Delta Airlines 2003 Annual Report Download - page 41

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$1.3 billion of operating lease payments; (2) approximately $750 million in interest payments, which may vary as interest rates change on our $4.2 billion
principal amount of variable rate debt; and (3) estimated pension funding of approximately $440 million. We also believe that our annual 2004 cash flows
from operations will be sufficient to fund our non-fleet capital expenditures for 2004, but will not be sufficient to pay our aircraft capital expenditures and
debt maturities for that year.
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. The voluntary contribution to the non-pilot pension plan will reduce our near term funding obligation for that plan and increase the
benefit security for plan participants. As a result of the 2004 contributions to our pension plans, the non-pilot and pilot pension plans will each have a funded
ratio, for current liability purposes under ERISA, of at least 80% as of July 1, 2003, our most recent ERISA funding measurement date.
During 2004, we expect capital expenditures to be approximately $1.2 billion, covering $600 million for aircraft expenditures, which includes
approximately $500 million for the acquisition of regional jet aircraft; $300 million for aircraft parts and modifications; and $300 million for non-fleet capital
expenditures. We may use the RJ Commitments to fund a substantial portion of our obligations for the acquisition of regional jet aircraft. As discussed above,
we believe our non-fleet capital expenditures will be funded through cash flows from operations. We currently expect to fund the remaining capital
expenditures in 2004 through cash and cash equivalents.
We have approximately $1.0 billion of debt maturities due during 2004, including $430 million in the March 2004 quarter, $160 million in the June 2004
quarter, $290 million in the September 2004 quarter and $120 million in the December 2004 quarter. These maturities include approximately $300 million
due under short-term financing arrangements associated with our acquisition of regional jet aircraft, which will be largely refinanced through the RJ
Commitments. We currently expect to pay the remaining debt maturities in 2004 through cash and cash equivalents.
We have significant obligations due in 2005 and thereafter. For additional information, see the Contractual Obligations section of Management's
Discussion and Analysis in this Form 10-K.
We expect to meet our obligations as they come due through available cash and cash equivalents, investments, internally generated funds and borrowings.
While new financing may 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. Failure to obtain new financing could have a material adverse effect on our liquidity.
Outlook. Based on the continuing weak revenue environment and cost pressures, including higher fuel costs, we estimate we will record a net loss of
approximately $400 million in the March 2004 quarter.
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