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DELTA AIR LINES INC /DE/ (DAL)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 03/02/2007
Filed Period 12/31/2006

Table of contents

  • Page 1
    DELTA AIR LINES INC /DE/ (DAL) 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/02/2007 Filed Period 12/31/2006

  • Page 2
    ...13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-5424 DELTA AIR LINES, INC. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) Post Office Box 20706 Atlanta, Georgia (Address of principal executive...

  • Page 3
    ... 31, 2007, there were outstanding 197,335,938shares of the registrant's common stock. This document is also available on our website at http://investor.delta.com/edgar.cfm. Documents Incorporated By Reference Part III of this Form 10-K will be filed with the Securities and Exchange Commission as an...

  • Page 4
    ...-Looking Information Other Information PART I ITEM 1. BUSINESS General Description Airline Operations Fuel Competition Frequent Flyer Program Regulatory Matters Employee Matters Additional Information ITEM 1A. RISK FACTORS Risk Factors Relating to Delta Risk Factors Relating to the Airline Industry...

  • Page 5
    ... 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES PART...

  • Page 6
    ... international alliance, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Including our SkyTeam and worldwide codeshare partners, we offer flights to 462 worldwide destinations in 99 countries. For the yearsended December 31, 2006, 2005...

  • Page 7
    ... alliances with foreign airlines to improve our access to international markets. These arrangements can include codesharing, reciprocal frequent flyer program benefits, shared or reciprocal access to passenger lounges, joint promotions, common use of airport gates and ticket counters, ticket office...

  • Page 8
    ... business travelers known as the Delta Shuttle. The Delta Shuttle provides nonstop, hourly service on business days between New York - LaGuardia Airport ("LaGuardia") and both Boston - Logan International Airport and Washington, D.C. Ronald Reagan National Airport ("Reagan"). Domestic Alliances...

  • Page 9
    ... cities, through alliances with international carriers. Frequent Flyer Program We have a frequent flyer program, the SkyMiles®program, which offers incentives to customers to increase travel on Delta. This program allows program members to earn mileage for travel awards by flying on Delta, Delta...

  • Page 10
    ..., denied boarding compensation, baggage liability and disabled passenger transportation. The DOT also has authority to review certain joint venture agreements between major carriers. The FAA has primary responsibility for matters relating to air carrier flight operations, including airline operating...

  • Page 11
    ... Financial Statements. CivilReserve Air Fleet Program We participate in the Civil Reserve Air Fleet program (the "CRAF Program"), which permits the United States military to use the aircraft and crew resources of participating U.S. airlines during airlift emergencies, national emergencies or times...

  • Page 12
    ... Railway Labor Act Our relations with labor unions in the United States are governed by the Railway Labor Act. Under the Railway Labor Act, a labor union seeking to represent an unrepresented craft or class of employees is required to file with the National Mediation Board (the "NMB") an application...

  • Page 13
    ... 170 1,345 535 880 Employee Group Delta Pilots Delta Flight Superintendents Comair Pilots Comair Maintenance Employees Comair Flight Attendants Union ALPA PAFCA ALPA IAM IBT Date on which Collective Bargaining Agreement Becomes Amendable December 31, 2009 January 1, 2010 May 21, 2007(1) December...

  • Page 14
    ... fuel would materially adversely affect our operations and operating results. Our operating results are significantly impacted by changes in the price and availability of aircraft fuel. Fuel prices increased substantially in 2004, 2005 and 2006. In 2006, our average fuel price per gallon rose 19% to...

  • Page 15
    ... purchase aircraft fuel on the spot market, from offshore sources and under contracts that permit the refiners to set the price. To attempt to manage our exposure to changes in fuel prices, we periodically use derivative instruments designated as cash flow hedges, which are comprised of heating oil...

  • Page 16
    ... are governed by the Railway Labor Act, which provides that a collective bargaining agreement between an airline and a labor union does not expire, but instead becomes amendable as of a stated date. The Railway Labor Act generally prohibits strikes or other types of self-help actions both before and...

  • Page 17
    ... rule under section 382(l)(5) or the special rule under section 382(l)(6). Assuming we rely on section 382(l)(5) of the Internal Revenue Code, a second "ownership change" within two years from the effective date of the Plan would eliminate completely our ability to utilize our net operating loss...

  • Page 18
    ... provide service at low fares to destinations served by us. In particular, we face significant competition at our hub airports in Atlanta and JFK from other carriers. In addition, our operations at our hub airports also compete with operations at the hubs of other airlines that are located in close...

  • Page 19
    ... aviation insurance in general. Since September 24, 2001, the U.S. government has been providing U.S. airlines with war-risk insurance to cover losses, including those resulting from terrorism, to passengers, third parties (ground damage) and the aircraft hull. The coverage currently extends through...

  • Page 20
    ... the Consolidated Financial Statements for information about (a) an agreement we entered into in January 2007 to purchase 30 CRJ-900 aircraft, with options to acquire an additional 30 CRJ-900 aircraft, and (b) letters of intent we have entered into to lease 13 B-757-200ER aircraft from third parties...

  • Page 21
    15

  • Page 22
    ... facility leases generally require us to pay the cost of providing, operating and maintaining such facilities, including, in some cases, amounts necessary to pay debt service on special facility bonds issued to finance their construction. We also lease marketing, ticket and reservations offices in...

  • Page 23
    ... Family-Care Savings Plan Litigation On March 16, 2005, a retired Delta employee filed an amended class action complaint in the U.S. District Court for the Northern District of Georgia against Delta, certain current and former Delta officers and certain current and former Delta directors on behalf...

  • Page 24
    ...2005) Fiscal 2006 First Quarter Second Quarter Third Quarter Fourth Quarter As of January 31, 2007, there were approximately 25,270 holders of record of our common stock. We suspended the payment of dividends on our common stock in 2003. We expect to retain any future earnings to fund our operations...

  • Page 25
    ... For the years ended December 31, 2006 (2) Total assets (millions) Long-term debt and capital leases (excluding current maturities) (millions) Shareowners' (deficit) equity (millions) Weighted average shares outstanding Revenue passengers enplaned (thousands) Available seat miles (millions) Revenue...

  • Page 26
    (3) Includes an $888 million charge or $5.49 diluted EPS for restructuring, asset writedowns, pension settlements and related items, net and an $884 million charge or $5.47 diluted EPS for reorganization costs (see Item 7). 19

  • Page 27
    ... net of tax, or $0.17 diluted EPS) for compensation under the Air Transportation Safety and System Stabilization Act; and a $94 million charge ($59 million net of tax, or $0.47 diluted EPS) for certain other income and expense items. Includes interest income. Includes (losses) gains from the sale...

  • Page 28
    ... by the Bankruptcy Court, the Debtors are planning to emerge from Chapter 11 shortly thereafter. For additional information regarding the Debtors' Chapter 11 proceedings, see Note 1 of the Notes to the Consolidated Financial Statements. Overview of 2006 Results In 2006, we recorded a net loss of...

  • Page 29
    ...Atlanta International Airport, which is the world's largest hub, and John F. Kennedy International Airport in New York. In addition, we offer more than 600 weekly flights to 58 destinations in Latin America and the Caribbean. In-Court Restructuring Initiatives. Our business plan includes annual cost...

  • Page 30
    ... average annual pilot labor cost savings between June 1, 2006 and December 31, 2009 from changes in pilot pay rates, benefits and work rules. This excludes savings we will achieve from the termination of the primary qualified defined benefit pension plan for pilots ("Pilot Plan") and the related non...

  • Page 31
    ... received $4.0 billion in cash and 78.5 million shares of US Airways common stock. In addition, US Airways contemplated that our debtor-in-possession financing agreements and all other allowed secured claims and administrative claims in our bankruptcy cases would be assumed or paid in full. The US...

  • Page 32
    ... rent payments instead of on a straight-line basis over the lease term as required by Statement of Financial Accounting Standards ("SFAS") No. 13, "Accounting for Leases" ("SFAS 13"). A $108 million net charge related to the sale of mileage credits under our SkyMiles frequent flyer program. This...

  • Page 33
    ... million income tax benefit (see "Income Tax Benefit" below). As discussed below, the net loss for 2005 includes an $888 million charge to restructuring, asset writedowns, pension settlements and related items, net and an $884 million charge to reorganization items, net. Operating Revenue Year Ended...

  • Page 34
    ... 2005, (2) certain Accounting Adjustments discussed above and (3) an increase in aircraft fuel prices. Operating capacity decreased 6% to 148 billion available seat miles primarily due to the reduction of our aircraft fleet as part of our business plan initiatives. Operating cost per available seat...

  • Page 35
    ... by a net $3 million reduction in accruals associated with prior year workforce reduction programs. Asset charges.A $10 million charge related tothe removal from service of six B-737-200 aircraft prior to their lease expiration dates. • • • Other.The decrease in other operating expense...

  • Page 36
    ... plans, see Note 10 of the Notes to the Consolidated Financial Statements. Pilot collective bargaining agreement.A $2.1 billion allowed general, unsecured pre-petition claim in connection with our comprehensive agreement with ALPA reducing our pilot labor costs. For additional information regarding...

  • Page 37
    ...our customers, enhanced by the availability of airline fare information on the Internet. During the fourth quarter of 2005, passenger mile yield increased 8% compared to the fourth quarter of 2004, which reflects a general improvement in the overall business environment and the structural changes we...

  • Page 38
    ... Notes to the Consolidated Financial Statements. Operating capacity for 2005 increased 3% to 157 billion available seat miles, primarily due to operational efficiencies from the redesign of our Atlanta hub from a banked to a continuous hub, which allowed us to increase system-wide capacity with no...

  • Page 39
    ...the impact of our sale of ASA. For additional information regarding our SkyMiles frequent flyer program, see Note 2 of the Notes to the Consolidated Financial Statements. Other (Expense) Income Other expenses, net for 2005 increased 42% to $974 million, compared to $684 million for 2004. This change...

