US Airways 2011 Annual Report Download - page 70

Table of Contents
Under all of our aircraft and engine purchase agreements, our total future commitments as of December 31, 2011 are expected to be approximately
$5.38 billion through 2019 as follows: $656 million in 2012, $1.16 billion in 2013, $937 million in 2014, $448 million in 2015, $107 million in 2016 and
$2.07 billion thereafter, which includes predelivery deposits and payments. We have financing commitments for all Airbus aircraft scheduled for delivery in
2012. See Part I, Item 1A, Risk Factors — "Increased costs of financing, a reduction in the availability of financing and fluctuations in interest rates could
adversely affect our liquidity, operating expenses and results" and "Our high level of fixed obligations limits our ability to fund general corporate
requirements and obtain additional financing, limits our flexibility in responding to competitive developments and increases our vulnerability to adverse
economic and industry conditions."
Covenants and Credit Rating
In addition to the minimum cash balance requirements, our long-term debt agreements contain various negative covenants that restrict or limit our
actions, including our ability to pay dividends or make other restricted payments. Our long-term debt agreements also generally contain cross-default
provisions, which may be triggered by defaults by us under other agreements relating to indebtedness. See Part I, Item 1A, Risk Factors — "Our high level of
fixed obligations limits our ability to fund general corporate requirements and obtain additional financing, limits our flexibility in responding to competitive
developments and increases our vulnerability to adverse economic and industry conditions" and "Any failure to comply with the liquidity covenants contained
in our financing arrangements would likely have a material adverse effect on our business, results of operations or financial condition." As of December 31,
2011, we and our subsidiaries were in compliance with the covenants in our long-term debt agreements.
The following table details our credit ratings as of December 31, 2011:
S&P Fitch Moody's
Local Issuer Issuer Default Corporate
credit rating credit rating Family rating
US Airways Group B- CCC Caa1
US Airways B- * *
(*) The credit agencies do not rate these categories for US Airways.
A decrease in our credit ratings could cause our borrowing costs to increase, which would increase our interest expense and could affect our net income,
and our credit ratings could adversely affect our ability to obtain additional financing. If our financial performance or industry conditions worsen, we may
face future downgrades, which could negatively impact our borrowing costs and the prices of our equity or debt securities. In addition, any downgrade of our
credit ratings may indicate a decline in our business and in our ability to satisfy our obligations under our indebtedness.
Off-Balance Sheet Arrangements
An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a
company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under derivative instruments classified as
equity or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk
support to us, or that engages in leasing, hedging or research and development arrangements with us.
We have no off-balance sheet arrangements of the types described in the first three categories above that we believe may have a material current or
future effect on financial condition, liquidity or results of operations. Certain guarantees that we do not expect to have a material current or future effect on
our financial condition, liquidity or results of operations are disclosed in Note 9(f) to the consolidated financial statements of US Airways Group included in
Item 8A of this report and Note 8(f) to the consolidated financial statements of US Airways included in Item 8B of this report.
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