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LUV · Southwest Airlines

50 filings

10-Q

LUV 10-Q Quarterly Reports

Southwest Airlines - 50 quarterly reports

Filing record · 2016–202610-K1210-Q338-K204

LUV filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 204 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jan ’17Jan ’17
  2. FY2018 annual report10-K · Feb ’19Feb ’19
  3. Leadership change8-K · Nov ’21Nov ’21
  4. Material agreement8-K · Nov ’25Nov ’25
  1. 2026-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2026

    Southwest Airlines Co. reported a third quarter 2026 net income of $270 million, or $0.55 per diluted share, versus $54 million, or $0.10 per diluted share, in the third quarter of 2025. Total operating revenues reached $8.42 billion, up 21.2 percent year-over-year and described as a third quarter Company record, driven by passenger revenue growth of 22.8 percent. Operating income rose to $379 million from $35 million. Results were partially offset by higher aircraft fuel and related taxes, which increased 61.7 percent to $2.15 billion, and higher salaries, wages, and benefits, which rose 10.0 percent. For the nine months, net income was $730 million, or $1.47 per diluted share, including a $285 million breakage revenue reversal recorded in the second quarter that the Company treated as a special item. Excluding special items, nine-month net income was $1.02 billion, or $2.05 per diluted share. The balance sheet shows total assets of $30.54 billion at September 30, 2026, cash and cash equivalents of $3.62 billion, and total stockholders' equity of $7.33 billion. Current maturities of long-term debt rose to $2.15 billion, and the Company reported a working capital deficit of approximately $7.2 billion, which it attributes to air traffic liability. Net cash provided by operating activities was $2.46 billion for the nine months, against capital expenditures of $2.45 billion. The Company expects 2026 net capital spending of $2.5 billion to $2.75 billion. It entered a new $2.0 billion revolving credit facility in August 2026, and it repurchased $1.25 billion of common stock in the nine months, all in the first quarter, with approximately $450 million remaining under its authorization. The Company also disclosed ongoing aircraft delivery dependence on Boeing, with the FAA certifying the 737-7 on August 3, 2026, and first delivery expected in late 2026. Management highlighted fleet and product initiatives, including assigned and extra legroom seating, the Southwest Icon Lounge network, and a Chase co-brand agreement amendment, and noted that several litigation matters remain pending.

    Oct 22, 2026
  2. 2026-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2026

    Southwest Airlines Co. reported second-quarter 2026 total operating revenues of $8.43 billion, up 16.4% from $7.24 billion a year earlier and an all-time quarterly record, while operating income rose to $285 million from $225 million and net income rose to $233 million from $213 million. Diluted EPS was $0.47 versus $0.39. Results include a $285 million reversal of previously recognized breakage revenue tied to non-expiring flight credits issued July 2022 through December 2025; excluding this and other special items, non-GAAP net income was $465 million and diluted EPS was $0.94. Aircraft fuel and related taxes rose 67.0% to $2.2 billion, or $3.92 per gallon, versus $2.32 a year earlier, partly offset by strong passenger yield growth of 15.4%. For the first half of 2026, net income was $460 million (diluted EPS $0.92) versus $64 million a year earlier, and net cash from operating activities was $1.95 billion versus $1.26 billion. The company repurchased 28,429,822 shares in the first quarter, none in the second quarter, and had about $450 million remaining under its share repurchase authorization at June 30, 2026. Cash and cash equivalents totaled $3.79 billion and total debt-related current maturities rose to $2.16 billion. Long-term debt, including the $1.5 billion term loan drawn under a credit agreement entered in March 2026 and upsized in May 2026, was used alongside the prepayment of the $426 million PSP3 Payroll Support note in April 2026. The balance sheet shows a working capital deficit of about $6.8 billion, which the filing attributes mainly to air traffic liability of $8.18 billion. Net capital spending guidance for 2026 is toward the low end of, or below, the $3.0 to $3.5 billion range. The company is fully exposed to fuel price changes after terminating its fuel hedges in 2025, and a one-cent change in jet fuel price would affect third-quarter 2026 fuel expense by $5.3 million.

    Jul 23, 2026
  3. 2026-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2026

    Southwest Airlines Co. reported first-quarter 2026 operating revenues of $7.2 billion, a first-quarter record and an increase of $821 million, or 12.8 percent, year over year. Passenger revenue rose $780 million, or 13.4 percent, driven mainly by ancillary revenue from the company's transformational initiatives, including bag fees and assigned and extra legroom seating that began January 27, 2026. Operating income was $330 million, compared with an operating loss of $(223) million in the prior-year quarter, and net income was $227 million, or $0.45 per diluted share, compared with a net loss of $(149) million, or $(0.26) per share. Unit revenue (RASM) was 17.24 cents, up 11.2 percent, while operating expenses per ASM rose 2.6 percent to 16.46 cents, largely due to higher salaries, wages, and benefits and fuel costs. Fuel was a significant headwind. Aircraft fuel and related taxes expense was $1.4 billion, or $2.73 per gallon, approximately $164 million higher than the company had forecast. The company discontinued its fuel hedging program and closed its hedge portfolio in 2025, so it is fully exposed to fuel price changes. The forward curve on April 16, 2026 implied second-quarter 2026 fuel cost of $4.10 to $4.15 per gallon, and the filing notes that impacts could be more significant if prices remain elevated. On the balance sheet, unrestricted cash was $3.3 billion, and the company had a working capital deficit of approximately $6.5 billion, which the filing attributes to the nature of its air traffic liability. Operating cash flow was $1.4 billion, compared with $860 million a year earlier. Total stockholders' equity fell to $6.9 billion from $8.0 billion at year-end 2025, reflecting $1.25 billion of share repurchases and dividends. During the quarter the company drew $500 million under a new secured term loan and prepaid the $426 million PSP3 Payroll Support Program loan on April 22, 2026.

    Apr 23, 2026
  4. 2025-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2025

    Southwest Airlines Co. reported third quarter 2025 net income of $54 million, or $0.10 per diluted share, down from $67 million, or $0.11, in the prior-year quarter. Total operating revenues reached $6.95 billion, which the filing describes as an all-time third quarter company record, up $79 million, or 1.1 percent, year over year. Operating income was $35 million versus $38 million, as operating expenses rose $82 million, or 1.2 percent, driven mainly by higher Salaries, wages, and benefits and Landing fees and airport rentals, partly offset by lower Fuel and oil expense. For the nine months, net income was $118 million versus $204 million, with interest income down $220 million as cash and investment balances fell. The balance sheet shows cash and cash equivalents of $2.90 billion at September 30, 2025, down from $7.51 billion at December 31, 2024, reflecting $2.5 billion of share repurchases and $2.6 billion of debt payments in the nine months, including the $1.6 billion Convertible Notes repayment and the $976 million PSP1 Payroll Support Program loan redemption. Total stockholders' equity fell to $7.78 billion from $10.35 billion. Operating cash flow improved to $1.55 billion for the nine months from a $14 million use a year earlier. The company closed its fuel hedging portfolio in the second quarter, so it is now fully exposed to jet fuel prices, and it reported a working capital deficit of approximately $5.6 billion, which the filing attributes to the nature of air traffic liability. The filing states 2025 EBIT guidance of $600 million to $800 million, excluding special items, and fourth quarter 2025 unit revenue growth of up 1 percent to 3 percent on capacity up roughly 6 percent. It also notes a $2.0 billion share repurchase authorization approved July 23, 2025, of which $1.75 billion remained at September 30, 2025, and a 2025 capital spending range of $2.5 billion to $3.0 billion.

    Oct 23, 2025
  5. 2025-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2025

    Southwest Airlines Co. reported a sharp decline in second-quarter 2025 earnings. Net income for the three months ended June 30, 2025 was $213 million, down from $367 million a year earlier, and diluted EPS was $0.39 versus $0.58. Total operating revenues were $7.24 billion, down $110 million, or 1.5 percent, driven by lower load factor (down 4.1 points to 78.5 percent) and passenger traffic (revenue passengers carried down 5.3 percent). Operating income fell to $225 million from $398 million. Six-month GAAP net income was $64 million versus $137 million, with operating income of only $2 million. The company's non-GAAP results, which exclude special items such as severance and transformation costs, show second-quarter net income of $230 million and six-month net income of $153 million, roughly flat year over year. Balance sheet and cash flow changed materially during the period. Cash and cash equivalents fell to $3.48 billion from $7.51 billion at year-end 2024, and total stockholders' equity declined to $8.00 billion from $10.35 billion, largely reflecting share repurchases totaling $2.25 billion in the first half. The company repaid its $1.6 billion Convertible Notes at maturity and redeemed the $976 million PSP1 Payroll Support Program loan early. Operating cash flow improved to $1.26 billion for the six months, compared with a $128 million outflow a year earlier, while capital expenditures were $1.14 billion. The company also terminated its remaining fuel hedge portfolio in the second quarter and now has no fuel derivatives, leaving it fully exposed to jet fuel price changes. Management's outlook calls for third-quarter 2025 RASM of down 2 percent to up 2 percent on roughly flat capacity, CASM-X up 3.5 to 5.5 percent, and full-year 2025 EBIT of $600 million to $800 million, excluding special items. The company cites approximately $1.8 billion of 2025 initiative EBIT contribution and about $4.3 billion targeted for 2026. Its transformational initiatives include bag fees, a new basic fare product, revised flight credit expiration rules, and assigned seating. Q2 2025 also included a $62 million one-time severance charge tied to a workforce reduction of about 1,750 roles, and the board approved a new $2.0 billion share repurchase authorization on July 23, 2025.

    Jul 24, 2025
  6. 2025-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2025

    Southwest Airlines Co. reported a first-quarter 2025 net loss of $149 million, or $0.26 per diluted share, compared with a net loss of $231 million, or $0.39 per share, in the prior-year quarter. Operating loss narrowed to $223 million from $393 million. Total operating revenues rose to a first-quarter record of $6.43 billion, up 1.6 percent, driven by a 9.9 percent increase in passenger yield, while load factor fell 4.4 points to 73.9 percent and available seat miles declined 1.9 percent. Total operating expenses fell 1.1 percent to $6.65 billion, mainly because fuel and oil expense dropped $282 million (18.4 percent), partly offset by higher salaries, wages, and benefits. On a non-GAAP basis, excluding special items such as $62 million of workforce-reduction severance and related costs, the operating loss was $128 million versus $377 million a year earlier. Cash flow improved, with net cash provided by operating activities of $860 million compared with $104 million used in the prior year period. Cash and cash equivalents rose to $8.13 billion, and unrestricted cash and short-term investments totaled $8.3 billion at March 31, 2025. Total stockholders' equity declined to $9.37 billion from $10.35 billion at year-end 2024, largely reflecting $750 million of share repurchases and $103 million of dividends declared. The company reported a working capital deficit of approximately $3.2 billion, which it describes as common in the airline industry due to air traffic liability. Current maturities of long-term debt rose to $2.61 billion, including the $1.6 billion 1.25% Convertible Notes maturing in May 2025 and the first Payroll Support Program loan, which was prepaid in full on April 17, 2025 for $976 million. Looking ahead, the company provided second-quarter 2025 guidance for RASM of flat to down 4 percent and capacity up 1 to 2 percent year over year, with CASM-X expected to rise 3.5 to 5.5 percent. It reaffirmed targets of approximately $1.8 billion of 2025 and $4.3 billion of 2026 EBIT contribution from its transformational initiatives, while withdrawing its full-year 2025 and 2026 EBIT guidance. The company also plans to reduce third- and fourth-quarter 2025 capacity and to launch a $1.5 billion accelerated share repurchase in the second quarter, expected to complete by the end of July 2025. Bag fees, a new Basic fare, and flight credit expirations take effect for tickets purchased on or after May 28, 2025.

