Delta Liquidity In Question

BLUE BAYOU

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From 10Q

Liquidity
During the past several years, we materially increased our borrowings to fund our operations and to meet our other obligations. Our debt and capital lease obligations totaled $14.1 billion at June 30, 2005 compared to $6.0 billion at December 31, 2000. Because substantially all of our assets are encumbered and our credit ratings are low, we believe we will not be able to obtain any material amount of additional debt financing. Except for commitments to finance our purchases of regional jet aircraft in 2005 and 2006, we have no available lines of credit.
At June 30, 2005, our cash and cash equivalents and short-term investments were $1.7 billion. However, we have significant obligations due in the six months ending December 31, 2005 and thereafter. We estimate that our aggregate obligations during that period will be approximately $2.0 billion for operating lease obligations, interest payments, debt maturities, capital expenditures and funding of our defined benefit and defined contribution pension plans. In addition to these obligations, there are other factors, many of which are outside of our control, that may negatively impact our liquidity. As discussed below, these factors include (1) the replacement of our existing Visa/MasterCard processing contract; (2) the financial covenants in our GE Commercial Finance Facility and American Express Travel Related Services Company, Inc. (“Amex”); and (3) potential early retirements by our pilots

The reserve component is in the neighborhood of about $750,000,000 that the credit card processor wants up front (with extension to OCT 05).
 

miles otoole

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BLUE BAYOU said:
From 10Q



Liquidity
During the past several years, we materially increased our borrowings to fund our operations and to meet our other obligations. Our debt and capital lease obligations totaled $14.1 billion at June 30, 2005 compared to $6.0 billion at December 31, 2000. Because substantially all of our assets are encumbered and our credit ratings are low, we believe we will not be able to obtain any material amount of additional debt financing. Except for commitments to finance our purchases of regional jet aircraft in 2005 and 2006, we have no available lines of credit.
At June 30, 2005, our cash and cash equivalents and short-term investments were $1.7 billion. However, we have significant obligations due in the six months ending December 31, 2005 and thereafter. We estimate that our aggregate obligations during that period will be approximately $2.0 billion for operating lease obligations, interest payments, debt maturities, capital expenditures and funding of our defined benefit and defined contribution pension plans. In addition to these obligations, there are other factors, many of which are outside of our control, that may negatively impact our liquidity. As discussed below, these factors include (1) the replacement of our existing Visa/MasterCard processing contract; (2) the financial covenants in our GE Commercial Finance Facility and American Express Travel Related Services Company, Inc. (“Amex”); and (3) potential early retirements by our pilots

The reserve component is in the neighborhood of about $750,000,000 that the credit card processor wants up front (with extension to OCT 05).
What?? OK, snap. Does the CFO's MBA intern who wrote this really know what GG is thinking? Do you? I didn't think so. Now that we have exercised one of the evil twin sisters (we'll still be pulling for you in future interviews, ASA guys) for mucho cashola and will spin off CMR to Mesa, we'll get rid of 2,000,000 grey hairs who are currently sitting in MY seat to Hawaii-Aloha (let's go wifeypoo-you don't work).
Do you really think some judge in georrrrgia is going to give Visa and Mastercard all of our money? That's like a judge taking someones home and giving it to a developer-NOPE-ain't gonna happen.
 

Boeingman

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Sounds like simplifares didn't quite work out the way they thought. I read that entire 10Q and noted they mentioned the B word 9 times.

Take note of the part about all their assets being encumbered. It is a very serious situation over there.
 
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