US Airways 2008 Annual Report Download - page 158

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
As of December 31, 2008, obligations under noncancellable operating leases for future minimum lease payments were as follows
(in millions):
2009 $ 1,065
2010 974
2011 850
2012 769
2013 628
Thereafter 3,227
Total minimum lease payments 7,513
Less sublease rental receipts (860)
Total minimum lease payments $ 6,653
For the years ended December 31, 2008, 2007 and 2006, rental expense under operating leases was $1.32 billion, $1.28 billion and
$1.28 billion, respectively.
US Airways leases certain flight equipment to related parties (see Note 11(b)) under noncancellable operating leases expiring in
various years through year 2022. The future minimum rental receipts associated with these leases are $78 million in each year 2009
through 2013 and $470 million thereafter. The following amounts relate to owned aircraft leased under such agreements as reflected in
flight equipment as of December 31, 2008 and 2007 (in millions):
2008 2007
Flight equipment $ 286 $ 286
Less accumulated amortization (33) (23)
$ 253 $ 263
(c) Off-Balance Sheet Arrangements
US Airways has obligations with respect to pass through trust certificates, also known as "Enhanced Equipment 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 relevant aircraft. The trusts were 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 in connection with a mortgage financing of the aircraft or by a separate owner trust in
connection with a leveraged lease financing of the aircraft. In the case of a leveraged lease financing, the owner trust then leased the
aircraft to US Airways. In both cases, the equipment notes are secured by a security interest in the aircraft. The pass through trust
certificates are not direct obligations of, nor are they guaranteed by, US Airways. However, in the case of mortgage financings, the
equipment notes issued to the trusts are direct obligations of US Airways. As of December 31, 2008, $540 million associated with these
mortgage financings is reflected as debt in the accompanying consolidated balance sheet.
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