US Airways 2006 Annual Report Download - page 157

Table of Contents
America West Airlines, Inc.
Notes to Consolidated Financial Statements — (Continued)
be delivered several years beyond the originally scheduled delivery dates. US Airways Group is currently evaluating the revised technical
and commercial aspects of the A350 program.
The future commitments under the purchase agreement with AWA and Airbus totals $1.56 billion as of December 31, 2006.
Engine Purchase Commitments
AWA has an agreement with International Aero Engines which provides for the purchase by AWA of five new V2500-A5 spare
engines scheduled for delivery through 2010 for use on certain of the Airbus A320 fleet the total engine purchase commitment was
$42 million at December 31, 2006.
Engine Maintenance Commitments
In connection with the merger, US Airways and AWA restructured their rate per engine hour agreements with General Electric
Engine Services for overhaul maintenance services. Under the restructured agreements, the minimum monthly payment on account of
accrued engine flight hours for both the US Airways and AWA agreements together will equal $3 million as long as both agreements
remain in effect or through October 2009.
(b) Leases
AWA leases certain aircraft, engines, and ground equipment, in addition to the majority of its ground facilities and terminal space.
As of December 31, 2006, AWA had 133 aircraft under operating leases, with remaining terms ranging from one month to approximately
17 years. Ground facilities include executive offices, maintenance facilities and ticket and administrative offices. Public airports are
utilized for flight operations under lease arrangements with the municipalities or agencies owning or controlling such airports.
Substantially all leases provide that the lessee must pay taxes, maintenance, insurance and certain other operating expenses applicable to
the leased property. Some leases also include renewal and purchase options.
At December 31, 2006, the scheduled future minimum cash rental payments under noncancelable operating leases with initial terms
of more than one year are as follows (in millions):
2007 $ 441
2008 387
2009 340
2010 298
2011 250
Thereafter 1,637
Total minimum lease payments $ 3,353
Rent expense (excluding landing fees) was approximately $461 million, $449 million and $421 million for the years ended
December 31, 2006, 2005 and 2004 respectively.
Collectively, the operating lease agreements require security deposits with lessors of $35 million, which have been classified as
other assets, net in the accompanying balance sheets, and bank letters of credit of $31 million.
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
up 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
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