Airways flight 1549 was involved in an accident in New York that resulted in the aircraft ditching in the
Hudson River. The Airbus A320 aircraft was en route to Charlotte from LaGuardia with 150 passengers and a crew of five onboard. All
aboard survived and there were no serious injuries. US Airways had insurance coverage for both the aircraft (which was a total loss) as
well as costs resulting from the accident, and there were no applicable deductibles.
The aircraft involved in the flight 1549 accident was leased by US Airways. In the first quarter of 2009, US Airways exercised its
aircraft substitution right under the lease agreement and transferred title of an owned Airbus A320 to the lessor in substitution for the
Airbus A320 aircraft that was involved in the accident. This transferred aircraft will continue to be leased to US Airways under the same
terms and conditions of the lease agreement. In connection with this transaction, US Airways extinguished $22 million of debt associated
with the previously owned aircraft that was transferred to the lessor.
16. Slot Transaction
In August 2009, US Airways Group and US Airways entered into a mutual asset purchase and sale agreement with Delta Air Lines,
Inc. ("Delta"). Pursuant to the agreement, US Airways would transfer to Delta certain assets related to flight operations at LaGuardia
Airport in New York, including 125 pairs of slots currently used to provide US Airways Express service at LaGuardia. Delta would
transfer to US Airways certain assets related to flight operations at Washington National Airport, including 42 pairs of slots, and the
authority to serve Sao Paulo, Brazil and Tokyo, Japan. One slot equals one take-off or landing, and each pair of slots equals one roundtrip
flight. The agreement is structured as two simultaneous asset sales and is expected to be cash neutral to US Airways. The closing of the
transactions under the agreement is subject to certain closing conditions, including approvals from a number of government agencies,
including the U.S. Department of Justice, the U.S. Department of Transportation ("DOT"), the FAA and The Port Authority of New York
and New Jersey.
On February 9, 2010, the DOT issued a proposed order conditionally approving the transaction. The proposed order, which is subject
to a 30-day comment period, would require the airlines to divest 20 of the 125 slot pairs involved at LaGuardia and 14 of the 42 slot pairs
at Washington National. Delta and US Airways are currently reviewing the DOT's proposed order to determine next steps. However, US
Airways expects that if this order is implemented as proposed the transaction will not go forward.
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