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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Southwest Airlines Co | NYSE:LUV | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.22 | -0.83% | 26.19 | 26.69 | 25.945 | 26.43 | 10,941,247 | 22:42:01 |
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended March 31, 2016
|
|
or
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ________ to ________
|
TEXAS
|
74-1563240
|
(State or other jurisdiction of
|
(IRS Employer
|
incorporation or organization)
|
Identification No.)
|
P.O. Box 36611
|
|
Dallas, Texas
|
75235-1611
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,388
|
|
|
$
|
1,583
|
|
Short-term investments
|
1,194
|
|
|
1,468
|
|
||
Accounts and other receivables
|
511
|
|
|
474
|
|
||
Inventories of parts and supplies, at cost
|
289
|
|
|
311
|
|
||
Prepaid expenses and other current assets
|
192
|
|
|
188
|
|
||
Total current assets
|
4,574
|
|
|
4,024
|
|
||
|
|
|
|
||||
Property and equipment, at cost:
|
|
|
|
|
|
||
Flight equipment
|
19,735
|
|
|
19,462
|
|
||
Ground property and equipment
|
3,308
|
|
|
3,219
|
|
||
Deposits on flight equipment purchase contracts
|
1,202
|
|
|
1,089
|
|
||
Assets constructed for others
|
986
|
|
|
915
|
|
||
|
25,231
|
|
|
24,685
|
|
||
Less allowance for depreciation and amortization
|
9,267
|
|
|
9,084
|
|
||
|
15,964
|
|
|
15,601
|
|
||
Goodwill
|
970
|
|
|
970
|
|
||
Other assets
|
733
|
|
|
717
|
|
||
|
$
|
22,241
|
|
|
$
|
21,312
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,153
|
|
|
$
|
1,188
|
|
Accrued liabilities
|
2,472
|
|
|
2,591
|
|
||
Air traffic liability
|
3,675
|
|
|
2,990
|
|
||
Current maturities of long-term debt
|
953
|
|
|
637
|
|
||
Total current liabilities
|
8,253
|
|
|
7,406
|
|
||
|
|
|
|
||||
Long-term debt less current maturities
|
2,355
|
|
|
2,541
|
|
||
Deferred income taxes
|
2,609
|
|
|
2,490
|
|
||
Construction obligation
|
825
|
|
|
757
|
|
||
Other noncurrent liabilities
|
703
|
|
|
760
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock
|
808
|
|
|
808
|
|
||
Capital in excess of par value
|
1,387
|
|
|
1,374
|
|
||
Retained earnings
|
9,872
|
|
|
9,409
|
|
||
Accumulated other comprehensive loss
|
(894
|
)
|
|
(1,051
|
)
|
||
Treasury stock, at cost
|
(3,677
|
)
|
|
(3,182
|
)
|
||
Total stockholders' equity
|
7,496
|
|
|
7,358
|
|
||
|
$
|
22,241
|
|
|
$
|
21,312
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
OPERATING REVENUES:
|
|
|
|
||||
Passenger
|
$
|
4,398
|
|
|
$
|
4,178
|
|
Freight
|
42
|
|
|
44
|
|
||
Other
|
386
|
|
|
192
|
|
||
Total operating revenues
|
4,826
|
|
|
4,414
|
|
||
|
|
|
|
||||
OPERATING EXPENSES:
|
|
|
|
|
|
||
Salaries, wages, and benefits
|
1,539
|
|
|
1,419
|
|
||
Fuel and oil
|
852
|
|
|
877
|
|
||
Maintenance materials and repairs
|
262
|
|
|
229
|
|
||
Aircraft rentals
|
59
|
|
|
60
|
|
||
Landing fees and other rentals
|
302
|
|
|
285
|
|
||
Depreciation and amortization
|
290
|
|
|
244
|
|
||
Acquisition and integration
|
—
|
|
|
23
|
|
||
Other operating expenses
|
578
|
|
|
497
|
|
||
Total operating expenses
|
3,882
|
|
|
3,634
|
|
||
|
|
|
|
||||
OPERATING INCOME
|
944
|
|
|
780
|
|
||
|
|
|
|
||||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
||
Interest expense
|
30
|
|
|
32
|
|
||
Capitalized interest
|
(11
|
)
|
|
(6
|
)
|
||
Interest income
|
(5
|
)
|
|
(1
|
)
|
||
Other (gains) losses, net
|
114
|
|
|
32
|
|
||
Total other expenses (income)
|
128
|
|
|
57
|
|
||
|
|
|
|
||||
INCOME BEFORE INCOME TAXES
|
816
|
|
|
723
|
|
||
PROVISION FOR INCOME TAXES
|
305
|
|
|
270
|
|
||
|
|
|
|
||||
NET INCOME
|
$
|
511
|
|
|
$
|
453
|
|
|
|
|
|
||||
NET INCOME PER SHARE, BASIC
|
$
|
0.80
|
|
|
$
|
0.67
|
|
|
|
|
|
||||
NET INCOME PER SHARE, DILUTED
|
$
|
0.79
|
|
|
$
|
0.66
|
|
|
|
|
|
||||
COMPREHENSIVE INCOME
|
$
|
668
|
|
|
$
|
449
|
|
|
|
|
|
||||
WEIGHTED AVERAGE SHARES OUTSTANDING
|
|
|
|
|
|
||
Basic
|
641
|
|
|
674
|
|
||
Diluted
|
648
|
|
|
682
|
|
||
|
|
|
|
||||
Cash dividends declared per common share
|
$
|
.075
|
|
|
$
|
.060
|
|
|
Three months ended
|
||||||
|
March 31,
|
||||||
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net income
|
$
|
511
|
|
|
$
|
453
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
290
|
|
|
244
|
|
||
Unrealized/realized (gain) loss on fuel derivative instruments
|
88
|
|
|
11
|
|
||
Deferred income taxes
|
26
|
|
|
19
|
|
||
Changes in certain assets and liabilities:
|
|
|
|
|
|
||
Accounts and other receivables
|
(21
|
)
|
|
(130
|
)
|
||
Other assets
|
4
|
|
|
13
|
|
||
Accounts payable and accrued liabilities
