US Airways 2010 Annual Report Download - page 62

Table of Contents
In 2010, US Airways Group borrowed $30 million to finance airport construction activities in Philadelphia. These notes bear interest at
fixed rates and are secured by certain US Airways' leasehold interests. The notes payable mature from 2020 to 2029.
In December 2010, US Airways created two pass-through trusts which issued approximately $340 million aggregate face amount of
Series 2010-1A and Series 2010-1B Enhanced Equipment Trust Certificates (the "2010 EETCs") in connection with the refinancing of
eight Airbus aircraft owned by US Airways. The 2010 EETCs represent fractional undivided interests in the respective pass-through
trusts and are not obligations of US Airways. The net proceeds from the issuance of the 2010 EETCs were used to purchase equipment
notes issued by US Airways in two series: Series A equipment notes in an aggregate principal amount of $263 million bearing interest at
6.25% per annum and Series B equipment notes in an aggregate principal amount of $77 million bearing interest at 8.5% per annum.
Interest on the equipment notes is payable semiannually in April and October of each year, beginning in April 2011. Principal payments
on the equipment notes are scheduled to begin in October 2011. The final payments on the Series A equipment notes and Series B
equipment notes will be due in April 2023 and April 2017, respectively. US Airways' payment obligations under the equipment notes are
fully and unconditionally guaranteed by US Airways Group. Substantially all of the proceeds from the issuance of the equipment notes
were used to repay the existing debt associated with eight Airbus aircraft, with the balance used for general corporate purposes. The
equipment notes are secured by liens on aircraft.
Credit Card Processing Agreements
We have agreements with companies that process customer credit card transactions for the sale of air travel and other services. Credit
card processors have financial risk associated with tickets purchased for travel because, although the processor generally forwards the
cash related to the purchase to us soon after the purchase is completed, the air travel generally occurs after that time, and the processor
may have liability if we do not ultimately provide the air travel. Our agreements allow these processing companies, under certain
conditions, to hold an amount of our cash (referred to as a "holdback") equal to a portion of advance ticket sales that have been processed
by that company, but for which we have not yet provided the air transportation. These holdback requirements can be modified at the
discretion of the processing companies, up to the estimated liability for future air travel purchased with the respective credit cards, upon
the occurrence of specified events, including material adverse changes in our financial condition. The amount that the processing
companies may withhold also varies as a result of changes in financial risk due to seasonal fluctuations in ticket volume. Additional
holdback requirements will reduce our liquidity in the form of unrestricted cash and short-term investments by the amount of the
holdbacks. These holdback amounts are reflected on our consolidated balance sheet as restricted cash.
Aircraft and Engine Purchase Commitments
US Airways has definitive purchase agreements with Airbus for the acquisition of 134 aircraft, including 97 single-aisle A320 family
aircraft and 37 widebody aircraft (comprised of 22 A350 XWB aircraft and 15 A330-200 aircraft). Since 2008, when deliveries
commenced under the purchase agreements, we have taken delivery of 34 aircraft through December 31, 2010, which includes four A320
aircraft, 23 A321 aircraft and seven A330-200 aircraft. During 2010, US Airways took delivery of two A320 aircraft and two A330-200
aircraft, which were financed as discussed above. US Airways plans to take delivery of 12 A320 family aircraft in each of 2011 and 2012,
with the remaining 46 A320 family aircraft scheduled to be delivered between 2013 and 2015. In addition, US Airways plans to take
delivery of the eight remaining A330-200 aircraft in 2013 and 2014. Deliveries of the 22 A350 XWB aircraft are scheduled to begin in
2017 and extend through 2019.
US Airways has agreements for the purchase of eight new IAE V2500-A5 spare engines scheduled for delivery through 2014 for use
on the A320 family fleet, three new Trent 700 spare engines scheduled for delivery through 2013 for use on the A330-200 fleet and three
new Trent XWB spare engines scheduled for delivery in 2017 through 2019 for use on the A350 XWB aircraft. US Airways has taken
delivery of two of the Trent 700 spare engines and one of the V2500-A5 spare engines through December 31, 2010.
Under all of our aircraft and engine purchase agreements, our total future commitments as of December 31, 2010 are expected to be
approximately $5.9 billion through 2019 as follows: $570 million in 2011, $618 million in 2012,
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