Airtran 2007 Annual Report Download - page 63

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57
57
Note 6 – Leases
Total rental expense charged to operations for aircraft, facilities and office space for the years ended December 31, 2007,
2006 and 2005 was approximately $315.6 million, $287.5 million and $238.0 million, respectively.
We lease 79 B717 aircraft through various lessors under leases with terms that expire through 2022. We have the option to
renew the B717 leases for periods ranging from one to four years. The B717 leases have purchase options at or near the end
of the lease term at fair market value, and two have purchase options based on a stated percentage of the lessor’s defined cost
of the aircraft at the end of the thirteenth year of the lease term. Each of the leases contains return conditions that must be met
prior to the termination of the leases. Forty-one of the B717 leases are the result of sale/leaseback transactions. Deferred
gains from these transactions are being amortized over the terms of the leases. At December 31, 2007 and 2006, unamortized
deferred gains were $56.2 million and $59.7 million, respectively.
We lease 22 B737 aircraft through a single lessor, under leases with terms that expire through 2021. We have the option to
extend the lease term for 12 months and up to 39 months. There are no purchase options. Each of the leases contains return
conditions that must be met prior to the termination of the leases.
The B737 leases require us to remit monthly maintenance deposit payments to the lessor based on actual flight hours and
landings. The balance of such payments, which is capped at any point in time at $2.25 million for each aircraft, is available to
reimburse us for the cost of airframe, engine and certain other component part maintenance. There will be an accounting at
the end of each aircraft lease to ascertain if there is any excess balance of the deposit payments; if so, such excess will be
returned to us. These payments are accounted for as deposits and the aggregate amount of such deposits is included in other
assets. As of December 31, 2007 and 2006, the balance of such maintenance deposits for all the B737 leased aircraft
aggregated $49.4 million and $33.9 million, respectively.
We also lease facilities from local airport authorities or other carriers, as well as office space under operating leases with
terms ranging up to 12 years. In addition, we lease spare engines and certain rotable parts under capital leases.
The amounts applicable to capital leases included in property and equipment were (in thousands):
Decembe
r
31
,
2007 2006
Flight equipment............................................................................................................................
.
$ 20,336 $ 21,560
Less: Accumulated amortization.....................................................................................................
.
(3,669) (4,169)
Flight equipment-net ......................................................................................................................
.
$ 16,667 $ 17,391
The following schedule outlines the future minimum lease payments at December 31, 2007, under non-cancelable operating
leases and capital leases with initial terms in excess of one year (in thousands):
Capital
Leases
Operating
Leases
2008.........................................................................................................................................
.
$ 2,665 $ 292,609
2009.........................................................................................................................................
.
2,799 273,655
2010.........................................................................................................................................
.
2,938 263,513
2011.........................................................................................................................................
.
3,085 256,011
2012.........................................................................................................................................
.
3,181 254,538
Thereafter.................................................................................................................................
.
5,173 1,994,442
Total minimum lease payments........................................................................................
.
19,841 $ 3,334,768
Less: amount representing interest ...................................................................................
.
(6,890)
Present value of future payments......................................................................................
.
12,951
Less: current obligations..................................................................................................
.
(1,036)
Long-term obligations .....................................................................................................
.
$ 11,915