US Airways 2006 Annual Report Download - page 205

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
(b) Leases
US Airways leases certain aircraft, engines and ground equipment, in addition to the majority of its ground facilities and terminal
space. As of December 31, 2006, US Airways had 221 aircraft under operating leases, with remaining terms ranging from one month to
approximately 17 years. Ground facilities include 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.
As of December 31, 2006, obligations under noncancelable operating leases for future minimum lease payments were as follows (in
millions):
2007 $ 625
2008 598
2009 530
2010 488
2011 471
Thereafter 3,067
Total minimum lease payments 5,779
Less sublease rental receipts (1,006)
Total minimum lease payments $ 4,773
For the year ended December 31, 2006, the three months ended December 31, 2005, the nine months ended September 30, 2005,
and the year ended December 31, 2004, rental expense under operating leases was $775 million, $180 million, $532 million, and
$758 million, respectively.
US Airways also leases certain owned flight equipment to related parties (see Note 10(b)) under noncancelable operating leases
expiring in various years through the year 2022. The future minimum rental receipts associated with these leases are: $78 million in 2007,
$78 million in 2008, $78 million 2009, $78 million in 2010, $78 million in 2011 and $616 million thereafter. The following amounts
relate to aircraft leased under such agreements as reflected in flight equipment as of December 31, 2006 and 2005 (in millions):
2006 2005
Flight equipment $ 283 $ 283
Less accumulated amortization (12) (3)
$ 271 $ 280
US Airways has set up pass through trusts, also known as "Enhanced Equipment Trust Certificates" or "EETC", covering the
financing of 19 owned aircraft and 62 leased 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 such aircraft is purchased or delivered, these trusts
allow US Airways 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
financing to US Airways.
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 US Airways' election, either by US Airways in
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