  • Page 40
    ... Financial Statements. Reorganization Items, Net Reorganization items, net totaled an $884 million charge for 2005. See "Results of Operations - 2006 Compared to 2005" for additional information on these items. Income Tax Benefit (Provision) In 2004, we recorded a valuation allowance on our net...

  • Page 41
    ...This change reflects a $401 million decrease in cash used for the purchase of flight and ground equipment in 2006. Our 2005 cash flows from investing activities also includes $842 million in proceeds from our sale of ASA and certain flight equipment. Cash provided by investing activities totaled $22...

  • Page 42
    ...included remain subject to change until a plan of reorganization is approved and we emerge from Chapter 11. This amount includes our noncancelable operating leases and our lease payments related to aircraft under our contract carrier agreements with ASA, SkyWest Airlines, Freedom and Shuttle America...

  • Page 43
    ... 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...

  • Page 44
    ... aircraft, sell the seats on those flights and retain the related revenues. We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services...

  • Page 45
    ...a frequent flyer program, the SkyMiles Program, offering incentives to increase travel on Delta. This program allows participants to earn mileage for travel awards by flying on Delta, Delta Connection carriers and participating airlines, as well as through participating companies such as credit card...

  • Page 46
    ... credits or our estimate of the fair value of transportation expected to be provided could have a material impact on our revenue in the year in which the change occurs and in future years. Our total liability for future SkyMiles award redemptions for free travel on us or participating airlines...

  • Page 47
    ... primarily on labor contracts with our employees under collective bargaining agreements and expected future pay rate changes for other employees. Due to the freeze of benefit accruals effective December 31, 2005 in our Non-pilot Plan, adjusting the rate of change in future compensation levels does...

  • Page 48
    ... the funded status of our defined benefit pension and other postretirement plans in our Consolidated Balance Sheet as of December 31, 2006, with changes in the funded status recognized through comprehensive loss in the year in which such changes occur. Application of this standard resulted in...

  • Page 49
    ... Miles- The total number of tons of cargo transported during a reporting period, multiplied by the total number of miles cargo is flown during that period. Cargo Ton Mile Yield- The amount of cargo revenue earned per cargo ton mile during a reporting period. CASM- (Operating) Cost per Available Seat...

  • Page 50
    ...and procedures were effective as of December 31, 2006 to ensure that material information was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Changes In Internal...

  • Page 51
    ... material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Delta Air Lines, Inc...

  • Page 52
    ... ACCOUNTANT FEES AND SERVICES The information required by this Item will be filed with the Securities and Exchange Commission as an amendment to this Form 10-K in accordance with General Instruction G(3). PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) (1), (2). The financial...

  • Page 53
    ..., thereunto duly authorized, on the 2nd day of March, 2007. DELTA AIR LINES, INC By: /s/ Gerald Grinstein Gerald Grinstein Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on the 2nd day of March, 2007 by the following...

  • Page 54
    Signature /s/ Arthur E. Johnson Arthur E. Johnson /s/ Karl J. Krapek Karl J. Krapek Title Director Director Paula Rosput Reynolds Director John F. Smith, Jr. /s/ Kenneth B. Woodrow Kenneth B. Woodrow Chairman of the Board Director 47

  • Page 55
    ... Credit Agreement dated as of August 31, 2006. Delta 2000 Performance Compensation Plan (Filed as Appendix A to Delta's Proxy Statement dated September 15, 2000).* First Amendment to Delta 2000 Performance Compensation Plan, effective April 25, 2003 (Filed as Exhibit 10.3 to Delta's Quarterly Report...

  • Page 56
    ... quarter ended March 31, 2003).* 10.13(a) Delta Air Lines, Inc. Director and Officer Severance Plan (Filed as Exhibit 10.1 to Delta's Current Report on Form 8-K filed on February 23, 2006).* 10.13(b) Form of Agreement Related to Relinquishment of Certain Prior Severance Benefits (Non-pilot). (Filed...

  • Page 57
    ... CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (Ernst & Young LLP) Report of Independent Registered Accounting Firm (Deloitte & Touche LLP) Consolidated Balance Sheets - December 31, 2006 and 2005 Consolidated Statements of Operations for the years ended...

  • Page 58
    ... consolidated financial statements, in 2006 the Company changed its methods of accounting for postretirement benefit plans and share-based compensation. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Delta...

  • Page 59
    ... 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United...

  • Page 60
    .... Debtor and Debtor-In-Possession Consolidated Balance Sheets December 31, 2006 and 2005 ASSETS (in millions) 2006 2005 CURRENT ASSETS: Cash and cash equivalents Short-term investments Restricted cash Accounts receivable, net of an allowance for uncollectible accounts of $21 and $41 at December...

  • Page 61
    ... (in millions, except share data) 2006 2005 CURRENT LIABILITIES: Current maturities of long-term debt and capital leases Air traffic liability Accounts payable Taxes payable Deferred revenue Accrued salaries and related benefits Other accrued liabilities Total current liabilities NONCURRENT...

  • Page 62
    ... the years ended December 31, 2006 and 2005, respectively) Interest income (Loss) gain from sale of investments, net Miscellaneous, net Total other expense, net LOSS BEFORE REORGANIZATION ITEMS REORGANIZATION ITEMS, NET LOSS BEFORE INCOME TAXES INCOME TAX BENEFIT (PROVISION) NET LOSS PREFERRED STOCK...

  • Page 63
    ... and amortization Deferred income taxes Pension, postretirement and postemployment expense in excess of (less than) payments Reorganization items, net Gain on extinguishment of debt, net Loss (gain) from sale of investments, net Changes in certain current assets and liabilities: (Increase) decrease...

  • Page 64
    The accompanying notes are an integral part of these Consolidated Financial Statements. F-7

  • Page 65
    ...01 per share Balance at December 31, 2005 Comprehensive loss: Net loss Other comprehensive income Total comprehensive loss (See Note 13) Adoption of SFAS 158, net of tax Dividends on Series B ESOP Convertible Preferred Stock allocated shares Compensation expense associated with vesting stock options...

  • Page 66
    Balance at December 31, 2006 (1) Average price per share $ 2 $ 1,561 $ (14,414) $ (518) $ (224) $ (13,593) The accompanying notes are an integral part of these Consolidated Financial Statements. F-8

  • Page 67
    ... to emerge from bankruptcy as a competitive, standalone airline with a global network. Our business strategy touches all facets of our operations - the destinations we will serve, the way we will serve our customers, and the fleet we will operate - in order to earn customer preference and continue...

  • Page 68
    ...under the plan and (2) no class of claims or interests senior to the common stock is being paid more than in full. Notices to Creditors; Effect of Automatic Stay.Shortly after the Petition Date, the Debtors began notifying all known current or potential creditors of the Chapter 11 filing. Subject to...

  • Page 69
    ...of Potential Claims" below). Special Protection Applicable to Leases and Secured Financing of Aircraft and Aircraft Equipment.Notwithstanding the general discussion above of the impact of the automatic stay, under Section 1110 of the Bankruptcy Code ("Section 1110"), certain secured parties, lessors...

  • Page 70
    ...agreement with ALPA became effective June 1, 2006, and becomes amendable December 31, 2009 ("Contract Period"). It provides for changes in pilot pay rates, benefits and work rules. In addition, ALPA agreed not to oppose termination of Delta's primary qualified defined benefit pension plan for pilots...

  • Page 71
    ... comprehensive settlement agreement with the Pension Benefit Guaranty Corporation (the "PBGC") regarding the termination of the Pilot Plan. For information regarding this agreement, see Note 10. Payment of Insurance Benefits to Retired Employees.Section 1114 of the Bankruptcy Code addresses a debtor...

  • Page 72
    ....The Bankruptcy Court issued a final order to assist us in preserving our net operating losses (the "NOL Order"). The NOL Order provides for certain notice and hearing procedures regarding trading in our common stock. It also provides a mechanism by which certain holders of claims may be required to...

  • Page 73
    ... included on our Consolidated Balance Sheets as of December 31, 2006 and 2005: (in millions) 2006 2005 Pension, postretirement and other benefits Debt and accrued interest Aircraft lease related obligations Accounts payable and other accrued liabilities Total liabilities subject to compromise...

  • Page 74
    ...) 2006 2005 Pilot collective bargaining Pilot pension termination(2) Aircraft financing renegotiations, rejections and repossessions(3) Retiree healthcare claims(4) Professional fees Rejection of other executory contracts(5) Compensation expense(6) Debt issuance and discount costs Facility leases...

  • Page 75
    a new entity for financial reporting purposes. The adoption of fresh start reporting may have a material impact on the consolidated financial statements of the new financial reporting entity. F-16

  • Page 76
    ... rent payments instead of on a straight-line basis over the lease term as required by Statement of Financial Accounting Standards ("SFAS") No. 13, "Accounting for Leases" ("SFAS 13"). A $108 million net charge related to the sale of mileage credits under our SkyMiles frequent flyer program. This...

  • Page 77
    ... our cash management system, we utilize controlled disbursement accounts that are funded daily. Checks we issue, which have not been presented for payment, are recorded in accounts payable on our Consolidated Balance Sheets. These amounts totaled zero and $66 million at December 31, 2006 and 2005...

  • Page 78
    ... 31, 2006 and 2005, respectively. Derivative Financial Instruments Fuel Hedging Program We periodically use derivative instruments designated as cash flow hedges, which are comprised of heating oil and jet fuel swap and collar contracts, to manage our exposure to changes in aircraft fuel prices. In...

  • Page 79
    ...Revenue Cargo revenue is recognized in our Consolidated Statements of Operations when we provide the transportation. Other, net Other, net revenue includes revenue from (1) a portion of the sale of mileage credits in our SkyMiles frequent flyer program, discussed above, (2) codeshare agreements with...

