Delta Airlines 2012 Annual Report Download - page 81

Borrowings under the Term Loan Facility must be repaid annually in an amount equal to 1% of the original principal amount (to be paid in equal
quarterly installments), with the balance due in 2017 . Borrowings under the Revolving Credit Facility are due in 2016 . As of December 31, 2012
and 2011, the Revolving Credit Facility was undrawn.
Our obligations under the 2011 Credit Facilities are guaranteed by the Guarantors. The 2011 Credit Facilities and the related guarantees are
secured by liens on certain of our and the Guarantors' assets, including accounts receivable, flight equipment, ground property and equipment, certain
aircraft, spare engines and parts, certain non-Pacific international routes, domestic slots, real estate and certain investments (the “Collateral”).
The 2011 Credit Facilities contain events of default customary for similar financings, including cross-defaults to other material indebtedness and
certain change of control events. The 2011 Credit Facilities also include events of default specific to our business, including the suspension of all or
substantially all of our flights and operations for more than five consecutive days (other than as a result of a Federal Aviation Administration
suspension due to extraordinary events similarly affecting other major U.S. air carriers). Upon the occurrence of an event of default, the outstanding
obligations may be accelerated and become due and payable immediately. For a discussion of related financial covenants, see "Key Financial
Covenants" below.
Key Financial Covenants
Our secured debt instruments discussed above include affirmative, negative and financial covenants that restrict our ability to, among other things,
make investments, sell or otherwise dispose of collateral if we are not in compliance with the collateral coverage ratio tests described below, pay
dividends or repurchase stock. We were in compliance with all covenants in our financing agreements at December 31, 2012 .
Minimum Collateral Coverage Ratio.
If the respective collateral coverage ratios are not maintained, we must either provide additional collateral to
secure our obligations or repay the loans under the facilities by an amount necessary to maintain compliance with the collateral coverage ratios. The
value of the collateral that has been pledged in each facility may change over time, which may be reflected in appraisals of collateral required by our
credit agreements and indentures. These changes could result from factors that are not under our control. A decline in the value of collateral could
result in a situation where we may not be able to maintain the collateral coverage ratio.
Availability Under Revolving Credit Facilities
The table below shows availability under revolving credit facilities, all of which were undrawn, as of December 31, 2012 :
74
2012 Pacific Facilities 2011 Credit Facilities
Minimum Fixed Charge Coverage Ratio
(1)
1.20:1 1.20:1
Minimum Unrestricted Liquidity
Unrestricted cash and permitted investments n/a $1.0 billion
Unrestricted cash, permitted investments and undrawn revolving credit facilities $2.0 billion $2.0 billion
Minimum Collateral Coverage Ratio
(2)
1.60:1 1.67:1
(3)
(1)
Defined as the ratio of (a) earnings before interest, taxes, depreciation, amortization and aircraft rent and other adjustments to net income to (b) the sum of gross cash interest expense
(including the interest portion of our capitalized lease obligations) and cash aircraft rent expense, for the 12-month period ending as of the last day of each fiscal quarter.
(2)
Defined as the ratio of (a) certain of the collateral that meets specified eligibility standards to (b) the sum of the aggregate outstanding obligations and certain other obligations.
(3)
Excluding the non-
Pacific international routes from the collateral for purposes of the calculation, the required minimum collateral coverage ratio is 0.75:1
(in millions)
Revolving Credit Facility
$
1,225
Pacific Revolving Credit Facility
450
Bank Revolving Credit Facility
150
Total availability under revolving credit facilities
$
1,825