US Airways 2011 Annual Report Download - page 125

Table of Contents
3. Debt
The following table details US Airways' debt (in millions). Variable interest rates listed are the rates as of December 31, 2011.
December 31, December 31,
2011 2010
Secured
Equipment loans and other notes payable, fixed and variable interest rates ranging from 1.67% to 10.48%, maturing from
2012 to 2021 (a) $ 1,699 $ 1,890
Aircraft enhanced equipment trust certificates ("EETCs"), fixed interest rates ranging from 6.25% to 11%, maturing from
2014 to 2023 (b) 1,279 809
Other secured obligations, fixed interest rate of 8%, maturing from 2018 to 2021 30 85
3,008 2,784
Unsecured
Airbus advance, repayments through 2018 (c) 142 222
Industrial development bonds, fixed interest rate of 6.3%, interest only payments until due in 2023 (d) 29 29
Other unsecured obligations, maturing in 2012 10 23
181 274
Total long-term debt and capital lease obligations 3,189 3,058
Less: Total unamortized discount on debt (71) (81)
Current maturities (420) (381)
Long-term debt and capital lease obligations, net of current maturities $ 2,698 $ 2,596
(a) The following are the significant equipment financing agreements entered into in 2011:
In 2011, US Airways borrowed $168 million to finance new Airbus aircraft deliveries. These financings bear interest at a rate of LIBOR plus an
applicable margin and contain default provisions and other covenants that are typical in the industry.
(b) The equipment notes underlying these EETCs are the direct obligations of US Airways and cover the financing of 36 aircraft. See Note 8(c) for further
discussion.
In June 2011, US Airways created three pass-through trusts which issued approximately $471 million aggregate face amount of Series 2011-1 Class A,
Class B and Class C Enhanced Equipment Trust Certificates in connection with the refinancing of five Airbus aircraft owned by US Airways and the
financing of four new Airbus aircraft delivered in 2011 (the "2011 EETCs"). The 2011 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 2011 EETCs were used to purchase equipment
notes issued by US Airways in three series: Series A equipment notes in an aggregate principal amount of $294 million bearing interest at 7.125% per
annum, Series B equipment notes in an aggregate principal amount of $94 million bearing interest at 9.75% per annum and Series C equipment notes in
an aggregate principal amount of $83 million bearing interest at 10.875% per annum. Interest on the equipment notes is payable semiannually in April
and October of each year and began in October 2011. Principal payments on the equipment notes are scheduled to begin in April 2012. The final
payments on the Series A equipment notes, Series B equipment notes and Series C equipment notes will be due in October 2023, October 2018 and
October 2014, respectively. US Airways' payment obligations under the equipment notes are fully and unconditionally guaranteed by US Airways
Group. The net proceeds from the issuance of these equipment notes were used to repay the existing debt associated with five Airbus aircraft and to
finance four new Airbus aircraft delivered in 2011, with the balance used for general corporate purposes. The equipment notes are secured by liens on
aircraft.
In July 2011, US Airways completed an offering of Class C certificates in the aggregate principal amount of $53 million under its Series 2010-1
EETCs. The 2010-1 Class A and B certificates originally closed in December 2010 in connection with the refinancing of owned Airbus aircraft. In
connection with this offering, US Airways issued $53 million in additional equipment notes bearing interest at 11% per annum. The net proceeds from
the offering will be used for general corporate purposes.
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