  • Page 80
    F-20

  • Page 81
    ... as held for sale. To determine impairments for aircraft used in operations, we group assets at the fleet-type level (the lowest level for which there are identifiable cash flows) and then estimate future cash flows based on projections of capacity, passenger yield, fuel costs, labor costs and other...

  • Page 82
    ... Statements of Operations. Frequent Flyer Program For SkyMiles accounts with sufficient mileage credits to qualify for a free travel award, we record a liability for the estimated incremental cost of flight awards that are earned and expected to be redeemed for travel on Delta or other airlines...

  • Page 83
    ... on our Consolidated Statements of Operations when the transportation is provided and the related revenue is recognized. Stock-Based Compensation Effective January 1, 2006, we adopted the fair value provisions of SFAS 123R. This standard requires companies to measure the cost of employee services in...

  • Page 84
    ... tickets purchased with Visa or MasterCard which have not yet been used for travel. The Cash Reserve is recorded in Restricted cash on our Consolidated Balance Sheets. See Note 6 for additional information related to our processing agreement. For the year ended December 31, 2006, the change in Cash...

  • Page 85
    ... for the year ended December 31, 2005 and $15 million for the year ended December 31, 2004 from the amounts previously reported. We reclassified certain other prior period amounts in our Consolidated Financial Statements to be consistent with our current period presentation. The effect of these...

  • Page 86
    ... over a five year period. Changes in fair value are recorded in other (expense) income on our Consolidated Statements of Operations. The fair values totaled $33 million and $29 million at December 31, 2006 and 2005, respectively. For additional information about our contract carrier agreements with...

  • Page 87
    ... related to this program was not significant at December 31, 2006 and 2005. Our accounts receivable are generated largely from the sale of passenger airline tickets and cargo transportation services. The majority of these sales are processed through major credit card companies, resulting in accounts...

  • Page 88
    ... new long-range cash flow plans. These actions reflected, among other things, (1) the strategic role of ASA and Comair in our business (see Note 11 for information about our sale of ASA in 2005), (2) the projected impact of changes to our fare structure on the revenues of each of our reporting units...

  • Page 89
    ... service between New York and London (the "Route"). We agreed to purchase the Route for up to $21 million, consisting of $13 million which we paid at the closing of the transaction and four annual payments of $2 million payable in 2007 through 2010. If, however, the current bilateral agreement...

  • Page 90
    F-28

  • Page 91
    .... Our variable interest rate long-term debt is shown using interest rates which represent LIBOR or Commercial Paper plus a specified margin, as provided for in the related agreements. The rates shown were in effect at December 31, 2006, if applicable. For additional information about the repayment...

  • Page 92
    ...) Future Maturities The following table summarizes the contractual maturities of our debt, including current maturities, at December 31, 2006: Principal Not Years Ending December 31, (in millions) Subject to Compromise Principal Subject to Compromise Total Principal Amount 2007 2008 2009 2010 2011...

  • Page 93
    F-30

  • Page 94
    NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued) The TLA, TLB and TLC each mature on the earliest of (1) March 16, 2008, (2) the effective date of a plan of reorganization in the Debtors' bankruptcy cases or (3) accelerations and termination of the obligations under such loans if an ...

  • Page 95
    ... the SkyMiles Agreements. Amex has the right, in certain circumstances, to impose a significant holdback on our receivables, including for tickets purchased using an American Express credit card but not yet used for travel. As required by the Modification Agreement, on September 16, 2005, we used...

  • Page 96
    ... leased to us at Cincinnati/Northern Kentucky International Airport and Salt Lake City International Airport. We pay debt service on these bonds pursuant to longterm lease agreements. • The Bonds (1) have scheduled maturities between 2029 and 2035, (2) currently bear interest at a variable rate...

  • Page 97
    ..., and lease rates will be based on the date of manufacture of the aircraft. We believe that the lease payments for these 15 aircraft will aggregate $215 million over the maximum 172 month term and that the lease payments approximate current market rates. As of December 31, 2006, GECC has leased nine...

  • Page 98
    ... tickets purchased with Visa or MasterCard which have not yet been used for travel (the "unflown ticket liability"). We estimate that the Cash Reserve, which adjusts daily, will range between $450 million and $1.1 billion during the term of the Processing Agreement. The Processing Agreement allows...

  • Page 99
    ...the Bankruptcy Court and certain other conditions, including compliance with Section 1110. Rental expense for operating leases, which is recorded on a straight-line basis over the life of the lease term, totaled $945 million, $1.1 billion, and $1.3 billion for the years ended December 31, 2006, 2005...

  • Page 100
    ... Total 2007 2008 2009 2010 2011 After 2011 Total minimum lease payments Less: amount of lease payments representing interest Present value of future minimum capital lease payments Less: current obligations under capital leases Long-term capital lease obligations Operating Leases Delta Years...

  • Page 101
    F-37

  • Page 102
    ... aircraft, sell the seats on those flights and retain the related revenues. We pay those airlines an amount, as defined in the applicable agreement, which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services...

  • Page 103
    ... equity it provided to purchase the aircraft and (2) repay in full any debt outstanding at such time that is not being assumed in connection with such purchase. If we are required to lease aircraft owned by Chautauqua or Shuttle America, the lease would have (1) a rate equal to the debt payments of...

  • Page 104
    Kentucky. Those matters pending in the Eastern District of Kentucky have been consolidated as "In Re Air Crash at Lexington, Kentucky, August 27, 2006, Master File No. 5:06-CV-316." F-39

  • Page 105
    ... Airport. We also provide a guarantee to the bond trustee covering payment of the debt service. General Indemnifications We are the lessee under many commercial real estate leases. It is common in these transactions for us, as the lessee, to agree to indemnify the lessor and the lessor's related...

  • Page 106
    ... the exclusive jet fuel supplier for our operations at the Atlanta airport, the Cincinnati airport and the three major airports in the New York City area. In accordance with this agreement, on September 6, 2006, we sold to Aron, at then current market prices, (1) all jet fuel inventory that we were...

  • Page 107
    ... information about our accounting policy for income taxes). The following table shows significant components of our deferred tax assets and liabilities at December 31, 2006 and 2005: (in millions) 2006 2005 Deferred tax assets: Net operating loss carryforwards Additional minimum pension liability...

  • Page 108
    ... by the Internal Revenue Code, the Employee Retirement Income Security Act ("ERISA") and our collective bargaining agreements. Any changes to the plans or assumptions used to estimate future benefits could have a significant effect on the amount of the reported obligation and future annual expense...

  • Page 109
    ... Agreements provided retirees an allowed general, unsecured pre-petition claim of $539 million, which was recorded in reorganization items, net with a corresponding offset in liabilities subject to compromise. The amendment of our postretirement plans reduces participant benefits and is accounted...

  • Page 110
    ... pension liability and the recording of the $3.0 billion in claims resulted in a net reduction of $490 million in liabilities subject to compromise. Claims associated with changes made in the Chapter 11 reorganization and obligations related to our defined benefit plans, other postretirement benefit...

  • Page 111
    ... December 31, 2005, future pay and service accruals under the Non-pilot Plan were frozen. The Non-pilot Plan provides a retirement benefit based on a combination of a final average earnings formula and a cash balance formula, subject to the terms of that plan. Under our settlement agreement with the...

  • Page 112
    ... agreement. In 2005, the $1.3 billion increase in our pension benefit obligation due to actuarial losses primarily relates to (1) changes in our discount rate and participant life expectancy assumptions used to measure the obligation and (2) the large number of early pilot retirements and related...

  • Page 113
    ... September 30): Other Pension Benefit (in millions) 2006 2005 2006 Postretirement Benefit 2005 2006 Other Postemployment Benefit 2005 Funded status Unrecognized net actuarial loss Unrecognized prior service cost (credit) Contributions, net made between the measurement date and year-end Settlement...

  • Page 114
    ...: Other Pension Benefit (in millions) 2006 2005 2004 2006 Postretirement Benefit 2005 2004 2006 Other Postemployment Benefit 2005 2004 Service cost Interest cost Expected return on plan assets Amortization of prior service cost (benefit) Recognized net actuarial loss Amortization of net transition...

  • Page 115
    ... on the actively managed structure of our investment program and its record of achieving such returns historically. Assumed healthcare cost trend rates have an effect on the amounts reported for the other postretirement benefit plans. A 1% change in the healthcare cost trend rate used in measuring...

  • Page 116
    ... and current assets. Actual benefit payments may vary significantly from these estimates. As the result of the Chapter 11 filing, benefits earned under our non-qualified defined benefit plans will not be paid, and are not included in the table below. Benefits earned under our qualified pension plans...

  • Page 117
    ... Stock ("ESOP Preferred Stock"), common stock or cash to the Savings Plan. Effective on the Petition Date, we began making all company contributions to the Savings Plan in cash. Our contributions, which are recorded as salaries and related costs on our Consolidated Statements of Operations, totaled...

  • Page 118
    airlines serve as Delta Connection carriers. The sale of ASA resulted in an immaterial gain that is being amortized over the life of our contract carrier agreement with ASA. For additional information on our contract carrier agreements with ASA and SkyWest Airlines, see Note 8. F-52

  • Page 119
    ... plans which provide for the issuance of common stock in connection with the exercise of stock options and for other stock-based awards. Effective March 31, 2006 the Bankruptcy Court granted our motion to reject substantially all of our then outstanding stock options. For additional information...

  • Page 120
    ... our reported net loss, (2) changes in our additional minimum pension liability, (3) changes in our deferred tax asset valuation allowance related to our additional minimum pension liability and (4) changes in the effective portion of our open fuel hedge contracts which qualify for hedge accounting...

