Delta Airlines 2010 Annual Report Download - page 76

Table of Contents
Aircraft Financing. We have $5.2 billion of loans secured by 287 aircraft, not including aircraft securing the Certificates. These loans had interest rates
ranging from 0.8% to 6.8% at December 31, 2010. In 2010, we took delivery of and financed the purchase of four aircraft, two of which were refinanced in
connection with the 2010-2A EETC. In 2009, we took delivery of and financed 20 aircraft, five of which were refinanced in connection with the 2009-1
EETC.
Other Secured Financings. Other secured financings primarily include (1) manufacturer term loans, secured by spare parts, spare engines and aircraft and
(2) real estate loans. The financings had annual interest rates ranging from 2.3% to 7.8% at December 31, 2010.
American Express Agreement. In 2010, we and American Express modified our agreement under which we received $1.0 billion in 2008 from American
Express for their advance purchase of SkyMiles. This advance payment is classified as debt on our Consolidated Balance Sheets. Our obligations with respect
to the advance payment will be satisfied by the use of SkyMiles by American Express over a specified period ("SkyMiles Usage Period") rather than by cash
payments from us to American Express. The modification, among other things, (1) provides that Delta-American Express co-branded credit card holders may
check their first bag for free on every Delta flight through June 2013, (2) changes the SkyMiles Usage Period to a three-year period beginning in
December 2011 from a two-year period beginning in December 2010, and (3) gives American Express the option to extend the agreement for one year. The
change in the SkyMiles Usage Period deferred $480 million of debt maturities originally due in 2011.
Clayton County Bonds, Series 2009. In 2009, the Development Authority of Clayton County (the "Development Authority") issued bonds with principal of
$150 million, in two series, maturing in 2029 and 2035 (the "Clayton Bonds"). The Clayton Bonds have a weighted average fixed interest rate of 8.9% and are
subject to mandatory sinking fund redemption requirements. The proceeds were loaned to us to refund bonds that previously had been issued to refinance
certain of our facilities at Atlanta's Hartsfield-Jackson International Airport. The bonds are secured solely by the Development Authority's pledge of the
revenues payable to it under loan agreements between Delta and the Development Authority. Our obligations under the loan agreements are not secured.
Unamortized Discount, Net. Unamortized discount, net primarily represents a reduction in the carrying value of (1) Northwest's debt as a result of purchase
accounting related to the Merger, (2) the debt recorded in connection with our American Express Agreement and (3) fair value adjustments to our long-term
debt in connection with our adoption of fresh start reporting upon emergence from bankruptcy. As described in the table below, we amortize these
adjustments over the remaining maturities of the respective debt to amortization of debt discount, net on our Consolidated Statements of Operations.
During 2010, we recorded a $391 million loss on extinguishment of debt, of which $304 million related to a non-cash write-off of debt discounts that were
recorded as part of purchase accounting.
Future Maturities
The following table summarizes scheduled maturities of our debt, including current maturities, at December 31, 2010:
Years Ending December 31, Total Secured and Amortization of
(in millions) Unsecured Debt Debt Discount, Net
2011 $ 2,024 $ (203)
2012 2,374 (203)
2013 1,776 (165)
2014 3,107 (108)
2015 1,271 (72)
Thereafter 4,890 (184)
Total $ 15,442 $ (935) $ 14,507
Covenants
We were in compliance with all covenants in our financing agreements at December 31, 2010.
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