EXHIBIT 99.1 1ST QUARTER 2008 FINANCIAL RESULTS
Published on April 17, 2008
Exhibit 99.1
SOUTHWEST AIRLINES REPORTS FIRST QUARTER EARNINGS
CONTACT: Investor
Relations (214)
792-4415
SOUTHWEST AIRLINES REPORTS FIRST QUARTER EARNINGS
DALLAS,
TEXAS – April 17, 2008 – Southwest Airlines (NYSE:LUV) today reported its first
quarter 2008 results. Net income for first quarter 2008 was $34
million, or $.05 per diluted share, compared to $93 million, or $.12 per diluted
share, for first quarter 2007. Excluding
special items, first quarter 2008 net income was $43 million, or $.06 per
diluted share, compared to $33 million, or $.04 per diluted share, in first
quarter 2007. The first quarter 2008 results exceed First Call’s mean
estimate of $.01 per diluted share. Refer to the reconciliation
in the accompanying tables for further information regarding special
items.
First
Quarter 2008 Financial Highlights:
|
-
|
Record
first quarter revenues of $2.53 billion, up 15
percent
|
|
-
|
Net
income, excluding special items, of $43 million, up 30
percent
|
|
-
|
Net
income per diluted share, excluding special items, of $.06, up 50
percent
|
Gary C.
Kelly, CEO, stated: “Considering the weak economy and soaring jet fuel prices,
we are very pleased to report a 30 percent year-over-year increase in first
quarter 2008 earnings, excluding special items. Our earnings growth
resulted from record first quarter 2008 operating revenues of $2.53 billion,
which increased a strong 15.1 percent from a year ago, or 8.2 percent on an
available seat mile (ASM) basis. Benefiting from the Easter
shift to March this year (versus April last year), this was the best quarterly
performance since second quarter 2006. With our new revenue
initiatives well underway, our load factor of 69.8 percent was a record first
quarter performance, and our passenger yields per revenue passenger mile (RPM)
were up 4.7 percent compared to first quarter 2007.
“Taking
into account the Easter shift to March, traffic thus far in April has been
solid, and bookings for the remainder of second quarter 2008 appear
strong. Barring a further slowdown in the domestic economy, based on
current trends, which include encouraging results from our revenue initiatives
and the airline industry's domestic capacity outlook, we expect favorable
year-over-year unit revenue results again in second quarter 2008.
/more
“While we
are pleased with our revenue performance, we are concerned about soaring energy
costs. Our first quarter 2008 unit costs, excluding special items,
increased 7.3 percent due largely to the significant increase in our economic
jet fuel costs. Even with $302 million in favorable cash settlements
from derivative contracts, our first quarter 2008 economic jet fuel costs
increased 20.7 percent to $1.98 per gallon. We have derivative
contracts in place for approximately 70 percent of our second quarter 2008
estimated fuel consumption, capped at an average crude-equivalent price of
approximately $51 per barrel. Based on this derivative position and
yesterday’s market prices, we currently anticipate our second quarter 2008
economic jet fuel costs will be in the $2.35 per gallon range, significantly
higher than first quarter even with anticipated hedging gains significantly
higher than first quarter. For the full year 2008, we have derivative
contracts for over 70 percent of our estimated fuel consumption at an average
crude-equivalent price of approximately $51 per barrel.
“Our
first quarter 2008 unit costs, excluding fuel, increased 2.4 percent over last
year, which was better than we anticipated. Based on current
cost trends, we expect our second quarter 2008 unit costs, excluding fuel, to
increase from first quarter 2008’s 6.70 cents.
“Although
we are pleased with the progress of our revenue initiatives and optimistic that
we can continue to grow revenues, we cannot ignore the threat of volatile and
unprecedented jet fuel prices. We will continue to take steps to
restore our profit margins, including an ongoing rigorous review of our flight
schedule to eliminate nonproductive flying. Presently, we still plan
to accept 29 new Boeing 737-700s in 2008, but we are reviewing our previous plan
to retire 22 aircraft in light of this month’s dramatic industry
developments. We have flexibility to adjust our fleet plans and are
well-positioned to respond to a rapidly changing environment.
