þ
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
TEXAS
|
74-1563240
|
(State
or other jurisdiction of
|
(IRS
Employer
|
incorporation
or organization)
|
Identification
No.)
|
P.O.
Box 36611, Dallas, Texas
|
75235-1611
|
(Address
of principal executive offices)
|
(Zip
Code)
|
June
30, 2006
|
December
31, 2005
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash
and cash equivalents
|
$
|
2,592
|
$
|
2,280
|
|||
Short-term
investments
|
396
|
251
|
|||||
Accounts
and other receivables
|
269
|
258
|
|||||
Inventories
of parts and supplies, at cost
|
189
|
150
|
|||||
Fuel
hedge contracts
|
853
|
641
|
|||||
Prepaid
expenses and other current assets
|
59
|
40
|
|||||
Total
current assets
|
4,358
|
3,620
|
|||||
Property
and equipment, at cost:
|
|||||||
Flight
equipment
|
11,145
|
10,592
|
|||||
Ground
property and equipment
|
1,292
|
1,256
|
|||||
Deposits
on flight equipment purchase contracts
|
704
|
660
|
|||||
13,141
|
12,508
|
||||||
Less
allowance for depreciation and amortization
|
3,517
|
3,296
|
|||||
9,624
|
9,212
|
||||||
Other
assets
|
1,362
|
1,171
|
|||||
$
|
15,344
|
$
|
14,003
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
609
|
$
|
524
|
|||
Accrued
liabilities
|
2,635
|
2,074
|
|||||
Air
traffic liability
|
958
|
649
|
|||||
Current
maturities of long-term debt
|
483
|
601
|
|||||
Total
current liabilities
|
4,685
|
3,848
|
|||||
Long-term
debt less current maturities
|
1,350
|
1,394
|
|||||
Deferred
income taxes
|
1,942
|
1,681
|
|||||
Deferred
gains from sale and leaseback of aircraft
|
128
|
136
|
|||||
Other
deferred liabilities
|
286
|
269
|
|||||
Stockholders'
equity:
|
|||||||
Common
stock
|
808
|
802
|
|||||
Capital
in excess of par value
|
1,047
|
963
|
|||||
Retained
earnings
|
4,325
|
4,018
|
|||||
Accumulated
other comprehensive income
|
1,104
|
892
|
|||||
Treasury
stock, at cost
|
(331
|
)
|
-
|
||||
Total
stockholders' equity
|
6,953
|
6,675
|
|||||
$
|
15,344
|
$
|
14,003
|
||||
See
accompanying notes.
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
OPERATING
REVENUES:
|
|||||||||||||
Passenger
|
$
|
2,362
|
$
|
1,868
|
$
|
4,300
|
$
|
3,461
|
|||||
Freight
|
38
|
33
|
74
|
67
|
|||||||||
Other
|
49
|
43
|
95
|
80
|
|||||||||
Total
operating revenues
|
2,449
|
1,944
|
4,469
|
3,608
|
|||||||||
OPERATING
EXPENSES:
|
|||||||||||||
Salaries,
wages, and benefits
|
786
|
684
|
1,502
|
1,345
|
