US Airways 2005 Annual Report Download - page 194

Table of Contents
America West Airlines, Inc.
Notes to Consolidated Financial Statements — (Continued)
by Juniper in connection with the co-branded credit card program and have not been repurchased by US Airways Group. US Airways Group will be
required to repurchase pre-purchased miles under certain reductions in the collateral held under the credit card processing agreement with JP Morgan
Chase Bank, N.A. Accordingly, the prepayment has been recorded as additional indebtedness.
Juniper requires US Airways Group to maintain an average quarterly balance of cash, cash equivalents and short-term investments of at least $1 billion
for the entirety of the agreement. Further, the agreement requires US Airways Group to maintain certain financial ratios beginning January 1, 2006.
Juniper may, at its option, terminate the amended credit card agreement, make payments to US Airways Group under the amended credit card
agreement in the form of pre-purchased miles rather than cash, or require US Airways Group to repurchase the pre-purchased miles before the fifth year
prior to the expiration date of the co-branded credit card agreement with Juniper in the event that US Airways Group breaches its obligations under the
amended credit card agreement, or upon the occurrence of certain events.
At December 31, 2005, the estimated maturities of long-term debt are as follows (in millions):
2006 94
2007 117
2008 252
2009 310
2010 250
Thereafter 29
$ 1,052
Certain of AWA's long-term debt agreements contain minimum cash balance requirements and other covenants with which AWA is in compliance at
December 31, 2005. Certain of these covenants restrict AWA's ability to pay cash dividends on its common stock and make certain other restricted payments
(as specified therein). Finally, AWA's long-term debt agreements contain cross-default provisions, which may be triggered by defaults by AWA under other
agreements relating to indebtedness.
9. Commitments and Contingencies
(a) Leases
As of December 31, 2005, AWA had 141 aircraft under operating leases, excluding two aircraft that will be delivered in 2006, with remaining terms
ranging from one month to approximately 19 years. As discussed in Note 8, in January 2002, AWA closed a $429 million loan supported by a $380 million
government loan guarantee 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 advance written notice. AWA 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.
Since AWA's restructuring in 1994, AWA has set up 19 pass through trusts, which have issued over $1.4 billion of pass through trust certificates (also
known as "Enhanced Equipment Trust Certificates" or "EETCs") covering the financing of 54 aircraft. 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
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