  • Page 121
    ...are managed as a single business unit that provides air transportation for passengers and cargo. This allows us to benefit from an integrated revenue pricing and route network that includes Mainline, Comair and our contract carriers. The flight equipment of the carriers is combined to form one fleet...

  • Page 122
    ...with the early retirement of leased aircraft, during the period from January 1, 2005 through the Petition Date. The severance and related costs reserve represents future payments associated with our 2005, 2004, 2002 and 2001 workforce reduction programs. During 2006,we recorded an additional accrual...

  • Page 123
    ...service of six B-737-200 aircraft prior to their lease expiration dates. • • • 2004 In 2004, we recorded a $41 million net gain in restructuring, asset writedowns, pension settlements and related items, net on our Consolidated Statement of Operations, as follows: • Elimination of Retiree...

  • Page 124
    ... the years ended December 31, 2006, 2005 and 2004, we excluded from our loss per share calculations all common stock equivalents because their effect on loss per share was anti-dilutive. These common stock equivalents primarily include (1) stock options and our ESOP Preferred Stock through the dates...

  • Page 125
    (5) $400 million of this amount was recorded in accumulated other comprehensive loss on our 2006 Consolidated Balance Sheet (see Note 13). F-58

  • Page 126
    ... unaudited quarterly results of operations for 2006 and 2005: 2006 (in millions, except per share data) Three Months Ended March 31 June 30 September 30 December 31 Operating revenue Operating (loss) income Net (loss) income Basic (loss) earnings per share Diluted (loss) earnings per share 2005 (in...

  • Page 127
    ..., each a Debtor and Debtor in Possession, as Credit Parties, THE LENDERS SIGNATORY HERETO FROM TIME TO TIME, as Lenders, and GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent and Lender *** GE CAPITAL MARKETS, INC., as Sole Lead Arranger and Sole Book Runner for Term Loan A and Term Loan...

  • Page 128
    ... Applicable Margins 1.6 Term A Borrowing Base 1.7 [Reserved.] 1.8 Fees 1.9 Receipt of Payments 1.10 Loan Account and Accounting 1.11 Indemnity 1.12 Access 1.13 Taxes 1.14 Capital Adequacy; Increased Costs; Illegality 1.15 Regulation D Compensation CONDITIONS PRECEDENT 2.1 Conditions to Effectiveness...

  • Page 129
    ...3.27 Aircraft; Engines 3.28 Slots, Primary Gates and Routes FINANCIAL STATEMENTS AND INFORMATION 4.1 Reports and Notices 4.2 Communication with Accountants AFFIRMATIVE COVENANTS 5.1 Maintenance of Existence and Conduct of Business 5.2 Payment of Charges 5.3 Books and Records 5.4 Insurance; Damage to...

  • Page 130
    ... Transactions 6.5 Capital Structure and Business 6.6 Guaranteed Indebtedness 6.7 Liens 6.8 Sale of Stock and Assets 6.9 [Reserved.] 6.10 Financial Covenants 6.11 Hazardous Materials 6.12 Sale-Leasebacks 6.13 Restricted Payments 6.14 Change of Corporate Name or Location; Change of Fiscal Year 6.15 No...

  • Page 131
    ... by Administrative Agent of the Credit Parties' Obligations 10.6 Limitation on Administrative Agent's duty in Respect of Collateral 10.7 Remedies; Rights Upon Default 10.8 The Administrative Agent's Appointment as Attorney-in-Fact 10.9 [Reserved] 10.10 Intercreditor Issues 10.11 Release of...

  • Page 132
    .... 13. 11.5 Lender Credit Decision 11.6 Indemnification 11.7 Successor Agents 11.8 Setoff and Sharing of Payments 11.9 Payments; Non-Funding Lenders; Information; Actions in Concert SUCCESSORS AND ASSIGNS 12.1 Successors and Assigns MISCELLANEOUS 13.1 Complete Agreement; Modification of Agreement 13...

  • Page 133
    ... Agreement Type of Entity; State of Organization Executive Offices, Collateral Locations, FEIN Financial Statements Real Estate and Leases: Owned Real Estate Material Real Estate Contracts Leases Affecting Owned Real Estate Labor Matters Ventures, Subsidiaries and Affiliates; Outstanding Stock Tax...

  • Page 134
    ... B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H - Form of Power of Attorney Form of Aircraft Mortgage Form of Copyright Security Agreements Form of Mortgage Form of SGR Security Agreement Form of Spare Parts Mortgage Form of Trademark Security Agreements Form of Pledge Amendment vii

  • Page 135
    ...Existing Credit Agreement (as defined below). RECITALS WHEREAS, on September 14, 2005, (the "Petition Date"), Borrower and each of the other Credit Parties filed voluntary petitions for relief (collectively, the "Cases") under chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court...

  • Page 136
    ...aggregate outstanding principal balance of the Term Loan A (including the portion of the Term Loan A the proceeds of which are held by the Administrative Agent in the L/C Cash Collateral Account) shall be due and payable in full in immediately available funds on the Maturity Date, if not sooner paid...

  • Page 137
    ...the Administrative Agent for the ratable benefit of each Term B Lender, ratably in proportion to each such Term B Lender's respective Term B Commitment. (c) Term Loan C. (i) On the Effective Date the aggregate principal amount of Term Loan C (as defined in the Existing Credit Agreement) outstanding...

  • Page 138
    ...in the Cash Collateral Account, in each case, to be applied in accordance with Section 1.2(c). (c) Application of Net Cash Proceeds. Any Net Cash Proceeds received by Borrower or any other Credit Party or the Administrative Agent under any Loan Document (except as otherwise expressly provided herein...

  • Page 139
    ... or following the Maturity Date, Borrower hereby irrevocably waives the right to direct the application of any and all payments received from or on behalf of Borrower, and Borrower and each Secured Party hereby irrevocably agrees that the Administrative Agent shall have the continuing exclusive...

  • Page 140
    ... of the Credit Parties. 1.5 Interest and Applicable Margins. (a) Borrower shall pay interest to the Administrative Agent, for the ratable benefit of Lenders in accordance with the various Loans being made by each Lender, in arrears on each applicable Interest Payment Date, at the following rates...

  • Page 141
    ... the Administrative Agent, on behalf of applicable Lenders, is equal to the total interest that would have been received had the interest rate payable hereunder been (but for the operation of this paragraph) the interest rate payable since the Closing Date as otherwise provided in this Agreement. In...

  • Page 142
    ...Eligible Refundable Ticket Accounts, Eligible Real Estate, Eligible Aircraft, Eligible Engines, Eligible Spare Parts, Eligible Ground Service Equipment, Eligible Flight Simulators and Eligible Tooling from time to time in its reasonable credit judgment. In addition, the Administrative Agent reserves...

  • Page 143
    ..., software, services or otherwise used in connection therewith (collectively, "Indemnified Liabilities"); provided, that no such Credit Party shall be liable for any indemnification to an Indemnified Person to the extent that any such suit, action, proceeding, claim, damage, loss, liability or...

  • Page 144
    ... any Credit Party's Books and Records (subject to requirements under any confidentiality agreements, if applicable) , and (iii) permit the Administrative Agent, and any of its officers, employees and agents, to have access to properties, facilities and to the Collateral and to inspect, audit, review...

  • Page 145
    ...has occurred and is continuing, Borrower shall provide the Administrative Agent and each Lender with access, with prior notice and opportunity for Borrower to be present, to its suppliers, service providers and customers. 1.13 Taxes. (a) Any and all payments by Borrower hereunder or under the Notes...

  • Page 146
    ... extent not inconsistent with such Lender's internal policies of general application use reasonable commercial efforts to mitigate any Taxes that would result in such payments by Borrower. If Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this Section...

  • Page 147
    ... date of such sale and such assignment shall not require the payment of an assignment fee to the Administrative Agent; provided, that Borrower shall have reimbursed such Affected Lender for the additional amounts or increased costs that it is entitled to receive under this Agreement through the date...

  • Page 148
    ... and from time to time in effect) for Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board) that are required to be maintained by a member bank of the Federal Reserve System over (ii) the applicable LIBOR Rate. 2. CONDITIONS PRECEDENT...

  • Page 149
    ... Payment of Fees. Borrower shall have paid to the Administrative Agent and the Lenders, the Fees required to be paid on or prior to the Effective Date in the respective amounts specified in the Fee Letters, and shall have reimbursed the Administrative Agent and the Arrangers for all fees, costs and...

  • Page 150
    ... 30, 2005 as updated by subsequent public filings prior to September 10, 2005. (g) continuing. (h) Final Order. The Final Order shall be in full force and effect and shall not have been vacated, reversed, modified, amended or stayed without the prior written consent of the Administrative Agent, the...

  • Page 151
    ...have a Material Adverse Effect. 3.2 Executive Offices, Collateral Locations, FEIN. As of the Closing Date, each Credit Party's name as it appears in official filings in its state of incorporation or organization, state of incorporation or organization, organization type, organization number, if any...

  • Page 152
    .... (a) the date hereof: (i) The audited consolidated balance sheet at December 31, 2004 of Borrower and its Subsidiaries and the related consolidated statements of operations, cash flows and shareowners' (deficit) equity for the Fiscal Year then ended, reported on by Deloitte Touche LLP. 18 Financial...

  • Page 153
    ... contract, lease or other agreement or instrument, that alone or in the aggregate could reasonably be expected to have a Material Adverse Effect. Since the date of Borrower's Form 10-Q for the six-month period ended June 30, 2005 as updated by subsequent public filings prior to September 10, 2005...

  • Page 154
    ... to have a Material Adverse Effect; (d) as of the Closing Date, no Credit Party is a party to or bound by any domestic collective bargaining agreement (and true and complete copies of any agreements described on Disclosure Schedule 3.7have been delivered to the Administrative Agent); (e) there is no...

