Southwest Airlines 1997 Annual Report Download - page 43

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43
SOUTHWEST AIRLINES CO. ♥ FIVE SYMBOLS OF FREEDOM
On March 7, 1995, the Company issued $100 million of senior unsecured 8% Notes
due March 1, 2005. Interest is payable semi-annually on March 1 and September 1.
The Notes are not redeemable prior to maturity.
On September 9, 1992, the Company 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 prior to
maturity.
The fair values, based on quoted market prices, of these securities at December 31,
1997, were as follows:
(IN THOUSANDS)
9 1/4% Notes due 1998 $100,350
9.4% Notes due 2001 110,150
8 3/4% Notes due 2003 111,630
8% Notes due 2005 108,920
7 7/8% Notes due 2007 109,410
7 3/8% Debentures due 2027 105,660
In addition to the credit facilities described above, Southwest has an unsecured Bank
Credit Agreement with a group of banks that permits Southwest to borrow through May
6, 2002, on a revolving credit basis, up to $475 million. Interest rates on borrowings
under the Credit Agreement can be, at the option of Southwest, the greater of the agent
bank’s prime rate or the federal funds rate plus .5 percent, .17 percent over LIBOR, or
a fixed rate offered by the banks at the time of borrowing. The commitment fee is .08
percent per annum. There were no outstanding borrowings under this agreement, or
prior similar agreements, at December 31, 1997 or 1996.
5. LEASES
Total rental expense for operating leases charged to operations in 1997, 1996, and
1995 was $297,158,000, $280,389,000, and $247,033,000, respectively. The majority
of the Company’s terminal operations space, as well as 106 aircraft, were under
operating leases at December 31, 1997. The amounts applicable to capital leases
included in property and equipment were:
(IN THOUSANDS) 1997 1996
Flight equipment $227,803 $226,677
Less accumulated amortization 122,346 111,815
$105,457 $114,862