EXHIBIT 99.1 1ST QUARTER 2009 FINANCIAL RESULTS
Published on April 16, 2009
Exhibit 99.1
CONTACT: Investor
Relations (214)
792-4415
SOUTHWEST
AIRLINES REPORTS FIRST QUARTER RESULTS
DALLAS,
TEXAS – April 16, 2009 – Southwest Airlines (NYSE:LUV) today reported a first
quarter 2009 net loss of $91 million, or $.12 loss per diluted share, compared
to net income of $34 million, or $.05 per diluted share, for first quarter
2008. First quarter 2009 results included special charges
totaling $71 million (net), relating to non-cash, mark-to-market and other items
associated with a portion of the Company’s fuel hedge
portfolio. Refer to the reconciliation in the accompanying
tables for further information regarding special
items. Excluding special items, first quarter 2009 net loss was
$20 million, or $.03 loss per diluted share, compared to net income of $43
million, or $.06 per diluted share, in first quarter 2008. The first
quarter 2009 results, excluding special items, of $.03 loss per diluted share
compares to Thomson's First Call mean estimate of $.01 loss per diluted
share. Operating loss for first quarter 2009 was $50
million compared to operating income of $88 million in first quarter
2008. Excluding special items, operating income was $31 million in
first quarter 2009 compared to $99 million for the same period last
year.
First Quarter 2009 Financial
Highlights:
|
·
|
Operating
income, excluding special items, of $31
million
|
|
·
|
Net
loss, excluding special items, of $20
million
|
|
·
|
Net
loss per diluted share, excluding special items, of
$.03
|
|
·
|
Cash
flow from operations of $286
million
|
|
·
|
Raised
$173 million through aircraft financing
activities
|
|
·
|
Record
first quarter load factor
|
Gary C.
Kelly, CEO, stated: “Our first quarter 2009 financial results are disappointing,
but not surprising given the current economic environment. We
face the toughest revenue environment in our history. A rapid
weakening in passenger demand during first quarter, particularly among business
travelers, led to our first quarter net loss. Although competitively
strong and financially resilient, we are not immune to the challenges the
worldwide recession is having on air travel.
“Still, I
am very proud of the efforts of our People. Our operations and
Customer Service delivery continues to be outstanding. Our revenue
trends continue to outperform our U.S. competitors. These revenue results
demonstrate the strength of our Low Fare brand, the benefits of our aggressive
flight schedule optimization, and the effectiveness of our Marketing and Revenue
Management efforts.
“We have
acted to reduce our spending, but also maintain our intense focus on
previously announced initiatives to grow revenues. We plan to follow
through with the investment in and construction of these strategic revenue
initiatives that we believe are vital to our future. However, overall, we
have significantly reduced planned capital spending by approximately $1.4
billion for 2009 and 2010 combined by deferring aircraft deliveries,
accelerating aircraft retirements, and suspending plans to grow our
capacity. As announced to our Employees earlier this morning, we
intend to reduce and align headcount to current capacity needs by offering a
systemwide voluntary early-out program. Virtually all Employees
are eligible under the early-out program and must make their election to
participate by June 19, 2009. We also have a hiring freeze in
place and have frozen pay for our officers and senior management. While
our balance sheet is strong, we believe these actions, along with our previous
decision to suspend growth plans, and our ongoing efforts to bolster our cash
reserves, will enable us to weather the current financial storm and remain
strong.
“Our
recent promotions and discounting activities have been successful in stimulating
traffic. Our first quarter 2009 load factor of 69.9 percent was a
record first quarter performance, despite the impact of Easter shifting to April
this year versus March last year. We continue to enhance our strong brand,
Customer Experience, and traffic through our No Hidden Fees
campaign. However, yields were down 2.8 percent from a year ago, resulting
in a unit revenue decline of 2.9 percent. Although our April results
should benefit from the timing of the Easter holiday, we currently expect
another year-over-year decline in our second quarter 2009 operating unit
revenues, based on revenue and booking trends thus far.