|||||||||
Fuel
and oil
|
518
|
330
|
1,019
|
609
|
|||||||||
Maintenance
materials and repairs
|
119
|
111
|
224
|
217
|
|||||||||
Aircraft
rentals
|
39
|
42
|
80
|
86
|
|||||||||
Landing
fees and other rentals
|
126
|
114
|
246
|
227
|
|||||||||
Depreciation
and amortization
|
127
|
116
|
250
|
227
|
|||||||||
Other
operating expenses
|
332
|
291
|
648
|
560
|
|||||||||
Total
operating expenses
|
2,047
|
1,688
|
3,969
|
3,271
|
|||||||||
OPERATING
INCOME
|
402
|
256
|
500
|
337
|
|||||||||
OTHER
EXPENSES (INCOME):
|
|||||||||||||
Interest
expense
|
34
|
29
|
68
|
57
|
|||||||||
Capitalized
interest
|
(14
|
)
|
(9
|
)
|
(26
|
)
|
(19
|
)
|
|||||
Interest
income
|
(21
|
)
|
(10
|
)
|
(39
|
)
|
(17
|
)
|
|||||
Other
(gains) losses, net
|
(112
|
)
|
11
|
(114
|
)
|
(8
|
)
|
||||||
Total
other expenses (income)
|
(113
|
)
|
21
|
(111
|
)
|
13
|
|||||||
INCOME
BEFORE INCOME TAXES
|
515
|
235
|
611
|
324
|
|||||||||
PROVISION
FOR INCOME TAXES
|
182
|
91
|
217
|
120
|
|||||||||
NET
INCOME
|
$
|
333
|
$
|
144
|
$
|
394
|
$
|
204
|
|||||
NET
INCOME PER SHARE, BASIC
|
$
|
.42
|
$
|
.18
|
$
|
.49
|
$
|
.26
|
|||||
NET
INCOME PER SHARE, DILUTED
|
$
|
.40
|
$
|
.18
|
$
|
.47
|
$
|
.25
|
|||||
WEIGHTED
AVERAGE SHARES
|
|||||||||||||
OUTSTANDING:
|
|||||||||||||
Basic
|
798
|
786
|
800
|
785
|
|||||||||
Diluted
|
825
|
802
|
831
|
802
|
|||||||||
See
accompanying notes.
|
Six
months ended June 30, 2006
|
Year
ended December 31, 2005
|
||||||
Expected
stock volatility
|
25.9
|
%
|
26.2
|
%
|
|||
Expected
life of option (years)
|
5.1
|
4.7
|
|||||
Wtd-average
risk-free interest rate
|
4.6
|
%
|
4.1
|
%
|
|||
Expected
dividend yield
|
0.07
|
%
|
0.09
|
%
|
COLLECTIVE
BARGAINING PLANS
|
||||||||||||||||
|
Options
(000)
|
Wtd.
average exercise price
|
|
Wtd.
average remaining contractual term
|
Aggregate
intrinsic value (millions)
|
|||||||||||
Outstanding
December 31, 2005
|
105,244
|
$
|
11.66
|
|||||||||||||
Granted
|
625
|
16.65
|
||||||||||||||
Exercised
|
(12,402
|
)
|
7.86
|
|||||||||||||
Surrendered
|
(781
|
)
|
14.15
|
|||||||||||||
Outstanding
June 30, 2006
|
92,686
|
$
|
12.18
|
4.3
|
$
|
393
|
||||||||||
Vested
or expected to vest at June 30, 2006
|
85,845
|
$
|
12.02
|
4.3
|
$
|
386
|
||||||||||
Exercisable
at June 30, 2006
|
72,012
|
$
|
11.50
|
3.8
|
$
|
354
|
OTHER
EMPLOYEE PLANS
|
||||||||||||||||
|
Options
(000)
|
Wtd.
average exercise price
|
|
Wtd.