    Apr 25, 2025
  7. 2024-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2024

    Southwest Airlines Co. reported third quarter 2024 total operating revenues of $6.9 billion ($6,870 million), an all-time third quarter record, up 5.3 percent year-over-year. However, operating income fell to $38 million from $117 million and net income fell to $67 million ($0.11 diluted per share) from $193 million ($0.31). The decline was driven mainly by higher Salaries, wages, and benefits expense, which rose 12.5 percent, including labor contract ratifications. For the nine months ended September 30, 2024, operating income was $43 million versus $628 million a year earlier, and net cash used in operating activities was $14 million compared with $2.7 billion provided in the prior-year period, largely reflecting an approximately $1.9 billion in bonuses paid upon labor contract ratifications. The company's balance sheet shows cash and cash equivalents of $8.5 billion and short-term investments of $879 million, with current maturities of long-term debt rising to $2.93 billion from $29 million, as the 1.25% Convertible Notes and 5.25% Notes mature in 2025. Management provided fourth quarter 2024 guidance for RASM up 3.5% to 5.5% year-over-year, ASMs down about 4%, and CASM-X up 11% to 13%. The company also disclosed Boeing delivery delays, a Board reconstitution following an agreement with Elliott Investment Management, and a shareholder rights plan that expired on October 25, 2024. Management set longer-term 2027 targets including operating margins of at least 10 percent, free cash flow exceeding $1 billion per year, and return on invested capital of at least 15 percent after tax. Non-GAAP ROIC for the twelve months ended September 30, 2024, was 1.0 percent after tax. The company also announced a new $2.5 billion share repurchase authorization and an initial $250 million accelerated share repurchase program planned for fourth quarter 2024.

    Oct 28, 2024
  8. 2024-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2024

    Southwest Airlines Co. reported second quarter 2024 operating revenues of $7.4 billion (up 4.5 percent year-over-year), an all-time quarterly record, driven by record passengers carried, passenger revenue and ancillary revenue. However, operating income fell to $398 million from $795 million, and net income declined to $367 million ($0.58 diluted EPS) from $683 million ($1.08). The company attributes the profit decline primarily to higher salaries, wages and benefits and fuel prices. Operating expenses rose 11.4 percent while capacity (ASMs) grew 8.6 percent, and RASM fell 3.8 percent to 15.90 cents as industry-wide domestic capacity growth outpaced demand. For the six months, net income was $137 million versus $524 million in the prior year, and net cash used in operating activities was $128 million compared with $2.1 billion provided a year earlier. The company's outlook calls for third-quarter 2024 unit revenue flat to down 2 percent year-over-year with capacity up roughly 2 percent, and CASM-X up 11 to 13 percent. For full-year 2024, CASM-X is expected to rise 7 to 8 percent and capacity to grow about 4 percent. Management expects unit revenue to turn positive by fourth quarter 2024, supported by capacity moderation and revenue management actions. Cash and short-term investments totaled $10.0 billion at June 30, 2024, against $14.1 billion of current liabilities and $5.1 billion of long-term debt (excluding current maturities of $2.9 billion). Governance and strategic matters dominate the filing. Elliott Investment Management disclosed an investment of approximately $1.9 billion, an approximately 11 percent economic interest, and has advocated for changes to management, the Board and strategy. The Board adopted a shareholder rights plan on July 2, 2024, with a 12.5 percent triggering threshold. The company also announced plans to introduce assigned and premium seating, redesign boarding and launch redeye flights, and suspended share repurchases with approximately $899 million remaining under its authorization.

    Jul 29, 2024
  9. 2024-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2024

    Southwest Airlines Co. reported a first quarter 2024 net loss of $231 million, or $0.39 per diluted share, compared with a net loss of $159 million, or $0.27 per share, in the first quarter of 2023. Operating revenues reached $6.3 billion, a first quarter record, up $623 million or 10.9 percent year-over-year, driven by an 11.0 percent increase in capacity and a 2.9 percent higher average fare. Operating expenses rose $732 million, or 12.2 percent, led by higher salaries, wages, and benefits ($462 million increase, or 18.6 percent) and maintenance materials and repairs ($121 million increase, or 50.4 percent). Cash flow from operations was negative $104 million, compared with $706 million provided in the prior-year period, largely reflecting a $1.35 billion pilot ratification bonus payment. Cash and short-term investments totaled $10.5 billion at March 31, 2024. The company updated its 2024 outlook, now expecting full-year operating revenue growth approaching high-single digits, down from its prior expectation of double-digit growth, because of Boeing aircraft delivery delays. Second quarter 2024 RASM is expected to decline 1.5 to 3.5 percent year-over-year on capacity growth of 8 to 9 percent, and full-year 2024 CASM-X is expected to rise 7 to 8 percent. The company also disclosed network optimization actions, including ceasing operations at four airports on August 4, 2024, and labor contract extensions with its pilots, flight attendants, and ramp agents. The filing also details ongoing legal matters, including a USERRA class action with a trial date set for July 21, 2025, a securities class action with a pending motion to dismiss, and shareholder derivative suits, along with the December 2022 operational disruption's continuing investigations. Management does not expect these proceedings to have a material adverse effect, though it notes an adverse outcome could be material.

    Apr 26, 2024
  10. 2023-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2023

    Southwest Airlines Co. reported third-quarter 2023 operating revenues of $6,525 million, up from $6,220 million a year earlier, to what the filing describes as a third-quarter record. However, operating income fell to $117 million from $395 million, and GAAP net income declined to $193 million from $277 million. Diluted EPS was $0.31 versus $0.44. The filing attributes the profit decline primarily to higher salaries, wages and benefits and maintenance materials and repairs expense. Operating expenses rose $583 million, or 10.0 percent, while capacity grew 12.5 percent, and the company notes that a $96 million flight attendant contract ratification bonus was included in GAAP results. Passenger revenue per ASM fell 6.4 percent as load factor dropped 4.7 points to 80.7 percent. For the nine months ended September 30, 2023, net income was $717 million versus $759 million, and operating income was $628 million versus $1,402 million. The filing states that the December 2022 operational disruption had a pre-tax financial impact of approximately $380 million on first-quarter 2023 results. Net cash from operations was $2.7 billion for the nine months, down from $3.2 billion. Cash and cash equivalents were $9,497 million at quarter end, and unrestricted cash and short-term investments totaled $11.7 billion. Management guides to fourth-quarter 2023 RASM down 9 to 11 percent and full-year 2023 capital spending of about $3.5 billion. The filing also discloses several pending matters. On October 27, 2023, the Department of Transportation notified the company that a civil penalty is warranted for customer service failures tied to the December 2022 disruption. A flight attendant tentative agreement with TWU 556 was reached in October 2023 and remains subject to ratification. Separately, a securities class action was dismissed with prejudice on October 5, 2023, and the company has suspended share repurchases, with about $899 million remaining under its authorization.

    Oct 30, 2023
  11. 2023-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2023

    Southwest Airlines Co. reported second-quarter 2023 net income of $683 million, or $1.08 per diluted share, compared with $760 million, or $1.20 per diluted share, in the second quarter of 2022. Total operating revenues rose to $7.04 billion, up $309 million or 4.6 percent, which the company described as an all-time quarterly record. Operating income fell to $795 million from $1.16 billion, with the decline attributed primarily to higher salaries, wages, and benefits, which increased $566 million or 25.5 percent year-over-year. For the six months ended June 30, 2023, net income was $524 million, and the filing states that the December 2022 operational disruption had a negative pre-tax impact of approximately $380 million. Operating metrics show capacity (ASMs) up 14.1 percent in the quarter while revenue per ASM (RASM) declined 8.3 percent to 16.53 cents, driven by a 4.0 percent decrease in passenger revenue yield and a 3.7-point drop in load factor to 83.4 percent. Fuel and oil expense fell $233 million, or 14.2 percent, to $1.40 billion on lower economic fuel cost per gallon of $2.60 versus $3.36. Net cash provided by operating activities was $1.42 billion for the quarter and $2.12 billion for the first six months, versus $2.98 billion in the prior-year six-month period. Unrestricted cash and short-term investments totaled $12.2 billion as of June 30, 2023. Management guided to third-quarter 2023 RASM down 3 to 7 percent year-over-year and full-year 2023 CASM-X down 1 to 2 percent, with capacity up 14 to 15 percent for the year. The company expects approximately $500 million in incremental pre-tax profit in 2024 from network optimization. The filing also discloses several pending legal matters, including securities class actions and shareholder derivative suits related to the December 2022 disruption, and a possible Department of Transportation fine or penalty for which the company cannot estimate a loss range.

    Jul 28, 2023
  12. 2023-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2023

    Southwest Airlines Co. reported a first-quarter 2023 net loss of $159 million, or $0.27 per diluted share, compared with a net loss of $278 million, or $0.47 per share, in first quarter 2022. Operating loss was $284 million versus $151 million a year earlier, while total operating revenues rose to $5.706 billion from $4.694 billion, described as a first-quarter record. The filing attributes the results in part to the wide-scale operational disruption in late December 2022, which cancelled more than 16,700 flights and is estimated to have had a pre-tax financial impact of approximately $380 million on first-quarter results. Non-GAAP net loss excluding special items was $163 million, compared with $191 million a year earlier. Demand was strong, with passenger revenues up 23.5% year-over-year, load factor of 77.6%, and RASM up 9.8%. Offsetting this, fuel and oil expense rose 54.1% to $1.547 billion, with economic fuel cost per gallon of $3.19 versus $2.30. Cash and short-term investments totaled $11.7 billion at March 31, 2023, and net cash provided by operating activities was $706 million. Management guided to full-year 2023 capital spending of approximately $3.5 billion, reduced from prior estimates because Boeing aircraft deliveries are expected to be about 70 737 MAX 8 aircraft rather than 90. The filing also discloses ongoing risks, including potential fines or penalties from the Department of Transportation related to the December 2022 disruption, several securities and derivative shareholder lawsuits, and the suspension of share repurchases with approximately $899 million remaining under the existing authorization.