“We
benefited from significantly lower year-over-year economic jet fuel costs in
first quarter 2009. Even with $65 million in unfavorable cash
settlements from derivative contracts, our first quarter 2009 economic jet fuel
costs decreased 16.2 percent to $1.76 per gallon. With oil
prices rising, we have begun to rebuild our 2009 and 2010 hedge positions, using
purchased call options, to provide protection against significant fuel price
spikes. These new positions present no additional exposure to cash
collateral requirements. Furthermore, we have modified our major fuel
hedge counterparty agreements to allow us to use collateral other than cash to
limit our cash collateral exposure to comfortable levels. Based on
our second quarter derivative position and market energy prices as of April 14,
2009, we currently anticipate our second quarter 2009 economic jet fuel costs,
including taxes, to be in line with first quarter 2009 (or the $1.75 per
gallon range).”
The
Company has derivative contracts in place for approximately 50 percent of its
second quarter 2009 estimated fuel consumption, capped at a weighted average
crude-equivalent price of approximately $66 per barrel; approximately 40 percent
for the remainder of 2009 capped at a weighted average crude-equivalent price of
approximately $71 per barrel; and approximately 30 percent in 2010 capped at a
weighted average crude-equivalent price of approximately $77 per
barrel. The Company has modest fuel hedge positions in 2011 through
2013. The current market value (as of April 14, 2009) of its net fuel
derivative contracts for 2009 through 2013 reflects a net liability of
approximately $950 million.
/more
Gary Kelly stated, “Our plans to reduce staffing via our voluntary early-out
program will help mitigate cost pressures next year. Our first
quarter 2009 unit costs, excluding fuel, increased 8.4 percent over last year,
which was in line with our expectations. We were very pleased to have
reached tentative agreements with our Flight Attendants and Pilots during the
quarter. In addition, our Ramp, Operations, Provisioning, and Freight
Agents and our Mechanics voted to ratify their tentative
agreements. These Employees demonstrated their commitment to maintain
Southwest's competitive position while enabling the Company to sustain its
financial strength in an increasingly tough economy. Based on these
agreements and current cost trends, we expect our second quarter 2009 unit
costs, excluding fuel, to be in line with first quarter 2009.
“Presently,
we still plan to accept 13 new Boeing 737-700s in 2009, and retire 15 aircraft
by the end of the year. Through continued focus on maximizing the
efficiency and profitability of each published flight schedule, we have the
ability to grow in exciting new and developing markets, such as Denver,
Minneapolis-St. Paul, New York LaGuardia, and Boston Logan, while reducing our
available seat miles, currently estimated to decline in the five percent range
versus 2008.”
The
Company previously announced its service from New York LaGuardia airport to
begin with five flights to Chicago Midway and three flights
to Baltimore/Washington on June 28, 2009; and its Boston Logan service to
begin on August 16, 2009 with five flights to both Chicago Midway
and Baltimore/Washington.
For the thirteenth year in a row,
Fortune magazine recognized Southwest Airlines in its annual survey of corporate
reputations. Among all industries, Southwest Airlines was named the
seventh most admired Company in the World, making it the only U.S. airline to
make the list of the World's Top 50 Most Admired
Companies. Institutional Investor magazine once again named Southwest
Airlines as America’s Most Shareholder-Friendly Airline in its survey of
investors and analysts. Finally, Southwest Airlines Cargo was
recently named “Airline of the Year” by the Express Delivery & Logistics
Association, for the fifth consecutive year in a row, honoring its excellence in
air cargo delivery service.
Southwest
will discuss its first quarter 2009 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 2009 decreased 6.8 percent to
$2.4 billion, compared to $2.5 billion for first quarter
2008. Total first quarter 2009 operating expenses were $2.4 billion,
in line with first quarter 2008.
“Other expenses” were $57 million for
first quarter 2009, compared to $51 million for first quarter
2008. In both periods, “other losses” included unrealized
gains/losses associated with our fuel hedging program. The cost of
the hedging program (which includes the premium costs of derivative contracts)
of $32 million in first quarter 2009 and $14 million in first quarter 2008 is
also included in "other (gains) losses.” First quarter 2009 interest
expense increased 57.1 percent over first quarter 2008 due to financing
transactions the Company completed in second and fourth quarter
2008. Interest income decreased versus first quarter 2008 due to
lower market interest rates and lower rates earned from more conservative
investments. Lower interest rates coupled with lower Boeing aircraft
progress payments also generated less capitalized interest in first quarter
2009 compared to the same period last year.
