LONG-TERM DEBT

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 was 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.



(in millions)	June 30, 2012			December 31, 2011
Total debt at par value	$	12,944		$	13,797
Unamortized discount, net	(625		)	(737		)
Net carrying amount	$	12,319		$	13,060
Fair value	$	13,100		$	13,600

Certificates

In July 2012, we completed a $480 million offering of Pass Through Certificates, Series 2012-1 ("2012-1 EETC") through a pass through trust. We plan to use the proceeds (currently held in escrow) primarily to refinance aircraft securing the Delta 2002-1 EETC, which matured on July 2, 2012, and the Northwest 2001-2 EETC, which is scheduled to mature in August 2013 and is expected to be prepaid in the September 2012 quarter. The details of the offering are shown in the table below:



(in millions)	Total Principal		Fixed Interest Rate	Offering Completion Date	Final Maturity Date	Collateral
2012-1A	$	354	4.750%	July 2012	May 2020	31 aircraft
2012-1B	126		6.875%	July 2012	May 2019	31 aircraft ⁽¹⁾
	$	480


⁽¹⁾	The B tranche is secured by the same aircraft that secure the A tranche.

Covenants

We were in compliance with all covenants in our financing agreements at June 30, 2012.