Delta Airlines 2004 Annual Report Download - page 85

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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
$1,000 principal amount of 27/8% Notes, subject to adjustment in certain circumstances, which is equivalent to a conversion price of approximately $13.59 per
share of common stock, if:
• during any calendar quarter after March 31, 2004, the last reported sale price of our common stock for at least 20 trading days during the
period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130% of the conversion price per share of our common stock;
• the trading price of the 27/8% Notes falls below a specified threshold;
• we call the 27/8% Notes for redemption; or
• specified corporate transactions occur.
We may redeem all or some of the 27/8% Notes for cash at any time after February 21, 2009, at a redemption price equal to the principal amount of the
27/8% Notes to be redeemed plus any accrued and unpaid interest.
Holders may require us to repurchase their 27/8% Notes for cash on February 18, 2009, 2014 and 2019, or in other specified circumstances involving the
exchange, conversion or acquisition of all or substantially all of our common stock, at a purchase price equal to the principal amount of the 27/8% Notes to be
purchased plus any accrued and unpaid interest. At December 31, 2004, 23.9 million shares of common stock were reserved for issuance for the conversion of
the 27/8% Notes.
Debt Exchanges and Purchases
During 2004 and 2003, we completed the following debt exchanges and purchases:
• In November 2004, we exchanged approximately $135 million aggregate principal amount of our unsecured 7.7% Notes due 2005 for a like
principal amount of newly issued unsecured 8.0% Senior Notes due 2007, net of a discount totaling $46 million, and 5,488,054 shares of our
common stock with a fair value of $38 million. As a result of this transaction, we recorded an $8 million gain on extinguishment of debt in
other income (expense) on our 2004 Consolidated Statement of Operations.
• In November 2004, we exchanged $237 million aggregate principal amount of our 7.78% Series 2000-1C Enhanced Equipment Trust
Certificates due 2005 and 7.30% Series 2001-1C Enhanced Equipment Trust Certificates due 2006 for $235 million principal amount of
newly issued 9.5% Senior Secured Notes due 2008.
• In September 2003, we exchanged $262 million aggregate principal amount of our 6.65% Series C Medium-Term Notes due 2004 and
7.70% Senior Notes due 2005 for a total of $47 million in cash (including $5 million in accrued interest) and $211 million principal amount
of newly issued unsecured 10% Notes due 2008, net of a discount. As a result of this transaction, we recorded a $15 million gain on
extinguishment of debt in other income (expense) on our 2003 Consolidated Statement of Operations.
• During the three years ended December 31, 2004, we purchased approximately $260 million aggregate principal amount of the Series C
Guaranteed Serial ESOP Notes issued by the Delta Family-Care Savings Plan. As a result of these purchases, we recognized a $1 million
gain, a $15 million loss and a $42 million loss due to the extinguishment of debt for the years ended December 31, 2004, 2003 and 2002,
respectively, in other income (expense) on our Consolidated Statements of Operations.
During the December 2004 quarter, we also completed agreements with certain other aircraft lenders to defer $112 million in debt obligations from 2004
through 2006 to later years. F-28