  • Page 155
    ... credit" within the meaning of Regulations T, U or X of the Federal Reserve Board. 3.11 Taxes. Except as provided on Disclosure Schedule 3.11, (and except as otherwise permitted by the Bankruptcy Court and the Bankruptcy Code) all Federal and other material tax returns, reports and statements...

  • Page 156
    ... ERISA Affiliate; and (vi) except in the case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes up, in the aggregate, no more than 10% of the fair market value of the assets of any Plan measured on the basis of fair market value as of the latest valuation date of any Plan. 22

  • Page 157
    ..., as of the Closing Date, no Credit Party is aware of any infringement claim by any other Person with respect to any material Intellectual Property. 3.15 Full Disclosure. No information contained in this Agreement, any of the other Loan Documents, Financial Statements or Collateral Reports or other...

  • Page 158
    ...in the aggregate would be reasonably likely to have a Material Adverse Effect. 3.17 Insurance. Part 1 of Disclosure Schedule 3.17lists all insurance policies of any nature maintained, as of the Closing Date, for current occurrences by each Credit Party, as well as a summary of the scope and term of...

  • Page 159
    ...as of the Closing Date, other than terms relating generally to Amex's purchase of Skymiles from Delta set forth in the American Express Co-Branded Credit Card Program Agreement and the Membership Rewards Agreement, each as amended and supplemented from time to time, that do not relate to the Advance...

  • Page 160
    ... by the Administrative Agent, to reflect all Primary Slots and Primary Routes of such Credit Parties. Each such Credit Party, if applicable, represents and warrants that it holds each of the FAA Slots pursuant to authority granted by the FAA pursuant to Title 14 of the United States Code. 26

  • Page 161
    ... independent registered public accountants and authorizes and shall instruct those accountants to communicate to the Administrative Agent and such Lender, with notice to Borrower, information relating to any Credit Party with respect to the business, results of operations and financial condition of...

  • Page 162
    ... Charges with respect to tax, social security and unemployment withholding with respect to its employees, (ii) lawful claims for labor, materials, supplies and services or otherwise, and (iii) all storage or rental charges payable to warehousemen and bailees, in each case, before any thereof shall...

  • Page 163
    ... of insurance relating to Collateral addressed by the Aircraft Mortgage and the Spare Parts Mortgage, the policies of insurance (or the loss payable and additional insured endorsements delivered to the Administrative Agent) described in Part 2 of Disclosure Schedule 3.17, which lists those policies...

  • Page 164
    ... Agent, with respect to the insurance policies listed on Part 2 of Disclosure Schedule 3.17, endorsements to (i) all "All Risk" property and business interruption insurance naming the Administrative Agent for the benefit of Secured Parties, as lender loss payee as its interests may appear; provided...

  • Page 165
    ... in excess of $500,000 individually or $2,500,000 in the aggregate in a Fiscal Year; and (d) promptly forward to the Administrative Agent a copy of any order, notice, request for information or any communication or report received by such Credit Party in connection with any such violation or...

  • Page 166
    ... location shall, in the Administrative Agent's discretion, be subject to such Reserves as may be established by the Administrative Agent in its reasonable credit judgment. Each Credit Party shall timely and fully pay and perform its material obligations under all leases and other agreements entered...

  • Page 167
    ... owned by any Credit Party and (B) effectively grant to the Administrative Agent for the benefit of the Secured Parties, a valid, perfected and enforceable security interest in all Stock and other debt Securities of any Credit Party and each direct Subsidiary of each Credit Party (other than...

  • Page 168
    ... to be granted pursuant to clause (ii) above, including the filing of financing statements or other recordations in such jurisdictions as may be required by the Collateral Documents, the Code, the FAA or applicable law, or as may be reasonably requested by the Administrative Agent; and (vii) if...

  • Page 169
    ... permitted by this Agreement and the SGR Security Agreement, utilize the Foreign Slots in a manner consistent in all material respects with applicable regulations and contracts in order reasonably to preserve its right to hold and operate the Foreign Slots, taking into account any waivers or...

  • Page 170
    ...the payment of any liability with respect to a Pension Plan, a copy of such notice; and (e) simultaneously with the date that any Credit Party (i) commences or terminates negotiations with any collective bargaining agent for the purpose of materially changing any collective bargaining agreement; (ii...

  • Page 171
    ... maintain until the Termination Date, the Cash Management Systems as described in Annex C. 5.20 Appraisals. Each Credit Party shall provide the Administrative Agent access to its properties and to the Collateral in accordance with Section 1.12and permit the Administrative Agent to have an Appraiser...

  • Page 172
    ...flight training, agreements relating to insurance arrangements, agreements relating to parts management systems and other similar agreements; (i) the Delta Companies may make advances to their respective officers, directors and employees in an amount not to exceed (i) $10,000 outstanding at any time...

  • Page 173
    ...100% of the purchase price or construction cost (including any capitalized interest and issuance fees) of the subject asset; (ii) (iii) (iv) the Loans and the other Obligations; [Reserved]; Indebtedness existing as of the Closing Date described in Disclosure Schedule 3.12(b)or 6.3; (v) Indebtedness...

  • Page 174
    ...and delivered such note to the Administrative Agent pursuant to this Agreement as additional collateral security for the Obligations, (B) each applicable Credit Party shall record all intercompany transactions on its Books and Records in the ordinary course of business and (C) the obligations of any...

  • Page 175
    ... business and consistent with past practices in connection with credit card processing services and (y) the Indebtedness described in clause (ix)above; (xix) other unsecured Indebtedness incurred subsequent to the Closing Date in an aggregate amount not to exceed $25,000,000 outstanding at any time...

  • Page 176
    ... compensation paid to, and indemnity provided on behalf of, officers, directors or employees of such Credit Party and other transactions permitted by Section 6.2(i)and (j), (c) any dividends, other distributions or payments permitted by Section 6.13, (d) any Investment in a Delta Company permitted...

  • Page 177
    ... money debt and such Indebtedness is incurred within one hundred eighty (180) days following such purchase and does not exceed 100% of the purchase price of the subject assets; (d) Liens (having the priority set forth in the Skymiles Intercreditor Agreement) securing the "Obligations" as defined in...

  • Page 178
    ... assets securing the Senior Claims or the Junior Claims (as each such term is defined in the Skymiles Intercreditor Agreement), as the case may be, to any Person other than each of the Administrative Agent and the Skymiles Agent on behalf of the applicable Secured Parties (as defined in the Skymiles...

  • Page 179
    ... of Accounts to a collection agency in connection with collections of delinquent receivables; (l) (i) abandonment of Slots, Gates, Routes or Supporting Route Facilities; provided, that such abandonment is (A) in connection with the downsizing of any hub or other facility located in Cincinnati as...

  • Page 180
    ... thereto; (p) (q) any sale of Margin Stock for fair value as determined in good faith by Borrower; and any Property Loss Event (without giving effect to the thresholds set forth in the definition thereof); (r) rejection of executory contracts in accordance with an order of the Bankruptcy Court to...

  • Page 181
    ... (e) change its state of incorporation or organization, in each case, without at least thirty (30) days' prior written notice to the Administrative Agent; provided, that (i) in the case of clauses (b)or (e), any such new location shall be in the continental United States and (ii) the Credit Parties...

  • Page 182
    ... occupancy of airport premises and facilities, operating leases, Capital Leases or Licenses with respect to properties subject thereto and interests created therein. 6.17 No Speculative Transactions. No Credit Party shall engage in any transaction involving commodity options, futures contracts or...

  • Page 183
    ...a Material Adverse Effect, and (c) would not materially and adversely affect the Administrative Agent's Liens, for the benefit of Secured Parties, in the Collateral stored or located at the location to which such modification or other change, or such new lease or other agreement relates. Further, no...

  • Page 184
    ... Letter of Credit Obligation when due and payable, (ii) fails to make any payment of interest on, or Fees owing in respect of, the Loans or any of the other Obligations within three (3) Business Days of the date when due and payable, or (iii) fails to pay or reimburse the Administrative Agent or any...

  • Page 185
    ... Document or in any written statement, report, financial statement or certificate (other than a Borrowing Base Certificate) made or delivered to the Administrative Agent or any Lender by any Credit Party is untrue or incorrect in any material respect, in each case, as of the date when made or deemed...

  • Page 186
    .... Any Change of Control occurs. Any Air Carrier shall cease to be a Certificated Air Carrier or a "citizen of the United States" as defined in Section (m) (i) In the case of any Primary Route, any applicable Aviation Authority revokes, terminates or cancels any Credit Party's Permits to use, occupy...

  • Page 187
    ... the Petition Date, other than a Permitted Prepetition Payment, (ii) approving any other First Day Order not reasonably acceptable to the Administrative Agent, (iii) granting relief from the automatic stay applicable under section 362 of the Bankruptcy Code to any holder of any security interest to...

  • Page 188
    ...subject solely to any requirement of the giving of notice by the terms of the Final Order, the automatic stay provided in section 362 of the Bankruptcy Code shall be deemed automatically vacated without further action or order of the Bankruptcy Court andthe Administrative Agent and the Lenders shall...

  • Page 189
    ...obligations under this Agreement shall not be discharged until the Termination Date. Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the Obligations. Each Guarantor agrees that any notice or directive given at any time to Secured Parties which...

  • Page 190
    ...(except as required by the Final Order), pay to the holders of the Obligations the entire amount of the outstanding Obligations due and owing to such holders. Payment by Guarantors shall be made to Administrative Agent in immediately available federal funds to the Cash Collateral Account and applied...

  • Page 191
    ... have been granted a Lien, to secure any Obligations; (f) release anyone who may be liable in any manner for the payment of any amounts owed by other Guarantors or any other Credit Party to any Secured Party; (g) modify or terminate the terms of any intercreditor or subordination agreement pursuant...

