DEBT OBLIGATIONS

Long term obligations consisted of the following (in thousands):



	December 31,			December 31,
	2011			2010
Unsubordinated term loan	$	150,000		$	178,000
Revolving credit facility	106,000			—
Aircraft loans	70,754			92,075
Capital lease obligations-Boeing 727	—			5,910
Promissory note due to DHL, unsecured	20,150			26,350
Other capital leases	—			193
Total long term obligations	346,904			302,528
Less: current portion	(13,223		)	(36,591		)
Total long term obligations, net	$	333,681		$	265,937

In May 2011, the Company executed a new, syndicated credit facility with a larger borrowing capacity and repayment terms through April 2016 ("Credit Facility"). The new Credit Facility, with a consortium of banks, includes a term loan of $150 million and a $175 million revolving credit loan, of which the Company has drawn $106 million, net of repayments. The former term loan, having a balance of $172.4 million, was completely paid-off on May 9, 2011, using the proceeds of the new term loan and revolving loan. Under the terms of the Credit Facility, interest rates are adjusted quarterly based on the Company's earnings before interest, taxes, depreciation and amortization expenses ("EBITDA"), its outstanding debt level and prevailing LIBOR or prime rates. At the Company's current debt-to-EBITDA ratio, the LIBOR based financing for the unsubordinated term loan and revolving credit facility bear a variable interest rate of 2.58% and 2.30%, respectively. During the next twelve months, the Company expects to make further draws on the revolving credit loan to fund its fleet expansion plans. The Credit Facility also has an accordion feature of $50 million which the Company may draw subject to the lenders' consent. Repayments of the term loan are scheduled to begin in June 2012. The Credit Facility provides for the issuance of letters of credit on the Company's behalf. As of December 31, 2011, the unused revolving credit facility totaled $52.5 million, net of draws of $106.0 million and outstanding letters of credit of $16.5 million.

In conjunction with the execution of the Credit Facility, the Company terminated its previous credit agreement, which resulted in the write-off of unamortized debt issuance costs associated with that credit agreement and losses for certain interest rate swaps which had previously been designated as cash flow hedges of interest payments required by the former debt. These charges, which totaled $6.8 million before income taxes, were recorded in March 2011.

The aircraft loans are collateralized by six aircraft, and amortize monthly with a balloon payment of approximately 20% with maturities between 2016 and early 2018. Interest rates range from 6.74% to 7.36% per annum payable monthly. In May, the Company completely paid-off an aircraft loan at par value prior to maturity, remitting $13.8 million for the outstanding principal.

The scheduled annual principal payments on long term debt, as of December 31, 2011, for the next five years are as follows (in thousands):



	Principal Payments
2012	$	13,223
2013	21,265
2014	23,722
2015	24,344
2016	226,115
2017 and beyond	38,235
	$	346,904

The promissory note payable to DHL becomes due in August 2028 as a balloon payment, unless it is extinguished sooner under the terms of the CMI agreement. Beginning April 1, 2010 and extending through the term of the CMI agreement, the balance of the note is amortized ratably without cash payment, in exchange for services provided and thus is expected to be completely amortized by April 2015. The promissory note bears interest at a rate of 5% per annum, and DHL reimburses ABX the interest expense from the note through the term of the CMI agreement.

In March 2009, the Company and DHL agreed to amend the promissory note. The Company agreed to pay DHL $15.0 million of the principal balance, while DHL agreed to extinguish an additional $46.3 million of principal balance. In 2009, the Company recorded the extinguishment of $46.3 million as a capital transaction due to the related party nature of ABX’s relationship with DHL stemming from ABX’s separation from Airborne, Inc. in August 2003. Net of the income tax effects, paid-in capital increased by $29.5 million in 2009 due to the extinguishment.

In June 2009, ABX executed a Lease Assumption and Option Agreement with DHL. In conjunction with the Lease Assumption and Option Agreement, DHL assumed financial responsibility for the capital leases associated with five Boeing 767 aircraft that ABX was operating on behalf of DHL. During 2009, the lease agreements for the five Boeing 767 capital lease aircraft were settled and terminated with the lessor. The Company recorded DHL’s assumption of the lease obligations and debt extinguishment of $45.7 million as a capital transaction due to the related party nature of ABX’s relationship with DHL. As a result, paid-in capital increased by $11.9 million in 2009. The increase in paid-in capital reflects the removal of aircraft having a net book value of $20.9 million, the recognition of the $10.0 million liability for future rent credits granted to DHL, the settlement of certain lease payments and expenses of $3.9 million, and the tax effect of $6.8 million as well as the extinguishment of the debt.

In 2010, the Company adjusted the income tax effect of the debt extinguishment for the promissory note with DHL to reflect the original issue discount associated with the extinguished amount. As a result, the Company reduced the deferred tax liability and increased paid-in-capital by $14.8 million during 2010.

The Credit Facility is collateralized by certain of the Company's Boeing 767 and 757 aircraft that are not collateralized under aircraft loans. Under the terms of the Credit Facility, the Company is required to maintain collateral coverage equal to 150% of the outstanding balance of the term loan and total revolving credit facility. The Credit Facility contains covenants including, among other things, limitations on certain additional indebtedness, guarantees of indebtedness, as well as a total debt to EBITDA ratio and a fixed charge coverage ratio. The Credit Facility stipulates events of default, including unspecified events that may have material adverse effects on the Company. If an event of default occurs, the Company may be forced to repay, renegotiate or replace the Credit Facility. The Company is currently in compliance with the financial covenants specified in the Credit Facility. The Credit Facility limits the amount of dividends the Company can pay and the amount of common stock it can repurchase to $50.0 million during any calendar year. Under the provisions of its promissory note due to DHL, the Company is required to prepay the DHL note in the amount of $0.20 for each dollar of dividend distributed to its stockholders. The same prepayment stipulation applies to stock repurchases.