Southwest Airlines Reports Fourth Quarter Earnings and 35th Consecutive Year of Profitability
DALLAS, Jan. 23 /PRNewswire-FirstCall/ -- Southwest Airlines (NYSE: LUV) today reported its fourth quarter and full year 2007 results. Net income for fourth quarter 2007 was $111 million, or $.15 per diluted share, compared to $57 million, or $.07 per diluted share, for fourth quarter 2006. Excluding special items, fourth quarter 2007 net income was $87 million compared to $100 million in fourth quarter 2006, or $.12 per diluted share in both years. The fourth quarter 2007 results, excluding special items, exceed First Call's mean estimate of $.10 per diluted share. Refer to the reconciliation in the accompanying tables for further information regarding special items.
For the full year 2007, net income was $645 million, or $.84 per diluted share, compared to $499 million, or $.61 per diluted share, for 2006. Excluding special items, full year 2007 net income was $471 million, or $.61 per diluted share, compared to $578 million, or $.70 per diluted share for full year 2006.
Gary C. Kelly, CEO, stated: "While fourth quarter and full year results fell short of our earnings goals, I am very proud of what our Employees accomplished during 2007. Although we were well prepared, 2007 was much more difficult than anticipated due to rising energy prices throughout the year and softer demand for domestic air travel. Given higher energy costs and signs of domestic economic weakness, we took the necessary steps to slow our planned aircraft fleet growth. In June, we reduced our planned growth for fourth quarter 2007 and for 2008. In December, we further reduced our 2008 planned growth, pruning our flight schedule for May 2008.
"I am especially proud of our operations during 2007. Despite air traffic congestion, unusually difficult weather, and security-related challenges, we had an exceptional year of operations, delivering excellent Customer Service. We also have made great progress with our efforts to further enhance our already outstanding Customer Experience. In fall 2007, we launched our new Business Select product; Rapid Rewards frequent flyer program enhancements; new boarding method; and our extreme gate makeover. We are delighted with the Customer response.
"We are also excited to announce today our agreement with Row 44 to install equipment on four aircraft this summer to test inflight internet connectivity. This is just one more way Southwest Airlines intends to make Customers more productive.
"In addition to our efforts to further strengthen our exceptional brand, we continue to optimize our capital structure, repurchasing 66 million shares of common stock for a total of $1.0 billion during 2007. Last week, we announced a new share repurchase program to acquire up to $500 million of the Company's common stock. While we have more hard work ahead and a cautious view on the economy, I am extremely proud of what our People have accomplished, and we remain committed to our long-term financial targets and maximizing Shareholder value.
"Turning to our fourth quarter 2007 earnings performance, our net income per share, excluding special items, was flat year-over-year at $.12 per diluted share. Despite a softer domestic economy and our available seat mile (ASM) growth of 5.6 percent, we grew our operating unit revenues 3.7 percent. We are encouraged by our year-over-year comparative trends, which improved each month during fourth quarter 2007. Our new Business Select product and other revenue management initiatives are on track and contributing to favorable unit revenue comparisons thus far in first quarter 2008.
"Our fourth quarter 2007 unit costs, excluding special items, increased 4.1 percent from a year ago to 9.15 cents, which was driven in large part by higher jet fuel costs. Even with a superb fuel hedging position and higher than expected realized cash hedging gains of $300 million, our fourth quarter 2007 jet fuel costs increased 10.3 percent from a year ago to $1.72 per gallon (economic). We have derivative contracts in place for approximately 75 percent of our first quarter 2008 estimated fuel consumption, capped at an average crude-equivalent price of approximately $51 per barrel. Based on this derivative position and present market prices, we currently anticipate our first quarter 2008 jet fuel costs (economic) will approximate $2.00 per gallon. For the full year 2008, we have derivative contracts for approximately 70 percent of our estimated fuel consumption at an average crude-equivalent price of approximately $51 per barrel.
"Our fourth quarter 2007 unit costs, excluding fuel, increased 1.7 percent from a year ago to 6.57 cents, which was somewhat better than expected. Based on current cost trends and, especially, increasing aircraft engine maintenance costs, we expect our first quarter 2008 unit costs, excluding fuel and anticipated gains from the sale of aircraft, to exceed fourth quarter 2007's 6.57 cents.