    Apr 28, 2023
  13. 2022-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2022

    Southwest Airlines Co. reported third-quarter 2022 operating revenues of $6.2 billion, up 32.9 percent from $4.68 billion in third quarter 2021, with net income of $277 million, or $0.44 per diluted share, compared with $446 million, or $0.73 per diluted share, a year earlier. The comparison is distorted by Payroll Support proceeds of $763 million recorded as a credit to expense in third quarter 2021. On a non-GAAP basis excluding special items, net income was $316 million versus a $135 million loss in the prior-year quarter. Operating expenses rose 47.6 percent to $5.8 billion, driven by fuel and oil expense, which increased 76.8 percent, and the absence of Payroll Support. Operating income was $395 million, down from $733 million. For the first nine months of 2022, operating revenues were $17.6 billion, up 64.3 percent, and net cash provided by operating activities was $3.2 billion. The company repaid $2.5 billion in debt and finance lease obligations, including a $1.3 billion prepayment of its 4.75% Notes due 2023. Cash and cash equivalents were $10.4 billion at September 30, 2022, and unrestricted cash and short-term investments totaled $13.7 billion. Capital expenditures were $2.6 billion year to date, and full-year 2022 capital spending is estimated at approximately $4.0 billion. Management estimates 2022 economic fuel costs per gallon of $3.05 to $3.15 and expects 768 aircraft at year-end. Key risks highlighted include fuel price volatility, the pending FAA certification of the Boeing 737 MAX 7, Boeing delivery delays extending into 2024, the Bernstein decision on California wage-and-hour litigation, and the cost of inflationary pressures and suboptimal productivity levels. The company also suspended share repurchases and has about $899 million remaining under its authorization.

    Oct 31, 2022
  14. 2022-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2022

    Southwest Airlines Co. reported a strong second quarter 2022 recovery from the COVID-19 pandemic. Operating revenues were $6.7 billion for the three months ended June 30, 2022, up from $4.0 billion in the prior-year quarter, with passenger revenues of $6.1 billion and a quarterly record cited by management. GAAP net income was $760 million, compared with $348 million a year earlier, and diluted EPS was $1.20 versus $0.57. Results were pressured by fuel and oil expense of $1.6 billion (up from $803 million), salaries, wages, and benefits of $2.2 billion, and a $43 million loss on partial extinguishment of convertible and unsecured notes. Adoption of ASU 2020-06 on January 1, 2022 reduced second-quarter net income by $21 million. For the first half of 2022, net income was $482 million and operating income was $1.0 billion, compared with $463 million of net income in the first half of 2021, which included $1.9 billion of Payroll Support grant allocations that benefited that period. Cash and short-term investments totaled $16.4 billion at June 30, 2022, and net cash provided by operating activities was $3.0 billion for the six months. The company repaid $409 million to retire $302 million principal of its 1.25% Convertible Notes and has a $1.0 billion revolving credit facility with no amounts outstanding. Management's outlook calls for 2022 capital spending of approximately $4.0 billion, reduced from prior guidance of approximately $5.0 billion, because Boeing deliveries of the 737 MAX 8 are now estimated at 66 in 2022 versus 114 previously contemplated. Year-end 2022 aircraft count is now expected at 765 versus 814 previously. Management also disclosed that on July 28, 2022, it announced flight credits will no longer expire, which is expected to shift revenue recognition and create a one-time third-quarter sequential revenue headwind of $250 million to $300 million.

    Aug 2, 2022
  15. 2022-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2022

    Southwest Airlines Co. reported a first-quarter 2022 GAAP net loss of $278 million, or $0.47 per diluted share, compared with net income of $116 million, or $0.19 per diluted share, in the first quarter of 2021. Total operating revenues rose to $4.69 billion from $2.05 billion, while operating loss was $151 million versus operating income of $199 million a year earlier. The filing attributes the GAAP year-over-year decline primarily to $1.2 billion of Payroll Support allocated as a credit to expense in first-quarter 2021, which did not recur in 2022. Passenger revenue was $4.14 billion, and the filing notes that Omicron-related bookings softness and cancellations cost about $380 million in January and February, with March 2022 demand improving. Fuel was a major driver of costs. Fuel and oil expense rose to $1.00 billion from $469 million, with the filing citing an average economic jet fuel price of $2.30 per gallon, net of about $229 million in hedging gains. Net cash provided by operating activities was $1.07 billion, and cash and cash equivalents ended the quarter at $13.10 billion. Total stockholders' equity was $10.42 billion at March 31, 2022, and the company adopted ASU 2020-06, which reclassified $300 million of convertible note equity and increased the first-quarter net loss by $36 million. Management guided to a full-year 2022 economic fuel cost of $2.75 to $2.85 per gallon and capital spending of about $5.0 billion, and noted that share repurchases and dividends remain suspended under Payroll Support restrictions through September 30, 2022.

    May 2, 2022
  16. 2021-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2021

    Southwest Airlines Co. reported a sharp recovery in its third quarter 2021 from the COVID-19 downturn. Operating revenues were $4.68 billion for the quarter, up from $1.79 billion a year earlier, and GAAP net income was $446 million, or $0.73 per diluted share, versus a net loss of $1.16 billion in third quarter 2020. For the nine months, net income was $909 million. GAAP results include grant allocations of Payroll Support funding from the U.S. Treasury of $763 million in the quarter and $2.7 billion year-to-date. Excluding special items, the company reported a net loss of $135 million for the quarter, which management attributes to higher fuel prices and cost pressures. Demand softened in the third quarter as Delta variant cases rose. Operating revenues reached 83% of 2019 levels, and the company estimates the Delta variant reduced August and September revenues by about $100 million and $200 million, respectively. For fourth quarter 2021, the company expects operating revenues to be down 15% to 25% compared with 2019 and does not expect to be profitable in that quarter. Fuel costs per gallon, including taxes, were $2.01 in the quarter, up from $1.18, and the company hedged 77% of 2021 estimated fuel consumption. Balance sheet liquidity remained strong. Cash and cash equivalents were $12.98 billion at September 30, 2021, and unrestricted cash and short-term investments totaled $16.0 billion. Air traffic liability rose to $8.24 billion, though about 17% represents customer travel funds that may be redeemed over time, and $1.4 billion of those funds carry a September 7, 2022 expiration. Share repurchases and dividends remain suspended under Payroll Support restrictions, and the company has $899 million remaining under its repurchase authorization.

    Oct 26, 2021
  17. 2021-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2021

    Southwest Airlines Co. reported a sharp recovery in its second quarter of 2021 as leisure travel demand returned. Operating revenues for the three months ended June 30, 2021 were $4.008 billion, up from $1.008 billion a year earlier, and the company posted GAAP operating income of $594 million versus an operating loss of $1.127 billion in the prior-year quarter. GAAP net income was $348 million, or $0.57 per diluted share, compared with a net loss of $915 million, or $1.63 per share, in second quarter 2020. For the six months ended June 30, 2021, GAAP net income was $463 million, or $0.76 per diluted share. Results were heavily influenced by Payroll Support grants from the U.S. Treasury, which totaled $1.5 billion in the quarter and $2.7 billion year-to-date, and the filing presents non-GAAP results excluding these and other special items, showing a non-GAAP net loss of $206 million for the quarter. Liquidity improved substantially, with cash and cash equivalents rising to $14.124 billion and total unrestricted cash and short-term investments reported at $16.9 billion as of June 30, 2021. Net cash provided by operating activities was $2.0 billion in the quarter, and the company stated it had average daily core cash flow, adjusted for working capital, of approximately $6 million in the quarter and about $11 million per day in June 2021. Long-term debt less current maturities was $9.188 billion, while current maturities of long-term debt rose to $2.166 billion, largely because the 1.25% Convertible Notes met conversion criteria beginning April 1, 2021. Management said it is hopeful to be profitable on both a GAAP and non-GAAP basis in the third and fourth quarters of 2021. The filing also flags continued uncertainty. Management expects third-quarter 2021 operating revenue to be down 10% to 15% versus 2019 in July and down 12% to 17% in August, with business travel recovery lagging. Fuel costs remain a key variable, with economic fuel cost per gallon of $1.92 in the quarter and a third-quarter 2021 estimate of $2.05 to $2.15 at current market prices. The company disclosed ongoing litigation, including a RICO class action related to the Boeing 737 MAX grounding and a securities class action, and management does not expect these to have a material adverse effect.

    Jul 27, 2021
  18. 2021-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2021

    Southwest Airlines Co. reported first-quarter 2021 net income of $116 million, or $0.19 per diluted share, compared with a net loss of $94 million, or $(0.18) per share, in the prior-year quarter. Total operating revenues fell to $2.05 billion from $4.23 billion, reflecting continued weak passenger demand from the COVID-19 pandemic. Results were materially helped by $1.2 billion of Payroll Support Program Extension grants recorded as a contra-expense within Payroll support and voluntary Employee programs, net, which produced an operating income of $199 million versus an operating loss of $110 million a year earlier. Excluding special items, the company reported a loss before income taxes of $1.31 billion. Liquidity remained a central focus. Net cash provided by operating activities was $645 million, compared with $377 million used a year earlier, and unrestricted cash and short-term investments totaled $14.3 billion at March 31, 2021. Average daily core cash burn was approximately $13 million in the quarter, and the company hopes to reach breakeven average core cash flow by June 2021. Management estimates second-quarter 2021 operating revenue will be down 40% to 45% compared with 2019 in April and down 35% to 40% in May, with load factors of 75% to 80%. The company also secured additional government support, including $1.9 billion of expected PSP3 Payroll Support funds, of which $926 million was received on April 23, 2021, along with restrictions on share repurchases and dividends through September 30, 2022. Fleet and cost developments were also significant. The company returned the Boeing 737 MAX to revenue service on March 11, 2021, but removed 32 MAX aircraft from service in April 2021 due to a Boeing production issue. Management also disclosed a $1.8 billion balance of Customer travel funds with a September 7, 2022 expiration date, and noted that air traffic liability rose to $7.73 billion. Ongoing legal proceedings include a DOJ civil investigative demand, class actions regarding capacity, and a RICO and securities litigation related to the 737 MAX, none of which management expects to have a material adverse effect.

