Commitments

3 Months Ended

Aug. 31, 2011

(4) Commitments

As of August 31, 2011, our purchase commitments under various contracts for the remainder of 2012 and annually thereafter were as follows (in millions):

		Aircraft and
		Aircraft Related		Other⁽¹⁾		Total

2012 (remainder)		$	874	$	13	$	887
2013			1,162		12		1,174
2014			781		16		797
2015			555		8		563
2016			580		8		588
Thereafter			1,464		106		1,570

⁽¹⁾	Primarily advertising and promotions contracts.

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. Our obligation to purchase 15 of these Boeing 777 Freighters (“B777F”) is conditioned upon there being no event that causes us or our employees not to be covered by the Railway Labor Act of 1926, as amended. Commitments to purchase aircraft in passenger configuration do not include the attendant costs to modify these aircraft for cargo transport unless we have entered into noncancelable commitments to modify such aircraft. Open purchase orders that are cancelable are not considered unconditional purchase obligations for financial reporting purposes and are not included in the table above.

We had $1 billion in deposits and progress payments as of August 31, 2011 on aircraft purchases and other planned aircraft-related transactions. These deposits are classified in the “Other assets” caption of our condensed consolidated balance sheets. In addition to our commitment to purchase B777Fs, our aircraft purchase commitments include the Boeing 757 (“B757”) in passenger configuration, which will require additional costs to modify for cargo transport. Aircraft and aircraft-related contracts are subject to price escalations.

The following table is a summary of the key aircraft we are committed to purchase as of August 31, 2011, with the year of expected delivery:

	B777F	B757	Total

2012 (remainder)	6	15	21
2013	6	5	11
2014	7	-	7
2015	3	-	3
2016	3	-	3
Thereafter	7	-	7
Total	32	20	52

A summary of future minimum lease payments under capital leases and noncancelable operating leases with an initial or remaining term in excess of one year at August 31, 2011 is as follows (in millions):

				Operating Leases
				Aircraft				Total
		Capital		and Related		Facilities		Operating
		Leases		Equipment		and Other		Leases

2012 (remainder)		$	5	$	418	$	509	$	927
2013			117		499		614		1,113
2014			-		473		539		1,012
2015			-		455		506		961
2016			-		458		396		854
Thereafter			-		1,545		3,597		5,142
Total			122	$	3,848	$	6,161	$	10,009

Less amount representing interest			6
Present value of net minimum lease
	payments	$	116


While certain of our lease agreements contain covenants governing the use of the leased assets or require us to maintain certain levels of insurance, none of our lease agreements include material financial covenants or limitations.

- Definition

The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.

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