"For
2009, we have decided to reduce our fleet growth. Prior to today's
announcement, we had 28 737-700 aircraft (25 firm and three options) scheduled
for delivery from Boeing in 2009. Our revised plan is to grow our
fleet in 2009 by no more than 14 737-700 aircraft, which is half our previous
plan, assuming no retirements, and will bring our 2009 year-over-year ASM
capacity growth to two to three percent. As a result of this change,
14 aircraft deliveries (11 firm and three options) have been deferred to
2015. We have also moved 12 2010 deliveries into 2013-2015 (one
option in 2013, eight options in 2014, and three options in
2015). Further, we have exercised a total of 12 options with Boeing
for delivery in 2010-2012 (six firm in 2010, three firm in 2011, and three firm
in 2012), bringing our firm orders for 2008 through 2015 to 125. We
now have 67 options, with delivery positions available in 2010 through 2015, and
54 purchase rights for delivery through December 31, 2018 (see accompanying
Revised 737-700 Delivery Schedule)."
/more
Southwest
will discuss its first quarter 2008 results on a conference call at 11:30
a.m. Eastern Time today. A live broadcast of the conference call will
be available at southwest.com.
Operating
Results
Total
operating revenues for first quarter 2008 increased 15.1 percent to $2.53
billion, compared to $2.20 billion for first quarter 2007. Total
first quarter 2008 operating expenses were $2.44 billion, compared to $2.11
billion in first quarter 2007. Operating income for first quarter
2008 was $88 million compared to $84 million in first quarter
2007. Excluding special items, operating income was $99 million in
first quarter 2008 compared to $70 million last year.
“Other expenses” were $51 million for
first quarter 2008, compared to $65 million in “other income” for first quarter
2007. The $116 million swing resulted primarily from $23 million in
“other losses” recognized in 2008 versus $83 million in “other gains” recognized
in 2007. In both periods, these “other (gains) losses” principally
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 $14 million in
first quarter 2008 and first quarter 2007 is also included in "other (gains)
losses.” The $10 million year-over-year increase in net interest
expense for first quarter 2008 resulted from lower interest rates on cash, cash
equivalents, and investments and lower Boeing aircraft progress payments, which
generated reduced capitalized interest.
The first
quarter 2008 income tax rate was approximately 9 percent compared to
approximately 38 percent for first quarter 2007. The significant decrease in
first quarter 2008’s income tax rate was primarily due to a decrease in first
quarter deferred tax liability by approximately $12 million as a result of a
January 2008 reversal by the State of Illinois of an August 2007 increase under
a State of Illinois income tax law.
Net cash
provided by operations for first quarter 2008 was $964 million, which included a
$570 million increase in fuel derivative collateral deposits related to
future periods. Capital expenditures for the first quarter 2008 were
$364 million. 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, of which $54 million (4.4
million shares of common stock) was purchased during first quarter
2008. The Company has not repurchased any common stock since February
15, 2008 and currently does not believe it is prudent to repurchase shares
considering today’s unstable financial markets and soaring fuel
prices.
/more
The
Company ended first quarter 2008 with $3.1 billion in cash and short-term
investments, which included $2.6 billion in fuel derivative cash collateral
deposits. In addition, the Company 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, and Section 21E of the Securities Exchange Act of 1934,
as amended. Specific forward-looking statements include, without
limitation, statements relating to (i) the Company's expectations regarding
future results of operations; and (ii) 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
impact of governmental regulations and inquiries on the Company’s operating
costs, as well as its operations generally; and (iv) 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,
2007.
