US Airways 2006 Annual Report Download - page 65

Table of Contents
Asset Based Financings
On March 31, 2006, US Airways entered into a loan agreement with Landesbank Baden-Württemberg ("LBBW") as Loan
Participant and Arranger, Wells Fargo Bank Northwest, National Association, as Security Trustee, and US Airways Group, as guarantor,
in the amount of $48 million. The LBBW loan bears interest at a rate of LIBOR plus a margin, subject to adjustment, with $46.5 million
of the loan amortizing over ten years and $1.5 million of the loan amortizing over three quarterly installments on the first three interest
payment dates. The LBBW loan is secured by three Boeing 757 aircraft that we purchased in February 2006.
On October 18, 2006, US Airways entered into a facility agreement with The Royal Bank of Scotland, PLC ("RBS") as Lender and
Arranger, Wells Fargo Bank Northwest, National Association, as Indenture Trustee, and AWA, as guarantor, in the total aggregate
amount of $242 million to finance the acquisition of eleven Embraer 190 aircraft. The RBS loan bears interest at a rate of LIBOR plus a
margin, and is amortized over twelve years with a balloon payment at maturity. As of December 31, 2006, $44 million of the RBS loan is
outstanding and secured by two Embraer 190 aircraft that we purchased in December 2006.
Embraer Purchase Commitments
On June 13, 2006, we and Embraer executed an Amended and Restated Purchase Agreement and an Amended and Restated Letter
Agreement. In accordance with the terms of these agreements, we placed an initial firm order for 25 Embraer 190 aircraft and an
additional firm order for 32 Embraer 190 aircraft. The progress and deposit payments totaling approximately $18 million previously paid
by us to Embraer in accordance with the terms of the Purchase Agreement dated as of May 9, 2003, will be applied to these orders in
accordance with the terms of the amended and restated agreements. In addition, we have the option to purchase up to 50 additional
Embraer 190 aircraft and to convert certain of the Embraer 190 aircraft to Embraer 170, Embraer 175 or Embraer 195 aircraft, subject to
availability and upon agreed notice. Embraer has agreed to provide financing for certain of the aircraft. On July 21, 2006, we assigned 30
of the purchase options to Republic Airline Inc. On January 12, 2007, we assigned eight additional purchase options to Republic Airline.
We purchased and took delivery of two Embraer 190 aircraft in December 2006. We expect to take delivery of nine Embraer 190 aircraft
in 2007 and fourteen 190 aircraft in 2008.
Bombardier Purchase Commitments
On December 14, 2006, the Bankruptcy Court approved a Global Settlement Letter between US Airways Group and Bombardier
Inc. which had been executed by the parties on November 10, 2006. The Global Settlement Letter amends the master purchase agreement
dated as of May 9, 2003, as amended, between US Airways Group and Bombardier. The Bankruptcy Court authorized the assumption of
the master purchase agreement, as modified and amended by the Global Settlement Letter. The parties agreed to modify and amend the
master purchase agreement to terminate all obligations of US Airways Group to purchase and take delivery of 42 firm aircraft remaining
undelivered under the agreement, as well as the rights of US Airways Group to purchase and take delivery of 90 additional aircraft and
options to take 94 aircraft in the future. All obligations of Bombardier to manufacture and deliver these aircraft were also terminated. The
master purchase agreement was amended to provide US Airways Group with the right to purchase Bombardier CRJ 200/700/900 series
aircraft from time to time during a period of five years. The Global Settlement Letter further provides that all pre-delivery payments held
by Bombardier be returned to US Airways Group. Under the Global Settlement Letter, all claims of Bombardier asserted against
US Airways Group and its subsidiaries in the Chapter 11 cases were resolved and Bombardier was granted a total aggregate allowed
general unsecured claim in the amount of $148 million. As a result of the settlement, we recorded an $11 million gain reflected in special
items, net on the 2006 statements of operations. The effects of distributions for general unsecured claims were reflected in US Airways'
financial statements upon emergence and will not have any further impact on the results of operations.
Airbus Purchase Commitments
In August 2006, AWA amended its A320/A319 Purchase Agreement with Airbus to add seven new Airbus A321s to an existing
order for thirty A320 family aircraft. The amendment also converted one A320 aircraft
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