  • Page 192
    ... and the amount of such bid need not be paid by Administrative Agent but shall be credited against the Obligations in accordance with Section 1.3. The amount of the successful bid at any such sale shall be conclusively deemed to be the fair market value of the Collateral and the difference...

  • Page 193
    ... Agent in the Skymiles Collateral pursuant to an order of the Bankruptcy Court in form and substance satisfactory to the Administrative Agent, (ii) valid, perfected, nonavoidable and enforceable Liens existing as of the Petition Date, (iii) valid liens in existence at the commencement of the Cases...

  • Page 194
    ... Agent or such Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Credit Party or as to which such Credit Party may have any right or power; (xvii) to the extent not otherwise included, all Proceeds of each of the foregoing, tort claims, insurance...

  • Page 195
    ... landlords at locations required by Section 5.8of this Agreement and (B) signed acknowledgements of Administrative Agent's Liens from bailees at locations required by Section 5.8of this Agreement having possession of any Credit Party's Goods that they hold for the benefit of Secured Parties, (v) to...

  • Page 196
    ...contain any other information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether such Credit Party is an organization, the type of organization and any organization identification number issued to...

  • Page 197
    ...Collateral. Each Credit Party covenants and agrees with Administrative Agent, for the benefit of Secured Parties, that from and after the date of this Agreement and until the Termination Date: Maintenance of Records. Credit Parties shall keep and maintain, at their own cost and expense, satisfactory...

  • Page 198
    ... the United States Copyright Office, Credit Party shall give Administrative Agent written notice of such filing and, upon request of Administrative Agent, Credit Party shall execute and deliver any and all Patent Security Agreements, Copyright Security Agreements or Trademark Security Agreements as...

  • Page 199
    ... to each Credit Party for filing or authorize each Credit Party to prepare and file termination statements and releases in respect of any sales, transfers, conveyances, assignments or other dispositions of Collateral made in accordance with Section 6.8of this Agreement. Administrative Agent will...

  • Page 200
    ... as Administrative Agent from time to time may reasonably request in order to ensure to Administrative Agent and Secured Parties obtain the benefits of the Liens in and to the Pledged Collateral intended to be created by this Agreement, including the filing of any necessary Code financing statements...

  • Page 201
    ... constitute a violation of the automatic stay provided by section 362 of the Bankruptcy Code and each Credit Party hereby waives applicability thereof. Moreover, the Administrative Agent shall in no way be responsible for the payment of any costs incurred in connection with preserving or disposing...

  • Page 202
    ..., realization or sale to the Cash Collateral Account and such net proceeds shall be applied in accordance with Section 1.3. To the maximum extent permitted by applicable law, each Credit Party waives all claims, damages, and demands against the Administrative Agent or any Secured Party arising out...

  • Page 203
    ..., possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of Collateral or to provide to the Administrative Agent a guaranteed return from the collection or disposition of Collateral, or (xii...

  • Page 204
    ... required under applicable law shall have been obtained. Any sale shall be made at a public or private sale at Administrative Agent's place of business, or at any place to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as Administrative Agent...

  • Page 205
    ... as Administrative Agent may request in order to facilitate the public sale or other disposition of the Pledged Shares by Administrative Agent; (iv) Use commercially reasonable efforts to register or qualify the Pledged Shares covered by such registration statement under such other securities or...

  • Page 206
    ... use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable but not later than 18 months after the effective date of the registration statement, an earnings statement...

  • Page 207
    ... to register) may be effected in compliance with the Bankruptcy Code and other laws affecting the enforcement of creditors' rights and the Act and all applicable state securities laws. (k) Each Credit Party recognizes that Administrative Agent may be unable to effect a public sale of any or all the...

  • Page 208
    ... Bankruptcy Code, such stay shall be deemed modified, as set forth in the Final Order, as applicable, to the extent necessary to permit the Administrative Agent to exercise such rights and remedies. 10.8 The Administrative Agent's Appointment as Attorney-in-Fact. (a) On the Closing Date each Credit...

  • Page 209
    ... by virtue hereof. Exercise by the Administrative Agent of the powers granted hereunder is not a violation of the automatic stay provided by section 362 of the Bankruptcy Code and each Credit Party waives applicability thereof. The power of attorney granted pursuant to this Section 10.8is a power...

  • Page 210
    ... with the terms of this Agreement, such Collateral shall be automatically released from the security interest granted pursuant to this Agreement and the Lien on such Collateral in favor of the Administrative Agent, for itself and for the benefit of the Secured Parties, shall automatically terminate...

  • Page 211
    ...the proceeds of any L/C Cash Collateral held by the Administrative Agent shall not be released in connection with any such assignment, but shall instead continue to be held by the Administrative Agent for application as provided by Annex B. (b) Procedure. The parties to each Sale made in reliance on...

  • Page 212
    ...any SPV grantee of an option pursuant to this clause (e) any bankruptcy, reorganization, insolvency, liquidation or similar proceeding, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper of such SPV; provided, however, that each Lender having...

  • Page 213
    ... any Credit Party or any of their respective Subsidiaries or any Account Debtor that is communicated to or obtained by GE Capital or any of its Affiliates in any capacity. Neither the Administrative Agent nor any of its Affiliates nor any of their respective officers, directors, employees, agents or...

  • Page 214
    ...None of the Administrative Agent or any of its Affiliates or any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or the other Loan Documents, except for damages caused by...

  • Page 215
    ... Agent in any way relating to or arising out of this Agreement or any other Loan Document or any action taken or omitted to be taken by the Administrative Agent in connection therewith; provided, that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages...

  • Page 216
    ..., within thirty (30) days after the date such notice of resignation was given by such resigning Administrative Agent, such resignation shall become effective and the Requisite Lenders shall thereafter perform all the duties of the Administrative Agent hereunder until such time, if any, as the...

  • Page 217
    ... required to be purchased by it under this Agreement and the other Loan Documents as of such Settlement Date, the Administrative Agent shall pay to each Lender such Lender's Pro Rata Share of principal, interest and Fees paid by Borrower since the previous Settlement Date for the benefit...

  • Page 218
    (b) Return of Payments. (i) If the Administrative Agent pays an amount to a Lender under this Agreement in the belief or expectation that a related payment has been or will be received by the Administrative Agent from Borrower and such related payment is not received by the Administrative Agent, ...

  • Page 219
    ... in such instrument, any of the requirements applicable to the Credit Parties, as the case may be, party to any Loan Document, or any Default or Event of Default and its consequences; provided, that: (i) the Requisite Term A Lenders (or the Administrative Agent with the prior written consent of the...

  • Page 220
    ... aggregate outstanding principal amount of the Term Loan C); (iv) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or...

  • Page 221
    ... by this Agreement and the Skymiles Intercreditor Agreement; or (xi) (A) amend, modify or waive this Section 13.2or any other provision specifying the Administrative Agent, Lenders or group of Lenders required for any amendment, modification or waiver thereof or (B) change the respective percentages...

  • Page 222
    ... or Notes or execute an Assignment Agreement shall not render such sale and purchase (and the corresponding assignment) invalid. (d) Upon the Termination Date, the Administrative Agent shall deliver to Borrower termination statements, mortgage releases, reconveyances and other documents necessary or...

  • Page 223
    ... and food paid or incurred in connection with the performance of such legal or other advisory services. 13.4 No Waiver. The Administrative Agent's or any Lender's failure, at any time or times, to require strict performance by the Credit Parties of any provision of this Agreement or any other...

  • Page 224
    ... Agent and Lender agree to use commercially reasonable efforts (equivalent to the efforts the Administrative Agent or Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all confidential information provided to them by the Credit...

  • Page 225
    ... THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK,NEW YORK SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS...

  • Page 226
    ..."writing", in each case including pursuant to any Loan Document, any applicable provision of any Uniform Commercial Code, the federal Uniform Electronic Transactions Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such...

  • Page 227
    ... or referenced in such E-System and related contractual obligations executed by Secured Parties and Delta Companies in connection with the use of such E-System. (e) ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED "AS IS" AND "AS AVAILABLE". NONE OF THE ADMINISTRATIVE AGENT OR ANY OF ITS...

  • Page 228
    ...issue any press releases or other public disclosure using the name of the Administrative Agent or any Arranger or its affiliates or referring to this Agreement, the other Loan Documents without at least two (2) Business Days' prior notice to the Administrative Agent or such Arranger, as the case may...

  • Page 229
    [The remainder of this page is intentionally left blank.] 95

  • Page 230
    IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above. DELTA AIR LINES, INC., as Borrower By: /s/ Paul A. Jacobson Name: Paul A. Jacobson Title: Vice President and Treasurer GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent and Lender By: /s/ ...

  • Page 231
    ... COMAIR, INC. By: /s/ Donald T. Bornhorst Name: Donald T. Bornhorst Title: Chief Financial Officer COMAIR SERVICES, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Treasurer CROWN ROOMS, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Assistant Treasurer Signature Page to Credit Agreement

  • Page 232
    ... DAL GLOBAL SERVICES, LLC By: /s/ Mona Warwar Name: Mona Warwar Title: Assistant Treasurer DAL MOSCOW, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Treasurer DELTA AIRELITE BUSINESS JETS, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Assistant Treasurer DELTA BENEFITS MANAGEMENT, INC...

  • Page 233
    Signature Page to Credit Agreement

  • Page 234
    ... DELTA LOYALTY MANAGEMENT SERVICES, LLC By: /s/ J. Scott McClain Name: J. Scott McClain Title: Vice President DELTA TECHNOLOGY, LLC By: /s/ David S. Cartee Name: David S. Cartee Title: Assistant Secretary DELTA VENTURES III, LLC By: /s/ Mona Warwar Name: Mona Warwar Title: Vice President - Tax...