    Apr 27, 2021
  19. 2020-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2020

    Southwest Airlines Co. reported a sharp deterioration in results for the quarter and nine months ended September 30, 2020, as the COVID-19 pandemic sharply reduced passenger demand and bookings. Third-quarter operating revenues were $1.79 billion, down from $5.64 billion a year earlier, and the company posted an operating loss of $1.41 billion and a net loss of $1.16 billion, or $1.96 per diluted share. For the nine months, the net loss was $2.17 billion. Management said operating expenses are largely fixed once schedules are published, and it cut capacity sharply, with third-quarter available seat miles down 32.8 percent and load factor at 44.9 percent versus 83.5 percent a year earlier. To bolster liquidity, the company received $3.4 billion in CARES Act Payroll Support Program funds, of which $2.4 billion is a grant not requiring repayment and $976 million is a promissory note maturing in 2030. It also raised substantial debt and equity, including a $2.3 billion common stock offering, $2.3 billion of convertible notes, and multiple senior notes issuances, while cash and cash equivalents rose to $12.1 billion at September 30, 2020, from $2.5 billion at December 31, 2019. Total debt and long-term obligations increased, with long-term debt less current maturities at $10.1 billion versus $1.8 billion at year-end 2019. Share repurchases and dividends have been suspended under CARES Act restrictions. Management estimated average daily core cash burn of about $16 million in the third quarter, with projections of approximately $12 million per day in October and $11 million per day in fourth quarter 2020. The company also disclosed a Voluntary Separation Program 2020 and Extended Emergency Time Off program covering about 15,200 employees, and it said the 34 grounded Boeing 737 MAX 8 aircraft will likely remain out of the published schedule until at least the second quarter of 2021.

    Oct 27, 2020
  20. 2020-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2020

    Southwest Airlines Co. reported a sharply weaker second quarter 2020 as the COVID-19 pandemic collapsed demand. Operating revenues were $1,008 million for the three months ended June 30, 2020, versus $5,909 million a year earlier, and the company posted an operating loss of $1,127 million and a net loss of $915 million, or $1.63 per diluted share. For the six months, net loss was $1,009 million. Results were helped by $784 million of net credits from the Payroll Support Program and a $222 million gain on sale-leaseback transactions, which the company excludes from its non-GAAP results. Excluding special items, the second-quarter non-GAAP net loss was $1.5 billion, or $2.67 per diluted share. Liquidity was substantially bolstered during the period. Cash and cash equivalents rose to $12,351 million at June 30, 2020, from $2,548 million at December 31, 2019, and the company stated it had raised a total of $17.3 billion, net of fees, since the beginning of 2020. Financing included $2.3 billion of convertible notes, a $2.2 billion common stock offering, several unsecured note issuances, and $850 million under a Payroll Support Program note, which is part of approximately $3.3 billion in expected Payroll Support receipts. Long-term debt less current maturities increased to $8,905 million from $1,846 million. Shareholder returns were suspended, and the company reported approximately $899 million remaining under its share repurchase authorization. Management guided to further pressure in the near term. July 2020 operating revenues were estimated to decrease 70 to 75 percent year-over-year, and third-quarter 2020 capacity was expected to decline 20 to 30 percent. The company also disclosed that about 16,900 employees volunteered for voluntary separation and extended emergency time off programs, and it expects a material third-quarter special termination benefits charge. Average daily core cash burn was $23 million in the second quarter, with July estimated at $18 million per day.

    Jul 27, 2020
  21. 2020-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2020

    Southwest Airlines Co. reported a first-quarter 2020 net loss of $94 million, or $0.18 per diluted share, compared with net income of $387 million, or $0.70 per diluted share, in first-quarter 2019. Operating revenues fell $915 million, or 17.8 percent, to $4.2 billion as COVID-19 drove a sharp decline in passenger demand and bookings beginning in late February 2020 and an unprecedented level of close-in trip cancellations in March. Operating loss was $110 million versus operating income of $505 million a year earlier. Load factor for March 2020 was 46.6 percent, compared with 85.7 percent in March 2019. The company estimates April 2020 operating revenues will decline 90 to 95 percent year over year, with capacity down about 60 percent, and May revenues are estimated to decline 90 to 95 percent as well. Liquidity was the central focus of the filing. Cash, cash equivalents and short-term investments were $5.5 billion at March 31, 2020, and had increased to approximately $9.3 billion as of April 24, 2020. Net cash used in operating activities was $377 million in the quarter, compared with $1.1 billion of cash provided a year earlier, driven by a $1.3 billion decrease in accounts payable and accrued liabilities. The company drew $1.0 billion on its revolving credit facility and $1.0 billion on a 364-day term loan in March, funded an additional approximately $2.3 billion on April 1, 2020, and borrowed another $350 million on April 24, 2020. It also agreed in principle to approximately $3.3 billion of Payroll Support Program funding under the CARES Act, with a $459 million promissory note and warrants issued on the first installment of approximately $1.6 billion received April 21, 2020. Stock repurchases and dividends have been suspended, and the company faces CARES Act restrictions on buybacks and dividends. Moody's, S&P and Fitch downgraded the company's credit ratings in March and April 2020. The filing also notes that the company has taken significant cost-reduction and capacity actions, including reducing the published schedule through June 2020 and placing a portion of its fleet into storage, with approximately 350 aircraft in long-term storage or temporary parking. The 34 Boeing 737 MAX 8 aircraft remain grounded, and the company expects the MAX to be removed from its schedule through October 30, 2020. Management states it is unable to reasonably estimate trends beyond May 2020 given the uncertain revenue environment.

    Apr 28, 2020
  22. 2019-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2019

    Southwest Airlines Co. reported third-quarter 2019 net income of $659 million, a record for a third quarter and up 7.2 percent from $615 million a year earlier. Diluted EPS was $1.23 versus $1.08. GAAP operating income rose 2.6 percent to $819 million, while operating revenues rose 1.1 percent to a third-quarter record of $5.6 billion. Nine-month net income was $1.8 billion, down 1.3 percent year-over-year, and nine-month operating income was $2.3 billion, down 3.9 percent. The filing attributes the year-to-date decline mainly to the Boeing 737 MAX grounding, unscheduled maintenance disruptions in the first quarter, and the U.S. government shutdown. The company estimates the MAX grounding reduced operating income by approximately $210 million in the third quarter and $435 million over the nine months. Capacity and cost trends were mixed. Available seat miles fell 2.9 percent in the quarter, while operating expenses per ASM rose 4.0 percent, and the company says the MAX grounding drove most of the unit cost increase. Fuel and oil expense fell 9.5 percent to $1.09 billion on lower jet fuel prices, and economic fuel cost per gallon declined 8.0 percent to $2.07. Management now expects fourth-quarter 2019 unit costs, excluding fuel and profitsharing, to rise 4 to 6 percent, and it has removed the MAX from its schedule through March 6, 2020, with 34 MAX 8 aircraft grounded since March 13, 2019. The balance sheet and cash flows remained strong. Cash and cash equivalents were $2.49 billion and short-term investments were $1.53 billion at September 30, 2019. Net cash from operating activities was $3.16 billion for the nine months. The company repurchased $1.45 billion of common stock in the period and paid $372 million in dividends. It also adopted the new lease standard (ASC 842) on January 1, 2019, which added $1.35 billion of operating lease right-of-use assets to the balance sheet. The company has $1.9 billion remaining under its May 2019 $2.0 billion repurchase authorization and expects 2019 capital expenditures of $1.1 billion to $1.2 billion.

    Nov 8, 2019
  23. 2019-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2019

    Southwest Airlines Co. reported second-quarter 2019 Net income of $741 million, up from $733 million a year earlier, with diluted earnings per share of $1.37 versus $1.27. Operating income was $968 million, essentially flat with $972 million in the prior-year quarter. Total operating revenues rose to $5.909 billion, an all-time quarterly record, while operating expenses increased 3.6% to $4.941 billion as capacity (ASMs) fell 3.6%. For the first six months, Net income was $1.128 billion, down 5.6% year over year, and Operating income was $1.473 billion, down 7.2%, reflecting the grounding of the Boeing 737 MAX 8, severe weather, unscheduled maintenance, and the U.S. government shutdown. The filing attributes the MAX grounding to an estimated $175 million reduction in second-quarter Operating income and about $225 million for the six months. The company canceled approximately 20,000 flights in the quarter, all 34 of its 737 MAX 8 aircraft remain grounded, and MAX flights are removed from the schedule through January 5, 2020. Management now expects third-quarter 2019 ASMs to decline 2 to 3 percent and full-year 2019 ASMs to decline 1 to 2 percent, with third-quarter RASM expected to rise 3 to 5 percent and unit costs excluding fuel and profitsharing expected to rise 9 to 11 percent. Capital returns remained significant: the company repurchased $950 million of stock in the first half, paid $276 million in dividends, and on July 30, 2019 launched a $500 million accelerated share repurchase program. The company had $4.0 billion of unrestricted cash and short-term investments at June 30, 2019, and a $1.0 billion undrawn revolving credit facility. The filing also discloses a July 11, 2019 putative class action against Boeing and Southwest alleging concealment of MAX defects, which the company says it will vigorously defend.

    Jul 30, 2019
  24. 2019-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2019

    Southwest Airlines Co. reported first quarter 2019 Net income of $387 million, down 16.4 percent from $463 million in the first quarter of 2018, with diluted earnings per share of $0.70 versus $0.79. Operating income fell to $505 million from $616 million, and Operating revenues rose to $5,149 million from $4,944 million. Operating expenses increased $316 million, or 7.3 percent, to $4,644 million, driven by higher Salaries, wages, and benefits and Other operating expenses. The filing attributes approximately $150 million of the first quarter net income reduction to more than 10,000 canceled flights tied to the Boeing 737 MAX 8 grounding, unscheduled maintenance, severe winter weather, the U.S. government shutdown, and softer leisure revenue trends. Cash generation remained solid, with net cash provided by operating activities of $1,105 million, and cash and cash equivalents rose to $2,344 million. The company repurchased $500 million of common stock under an accelerated share repurchase program, and it paid $178 million in dividends. Management also cited a $944 million increase in Air traffic liability from future bookings. Subsequent to quarter end, the company made additional share repurchases totaling $450 million. The filing highlights the Boeing 737 MAX 8 grounding as the most significant near-term risk. All 34 MAX 8 aircraft in the fleet were grounded as of March 13, 2019, and management said an extended grounding could materially affect future operating results. Management expects second quarter 2019 ASMs to decrease 2 to 3 percent and second quarter operating unit revenues to increase 5.5 to 7.5 percent, while unit costs are expected to rise 10.5 to 12.5 percent.