average remaining contractual term
|
Aggregate
intrinsic value (millions)
|
|||||||||||
Outstanding
December 31, 2005
|
35,820
|
$
|
13.96
|
|||||||||||||
Granted
|
2,831
|
17.52
|
||||||||||||||
Exercised
|
(3,257
|
)
|
9.15
|
|||||||||||||
Surrendered
|
(680
|
)
|
15.83
|
|||||||||||||
Outstanding
June 30, 2006
|
34,714
|
$
|
14.66
|
5.9
|
$
|
74
|
||||||||||
Vested
or expected to vest at June 30, 2006
|
33,319
|
$
|
14.65
|
5.9
|
$
|
74
|
||||||||||
Exercisable
at June 30, 2006
|
19,862
|
$
|
14.09
|
4.9
|
$
|
54
|
Three
months ended June 30,
|
Six
months ended June 30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
NUMERATOR:
|
|||||||||||||
Net
income available to
|
|||||||||||||
common
stockholders
|
$
|
333
|
$
|
144
|
$
|
394
|
$
|
204
|
|||||
DENOMINATOR:
|
|||||||||||||
Weighted-average
shares
|
|||||||||||||
outstanding,
basic
|
798
|
786
|
800
|
785
|
|||||||||
Dilutive
effect of Employee stock
|
|||||||||||||
options
|
27
|
16
|
31
|
17
|
|||||||||
Adjusted
weighted-average shares
|
|||||||||||||
outstanding,
diluted
|
825
|
802
|
831
|
802
|
|||||||||
NET
INCOME PER SHARE:
|
|||||||||||||
Basic
|
$
|
.42
|
$
|
.18
|
$
|
.49
|
$
|
.26
|
|||||
Diluted
|
$
|
.40
|
$
|
.18
|
$
|
.47
|
$
|
.25
|
Three
months ended June 30,
|
||||||||||
2006
|
2005
|
|||||||||
Net
income
|
$
|
333
|
$
|
144
|
||||||
Unrealized
gain on derivative instruments,
|
||||||||||
net
of deferred taxes of $51 and $18
|
95
|
28
|
||||||||
Other,
net of deferred taxes of $0 and $0
|
-
|
-
|
||||||||
Total
other comprehensive income
|
95
|
28
|
||||||||
Comprehensive
income
|
$
|
428
|
$
|
172
|
||||||
Six
months ended June
30,
|
||||||||||
2006
|
2005
|
|||||||||
Net
income
|
$
|
394
|
$
|
204
|
||||||
Unrealized
gain on derivative instruments,
|
||||||||||
net
of deferred taxes of $122 and $370
|
211
|
583
|
||||||||
Other,
net of deferred taxes of $0 and $0
|
1
|
-
|
||||||||
Total
other comprehensive income
|
212
|
583
|
||||||||
Comprehensive
income
|
$
|
606
|
$
|
787
|
Accumulated
|
||||||||||
Fuel
|
other
|
|||||||||
hedge
|
comprehensive
|
|||||||||
derivatives
|
Other
|
income
(loss)
|
||||||||
Balance
at March 31, 2006
|
$
|
1,006
|
$
|
3
|
$
|
1,009
|
||||
Second
quarter 2006 changes in value
|
210
|
-
|
210
|
|||||||
Reclassification
to earnings
|
(115
|
)
|
-
|
(115
|
)
|
|||||
Balance
at June 30, 2006
|
$
|
1,101
|
$
|
3
|
$
|
1,104
|
||||
|
||||||||||
|
|
Accumulated
|
||||||||
|
Fuel
|
other
|
||||||||
|
hedge
|
comprehensive
|
||||||||
derivatives
|
Other
|
income
(loss)
|
|
|||||||
Balance
at December 31, 2005
|
$
|
890
|
$
|
2
|
$
|
892
|
||||
2006
changes in value
|
388
|
1
|
389
|
|||||||
Reclassification
to earnings
|
(177
|
)
|
-
|
(177
|
)
|
|||||
Balance
at June 30, 2006
|
$
|
1,101
|
$
|
3
|
$
|
1,104
|
June
30,
|
December
31,
|
||||||
2006
|
2005
|
||||||
|
|
