Southwest Airlines 2002 Annual Report Download - page 60

SOUTHWEST AIRLINES CO. 2002 10-K | 41
In April 2002, the Company entered into
new unsecured revolving credit facility
agreements 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 effective borrowing rate of the
credit facility would vary depending on factors
in place at the time funds were drawn, as
defined in the agreements.
7. Long-Term Debt
(In thousands) 2002 2001
8 3/4% Notes due 2003 $ 100,000 $ 100,000
Aircraft Secured Notes due 2004 175,000 200,000
8% Notes due 2005 100,000 100,000
Pass Through Certificates 585,661 614,250
7 7/8% Notes due 2007 100,000 100,000
French Credit Agreements 50,024 52,310
6 1/2% Notes due 2012 385,000 -
7 3/8% Debentures due 2027 100,000 100,000
Capital leases (Note 8) 100,563 109,268
1,696,248 1,375,828
Less current maturities 130,454 39,567
Less debt discount and issue costs 13,013 9,103
$ 1,552,781 $ 1,327,158
On March 1, 2002, the Company issued
$385 million senior unsecured Notes (Notes)
due March 1, 2012. The Notes bear interest at
6.5 percent, payable semi-annually beginning
on September 1, 2002. Southwest used the
net proceeds from the issuance of the Notes,
approximately $380.2 million, for general
corporate purposes, including the repayment
of the Company’s credit facility in March 2002.
See Note 6.
On October 30, 2001, the Company issued
$614.3 million Pass Through Certificates
consisting of $150.0 million 5.1% Class A-1
certificates, $375.0 million 5.5% Class A-2
certificates, and $89.3 million 6.1% Class B
certificates. A separate trust was established
for each class of certificates. The trusts used
the proceeds from the sale of certificates to
acquire equipment notes, which were issued
by Southwest on a full recourse basis.
Payments on the equipment notes held in
each trust will be passed through to the
holders of certificates of such trust. The
equipment notes were issued for each of 29
Boeing 737-700 aircraft owned by Southwest
and are secured by a mortgage on such
aircraft. Interest on the equipment notes held
for the certificates is payable semi-annually,
beginning May 1, 2002. Beginning May 1,
2002, principal payments on the equipment
notes held for the Class A-1 certificates are
due semi-annually until the balance of the
certificates mature on May 1, 2006. The entire
principal of the equipment notes for the Class
A-2 and Class B certificates are scheduled for
payment on November 1, 2006.