The
first quarter 2009 tax rate was impacted by the Company’s current projections
for financial results for the year and the related impact that permanent tax
differences have on these projections. The first quarter 2008 income tax rate of
approximately 9 percent was primarily the result of a decrease in deferred tax
liabilities of approximately $12 million as a result of a January 2008 reversal
of an August 2007 tax increase under a State of Illinois income tax
law.
Net cash
provided by operations for first quarter 2009 was $286 million, which was
net of a $60 million increase in cash posted as collateral to a fuel hedge
counterparty since December 31, 2008. First quarter 2009 capital
expenditures were $85 million. The Company’s planned
capital expenditures are still estimated to be in the $750 million range for
2009 and in the $800 to $900 million range for 2010.
In its
continued effort to structure counterparty agreements to minimize liquidity
exposure, the Company replaced an existing fuel hedging agreement
with a major fuel hedge counterparty, effective April 8,
2009. Previously, Southwest became obligated to post cash or letters
of credit as security to this counterparty upon a noninvestment grade credit
rating. Under the new agreement, the Company posts cash as collateral
for obligations in amounts of up to $125 million. For amounts between
$125 million and $625 million, the Company’s obligation is satisfied by its
pledge of 29 Boeing 737-700 aircraft (or cash or letters of credit in lieu of
the pledged aircraft). For amounts above $625 million, the Company
may post cash and/or letters of credit. This agreement is in
addition to the previously announced amendment to another major counterparty
agreement that became effective January 1, 2009. As of April 14,
2009, the Company had posted a total of $425 million in cash collateral and
approximately $350 million in aircraft collateral to its fuel hedge
counterparties.
During
the first quarter 2009, the Company closed on the second five aircraft tranche
of the sale and leaseback transaction entered into at the end of 2008 for ten of
the Company’s Boeing 737-700 aircraft. Including the $173 million in
proceeds from this transaction and net of the $300 million the
Company posted in cash collateral with a counterparty at March
31, 2009, the Company ended the quarter with $2.1 billion in unrestricted cash
and short-term investments. The Company had posted $240 million in
cash collateral with a counterparty at December 31, 2008. In
addition, the Company has $200 million of borrowing availability remaining on
its $600 million unsecured revolving credit line.
Following
first quarter 2009, the Company executed and closed the first tranche of
what is expected to be a two tranche sale and leaseback transaction for six of
the Company's Boeing 737-700 aircraft. The first three aircraft tranche
closed on April 2, 2009 for approximately $105 million and the second tranche is
expected to be executed and closed in second quarter 2009 with similar
terms and proceeds.
/more
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 strategic
initiatives and related expectations, (ii) its growth plans and expectations,
and (iii) its expectations regarding future results of operations. 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) continued unfavorable
economic conditions, which could continue to impact the demand for air travel
and the Company’s ability to adjust fares; (ii) the price and availability of
aircraft fuel and any changes to the Company’s fuel hedging strategies and
positions; (iii) the Company's ability to timely and effectively prioritize its
revenue and cost reduction initiatives and its related ability to timely
implement, transition, and maintain the necessary information technology systems
and infrastructure to support these initiatives; (iv) competitor capacity and
load factors; and (v) 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, 2008.
