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Commitments
6 Months Ended
Nov. 30, 2013
Commitments [Abstract]  
Commitments

(4) Commitments

 

As of November 30, 2013, our purchase commitments under various contracts for the remainder of 2014 and annually thereafter were as follows (in millions):

  Aircraft and        
  Aircraft-Related Other(1)   Total   
             
2014 (remainder)$ 395 $ 49  $ 444  
2015  1,142   40    1,182  
2016  1,127   31    1,158  
2017  903   23    926  
2018  1,447   20    1,467  
Thereafter  5,294   89    5,383  
Total$ 10,308 $ 252  $ 10,560  
             
(1) Primarily advertising and promotions contracts.
             

The amounts reflected in the table above for purchase commitments represent noncancelable agreements to purchase goods or services. As of November 30, 2013, our obligation to purchase four Boeing 767-300 Freighter (“B767F”) aircraft and nine Boeing 777 Freighter (“B777F”) aircraft 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 $237 million in deposits and progress payments as of November 30, 2013 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 and B767Fs, 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 November 30, 2013, with the year of expected delivery:

  B757 B767F B777F Total 
          
2014 (remainder) 11  1  -  12 
2015 11  12  -  23 
2016 -  10  2  12 
2017 -  10  -  10 
2018 -  10  2  12 
Thereafter -  4  14  18 
Total 22  47  18  87 
          

On December 10, 2013, we entered into an agreement with The Boeing Company for the purchase of two B767F aircraft, the delivery of which will occur in 2016 and 2017. We are also deferring 11 existing options to purchase B777F aircraft by two years. This aircraft transaction is not included in the table above, as it occurred subsequent to the end of the second quarter of 2014.

 

A summary of future minimum lease payments under noncancelable operating leases with an initial or remaining term in excess of one year at November 30, 2013 is as follows (in millions):

   Operating Leases 
   Aircraft    Total 
   and Related Facilities Operating 
   Equipment  and Other Leases 
            
2014 (remainder)$ 395 $ 380 $ 775 
2015  448   744   1,192 
2016  453   607   1,060 
2017  391   789   1,180 
2018  326   478   804 
Thereafter  824   4,037   4,861 
Total$ 2,837 $ 7,035 $ 9,872 
            

Future minimum lease payments under capital leases were immaterial at November 30, 2013. 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.