Delta Airlines 2004 Annual Report Download - page 45

Table of Contents
(1) These amounts are included on our Consolidated Balance Sheets. A portion of this debt is backed by letters of credit totaling $300 million at December 31,
2004. Additionally, included in these amounts is approximately (1) $75 million and $180 million due in 2005 and 2006, respectively, under interim
financing arrangements which we used to purchase regional jet aircraft that we may elect to refinance using long-term, secured financing commitments
available to us from a third party and (2) $130 million in 2005 debt maturities which we do not expect to be required to repay in 2005 or which we expect
to repay and then re-borrow during 2005. For additional information about our debt and related matters, see Note 6 of the Notes to the Consolidated
Financial Statements.
(2) Our operating lease obligations are discussed in Note 7 of the Notes to the Consolidated Financial Statements. A portion of these obligations is backed by
letters of credit totaling $104 million at December 31, 2004. For additional information about these letters of credit, see Note 6 of the Notes to the
Consolidated Financial Statements.
(3) Our capital expenditures in 2005 include approximately (1) $520 million related to our agreement to purchase 32 CRJ-200 aircraft, for which financing is
available to us on a long-term secured basis when we acquire these aircraft and (2) $415 million related to our commitment to purchase 11 B737-800
aircraft, for which we have entered into a definitive agreement to sell to a third party immediately following delivery of these aircraft to us by the
manufacturer in 2005. For additional information about these matters, see Notes 6 and 8 of the Notes to the Consolidated Financial Statements.
(4) Interest payments related to capital lease obligations are included in the table. The present value of these obligations, excluding interest, is included on our
Consolidated Balance Sheets. For additional information about our capital lease obligations, see Note 7 of the Notes to the Consolidated Financial
Statements.
(5) This amount represents our minimum fixed obligation under our contract carrier agreement with Chautauqua. Under the Chautauqua agreement, we are
obligated to pay certain minimum fixed obligations. Due to an amendment to the Chautauqua agreement in March 2004, we are now able to calculate the
amount of the minimum fixed obligation. Payments due after 2008 are not included in the table as minimum rates have not been contractually agreed upon.
For additional information regarding our contract carrier agreements, see "Contract Carriers" below.
(6) These amounts represent future interest payments related to our debt obligations based on the fixed and variable interest rates specified in the associated
debt agreements. Payments in early 2005 related to variable rate debt are based on the specified margin and the base rate, such as LIBOR, in effect at
December 31, 2004. The base rates typically reset every one to six months depending on the financing agreement. Payments for variable rate debt in late
2005 and thereafter do not consider any amount for the base rate component of the interest calculation since the rate is unknown at December 31, 2004;
these payments were calculated based only on the specified margin. At December 31, 2004, by way of context, the base rate component of the interest
calculation on our $5 billion of variable rate debt is approximately 2.5%. The related payments represent credit enhancements required in conjunction with
certain financing agreements.
(7) Includes purchase obligations pursuant to which we are required to make minimum payments for goods and services, including but not limited to
communications and reservations systems, technology, insurance, fuel, flight operations, and other third party services and products. For additional
information about other commitments and contingencies, see Note 8 of the Notes to the Consolidated Financial Statements.
(8) Represents other liabilities on our Consolidated Balance Sheets for which we are obligated to make future payments related to postretirement medical
benefit costs incurred but not yet paid and payments required under the pilot collective bargaining agreement for unused vacation time. These liabilities are
not included in any other line item on this table.
(9) In addition to the contractual obligations included in the table, we have significant cash obligations that are not included in the table. For example, we will
pay wages required under collective bargaining agreements; fund pension plans (as discussed below); purchase capacity under contract carrier
arrangements (as discussed below); and pay credit card processing fees and fees for other goods and services, including those related to fuel, maintenance
and commissions. While we are parties to legally binding contracts regarding these goods and services, the actual commitment is contingent on certain
factors such as volume and/or variable rates that are uncertain or unknown at this time. Therefore, these items are not included in the table. In addition,
purchase orders made in the ordinary course of business are excluded from the table and any amounts which we are liable for under the purchase orders are
included in current liabilities on our Consolidated Balance Sheets.
The following items are not included in the table above:
Pension Funding. Estimates of the amount and timing of future funding obligations under our pension plans are based on various assumptions. These
include assumptions concerning, among other things, the actual and projected market performance of the plan assets, 30-year U.S. Treasury bond yields,
statutory requirements and demographic data for pension plan participants.
We estimate that our pension plan funding will be approximately $450 million for 2005. Our anticipated funding obligations under our pension plans for
2006 and thereafter vary materially depending on the assumptions used to determine these funding obligations, including potential legislative changes
regarding these obligations. Absent the enactment of new federal legislation which reduces our pension funding obligations
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