Delta Airlines 2003 Annual Report Download - page 105

Table of Contents
Note 8. Sale of Receivables
We were party to an agreement, as amended, under which we sold a defined pool of our accounts receivable, on a revolving basis, through a special-purpose,
wholly owned subsidiary, which then sold an undivided interest in the receivables to a third party. In accordance with SFAS 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS 140), the subsidiary was not consolidated in our Consolidated Financial
Statements. At December 31, 2002, we had a subordinated promissory note with a principal amount of $67 million from the subsidiary; this note was included
in accounts receivable on our 2002 Consolidated Balance Sheet. Additionally, our investment in the subsidiary, which represented our funding of that entity,
totaled $117 million at December 31, 2002, and was recorded in investments in associated companies on our Consolidated Balance Sheet.
This agreement terminated on its scheduled expiration date of March 31, 2003. As a result, on April 2, 2003, we paid $250 million, which represented the
total amount owed to the third party by the subsidiary, and subsequently collected the related receivables.
Note 9. Purchase Commitments and Contingencies
Aircraft Order Commitments
Future commitments for aircraft on firm order as of December 31, 2003 are estimated to be $4.0 billion. The following table shows the timing of these
commitments:
Year Ending December 31,
(in millions) Amount
2004 $ 675
2005 1,171
2006 1,285
2007 840
2008 43
Total $ 4,014
The table above includes our payments to purchase from the manufacturer 11 B-737-800 aircraft, which we have entered into a definitive agreement to sell to
a third party immediately following delivery of these aircraft to us in 2005. This transaction will reduce our commitments by approximately $460 million
through 2005. We also granted the third party an option to purchase up to 10 additional B-737-800 aircraft scheduled for delivery to us in 2006.
Additionally, as of December 31, 2003, we had deferred delivery of one B-737-800 aircraft, and plan to exercise our right to defer delivery of an additional
seven B-737-800 aircraft from 2005 to 2008. This transaction will defer approximately $300 million of our commitments through 2005 to later years in the
table above.
Contract Carrier Agreements
We have contract carrier agreements with three regional air carriers, Atlantic Coast Airlines (ACA), SkyWest and Chautauqua. Under these agreements,
ACA, SkyWest and Chautauqua operate certain of their aircraft using our flight code; we schedule those aircraft and sell the seats
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