|
313
|
|
|
177
|
|
||
Air traffic liability
|
685
|
|
|
717
|
|
||
Cash collateral provided to derivative counterparties
|
(231
|
)
|
|
(17
|
)
|
||
Other, net
|
(49
|
)
|
|
(35
|
)
|
||
Net cash provided by operating activities
|
1,616
|
|
|
1,452
|
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Capital expenditures
|
(438
|
)
|
|
(573
|
)
|
||
Assets constructed for others
|
(11
|
)
|
|
(22
|
)
|
||
Purchases of short-term investments
|
(256
|
)
|
|
(316
|
)
|
||
Proceeds from sales of short-term and other investments
|
530
|
|
|
609
|
|
||
Net cash used in investing activities
|
(175
|
)
|
|
(302
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from Employee stock plans
|
11
|
|
|
13
|
|
||
Proceeds from termination of interest rate derivative instruments
|
—
|
|
|
12
|
|
||
Reimbursement for assets constructed for others
|
10
|
|
|
2
|
|
||
Payments of long-term debt and capital lease obligations
|
(56
|
)
|
|
(51
|
)
|
||
Payments of cash dividends
|
(96
|
)
|
|
(81
|
)
|
||
Repayment of construction obligation
|
(2
|
)
|
|
(2
|
)
|
||
Repurchase of common stock
|
(500
|
)
|
|
(300
|
)
|
||
Other, net
|
(3
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(636
|
)
|
|
(407
|
)
|
||
|
|
|
|
||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
805
|
|
|
743
|
|
||
|
|
|
|
||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,583
|
|
|
1,282
|
|
||
|
|
|
|
||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
2,388
|
|
|
$
|
2,025
|
|
|
|
|
|
||||
CASH PAYMENTS FOR:
|
|
|
|
||||
Interest, net of amount capitalized
|
$
|
27
|
|
|
$
|
32
|
|
Income taxes
|
$
|
73
|
|
|
$
|
111
|
|
|
|
|
|
||||
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
|
|
|
|
||||
Flight equipment under capital leases
|
$
|
169
|
|
|
$
|
41
|
|
Assets constructed for others
|
$
|
60
|
|
|
$
|
43
|
|
(in millions, except per share amounts)
|
Three months ended March 31, 2016
|
||
Passenger revenue
|
$
|
(54
|
)
|
Other revenue
|
169
|
|
|
Operating revenues
|
$
|
115
|
|
Net income
|
$
|
62
|
|
Net income per basic share
|
$
|
0.10
|
|
Net income per diluted share
|
$
|
0.09
|
|
(in millions, except per share amounts)
|
Three months ended March 31, 2016
|
||
Depreciation expense
|
$
|
28
|
|
Net income
|
$
|
(15
|
)
|
Net income per basic share
|
$
|
(0.02
|
)
|
Net income per diluted share
|
$
|
(0.02
|
)
|
|
|
Fuel hedged as of
|
|
|
|
|
|
March 31, 2016
|
|
Derivative underlying commodity type as of
|
|
Period (by year)
|
|
(gallons in millions) (a)
|
|
March 31, 2016
|
|
Remainder of 2016
|
|
884
|
|
|
Brent crude oil and Gulf Coast jet fuel
|
2017
|
|
1,269
|
|
|
WTI crude and Brent crude oil
|
2018
|
|
731
|
|
|
Brent crude oil
|
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
|
|
Balance Sheet
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
||||||||
(in millions)
|
|
location
|
|
3/31/2016
|
|
12/31/2015
|
|
3/31/2016
|
|
12/31/2015
|
||||||||
Derivatives designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
6
|
|
|
2
|
|
|
26
|
|
|
—
|
|
||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
74
|
|
|
107
|
|
|
548
|
|
|
526
|
|
||||
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
54
|
|
|
55
|
|
|
498
|
|
|
658
|
|
||||
Interest rate derivative contracts
|
|
Other assets
|
|
16
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
—
|
|
|
—
|
|
|
46
|
|
|
49
|
|
||||
Total derivatives designated as hedges
|
|
$
|
151
|
|
|
$
|
168
|
|
|
$
|
1,118
|
|
|
$
|
1,233
|
|
||
Derivatives not designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
29
|
|
|
$
|
39
|
|
|
$
|
19
|
|
|
$
|
26
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
39
|
|
|
5
|
|
|
—
|
|
|
—
|
|
||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
920
|
|
|
1,395
|
|
|
1,390
|
|
|
1,854
|
|
||||
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
298
|
|
|
330
|
|
|
348
|
|
|
352
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
1,286
|
|
|
$
|
1,769
|
|
|
$
|
1,757
|
|
|
$
|
2,232
|
|
Total derivatives
|
|
|
|
$
|
1,437
|
|
|
$
|
1,937
|
|
|
$
|
2,875
|
|
|
$
|
3,465
|
|
|
|
Balance Sheet
|
|
March 31,
|
|
December 31,
|
||||
(in millions)
|
|
location
|
|
2016
|
|
2015
|
||||
Cash collateral deposits held from counterparties for fuel
contracts - current
|
|
Offset against Prepaid expenses and other current assets
|
|
$
|
9
|
|
|
$
|
—
|
|
Cash collateral deposits held from counterparties for fuel
contracts - noncurrent
|
|
Offset against Other assets
|
|
4
|
|
|
—
|
|
||
Cash collateral deposits provided to counterparties for fuel
contracts - current
