US Airways 2010 Annual Report Download - page 141

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Table of Contents
stock options was granted on January 31, 2006 with an exercise price of $33.65. The second tranche of 0.3 million stock options was
granted on January 31, 2007 with an exercise price of $56.90. The third and final tranche of 0.3 million stock options was granted on
January 31, 2008 with an exercise price of $12.50. The stock options granted to pilots do not reduce the shares available for grant under
any equity incentive plan. Any of these pilot stock options that are forfeited or that expire without being exercised will not become
available for grant under any of US Airways' plans.
The per share fair value of the pilot stock options and assumptions used for the January 31, 2008 grant was as follows:
January 31,
2008
Per share fair value $ 3.02
Risk free interest rate 2.2%
Expected dividend yield —
Expected life 2.0 years
Volatility 55%
As of December 31, 2010, there were no unrecognized compensation costs related to stock options granted to pilots as the stock
options were fully vested on the grant date. As of December 31, 2010, there were 0.8 million pilot stock options outstanding at a
weighted average exercise price of $34.48 and a weighted average remaining contractual term of 1.27 years. No pilot stock options were
exercised in 2010, 2009 or 2008.
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, 2010 $ 8 $ 4 $ 3 $ 9
Year ended December 31, 2009 $ 6 $ 7 $ 5 $ 8
Year ended December 31, 2008 $ 4 $ 10 $ 8 $ 6
Allowance for inventory obsolescence:
Year ended December 31, 2010 $ 58 $ 18 $ 2 $ 74
Year ended December 31, 2009 $ 48 $ 12 $ 2 $ 58
Year ended December 31, 2008 $ 38 $ 18 $ 8 $ 48
Valuation allowance on deferred tax asset, net:
Year ended December 31, 2010 $ 653 $ — $ 203 $ 450
Year ended December 31, 2009 $ 643 $ 29 $ 19 $ 653
Year ended December 31, 2008 $ 83 $ 560 $ — $ 643
15. Slot Transaction
In August 2009, US Airways Group and US Airways entered into a mutual asset purchase and sale agreement with Delta Airlines, Inc.
("Delta"). Pursuant to the agreement, US Airways would transfer to Delta certain assets related to flight operations at LaGuardia Airport
in New York ("LaGuardia"), 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, including 42 pairs of slots, and the
authority to serve Sao Paulo, Brazil and Tokyo, Japan. The closing of the transactions under the agreement is subject to certain closing
conditions, including approvals from a number of government agencies. In a final decision dated May 4, 2010, the Federal Aviation
Administration ("FAA") rejected an alternative transaction proposed by Delta and US Airways. On July 2, 2010, US Airways and Delta
jointly filed with the United States Circuit Court of Appeals for the District of Columbia Circuit a notice of appeal of the regulatory
action taken by the FAA with respect to this transaction. US Airways is presently in discussions with Delta and the relevant government
agencies regarding a possible
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