Airtran 2009 Annual Report Download - page 56

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47
Year 2010 Cash Requirements and Potential Sources of Liquidity
Our 2010 cash flows will be impacted by a variety of factors including our operating results, payments of our
debt and capital lease obligations, and capital expenditure requirements. In addition, we may need cash
resources to fund increases in collateral provided to counterparties to our derivative financial instrument
arrangements and our cash flows may be adversely impacted in the event that one or more credit card
processors withholds amounts that would otherwise be remitted to us.
During 2010, we will need cash for capital expenditures and debt and capital lease obligations. Expenditures for
acquisition of property and equipment, other than aircraft and aircraft parts, are anticipated to be approximately
$20 million during 2010. Additionally, during 2010, we currently have scheduled payments of $50 million
related to aircraft purchase commitments. Payments of current maturities of existing debt and capital lease
obligations will aggregate $282.1 million during 2010, including payment of $125 million previously borrowed
under our revolving line of credit facility and which was repaid as of February 1, 2010. The maturities of debt
amount also includes the $95.8 million assumed effect of all holders of our 7.0% convertible notes exercising
their option to require us to repurchase the notes in 2010.
We may need cash resources to fund increases in collateral provided to counterparties to our derivative financial
arrangements and our cash flows may be adversely impacted in the event that one or more credit card
processors withholds amounts that would otherwise be remitted to us. We provide counterparties to our
derivative financial instrument arrangements with collateral when the fair value of our obligation exceeds
specified amounts. As of December 31, 2009, we provided counterparties with collateral aggregating $15.0
million.
Each agreement with our two largest credit card processors (based on volumes processed for us) was amended
in 2009 resulting in changes to contractual terms generally favorable to us. Our agreement with our largest
credit card processor now expires December 31, 2010. Each agreement with our two largest credit card
processors allows, under specified conditions, the processor to retain cash related to future travel that such
processor otherwise would remit to us (a holdback). As of December 31, 2009, we were in compliance with our
processing agreements and our two largest credit card processors were holding back no cash remittances from
us. Our potential cash exposure to holdbacks by our largest two credit card processors, based on advance ticket
sales as of December 31, 2009, was up to a maximum of $149.1 million (after considering the $50 million letter
of credit issued in favor of our largest credit card processor). Even had there been no letter of credit issued for
the benefit of our largest credit card processor, as of December 31, 2009, neither of our two largest credit card
processors would have been entitled to holdback any cash remittances from us. A decrease in our unrestricted
cash and investments could result in cash remittance amounts being held back by our largest credit card
processors. Should the largest processor be entitled in the future to withhold amounts that would otherwise be
remitted to us, we retain the contractual right to eliminate or reduce the amounts withheld by achieving
specified aggregate unrestricted cash and investment levels and / or by providing the processor with letters of
credit. While we may be subject to holdbacks in the future in accordance with the terms of our credit card
processing agreements, based on our current liquidity and current forecast, we do not expect that our two largest
credit card processors would be entitled to holdback cash amounts during 2010.
We believe we have options available to meet our debt repayment, capital expenditure needs, and operating
commitments; such options may include internally generated funds as well as various financing or leasing
options, including the sale, lease, or sublease of our aircraft or other assets. Additionally, we have a $125
million revolving line of credit facility, under which $125 million and zero borrowings were outstanding as of
December 31, 2009 and February 1, 2010, respectively. However, our future financing options may be limited
because our owned aircraft are pledged to the lenders that provided financing to acquire such aircraft, and we
have pledged, directly or indirectly, a significant portion of our owned assets, other than aircraft and engines, to