    Apr 30, 2019
  25. 2018-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2018

    Southwest Airlines Co. reported third quarter 2018 GAAP net income of $615 million, a record for a third quarter and up 16.5 percent year-over-year, with diluted earnings per share of $1.08 versus $0.88 a year earlier. Operating income fell to $798 million from $845 million, a decrease of 5.6 percent, as Operating revenues rose to $5.58 billion from $5.30 billion. Passenger revenues increased 5.1 percent on a 3.9 percent capacity increase, while Fuel and oil expense rose $168 million, or 16.2 percent, on higher market jet fuel prices, partly offset by $54 million of net hedging gains. The increase in net income was primarily driven by a lower federal corporate tax rate of 21.0 percent versus 35.0 percent under the Tax Cuts and Jobs Act. For the nine months ended September 30, 2018, net income was $1.81 billion and diluted EPS was $3.13. The balance sheet and cash flows show continued capital return. Cash and cash equivalents were $2.10 billion and short-term investments $1.72 billion at September 30, 2018. Net cash provided by operating activities was $3.90 billion for the nine months, while the company repurchased $1.5 billion of common stock through accelerated share repurchase programs and paid $332 million in dividends in that period. The company completed the remaining $350 million of its May 2017 authorization and had $1.85 billion remaining under its May 2018 $2.0 billion authorization, and launched a new $500 million accelerated share repurchase on October 29, 2018. Full-year 2018 capital expenditures are estimated at $2.0 to $2.1 billion, and the company expects 2018 ASMs to increase approximately four percent. The filing also highlights operating and legal items for investors. The Aircraft Mechanics Fraternal Association workgroup, representing 2,400 employees, failed to ratify a tentative collective-bargaining agreement in September 2018. Fuel derivative contracts had a fair value of $698 million at September 30, 2018, and the company reports non-GAAP results excluding special items, with non-GAAP net income of $614 million for the quarter. The company is also a defendant in antitrust class actions alleging capacity collusion, and it has agreed to pay $15 million to settle the domestic class action, with a fairness hearing scheduled for March 22, 2019.

    Oct 30, 2018
  26. 2018-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2018

    Southwest Airlines Co. reported second quarter 2018 net income of $733 million, down 1.3 percent year-over-year, or $1.27 per diluted share, a second quarter record per share. The decline in GAAP net income was primarily driven by higher market jet fuel prices, partially offset by a lower federal corporate tax rate (21.0 percent in 2018 versus 35.0 percent in 2017) under the Tax Cuts and Jobs Act. Operating income fell 20.0 percent to $972 million, with operating expenses rising 5.6 percent to $4.77 billion while capacity grew 3.3 percent. Total operating revenues were essentially flat at $5.74 billion, as passenger revenues declined 0.4 percent, which management attributed largely to effects following the Flight 1380 accident on April 17, 2018, which had an approximate $100 million impact on second quarter passenger revenues. For the six months ended June 30, 2018, net income rose 10.4 percent to $1.20 billion, or $2.05 per diluted share, driven mainly by the lower tax rate and partially offset by higher jet fuel prices. Operating income for the six months fell 12.8 percent to $1.59 billion. Net cash provided by operating activities was $2.63 billion for the six months, and the company repurchased $1.0 billion of common stock through accelerated share repurchase programs during the period. Cash and cash equivalents were $2.11 billion at June 30, 2018, and unrestricted cash and short-term investments totaled $3.7 billion. The company adopted three new accounting standards effective January 1, 2018 (revenue recognition, pension cost presentation, and hedging), and prior periods were recast. The company also reported a fleet of 730 aircraft, expects 751 aircraft by year-end 2018, and disclosed a $500 million accelerated share repurchase launched August 1, 2018 under its new $2.0 billion authorization.

    Aug 1, 2018
  27. 2018-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2018

    Southwest Airlines Co. reported first quarter 2018 net income of $463 million, or $0.79 per diluted share, up from $339 million, or $0.55 per diluted share, in the first quarter of 2017. Operating income was $616 million versus $606 million a year earlier. The filing attributes the increase in GAAP net income primarily to the reduction in the federal corporate tax rate from 35.0 percent to 21.0 percent under the Tax Cuts and Jobs Act. Excluding special items, non-GAAP net income was $438 million, or $0.75 per diluted share, up 22.0 percent year-over-year. Total operating revenues rose to $4.94 billion from $4.85 billion, with passenger revenues of $4.59 billion and a 1.8 percent increase in capacity, while passenger revenue yield fell 2.8 percent. Cost pressures were visible in the quarter. Operating expenses rose $80 million, or 1.9 percent, with fuel and oil expense up $62 million, or 6.5 percent, to $1.02 billion. Salaries, wages, and benefits increased $91 million, or 5.3 percent, on higher wage rates and headcount. The company's guidance points to continued pressure on second quarter unit revenues, which it expects to decrease in the one to three percent range, partly due to softness in bookings following the April 17, 2018 Flight 1380 engine failure accident. Management also expects second quarter unit costs excluding fuel and profitsharing to increase in the one to two percent range. On the balance sheet, cash and cash equivalents were $1.82 billion and short-term investments were $1.42 billion at March 31, 2018. Net cash provided by operating activities was $1.00 billion, versus $1.63 billion a year earlier, reflecting a $501 million decrease in accounts payable and accrued liabilities tied to a $543 million profitsharing plan contribution. The company repurchased $500 million of common stock in the quarter under an accelerated share repurchase program and paid $148 million in dividends, and it launched a second $500 million accelerated share repurchase program on April 30, 2018.

    May 1, 2018
  28. 2017-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2017

    Southwest Airlines Co. reported third-quarter 2017 net income of $503 million, up from $388 million a year earlier, or $0.84 per diluted share versus $0.62. Total operating revenues rose to $5.27 billion from $5.14 billion, with passenger revenues up 1.6 percent on 3.1 percent capacity growth. Operating income was $834 million, compared with $695 million, and the company cited the absence of $356 million in prior-year contract ratification bonuses. On a non-GAAP basis, excluding special items, net income declined 9.3 percent to $528 million, and pre-tax non-GAAP return on invested capital fell to 26.8 percent for the twelve months ended September 30, 2017, from 32.3 percent. For the nine months ended September 30, 2017, net income was $1.60 billion, down 7.1 percent, and diluted EPS was $2.64. Salaries, wages, and benefits rose 6.0 percent and fuel and oil expense rose 8.1 percent, while passenger revenues grew 3.1 percent. Operating cash flow was $3.37 billion for the nine months, compared with $3.58 billion a year earlier. The company repurchased $1.25 billion of common stock in 2017 year to date, leaving $1.7 billion under its May 2017 $2.0 billion authorization, and paid $274 million in dividends. The company grounded its remaining 69 Boeing 737-300 (Classic) aircraft on September 29, 2017, recording a $63 million charge, and ended the quarter with 687 aircraft. It expects its fleet to reach 707 aircraft by year-end 2017 and 750 by year-end 2018. Ongoing risks include antitrust class actions alleging capacity coordination and a DOJ civil investigative demand regarding capacity, which the company says it is defending vigorously. Management does not expect these matters to have a material adverse effect.

    Nov 1, 2017
  29. 2017-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2017

    Southwest Airlines Co. reported second-quarter 2017 GAAP net income of $746 million, down 9.0 percent year-over-year, or $1.23 per diluted share, versus $820 million a year earlier. Operating income was $1,250 million, down 2.0 percent. The decline was driven mainly by a 13.9 percent increase in Salaries, wages, and benefits, attributed to wage rate increases under amended collective-bargaining agreements, and a 9.6 percent increase in Fuel and oil expense, attributed to higher market prices. Passenger revenues rose 6.7 percent to $5,233 million on 5.1 percent capacity growth. Excluding special items, non-GAAP net income was $748 million, down 1.2 percent, or $1.24 per diluted share. For the six months ended June 30, 2017, GAAP net income was $1.10 billion, down 17.7 percent, or $1.80 per diluted share. Operating income was $1.91 billion. The company reported a pre-tax non-GAAP return on invested capital of 27.5 percent for the twelve months ended June 30, 2017, compared with 33.5 percent a year earlier. Operating cash flow for the six months was $2.37 billion, and the company repurchased $950 million of common stock and paid $199 million in dividends during the period. Management guided third-quarter 2017 ASM growth to the four to five percent range and fourth-quarter growth to one to two percent. The company is accelerating the retirement of its 737-300 (Classic) fleet, which it expects to produce at least $200 million in cumulative incremental pre-tax savings by the end of 2020. Cash and short-term investments totaled $3.2 billion at June 30, 2017, and the company had a $1.0 billion undrawn revolving credit facility.

    Aug 1, 2017
  30. 2017-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2017

    Southwest Airlines Co. reported first-quarter 2017 net income of $351 million, or $0.57 per diluted share, versus $513 million, or $0.79 per diluted share, in the first quarter of 2016. GAAP operating income fell to $658 million from $944 million, while non-GAAP operating income was $626 million compared with $952 million. Operating revenues rose slightly to $4.88 billion from $4.83 billion, but total operating expenses increased to $4.23 billion from $3.88 billion. Management attributed the earnings decline mainly to a 12.6 percent increase in Salaries, wages, and benefits, driven by wage rate increases under new labor agreements, along with higher fuel and other operating costs. Operating expenses per available seat mile rose 4.5 percent to 11.51 cents. The balance sheet and cash flow remained solid. Net cash provided by operating activities was $1.63 billion, and the company held unrestricted cash and short-term investments of $3.5 billion at March 31, 2017. During the quarter, Southwest repurchased $550 million of common stock and paid $123 million in dividends, and the quarterly dividend was raised to $0.100 per share from $0.075. Air traffic liability increased $897 million to $4.01 billion, reflecting advance ticket sales and frequent flyer deferred revenue. The company had $1.0 billion of unused revolving credit capacity and repaid $300 million of senior notes at maturity on March 1, 2017. Looking ahead, the company expects second-quarter 2017 available seat mile growth of about five percent and full-year 2017 growth of about 3.5 percent. It also expects second-quarter operating unit costs to rise about six percent year over year, excluding fuel, profitsharing, and special items. The filing notes ongoing antitrust class action litigation alleging capacity collusion among major U.S. airlines, which the company says it intends to defend vigorously.

    May 3, 2017
  31. 2016-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2016

    Southwest Airlines Co. reported third quarter 2016 net income of $388 million, or $0.62 per diluted share, down from $584 million in the prior-year quarter. Operating revenues were $5.14 billion versus $5.32 billion, and operating income fell to $695 million from $1.23 billion. The decline was driven mainly by a 12.4 percent increase in Salaries, wages, and benefits, which reflected accrued proposed union contract signing bonuses, and by the absence of the $172 million one-time special revenue adjustment recorded in third quarter 2015. The company also cited a July 2016 technology outage that led to over 2,000 canceled flights. Nine-month results were stronger, with net income of $1.72 billion, up 4.7 percent, and diluted EPS of $2.70. Passenger load factor was 85.3 percent in the quarter on 4.2 percent capacity growth, while passenger revenue yield fell 4.9 percent. Liquidity remained substantial. Unrestricted cash and short-term investments totaled $3.4 billion at September 30, 2016, and net cash provided by operating activities was $3.6 billion for the nine months. The company repurchased $1.45 billion of common stock in 2016 year-to-date, including a $250 million accelerated share repurchase completed in October 2016, and $1.25 billion remained under its $2.0 billion authorization. Fuel hedging produced net losses of $189 million in Fuel and oil expense for the quarter. As of September 30, 2016, the fuel derivative portfolio carried a net liability of $722 million before collateral. The filing also reports tentative labor agreements with the Pilots and Flight Attendants, with ratification votes scheduled for November 7 and October 31, 2016, respectively. Management expects fourth quarter 2016 operating unit revenues to decline four to five percent year over year and unit costs excluding fuel and profitsharing to rise four to five percent. Subsequent to quarter end, the company borrowed $215 million under a term loan secured by seven 737-800 aircraft.

