US Airways 2008 Annual Report Download - page 115

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
In 2008, US Airways executed purchase agreements for the purchase of eight new IAE V2500-A5 spare engines scheduled for
delivery through 2014 for use on the Airbus A320 family fleet, three new Trent 700 spare engines scheduled for delivery through 2011
for use on the Airbus A330-200 fleet and three new Trent XWB spare engines scheduled for delivery in 2015 through 2017 for use on the
Airbus A350 XWB aircraft.
Under all of the Company's aircraft and engine purchase agreements, the Company's total future commitments as of December 31,
2008 are expected to be approximately $6.83 billion through 2018 as follows: $1.31 billion in 2009, $1.34 billion in 2010, $1.29 billion
in 2011, $768 million in 2012, $36 million in 2013 and $2.09 billion thereafter, which includes predelivery deposits and payments. The
Company expects to fund these payments through future financings.
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 of the agreements together will equal $3 million as long as both agreements remain in effect through
October 2009. In September 2007, all engines covered under the AWA agreement were transferred to the US Airways agreement, and the
AWA agreement was terminated. The minimum monthly payment of $3 million remains unchanged.
(b) Leases
The Company leases certain aircraft, engines, and ground equipment, in addition to the majority of its ground facilities and terminal
space. As of December 31, 2008, the Company had 343 aircraft under operating leases, with remaining terms ranging from one month to
approximately 15 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.
As of December 31, 2008, obligations under noncancellable operating leases for future minimum lease payments were as follows
(in millions):
2009 $ 1,075
2010 976
2011 851
2012 770
2013 629
Thereafter 3,227
Total minimum lease payments $ 7,528
For the years ended December 31, 2008, 2007 and 2006, rental expense under operating leases was $1.33 billion, $1.29 billion and
$1.29 billion, respectively.
(c) Off-balance Sheet Arrangements
US Airways has obligations with respect to pass through trust certificates, or EETCs, issued by pass through trusts to cover the
financing of 19 owned aircraft, 116 leased aircraft and three leased engines. 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 allowed 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
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