/more
|
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
||||||||||||
|
(in
millions, except per share amounts)
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Three
months ended
|
||||||||||||
|
March
31,
|
||||||||||||
|
Percent
|
||||||||||||
|
2009
|
2008
|
Change
|
||||||||||
|
OPERATING
REVENUES:
|
||||||||||||
|
Passenger
|
$ | 2,252 | $ | 2,414 | (6.7 | ) | ||||||
|
Freight
|
30 | 34 | (11.8 | ) | ||||||||
|
Other
|
75 | 82 | (8.5 | ) | ||||||||
|
Total
operating revenues
|
2,357 | 2,530 | (6.8 | ) | ||||||||
|
OPERATING
EXPENSES:
|
||||||||||||
|
Salaries,
wages, and benefits
|
836 | 800 | 4.5 | |||||||||
|
Fuel
and oil
|
698 | 800 | (12.8 | ) | ||||||||
|
Maintenance
materials and repairs
|
184 | 143 | 28.7 | |||||||||
|
Aircraft
rentals
|
45 | 38 | 18.4 | |||||||||
|
Landing
fees and other rentals
|
166 | 171 | (2.9 | ) | ||||||||
|
Depreciation
and amortization
|
150 | 145 | 3.4 | |||||||||
|
Other
operating expenses
|
328 | 345 | (4.9 | ) | ||||||||
|
Total
operating expenses
|
2,407 | 2,442 | (1.4 | ) | ||||||||
|
OPERATING
INCOME (LOSS)
|
(50 | ) | 88 | (156.8 | ) | |||||||
|
OTHER
EXPENSES (INCOME):
|
||||||||||||
|
Interest
expense
|
44 | 28 | 57.1 | |||||||||
|
Capitalized
interest
|
(6 | ) | (8 | ) | (25.0 | ) | ||||||
|
Interest
income
|
(4 | ) | (7 | ) | (42.9 | ) | ||||||
|
Other
(gains) losses, net
|
23 | 38 | (39.5 | ) | ||||||||
|
Total
other expenses
|
57 | 51 | 11.8 | |||||||||
|
INCOME
(LOSS) BEFORE INCOME TAXES
|
(107 | ) | 37 |
n.a.
|
||||||||
|
PROVISION
(BENEFIT) FOR INCOME TAXES
|
(16 | ) | 3 |
n.a.
|
||||||||
|
NET
INCOME (LOSS)
|
$ | (91 | ) | $ | 34 |
n.a.
|
||||||
|
NET
INCOME (LOSS) PER SHARE:
|
||||||||||||
|
Basic
|
($.12 | ) | $.05 | |||||||||
|
Diluted
|
($.12 | ) | $.05 | |||||||||
|
WEIGHTED
AVERAGE SHARES OUTSTANDING:
|
||||||||||||
|
Basic
|
740 | 733 | ||||||||||
|
Diluted
|
740 | 734 | ||||||||||
/more
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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 contains differences for specific items recorded as a result of SFAS
133, "Accounting for Derivative Instruments and Hedging Activities," as
amended.
|
||||||||||||
|
Items
calculated on an "economic" basis include only cash settlement gains or
losses for derivative instruments that settled in the current accounting
period,
|
||||||||||||
|
and
excludes certain gains or losses associated with derivatives that settled
in a prior period or will settle in a future period. 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, which reflects the cash settlements from derivative contracts
for the applicable period.
|
||||||||||||
|
Three
Months Ended
|
||||||||||||
|
March
31,
|
||||||||||||
|
Percent
|
||||||||||||
|
2009
|
2008
|
Change
|
||||||||||
|
Fuel
and oil expense - unhedged
|
$ | 552 | $ | 1,091 | ||||||||
|
Less:
Fuel hedge (gains) losses included in fuel and oil expense
|
146 | (291 | ) | |||||||||
|
Fuel
and oil expense - GAAP
|
$ | 698 | $ | 800 | (12.8 | ) | ||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
(81 | ) | (11 | ) | ||||||||
|
Fuel
and oil expense - economic
|
$ | 617 | $ | 789 | (21.8 | ) | ||||||
|
Operating
income (loss), as reported
|
$ | (50 | ) | $ | 88 | |||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
81 | 11 | ||||||||||
|
Operating
income, non-GAAP
|
$ | 31 | $ | 99 | (68.7 | ) | ||||||
|
Other
(gains) losses, net, as reported
|
$ | 23 | $ | 38 | ||||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
10 | (23 | ) | |||||||||
|
Other
(gains) losses, net, non-GAAP
|
$ | 33 | $ | 15 | 120.0 | |||||||
|
Net
income (loss), as reported
|
$ | (91 | ) | $ | 34 | |||||||
|
Add/(Deduct):
Net impact from fuel contracts (1)
|
71 | 34 | ||||||||||
|
Income
tax impact of fuel contracts
|
- | (13 | ) | |||||||||
| $ | (20 | ) | $ | 55 | ||||||||
|
Add
(Deduct): Change in Illinois state income tax law, net
|
- | (12 | ) | |||||||||
|
Net
income (loss), non-GAAP
|
$ | (20 | ) | $ | 43 | (146.5 | ) | |||||
|
Net
income (loss) per share, diluted, as reported
|
$ | (.12 | ) | $ | .05 | |||||||
|
Add/(Deduct):
Net impact from fuel contracts
|
.09 | .02 | ||||||||||
| $ | (.03 | ) | $ | .07 | ||||||||
|
Add:
Impact of special items, net
|
- | (.01 | ) | |||||||||
|
Net
income (loss) per share, diluted, non-GAAP
|
$ | (.03 | ) | $ | .06 | (150.0 | ) | |||||
|
(1)
See Reconciliation of Impact from Fuel Contracts
|
||||||||||||
/more
|
SOUTHWEST
AIRLINES CO.
