Southwest Airlines 1994 Annual Report Download - page 30

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Notes to Consolidated Financial Statements
Southwest Airlines – 1994 Annual Report Page 30
6. Long-Term Debt (In Thousands)
1994 1993
9 1/4% Notes due 1998 $100,000 100,000
9.4% Notes due 2001 100,000 100,000
8 3/4% Notes due 2003 100,000 100,000
7 7/8% Notes due 2007 100,000 100,000
Capital leases (Note 7) 195,756 204,904
Secured notes payable to financial institutions, repaid
in 1994 -53,950
Industrial Revenue Bonds, repaid in 1994 -375
Other 435 13
596,191 659,242
Less current maturities 9,553 16,068
Less debt discount 3,567 4,038
$583,071 $639,136
On March 1, 1993, the Company redeemed the $100 million in senior unsecured 9% Notes due March 1,
1996 issued in March 1986. The Notes were redeemed at par plus accrued interest.
On September 9, 1992, Southwest issued $100 million of senior unsecured 7 7/8% Notes due September 1,
2007. Interest is payable semi-annually on March 1 and September 1. The Notes are not redeemable prior
to maturity.
During 1991, the Company issued $100 million of senior unsecured 9 1/4% Notes, $100 million of senior
unsecured 9.4% Notes, and $100 million of senior unsecured 8 3/4% Notes due February 15, 1998, July 1,
2001, and October 15, 2003, respectively. Interest on the Notes is payable semi-annually. The Notes are
not redeemable by the Company prior to maturity.
The fair values, based on quoted market prices, of these Notes at December 31, 1994, were as follows (in
thousands):
9 1/4% Notes due 1998 $102,000
9.4% Notes due 2001 103,820
8 3/4% Notes due 2003 100,670
7 7/8% Notes due 2007 93,070
In 1992, certain Convertible Subordinated Debentures issued by Southwest Airlines Eurofinance N.V.
were redeemed. The principal amount of $35,000,000 was converted into 1,370,902 shares (unadjusted for
the 1993 and 1992 stock splits) of Southwest's common stock at the conversion price of $25.53 per share.
The conversion was primarily a noncash transaction and, therefore, was excluded from the Statement of
Cash Flows.
In addition to the credit facilities described above, Southwest has an unsecured Bank Credit Agreement
with a group of domestic banks that permits Southwest to borrow through December 14, 1996 on a
revolving credit basis up to $300 million. Interest rates on borrowings under the Credit Agreement can be,
at the option of Southwest, the agent bank's prime rate, .30% over LIBOR, or .50% over domestic
certificate of deposit rates. The commitment fee is 0.1875% per annum. There were no outstanding
borrowings under this agreement at December 31, 1994 or 1993.