"We are intensely focused on improving the efficiency and profitability of our flight schedule, while continuing to bring low, friendly fares to our markets. Although we are taking a cautious approach to our overall fleet growth in 2008, we currently plan to grow our ASMs four to five percent on a year-over-year basis and remain well-positioned to respond quickly to favorable market opportunities. We will accept 29 new Boeing 737-700s scheduled for 2008 delivery, and currently plan to reduce our existing fleet by 22 aircraft, ending 2008 with 527 aircraft. Since third quarter 2007, we have exercised three Boeing 737-700 options for delivery in 2009, bringing our 2009 firm orders and options to 21 and seven, respectively.
"As we enter 2008, I am pleased with our longer-term prospects and could not be prouder of our Employees. They are the heart and soul of our great Company, and they continue to demonstrate the Warrior Spirit necessary to maintain our industry-leading competitive position and financial strength. Recent Southwest recognitions include receiving the distinctive honor of the Best Domestic Airline award by Travel Weekly. In addition, the Company ranked number one in the airline category of Corporate Research International's customer service survey. Finally, the Company received top ranking in the Zagat Survey of Global Airlines in the categories for Frequent Flyer program and domestic website."
Southwest will discuss its fourth quarter 2007 results on a conference call at 11:30 a.m. Eastern Time today. A live broadcast of the conference call will be available at http://www.southwest.com/?frc=IR_012308.
Operating Results
Total operating revenues for fourth quarter 2007 increased 9.5 percent to $2.49 billion, compared to $2.28 billion for fourth quarter 2006. Total fourth quarter 2007 operating expenses were $2.37 billion, compared to $2.10 billion in fourth quarter 2006. Operating income for fourth quarter 2007 was $126 million, a decrease of 27.6 percent as compared to $174 million in fourth quarter 2006. Excluding special items, operating income increased 4.0 percent in fourth quarter 2007, to $180 million from $173 million in fourth quarter 2006.
Operating revenues for the year ended December 31, 2007 increased 8.5 percent, to $9.86 billion, from 2006, while operating expenses increased 11.3 percent to $9.07 billion, resulting in operating income of $791 million, a decrease of $143 million or 15.3 percent. Excluding special items, operating income was $853 million, a decrease of $122 million, or 12.5 percent. The Company's 2007 jet fuel costs per gallon (economic) increased 11.3 percent to $1.67 from the same period in 2006, reflecting cash hedging gains of $727 million and $675 million in 2007 and 2006, respectively.
"Other income" was $267 million for 2007 versus "other expenses" of $144 million for 2006. The $411 million swing in total other expenses (income) primarily resulted from $292 million in "other gains" recognized in 2007 versus $151 million in "other losses" recognized in 2006. In both periods, these "other (gains) losses" primarily resulted from unrealized gains/losses associated with Statement of Financial Accounting Standard (SFAS) 133, "Accounting for Derivative Instruments and Hedging Activities," as amended. The cost of the hedging program (which includes the premium costs of derivative contracts) of $58 million in 2007 and $52 million in 2006 is also included in "other (gains) losses". Net interest expense increased $32 million in 2007 compared to 2006, primarily due to decreased interest income resulting from a decrease in average cash and short-term investment balances on which the Company earns interest.
The fourth quarter and full year 2007 income tax rates were both approximately 39 percent compared to approximately 44 and 37 percent for fourth quarter and full year 2006, respectively. The fourth quarter 2006 income tax rate of 44 percent reflects a $4 million increase to income tax expense, which related to the State of Texas Franchise Tax law enacted in 2006. For the full year 2006, income tax expense decreased by $9 million due to this state law change. An August 2007 increase under a State of Illinois income tax law was reversed by the State of Illinois in January 2008. As a result of this 2008 change in Illinois state tax law, there will be a decrease to the first quarter 2008 deferred tax liability of approximately $11 million.
Net cash provided by operations for 2007 was $2.85 billion, which included a $1.46 billion increase in fuel derivative collateral deposits related to future periods. For the full year 2007, capital expenditures were $1.33 billion, and the Company also repurchased 66 million shares of its common stock for a total of $1.0 billion. On January 17, 2008, the Company's Board of Directors authorized a new share repurchase program to acquire up to $500 million of the Company's common stock. This new program represents the sixth authorized since January 2006. Over the past two years, Southwest has repurchased 116 million shares of common stock for a total of $1.8 billion.