    Oct 31, 2016
  32. 2016-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2016

    Southwest Airlines Co. reported record second-quarter 2016 results, with Net income of $820 million, up 34.9 percent year-over-year, or $1.28 per diluted share. Operating income was $1,276 million, up 17.6 percent, and Operating revenues rose to $5,384 million from $5,111 million. The company attributes the growth to capacity increases, strong demand for low-fare travel, a lower fuel bill (Fuel and oil expense fell 10.1 percent to $903 million), and a $137 million benefit from the amended Chase co-branded credit card agreement and the related change in revenue accounting. Excluding special items, non-GAAP Net income was $757 million, or $1.19 per diluted share. For the six months ended June 30, 2016, Net income was $1.33 billion, or $2.07 per diluted share. Operating cash flow was $2.73 billion, and cash and cash equivalents plus short-term investments totaled $3.4 billion at quarter end. The company returned capital to shareholders through $1.2 billion of share repurchases in 2016 year to date, a dividend increase of 33 percent to $0.10 per quarter, and a new $2.0 billion repurchase authorization, of which $1.5 billion remained at June 30, 2016. Key risks include fuel hedging: the company had a net derivative liability of $957 million at June 30, 2016, with $719 million in cash collateral posted. The company also disclosed a July 20, 2016 technology outage that cancelled over 2,000 flights, with its financial impact still under evaluation. Third-quarter 2016 operating unit revenues are expected to decline three to four percent year-over-year, and the company faces pending antitrust litigation, including a July 12, 2016 class certification relating to AirTran first-bag fees.

    Jul 28, 2016
  33. 2016-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2016

    Southwest Airlines Co. reported first quarter 2016 net income of $511 million, or $0.79 per diluted share, compared with $453 million, or $0.66 per diluted share, in the first quarter of 2015. Operating income rose to $944 million from $780 million, and operating revenues increased to $4.83 billion from $4.41 billion. The filing attributes the growth to capacity expansion, strong demand for low-fare travel, and a $115 million operating revenue effect from the amended co-branded credit card agreement with Chase, which changed revenue accounting. Excluding special items, the company reported non-GAAP net income of $567 million, or $0.88 per diluted share. Fuel expense was $852 million, down from $877 million, though fuel hedging produced net losses of $275 million within fuel and oil expense. The balance sheet strengthened in liquidity terms, with cash and cash equivalents rising to $2.39 billion from $1.58 billion at year-end 2015, and short-term investments of $1.19 billion. Operating cash flow was $1.62 billion, and the company repurchased $500 million of common stock and paid $96 million in dividends. The company had $200 million remaining under its $1.5 billion repurchase authorization at quarter end and subsequently launched a $200 million accelerated share repurchase in April 2016, exhausting that authorization. Net fuel derivatives were a liability of $1.41 billion at March 31, 2016, with $1.1 billion in cash collateral posted to counterparties. Management's outlook calls for 2016 fleet growth to approximately 720 aircraft and full-year ASM growth of five to six percent. The company expects second quarter 2016 ASMs to rise four to five percent and a modest increase in operating unit revenues. Accelerated depreciation tied to retiring the Boeing 737-300 fleet by third quarter 2017 is a headwind to unit costs. The company is also a defendant in several antitrust class actions alleging capacity coordination, which management says it will vigorously defend.

    Apr 29, 2016
  34. 2015-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2015

    Southwest Airlines Co. reported third quarter 2015 net income of $584 million, or $0.88 per diluted share, compared with $329 million, or $0.48 per diluted share, in the prior-year quarter. Operating revenues rose to $5.318 billion from $4.800 billion, including a one-time, non-cash $172 million Special revenue adjustment tied to the July 2015 amended co-branded credit card agreement with Chase. Operating expenses fell 2.2 percent to $4.093 billion as fuel and oil expense dropped to $936 million from $1.386 billion. Excluding special items, non-GAAP net income was $623 million, or $0.94 per diluted share. For the nine months ended September 30, 2015, net income was $1.645 billion, or $2.45 per diluted share, versus $946 million, or $1.36 per diluted share, a year earlier. Non-GAAP net income for the nine months was $1.764 billion, or $2.63 per diluted share. Cash and short-term investments totaled $3.1 billion at September 30, 2015, and the company repurchased about $1.2 billion of common stock year to date. The company also reported a $500 million accelerated share repurchase launched in July 2015, with $700 million remaining under its $1.5 billion authorization. The filing also discloses that the company's fuel hedge position is largely unhedged for fourth quarter 2015, that it has a net fuel derivative liability of $1.2 billion, and that it posted $478 million of cash collateral and $300 million of aircraft collateral to counterparties. The company is also named in antitrust class actions and a U.S. Department of Justice civil investigative demand concerning capacity, which it says it intends to defend vigorously.

    Oct 29, 2015
  35. 2015-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2015

    Southwest Airlines Co. reported record second-quarter 2015 results. Net income for the three months ended June 30, 2015 was $608 million, or $0.90 per diluted share, up 30.8 percent year-over-year from $465 million, and operating income was $1,085 million versus $775 million. For the six months, net income was $1,061 million ($1.57 per diluted share), up 72.0 percent. The filing attributes the earnings growth mainly to a 29.5 percent decline in fuel expense for the quarter, together with a 2.0 percent increase in operating revenues. On a non-GAAP basis, excluding special items and economic fuel accounting, second-quarter net income was $691 million, or $1.03 per diluted share. Revenue and cost trends were mixed. Passenger revenue rose $100 million, or 2.1 percent, on 7.0 percent capacity growth, while the average passenger fare and passenger revenue yield per RPM declined. Total operating expenses fell $210 million, or 5.0 percent, mainly on lower fuel costs. The company also disclosed a $1.0 billion, then a new $1.5 billion, share repurchase program, a 25 percent increase in the quarterly dividend to $.075 per share, and a $300 million accelerated repurchase completed in June, with a further $500 million advanced on July 31, 2015. Management also flagged that the company's fuel derivative portfolio carried a $1.0 billion net liability at June 30, 2015, rising to $1.3 billion by July 20, 2015, and that a Department of Justice civil investigative demand and multiple class action complaints concerning capacity and fares were filed in late June and July 2015. Looking ahead, the company expects a one-time non-cash revenue increase of approximately $150 million in third quarter 2015 from a materially modified co-branded credit card agreement with Chase, and estimates second-half 2015 operating revenues will rise approximately $400 million from that agreement and an accounting change. Third-quarter 2015 operating unit revenues are estimated to decline about one percent year-over-year. The Flight Attendants failed to approve a tentative labor agreement on July 24, 2015, and negotiations continue.

    Jul 31, 2015
  36. 2015-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2015

    Southwest Airlines Co. reported first quarter 2015 net income of $453 million, or $0.66 per diluted share, versus $152 million, or $0.22 per diluted share, in the first quarter of 2014. Operating income rose to $780 million from $215 million, on total operating revenues of $4.41 billion (up from $4.17 billion) and total operating expenses of $3.63 billion (down from $3.95 billion). The filing attributes the improvement mainly to fuel and oil expense falling to $877 million from $1.31 billion, reflecting lower jet fuel prices, while Passenger revenues rose $245 million, or 6.2 percent, on a 6.0 percent increase in capacity. Management described the quarter's net income as a first-quarter record and highlighted a 25.6 percent pre-tax return on invested capital, excluding special items, for the twelve months ended March 31, 2015. The company's fuel hedging position is a key consideration for investors. At March 31, 2015, Southwest stated it was effectively unhedged at then-current price levels after offsetting its 2015 and 2018 fuel derivative portfolios in fourth quarter 2014, and the filing shows a net fuel derivative liability of $1.07 billion. Management expects April 2015 passenger unit revenues to decline approximately two percent year-over-year and projects 2015 capacity growth of roughly seven percent. Note 1 also discloses that a change in spoilage estimates for frequent flyer points increased first-quarter 2015 Passenger revenues by about $43 million and net income by $23 million. Liquidity remained strong, with unrestricted cash and short-term investments of $3.4 billion at March 31, 2015, net cash provided by operating activities of $1.45 billion, and $300 million of share repurchases in the quarter. The company also paid $81 million in dividends and declared a $0.06 per share dividend. The filing notes a $1 billion unsecured revolving credit facility with no amounts outstanding, and it reports that a $1 billion share repurchase program had $80 million remaining as of March 31, 2015.

    Apr 30, 2015
  37. 2014-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2014

    Southwest Airlines Co.'s Form 10-Q for the quarter ended September 30, 2014 reports third-quarter net income of $329 million, or $0.48 per diluted share, versus $259 million, or $0.37, a year earlier. Total operating revenues rose to $4.80 billion from $4.55 billion, while operating income increased to $614 million from $390 million. On a non-GAAP basis, which excludes special items such as acquisition and integration costs and unrealized hedge-accounting adjustments, third-quarter net income was $382 million, or $0.55 per diluted share. For the nine months ended September 30, 2014, net income was $946 million, or $1.36 per diluted share, compared with $542 million, or $0.75, in the prior-year period. Cash generation and balance sheet activity were strong. Net cash provided by operating activities was $2.70 billion for the nine months, up from $2.19 billion, helped by an $806 million increase in air traffic liability. The company spent $1.34 billion on capital expenditures in the nine months, repurchased $755 million of common stock, and paid $138 million in dividends. Cash and cash equivalents stood at $1.83 billion, and the filing states unrestricted cash and short-term investments of $3.6 billion. Management also cited a $1 billion unsecured revolving credit facility with no amounts outstanding, and Moody's upgraded the company's senior unsecured debt rating to Baa2. Operating metrics were mixed. Load factor rose to 84.4% in the quarter from 80.8%, and fuel costs per gallon, including fuel tax, fell 4.2% to $2.97. The company's AirTran integration is expected to be effectively completed by December 31, 2014, and the filing notes that the Wright Amendment restrictions at Dallas Love Field were repealed on October 13, 2014. The company also introduced international service to the Caribbean and Mexico, and it expects to retire all Boeing 717 aircraft from service on December 28, 2014.