  • Page 235
    KAPPA CAPITAL MANAGEMENT, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Vice President and Treasurer SONG, LLC By: /s/ Kenneth W. Morge Name: Kenneth W. Morge Title: Assistant Treasurer Signature Page to Credit Agreement

  • Page 236
    ...the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise; provided, that the term "Affiliate," when used with reference to a Credit Party, shall specifically exclude the Administrative Agent and each Lender...

  • Page 237
    ...American Express Travel Related Services Company, Inc. and each of its affiliates party to the Post-Petition Skymiles Facility Documents. "Appendices" has the meaning ascribed to it in the recitals to the Agreement. "Applicable Term A Index Margin" means the per annum interest rate from time to time...

  • Page 238
    ... rate from time to time in effect and payable in addition to the LIBOR Rate applicable to the Term Loan B, as determined by reference to Section 1.5(a). "Applicable Term C Index Margin" means the per annum interest rate from time to time in effect and payable in addition to the Index Rate applicable...

  • Page 239
    ..." means books and records of the Credit Parties, including financial, corporate, operations and sales books, records, books of account, sales and purchase records, lists of suppliers and customers, formulae, business reports, plans and projections and all other documents, logs, surveys, plans, files...

  • Page 240
    ... the Secured Parties in respect thereof; provided, further, that (a) as long as no Event of Default shall have occurred and be continuing, the Credit Parties shall be permitted to pay compensation and reimbursement of expenses allowed and payable under sections 330 and 331 of the Bankruptcy Code, as...

  • Page 241
    ...Party, wherever located. "Citibank Cash Collateral Account" means the Cash Collateral Account as defined in the Security Agreement dated as of September 1, 2004 between Borrower and Citibank, N.A. and the cash, cash equivalents and other investment property and financial assets credited thereto, and...

  • Page 242
    ...Collateral Reports" means the reports with respect to the Collateral referred to in Annex F. "Collection Account" means that certain account of the Administrative Agent, account number 502-328-54 in the name of the Administrative Agent at DeutscheBank Trust Company Americas in New York, New York ABA...

  • Page 243
    ... Party under any written agreement granting any right to use any Copyright or Copyright registration. "Copyright Security Agreements" means the Copyright Security Agreements made in favor of Administrative Agent for the benefit of the Secured Parties, by each applicable Credit Party substantially in...

  • Page 244
    ... Report; (ii) reviewing the Appraiser's internal value database for values applicable to such Ground Service Equipment; and (iii) checking other sources, such as manufacturers, other airlines and U.S. government procurement data, for orderly liquidation prices of such Ground Service Equipment...

  • Page 245
    ... Report; (ii) reviewing the Appraiser's internal value database for values applicable to such Tooling; and (iii) checking other sources, such as manufacturers, other airlines and U.S. government procurement data, for orderly liquidation prices of such Tooling. "DFW Assets" means assets located...

  • Page 246
    ... report, authorization, agreement, document, file, information and any other communication transmitted, posted or otherwise made or communicated by e-mail, E-Fax, Internet or extranet-based site or any other equivalent electronic service, whether owned, operated or hosted by the Administrative Agent...

  • Page 247
    ... to the Administrative Agent shall be "Eligible Accounts" for purposes of this Agreement, except, without duplication, any Account of the Credit Parties: (a) that does not arise from the air transportation of passengers, freight and cargo or the sale of goods or performance of services by the...

  • Page 248
    ...: (i) (ii) the Account is not paid within ninety (90) days following its original invoice date; the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or a petition is filed by or...

  • Page 249
    ... Agent) shall have been granted by the applicable Credit Party in favor of Administrative Agent for the benefit of the Secured Parties pursuant to the Aircraft Mortgage and (ii) the Liens described in clause (i)above shall be in full force and effect in favor of Administrative Agent for the benefit...

  • Page 250
    ... of refundable tickets that are to be used within 30 days from the date of issuance of such ticket. "Eligible Spare Parts" means all of the Pledged Spare Parts owned by Credit Parties and reflected in the most recent Term A Borrowing Base Certificate delivered by Borrower to the Administrative Agent...

  • Page 251
    ..., codes, rules, standards and regulations, now or hereafter in effect, and any applicable judicial or administrative interpretation thereof, including any applicable judicial or administrative order, consent decree, order or judgment, imposing liability or standards of conduct for or relating to...

  • Page 252
    ...; provided, that such amount may be increased upon an increase in any of the foregoing taxes, fees and charges for which Borrower's or any Subsidiary's officers and directors may have personal liability if not paid; or (2) accounts, capitalized interest accounts, debt service reserve accounts and...

  • Page 253
    ... any issuer, the issued and outstanding shares of each class of capital stock or other membership interests of such issuer entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)). "Excluded Issuer" means (i) Delta Air Lines, Inc. and Pan American World Airways, Inc., GMBH, (ii...

  • Page 254
    ...no such closing sale price of such Security, the final price for the purchase of such Security at face value quoted on such Business Day by a financial institution of recognized standing regularly dealing in Securities of such type and selected by the Administrative Agent. "Federal Funds Rate" means...

  • Page 255
    ... income statements, statements of cash flows and balance sheets of Borrower delivered in accordance with Section 3.4and Annex E. "First Day Orders" means all orders entered by the Bankruptcy Court in respect of motions filed on the Petition Date or within five Business Days thereafter. "Fiscal Month...

  • Page 256
    ... Agreement. "GAAP" means generally accepted accounting principles in the United States of America, consistently applied, as such term is further defined in Annex Gto the Agreement. "Gates" shall have the meaning ascribed to it in the SGR Security Agreement. "GECAS Facilities" means, collectively...

  • Page 257
    ... is defined in the Code, now owned or hereafter acquired by any Credit Party, including all right, title and interest that such Credit Party may now or hereafter have in or under any Contract, all payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications...

  • Page 258
    ... Lease Obligations and the present value (discounted at the Index Rate as in effect on the Closing Date) of future rental payments under all synthetic leases, (f) all obligations of such Person under commodity purchase or option agreements or other commodity price hedging arrangements, in each case...

  • Page 259
    ...rate provided for in the Agreement based upon the Index Rate shall take effect at the time of such change in the Index Rate. "Index Rate Loan" means a Loan or portion thereof bearing interest by reference to the Index Rate. "Ineligible Refundable Ticket Accounts" means Accounts arising from the sale...

  • Page 260
    ... period ended on such date. "Interest Payment Date" means (a) as to any Index Rate Loan, the first Business Day of each month to occur while such Loan is outstanding, and (b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that in the case of any LIBOR Period greater...

  • Page 261
    ... from time to time by the Borrower in the L/C Cash Collateral Account. "L/C Cash Collateral Account" means a cash collateral account maintained at a bank or financial institution acceptable to the Administrative Agent, subject to a Blocked Account Agreement, into which cash or Cash Equivalents...

  • Page 262
    ... Period (unless such date is not a Business Day, in which event the next succeeding Business Day will be used). If such interest rates shall cease to be available from Telerate News Service, the LIBOR Rate shall be determined from such financial reporting service or other information as shall be...

  • Page 263
    ... arrangement, lien, charge, claim, security interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any capital lease or conditional sale agreement, and any financing lease having substantially the...

  • Page 264
    ... operating budget dated September 9, 2005 provided to the Administrative Agent), (ii) the ability of Borrower or Guarantors to pay any of the Loans or any of the other Obligations in accordance with the terms of the Agreement, (iii) the Collateral, the Liens of Administrative Agent for the benefit...

  • Page 265
    ... to each of them) Administrative Agent for the benefit of the Secured Parties and, if the Administrative Agent requires a Mortgage Title Insurance Policy pursuant to clause (a)above, the title insurance company issuing the Mortgagee's Title Insurance Policy for such Mortgage, dated a date reasonably...

  • Page 266
    ...or in the aggregate, for any Fiscal Year for all such Asset Sales, in each case, net of (1) the reasonable cash costs of sale, assignment or other disposition, (2) taxes paid or reasonably estimated to be payable as a result thereof, (3) reserves provided, to the extent required by GAAP, against any...

  • Page 267
    ...the aggregate Costs related to any Asset Sale or any Property Loss Event exceeds $500,000, evidence of each such Costs shall be provided to the Administrative Agent, in form and substance reasonably satisfactory to them. "Net Orderly Liquidation Value" shall mean with regard to any Eligible Aircraft...

  • Page 268
    ... acquired by any Credit Party granting any right with respect to any invention on which a Patent is in existence. "Patent Security Agreements" means the Patent Security Agreements made in favor of Administrative Agent for the benefit of the Secured Parties by each applicable Credit Party. "Patents...

  • Page 269
    ... Insurance Policy, (m) liens imposed by applicable law on the assets of any Credit Party located at an airport for the benefit of an Aviation Authority; (n) Liens (including leases) permitted pursuant to the Aircraft Mortgage and (o) subject, with respect to Blocked Accounts, to the Blocked Account...

  • Page 270
    ...Delta Company that (a) is expressly subordinated to the prior payment in full in cash of the Obligations on terms reasonably acceptable to the Administrative Agent, (b) will not mature prior to the date that is ninety-one (91) days after the Scheduled Maturity Date, and (c) does not require payments...

  • Page 271
    ... Collateral Report; (ii) reviewing the Appraiser's internal value database for values applicable to such Ground Service Equipment; (iii) checking other sources, such as manufacturers, other airlines and U.S. government procurement data, for orderly liquidation prices of such Ground Service Equipment...

  • Page 272
    ... any or all of the Pledged Shares; and (b) such portion, as determined by Administrative Agent as provided in Section 10.4(i)(v)of this Agreement, of any additional shares of stock of a Pledged Entity from time to time acquired by Credit Party in any manner (which shares shall be deemed to be part...