During fourth quarter 2007, the Company issued $500 million in Pass Through Certificates secured by 16 aircraft. The Company also repaid $122 million in debt during 2007. Southwest ended the year with $2.8 billion in cash and short-term investments, which includes $2.0 billion in fuel derivative collateral deposits. In addition, the Company also had a fully available unsecured revolving credit line of $600 million.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Specific forward-looking statements include, without limitation, statements relating to (i) the Company's revenue and cost cutting initiatives; (ii) its financial targets and expectations regarding results of operations; and (iii) its plans for fleet growth. 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 price and availability of aircraft fuel; (ii) the Company's ability to timely and effectively prioritize its revenues initiatives and its related ability to timely implement and maintain the necessary information technology systems and infrastructure, and other techniques and processes to support these initiatives; (iii) the extent and timing of the Company's investment of incremental operating expenses and capital expenditures to develop and implement its initiatives and its corresponding ability to effectively control its operating expenses; (iv) the Company's dependence on third party arrangements to assist with the implementation of certain of its initiatives; (v) competitor capacity and load factors; and (vi) 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, 2006, and subsequent filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this news release.
SOUTHWEST AIRLINES CO.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share amounts)
(unaudited)
Three months ended Year ended
December 31, December 31,
Percent Percent
2007 2006 Change 2007 2006 Change
OPERATING REVENUES:
Passenger $2,388 $2,191 9.0 $9,457 $8,750 8.1
Freight 35 32 9.4 130 134 (3.0)
Other 69 53 30.2 274 202 35.6
Total operating
revenues 2,492 2,276 9.5 9,861 9,086 8.5
OPERATING EXPENSES:
Salaries, wages, and
benefits 800 779 2.7 3,213 3,052 5.3
Fuel and oil 705 557 26.6 2,536 2,138 18.6
Maintenance materials
and repairs 166 126 31.7 616 468 31.6
Aircraft rentals 41 39 5.1 156 158 (1.3)
Landing fees and other
rentals 138 121 14.0 560 495 13.1
Depreciation and
amortization 143 134 6.7 555 515 7.8
Other operating
expenses 373 346 7.8 1,434 1,326 8.1
Total operating
expenses 2,366 2,102 12.6 9,070 8,152 11.3
OPERATING INCOME 126 174 (27.6) 791 934 (15.3)
OTHER EXPENSES (INCOME):
Interest expense 33 28 17.9 119 128 (7.0)
Capitalized interest (10) (13) (23.1) (50) (51) (2.0)
Interest income (8) (22) (63.6) (44) (84) (47.6)
Other (gains) losses, net (72) 80 n.a. (292) 151 n.a.
Total other expenses
(income) (57) 73 n.a. (267) 144 n.a.
INCOME BEFORE INCOME
TAXES 183 101 81.2 1,058 790 33.9
PROVISION FOR INCOME
TAXES 72 44 63.6 413 291 41.9
NET INCOME $111 $57 94.7 $645 $499 29.3
NET INCOME PER SHARE:
Basic $.15 $.07 $.85 $.63
Diluted $.15 $.07 $.84 $.61
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 734 790 757 795
Diluted 742 813 768 824
SOUTHWEST AIRLINES CO.
RECONCILIATION OF REPORTED AMOUNTS TO NON-GAAP ITEMS (SEE NOTE)
(in millions, except per share amounts)
(unaudited)
Note regarding use of non-GAAP financial measures
The special items referred to in this news release are non-GAAP items
that are provided as supplemental information. These items should not be
relied upon as alternative measures to Generally Accepted Accounting
Principles (GAAP) and include (i) items calculated on an "economic" basis,
which excludes certain items that are recorded as a result of SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities", as
amended, and (ii) other special items that management believes are
necessary to provide it and its Investors the ability to measure and
monitor the Company's performance on a consistent basis.
Items calculated on an "economic" basis consist of gains or losses for
derivative instruments that settled in the current accounting period, but
were either recognized in a prior period or will be recognized in a future
period in GAAP results. The items excluded from economic results
primarily include ineffectiveness, as defined, for future period
instruments, and changes in market value for future period derivatives
that no longer qualify for special hedge accounting, as defined in SFAS
133.