    Oct 29, 2014
  38. 2014-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2014

    Southwest Airlines Co. reported record second-quarter 2014 GAAP net income of $465 million, or $0.67 per diluted share, versus $224 million, or $0.31 per diluted share, in the prior-year quarter. Total operating revenues rose to $5.01 billion from $4.64 billion, and operating income increased to $775 million from $433 million. Management attributed the gain to strong demand for air travel and the execution of strategic initiatives, while operating expenses were described as relatively flat. The filing also cites a $47 million increase in passenger revenue from a change in estimate for ticket spoilage, which contributed $0.04 per diluted share in both the quarter and the six months. For the six months ended June 30, 2014, GAAP net income was $617 million, or $0.88 per diluted share, and operating income was $991 million. Non-GAAP net income, which excludes special items such as AirTran acquisition and integration costs and unrealized fuel hedge adjustments, was $611 million, or $0.87 per diluted share. Cash flow from operations was $2.46 billion for the six months, and cash and short-term investments were $4.0 billion at June 30, 2014, alongside a $1 billion undrawn revolving credit facility. Capital allocation remained active. The company completed its $1.5 billion repurchase program, raised its quarterly dividend from $.04 to $.06 per share, and authorized a new $1 billion share repurchase program, under which $220 million had been used by June 30. The filing also reports that the AirTran integration is on track for completion by December 31, 2014, that fuel derivatives covered approximately 41 percent of remaining 2014 estimated fuel consumption, and that the company expects third-quarter 2014 ASMs to rise about two percent.

    Jul 30, 2014
  39. 2014-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2014

    Southwest Airlines Co. reported first-quarter 2014 net income of $152 million, or $0.22 per diluted share, compared with $59 million, or $0.08 per diluted share, in the first quarter of 2013. Operating income rose to $215 million from $70 million. Operating revenues increased $82 million, or 2.0 percent, to $4.166 billion, primarily on continued strong demand for air travel, despite an estimated $45 million revenue reduction from winter storm cancellations. Operating expenses fell $63 million, or 1.6 percent, to $3.951 billion, primarily due to lower fuel prices and fleet modernization. Fuel and oil expense declined $143 million, or 9.8 percent, and the company's average economic jet fuel cost per gallon decreased from $3.29 to $3.08. Non-GAAP net income was $126 million, or $0.18 per diluted share, which the filing describes as a company first-quarter record and the fourth consecutive quarter of record non-GAAP net income for the applicable fiscal quarter. Operating cash flow was $1.119 billion, up from $983 million. Capital expenditures were $407 million, and the company repurchased about $315 million of common stock, leaving roughly $20 million remaining on its $1.5 billion authorization as of March 31, 2014. The company remains focused on integrating AirTran, with integration costs of $18 million in the quarter and a stated cap of no more than $550 million total, of which about $428 million had been incurred through March 31, 2014. Southwest began selling seats on its first scheduled international flights and expects fleet size to stay flat in 2014, with second-quarter and full-year 2014 capacity expected to be flat year over year.

    May 1, 2014
  40. 2013-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2013

    Southwest Airlines Co. reported third-quarter 2013 GAAP net income of $259 million, or $0.37 per diluted share, compared with $16 million, or $0.02 per diluted share, in third quarter 2012. Operating income was $390 million versus $51 million a year earlier, and total operating revenues rose to $4.545 billion from $4.309 billion, driven mainly by a $249 million, or 6.1 percent, increase in Passenger revenues. Total operating expenses fell 2.4 percent to $4.155 billion, largely due to lower fuel costs and reduced Acquisition and integration expenses of $28 million versus $145 million. The Company reports non-GAAP net income of $241 million for the quarter, up 148.5 percent, which it describes as a third-quarter record, and nine-month non-GAAP net income of $569 million, up 61.6 percent. Management attributes the improvement primarily to higher passenger revenues and lower fuel costs. The balance sheet shows total assets of $19.364 billion, cash and short-term investments of $1.333 billion and $1.995 billion respectively, and total stockholders' equity of $7.013 billion at September 30, 2013. Operating cash flow for the nine months was $2.188 billion, and the Company repurchased about $501 million of its common stock during that period. Management expects fourth-quarter 2013 and full-year ASMs to rise two percent and plans to keep 2014 capacity in line with 2013. The company also flagged that its WTI-based fuel derivatives no longer qualify for hedge accounting, which will cause income statement volatility, and it is integrating AirTran with a stated goal of about $400 million in annualized net pre-tax synergies by the end of 2013. The quarter was also affected by a government shutdown that management estimated reduced October revenues by about $20 million, and by a new No Show policy effective September 13, 2013, whose impact on passenger revenue was not material. Investors should note that GAAP results remain heavily influenced by non-cash fuel hedge mark-to-market adjustments, so the non-GAAP measures are management's preferred view of ongoing performance.

    Oct 30, 2013
  41. 2013-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2013

    Southwest Airlines Co. reported second-quarter 2013 GAAP net income of $224 million, or $0.31 per diluted share, compared with $228 million, or $0.30 per diluted share, in the second quarter of 2012. Total operating revenues rose to $4.64 billion from $4.62 billion, while operating income was $433 million versus $460 million a year earlier. For the six months ended June 30, 2013, GAAP net income was $283 million ($0.39 per diluted share) versus $327 million ($0.43) in the prior-year period. The company stated that non-GAAP net income for the second quarter was a record $274 million, and non-GAAP net income for the six months rose 28.6 percent to $328 million, driven mainly by higher passenger revenues and lower fuel costs. GAAP results were affected by non-cash fuel hedge mark-to-market adjustments and AirTran acquisition and integration costs of $26 million in the quarter. Operating unit metrics were mixed. Operating revenue per available seat mile fell 2.4 percent in the second quarter as capacity grew 3.0 percent, and the company cited the lingering effects of government sequestration and higher taxes as a drag. Fuel and oil expense fell 5.6 percent to $1.49 billion, and the company said unit costs excluding fuel and special items rose 1.8 percent. The company estimated about $95 million in net AirTran synergies in the second quarter and targets roughly $400 million in annualized net synergies by the end of 2013. Management also noted that July unit revenues were above the prior year's July. Capital returns and liquidity remained strong. Cash and cash equivalents were $1.49 billion and short-term investments were $1.90 billion at June 30, 2013, with no amounts outstanding under a new $1 billion revolving credit facility. The company repurchased about 18 million shares in an accelerated share repurchase program for $251 million and raised its quarterly dividend from $.01 to $.04 per share, with cumulative repurchases under the $1.5 billion authorization at approximately $975 million.

    Jul 31, 2013
  42. 2013-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2013

    Southwest Airlines Co. reported first-quarter 2013 GAAP net income of $59 million, or $0.08 per diluted share, down from $98 million, or $0.13 per diluted share, in the first quarter of 2012. Operating income rose to $70 million from $22 million, while total operating revenues increased to $4.084 billion from $3.991 billion. Operating expenses were $4.014 billion versus $3.969 billion. Results were significantly affected by non-cash mark-to-market adjustments on fuel hedges and by AirTran acquisition and integration costs of $13 million in each period. On a non-GAAP basis, operating income was $112 million versus $10 million, and non-GAAP net income was $53 million versus a loss of $18 million. The filing states that the improvement primarily reflected better revenue production while operating expenses remained relatively flat. Passenger revenue was $3.838 billion, up from $3.751 billion, driven mainly by higher passenger yields from fare increases. Fuel and oil expense fell to $1.457 billion from $1.510 billion, reflecting a lower economic fuel cost per gallon of $3.29 versus $3.44. Net cash provided by operating activities was $983 million, compared with $1.225 billion a year earlier. Cash and short-term investments totaled $3.1 billion at March 31, 2013, and the company repurchased about $100 million of common stock during the quarter. Management continues to pursue five strategic initiatives, including completing the AirTran integration by the end of 2014 and transitioning 88 AirTran Boeing 717-200 aircraft to Delta Air Lines under a lease and sublease agreement beginning in August 2013. The company expects a year-over-year decline in April passenger unit revenues and an increase in second-quarter unit costs excluding fuel. It does not plan to grow its fleet in 2013 and expects 2013 ASMs to increase approximately two percent. Fuel hedges covered approximately 82 percent of remaining 2013 estimated fuel consumption as of March 31, 2013.

    May 2, 2013
  43. 2012-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2012

    Southwest Airlines Co. reported net income of $16 million for the third quarter of 2012, compared with a net loss of $140 million in the third quarter of 2011, and net income of $343 million for the first nine months of 2012 versus $26 million a year earlier. Total operating revenues were $4,309 million for the quarter, essentially flat versus $4,311 million, while total operating expenses rose to $4,258 million from $4,086 million. Operating income fell to $51 million from $225 million. GAAP results were heavily affected by non-cash fuel hedge accounting adjustments and by $145 million of acquisition and integration costs, which included a $137 million charge tied to the agreement with Delta Air Lines and Boeing Capital Corp. to lease or sublease all 88 of AirTran's Boeing 717-200 aircraft. The company reports non-GAAP net income of $97 million for the quarter, down 20.5 percent, and says the decline was driven mainly by a 1.9 percent increase in non-GAAP operating expenses while operating revenues stayed relatively flat. Cash flow improved considerably. Net cash provided by operating activities was $464 million for the quarter and $1.8 billion for the nine months, compared with the prior-year figures of a $218 million outflow and $985 million inflow. Unrestricted cash and short-term investments totaled $3.2 billion at September 30, 2012. Share repurchases were $325 million year to date, and the company retired 30 older 737-300 and 737-500 aircraft during the nine months while taking delivery of 20 new 737-800s. Management expects fourth-quarter 2012 operating unit revenues to rise solidly year over year, and expects non-fuel unit costs to increase approximately 6.0 percent. The filing also notes that the company deferred 30 Boeing firm deliveries from 2013 and 2014 to 2017 and 2018, reducing expected capital expenditures by approximately $1 billion over 2012 through 2014. Total shareholders' equity was $7.0 billion at September 30, 2012, and long-term debt less current maturities was $2.96 billion.