|
|
Offset against Accrued liabilities
|
|
586
|
|
|
235
|
|
||
Cash collateral deposits provided to counterparties for fuel
contracts - noncurrent |
|
Offset against Other noncurrent liabilities
|
|
494
|
|
|
600
|
|
||
Due to third parties for fuel contracts
|
|
Accounts payable
|
|
53
|
|
|
46
|
|
Offsetting of derivative liabilities
|
||||||||||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||||
|
|
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) + (ii)
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) + (ii)
|
||||||||||||
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
Description
|
|
Balance Sheet location
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet (a)
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet (a)
|
||||||||||||
Fuel derivative contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
28
|
|
|
$
|
(28
|
)
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
Fuel derivative contracts
|
|
Other assets
|
|
$
|
30
|
|
|
$
|
(30
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fuel derivative contracts
|
|
Accrued liabilities
|
|
$
|
1,938
|
|
|
$
|
(1,580
|
)
|
|
$
|
358
|
|
|
$
|
2,380
|
|
|
$
|
(1,737
|
)
|
|
$
|
643
|
|
Fuel derivative contracts
|
|
Other noncurrent liabilities
|
|
$
|
846
|
|
|
$
|
(846
|
)
|
|
$
|
—
|
|
|
$
|
1,010
|
|
|
$
|
(985
|
)
|
|
$
|
25
|
|
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
Counterparty (CP)
|
|
|
||||||||||||||||||||||||||||
(in millions)
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
F
|
|
Other
(a)
|
|
Total
|
||||||||||||||||
Fair value of fuel derivatives
|
$
|
(565
|
)
|
|
$
|
(183
|
)
|
|
$
|
(118
|
)
|
|
$
|
(415
|
)
|
|
$
|
(145
|
)
|
|
$
|
15
|
|
|
$
|
3
|
|
|
$
|
(1,408
|
)
|
Cash collateral held from (by) CP
|
(544
|
)
|
|
(140
|
)
|
|
(12
|
)
|
|
(355
|
)
|
|
(31
|
)
|
|
15
|
|
|
—
|
|
|
(1,067
|
)
|
||||||||
Aircraft collateral pledged to CP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Letters of credit (LC)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Option to substitute LC for aircraft
|
(200) to (600)(h)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
(150) to (550)(d)
|
|
N/A
|
|
|
|
|
||||||||||||||||
Option to substitute LC for cash
|
N/A
|
|
>(500)(e)
|
|
(225) to (275)(e)
|
|
(75) to (150) or >(550)(e)
|
|
(75) to (150) or >(550)(e)
|
|
(g)
|
|
|
|
|
||||||||||||||||
If credit rating is investment
grade, fair value of fuel
derivative level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash is provided to CP
|
(50) to (200) or >(600)
|
|
(50) to (100) or >(500)
|
|
>(125)
|
|
(75) to (150) or >(550)
|
|
(125) to (150) or >(550)
|
|
>(100)
|
|
|
|
|
||||||||||||||||
Cash is received from CP
|
>50
|
|
>150
|
|
>175(c)
|
|
>250
|
|
>75
|
|
>0
|
|
|
|
|
||||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(200) to (600)(f)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
(150) to (550)(d)
|
|
N/A
|
|
|
|
|
||||||||||||||||
If credit rating is non-investment
grade, fair value of fuel derivative level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash is provided to CP
|
(0) to (200) or >(600)
|
|
(0) to (100) or >(500)
|
|
(b)
|
|
(0) to (150) or >(550)
|
|
(0) to (150) or >(550)
|
|
(b)
|
|
|
|
|
||||||||||||||||
Cash is received from CP
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
|
|
|
||||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(200) to (600)
|
|
(100) to (500)
|
|
N/A
|
|
(150) to (550)
|
|
(150) to (550)
|
|
N/A
|
|
|
|
|
|
Three months ended March 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
NET INCOME
|
$
|
511
|
|
|
$
|
453
|
|
Unrealized gain (loss) on fuel derivative instruments, net of
deferred taxes of $93 and ($1)
|
160
|
|
|
(3
|
)
|
||
Unrealized loss on interest rate derivative instruments, net of
deferred taxes of ($1) and $-
|
(3
|
)
|
|
(1
|
)
|
||
Total other comprehensive income (loss)
|
$
|
157
|
|
|
$
|
(4
|
)
|
COMPREHENSIVE INCOME
|
$
|
668
|
|
|
$
|
449
|
|
(in millions)
|
Fuel derivatives
|
|
Interest rate derivatives
|
|
Defined benefit plan items
|
|
Other
|
|
Deferred tax
|
|
Accumulated other
comprehensive income (loss)
|
||||||||||||
Balance at December 31, 2015
|
$
|
(1,666
|
)
|
|
$
|
(30
|
)
|
|
$
|
22
|
|
|
$
|
6
|
|
|
$
|
617
|
|
|
$
|
(1,051
|
)
|
Changes in fair value
|
(57
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
25
|
|
|
(40
|
)
|
||||||
Reclassification to earnings
|
310
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
(117
|
)
|
|
197
|
|
||||||
Balance at March 31, 2016
|
$
|
(1,413
|
)
|
|
$
|
(34
|
)
|
|