Other special items include a charge during third quarter 2007 related to
the Company's voluntary early retirement program, a change in the Illinois
state income tax law resulting in an increase in income taxes during third
quarter 2007, which increase has already been reversed in first quarter
2008 due to the January reversal of the state income tax law change in
August 2007, and a 2006 change in the Texas state tax law related to
franchise taxes. Management does not believe these types of items
are a meaningful indicator of the Company's ongoing performance.
The Company's management utilizes both the GAAP and the non-GAAP results
in this news release to evaluate the Company's performance and believes
that comparative analysis of results can be enhanced by excluding the
impact of the unrealized items. Management believes in certain cases the
Company's GAAP results are not indicative of the Company's operating
performance for the applicable period, nor should they be considered in
developing trend analysis for future periods. In addition, since fuel
expense is such a large part of the Company's operating costs and is
subject to extreme volatility, the Company believes it is useful to
provide Investors with the Company's true economic cost of fuel for the
periods presented, based on cash settlements from hedging activities, but
excluding the unrealized impact of hedges that will settle in future
periods or were recognized in prior periods.
Three Months Ended Year Ended
December 31, December 31,
Percent Percent
2007 2006 Change 2007 2006 Change
Fuel and oil expense - unhedged $951 $676 $3,222 $2,772
Less: Fuel hedge gains included
in fuel and oil expense (246) (119) (686) (634)
Fuel and oil expense - GAAP 705 557 26.6 2,536 2,138 18.6
Add/(Deduct): Net impact from
fuel contracts (54) 1 (41) (41)
Fuel and oil expense - economic $651 $558 16.7 $2,495 $2,097 19.0
Operating income, as reported $126 $174 $791 $934
Add/(Deduct): Net impact from
fuel contracts 54 (1) 41 41
$180 $173 $832 $975
Add: Charge from voluntary early
out program, net $- $- $21 $-
Operating income, non-GAAP $180 $173 4.0 $853 $975 (12.5)
Other (gains) losses, net, as
reported $(72) $80 $(292) $151
Add/(Deduct): Net impact from
fuel contracts $94 $(64) $360 $(101)
Other (gains) losses, net,
excluding special items $22 $16 n.a. $68 $50 n.a.
Net income, as reported $111 $57 $645 $499
Add/(Deduct): Net impact from
fuel contracts (40) 63 (319) 142
Income tax impact of unrealized
items 16 (24) 122 (54)
$87 $96 $448 $587
Add: Charge from voluntary early
out program, net - - 12 -
Add: Charge from change in
Illinois state income tax law,
net - - 11 -
Add/(Deduct): Change in Texas
state tax law, net - 4 - (9)
Net income, non-GAAP $87 $100 (13.0) $471 $578 (18.5)
Net income per share, diluted, as
reported $.15 $.07 $.84 $.61
Add/(Deduct): Net impact from
fuel contracts (.03) .05 (.26) .10
$.12 $.12 $.58 $.71
Add: Impact of special items, net - - .03 (.01)
Net income per share, diluted,
non-GAAP $.12 $.12 (0.0) $.61 $.70 (12.9)
SOUTHWEST AIRLINES CO.