|
||||||||
|
RECONCILIATION
OF IMPACT FROM FUEL CONTRACTS (SEE PREVIOUS NOTE)
|
||||||||
|
(in
millions)
|
||||||||
|
(unaudited)
|
||||||||
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Fuel & Oil Expense
|
||||||||
|
Add/(Deduct):
Impact from current period settled contracts
|
||||||||
|
included
in Other (gains) losses, net
|
$ | (15 | ) | $ | 16 | |||
|
Add/(Deduct):
Other impact of fuel contracts settling in the
|
||||||||
|
current
or a prior period
|
(66 | ) | (27 | ) | ||||
|
Impact
from fuel contracts to Fuel & Oil Expense
|
$ | (81 | ) | $ | (11 | ) | ||
|
Operating Income
|
||||||||
|
Add/(Deduct):
Impact from current period settled contracts
|
||||||||
|
included
in Other (gains) losses, net
|
$ | 15 | $ | (16 | ) | |||
|
Add/(Deduct):
Other impact of fuel contracts settling in the
|
||||||||
|
current
or a prior period
|
66 | 27 | ||||||
|
Impact
from fuel contracts to Operating Income
|
$ | 81 | $ | 11 | ||||
|
Other (gains) losses
|
||||||||
|
Add/(Deduct):
Mark-to-market impact from fuel contracts
|
||||||||
|
settling
in future periods
|
$ | 10 | $ | (7 | ) | |||
|
Add/(Deduct):
Ineffectiveness from fuel hedges settling in future
periods
|
(15 | ) | - | |||||
|
Add/(Deduct):
Impact from current period settled contracts
|
||||||||
|
included
in Other (gains) losses, net
|
15 | (16 | ) | |||||
|
Impact
from fuel contracts to Other (gains) losses
|
$ | 10 | $ | (23 | ) | |||
|
Net Income
|
||||||||
|
Add/(Deduct):
Mark-to-market impact from fuel contracts
|
||||||||
|
settling
in future periods
|
$ | (10 | ) | $ | 7 | |||
|
Add/(Deduct):
Ineffectiveness from fuel hedges settling in future
periods
|
15 | - | ||||||
|
Add/(Deduct):
Other impact of fuel contracts settling in the
|
||||||||
|
current
or a prior period
|
66 | 27 | ||||||
|
Impact
from fuel contracts to Net Income (loss) *
|
$ | 71 | $ | 34 | ||||
|
*
Excludes income tax impact of unrealized items
|
||||||||
/more
|
SOUTHWEST
AIRLINES CO.
