Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Flight Equipment Held For Operating Leases, Net

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Flight Equipment Held For Operating Leases, Net
12 Months Ended
Dec. 31, 2011
Flight Equipment Held For Operating Leases, Net [Abstract]  
Flight Equipment Held For Operating Leases, Net

5. Flight equipment held for operating leases, net

Movements in flight equipment held for operating leases during the periods presented were as follows:

  Year ended December 31,
  2009 2010 2011
Net book value at beginning of period $ 3,989,629   $ 5,230,437   $ 8,061,260  
Fair value of flight equipment acquired in acquisitions       1,337,412      
Additions   1,649,520     2,531,719     882,625  
Depreciation   (215,574 )   (329,639 )   (383,148 )
Impairment (Note 22)   (32,378 )   (11,764 )   (23,323 )
Disposals   (119,349 )   (646,841 )   (333,140 )
Transfers to direct finance leases/flight equipment held for sale       (3,550 )    
Transfer to inventory   (41,411 )   (46,514 )   (11,430 )
Sale of AeroTurbine           (296,970 )
Net book value at end of period $ 5,230,437   $ 8,061,260   $ 7,895,874  
Accumulated depreciation/impairment at December 31, 2009, 2010 and 2011 $ (542,309 ) $ (856,894 ) $ (1,060,416 )

 

      At December 31, 2011, 245 out of our 251 owned aircraft and seven owned engines were on lease under operating leases to 89 lessees in 46 countries. The geographic concentrations of leasing revenues are set out in Note 19.

     Prepayments on flight equipment (including related capitalized interest) of $$375,690, $468,933 and $151,550 have been applied against the purchase of aircraft during the years ended December 31, 2009, 2010 and 2011, respectively.

     The following table indicates our contractual commitments for the prepayment and purchase of flight equipment in the periods indicated as of December 31, 2011:

  2012 2013 2014 Thereafter
Capital expenditures $ 466,231 $ 220,648 $ $ 294,793
Pre-delivery payments   31,320   57,742   91,119   18,224
  $ 497,551 $ 278,390 $ 91,119 $ 313,017

 

     As of December 31, 2011, we expect to make capital expenditures related to five A330, seven A320 aircraft and ten Boeing 737 aircraft (excluding the remaining 31 American Airlines purchase-leaseback Boeing 737 aircraft) in 2012 and thereafter. As we implement our growth strategy, currently focused on the mid- to long-term, and expand our aircraft portfolio, we expect our capital expenditures to increase in the future. We anticipate that we will fund these capital expenditures through internally generated cash flows, draw downs on our committed revolving credit facilities and the incurrence of bank debt, and other debt and equity issuances.

     Our current operating lease agreements expire over the next twelve years. The contracted minimum future lease payments receivable from lessees for equipment on non-cancelable operating leases at December 31, 2011 are as follows:

  Contracted
minimum
future lease
receivables
2012 $ 942,212
2013   891,168
2014   762,176
2015   646,514
2016   524,857
Thereafter   1,465,597
  $ 5,232,524

 

     The titles to certain aircraft leased in the United States are held by a U.S. trust company as required by U.S. law. We are the beneficial owner of these aircraft and the aircraft are recorded under flight equipment held for operating lease on the consolidated balance sheets. The trust company is administered by a bank. The aircraft are segregated from the bank's assets and will not be considered part of the bank's bankruptcy estate in the event of a trustee bankruptcy.