US Airways 2008 Annual Report Download - page 160

Table of Contents
US Airways, Inc.
Notes to Consolidated Financial Statements — (Continued)
(f) Guarantees and Indemnifications
US Airways guarantees the payment of principal and interest on certain special facility revenue bonds issued by municipalities to
build or improve certain airport and maintenance facilities which are leased to US Airways. Under such leases, US Airways is required to
make rental payments through 2023, sufficient to pay maturing principal and interest payments on the related bonds. As of December 31,
2008, the principal amount outstanding on these bonds was $90 million. Remaining lease payments guaranteeing the principal and
interest on these bonds are $145 million.
US Airways enters into real estate leases in substantially all cities that it serves. It is common in such commercial lease transactions
for US Airways as the lessee to agree to indemnify the lessor and other related third parties for tort liabilities that arise out of or relate to
the use or occupancy of the leased premises. In some cases, this indemnity extends to related liabilities arising from the negligence of the
indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct. With respect to certain
special facility bonds, US Airways agreed to indemnify the municipalities for any claims arising out of the issuance and sale of the bonds
and use or occupancy of the concourses financed by these bonds. Additionally, US Airways typically indemnifies such parties for any
environmental liability that arises out of or relates to its use or occupancy of the leased premises.
US Airways is the lessee under many aircraft financing agreements (including leveraged lease financings of aircraft under pass
through trusts). It is common in such transactions for US Airways as the lessee to agree to indemnify the lessor and other related third
parties for the manufacture, design, ownership, financing, use, operation and maintenance of the aircraft, and for tort liabilities that arise
out of or relate to US Airways' use or occupancy of the leased asset. In some cases, this indemnity extends to related liabilities arising
from the negligence of the indemnified parties, but usually excludes any liabilities caused by their gross negligence or willful misconduct.
In aircraft financing agreements structured as leveraged leases, US Airways typically indemnifies the lessor with respect to adverse
changes in U.S. tax laws.
US Airways has long-term operating leases at a number of airports, including leases where US Airways is also the guarantor of the
underlying debt. Such leases are typically with municipalities or other governmental entities. The arrangements are not required to be
consolidated based on the provisions of FIN No. 46(R).
US Airways Group's 7% Senior Convertible Notes are fully and unconditionally guaranteed, jointly and severally and on a senior
unsecured basis, by US Airways and AWA. In addition, US Airways is a guarantor of US Airways Group's Citicorp credit facility.
9. Other comprehensive income (loss)
US Airways' other comprehensive income (loss) consisted of the following (in millions):
Year Ended December 31,
2008 2007 2006
Net income (loss) $ (2,148) $ 478 $ 349
Unrealized losses on available for sale securities — (48) —
Recognition of previous unrealized losses now deemed other than temporary 48 — —
Actuarial gains associated with pension and other postretirement benefits, net of current period amortization 31 47 —
Total comprehensive income (loss) $ (2,069) $ 477 $ 349
158