$
|
22
|
|
|
$
|
6
|
|
|
$
|
525
|
|
|
$
|
(894
|
)
|
Three months ended March 31, 2016
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized loss on fuel derivative instruments
|
|
$
|
310
|
|
|
Fuel and oil expense
|
|
|
115
|
|
|
Less: Tax Expense
|
|
|
|
$
|
195
|
|
|
Net of tax
|
Unrealized loss on interest rate derivative instruments
|
|
$
|
4
|
|
|
Interest expense
|
|
|
2
|
|
|
Less: Tax Expense
|
|
|
|
$
|
2
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
197
|
|
|
Net of tax
|
(in millions)
|
March 31, 2016
|
|
December 31, 2015
|
||||
Intangible assets
|
$
|
460
|
|
|
$
|
464
|
|
Non-current investments
|
41
|
|
|
40
|
|
||
Other
|
232
|
|
|
213
|
|
||
Other assets
|
$
|
733
|
|
|
$
|
717
|
|
(in millions)
|
March 31, 2016
|
|
December 31, 2015
|
||||
Accounts payable trade
|
$
|
191
|
|
|
$
|
178
|
|
Salaries payable
|
171
|
|
|
173
|
|
||
Taxes payable
|
246
|
|
|
179
|
|
||
Aircraft maintenance payable
|
75
|
|
|
168
|
|
||
Fuel payable
|
49
|
|
|
48
|
|
||
Other payables
|
421
|
|
|
442
|
|
||
Accounts payable
|
$
|
1,153
|
|
|
$
|
1,188
|
|
(in millions)
|
March 31, 2016
|
|
December 31, 2015
|
||||
ProfitSharing and savings plans
|
$
|
798
|
|
|
$
|
655
|
|
Aircraft and other lease related obligations
|
50
|
|
|
74
|
|
||
Vacation pay
|
314
|
|
|
309
|
|
||
Accrued union bonuses
|
244
|
|
|
329
|
|
||
Health
|
80
|
|
|
86
|
|
||
Derivative contracts
|
358
|
|
|
643
|
|
||
Workers compensation
|
191
|
|
|
187
|
|
||
Property and income taxes
|
232
|
|
|
62
|
|
||
Other
|
205
|
|
|
246
|
|
||
Accrued liabilities
|
$
|
2,472
|
|
|
$
|
2,591
|
|
(in millions)
|
March 31, 2016
|
|
December 31, 2015
|
||||
Postretirement obligation
|
$
|
206
|
|
|
$
|
201
|
|
Non-current lease-related obligations
|
155
|
|
|
165
|
|
||
Other deferred compensation
|
168
|
|
|
179
|
|
||
Deferred gains from sale and leaseback of aircraft
|
40
|
|
|
43
|
|
||
Derivative contracts
|
46
|
|
|
74
|
|
||
Other
|
88
|
|
|
98
|
|
||
Other noncurrent liabilities
|
$
|
703
|
|
|
$
|
760
|
|
|
Three months ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
NUMERATOR:
|
|
|
|
||||
Net income
|
$
|
511
|
|
|
$
|
453
|
|
Incremental income effect of interest on 5.25% convertible notes
|
1
|
|
|
1
|
|
||
Net income after assumed conversion
|
$
|
512
|
|
|
$
|
454
|
|
|
|
|
|
||||
DENOMINATOR:
|
|
|
|
|
|
||
Weighted-average shares outstanding, basic
|
641
|
|
|
674
|
|
||
Dilutive effect of Employee stock options and restricted stock units
|
1
|
|
|
2
|
|
||
Dilutive effect of 5.25% convertible notes
|
6
|
|
|
6
|
|
||
Adjusted weighted-average shares outstanding, diluted
|
648
|
|
|
682
|
|
||
|
|
|
|
||||
NET INCOME PER SHARE:
|
|
|
|
|
|
||
Basic
|
$
|
0.80
|
|
|
$
|
0.67
|
|
Diluted
|
$
|
0.79
|
|
|
$
|
0.66
|
|
|
|
|
|
Fair value measurements at reporting date using:
|
||||||||||||
|
|
|
|
Quoted prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
||||||||
Description
|
|
March 31, 2016
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
2,183
|
|
|
$
|
2,183
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
125
|
|
|
—
|
|
|
125
|
|
|
—
|
|
||||
Certificates of deposit
|
|
10
|
|
|
—
|
|
|
10
|
|
|
—
|
|
||||
Eurodollar time deposits
|
|
70
|
|
|
—
|
|
|
70
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
968
|
|
|
968
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
226
|
|
|
—
|
|
|
226
|
|
|
—
|
|
||||
Interest rate derivatives
|
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (b)
|
|
28
|
|
|
—
|
|
|
28
|
|
|
—
|
|
||||
Swap contracts (c)
|
|
644
|
|
|
—
|
|
|
644
|
|
|
—
|
|
||||
Option contracts (b)
|
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||
Option contracts (c)
|
|
702
|
|
|
—
|
|
|
—
|
|
|
702
|
|
||||
Other available-for-sale securities
|
|
89
|
|
|
63
|
|
|
—
|
|
|
26
|
|
||||
Total assets
|
|
$
|
5,108
|
|
|
$
|
3,214
|
|
|
$
|
1,119
|
|
|
$
|
775
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(599
|
)
|
|
$
|
—
|
|
|
$
|
(599
|
)
|
|
$
|
—
|
|
Option contracts (b)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(45
|
)
|
||||
Option contracts (c)
|
|
(2,185
|
)
|
|
—
|
|
|
—
|
|
|
(2,185
|
)
|
||||
Interest rate derivatives
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(2,875
|
)
|
|
$
|
—
|
|
|
$
|
(645
|
)
|
|
$
|
(2,230
|
)
|
|
|
|
|
Fair value measurements at reporting date using:
|
||||||||||||
|
|
|
|
Quoted prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
||||||||
Description
|
|
December 31, 2015
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
1,337
|
|
|
$
|
1,337
