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Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements
1. Basis of Presentation and Summary of Significant Accounting Policies
(a) Nature of Operations and Operating Environment
US Airways, Inc. ("US Airways") is a Delaware corporation whose primary business activity is the operation of a major network air
carrier. US Airways is a wholly owned subsidiary of US Airways Group, Inc. ("US Airways Group"), which owns all of US Airways'
outstanding common stock, par value $1 per share. The accompanying consolidated financial statements include the accounts of US
Airways and its wholly owned subsidiary, FTCHP LLC.
US Airways operates the fifth largest airline in the United States as measured by domestic revenue passenger miles ("RPMs") and
available seat miles ("ASMs"). US Airways has hubs in Charlotte, Philadelphia and Phoenix and a focus city in Washington, D.C. at
Ronald Reagan Washington National Airport ("Washington National"). US Airways offers scheduled passenger service on more than
3,200 flights daily to more than 200 communities in the United States, Canada, Mexico, Europe, the Middle East, the Caribbean, Central
and South America. US Airways also has an established East Coast route network, including the US Airways Shuttle service. US
Airways had approximately 52 million passengers boarding its mainline flights in 2010. During 2010, US Airways' mainline operation
provided regularly scheduled service or seasonal service at 132 airports, while the US Airways Express network served 155 airports in
the United States, Canada and Mexico, including 75 airports also served by the mainline operation. US Airways Express air carriers had
approximately 28 million passengers boarding their planes in 2010. As of December 31, 2010, US Airways operated 339 mainline jets
and is supported by US Airways Group's regional airline subsidiaries and affiliates operating as US Airways Express under capacity
purchase agreements, which operated 231 regional jets and 50 turboprops. US Airways' prorate carriers operated 10 turboprops and three
regional jets at December 31, 2010.
As of December 31, 2010, US Airways employed approximately 30,900 active full-time equivalent employees. Approximately 85% of
employees are covered by collective bargaining agreements with various labor unions. US Airways' pilots and flight attendants are
currently working under the terms of their respective US Airways or America West Airlines, Inc. ("AWA") collective bargaining
agreements, as modified by transition agreements reached in connection with the merger.
(b) Basis of Presentation
The accompanying consolidated financial statements include the accounts of US Airways and its wholly owned subsidiary. US
Airways Group has the ability to move funds freely between its operating subsidiaries to support operations. These transfers are
recognized as intercompany transactions. In the accompanying consolidated statements of cash flows, these intercompany transactions
are designated as payables to related parties, net and are classified as operating or financing activities depending upon the nature of the
transaction. All significant intercompany accounts and transactions between US Airways and its wholly owned subsidiary have been
eliminated.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires
management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses,
and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those
estimates. The principal areas of judgment relate to passenger revenue recognition, impairment of long-lived and intangible assets,
valuation of investments in marketable securities, the frequent traveler program and the deferred tax asset valuation allowance.
(c) Cash and Cash Equivalents
Cash equivalents consist of cash in money market securities and certificates of deposit. All highly liquid investments purchased within
three months of maturity are classified as cash equivalents. Cash equivalents are
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