US Airways 2011 Annual Report Download - page 75

Table of Contents
As of December 31, 2011 and 2010, we had $196 million and $178 million, respectively, in deferred revenue from the sale of mileage credits included
in other accrued expenses on the consolidated balance sheets. For the years ended December 31, 2011, 2010 and 2009, the marketing component of mileage
sales recognized at the time of sale in other revenues was approximately $133 million, $144 million and $112 million, respectively.
A change to the estimated fair value of the transportation component could have a significant impact on revenue. A 10% increase or decrease in the
estimated fair value of the transportation component would have a $13 million impact on revenue recognized in 2011.
The number of travel award redemptions during the year ended December 31, 2011 was approximately 0.8 million, representing approximately 4% of
US Airways' total mainline and Express RPMs during that period. The use of inventory management techniques minimizes the displacement of revenue
passengers by passengers traveling on award tickets.
We adopted Accounting Standards Update ("ASU") No. 2009-13, "Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements,"
on January 1, 2011, and its application has had no material impact on our consolidated financial statements. Refer to the "Recent Accounting
Pronouncements" section below for more information.
Deferred Tax Asset Valuation Allowance
At December 31, 2011, US Airways Group has a full valuation allowance against its net deferred tax assets. In assessing the realizability of the deferred
tax assets, we considered whether it was more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which those
temporary differences will become deductible.
Recent Accounting Pronouncements
In October 2009, the Financial Accounting Standards Board ("FASB") issued ASU No. 2009-13, "Revenue Recognition (Topic 605) — Multiple-
Deliverable Revenue Arrangements." ASU No. 2009-13 addresses the accounting for multiple-deliverable arrangements to enable vendors to account for
products or services (deliverables) separately rather than as a combined unit. This guidance establishes a selling price hierarchy for determining the selling
price of a deliverable, which is based on: (a) vendor-specific objective evidence; (b) third-party evidence; or (c) estimates. This guidance also eliminates the
residual method of allocation and requires that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative
selling price method. In addition, this guidance significantly expands required disclosures related to a vendor's multiple-deliverable revenue arrangements.
Our multiple-deliverable revenue arrangements consist principally of sales of frequent flyer program mileage credits to business partners, which are
comprised of two components, transportation and marketing. Refer to the "Critical Accounting Policies and Estimates" section above for more information on
our frequent traveler program. We were required to adopt and apply ASU No. 2009-13 to any new or materially modified multiple-deliverable revenue
arrangements entered into on or after January 1, 2011. We adopted ASU No. 2009-13 on January 1, 2011, and its application has had no material impact on
our consolidated financial statements. As of December 31, 2011, we had not materially modified any of our significant multiple-deliverable revenue
arrangements.
In May 2011, the FASB issued ASU No. 2011-4, "Fair Value Measurement (Topic 820) — Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs." This ASU represents the converged guidance of the FASB and the International Accounting
Standards Board on fair value measurement. The guidance clarifies how a principal market is determined, addresses the fair value measurement of instruments
with offsetting market or counterparty credit risks, addresses the concept of valuation premise and highest and best use, extends the prohibition on blockage
factors to all three levels of the fair value hierarchy and requires additional disclosures. ASU No. 2011-4 is effective for interim and annual periods beginning
after December 15, 2011 and is applied prospectively. We do not expect the adoption of ASU No. 2011-4 to have a material impact on our consolidated
financial statements.
In June 2011, the FASB issued ASU No. 2011-5, "Presentation of Comprehensive Income." This ASU eliminates the current option to report other
comprehensive income and its components in the statement of changes in equity. Upon adoption, other comprehensive income must be presented either in a
single continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-5 is effective for fiscal years, and interim
periods within those years, beginning after December 15, 2011 and must be applied retrospectively. ASU No. 2011-5 will not have a material effect on our
financial position or results of operations, but will change our disclosures related to other comprehensive income.
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