|
||||||||||||
|
COMPARATIVE
CONSOLIDATED OPERATING STATISTICS
|
||||||||||||
|
(unaudited)
|
||||||||||||
|
Three
months ended
|
||||||||||||
|
March
31,
|
||||||||||||
|
2009
|
2008
|
Change
|
||||||||||
|
Revenue
passengers carried
|
19,759,690 | 21,504,821 | (8.1 | )% | ||||||||
|
Enplaned
passengers
|
23,049,990 | 24,708,615 | (6.7 | )% | ||||||||
|
Revenue
passenger miles (RPMs) (000s)
|
16,891,629 | 17,592,159 | (4.0 | )% | ||||||||
|
Available
seat miles (ASMs) (000s)
|
24,171,675 | 25,193,437 | (4.1 | )% | ||||||||
|
Load
factor
|
69.9 | % | 69.8 | % |
0.1
|
pts. | ||||||
|
Average
length of passenger haul (miles)
|
855 | 818 | 4.5 | % | ||||||||
|
Average
aircraft stage length (miles)
|
635 | 627 | 1.3 | % | ||||||||
|
Trips
flown
|
279,135 | 294,790 | (5.3 | )% | ||||||||
|
Average
passenger fare
|
$113.97 | $112.24 | 1.5 | % | ||||||||
|
Passenger
revenue yield per RPM (cents)
|
13.33 | 13.72 | (2.8 | )% | ||||||||
|
Operating
revenue yield per ASM (cents)
|
9.75 | 10.04 | (2.9 | )% | ||||||||
|
CASM,
GAAP (cents)
|
9.96 | 9.69 | 2.8 | % | ||||||||
|
CASM,
GAAP excluding fuel (cents)
|
7.07 | 6.52 | 8.4 | % | ||||||||
|
CASM,
excluding special items (cents)
|
9.62 | 9.65 | (0.3 | )% | ||||||||
|
CASM,
excluding fuel and special items (cents)
|
7.07 | 6.52 | 8.4 | % | ||||||||
|
Fuel
costs per gallon, including fuel tax (unhedged)
|
$1.57 | $2.91 | (46.0 | )% | ||||||||
|
Fuel
costs per gallon, including fuel tax (GAAP)
|
$1.99 | $2.13 | (6.6 | )% | ||||||||
|
Fuel
costs per gallon, including fuel tax (economic)
|
$1.76 | $2.10 | (16.2 | )% | ||||||||
|
Fuel
consumed, in gallons (millions)
|
349 | 373 | (6.4 | )% | ||||||||
|
Fulltime
equivalent Employees at period-end *
|
35,512 | 34,793 | 2.1 | % | ||||||||
|
Size
of fleet at period-end
|
539 | 527 | 2.3 | % | ||||||||
|
CASM
(unit costs) - Operating expenses per ASM
|
||||||||||||
|
RASM
(unit revenue) - Operating revenue yield per ASM
|
||||||||||||
|
*
Headcount is defined as "Active" fulltime equivalent Employees for both
periods presented.
|
||||||||||||
/more
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
|||||||||
|
(in
millions)
|
|||||||||
|
(unaudited)
|
|||||||||
|
March
31,
|
December
31,
|
||||||||
|
2009
|
2008
|
||||||||
|
ASSETS
|
|||||||||
|
Current
assets:
|
|||||||||
|
Cash
and cash equivalents
|
$ | 1,145 | $ | 1,368 | |||||
|
Short-term
investments
|
989 | 435 | |||||||
|
Accounts
and other receivables
|
231 | 209 | |||||||
|
Inventories
of parts and supplies, at cost
|
171 | 203 | |||||||
|
Deferred
Income Taxes
|
365 | 365 | |||||||
|
Prepaid
expenses and other current assets
|
95 | 73 | * | ||||||
|
Total
current assets
|
2,996 | 2,653 | |||||||
|
Property
and equipment, at cost:
|
|||||||||
|
Flight
equipment
|
13,650 | 13,722 | |||||||
|
Ground
property and equipment
|
1,798 | 1,769 | |||||||
|
Deposits
on flight equipment purchase contracts
|
333 | 380 | |||||||
| 15,781 | 15,871 | ||||||||
|
Less
allowance for depreciation and amortization
|
4,968 | 4,831 | |||||||
| 10,813 | 11,040 | ||||||||
|
Other
assets
|
370 | 375 | |||||||
| $ | 14,179 | $ | 14,068 | ||||||
|
LIABILITIES
& STOCKHOLDERS' EQUITY
|
|||||||||
|
Current
liabilities:
|
|||||||||
|
Accounts
payable
|
$ | 693 | $ | 668 | |||||
|
Accrued
liabilities
|
1,016 | 1,012 | |||||||
|
Air
traffic liability
|
1,251 | 963 | |||||||
|
Current
maturities of long-term debt
|
163 | 163 | |||||||
|
Total
current liabilities
|
3,123 | 2,806 | |||||||
|
Long-term
debt less current maturities
|
3,447 | 3,498 | |||||||
|
Deferred
income taxes
|
1,895 | 1,904 | |||||||
|
Deferred
gains from sale and leaseback of aircraft
|
111 | 105 | |||||||
|
Other
deferred liabilities
|
675 | 802 | * | ||||||
|
Stockholders'
equity:
|
|||||||||
|
Common
stock
|
808 | 808 | |||||||
|
Capital
in excess of par value
|
1,219 | 1,215 | |||||||
|
Retained
earnings
|
4,819 | 4,919 | |||||||
|
Accumulated
other comprehensive loss
|
(922 | ) | (984 | ) | |||||
|
Treasury
stock, at cost
|
(996 | ) | (1,005 | ) | |||||
|
Total
stockholders' equity
|
4,928 | 4,953 | |||||||
| $ | 14,179 | $ | 14,068 | ||||||
|
*
|
$240
million in fuel hedge cash collateral deposits provided to a counterparty
at December 31, 2008
|
||||||||
|
have
been reclassified from Prepaid expenses and other current assets to reduce
Other deferred
|
|||||||||
|
liabilities
to conform to the current period presentation.
