Assets Held For Sale
The balance of those assets held for sale which are classified in accordance with FAS 144 was immaterial to the total fixed asset balance in 2008 and 2007.
Interest Capitalization
No interest was capitalized in 2008, 2007, or 2006.
Repairs and Maintenance
Repairs and maintenance are charged to expense as incurred. This expense amounted to $711 million in 2008, $665 million in 2007, and $641 million in 2006.
Note 7 — Leases and other commitments
Capital
At September 30, 2008, our future minimum lease payments for all noncancelable leases are as follows.
Lease Obligations |
Operating |
Capital |
|---|---|---|
(Dollars in millions) |
||
2009 |
$ 780 |
$ 102 |
2010 |
763 |
98 |
2011 |
710 |
96 |
2012 |
640 |
98 |
2013 |
579 |
92 |
After 2013 |
4,864 |
523 |
Total Lease Obligations |
$ 8,336 |
$ 1,009 |
Less: Interest |
|
376 |
Total Capital Lease Obligations |
|
633 |
Less: Short-term portion of capital lease obligations |
|
46 |
Long-term portion of capital lease obligations |
|
$ 587 |
Most of these leases contain renewal options for periods ranging from 3 to 20 years. Certain noncancelable real estate leases give us the option to purchase the facilities at prices specified in the leases.
Capital leases included in buildings were $916 million in 2008 and $931 million in 2007. Total accumulated amortization is $419 million in 2008 and $404 million in 2007. Amortization expense for assets recorded under capital leases is classified as depreciation expense, which is included in other operating expenses in the statements of operations.
Our total rental expense for the years ended September 30 is summarized as follows.
Rental Expense |
2008 |
2007 |
2006 |
|---|---|---|---|
(Dollars in millions) |
|||
Non-cancelable real estate leases including related taxes |
$ 967 |
$ 927 |
$ 953 |
Facilities leased from GSA subject to 120-day cancellation |
44 |
46 |
49 |
Equipment and other |
294 |
261 |
192 |
Total Rental Expense |
$ 1,305 |
$ 1,234 |
$ 1,194 |
At September 30, 2008, we estimate our financial commitment for approved capital projects in progress (resources on order) to be $2,830 million, detailed in the following table.
| Capital Resources on Order | 2008 |
|---|---|
(Dollars in millions) |
|
Mail Processing Equipment |
$1,424 |
Building Improvements |
548 |
Postal Support Equipment |
360 |
Construction and Building Purchase |
459 |
Vehicles |
5 |
Retail Equipment |
34 |
Total Capital Resources on Order |
$ 2,830 |
Expense Commitments
In the normal operating of our business, we enter into commitments for expense contracts. The contracts run for periods from one to ten years. Although these contracts contain clauses for termination by the Postal Service, we normally would have early termination costs.
Expense commitments are classified as miscellaneous, inventory, and research and development. Our miscellaneous expense commitments include contracts for supplies, services, communications, repairs, research, printing, and advertising. Our inventory contracts are for vehicle repair parts and mechanized equipment spare parts. These are summarized in the following table.
| Expense Resources on Order | 2008 |
|---|---|
(Dollars in millions) |
|
Miscellaneous Contracts |
$4,960 |
Inventory Contracts |
50 |
Research and Development Contracts |
39 |
Total Expense Resources on Order |
$ 5,049 |