US Airways 2009 Annual Report Download - page 139

Table of Contents
estimate of the aircraft's fair value at the option date. Under this feature, US Airways does not participate in any increases in the value of
the aircraft. US Airways concluded it was not the primary beneficiary under these arrangements. Therefore, US Airways accounts for its
EETC leveraged lease financings as operating leases. US Airways' total future obligations under these leveraged lease financings are
$3.25 billion as of December 31, 2009, which are included in the future minimum lease payments table in (b) above.
(d) Regional Jet Capacity Purchase Agreements
US Airways has entered into capacity purchase agreements with certain regional jet operators. The capacity purchase agreements
provide that all revenues, including passenger, mail and freight revenues, go to US Airways. In return, US Airways agrees to pay
predetermined fees to these airlines for operating an agreed-upon number of aircraft, without regard to the number of passengers onboard.
In addition, these agreements provide that certain variable costs, such as airport landing fees and passenger liability insurance, will be
reimbursed 100% by US Airways. US Airways controls marketing, scheduling, ticketing, pricing and seat inventories. The regional jet
capacity purchase agreements have expirations from 2012 to 2020. The future minimum noncancellable commitments under the regional
jet capacity purchase agreements are $1.01 billion in 2010, $1.03 billion in 2011, $900 million in 2012, $772 million in 2013,
$771 million in 2014 and $2.35 billion thereafter.
Certain entities with which US Airways has capacity purchase agreements are considered variable interest entities. In connection with
its restructuring and emergence from bankruptcy, US Airways contracted with Air Wisconsin and Republic to purchase a significant
portion of these companies' regional jet capacity for a period of 10 years. US Airways has determined that it is not the primary
beneficiary of these variable interest entities, based on cash flow analyses. Additionally, US Airways has analyzed the arrangements with
other carriers with which US Airways has long-term capacity purchase agreements and has concluded it is not required to consolidate any
of the entities.
(e) Legal Proceedings
On September 12, 2004, US Airways Group and its domestic subsidiaries (collectively, the "Reorganized Debtors") filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia,
Alexandria Division (Case Nos. 04-13819-SSM through 03-13823-SSM) (the "2004 Bankruptcy"). On September 16, 2005, the
Bankruptcy Court issued an order confirming the plan of reorganization submitted by the Reorganized Debtors and on September 27,
2005, the Reorganized Debtors emerged from the 2004 Bankruptcy. The Bankruptcy Court's order confirming the plan included a
provision called the plan injunction, which forever bars other parties from pursuing most claims against the Reorganized Debtors that
arose prior to September 27, 2005 in any forum other than the Bankruptcy Court. Substantially all of the claims in the 2004 Bankruptcy
have been settled and the remaining claims, if paid at all, will be paid out in common stock of the post-bankruptcy US Airways Group at
a small fraction of the actual claim amount. However, the effects of these common stock distributions were already reflected in US
Airways' financial statements upon emergence from bankruptcy and will not have any further impact on its financial position or results of
operations. US Airways presently expects the bankruptcy case to be closed during 2010.
US Airways and/or its subsidiaries are defendants in various pending lawsuits and proceedings, and from time to time are subject to
other claims arising in the normal course of its business, many of which are covered in whole or in part by insurance. The outcome of
those matters cannot be predicted with certainty at this time, but US Airways, having consulted with outside counsel, believes that the
ultimate disposition of these contingencies will not materially affect its consolidated financial position or results of operations.
(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, 2009,
the remaining lease payments guaranteeing the
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