RECONCILIATION OF IMPACT FROM FUEL CONTRACTS (SEE PREVIOUS NOTE)
(in millions, except per share amounts)
(unaudited)
Three Months
Ended Year Ended
December 31, December 31,
2007 2006 2007 2006
Fuel & Oil Expense
Add/(Deduct): Impact from current
period settled contracts included
in Other (gains) losses, net (11) 2 (90) 20
Add/(Deduct): Fuel contract impact
recognized in earnings in prior or
future periods for contracts settling
in the current period (43) (1) 49 (61)
Impact from fuel contracts to Fuel &
Oil Expense $(54) $1 $(41) $(41)
Operating Income
Add/(Deduct): Impact from current
period settled contracts included
in Other (gains) losses, net 11 (2) 90 (20)
Add/(Deduct): Fuel contract impact
recognized in earnings in prior or
future periods for contracts settling
in the current period 43 1 (49) 61
Impact from fuel contracts to
Operating Income $54 $(1) $41 $41
Other (gains) losses
Add/(Deduct): Mark-to-market impact
from fuel contracts settling in
future periods 38 (34) 219 (42)
Add/(Deduct): Ineffectiveness from
fuel hedges settling in future periods 45 (28) 51 (39)
Add/(Deduct): Impact from current period
settled contracts included in Other
(gains) losses, net 11 (2) 90 (20)
Impact from fuel contracts to Other
(gains) losses $94 $(64) $360 $(101)
Net Income
Add/(Deduct): Mark-to-market impact
from fuel contracts settling in
future periods (38) 34 (219) 42
Add/(Deduct): Ineffectiveness from
fuel hedges settling in future periods (45) 28 (51) 39
Add/(Deduct): Fuel contract impact
recognized in earnings in prior or
future periods for contracts settling
in the current period 43 1 (49) 61
Impact from fuel contracts to Net
Income* $(40) $63 $(319) $142
* Excludes income tax impact of unrealized items
SOUTHWEST AIRLINES CO.
COMPARATIVE CONSOLIDATED OPERATING STATISTICS
(unaudited)
Three months ended
December 31,
2007 2006 Change
Revenue passengers carried 21,757,154 21,057,097 3.3 %
Enplaned passengers 24,875,699 24,073,919 3.3 %
Revenue passenger miles (RPMs) (000s) 17,505,282 16,799,816 4.2 %
Available seat miles (ASMs) (000s) 25,258,958 23,914,966 5.6 %
Load factor 69.3% 70.2% (0.9) pts.
Average length of passenger haul (miles) 805 798 0.9 %
Average aircraft stage length (miles) 627 626 0.2 %
Trips flown 295,370 279,903 5.5 %
Average passenger fare $109.77 $104.07 5.5 %
Passenger revenue yield per RPM (cents) 13.64 13.04 4.6 %
Operating revenue yield per ASM (cents) 9.87 9.52 3.7 %
CASM, GAAP (cents) 9.37 8.79 6.6 %
CASM, GAAP excluding fuel (cents) 6.57 6.46 1.7 %
CASM, excluding special items (cents) 9.15 8.79 4.1 %
CASM, excluding fuel and special
items (cents) 6.57 6.46 1.7 %
Fuel costs per gallon, excluding fuel
tax (unhedged) $2.52 $1.89 33.3 %
Fuel costs per gallon, excluding fuel
tax (GAAP) $1.87 $1.55 20.6 %
Fuel costs per gallon, excluding fuel
tax (economic) $1.72 $1.56 10.3 %
Fuel consumed, in gallons (millions) 376 357 5.3 %
Fulltime equivalent Employees at
period-end 34,378 32,664 5.2 %
Size of fleet at period-end 520 481 8.1 %
Year ended
December 31,
2007 2006 Change
Revenue passengers carried 88,713,472 83,814,823 5.8 %
Enplaned passengers 101,910,809 96,276,907 5.9 %
Revenue passenger miles (RPMs) (000s) 72,318,812 67,691,289 6.8 %
Available seat miles (ASMs) (000s) 99,635,967 92,663,023 7.5 %
Load factor 72.6% 73.1% (0.5) pts.
Average length of passenger haul (miles) 815 808 0.9 %
Average aircraft stage length (miles) 629 622 1.1 %
Trips flown 1,160,699 1,092,331 6.3 %
Average passenger fare $106.60 $104.40 2.1 %
Passenger revenue yield per RPM (cents) 13.08 12.93 1.2 %
Operating revenue yield per ASM (cents) 9.90 9.81 0.9 %
CASM, GAAP (cents) 9.10 8.80 3.4 %
CASM, GAAP excluding fuel (cents) 6.56 6.49 1.1 %
CASM, excluding special items (cents) 9.04 8.75 3.3 %
CASM, excluding fuel and special
items (cents) 6.54 6.49 0.8 %
Fuel costs per gallon, excluding fuel
tax (unhedged) $2.16 $1.99 8.5 %
Fuel costs per gallon, excluding fuel
tax (GAAP) $1.70 $1.53 11.1 %
Fuel costs per gallon, excluding fuel
tax (economic) $1.67 $1.50 11.3 %
Fuel consumed, in gallons (millions) 1,489 1,389 7.2 %
Fulltime equivalent Employees at
period-end 34,378 32,664 5.2 %
Size of fleet at period-end 520 481 8.1 %
CASM (unit costs) - Operating expenses per ASM
SOUTHWEST AIRLINES CO.