/more
|
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
||||||||||||
|
(in
millions, except per share amounts)
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Three
months ended
|
||||||||||||
|
March
31,
|
||||||||||||
|
Percent
|
||||||||||||
|
2008
|
2007
|
Change
|
||||||||||
|
OPERATING
REVENUES:
|
||||||||||||
|
Passenger
|
$ | 2,414 | $ | 2,112 | 14.3 | |||||||
|
Freight
|
34 | 30 | 13.3 | |||||||||
|
Other
|
82 | 56 | 46.4 | |||||||||
|
Total
operating revenues
|
2,530 | 2,198 | 15.1 | |||||||||
|
OPERATING
EXPENSES:
|
||||||||||||
|
Salaries,
wages, and benefits
|
800 | 767 | 4.3 | |||||||||
|
Fuel
and oil
|
753 | 564 | 33.5 | |||||||||
|
Maintenance
materials and repairs
|
143 | 136 | 5.1 | |||||||||
|
Aircraft
rentals
|
38 | 39 | (2.6 | ) | ||||||||
|
Landing
fees and other rentals
|
171 | 136 | 25.7 | |||||||||
|
Depreciation
and amortization
|
145 | 135 | 7.4 | |||||||||
|
Other
operating expenses
|
392 | 337 | 16.3 | |||||||||
|
Total
operating expenses
|
2,442 | 2,114 | 15.5 | |||||||||
|
OPERATING
INCOME
|
88 | 84 | 4.8 | |||||||||
|
OTHER
EXPENSES (INCOME):
|
||||||||||||
|
Interest
expense
|
28 | 29 | (3.4 | ) | ||||||||
|
Capitalized
interest
|
(8 | ) | (13 | ) | (38.5 | ) | ||||||
|
Interest
income
|
(7 | ) | (13 | ) | (46.2 | ) | ||||||
|
Other
(gains) losses, net
|
38 | (68 | ) |
n.a.
|
||||||||
|
Total
other expenses (income)
|
51 | (65 | ) |
n.a.
|
||||||||
|
INCOME
BEFORE INCOME TAXES
|
37 | 149 | (75.2 | ) | ||||||||
|
PROVISION
FOR INCOME TAXES
|
3 | 56 | (94.6 | ) | ||||||||
|
NET
INCOME
|
$ | 34 | $ | 93 | (63.4 | ) | ||||||
|
NET
INCOME PER SHARE:
|
||||||||||||
|
Basic
|
$.05 | $.12 | ||||||||||
|
Diluted
|
$.05 | $.12 | ||||||||||
|
WEIGHTED
AVERAGE SHARES OUTSTANDING:
|
||||||||||||
|
Basic
|
733 | 786 | ||||||||||
|
Diluted
|
734 | 800 | ||||||||||
/more
|
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
financial results provided in this news release "excluding special items"
are non-GAAP results that are provided as supplemental
information. These results
|
||||||||||||
|
should
not be relied upon as alternative measures to Generally Accepted
Accounting Principles (GAAP) and primarily reflect 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.
|
||||||||||||
|
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. The special items referred to in this news release also reflect
adjustments for other special items that management believes it should
take into
|
||||||||||||
|
consideration
to more accurately measure and monitor the Company's comparative
performance on a consistent basis; therefore, management wants to
provide
|
||||||||||||
|
the
transparency to Investors regarding its views as to a more accurate
reflection of the Company’s on-going operations.
|
||||||||||||
|
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. In part, 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
|
||||||||||||
|
March
31,
|
||||||||||||
|
Percent
|
||||||||||||
|
2008
|
2007
|
Change
|
||||||||||
|
Fuel
and oil expense - unhedged
|
$ | 1,044 | $ | 643 | ||||||||
|
Less:
Fuel hedge gains included in fuel and oil expense
|
(291 | ) | (79 | ) | ||||||||
|
Fuel
and oil expense - GAAP
|
$ | 753 | $ | 564 | 33.5 | |||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
(11 | ) | 14 | |||||||||
|
Fuel
and oil expense - economic
|
$ | 742 | $ | 578 | 28.4 | |||||||
|
Operating
income, as reported
|
$ | 88 | $ | 84 | ||||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
11 | (14 | ) | |||||||||
|
Operating
income, non-GAAP
|
$ | 99 | $ | 70 | 41.4 | |||||||
|
Other
(gains) losses, net, as reported
|
$ | 38 | $ | (68 | ) | |||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
(23 | ) | 83 | |||||||||
|
Other
(gains) losses, net, non-GAAP
|
$ | 15 | $ | 15 |
n.a.
