Delta Airlines 2005 Annual Report Download - page 98

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Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following tables summarize, as of December 31, 2005, our minimum rental commitments under capital leases and
noncancelable operating leases (including certain aircraft under contract carrier agreements) with initial terms in excess of one year:
Capital Leases
Years Ending December 31, Not Subject to Subject to
(in millions) Compromise Compromise Total
2006 $ 5 $ 178 $ 183
2007 4 133 137
2008 4 109 113
2009 4 146 150
2010 3 141 144
After 2010 — 269 269
Total minimum lease payments 20 976 996
Less: amount of lease payments representing interest 4 598 602
Present value of future minimum capital lease payments 16 378 394
Less: current obligations under capital leases 3 48 52
Long-term capital lease obligations $ 13 $ 330 $ 343
Operating Leases
Delta Contract Carrier
Years Ending December 31, Lease Agreements
(in millions) Payments Lease Payments(1) Total
2006 $ 988 $ 336 $ 1,324
2007 802 400 1,202
2008 874 407 1,281
2009 743 407 1,150
2010 681 408 1,089
After 2010 3,509 3,485 6,994
Total minimum lease payments $ 7,597 $ 5,443 $ 13,040
(1) Payments related to Chautauqua aircraft are not included as we entered into this agreement prior to June 30, 2003.
At December 31, 2005, we operated 224 aircraft under operating leases and 47 aircraft under capital leases. These leases have
remaining terms ranging from one month to 11 years. During the December 2004 quarter, we renegotiated 99 aircraft lease agreements
(95 operating leases and four capital leases) as part of our transformation plan announced in 2004. As a result of changes in certain
lease terms, 33 of the operating leases were reclassified as capital leases when their new terms were evaluated in accordance with
SFAS No. 13 "Accounting for Leases" ("SFAS 13").
In 2003, the EITF reached a consensus on EITF 01-08 "Determining Whether an Arrangement Contains a Lease", which provides
guidance whether an arrangement contains a lease that is within the scope of SFAS 13. The guidance is applicable to agreements
entered into or modified after June 30, 2003. Since that date, we have entered into or modified contract carrier agreements with ASA,
SkyWest, Freedom Airlines, Inc. ("Freedom") and Shuttle America. These agreements provided us with the right to use 226 aircraft in
the Delta Connection program at December 31, 2005. Our rights to use these aircraft are considered leases and qualified for operating
lease treatment under SFAS 13. Payments related to these aircraft are included in the table above. For additional information on these
contract carriers agreements, see Note 10.
Subsequent to December 31, 2005, we reached agreement with a group of creditors on a term sheet to restructure the financing for
88 Mainline aircraft. On February 15, 2006, the Bankruptcy Court approved
F-36