  • Page 273
    ... the Administrative Agent of Borrower's determination not to acquire replacement assets useful in any Credit Party's business (or, in the case of a Property Loss Event, not to effect repairs). "Primary Gates" shall have the meaning ascribed to it in the SGR Security Agreement. "Primary Routes" shall...

  • Page 274
    ..." means Borrower's forecasted consolidated (a) balance sheets, (b) profit and loss statements and (c) cash flow statements consistent with the historical Financial Statements of Borrower (other than adjustments related to the impact of the Cases), together with appropriate supporting details and...

  • Page 275
    ... the date on which the Net Cash Proceeds of (x) any Asset Sale of assets not included in the Term A Borrowing Base or (y) any Property Loss Event, which in each case are deposited in the Cash Collateral Account. "Reinvestment Notice" means a written notice executed by the Chief Financial Officer of...

  • Page 276
    ... Ground Service Equipment, including, but not limited to, pursuant to Section 5.8, and (b) reserves established by the Administrative Agent from time to time in its reasonable credit judgment against Eligible Accounts, Eligible Unbilled Accounts and Eligible Refundable Ticket Accounts including...

  • Page 277
    ...as "equipment," as such term is used in Section 1110(a)(3) of the Bankruptcy Code, including, without limitation, security agreements, mortgages, trusts, leases, conditional sale agreements or other instruments applicable to such property. "Section 1110 Assets" shall mean (a) property that qualifies...

  • Page 278
    ... the Administrative Agent, subject to a Blocked Account Agreement, into which cash or Cash Equivalents are deposited pursuant to Section 8.1(m). "SGR Security Agreement" means the Slot, Gate and Route Security and Pledge Agreement from Borrower in favor of the Administrative Agent for the benefit of...

  • Page 279
    ... each case, as amended, modified or supplemented from time to time. "SPC" has the meaning ascribed to it in Section 11.1(e). "SPV" means any special purpose funding vehicle identified as such in a writing by any Lender to the Administrative Agent. "Stock" means all shares, options, warrants, general...

  • Page 280
    ...the Administrative Agent and Lenders are organized or conduct business or any political subdivision thereof. "Technology" means, collectively, all designs, formulas, algorithms, procedures, methods, techniques, ideas, know-how, programs, subroutines, tools, inventions, creations, improvements, works...

  • Page 281
    ... in the Cash Collateral Account and the LC Cash Collateral Account minus100% of the aggregate face amount of all outstanding Letters of Credit, (h) (i) (j) (k) (l) (m) in each case, lessany Reserves established by the Administrative Agent at such time and provided, that the availability from the...

  • Page 282
    ...Effective Date. After advancing the aggregate amount of the Term C Commitment, each reference to a Lender's Term C Commitment shall refer to that Lender's Pro Rata Share of the outstanding...used as L/C Cash Collateral), cancelled or backed by standby letters of credit in accordance with this Agreement...

  • Page 283
    ... Agreements made in favor of Administrative Agentfor the benefit of the Secured Parties by each applicable Credit Party substantially in the form of Exhibit G. "Trademark License" means rights under any written agreement now owned or hereafter acquired by any Credit Party granting any right to use...

  • Page 284
    ... accounting terms used in the Agreement or the other Loan Documents shall be as set forth in Annex G. All other undefined terms contained in any of the Loan Documents shall, unless the context indicates otherwise, have the meanings provided for by the Code to the extent the same are used or defined...

  • Page 285
    ANNEX B(Section 1.1(a)(iv)) to CREDIT AGREEMENT [Intentionally Omitted] B-1

  • Page 286
    ANNEX C (Section 5.19) to CREDIT AGREEMENT [Intentionally Omitted] C-1

  • Page 287
    ANNEX D (Section 2.2(c)) to CREDIT AGREEMENT [Intentionally Omitted] D-1

  • Page 288
    ANNEX E (Section 4.1(a)) to CREDIT AGREEMENT [Intentionally Omitted] E-1

  • Page 289
    ANNEX F(Section 4.1(b)) to CREDIT AGREEMENT [Intentionally Omitted] F-1

  • Page 290
    ...October December January March 2005 (in millions) 145 2006 2006 2006 131 138 108 2006 121 2007 2007 2007 152 132 108 2007 106 2008 106 ; provided, however, that the amount of Net Capital Expenditures referenced above will be increased in any period by the positive amount (if any), equal...

  • Page 291
    ...963 1,988 2,000 2,000 2,000 (c) Aggregate Cash On Hand. The Delta Companies shall maintain Aggregate Cash On Hand of at least: (i) (ii) (iii) (iv) at all times from the Closing Date through May 31, 2006, $750,000,000; at all times from June 1, 2006 through November 30, 2006, $1,000,000,000; at all...

  • Page 292
    ... to bind all Lenders. "Accounting Changes" means (i) changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any...

  • Page 293
    ANNEX H (Section 1.1(d)) to CREDIT AGREEMENT [Intentionally Omitted] H-1

  • Page 294
    ANNEX I (Section 13.10) to CREDIT AGREEMENT [Intentionally Omitted] I-1

  • Page 295
    ANNEX J (from Annex A - Commitments definition) to CREDIT AGREEMENT [Intentionally Omitted] J-1

  • Page 296
    ANNEX K (from Annex A - Permitted Investments definition) to CREDIT AGREEMENT [Intentionally Omitted] K-1

  • Page 297
    ANNEX L (from Annex B - Paragraph (b)(iii)) [Intentionally Omitted] K-2

  • Page 298
    ...time to time, the "Credit Agreement"), among Delta Air Lines, Inc., as a debtor and debtor in possession ("Borrower"), the other Credit Parties signatory thereto, each as a debtor and debtor in possession, the Lenders party thereto from time to time and General Electric Capital Corporation, as agent...

  • Page 299
    ... or any similar benefit plans of the Borrower (together, the "Benefits Plan") for the payment of ordinary operating expenses of the Benefits Plans (including the payment of benefits in accordance with the terms of the Benefits Plans and periodic premiums under insurance or annuity contracts) or for...

  • Page 300
    ... transfer the Jet Fuel Assets and supply jet fuel for Borrower's operations in Atlanta, Cincinnati and New York. "SkyTeam Partner" means any airline that is a member of the SkyTeam international airline alliance. (k) by deleting the phrase "if it had been placed in service on or prior to October...

  • Page 301
    ... (i) Amendment No. 1 to the Second Amended and Restated Advanced Payment Supplement to the Co-Branded Credit Card Program Agreement dated as of the date hereof among American Express Travel Related Services Company, Inc. ("TRS"), American Express Bank, F.S.B., Borrower and DLMS and (ii) Amendment No...

  • Page 302
    ... the Administrative Agent and each Lender, with respect to all Credit Parties, as follows: (a) After giving effect to this Amendment, each of the representations and warranties in the Credit Agreement and in the other Loan Documents are true and correct in all material respects on and as of the date...

  • Page 303
    (d) The Credit Parties hereby confirm that the security interests and liens granted pursuant to the Loan Documents continue to secure the Obligations as set forth in the Loan Documents and that such security interests and liens remain in full force and effect. Section 7. Governing Law.This Amendment...

  • Page 304
    ... officers, general partners or managing members thereunto duly authorized, as of the date first written above. DELTA AIR LINES, INC., as Borrower By: /s/ Paul A. Jacobson Name: Paul A. Jacobson Title: Vice President and Treasurer GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent...

  • Page 305
    ... Assistant Treasurer DAL AIRCRAFT TRADING, INC. By: /s/ Kenneth W. Morge Name: Kenneth W. Morge Title: Treasurer DAL GLOBAL SERVICES, LLC By: ... DELTA AIRELITE BUSINESS JETS, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Assistant Treasurer Amendment No. 1 to A&R Delta DIP Credit Agreement ...

  • Page 306
    ... Name: Mona Warwar Title: Treasurer DELTA CORPORATE IDENTITY, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Assistant Treasurer DELTA LOYALTY MANAGEMENT SERVICES, LLC By: /s/ J. Scott McClain Name: J. Scott McClain Title: Vice President DELTA TECHNOLOGY, LLC By: /s/ David S. Cartee Name...

  • Page 307
    ... Edward M. Smith Title: Treasurer and Controller KAPPA CAPITAL MANAGEMENT, INC. By: /s/ Mona Warwar Name: Mona Warwar Title: Vice President and Treasurer SONG, LLC By: /s/ Kenneth W. Morge Name: Kenneth W. Morge Title: Assistant Treasurer Amendment No. 1 to A&R Delta DIP Credit Agreement - 10 -

  • Page 308
    [EXHIBITS INTENTIONALLY OMITTED]

  • Page 309
    ...Inc. Delta Corporate Identity, Inc. Delta Loyalty Management Services, LLC Delta Technology, LLC Delta Ventures III, LLC Epsilon Trading, LLC Kappa Capital Management, Inc. New Sky, Ltd. Song, LLC JURISDICTION OF INCORPORATION OR ORGANIZATION Vermont Georgia Delaware Ohio Kentucky New York Delaware...

  • Page 310
    ... 23.1 Consent to Independent Registered Public Accounting Firm We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-121482) pertaining to the Delta 2004 Employee Stock Option Plan and Delta 2004 Pilots Stock Option Plan of Delta Air Lines, Inc. (Debtor-In...

  • Page 311
    ...2005 and for the years ended December 31, 2005 and 2004 (which report expresses an unqualified opinion on the Company's consolidated financial statements and includes explanatory paragraphs relating to the Company's reorganization under Chapter 11 of the United States Bankruptcy Code and the Company...

  • Page 312
    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have...

  • Page 313
    ... in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Delta's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have...

  • Page 314
    ... United States Code in connection with the filing on the date hereof with the Securities and Exchange Commission of the Annual Report on Form 10-K of Delta Air Lines, Inc. ("Delta") for the fiscal year ended December 31, 2006 (the "Report"). Each of the undersigned, the Chief Executive Officer and...