|
|||||||||
/more
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
||||||||
|
(in
millions)
|
||||||||
|
(unaudited)
|
||||||||
|
Three
months ended
|
||||||||
|
March
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net
income (loss)
|
$ | (91 | ) | $ | 34 | |||
|
Adjustments
to reconcile net income (loss) to
|
||||||||
|
cash
provided by operating activities:
|
||||||||
|
Depreciation
and amortization
|
150 | 145 | ||||||
|
Deferred
income taxes
|
(16 | ) | (5 | ) | ||||
|
Amortization
of deferred gains on sale and
|
||||||||
|
leaseback
of aircraft
|
(3 | ) | (3 | ) | ||||
|
Share-based
compensation expense
|
3 | 5 | ||||||
|
Excess
tax benefits from share-based
|
||||||||
|
compensation
arrangements
|
3 | - | ||||||
|
Changes
in certain assets and liabilities:
|
||||||||
|
Accounts
and other receivables
|
(22 | ) | (70 | ) | ||||
|
Other
current assets
|
(46 | ) | 220 | |||||
|
Accounts
payable and accrued liabilities
|
47 | 46 | ||||||
|
Air
traffic liability
|
288 | 267 | ||||||
|
Other,
net
|
(27 | ) | 325 | |||||
|
Net
cash provided by operating activities
|
286 | 964 | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Purchases
of property and equipment, net
|
(85 | ) | (364 | ) | ||||
|
Purchases
of short-term investments
|
(1,697 | ) | (1,221 | ) | ||||
|
Proceeds
from sales of short-term investments
|
1,144 | 1,459 | ||||||
|
Net
cash used in investing activities
|
(638 | ) | (126 | ) | ||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Proceeds
from leaseback transactions
|
173 | - | ||||||
|
Proceeds
from Employee stock plans
|
4 | 11 | ||||||
|
Payments
of long-term debt and capital lease obligations
|
(35 | ) | (19 | ) | ||||
|
Payments
of cash dividends
|
(7 | ) | (7 | ) | ||||
|
Repurchase
of common stock
|
- | (54 | ) | |||||
|
Excess
tax benefits from share-based
|
||||||||
|
compensation
arrangements
|
(3 | ) | - | |||||
|
Other,
net
|
(3 | ) | - | |||||
|
Net
cash provided by (used in) financing activities
|
129 | (69 | ) | |||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(223 | ) | 769 | |||||
|
CASH
AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,368 | 2,213 | ||||||
|
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 1,145 | $ | 2,982 | ||||
/more
|
BOEING
737-700 DELIVERY SCHEDULE
|
||||||||
|
AS
OF APRIL 16, 2009
|
||||||||
|
Purchase
|
||||||||
|
Firm
|
Options
|
Rights
|
Total
|
|||||
|
2009
|
13
|
13
|
*
|
|||||
|
2010
|
10
|
10
|
||||||
|
2011
|
10
|
10
|
20
|
|||||
|
2012
|
13
|
10
|
23
|
|||||
|
2013
|
19
|
4
|
23
|
|||||
|
2014
|
13
|
7
|
20
|
|||||
|
2015
|
14
|
3
|
17
|
|||||
|
2016
|
12
|
11
|
23
|
|||||
|
2017
|
|
17
|
17
|
|||||
|
Through
2018
|
54
|
54
|
||||||
|
Total
|
104
|
62
|
54
|
220
|
||||
|
*
Currently plan to reduce fleet by 15 aircraft, bringing 2009 net
reductions
|
||||||||
|
to
two aircraft.
|
||||||||
***