|
|||||||
|
Net
income, as reported
|
$ | 34 | $ | 93 | ||||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
34 | (97 | ) | |||||||||
|
Income
tax impact of fuel contracts
|
(13 | ) | 37 | |||||||||
| $ | 55 | $ | 33 | |||||||||
|
(Deduct):
Change in Illinois state income tax law, net
|
(12 | ) | - | |||||||||
|
Net
income, non-GAAP
|
$ | 43 | $ | 33 | 30.3 | |||||||
|
Net
income per share, diluted, as reported
|
$ | .05 | $ | .12 | ||||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
.02 | (.08 | ) | |||||||||
| $ | .07 | $ | .04 | |||||||||
|
Add:
Impact of special items, net
|
(.01 | ) | - | |||||||||
|
Net
income per share, diluted, non-GAAP
|
$ | .06 | $ | .04 | 50.0 | |||||||
|
(1)
See Reconciliation of Impact from Fuel Contracts
|
||||||||||||
/more
|
SOUTHWEST
AIRLINES CO.
|
||||||||
|
RECONCILIATION
OF IMPACT FROM FUEL CONTRACTS (SEE PREVIOUS NOTE)
|
||||||||
|
(in
millions, except per share amounts)
|
||||||||
|
(unaudited)
|
||||||||
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
Fuel & Oil
Expense
|
||||||||
|
Add/(Deduct):
Impact from current period settled contracts
|
||||||||
|
included
in Other (gains) losses, net
|
$ | 16 | $ | (4 | ) | |||
|
Add/(Deduct):
Fuel contract impact recognized in earnings in
|
||||||||
|
prior
or future periods for contracts settling in the current
period
|
(27 | ) | 18 | |||||
|
Impact
from fuel contracts to Fuel & Oil Expense
|
$ | (11 | ) | $ | 14 | |||
|
Operating
Income
|
||||||||
|
Add/(Deduct):
Impact from current period settled contracts
|
||||||||
|
included
in Other (gains) losses, net
|
$ | (16 | ) | $ | 4 | |||
|
Add/(Deduct):
Fuel contract impact recognized in earnings in
|
||||||||
|
prior
or future periods for contracts settling in the current
period
|
27 | (18 | ) | |||||
|
Impact
from fuel contracts to Operating Income
|
$ | 11 | $ | (14 | ) | |||
|
Other (gains)
losses
|
||||||||
|
Add/(Deduct):
Mark-to-market impact from fuel contracts
|
||||||||
|
settling
in future periods
|
$ | (7 | ) | $ | 85 | |||
|
Add/(Deduct):
Ineffectiveness from fuel hedges settling in future
periods
|
- | (6 | ) | |||||
|
Add/(Deduct):
Impact from current period settled contracts
|
||||||||
|
included
in Other (gains) losses, net
|
(16 | ) | 4 | |||||
|
Impact
from fuel contracts to Other (gains) losses
|
$ | (23 | ) | $ | 83 | |||
|
Net
Income
|
||||||||
|
Add/(Deduct):
Mark-to-market impact from fuel contracts
|
||||||||
|
settling
in future periods
|
$ | 7 | $ | (85 | ) | |||
|
Add/(Deduct):
Ineffectiveness from fuel hedges settling in future
periods
|
- | 6 | ||||||
|
Add/(Deduct):
Fuel contract impact recognized in earnings in
|
||||||||
|
prior
or future periods for contracts settling in the current
period
|
27 | (18 | ) | |||||
|
Impact
from fuel contracts to Net Income *
|
$ | 34 | $ | (97 | ) | |||
|
*
Excludes income tax impact of unrealized items
|
||||||||
/more
|
SOUTHWEST
AIRLINES CO.
