Southwest Airlines 2002 Annual Report Download - page 41

22 | SOUTHWEST AIRLINES CO. 2002 10-K
of $1.82 billion, internally generated funds, and a
$575 million bank revolving line of credit. In
addition, the Company will also consider various
borrowing or leasing options to maximize
earnings and supplement cash requirements.
The Company believes it has access to a wide
variety of financing arrangements because of its
excellent credit ratings, unencumbered assets,
modest leverage, and consistent profitability.
The Company has an available revolving credit
facility from which it can borrow up to
$575 million from a group of banks. One-half of
the facility is short term and expires on April 23,
2003, if not drawn before that date. The other
one-half expires on April 23, 2005. The Company
expects that it will be able to renew the expiring
365-day facility for an additional 365-day period
at reasonable terms. If the Company is unable to
renew, the Company’s available credit facility will
be reduced.
The Company currently has outstanding shelf
registrations for the issuance of up to $1.0 billion
in public debt securities and Pass-Through Certifi-
cates, which it may utilize for aircraft financings
in the future.
In 1999, the Company’s Board of Directors
authorized the repurchase of up to $250 million
of the Company’s common stock. Repurchases
are made in accordance with applicable securi-
ties laws in the open market or in private
transactions from time to time, depending on
market conditions, and may be discontinued at
any time. As of December 31, 2002, in aggre-
gate, 18.3 million shares had been repurchased
at a total cost of $199.2 million, of which
$108.7 million was completed in 2000. No
shares were repurchased in 2001 or in 2002.
Contractual Obligations and Contingent Liabilities
and Commitments
Southwest has contractual obligations and
commitments primarily with regards to future
purchases of aircraft, payment of debt, and lease
arrangements.
As of February 1, 2003, Southwest is scheduled
to take delivery of 17 new 737-700 aircraft from
Boeing in 2003, 23 in 2004, 24 in 2005, 22 in
2006, 25 in 2007, and six in 2008. The Company
also has a total of 79 purchase options for new
737-700 aircraft for years 2004 through 2008 and
purchase rights for an additional 217 737-700s
during 2007–2012. The Company has the option,
which must be exercised two years prior to the
contractual delivery date, to substitute 737-600s
or 737-800s for the 737-700s.
The following table aggregates the Company’s
expected contractual obligations and commit-
ments subsequent to December 31, 2002:
Payments due by period (in thousands)
Contractual obligations(1) 2003
2004-
2005
2006-
2007
Beyond
2007 Total
Long-term debt $ 120,797 $ 320,320 $ 637,588 $ 516,980 $1,595,685
Capital lease commitments(2) 17,751 41,160 26,758 52,016 137,685
Operating lease commitments 281,042 496,371 365,403 1,459,961 2,602,777
Aircraft purchase commitments 597,097 1,394,569 1,139,891 104,924 3,236,481
Total contractual cash obligations $1,016,687 $ 2,252,420 $2,169,640 $ 2,133,881 $7,572,628
(1) Does not include other commitments for the purchase of goods and services which in the aggregate are immaterial.
(2) Includes amounts classified as interest.
There were no outstanding borrowings under the revolving credit facility at December 31, 2002. See
Note 6 to the consolidated financial statements for more information.