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
200
|
|
|
—
|
|
|
200
|
|
|
—
|
|
||||
Certificates of deposit
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Eurodollar time deposits
|
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
1,248
|
|
|
1,248
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
220
|
|
|
—
|
|
|
220
|
|
|
—
|
|
||||
Interest rate derivatives (see Note 3)
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (b)
|
|
38
|
|
|
—
|
|
|
38
|
|
|
—
|
|
||||
Swap contracts (c)
|
|
931
|
|
|
—
|
|
|
931
|
|
|
—
|
|
||||
Option contracts (b)
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Option contracts (c)
|
|
956
|
|
|
—
|
|
|
—
|
|
|
956
|
|
||||
Other available-for-sale securities
|
|
93
|
|
|
66
|
|
|
—
|
|
|
27
|
|
||||
Total assets
|
|
$
|
5,081
|
|
|
$
|
2,651
|
|
|
$
|
1,437
|
|
|
$
|
993
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(774
|
)
|
|
$
|
—
|
|
|
$
|
(774
|
)
|
|
$
|
—
|
|
Option contracts (b)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
||||
Option contracts (c)
|
|
(2,616
|
)
|
|
—
|
|
|
—
|
|
|
(2,616
|
)
|
||||
Interest rate derivatives (see Note 3)
|
|
(49
|
)
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(3,465
|
)
|
|
$
|
—
|
|
|
$
|
(823
|
)
|
|
$
|
(2,642
|
)
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||
|
Fuel
|
|
Other
|
|
|
||||||
(in millions)
|
derivatives
|
|
securities
|
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
(1,676
|
)
|
|
$
|
27
|
|
|
$
|
(1,649
|
)
|
Total losses (realized or unrealized)
|
|
|
|
|
|
|
|
|
|||
Included in earnings
|
(34
|
)
|
|
—
|
|
|
(34
|
)
|
|||
Included in other comprehensive income
|
(52
|
)
|
|
(1
|
)
|
|
(53
|
)
|
|||
Purchases
|
71
|
|
(a)
|
—
|
|
|
71
|
|
|||
Sales
|
(29
|
)
|
(a)
|
—
|
|
|
(29
|
)
|
|||
Settlements
|
239
|
|
|
—
|
|
|
239
|
|
|||
Balance at March 31, 2016
|
$
|
(1,481
|
)
|
|
$
|
26
|
|
|
$
|
(1,455
|
)
|
The amount of total losses for the period
included in earnings attributable to the
change in unrealized gains or losses relating
to assets still held at March 31, 2016
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
Quantitative information about Level 3 fair value measurements
|
||||
|
Valuation technique
|
Unobservable input
|
Period (by year)
|
Range
|
Fuel derivatives
|
Option model
|
Implied volatility
|
Second quarter 2016
|
22-42%
|
|
|
|
Third quarter 2016
|
33-43%
|
|
|
|
Fourth quarter 2016
|
32-43%
|
|
|
|
2017
|
28-41%
|
|
|
|
2018
|
23-32%
|
(in millions)
|
Carrying value
|
|
Estimated fair value
|
|
Fair value level hierarchy
|
||||
5.75% Notes due 2016
|
$
|
305
|
|
|
$
|
314
|
|
|
Level 2
|
5.25% Convertible Senior Notes due 2016
|
111
|
|
|
335
|
|
|
Level 2
|
||
5.125% Notes due 2017
|
307
|
|
|
317
|
|
|
Level 2
|
||
French Credit Agreements due 2018 - 1.53%
|
25
|
|
|
25
|
|
|
Level 3
|
||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02%
|
15
|
|
|
15
|
|
|
Level 3
|
||
2.75% Notes due 2019
|
303
|
|
|
312
|
|
|
Level 2
|
||
Term Loan Agreement due 2019 - 6.315%
|
134
|
|
|
138
|
|
|
Level 3
|
||
Term Loan Agreement due 2019 - 4.84%
|
32
|
|
|
34
|
|
|
Level 3
|
||
2.65% Notes due 2020
|
514
|
|
|
526
|
|
|
Level 2
|
||
Term Loan Agreement due 2020 - 5.223%
|
318
|
|
|
313
|
|
|
Level 3
|
||
Floating-rate 737 Aircraft Notes payable through 2020
|
245
|
|
|
242
|
|
|
Level 3
|
||
Pass Through Certificates due 2022 - 6.24%
|
331
|
|
|
374
|
|
|
Level 2
|
||
7.375% Debentures due 2027
|
131
|
|
|
159
|
|
|
Level 2
|
|
|
Three months ended March 31,
|
|
|
|
|||||||
|
|
2016
|
|
2015
|
|
Change
|
||||||
Revenue passengers carried
|
|
28,603,479
|
|
|
26,442,996
|
|
|
8.2
|
%
|
|
||
Enplaned passengers
|
|
34,628,441
|
|
|
32,098,958
|
|
|
7.9
|
%
|
|
||
Revenue passenger miles (RPMs) (000s)
(1)
|
|
28,408,164
|
|
|
25,860,866
|
|
|
9.9
|
%
|
|
||
Available seat miles (ASMs) (000s)
(2)
|
|
35,268,149
|
|
|
32,297,465
|
|
|
9.2
|
%
|
|
||
Load factor
(3)
|
|
80.5
|
%
|
|
80.1
|
%
|
|
0.4
|
|
pts
|
||
Average length of passenger haul (miles)
|
|
993
|
|
|
978
|
|
|
1.5
|
%
|
|
||
Average aircraft stage length (miles)
|
|
757
|
|
|
739
|
|
|
2.4
|
%
|
|
||
Trips flown
|
|
314,537
|
|
|
296,570
|
|
|
6.1
|
%
|
|
||
Seats flown
(4)
|
|
46,101,321
|
|
|
43,244,404
|
|
|
6.6
|
%
|
|
||
Seats per trip
(5)
|
|
146.57
|
|
|
145.82
|
|
|
0.5
|
%
|
|
||
Average passenger fare
(11)
|
|
$
|
153.75
|
|
|
$
|
158.01
|
|
|
(2.7
|
)%
|
|
Passenger revenue yield per RPM (cents)
(6)(11)
|
|
15.48
|
|
|
16.16
|
|
|
(4.2
|
)%
|
|
||
Operating revenues per ASM (cents)
(7)
|
|
13.68
|
|
|
13.67
|
|
|
0.1
|
%
|
|
||
