UAL, Inc. and Southwest Airlines

Instructions

Go to the book’s companion website or the company websites and use information found there to answer the following questions related to UAL, Inc. and Southwest Airlines.

(a) What types of leases are used by Southwest and on what assets are these leases primarily used?

(b) How long-term are some of Southwest’s leases? What are some of the characteristics or provisions of Southwest’s (as lessee) leases?

(c) What did Southwest report in 2009 as its future minimum annual rental commitments under noncancelable leases?

(d) At year-end 2009, what was the present value of the minimum rental payments under Southwest’s capital leases? How much imputed interest was deducted from the future minimum annual rental commitments to arrive at the present value?

(e) What were the amounts and details reported by Southwest for rental expense in 2009, 2008, and 2007?

(f) How does UAL’s use of leases compare with Southwest’s?