||||||
Noncurrent
fuel hedge contracts, at fair value
|
$
|
1,228
|
$
|
1,037
|
|||
Other
|
134
|
134
|
|||||
Other
assets
|
$
|
1,362
|
$
|
1,171
|
|||
|
June
30,
|
December
31,
|
|||||
2006
|
2005
|
||||||
Retirement
Plans
|
$
|
232
|
$
|
142
|
|||
Aircraft
Rentals
|
129
|
116
|
|||||
Vacation
Pay
|
143
|
135
|
|||||
Advances
and deposits
|
1,290
|
955
|
|||||
Deferred
income taxes
|
563
|
489
|
|||||
Other
|
278
|
237
|
|||||
Accrued
liabilities
|
$
|
2,635
|
$
|
2,074
|
Three
months ended June 30,
|
||||||||||
(In
millions)
|
2006
|
|
2005
|
|||||||
|
|
|
||||||||
Service
cost
|
$
|
3
|
$
|
3
|
||||||
Interest
cost
|
2
|
1
|
||||||||
Amortization
of prior service cost
|
1
|
1
|
||||||||
Recognized
actuarial loss
|
-
|
-
|
||||||||
Net
periodic postretirement benefit cost
|
$
|
6
|
$
|
5
|
||||||
|
Six
months ended June 30,
|
|||||||||
(In
millions)
|
2006
|
2005
|
||||||||
Service
cost
|
$
|
7
|
$
|
6
|
||||||
Interest
cost
|
3
|
2
|
||||||||
Amortization
of prior service cost
|
1
|
1
|
||||||||
Recognized
actuarial loss
|
-
|
-
|
||||||||
Net
periodic postretirement benefit cost
|
$
|
11
|
$
|
9
|
Three
months ended June 30,
|
||||||||||
|
||||||||||
2006
|
2005
|
Change
|
||||||||
Revenue
passengers carried
|
21,999,256
|
20,096,357
|
9.5
|
%
|
||||||
Enplaned
passengers
|
25,306,858
|
22,777,660
|
11.1
|
%
|
||||||
Revenue
passenger miles (RPMs) (000s)
|
17,843,848
|
15,480,310
|
15.3
|
%
|
||||||
Available
seat miles (ASMs) (000s)
|
22,883,984
|
21,338,928
|
7.2
|
%
|
||||||
Load
factor
|
78.0
|
%
|
72.5
|
%
|
5.5
pts
|
|||||
Average
length of passenger haul (miles)
|
811
|
770
|
5.3
|
%
|
||||||
Average
aircraft stage length (miles)
|
619
|
606
|
2.1
|
%
|
||||||
Trips
flown
|
270,947
|
258,331
|
4.9
|
%
|
||||||
Average
passenger fare
|
|
$107.38
|
|
$92.94
|
15.5
|
%
|
||||
Passenger
revenue yield per RPM (cents)
|
13.24
|
12.07
|
9.7
|
%
|
||||||
Operating
revenue yield per ASM (cents)
|
10.70
|
9.11
|
17.5
|
%
|
||||||
Operating
expenses per ASM (cents)
|
8.95
|
7.91
|
13.1
|
%
|
||||||
Operating
expenses per ASM, excluding fuel (cents)
|
6.68
|
6.37
|
4.9
|
%
|
||||||
Fuel
costs per gallon, excluding fuel tax
|
|
$1.50
|
|
$1.02
|
47.1
|
%
|
||||
Fuel
consumed, in gallons (millions)
|
344
|
322
|
6.8
|
%
|
||||||
Number
of Employees at period-end
|
31,734
|
31,366
|
1.2
|
%
|
||||||
Size
of fleet at period-end
|
462
|
434
|
6.5
|
%
|
Six
months ended June 30,
|
||||||||||
|
||||||||||
2006
|
2005
|
Change
|
||||||||
Revenue
passengers carried
|
41,198,739
|
37,570,914
|
9.7
|
%
|
||||||
Enplaned
passengers
|
47,322,342
|
42,558,406
|
11.2
|
%
|
||||||
Revenue
passenger miles (RPMs) (000s)
|
33,124,345
|
28,718,319
|
15.3
|
%
|
||||||
Available
seat miles (ASMs) (000s)
|
44,963,442
|
41,570,527
|
8.2
|
%
|
||||||
Load
factor
|
73.7
|
%
|
69.1
|
%
|
4.6
pts.
