United Airlines 2007 Annual Report Download - page 139

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UAL Corporation and Subsidiary Companies
Combined Notes to Consolidated Financial Statements (Continued)
(16) Lease Obligations (Continued)
In connection with fresh-start reporting requirements, aircraft operating leases were adjusted to fair value and a net deferred asset of $263 million was
recorded in the Statement of Consolidated Financial Position on the Effective Date, representing the net present value of the differences between stated lease
rates in agreed term sheets and the fair market lease rates for similar aircraft. These deferred amounts are amortized on a straight-line basis as an adjustment to
aircraft rent expense over the individual applicable remaining lease terms, generally from one to 17 years.
At December 31, 2007, the Company's leased aircraft, scheduled future minimum lease payments under capital leases (substantially all of which are for
aircraft) and operating leases having initial or remaining noncancelable lease terms of more than one year were as follows:
Operating Leases
(In millions)
Mainline Aircraft
United Express
Aircraft
Non-aircraft
Capital Leases(b)
Number of Aircraft
United 162 251 — 72
UAL 161 251 — 72
Payable during(a)
2008 $ 346 $ 410 $ 558 $ 341
2009 323 435 535 180
2010 307 433 516 465
2011 307 417 461 168
2012 297 372 422 119
After 2012 936 1,380 3,284 592
UAL minimum lease payments $ 2,516 $ 3,447 $ 5,776 1,865
Imputed interest (at rates of 1.0% to 8.9%) (509)
Present value of minimum lease payments 1,356
Current portion (250)
Long-term obligations under capital leases $ 1,106
(a)
Amounts apply to both UAL and United except that United leases one aircraft from UAL, resulting in total United mainline aircraft operating lease
payments of $2,523 million.
(b)
Aircraft lease obligations are for 44 Mainline and 28 United Express aircraft. Includes non-aircraft capital lease payments aggregating $19 million in
years 2008 through 2011, and United Express capital lease obligations of $13 million in 2008, $11 million in 2009, $5 million each in years 2010,
2011 and 2012 and $4 million thereafter.
Aircraft operating leases have initial terms of 1 to 26 years, with expiration dates ranging from 2008 through 2024. The Company has facility operating
leases that extend to 2030. Under the terms of most leases, the Company has the right to purchase the aircraft at the end of the lease term, in some cases at fair
market value and in others, at fair market value or a percentage of cost. See Note 2(j), "Summary of Significant Accounting Policies—United Express" for
additional information related to United Express contracts.
130
Source: UNITED AIR LINES INC, 10-K, February 29, 2008