Airtran 2001 Annual Report Download - page 17

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T
T
Our contractual obligations
and
commitments,
as
described in the preceding table, have been modified
by
the
amendments
to
our
8717
purchase
contract
described above and
would
be
modified
if
transactions subject
to
the lease financing proposal from Boeing
capital
are
completed
as
con-
templated. The lease financing proposal provides for
the
lease-finance
of
atotal
of
20
87175 scheduled for delivery during
2002
(see
Note
16
to
the
consolidated financial statements). The amounts
in
the table above have been modified
by
the
amendments
as
follows; (ij aircraft purchase
commit-
ments have increased for 2002 and decreased for 2003; and
(ii)
purchase deposits that were previously
paid
for aircraft deliveries in 2002 will
be
applied
to
future aircraft deliveries, rather than reducing the balance
of
the lotal purchase price
due
at delivery.
The
amounts in the lable above
would
also
be
modified
by
the lease financing proposal
as
follows:
~)
aggregate operating lease payments for aircraft
would
increase for all periods;
and
(ii)
aggregate aircraft purchase
commitments
would
decrease
in
2002. Our contractual obligations and commitments after giving effect to the above
described amendments and lease financing proposal, are
as
follows:
(In
millions) 2002
Revised total contractual obligations
and
commitments
$113.7
2003
$354.0
2004
$139.7
2005
$141.3
2006
$140.3
Thereafter
$1,507.8
Avariety
of
assumptions were necessary in order
to
derive the information described
in
the paragraph herein, including,
but
not limited to: (ij
our
deci-
sion
to
acquire
new
versus previously owned B717 aircraft; (iij the timing
of
aircraft delivery dates; and
~iij
estimated rental factors
which
are correlated
to
floating interest rates prior
to
delivery.
OUr
actual results may differ from these estimates under different assumptions
or
conditions.
Other
Information
We
entered into an amended
and
restated financing commitment with Boeing Capital
on
March 22, 2001, and aseries
of
definitive agreements on
April 12, 2001, in
order
to
refinance
our
10:&%
($150.0 million) senior
notes
and AirTran Airways, Inc.'s
10~%
($80.0 million) senior secured notes
due
April 2001 (collectively, the Existing Notes), and
10
provide additional liquidity. The cash flow generated from the Boeing
capilal
transactions, together
with internally generated funds, was used
to
retire the Existing Notes at maturity. The
components
of
the refinancing are as follows:
(In
thousands)
11.27% Senior secured notes
of
AirTran Airways, Inc. due
2008
13.00% Subordinated notes
of
AirTran Holdings, Inc.
due
2009
7.75% Convertible
noles
of
AirTran Holdings, Inc.
due
2009
$166,400
17,500
17,500
$201,400
!.
Under
the
new
senior secured
notes
issued by
our
operating subsidiary, AirTran Airways, principal payments
of
approximately S3.3 million plus interest
are
due
and payable semiannually.
In
addition, there are certain mandatory prepayment events, including a
$3.1
million prepayment upon the
consum-
mation
of
each
of
11
sale-leaseback transactions for B717 aircraft. During 2001,
aJI11
prepayments were completed. The
new
senior secured
notes
are
secured
by
substantially all
of
the assets
of
AirTran Airways
not
previously encumbered,
and
are noncallable for four years.
In
the fifth year, the senior
secured notes
may
be
prepaid at apremium
of
four percent and in the sixth year at apremium
of
two
percent. Contemporaneously with the issuance
of
the
new
senior secured notes,
we
issued detachable warrants
to
Boeing Capital for the purchase
of
three million shares of
our
common
stock
at
$4.51
per
share. The warrants have an estimated value
of
$12.3 million and expire
in
five years. This amount is being amortized
to
interest expense
over the life
of
the
new
senior secured notes.