    Oct 26, 2012
  44. 2012-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2012

    Southwest Airlines Co. reported second-quarter 2012 GAAP net income of $228 million, or $0.30 per diluted share, compared with $161 million, or $0.21 per diluted share, in second quarter 2011. Operating income was $460 million versus $207 million, and total operating revenues rose to $4.616 billion from $4.136 billion. For the six months ended June 30, 2012, net income was $327 million ($0.43 per diluted share) and operating income was $481 million. The filing states that the year-over-year improvement was driven by fare increases and revenue management, a softening in second-quarter jet fuel prices, lower net interest expense, and operating efficiency. Non-GAAP net income, which excludes fuel-hedge mark-to-market effects and AirTran integration costs, was $273 million ($0.36 per diluted share) for the quarter. The company also noted that the AirTran acquisition, completed May 2, 2011, is expected to produce $400 million in annual pre-tax synergies in 2013. Balance sheet and cash flow items are mixed. Cash and cash equivalents were $1.083 billion and short-term investments were $2.173 billion at June 30, 2012. Net cash provided by operating activities was $1.37 billion for the six months, compared with $1.202 billion a year earlier, helped by a $693 million increase in air traffic liability. Southwest repurchased about $275 million of common stock in the first half and raised its quarterly dividend to $.01 per share. Total stockholders' equity was $6.840 billion, and long-term debt less current maturities was $3.019 billion. Accumulated other comprehensive loss grew to $320 million, mainly from unrealized losses on fuel derivatives. The filing also flags several forward-looking items. In July 2012 the company agreed to lease or sublease all 88 AirTran Boeing 717-200 aircraft to Delta Air Lines starting in August 2013, with an expected charge of approximately $140 million in the third quarter of 2012. Thirty firm Boeing deliveries were deferred, reducing expected capital expenditures by approximately $1 billion over 2012 through 2014. Pending litigation involving AirTran and Delta over baggage fees and capacity conduct is ongoing, and management does not expect a material adverse effect from it.

    Jul 27, 2012
  45. 2012-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2012

    Southwest Airlines Co. reported first-quarter 2012 net income of $98 million, or $.13 per share diluted, compared with $5 million, or $.01 per share, in first-quarter 2011. On a non-GAAP basis, the company reported a net loss of $18 million, or $.02 per share diluted, versus non-GAAP net income of $20 million, or $.03 per share, a year earlier. Operating income was $22 million, compared with $114 million in the prior-year quarter. Total operating revenues rose to $3.99 billion from $3.10 billion, with the majority of the increase attributable to the May 2, 2011 acquisition of AirTran. Excluding AirTran, operating revenues increased 6.8 percent, and passenger yields rose as fare increases offset part of higher fuel costs. Fuel and oil expense increased to $1.51 billion from $1.04 billion, and the economic jet fuel cost per gallon was $3.44, a 16.2 percent increase. Management attributed the gap between GAAP and non-GAAP results primarily to non-cash fuel hedge adjustments. Unit operating expenses rose 6.2 percent to 12.96 cents per ASM, with over 92 percent of that increase due to higher fuel costs. The company stated it expects AirTran integration to produce total net pre-tax annual synergies of $400 million in 2013, excluding acquisition and integration expenses. Net cash provided by operating activities was $1.2 billion, and the company repurchased about $50 million of common stock during the quarter. Unrestricted cash and short-term investments totaled $3.8 billion as of March 31, 2012, and the company repaid $431 million of debt, including its $385 million 6.5% notes at maturity. The company does not plan to grow its fleet in 2012, expects to receive 33 Boeing 737-800 deliveries during the year, and plans to retire approximately 40 older 737-300 and 737-500 aircraft. Management stated that it expects 2012 ASMs to approximate the combined 2011 levels of Southwest and AirTran. Legal proceedings include a remaining AirTran shareholder class action in Florida and an antitrust class action against Delta and AirTran, and management does not expect either to have a material adverse effect.

    Apr 25, 2012
  46. 2011-Q3-A

    Southwest Airlines Quarterly Report (Amendment) for Q3 Ended Sep 30, 2011

    Southwest Airlines Co. filed this Amendment No. 1 on Form 10-Q/A to its quarterly report for the period ended September 30, 2011. The original Form 10-Q was filed with the SEC on October 25, 2011. The stated sole purpose of the amendment is to correct certain technical and formatting errors in the Interactive Data File (XBRL) included as Exhibit 101 to the original filing. The company states that no other changes were made to the Form 10-Q. The amendment continues to speak as of the original filing date and does not reflect later events or update other disclosures in the Form 10-Q. The registrant reports 778,522,395 shares of Common Stock outstanding as of October 19, 2011, and checks the box for large accelerated filer. It is not a shell company. The exhibit list references the September 26, 2010 Agreement and Plan of Merger among Southwest Airlines Co., AirTran Holdings, Inc., and Guadalupe Holdings Corp., along with the company's restated articles, bylaws, a Boeing purchase agreement supplement with confidential treatment, and CEO and CFO certifications. Most of these items were incorporated by reference or previously filed with the original Form 10-Q.

    Nov 8, 2011
  47. 2011-Q3

    Southwest Airlines Quarterly Report for Q3 Ended Sep 30, 2011

    Southwest Airlines Co.'s Form 10-Q for the quarter ended September 30, 2011 reports a third-quarter net loss of $140 million, or $0.18 per diluted share, compared with net income of $205 million, or $0.27 per share, in third quarter 2010. Operating revenues rose to $4.311 billion from $3.192 billion, while operating income fell to $225 million from $355 million. The filing attributes the GAAP loss mainly to a $405 million charge in Other (gains) losses, net, driven by non-cash fuel hedge mark-to-market and ineffectiveness adjustments. On a non-GAAP basis, third-quarter net income was $122 million, or $0.15 per diluted share, compared with $195 million, or $0.26 per share, a year earlier, and non-GAAP operating income was $285 million versus $389 million. The quarter includes results of AirTran, acquired May 2, 2011, which contributed $758 million of operating revenues and $3 million of net income for the period. The acquisition was valued at approximately $3.2 billion in total transaction value and produced $970 million of goodwill. Management cites expected net annual synergies of more than $400 million by 2013 and integration costs of roughly $500 million through 2014. Fuel remained the key cost pressure, with average fuel cost per gallon up 30.8 percent to $3.23 including hedging, and the company reported $736 million of total derivative liabilities versus assets on its balance sheet at quarter-end. Liquidity remained substantial, with cash and short-term investments of $3.7 billion at September 30, 2011, and an undrawn $800 million revolving credit facility. The company repurchased about 21 million shares for approximately $175 million during the quarter, and the balance sheet showed total stockholders' equity of $6.485 billion. Management expects solid passenger unit revenue growth in the fourth quarter of 2011, based on October trends.

    Oct 25, 2011
  48. 2011-Q2

    Southwest Airlines Quarterly Report for Q2 Ended Jun 30, 2011

    Southwest Airlines Co. reported second quarter 2011 net income of $161 million, or $0.21 per diluted share, compared with $112 million, or $0.15 per diluted share, in second quarter 2010. Operating income fell to $207 million from $363 million, and total operating revenues rose to $4,136 million from $3,168 million. Results were heavily affected by fuel: fuel and oil expense rose to $1,527 million from $933 million, and the company's average fuel cost per gallon increased 32.0 percent to $3.30 including hedging. The company also reported non-GAAP net income of $121 million, or $0.15 per diluted share, which it describes as 44.0 percent lower than the prior-year non-GAAP figure, driven mainly by significant increases in jet fuel costs that outpaced fare increases and other revenue initiatives. The quarter includes the acquisition of AirTran Holdings, which closed on May 2, 2011, for total transaction value of approximately $3.2 billion. AirTran contributed $540 million of operating revenue and a net loss of $27 million for the period from May 2 through June 30. Acquisition and integration costs were $58 million in the quarter and $75 million year to date. Management estimates net annual synergies of more than $400 million by 2013 and one-time integration costs of approximately $500 million. Goodwill of $971 million was recorded, and total assets grew to $18,945 million from $15,463 million at year-end 2010. Liquidity remained solid, with cash and cash equivalents of $1,595 million and short-term investments of $2,779 million at June 30, 2011. Net cash provided by operating activities was $1.2 billion for the first six months. In August 2011 the Board authorized repurchases of up to $500 million of common stock, and the company had not repurchased any shares as of the filing date.

    Aug 5, 2011
  49. 2011-Q1

    Southwest Airlines Quarterly Report for Q1 Ended Mar 31, 2011

    Southwest Airlines Co. reported first-quarter 2011 net income of $5 million, or $0.01 per share diluted, compared with $11 million, or $0.01 per share diluted, in first quarter 2010. On a non-GAAP basis, net income was $20 million, or $0.03 per share diluted, versus $24 million, or $0.03 per share, a year earlier. Operating income rose to $114 million from $54 million, while non-GAAP operating income was $110 million versus $102 million. Total operating revenues increased $473 million, or 18.0 percent, to $3,103 million, driven by a 17.8 percent increase in passenger revenues and an 11.4 percent increase in average fares. Operating expenses grew 16.0 percent, largely reflecting a 16.9 percent rise in fuel cost per gallon, and the company's economic fuel cost per gallon rose 26.5 percent. The pending acquisition of AirTran Holdings, Inc. is the central strategic item. The merger agreement, signed September 26, 2010, provides for 0.321 Southwest shares plus $3.75 in cash per AirTran share, subject to an exchange ratio adjustment, and closing is expected May 2, 2011. Management expects about $670 million in cash consideration funded from cash on hand, roughly $500 million in one-time integration and closing costs, and more than $400 million in net annual synergies by 2013. Liquidity remained solid, with cash and short-term investments of $4.5 billion at March 31, 2011, and an undrawn $600 million revolving credit facility. Operating cash flow was $965 million for the quarter, compared with $373 million a year earlier. The filing also highlights fuel hedging exposure, with derivatives covering about 40 percent of first-quarter fuel consumption and a net fuel derivative asset of $1.1 billion at Level 3. Management described the Rapid Rewards frequent flyer program relaunch in March 2011 and the addition of three new destinations, and it noted that the company expects a solid passenger unit revenue improvement in second quarter 2011.

    Apr 25, 2011
  50. 2010-Q3-A

    Southwest Airlines Quarterly Report (Amendment) for Q3 Ended Sep 30, 2010

    Southwest Airlines Co. filed Amendment No. 1 (Form 10-Q/A) to its Quarterly Report for the period ended September 30, 2010. The sole stated purpose is to furnish the Interactive Data File as Exhibit 101, which was inadvertently omitted from the original Form 10-Q filed October 22, 2010 because of technical difficulties with the company's EDGAR filing software. The explanatory note states that no other changes were made, that the amendment speaks as of the original filing date, and that it does not update any related disclosures. The filing identifies the company as a large accelerated filer, reports 747,095,928 shares of Common Stock outstanding as of October 19, 2010, and indicates it is not a shell company. The exhibit list references the Agreement and Plan of Merger among Southwest Airlines Co., AirTran Holdings, Inc., and Guadalupe Holdings Corp., dated as of September 26, 2010, incorporated by reference from a Current Report on Form 8-K dated September 27, 2010. Other listed exhibits include the restated articles and bylaws, Supplemental Agreement No. 66 to Purchase Agreement No. 1810 with The Boeing Company (with confidential portions omitted under a confidential treatment application), and the Section 302 and Section 906 certifications. The XBRL exhibits (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE) are noted as furnished, not filed.

    Oct 28, 2010