Delta Airlines 2003 Annual Report Download - page 23

Table of Contents
a credit ratings downgrade, our credit ratings have negatively impacted our ability to issue unsecured debt, renew outstanding letters of credit that back certain
of our obligations and obtain certain financial instruments that we use in our fuel hedging program. Our credit ratings have also increased the cost of our
financing transactions and the amount of collateral required for certain financial instruments, insurance coverage and vendor agreements. To the extent we are
unable to access the capital markets, or our financing costs continue to increase, including as a result of further credit ratings downgrades, our business,
financial condition and operating results would be materially adversely impacted.
Our pension plan funding obligations are significant and are affected by factors beyond our control.
We sponsor qualified defined benefit pension plans for eligible employees and retirees. Our funding obligations under these plans are governed by the
Employee Retirement Income Security Act of 1974 ("ERISA"). We have met our required funding obligations in 2003 for these plans, which currently satisfy
minimum funding requirements under ERISA.
Estimates of the amount and timing of our future funding obligations for the pension plans are based on various assumptions. These include assumptions
concerning, among other things, the actual and projected market performance of the pension plan assets; 30-year U.S. treasury bond yields; statutory
requirements; and demographic data for pension plan participants. The amount and timing of our future funding obligations also depend on whether we elect
to make contributions to the pension plans in excess of those required under ERISA; such voluntary contributions may reduce or defer the funding obligations
we would have absent those contributions.
Our estimated pension funding of approximately $440 million for 2004 includes (1) a voluntary contribution of $325 million to our non-pilot pension plan,
the majority of which we made in February 2004; and (2) required contributions totaling approximately $115 million which we will make to our pilot pension
plan during the year. Our anticipated funding obligations under our pension plans for 2005 and thereafter cannot be reasonably estimated at this time because
these estimates vary materially depending on the assumptions used to determine them and whether we make contributions in excess of those required.
Nevertheless, we presently expect that our funding obligations under our pension plans in each of the years from 2005 through 2008 will be significant and
could have a material adverse impact on our liquidity.
Our indebtedness and other obligations are substantial and could materially adversely affect our business and our ability to incur additional debt to
fund future needs.
We have now and will continue to have a significant amount of indebtedness and other obligations. As of December 31, 2003, we had approximately $12.6
billion of total consolidated indebtedness, including capital leases. We also have minimum rental commitments with a present value of approximately $8
billion under noncancelable operating leases with initial or remaining terms in excess of one year. Our substantial indebtedness and other obligations could
negatively impact our operations in the future. For example, it could:
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