|
|||||
Average
length of passenger haul (miles)
|
804
|
764
|
5.2
|
%
|
||||||
Average
aircraft stage length (miles)
|
618
|
601
|
2.8
|
%
|
||||||
Trips
flown
|
533,396
|
507,450
|
5.1
|
%
|
||||||
Average
passenger fare
|
|
$104.38
|
|
$92.11
|
13.3
|
%
|
||||
Passenger
revenue yield per RPM (cents)
|
12.98
|
12.05
|
7.7
|
%
|
||||||
Operating
revenue yield per ASM (cents)
|
9.94
|
8.68
|
14.5
|
%
|
||||||
Operating
expenses per ASM (cents)
|
8.83
|
7.87
|
12.2
|
%
|
||||||
Operating
expenses per ASM, excluding fuel (cents)
|
6.56
|
6.40
|
2.5
|
%
|
||||||
Fuel
costs per gallon, excluding fuel tax
|
|
$1.51
|
|
$.96
|
57.3
|
%
|
||||
Fuel
consumed, in gallons (millions)
|
673
|
628
|
7.2
|
%
|
||||||
Number
of Employees at period-end
|
31,734
|
31,366
|
1.2
|
%
|
||||||
Size
of fleet at period-end
|
462
|
434
|
6.5
|
%
|
Three
months ended June 30,
|
Per
ASM
|
Percent
|
||||||||||||
2006
|
2005
|
Change
|
Change
|
|||||||||||
Salaries,
wages, and benefits
|
3.43
|
3.21
|
.22
|
6.9
|
||||||||||
Fuel
and oil
|
2.27
|
1.55
|
.72
|
46.5
|
||||||||||
Maintenance
materials
|
||||||||||||||
and
repairs
|
.52
|
.52
|
-
|
-
|
||||||||||
Aircraft
rentals
|
.17
|
.20
|
(.03
|
)
|
(15.0
|
)
|
||||||||
Landing
fees and other rentals
|
.56
|
.53
|
.03
|
5.7
|
||||||||||
Depreciation
|
.55
|
.54
|
.01
|
1.9
|
||||||||||
Other
operating expenses
|
1.45
|
1.36
|
.09
|
6.6
|
||||||||||
Total
|
8.95
|
7.91
|
1.04
|
13.1
|
Six
months ended June 30,
|
Per
ASM
|
Percent
|
|||||
2006
|
2005
|
Change
|
Change
|
||||
|
|||||||
Salaries,
wages, and benefits
|
3.34
|
3.23
|
.11
|
3.4
|
|||
Fuel
and oil
|
2.27
|
1.47
|
.80
|
54.4
|
|||
Maintenance
materials
|
|||||||
and
repairs
|
.50
|
.52
|
(.02)
|
(3.8)
|
|||
Aircraft
rentals
|
.18
|
.21
|
(.03)
|
(14.3)
|
|||
Landing
fees and other rentals
|
.54
|
.54
|
-
|
-
|
|||
Depreciation
|
.56
|
.55
|
.01
|
1.8
|
|||
Other
operating expenses
|
1.44
|
1.35
|
.09
|
6.7
|
|||
|
|
|
|||||
Total
|
8.83
|
7.87
|
.96
|
12.2
|
Current
Schedule
|
|||||||||||||||||||
Firm
|
Options
|
||||||||||||||||||
2006*
|
34
|
-
|
|||||||||||||||||
2007**
|
35
|
-
|
|||||||||||||||||
2008
|
30
|
6
|
|||||||||||||||||
2009
|
18
|
18
|
|||||||||||||||||
2010
|
10
|
32
|
|||||||||||||||||
2011
|
10
|
30
|
|||||||||||||||||
2012
|
10
|
30
|
|||||||||||||||||
2008-2014
|
-
|
54
|
***
|
||||||||||||||||
Total
|
147
|
170
|
|||||||||||||||||
*Includes
17 aircraft delivered through June 30, 2006, plus two aircraft
delivered
thus far in July
|
|||||||||||||||||||
**One
of the Company's planned 2007 deliveries was moved into
2006
|
|||||||||||||||||||
***Purchase
rights
|
Average
|
Number
|
Number
|
Number
|
|||||||||||||
737
Type
|
Seats
|
Age
(Yrs)
|
of
Aircraft
|
Owned
|
Leased
|
|||||||||||
-300
|
137
|
15.2
|
194
|
112
|
82
|
|||||||||||
-500
|
122
|
15.2
|
