DALLAS, May 18, 2016 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) (the "Company") announces the Southwest Airlines Board of Directors, at its meeting held today, increased the Company's quarterly dividend by 33 percent and authorized a new $2 billion share repurchase program. Under the new $2 billion share repurchase authorization, the Company intends to repurchase an initial $500 million of Southwest common stock under an accelerated share repurchase program. The quarterly dividend will increase to $.10 per share from $.075 per share, beginning with the 159th consecutive quarterly dividend declared today to Shareholders of record at the close of business on June 8, 2016, on all shares then issued and outstanding. The dividend will be paid on June 29, 2016. Annualized, this increased dividend amounts to approximately $255 million based on approximately 632 million1 shares of common stock outstanding.
Gary C. Kelly, Chairman of the Board, President, and CEO, stated: "I'm pleased to announce the Board's decision today to increase our quarterly dividend by 33 percent, which would provide an approximate one percent annual dividend yield to our Shareholders, based on yesterday's closing stock price of $42.20. On a cumulative basis over the past five years, including today's increase, our quarterly dividend has grown more than twenty fold. The Board also authorized a $2 billion share repurchase program, representing our largest repurchase authorization in a decades-long history of returning value back to our Shareholders through share repurchases. Since 2010, we have reduced our outstanding shares by over 25 percent through the cumulative repurchase of $4 billion of common stock. Our strong performance, investment grade balance sheet, and cash flow outlook has enabled the Board's actions today that reinforce our ongoing commitment to return value to our Shareholders."
The Company recently completed its previous total $1.5 billion share repurchase authorization, including $700 million repurchased this year under accelerated share repurchase programs. The Company repurchased $500 million in common stock pursuant to an accelerated share repurchase program launched during first quarter 2016, and $200 million pursuant to an accelerated share repurchase program launched during second quarter 2016, receiving approximately 11.9 million and approximately 4.5 million total shares, respectively. Under the total $1.5 billion share repurchase authorization, the Company repurchased approximately 37.3 million shares. The Company's share repurchases under the new $2 billion repurchase program will be made in accordance with applicable securities laws in open market, private, or accelerated repurchase transactions from time to time, depending on market conditions, but may be discontinued at any time.
1As of May 16, 2016.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's plans with respect to the return of value to Shareholders and (ii) the Company's financial outlook. These forward-looking statements are based on the Company's current intent, expectations, and projections and are not guarantees of future performance. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the impact of economic conditions, consumer behavior, fuel prices, actions of competitors (including without limitation pricing, scheduling, and capacity decisions and consolidation and alliance activities), governmental actions, and other factors beyond the Company's control, on the Company's business decisions, plans, and strategies and (ii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
SW-DSR
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SOURCE Southwest Airlines Co.