Delta Airlines 2010 Annual Report Download - page 77

Table of Contents
NOTE 6. LEASE OBLIGATIONS
We lease aircraft, airport terminals, maintenance facilities, ticket offices and other property and equipment from third parties. Rental expense for operating
leases, which is recorded on a straight-line basis over the life of the lease term, totaled $1.2 billion, $1.3 billion and $798 million for the years ended
December 31, 2010, 2009 and 2008, respectively. Amounts due under capital leases are recorded as liabilities on our Consolidated Balance Sheets. Assets
acquired under capital leases are recorded as property and equipment on our Consolidated Balance Sheets. Amortization of assets recorded under capital
leases is included in depreciation and amortization expense on our Consolidated Statements of Operations. Many of our aircraft, facility, and equipment leases
include rental escalation clauses and/or renewal options. Our leases do not include residual value guarantees and we are not the primary beneficiary in or have
any other forms of variable interest with the lessor of the leased assets. As a result, we have not consolidated any of the entities that lease to us. As discussed
in Note 8, we have a variable interest associated with our JFK redevelopment project.
The following tables summarize, as of December 31, 2010, our minimum rental commitments under capital leases and noncancelable operating leases
(including certain aircraft under Contract Carrier agreements) with initial or remaining terms in excess of one year:
Capital Leases
Years Ending December 31,
(in millions)
2011 $ 214
2012 193
2013 160
2014 130
2015 124
Thereafter 404
Total minimum lease payments 1,225
Less: amount of lease payments representing interest (487)
Present value of future minimum capital lease payments 738
Plus: unamortized premium, net 7
Less: current obligations under capital leases (119)
Long-term capital lease obligations $ 626
Operating Leases
Contract
Carrier
Delta Aircraft
Years Ending December 31, Lease Lease
(in millions) Payments(1) Payments(2) Total
2011 $ 899 $ 521 $ 1,420
2012 840 511 1,351
2013 816 504 1,320
2014 770 493 1,263
2015 688 481 1,169
Thereafter 7,096 1,327 8,423
Total minimum lease payments $ 11,109 $ 3,837 $ 14,946
(1) These amounts include payments accounted for as construction obligations, which are described in Note 8 — "JFK Redevelopment".
(2) These amounts represent the minimum lease obligations under our Contract Carrier agreements with Atlantic Southeast Airlines, Inc. ("ASA"),
Chautauqua Airlines, Inc. ("Chautauqua"), Compass, Mesaba, Pinnacle, Shuttle America Corporation ("Shuttle America") and SkyWest Airlines, Inc.
("SkyWest Airlines").
At December 31, 2010, we operated 111 aircraft under operating leases and 113 aircraft under capital leases. Our Contract Carriers under capacity
purchase agreements operated 540 aircraft under operating leases (see Note 7). Leases for aircraft operated by us and our Contract Carriers have expiration
dates ranging from 2011 to 2025.
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