Delta Airlines 2014 Annual Report Download - page 82

Fair Value of Debt
Market risk associated with our fixed and variable rate long-term debt relates to the potential reduction in fair value and negative impact to future
earnings, respectively, from an increase in interest rates. In the table below, the aggregate fair value of debt is based primarily on reported market
values, recently completed market transactions and estimates based on interest rates, maturities, credit risk and underlying collateral and is classified
primarily as Level 2 within the fair value hierarchy.
NOTE 9 . 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 approximately $1.2 billion for the year ended
December 31, 2014 and $1.1 billion for the years ended December 31, 2013 and 2012 . Amounts due under capital leases are recorded as liabilities,
while assets acquired under capital leases are recorded as property and equipment. Amortization of assets recorded under capital leases is included in
depreciation and amortization expense. Our airport terminal leases include contingent rents, which vary based upon: facility usage, enplanements,
aircraft weight and other factors. 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 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.
The following tables summarize, as of December 31, 2014 , our minimum rental commitments under capital leases and noncancelable operating
leases (including certain aircraft flown by Contract Carriers) with initial or remaining terms in excess of one year:
Capital Leases
75
December 31,
(in millions) 2014 2013
Total debt at par value
$
9,469
$
11,228
Unamortized discount, net
(90
)
(383
)
Net carrying amount
$
9,379
$
10,845
Fair value
$
9,800
$
11,600
Years Ending December 31,
(in millions) Total
2015
$
157
2016
139
2017
97
2018
51
2019
33
Thereafter
42
Total minimum lease payments
519
Less: amount of lease payments representing interest
(121
)
Present value of future minimum capital lease payments
398
Less: current obligations under capital leases
(107
)
Long-term capital lease obligations
$
291