US Airways 2005 Annual Report Download - page 84

Table of Contents
initial term, the amended card processing agreement will automatically renew for successive one-year periods pursuant to the terms of the agreement.
Under the amended card processing agreement, AWA will pay to Chase fees in connection with card processing services such as sales authorization,
settlement services and customer service. AWA and US Airways will also be required to maintain a reserve account to secure Chase's exposure to outstanding
air traffic liability. As of December 31, 2005, $543 million in cash collateral is classified as restricted cash on US Airways Group's consolidated balance sheet
to secure credit card sales under its various processing agreements.
Asset Based Financings and Sales
In addition to the sale-leaseback transactions completed in June 2005 related to the GE Merger MOU described above, US Airways also executed flight
equipment asset sale and sale-leaseback transactions in the third and fourth quarters of 2005. While transactions completed prior to the merger date by
US Airways are not reflected in the US Airways Group financial statements as a result of accounting for the merger as a reverse acquisition, these transactions
provided additional liquidity and reductions to debt for US Airways Group. US Airways received net proceeds of $209 million and a reduction in aircraft
related debt of $561 million. Additionally during the third quarter, US Airways received net proceeds of $51 million in connection with an agreement to sell
and leaseback certain of its commuter slots at Ronald Reagan Washington National Airport and New York LaGuardia Airport. US Airways was required to
use proceeds totaling $156 million to pay down the US Airways ATSB Loan.
For 2005, AWA executed flight equipment asset sale and leaseback transactions resulting in net proceeds of $23 million and a reduction in aircraft related
debt of $38 million.
Airbus Purchase Commitments
On September 27, 2005, US Airways Group, US Airways and AWA entered into an Airbus A350 Purchase Agreement with Airbus. This agreement
provides for the delivery of 20 A350 aircraft during the period 2011 through 2014. The agreement contains terms and conditions with respect to aircraft price,
escalation, payment terms and pre-delivery payments, inspection and certification, technical acceptance, excusable and inexcusable delays, warranties and
service life policy, patent and copyright indemnity, technical data and training aids, training, supplier product support, indemnities and insurance, assignments
and transfers, and termination events. Airbus also agreed to provide backstop financing with respect to a substantial number of these A350 aircraft.
On September 27, 2005, US Airways Group entered into Amendment 16 to the A319/ A320/ A321 Purchase Agreement dated as of October 31, 1997
among US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of 19 firm order A320-family aircraft for delivery during the
period 2009 and 2010. The amendment also modifies other provisions of the Purchase Agreement relating to the deletion of certain aircraft cancellation rights
and the rescheduling of aircraft.
On September 27, 2005, US Airways Group entered into Amendment 10 to the A330/340 Purchase Agreement dated as of November 24, 1998 among
US Airways Group and AVSA, S.A.R.L. The amendment provides for the rescheduling of ten firm order A330-200 aircraft for delivery during the period
2009 and 2010 and allows for cancellation in the event that US Airways takes certain deliveries under the A350 Purchase Agreement described above. Other
provisions of the Purchase Agreement which have been modified by the amendment relate to the application of existing pre-delivery payments, adjustments to
various cancellation rights and the cancellation of the right for additional A330 aircraft.
On September 27, 2005, AWA entered into Amendment No. 9 and Amendment No. 10 to the Airbus A320/ A319 Purchase Agreement dated as of
September 12, 1997 between AWA and AVSA, S.A.R.L. Amendment No. 9 provides for the rescheduling of 11 firm order A320 family aircraft for delivery
during 2009. Amendment No. 10 sets forth provisions for restructuring fees and adjustments to escalation provisions and added purchase rights for aircraft.
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