Delta Airlines 2002 Annual Report Download - page 150

Notes to the Consolidated Financial Statements
The fair value of our total debt was $9.5 billion and $8.9 billion at December
31, 2002 and 2001, respectively.
FUTURE MATURITIES
The following table summarizes the scheduled maturities of our debt at December
31, 2002, for the next five years and thereafter:
Years Ending December 31, Principal
(in millions) Amount
---------
2003 $ 666
2004 623
2005 1,203
2006 602
2007 285
After 2007 7,361
-------
Total $10,740
=======
BOSTON AIRPORT TERMINAL PROJECT
During 2001, we entered into lease and financing agreements with the
Massachusetts Port Authority (Massport) for the redevelopment and expansion of
Terminal A at Boston's Logan International Airport. The completion of this
project will enable us to consolidate all of our domestic operations at that
airport into one location. Construction began in the June 2002 quarter and
is expected to be completed during 2005. Project costs will be funded with $498
million in proceeds from Special Facilities Revenue Bonds issued by Massport on
August 16, 2001. We agreed to pay the debt service on the bonds under a
long-term lease agreement with Massport and issued a guarantee to the bond
trustee covering the payment of the debt service on the bonds. For additional
information about these bonds, see "Massachusetts Port Authority Special
Facilities Revenue Bonds" on the table on page 43. Because we have issued a
guarantee of the debt service on the bonds, we have included the bonds, as well
as the related bond proceeds, on our Consolidated Balance Sheets. The bonds are
reflected in noncurrent liabilities and the related proceeds, which are held in
trust, are reflected as restricted investments in other assets on our
Consolidated Balance Sheets.
LETTER OF CREDIT ENHANCED MUNICIPAL BONDS
In June 2000, the Development Authority of Clayton County (Development
Authority) issued $301 million principal amount of bonds in three series with
scheduled maturities between 2029 and 2035. The proceeds of this sale were used
to refund bonds that had been issued to finance certain of our facilities at
Hartsfield Atlanta International Airport. The new bonds are secured by the
Development Authority's pledge of revenues derived by the Development Authority
under related loan agreements between us and the Development Authority. The
Development Authority bonds currently bear interest at a variable rate which is
determined weekly. The bonds may be tendered for purchase by their holders on
seven days notice. Subject to certain conditions, tendered bonds will be
remarketed at then prevailing interest rates.
Principal and interest on the bonds, and the payment of the purchase price of
bonds tendered for purchase, are presently paid under three irrevocable,
direct-pay letters of credit totaling $305 million issued by Commerzbank AG
under a Reimbursement Agreement between us and a group of banks (Reimbursement
Agreement).
There are also outstanding under the Reimbursement Agreement irrevocable
direct-pay letters of credit totaling $104 million relating to $102 million
principal amount of bonds issued by other municipalities to build certain
airport facilities leased to us. These bonds currently bear interest at a
variable rate, which is determined weekly, and may be tendered for purchase by
their holders on seven days notice. We pay the debt service on these bonds under
long-term lease agreements (see Note 7). The related letters of credit are
similar to the letters of credit relating to the Development Authority bonds.
In October 2002, we and the banks that are parties to the Reimbursement
Agreement amended that agreement to eliminate covenants that limited our secured
debt and debt-to-equity ratio. We took this action to increase our financial
flexibility and because we believed we would not be in compliance with the
debt-to-equity covenant at December 31, 2002, due to the
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