Passenger revenue per ASM (cents)
(8)(11)
|
|
12.47
|
|
|
12.94
|
|
|
(3.6
|
)%
|
|
||
Operating expenses per ASM (cents)
(9)
|
|
11.01
|
|
|
11.25
|
|
|
(2.1
|
)%
|
|
||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.59
|
|
|
8.53
|
|
|
0.7
|
%
|
|
||
Operating expenses per ASM, excluding fuel and profitsharing (cents)
|
|
8.15
|
|
|
8.14
|
|
|
0.1
|
%
|
|
||
Fuel costs per gallon, including fuel tax
|
|
$
|
1.80
|
|
|
$
|
2.01
|
|
|
(10.4
|
)%
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
1.78
|
|
|
$
|
2.00
|
|
|
(11.0
|
)%
|
|
Fuel consumed, in gallons (millions)
|
|
472
|
|
|
434
|
|
|
8.8
|
%
|
|
||
Active fulltime equivalent Employees
|
|
50,911
|
|
|
47,005
|
|
|
8.3
|
%
|
|
||
Aircraft at end of period
(10)
|
|
714
|
|
|
679
|
|
|
5.2
|
%
|
|
|
Three months ended March 31,
|
|
Percent
|
||||||
|
2016
|
|
2015
|
|
Change
|
||||
Fuel and oil expense, unhedged
|
$
|
577
|
|
|
$
|
830
|
|
|
|
Add: Fuel hedge (gains) losses included in Fuel and oil expense
|
275
|
|
|
47
|
|
|
|
||
Fuel and oil expense, as reported
|
$
|
852
|
|
|
$
|
877
|
|
|
|
Deduct: Net impact from fuel contracts
|
(8
|
)
|
|
(4
|
)
|
|
|
||
Fuel and oil expense, non-GAAP (economic)
|
$
|
844
|
|
|
$
|
873
|
|
|
(3.3)%
|
|
|
|
|
|
|
||||
Total operating expenses, as reported
|
$
|
3,882
|
|
|
$
|
3,634
|
|
|
|
Deduct: Contracts settling in the current period, but for which gains have been recognized in a prior period*
|
(8
|
)
|
|
(4
|
)
|
|
|
||
Deduct: Acquisition and integration costs
|
—
|
|
|
(23
|
)
|
|
|
||
Add: Litigation settlement
|
—
|
|
|
37
|
|
|
|
||
Total operating expenses, non-GAAP
|
$
|
3,874
|
|
|
$
|
3,644
|
|
|
6.3%
|
|
|
|
|
|
|
||||
Operating income, as reported
|
$
|
944
|
|
|
$
|
780
|
|
|
|
Add: Contracts settling in the current period, but for which gains have been recognized in a prior period*
|
8
|
|
|
4
|
|
|
|
||
Add: Acquisition and integration costs
|
—
|
|
|
23
|
|
|
|
||
Deduct: Litigation settlement
|
—
|
|
|
(37
|
)
|
|
|
||
Operating income, non-GAAP
|
$
|
952
|
|
|
$
|
770
|
|
|
23.6%
|
|
|
|
|
|
|
||||
Net income, as reported
|
$
|
511
|
|
|
$
|
453
|
|
|
|
Add: Mark-to-market impact from fuel contracts settling in future periods
|
76
|
|
|
19
|
|
|
|
||
Add (Deduct): Ineffectiveness from fuel hedges settling in future periods
|
4
|
|
|
(13
|
)
|
|
|
||
Add: Other net impact of fuel contracts settling in the current or a prior period (excluding reclassifications)
|
8
|
|
|
4
|
|
|
|
||
Deduct: Income tax impact of fuel contracts
|
(32
|
)
|
|
(3
|
)
|
|
|
||
Add: Acquisition and integration costs (a)
|
—
|
|
|
14
|
|
|
|
||
Deduct: Litigation settlement (a)
|
—
|
|
|
(23
|
)
|
|
|
||
Net income, non-GAAP
|
$
|
567
|
|
|
$
|
451
|
|
|
25.7%
|
|
|
|
|
|
|
||||
Net income per share, diluted, as reported
|
$
|
0.79
|
|
|
$
|
0.66
|
|
|
|
Add: Net impact to net income above from fuel contracts divided by dilutive shares (a)
|
0.09
|
|
|
0.01
|
|
|
|
||
Deduct: Impact of special items (a)
|
—
|
|
|
(0.01
|
)
|
|
|
||
Net income per share, diluted, non-GAAP
|
$
|
0.88
|
|
|
$
|
0.66
|
|
|
33.3%
|
|
|
|
|
|
|
||||
Operating expenses per ASM (cents)
|
|
11.01
|
¢
|
|
|
11.25
|
¢
|
|
|
Deduct: Fuel and oil expense divided by ASMs
|
(2.42
|
)
|
|
(2.72
|
)
|
|
|
||
Add: Impact of special items
|
—
|
|
|
0.05
|
|
|
|
||
Operating expenses per ASM, non-GAAP, excluding Fuel and oil and special items (cents)
|
|
8.59
|
¢
|
|
|
8.58
|
¢
|
|
0.1%
|
|
|
|
|
||||
|
Twelve Months Ended
|
|
Twelve Months Ended
|
||||
|
March 31, 2016
|
|
March 31, 2015
|
||||
Operating income, as reported
|
$
|
4,280
|
|
|
$
|
2,790
|
|
Deduct: Special revenue adjustment (1)
|
(172
|
)
|
|
—
|
|
||
Add: Union contract bonuses
|
334
|
|
|
9
|
|
||
Add (Deduct): Net impact from fuel contracts
|
(319
|
)
|
|
23
|
|
||
Add: Acquisition and integration costs
|
16
|
|
|
132
|
|
||
Deduct: Litigation settlement
|
—
|
|
|
(37
|
)
|
||
Operating income, non-GAAP
|
$
|
4,139
|
|
|
$
|
2,917
|
|
Net adjustment for aircraft leases (2)
|
115
|
|
|
123
|
|
||
Adjustment for fuel hedge accounting
|
(133
|
)
|
|
(71
|
)
|
||
Adjusted Operating income, non-GAAP
|
$
|
4,121
|
|
|
$
|
2,969
|
|
|
|
|
|
||||
Average invested capital (3)
|
$
|
11,250
|
|
|
$
|
11,288
|
|
Equity adjustment for hedge accounting
|
1,082
|
|
|
289
|
|
||
Adjusted average invested capital
|
$
|
12,332
|
|
|
$
|
11,577
|
|
|
|
|
|
||||
ROIC, pre-tax
|
33.4
|
%
|
|
25.6
|
%
|
|
|
Three months ended
|
|
|
|||||||
(in millions, except per share amounts)
|
|
March 31,
|
|
|
|||||||
GAAP
|
|
2016
|
|
2015
|
|
Percent Change
|
|||||