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
(unaudited)
December 31, December 31,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $2,213 $1,390
Short-term investments 566 369
Accounts and other receivables 279 241
Inventories of parts and supplies, at cost 259 181
Fuel derivative contracts 1,069 369
Prepaid expenses and other current assets 57 51
Total current assets 4,443 2,601
Property and equipment, at cost:
Flight equipment 13,019 11,769
Ground property and equipment 1,515 1,356
Deposits on flight equipment
purchase contracts 626 734
15,160 13,859
Less allowance for depreciation and
amortization 4,286 3,765
10,874 10,094
Other assets 1,455 765
$16,772 $13,460
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $759 $643
Accrued liabilities 3,107 1,323
Air traffic liability 931 799
Current maturities of long-term debt 41 122
Total current liabilities 4,838 2,887
Long-term debt less current maturities 2,050 1,567
Deferred income taxes 2,535 2,104
Deferred gains from sale and leaseback
of aircraft 106 120
Other deferred liabilities 302 333
Stockholders' equity:
Common stock 808 808
Capital in excess of par value 1,207 1,142
Retained earnings 4,788 4,307
Accumulated other comprehensive income 1,241 582
Treasury stock, at cost (1,103) (390)
Total stockholders' equity 6,941 6,449
$16,772 $13,460
SOUTHWEST AIRLINES CO.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(unaudited)
Three months ended Year ended
December 31, December 31,
2007 2006 2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $111 $57 $645 $499
Adjustments to reconcile net income
to cash provided by operating
activities:
Depreciation and amortization 143 134 555 515
Deferred income taxes 57 39 328 277
Amortization of deferred gains
on sale and leaseback of aircraft (3) (4) (14) (16)
Share-based compensation expense 7 14 37 80
Excess tax benefits from share-based
compensation arrangements 2 (5) (28) (60)
Changes in certain assets and
liabilities:
Accounts and other receivables 47 24 (38) (5)
Other current assets (11) 40 (229) 87
Accounts payable and accrued
liabilities 924 (50) 1,609 (223)
Air traffic liability (164) (169) 131 150
Other, net (19) 63 (151) 102
Net cash provided by
(used in) operating
activities 1,094 143 2,845 1,406
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and
equipment, net (350) (353) (1,331) (1,399)
Purchases of short-term investments (1,479) (1,161) (5,086) (4,509)
Proceeds from sales of short-term
investments 1,419 1,147 4,888 4,392
Proceeds from ATA Airlines, Inc.
debtor in possession loan - - - 20
Other, net - - - 1
Net cash used in investing
activities (410) (367) (1,529) (1,495)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 500 300 500 300
Proceeds from Employee stock plans 11 35 139 260
Payments of long-term debt and capital
lease obligations (6) (470) (122) (607)
Payments of cash dividends - - (14) (14)
Repurchase of common stock - (200) (1,001) (800)
Excess tax benefits from share-based
compensation arrangements (2) 5 28 60
Other, net (24) (3) (23) -
Net cash provided by (used
in) financing activities 479 (333) (493) (801)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,163 (557) 823 (890)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 1,050 1,947 1,390 2,280
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $2,213 $1,390 $2,213 $1,390
SOUTHWEST AIRLINES CO.
REVISED 737-700 DELIVERY SCHEDULE
AS OF DECEMBER 31, 2007
The Boeing Company
Purchase Previously
Firm Options Rights Owned Total
2007 37 2 39
2008 29 29 *
2009 20 8 28 **
2010 10 24 34
2011 10 22 32
2012 10 30 40
2013 19 19
2014 10 10
Through 2014 54 54
Total 145 84 54 2 285
* Currently plan to reduce fleet by 22 aircraft, bringing 2008 net
additions to 7 aircraft. 2008 delivery dates: 12 in first quarter, 9 in
second quarter, 5 in third quarter and 3 in fourth quarter.
** Exercised one option in January 2008, bringing 2009 firm orders and
options to 21 and 7, respectively.
SOURCE Southwest Airlines
Released January 23, 2008