Southwest Airlines 2009 Annual Report Download - page 70

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2009
5. ACCRUED LIABILITIES
(In millions) 2009 2008
Retirement plans (Note 15) ............................. $ 32 $ 86
Aircraft rentals ....................................... 112 118
Vacation pay ......................................... 190 175
Advances and deposits (Note 10) ......................... 32 23
Fuel derivative contracts ............................... 32 246
Workers compensation ................................. 130 122
Other ............................................... 168 242
Accrued liabilities ................................ $696 $1,012
6. REVOLVING CREDIT FACILITY AND SHORT-TERM BORROWING
During May 2009, the Company fully repaid the $400 million it had previously borrowed in 2008 under its
former $600 million revolving credit facility. On September 29, 2009, the Company entered into a new $600
million unsecured revolving credit facility expiring in October 2012 and terminated the previous facility which
would have expired in August 2010. At the Company’s option, interest on the new facility can be calculated on
one of several different bases. The new facility also contains a financial covenant requiring a minimum coverage
ratio of adjusted pre-tax income to fixed obligations, as defined in the agreement. As of December 31, 2009, the
Company was in compliance with this covenant and there were no amounts outstanding under the revolving
credit facility.
During 2008, as part of the Company’s agreement with a counterparty in which it has invested in auction
rate security instruments, the Company received a loan that is secured by the auction rate security instruments
from that counterparty. The balance of that loan was $75 million at December 31, 2009. See Note 11 for further
information on the instruments and the agreement. The loan is callable by the counterparty at any time and was
made to the Company at a cost that effectively offsets the interest earned on the auction rate security instruments.
The loan is classified as a component of “Current maturities of long-term debt” in the accompanying
Consolidated Balance Sheet.
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