Airtran 2007 Annual Report Download - page 38

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32
Aircraft Acquisitions and Aircraft Purchase Commitments
During 2007, we took delivery of ten purchased B737 aircraft, excluding two aircraft subsequently sold as discussed below. During
2006, we took delivery of two B717 and 20 B737 aircraft of which the two B717 and seven B737 aircraft were held under operating
leases. The additional 13 B737 aircraft deliveries in 2006 were purchased and financed with debt.
As of December 31, 2007, we had on order 63 B737 aircraft. The table below summarizes all aircraft scheduled for delivery:
Fir
m
Aircraf
t
Deliveries
B737
2008 ......................................................................................................................................................
.
10
2009 ......................................................................................................................................................
.
14
2010 ......................................................................................................................................................
.
14
2011 ......................................................................................................................................................
.
13
2012 ......................................................................................................................................................
.
12
Total......................................................................................................................................................
.
63
In April 2007, we took delivery of and in May 2007, we subsequently sold two aircraft for cash proceeds of $77.9 million, of which
$5.0 million was received prior to 2007. Unless otherwise expressly indicated, all aircraft delivery totals are exclusive of these two
deliveries.
In June 2007, we entered into an amendment to an agreement with an aircraft manufacturer to purchase an additional 15 B737 aircraft.
The newly-ordered aircraft are scheduled to be delivered during 2011 and 2012. Also, pursuant to that same amendment, we agreed to
reschedule the delivery positions for six B737 aircraft on firm order. The aircraft originally scheduled to be delivered during the
second half of 2008 and first half of 2009 are now scheduled to be delivered during 2011. In October we rescheduled the delivery
dates for three B737 aircraft on firm order from 2008 to 2011. The new orders and revised delivery dates are reflected in this annual
report.
Aircraft purchase contracts typically require the purchaser to make pre-delivery deposits to the manufacturer. We have arranged pre-
delivery deposit financing for a portion of our pre-delivery deposit requirements for aircraft scheduled to be delivered in 2008, 2009,
and some aircraft in 2010. The pre-delivery deposit financing typically funds between 75 percent and 80 percent of our pre-delivery
deposit obligation for any given aircraft.
Our aircraft purchase commitments for the next five years, in aggregate, are (in thousands): 2008—$391,300; 2009—$508,000;
2010—$518,600; 2011—$462,300; and 2012—$401,300. These amounts include payment commitments, including payment of pre-
delivery deposits, for aircraft on firm order. Payment commitments include the forecasted impact of contractual price escalations. The
aircraft purchase commitment totals do not reflect the effects of prearranged aircraft financings.
Aircraft Financing Arrangements
Of the 63 B737 aircraft we have on order, we have secured debt financing for nine B737 aircraft scheduled for delivery in 2008. Such
debt financing funds approximately 85 percent of the total cost of the aircraft. While our intention is to finance the remainder of the
aircraft on order through a combination of debt and lease financings, we have not yet arranged for such financing.
Letters of Credit
As of December 31, 2007, $12.2 million of restricted cash relates to outstanding letters of credit, primarily for airport facilities and
insurance.
Investments
As of December 31, 2007 we had short-term and long-term investments of $111.1 million and $8.2 million, respectively. In December
2007 we were advised that one of the funds that we had invested in would be closed to new investments and immediate redemptions
and that there had been a one percent decline in the net asset value of the fund. The fund currently has a projected redemption
schedule that will result in approximately 90 percent of the fund being redeemed in 2008. As a result, we have classified the remaining
10 percent of our investment, which is expected to payout in 2009, as long-term as of December 31, 2007.