Operating income
|
|
$
|
944
|
|
|
$
|
780
|
|
|
21.0
|
%
|
Net income
|
|
$
|
511
|
|
|
$
|
453
|
|
|
12.8
|
%
|
Net income per share, diluted
|
|
$
|
0.79
|
|
|
$
|
0.66
|
|
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
|
||
Non-GAAP
|
|
|
|
|
|
|
|
||||
Operating income
|
|
$
|
952
|
|
|
$
|
770
|
|
|
23.6
|
%
|
Net income
|
|
$
|
567
|
|
|
$
|
451
|
|
|
25.7
|
%
|
Net income per share, diluted
|
|
$
|
0.88
|
|
|
$
|
0.66
|
|
|
33.3
|
%
|
|
Three months ended March 31,
|
|
Per ASM
|
|
Percent
|
|||||||||
(in cents, except for percentages)
|
2016
|
|
2015
|
|
change
|
|
change
|
|||||||
Salaries, wages, and benefits
|
|
4.36
|
¢
|
|
|
4.39
|
¢
|
|
|
(0.03
|
)¢
|
|
(0.7
|
)%
|
Fuel and oil
|
2.42
|
|
|
2.72
|
|
|
(0.30
|
)
|
|
(11.0
|
)
|
|||
Maintenance materials and repairs
|
0.74
|
|
|
0.71
|
|
|
0.03
|
|
|
4.2
|
|
|||
Aircraft rentals
|
0.17
|
|
|
0.19
|
|
|
(0.02
|
)
|
|
(10.5
|
)
|
|||
Landing fees and other rentals
|
0.86
|
|
|
0.88
|
|
|
(0.02
|
)
|
|
(2.3
|
)
|
|||
Depreciation and amortization
|
0.82
|
|
|
0.76
|
|
|
0.06
|
|
|
7.9
|
|
|||
Acquisition and integration
|
—
|
|
|
0.07
|
|
|
(0.07
|
)
|
|
n.m.
|
|
|||
Other operating expenses
|
1.64
|
|
|
1.53
|
|
|
0.11
|
|
|
7.2
|
|
|||
Total
|
|
11.01
|
¢
|
|
|
11.25
|
¢
|
|
|
(0.24
|
)¢
|
|
(2.1
|
)%
|
Period
|
Maximum percent of estimated fuel consumption covered by fuel derivative contracts at varying WTI/Brent Crude Oil, Heating Oil, and Gulf Coast Jet Fuel-equivalent price levels (1)
|
|
2017
|
62%
|
|
2018
|
35%
|
Year
|
|
Fair value (liability) of fuel derivative contracts at March 31, 2016
|
|
Amount of gains (losses) deferred in AOCI at March 31, 2016 (net of tax)
|
||||
Remainder of 2016
|
|
$
|
(755
|
)
|
|
$
|
(432
|
)
|
2017
|
|
(676
|
)
|
|
(436
|
)
|
||
2018
|
|
23
|
|
|
(21
|
)
|
||
Total
|
|
$
|
(1,408
|
)
|
|
$
|
(889
|
)
|
|
Estimated economic jet fuel price per gallon,
including taxes |
|
Average Brent Crude Oil price per barrel
|
2Q 2016 (2)
|
Full Year 2016 (2)
|
$20
|
$1.20 - $1.25
|
$1.45 - $1.50
|
$30
|
$1.40 - $1.45
|
$1.60 - $1.65
|
Current Market (1)
|
$1.75 - $1.80
|
$1.85 - $1.90
|
$50
|
$1.90 - $1.95
|
$1.95 - $2.00
|
$60
|
$2.05 - $2.10
|
$2.05 - $2.10
|
Estimated Premium Costs (3)
|
$45 - $50 million
|
$150 - $160 million
|
|
Three months ended March 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
76
|
|
|
$
|
19
|
|
Ineffectiveness from fuel hedges settling in future periods
|
4
|
|
|
(13
|
)
|
||
Premium cost of fuel contracts
|
35
|
|
|
26
|
|
||
Other
|
(1
|
)
|
|
—
|
|
||
|
$
|
114
|
|
|
$
|
32
|
|
Share repurchases
|
|
Shares received
|
|
Cash paid
|
||
Second Quarter 2015 Accelerated Share Repurchase Program
|
|
8,085,077
|
|
$
|
300,000,000
|
|
Third Quarter 2015 Accelerated Share Repurchase Program
|
|
12,892,204
|
|
500,000,000
|
|
|
First Quarter 2016 Accelerated Share Repurchase Program (a)
|
|
9,615,384
|
|
500,000,000
|
|
|
Remaining share repurchase authorization (b)
|
|
—
|
|
200,000,000
|
|
|
Total
|
|
30,592,665
|
|
$
|
1,500,000,000
|
|
|
The Boeing Company
737
|
|
|
|
|
|||||
|
-800 Firm Orders
|
-800 Options
|
-7
Firm Orders |
-8
Firm Orders |
|
-8 Options
|
|
Additional -700s
|
Total
|
|
2016
|
38
|
—
|
—
|
—
|
|
—
|
|
21
|
59
|
(2)
|
2017
|
33
|
—
|
—
|
14
|
|
—
|
|
14
|
61
|
|
2018
|
18
|
18
|
—
|
13
|
|
—
|
|
4
|
53
|
|
2019
|
—
|
—
|
15
|
10
|
|
—
|
|
—
|
25
|
|
2020
|
—
|
—
|
14
|
22
|
|
—
|
|
—
|
36
|
|
2021
|
—
|
—
|
1
|
33
|
|
18
|
|
—
|
52
|
|
2022
|
—
|
—
|
—
|
30
|
|
19
|
|
—
|
49
|
|
2023
|
—
|
—
|
—
|
24
|
|
23
|
|
—
|
47
|
|
2024
|
—
|
—
|
—
|
24
|
|
23
|
|
—
|
47
|
|
2025
|
—
|
—
|
—
|
—
|
|
36
|
|
—
|
36
|
|
2026
|
—
|
—
|
—
|
—
|
|
36
|
|
—
|
36
|
|
2027
|
—
|
—
|
—
|
—
|
|
36
|
|
—
|
36
|
|
Total
|
89
|
18
|
30
|
170
|
(1)
|
191
|
(1)
|
39
|
537
|
|
|
|
|
|
Average
|
|
Number
|
|
Number
|
|
Number
|
||||
Type
|
|
Seats
|
|
Age (Yrs)
|
|
of Aircraft
|
|
Owned
|
|
Leased
|
||||
737-300
|
|
137 or 143
|
|
22
|
|
|
111
|
|
(1)
|
73
|
|
|
38
|
|
737-500
|
|
122
|
|
24
|
|
|
8
|
|
|
8
|
|
|
—
|
|
737-700
|
|
143
|
|
12
|
|
|
484
|
|
|
397
|
|
|
87
|
|
737-800
|
|
175
|
|
2
|
|
|
111
|
|
|
104
|
|
|
7
|
|
TOTALS
|
|
|
|
12
|
|
|
714
|
|
|
582
|
|
|
132
|
|
•
|
the Company's network, fleet, and capacity plans;
|
•
|
the Company’s financial outlook and projected results of operations, including factors and assumptions underlying the Company’s projections;
|
•
|
the Company’s plans and expectations with respect to managing risk associated with changing jet fuel prices;
|
•
|
