Airtran 2009 Annual Report Download - page 57

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collateralize our obligations under our Credit Facility. The counterparty to the Credit Facility has agreed to
release its lien on certain specified assets securing that facility in the event we seek to re-pledge those assets in
order to secure a new financing so long as the aggregate collateral value of the assets pledged under the Credit
Facility is at least equal to the amount then available under the Credit Facility.
We believe that our existing liquidity and forecasted 2010 cash flows will be sufficient to fund our operations
and other financial obligations in 2010. While we believe our 2010 forecast is reasonable, a combination of one
or more material and significant adverse events, most of which are outside of our direct control, could,
depending on the severity and duration thereof, have significant unfavorable impacts on our future cash flows.
Such adverse events could include: significant increases in fuel prices for an extended period of time,
significant sustained declines in unit revenues as a consequence of unfavorable macroeconomic or other
conditions, or an increase in the percentage of advance ticket sales held back by our credit card processors.
Credit Facility
We have a combined letter of credit facility and a revolving line of credit facility. We generally refer to the
combined letter of credit facility and revolving line of credit facility as a whole as the Credit Facility, and we
generally refer to its components as the letter of credit facility and the revolving line of credit facility,
respectively.
The following discussion summarizes the current terms of the Credit Facility. Under the revolving line of credit
facility, we are permitted to borrow, upon two (2) business days notice, until December 31, 2010, up to $125
million for general corporate purposes. Under the letter of credit facility, we are entitled to the issuance by a
financial institution of letters of credit for the benefit of one or more of our credit card processors. The total
amount of outstanding letters of credit under the letter of credit facility plus the outstanding amount borrowed
under the revolving line of credit facility is not permitted to exceed an aggregate of $175 million. Amounts
borrowed under the revolving line of credit facility bear interest at a rate of 12 percent per annum and must be
repaid within three (3) business days to the extent that our aggregate unrestricted cash and investment amount
exceeds $405 million at any time. We may borrow once a month and are permitted to repay amounts borrowed
at any time without penalty. As of December 31, 2008, December 31, 2009, and February 1, 2010, we had $90
million, $125 million and $0, respectively in outstanding borrowings under the revolving line of credit facility.
As of December 31, 2009, the stated amount of the letter of credit issued for the benefit of our largest credit
card processor was $50 million.
The aggregate of amounts borrowed and outstanding letters of credit under the Credit Facility is not permitted
to exceed the estimated value of the collateral securing such facility. The Credit Facility includes various
covenants, including limitations on: dividends and distributions, the incurrence of indebtedness, the
prepayment of indebtedness, and mergers and acquisitions. Drawings under any letter of credit may be made
only to satisfy our obligation to a beneficiary credit card processor to cover chargebacks arising from tickets
sold during the period of exposure to be covered by the letter of credit, which, in the case of the sole letter of
credit outstanding in favor of our largest credit card processor, ends March 31, 2010, but is subject to periodic
extensions, at the discretion of the lender, ending not later than December 31, 2010, and is subject to earlier
termination upon the occurrence of a material adverse change in our financial condition or other like event. We
expect that the period of exposure covered by the letter of credit will be periodically extended through
December 31, 2010, in the absence of a material adverse change in our financial condition or other like event.