US Airways 2009 Annual Report Download - page 81

Table of Contents
The estimated useful lives of owned aircraft, jet engines, other flight equipment and rotable parts range from five to 30 years.
Leasehold improvements relating to flight equipment and other property on operating leases are amortized over the life of the lease or the
life of the asset, whichever is shorter, on a straight-line basis. The estimated useful lives for other owned property and equipment range
from three to 12 years and range from 18 to 30 years for training equipment and buildings.
The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets
might be impaired. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to
undiscounted future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to
be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying amount or fair value less cost to sell.
The Company recorded a $13 million impairment charge in 2008 related to the decline in the fair value of Boeing 737 rotable parts
included in flight equipment on its consolidated balance sheet. The Company recorded no impairment charges in the years ended
December 31, 2009 and 2007.
(h) Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. A valuation allowance is established, if necessary, for the amount of
any tax benefits that, based on available evidence, are not expected to be realized.
(i) Goodwill and Other Intangibles, Net
Goodwill
In 2008, the Company recorded a $622 million impairment charge to write off all the goodwill created by the merger of US Airways
Group and America West Holdings in September 2005. The Company performed an interim goodwill impairment test during 2008 as a
result of a significant increase in fuel prices, declines in the Company's stock price and mainline capacity reductions, which led to no
implied fair value of goodwill.
Other intangible assets
Other intangible assets consist primarily of trademarks, international route authorities, airport take-off and landing slots and airport
gates. Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual
values and reviewed for impairment whenever events or changes in circumstances indicate that the carrying value may not be
recoverable. The following table provides information relating to the Company's intangible assets subject to amortization as of
December 31, 2009 and 2008 (in millions):
2009 2008
Airport take-off and landing slots $ 495 $ 495
Airport gate leasehold rights 52 52
Accumulated amortization (113) (87)
Total $ 434 $ 460
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, 2009, 2008 and 2007, the Company recorded amortization
expense of $26 million, $25 million and $25 million, respectively, related to its intangible assets. The Company expects to record annual
amortization expense of $26 million in 2010, $23 million in year 2011, $22 million in year 2012, $22 million in year 2013, $22 million in
year 2014 and $319 million thereafter related to these intangible assets.
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