US Airways 2005 Annual Report Download - page 195

Table of Contents
America West Airlines, Inc.
Notes to Consolidated Financial Statements — (Continued)
such aircraft is purchased or delivered, these trusts allow AWA 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 for certain credit enhancements, such as liquidity facilities to cover
certain interest payments, that reduce the risks to the purchasers of the trust certificates and, as a result, reduce the cost of aircraft financings to AWA.
Each trust covered a set amount of aircraft scheduled to be delivered within a specific period of time. At the time of each covered aircraft financing, the
relevant trust used the funds in escrow to purchase equipment notes relating to the financed aircraft. The equipment notes were issued, at AWA's election,
either by AWA in connection with a mortgage financing of the aircraft or by a separate owner trust in connection with a leveraged lease financing of the
aircraft. In the case of a leveraged lease financing, the owner trust then leased the aircraft to AWA. In both cases, the equipment notes are secured by a
security interest in the aircraft. The pass through trust certificates are not direct obligations of, nor are they guaranteed by AWA. However, in the case of
mortgage financings, the equipment notes issued to the trusts are direct obligations of AWA and in the case of leveraged lease financings, the leases are direct
obligations of AWA. In addition, AWA does not guarantee or participate in any way in the residual value of the leased aircraft. All aircraft financed by these
trusts are currently structured as leveraged lease financings, which are not reflected as debt on the balance sheet of AWA. AWA does not provide residual
value guarantees under these lease arrangements. Each lease contains a purchase option that allows AWA to purchase the aircraft at a fixed price, which at the
inception of the lease approximated the aircraft's expected fair market value at the option date, near the end of the lease term. These leasing entities meet the
criteria for variable interest entities. However, they do not meet the consolidation criteria under FASB Interpretation No. 46, "Consolidation of Variable
Interest Entities," because AWA is not the primary beneficiary under these arrangements.
In May 2005, one aircraft lessor exercised its put rights under the aircraft lease agreement to extend the leases on two Boeing 737-300 aircraft for an
additional 14 and 15 months, respectively.
In July 2005, one aircraft lessor exercised its put rights under the aircraft lease agreement to extend the lease on one Boeing 737-300 aircraft for an
additional 14 months.
In November 2005, one aircraft lessor exercised its put rights under the aircraft lease agreements to extend the lease terms on to Boeing 737-300 aircraft
for an additional 10 and 14 months, respectively.
AWA also leases certain terminal space, ground facilities and computer and other equipment under noncancelable operating leases.
At December 31, 2005, the scheduled future minimum cash rental payments under noncancelable operating leases with initial terms of more than one year
are as follows (in millions):
Operating
Years Ending December 31, Leases
2006 $ 384
2007 360
2008 309
2009 271
2010 243
Thereafter 1,629
Total minimum lease payments $ 3,196
Rent expense (excluding landing fees) was approximately $449 million, $421 million and $407 million for the years ended December 31, 2005, 2004 and
2003 respectively. 189