As a liquidity provider for equipment trust certificate (ETC) pass-through arrangements, the Company has certain obligations to investors in the trusts, which requires funding to the trust to cover interest due to such investors resulting from an event of default by United Airlines. In the event of funding, the Company receives a first priority position in the ETC collateral in the amount of the funding. On February 7, 2003, the Company advanced $101 million to the trust perfecting its collateral position and terminating its liquidity obligation. The trust currently has collateral value that significantly exceeds the amount due to the Company.

Also relating to an ETC investment, the Company has potential obligations relating to shortfall interest payments in the event that the interest rates in the underlying agreements are reset below a certain level. These obligations would cease if United Airlines were to default on its interest payments to the trust. There were no significant payments made by the Company during 2002.

The Company has outstanding performance guarantees issued in conjunction with joint venture investments. Pursuant to these guarantees, the Company would be required to make payments in the event a third-party fails to perform specified services.

Material variable interests in unconsolidated entities The Company is currently assessing the application of FIN 46 as it relates to its variable interests. While the Company is currently not required to consolidate the full amount of the ETCs, EETCs or the Sea Launch venture in which it has invested, it is unable to definitively conclude at this time whether consolidation or disclosure will be required for these investments upon full adoption of FIN 46. The Company’s investment in ETCs and EETCs aggregated $455 million at December 31, 2002. During the year ended December 31, 2002, the Company recorded revenues of $25 million, cash inflows of $41 million, and impairment expense of $79 million relating to these investments. As of December 31, 2002, the VIE (ETCs and EETCs) in which the Company has invested have total assets of approximately $4.2 billion and total debt (which is non-recourse to the Company) of approximately $3.7 billion. The total assets and total liabilities of the Sea Launch venture each represent less than 4% of the Company’s consolidated total assets and total liabilities as of December 31, 2002. The Company made no additional capital contributions to the Sea Launch venture during the year ended December 31, 2002.

Disclosures about commercial commitments The following table summarizes the Company’s commercial commitments outstanding as of December 31, 2002, as well as an estimate of the timing in which these commitments are expected to expire.

Commercial commitments

Related to the issuance of certain standby letters of credit and surety bonds included in the above table, the Company received $608 million of advance payments from customers.

The Company enters into certain trade-in agreements to purchase used aircraft from customers at a specific price at a future point in time when those customers purchase new aircraft from the Company. In the event the Company accepts an aircraft under a trade-in agreement, the aircraft purchased by the Company serves as collateral to offset amounts paid by the Company to the customer. As of December 31, 2002, accounts payable and other liabilities included $156 million related to trade-in commitments, of which $93 million was related to the events of September 11, 2001. The total contractual trade-in value of all aircraft that customers had the right to sell to the Company was $1,993 million as of December 31, 2002, and the Company estimated the fair value of those aircraft was $1,837 million. There is a high degree of uncertainty inherent in the assessment of the likelihood of trade-in commitments. Generally, as commercial aircraft values decline, the probability of the Company’s performance on trade-in commitments increases. There have been recent declines in value for certain aircraft models, including those for which the Company has trade-in agreements. Updates on the likelihood that trade-in commitments will be exercised using both quantitative information from valuation sources and qualitative information from other sources are continually assessed. The Company continues to monitor all trade-in commitments for adverse developments.

Other commercial commitments include irrevocable financing commitments related to aircraft on order and commercial equipment financing. These are previously discussed and also disclosed in Note 20 to the consolidated financial statements.