|
||||||||||||
|
COMPARATIVE
CONSOLIDATED OPERATING STATISTICS
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Three
months ended
|
||||||||||||
|
March
31,
|
||||||||||||
|
2008
|
2007
|
Change
|
||||||||||
|
Revenue
passengers carried
|
21,504,821 | 19,960,933 | 7.7 | % | ||||||||
|
Enplaned
passengers
|
24,708,615 | 22,903,073 | 7.9 | % | ||||||||
|
Revenue
passenger miles (RPMs) (000s)
|
17,592,159 | 16,109,071 | 9.2 | % | ||||||||
|
Available
seat miles (ASMs) (000s)
|
25,193,437 | 23,678,376 | 6.4 | % | ||||||||
|
Load
factor
|
69.8 | % | 68.0 | % |
1.8
|
pts. | ||||||
|
Average
length of passenger haul (miles)
|
818 | 807 | 1.4 | % | ||||||||
|
Average
aircraft stage length (miles)
|
627 | 627 | 0.0 | % | ||||||||
|
Trips
flown
|
294,790 | 276,900 | 6.5 | % | ||||||||
|
Average
passenger fare
|
$112.24 | $105.79 | 6.1 | % | ||||||||
|
Passenger
revenue yield per RPM (cents)
|
13.72 | 13.11 | 4.7 | % | ||||||||
|
Operating
revenue yield per ASM (cents)
|
10.04 | 9.28 | 8.2 | % | ||||||||
|
CASM,
GAAP (cents)
|
9.69 | 8.93 | 8.5 | % | ||||||||
|
CASM,
GAAP excluding fuel (cents)
|
6.70 | 6.54 | 2.4 | % | ||||||||
|
CASM,
excluding special items (cents)
|
9.65 | 8.99 | 7.3 | % | ||||||||
|
CASM,
excluding fuel and special items (cents)
|
6.70 | 6.54 | 2.4 | % | ||||||||
|
Fuel
costs per gallon, excluding fuel tax (unhedged)
|
$2.79 | $1.82 | 53.3 | % | ||||||||
|
Fuel
costs per gallon, excluding fuel tax (GAAP)
|
$2.01 | $1.60 | 25.6 | % | ||||||||
|
Fuel
costs per gallon, excluding fuel tax (economic)
|
$1.98 | $1.64 | 20.7 | % | ||||||||
|
Fuel
consumed, in gallons (millions)
|
373 | 352 | 6.0 | % | ||||||||
|
Fulltime
equivalent Employees at period-end
|
33,895 | 32,962 | 2.8 | % | ||||||||
|
Size
of fleet at period-end
|
527 | 489 | 7.8 | % | ||||||||
|
CASM
(unit costs) - Operating expenses per ASM
|
||||||||||||
/more
|
SOUTHWEST
AIRLINES CO.
|
||||||||
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
||||||||
|
(in
millions)
|
||||||||
|
(unaudited)
|
||||||||
|
March
31,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 2,982 | $ | 2,213 | ||||
|
Short-term
investments
|
140 | 566 | ||||||
|
Accounts
and other receivables
|
350 | 279 | ||||||
|
Inventories
of parts and supplies, at cost
|
265 | 259 | ||||||
|
Fuel
derivative contracts
|
1,248 | 1,069 | ||||||
|
Prepaid
expenses and other current assets
|
65 | 57 | ||||||
|
Total
current assets
|
5,050 | 4,443 | ||||||
|
Property
and equipment, at cost:
|
||||||||
|
Flight
equipment
|
13,408 | 13,019 | ||||||
|
Ground
property and equipment
|
1,555 | 1,515 | ||||||
|
Deposits
on flight equipment purchase contracts
|
541 | 626 | ||||||
| 15,504 | 15,160 | |||||||
|
Less
allowance for depreciation and amortization
|
4,413 | 4,286 | ||||||
| 11,091 | 10,874 | |||||||
|
Other
assets
|
1,890 | 1,455 | ||||||
| $ | 18,031 | $ | 16,772 | |||||
|
LIABILITIES
& STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 787 | $ | 759 | ||||
|
Accrued
liabilities
|
3,756 | 3,107 | ||||||
|
Air
traffic liability
|
1,198 | 931 | ||||||
|
Current
maturities of long-term debt
|
40 | 41 | ||||||
|
Total
current liabilities
|
5,781 | 4,838 | ||||||
|
Long-term
debt less current maturities
|
2,079 | 2,050 | ||||||
|
Deferred
income taxes
|
2,611 | 2,535 | ||||||
|
Deferred
gains from sale and leaseback of aircraft
