Delta Airlines 2009 Annual Report Download - page 20

Table of Contents
Agreements governing our debt, including credit agreements and indentures, include financial and other covenants that impose restrictions on our
financial and business operations.
Our credit facilities and indentures for secured notes have various financial and other covenants that require us to maintain, depending on the particular
agreement, minimum fixed charge coverage ratios, minimum unrestricted cash reserves and/or minimum collateral coverage ratios. The value of the collateral
that has been pledged in each facility may change over time, including due to factors that are not under our control, resulting in a situation where we may not
be able to maintain the collateral coverage ratio. In addition, the credit facilities and indentures contain other negative covenants customary for such
financings. If we fail to comply with these covenants and are unable to obtain a waiver or amendment, an event of default would result. These covenants are
subject to important exceptions and qualifications.
The credit facilities and indentures also contain other events of default customary for such financings. If an event of default were to occur, the lenders or
the trustee could, among other things, declare outstanding amounts due and payable, and our cash may become restricted. We cannot provide assurance that
we would have sufficient liquidity to repay or refinance the borrowings or notes under any of the credit facilities if such amounts were accelerated upon an
event of default. In addition, an event of default or declaration of acceleration under any of the credit facilities or the indentures could also result in an event
of default under other of our financing agreements.
Employee strikes and other labor-related disruptions may adversely affect our operations.
Our business is labor intensive, utilizing large numbers of pilots, flight attendants and other personnel. As of December 31, 2009, approximately 39% of
our workforce was unionized. Strikes or labor disputes with our unionized employees may adversely affect our ability to conduct business. Relations between
air carriers and labor unions in the United States 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 after a collective bargaining agreement becomes amendable, unless and until the collective bargaining processes required
by the Railway Labor Act have been exhausted.
In addition, if we or our affiliates are unable to reach agreement with any of our unionized work groups on future negotiations regarding the terms of their
collective bargaining agreements or if additional segments of our workforce become unionized, we may be subject to work interruptions or stoppages, subject
to the requirements of the Railway Labor Act. Likewise, if third party regional carriers with whom we have contract carrier agreements are unable to reach
agreement with their unionized work groups on current or future negotiations regarding the terms of their collective bargaining agreements, those carriers may
be subject to work interruptions or stoppages, subject to the requirements of the Railway Labor Act, which could have a negative impact on our operations.
The ability to realize fully the anticipated benefits of our merger with Northwest may depend on the successful integration of the businesses of Delta
and Northwest.
Our merger with Northwest involved the combination of two companies which operated as independent public companies prior to the merger. We are
devoting significant attention and resources to integrating our business practices and operations in order to achieve the benefits of the merger, including
expected synergies. If we are unable to integrate our business practices and operations in a manner that allows us to achieve the anticipated revenue and cost
synergies, or if achievement of such synergies takes longer or costs more than expected, the anticipated benefits of the merger may not be realized fully or at
all or may take longer to realize than expected. In addition, it is possible that the integration process could result in the loss of key employees, diversion of
management's attention, the disruption or interruption of, or the loss of momentum in our ongoing businesses or inconsistencies in standards, controls,
procedures and policies, any of which could adversely affect our ability to maintain relationships with customers and employees or our ability to achieve the
anticipated benefits of the merger, or could reduce our earnings or otherwise adversely affect our business and financial results. We expect to incur total cash
costs of approximately $500 million over approximately three years to integrate the two airlines.
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