Clear skies for investors…

January 30, 2004

I usually try to devote Fridays to something positive that a company is doing for its investors, though lately I’ve had difficulty finding examples. But Southwest Airlines (LUV) filed their 10-K yesterday and there’s some great examples on how to do things right. First, is the fact that they filed only a week after releasing their fourth quarter results, substantially reducing the lag time between the headline number that is widely reported and the more complete K. Next is the fact that their disclosures are clear and concise. For example, Southwest’s disclosure on their off-balance sheet obligations — which didn’t even appear in last year’s K — notes that the company had operating leases for 89 aircraft that do not appear on the balance sheet. It then goes on to explain to investors why this arrangement makes sense. Though a lot of companies tend to avoid using the words off-balance sheet, worried that in conjures up Enron-esque dealings, Southwest shows that it’s not necessarily a bad thing. It’s the hiding from investors that’s the real problem!

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