|
103 | 106 | ||||||
|
Other
deferred liabilities
|
272 | 302 | ||||||
|
Stockholders'
equity:
|
||||||||
|
Common
stock
|
808 | 808 | ||||||
|
Capital
in excess of par value
|
1,212 | 1,207 | ||||||
|
Retained
earnings
|
4,811 | 4,788 | ||||||
|
Accumulated
other comprehensive income
|
1,492 | 1,241 | ||||||
|
Treasury
stock, at cost
|
(1,138 | ) | (1,103 | ) | ||||
|
Total
stockholders' equity
|
7,185 | 6,941 | ||||||
| $ | 18,031 | $ | 16,772 | |||||
/more
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
||||||||
|
(in
millions)
|
||||||||
|
(unaudited)
|
||||||||
|
Three
months ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2007
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net
income
|
$ | 34 | $ | 93 | ||||
|
Adjustments
to reconcile net income to
|
||||||||
|
cash
provided by operating activities:
|
||||||||
|
Depreciation
and amortization
|
145 | 135 | ||||||
|
Deferred
income taxes
|
(5 | ) | 42 | |||||
|
Amortization
of deferred gains on sale and
|
||||||||
|
leaseback
of aircraft
|
(3 | ) | (4 | ) | ||||
|
Share-based
compensation expense
|
5 | 13 | ||||||
|
Excess
tax benefits from share-based
|
||||||||
|
compensation
arrangements
|
- | (29 | ) | |||||
|
Changes
in certain assets and liabilities:
|
||||||||
|
Accounts
and other receivables
|
(70 | ) | (37 | ) | ||||
|
Other
current assets
|
26 | (56 | ) | |||||
|
Accounts
payable and accrued liabilities
|
616 | 383 | ||||||
|
Air
traffic liability
|
267 | 210 | ||||||
|
Other,
net
|
(51 | ) | (133 | ) | ||||
|
Net
cash provided by operating activities
|
964 | 617 | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Purchases
of property and equipment, net
|
(364 | ) | (325 | ) | ||||
|
Purchases
of short-term investments
|
(1,221 | ) | (914 | ) | ||||
|
Proceeds
from sales of short-term investments
|
1,459 | 968 | ||||||
|
Net
cash used in investing activities
|
(126 | ) | (271 | ) | ||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Proceeds
from Employee stock plans
|
11 | 78 | ||||||
|
Payments
of long-term debt and capital lease obligations
|
(19 | ) | (9 | ) | ||||
|
Payments
of cash dividends
|
(7 | ) | (7 | ) | ||||
|
Repurchase
of common stock
|
(54 | ) | (209 | ) | ||||
|
Excess
tax benefits from share-based
|
||||||||
|
compensation
arrangements
|
- | 29 | ||||||
|
Net
cash used in financing activities
|
(69 | ) | (118 | ) | ||||
|
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
769 | 228 | ||||||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
2,213 | 1,390 | ||||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 2,982 | $ | 1,618 | ||||
/more
|
SOUTHWEST
AIRLINES CO.
|
||||||||||||||||
|
REVISED
BOEING 737-700 DELIVERY SCHEDULE
|
||||||||||||||||
|
AS
OF APRIL 17, 2008
|
||||||||||||||||
|
Purchase
|
||||||||||||||||
|
Firm
|
Options
|
Rights
|
Total
|
|||||||||||||
|
2008
|
29 | 29 | * | |||||||||||||
|
2009
|
14 | 14 | ||||||||||||||
|
2010
|
16 | 6 | 22 | |||||||||||||
|
2011
|
13 | 19 | 32 | |||||||||||||
|
2012
|
13 | 27 | 40 | |||||||||||||
|
2013
|
19 | 1 | 20 | |||||||||||||
|
2014
|
10 | 8 | 18 | |||||||||||||
|
2015
|
11 | 6 | 17 | |||||||||||||
|
Through
2018
|
54 | 54 | ||||||||||||||
|
Total
|
125 | 67 | 54 | 246 | ||||||||||||
|
*
Currently plan to reduce fleet by 22 aircraft, bringing 2008 net additions
to seven.
|
||||||||||||||||
***