US Airways 2005 Annual Report Download - page 147

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
As of December 31, 2005, obligations under capital and noncancelable operating leases for future minimum lease payments were as follows (in millions):
Capital Leases Operating Leases
2006 $ 5 $ 1,156
2007 5 1,054
2008 5 974
2009 5 872
2010 5 792
Thereafter 55 5,566
Total minimum lease payments 80 $ 10,414
Less sublease rental receipts —
Total minimum lease payments 80
Less amount representing interest (34)
Present value of future minimum capital lease payments 46
Less current obligations under capital leases (5)
Long-term obligations under capital leases $ 41
For the years ended December 31, 2005, 2004 and 2003, rental expense under operating leases, excluding landing fees, was $632 million, $421 million
and $407 million, respectively.
As discussed in Note 9, in January 2002, AWA closed a $429 million loan supported by a $380 million government loan guarantee from the ATSB that
resulted in a restructuring of its aircraft lease commitments. Under the restructured lease agreements, annual rent payments have been reduced through
January 2007. Certain of these leases contain put options pursuant to which the lessors could require AWA to renew the leases for periods ranging from eight
months to approximately nine years or call options pursuant to which the lessors could require AWA to return the aircraft to the lessors upon receipt of six to
nine months written notice. The Company also has options to purchase certain of the aircraft at fair market values at the end of the lease terms. Certain of the
agreements require security deposits, minimum return provisions and supplemental rent payments.
The following amounts related to capital leases are included in property and equipment as of December 31, 2005 and 2004 (in millions):
2005 2004
Ground property $ 32 $ 34
Less accumulated amortization (1) (3)
Total net book value of capital leases $ 31 $ 31
AWA and US Airways have set up pass through trusts, which have issued pass through trust certificates (also known as "Enhanced Equipment
Trust Certificates" or "EETCs") covering the leveraged lease financing of 54 AWA aircraft. On September 27, 2005, the Company acquired debt on 19
aircraft and assumed leases on 62 aircraft that were financed through US Airways' use of EETCs.
These trusts are off-balance sheet entities, the primary purpose of which is to finance the acquisition of aircraft. Rather than finance each aircraft
separately when such aircraft is purchased or delivered, these trusts allow the Company to raise the financing for several aircraft at one time and place such
funds in escrow pending the purchase or delivery of the relevant aircraft. The trusts are also structured to provide
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