Delta Airlines 2003 Annual Report Download - page 24

Table of Contents
• limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and general corporate purposes;
• require us to dedicate a substantial portion of our cash flow from operations to the payment of principal of, and interest on, our indebtedness,
thereby reducing the funds available to us for other purposes;
• make us more vulnerable to economic downturns, adverse industry conditions or catastrophic external events, limit our ability to withstand
competitive pressures and reduce our flexibility in planning for, or responding to, changing business and economic conditions; and
• place us at a competitive disadvantage to our competitors that have relatively less debt than we have.
We have significant debt obligations maturing in the near term (approximately $1.0 billion in 2004 and $1.2 billion in 2005, as adjusted for certain
refinancings of regional jet aircraft subsequent to December 31, 2003), as well as substantial pension funding obligations. We expect to meet our obligations
as they come due through available cash and cash equivalents, investments, internally generated funds and borrowings. We do not have any existing undrawn
lines of credit. However, we have available to us long-term secured financing commitments that we may use only to finance a substantial portion of regional
jet aircraft delivered to us through 2004. While we believe that new financing will be available to us, access to such financing cannot be assured given the
existing business environment and the composition of our currently available unencumbered assets. Most of our owned aircraft are encumbered and those that
are not are less attractive to lenders because they are not eligible for mortgage financing under Section 1110 of the U.S. Bankruptcy Code, are older aircraft
types and/or are aircraft types which are no longer manufactured. Failure to obtain new financing could have a material adverse effect on our liquidity.
Interruptions or disruptions in service at one of our hub airports could have a material adverse impact on our operations.
Our business is heavily dependent on our operations at the Atlanta Airport and at our other hub airports in Cincinnati, Dallas/Fort Worth and Salt Lake
City. Each of these hub operations includes flights that gather and distribute traffic from markets in the geographic region surrounding the hub to other major
cities and to other Delta hubs. A significant interruption or disruption in service at the Atlanta Airport or at one of our other hubs could have a serious impact
on our business, financial condition and operating results.
We are increasingly dependent on technology in our operations, and if our technology fails or we are unable to continue to invest in new technology,
our business may be adversely affected.
We are increasingly dependent on technology initiatives to reduce costs and to enhance customer service in order to compete in the current business
environment. For example, we have
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