the Company's expectations with respect to liquidity and capital expenditures, including anticipated needs for, and sources of, funds;
|
•
|
the Company's assessment of market risks; and
|
•
|
the Company's plans and expectations related to legal proceedings.
|
•
|
the Company's dependence on third party vendors, in particular with respect to its fleet plans;
|
•
|
changes in demand for the Company's services and the impact of economic conditions, fuel prices, and actions of competitors (including, without limitation, pricing, scheduling, and capacity decisions and consolidation and alliance activities) and other factors beyond the Company’s control on the Company's business decisions, plans, and strategies;
|
•
|
other changes in consumer behavior, including with respect to the Company's co-branded credit card;
|
•
|
changes in the price of aircraft fuel, the impact of hedge accounting, and any changes to the Company's fuel hedging strategies and positions; and
|
•
|
the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; and
|
•
|
other factors as set forth in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.
|
Issuer Purchases of Equity Securities (1)
|
|
||||||||||||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
||||||
|
|
|
|
|
|
Total number of
|
|
Maximum dollar
|
|
||||||
|
|
|
|
|
|
shares purchased
|
|
value of shares that
|
|
||||||
|
|
Total number
|
|
Average
|
|
as part of publicly
|
|
may yet be purchased
|
|
||||||
|
|
of shares
|
|
price paid
|
|
announced plans
|
|
under the plans
|
|
||||||
Period
|
|
purchased
|
|
per share
|
|
or programs
|
|
or programs
|
|
||||||
January 1, 2016 through
January 31, 2016
|
|
9,615,384
|
|
|
$
|
—
|
|
(2)
|
9,615,384
|
|
|
$
|
200,000,000
|
|
|
February 1, 2016 through
February 29, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
200,000,000
|
|
|
March 1, 2016 through
March 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
200,000,000
|
|
|
Total
|
|
9,615,384
|
|
|
|
|
9,615,384
|
|
|
|
|
(1)
|
On May 13, 2015, the Company’s Board of Directors authorized the repurchase of up to $1.5 billion of the Company’s common stock. Repurchases are made in accordance with applicable securities laws in open market, private, or accelerated repurchase transactions from time to time, depending on market conditions, and may be discontinued at any time.
|
(2)
|
Under the First Quarter 2016 ASR Program, the Company paid $500 million in January 2016 and received an initial delivery of 9,615,384 shares during first quarter 2016, representing an estimated 75 percent of the shares to be purchased by the Company under the First Quarter 2016 ASR Program based on a price of $39.00 per share, which was the closing price of the Company’s common stock on the New York Stock Exchange on January 22, 2016. Final settlement of this First Quarter 2016 ASR Program occurred in April 2016 and was determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period completed in April 2016. Upon settlement, the third party financial institution delivered 2,300,423 additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the 11,915,807 shares repurchased under the First Quarter 2016 ASR Program, upon completion of the First Quarter 2016 ASR Program in April 2016, was $41.96.
|
3.1
|
Restated Certificate of Formation of the Company, effective May 18, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (File No. 1-7259)).
|
3.2
|
Amended and Restated Bylaws of the Company, effective November 19, 2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009 (File No. 1-7259)).
|
10.1
|
Supplemental Agreement No. 93 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
32.1
|
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. (2)
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
SOUTHWEST AIRLINES CO.
|
|
|
|
|
April 28, 2016
|
By
|
/s/ Tammy Romo
|
|
|
|
|
|
Tammy Romo
|
|
|
Executive Vice President & Chief Financial Officer
|
|
|
(On behalf of the Registrant and in
|
|
|
her capacity as Principal Financial
|
|
|
and Accounting Officer)
|
3.1
|
Restated Certificate of Formation of the Company, effective May 18, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (File No. 1-7259)).
|
3.2
|
Amended and Restated Bylaws of the Company, effective November 19, 2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009 (File No. 1-7259)).
|
10.1
|
Supplemental Agreement No. 93 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
32.1
|
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. (2)
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
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