25
|
16
|
9
|
|||||||||||
-700
|
137
|
3.9
|
243
|
241
|
2
|
|||||||||||
TOTALS
|
9.3
|
462
|
369
|
93
|
(a)
|
(b)
|
(c)
|
(d)
|
||||||||||
Total
number of
|
Maximum
dollar
|
||||||||||||
shares
purchased
|
value
that may
|
||||||||||||
Total
number
|
Average
|
as
part of publicly
|
yet
be purchased
|
||||||||||
of
shares
|
price
paid
|
announced
plans
|
under
the plans
|
||||||||||
Period
|
purchased
|
per
share
|
or
programs
|
or
programs
|
|||||||||
|
|
|
|
||||||||||
April
1, 2006 through April 30, 2006
|
4,269,600
|
$
|
17.03
|
4,269,600
|
$
|
14,039,122
|
|||||||
May
1, 2006 through May 31, 2006
|
2,060,000
|
$
|
15.85
|
2,060,000
|
$
|
281,347,560
|
|||||||
June
1, 2006 through June 30, 2006
|
11,499,200
|
$
|
15.93
|
11,499,200
|
$
|
98,208,014
|
|||||||
Total
(2)
|
17,828,800
|
17,828,800
|
(1). |
In
January 2006, the Company announced a program for the repurchase
of up to
$300 million of the Company’s common stock. This program was completed
during second quarter 2006, resulting in the purchase of 17.8 million
shares. In May 2006, the Company announced a second program for
the
repurchase of up to $300 million of the Company’s common stock. This
program was completed in July 2006, resulting in the purchase of
18.7
million shares. Repurchases for both programs have been made in
accordance
with applicable securities laws in the open market or in private
transactions from time to time, depending on market conditions.
|
(2) |
All
shares were purchased pursuant to the publicly announced
programs.
|
10.1
|
Supplemental
Agreement No. 48 to Purchase Agreement No. 1810, dated
January
|
|
19,
1994 between The Boeing Company and Southwest.
|
||
Pursuant
to 17 CFR 240.24b-2, confidential information has been
omitted
|
||
and
has been filed separately with the Securities and Exchange
Commission
|
||
pursuant
to a Confidential Treatment Application filed with the
|
||
Commission.
|
||
31.1
|
Rule
13a-14(a) Certification of Chief Executive Officer
|
|
31.2
|
Rule
13a-14(a) Certification of Chief Financial Officer
|
|
32.1
|
Section
1350 Certifications of Chief Executive Officer and Chief
Financial
|
|
Officer
|
|
SOUTHWEST
AIRLINES CO.
|
|
July
20, 2006
|
By
|
/s/
Laura Wright
|
Laura
Wright
|
||
Chief
Financial Officer
|
||
(Principal
Financial and
|
||
Accounting
Officer)
|
||
Exhibit
No
.
|
Description
|
|
Exhibit
10.1
|
-
|
Supplemental
Agreement No. 48 to Purchase Agreement No. 1810,
|
dated
January 19, 1994 between The Boeing Company and
|
||
Southwest.
|
||
Pursuant
to 17 CFR 240.24b-2, confidential information has been
|
||
omitted
and has been filed separately with the Securities and
|
||
Exchange
Commission pursuant to a Confidential Treatment
|
||
Application
filed with the Commission.
|
||
Exhibit
31.1
|
-
|
Rule
13a-14(a) Certification of Chief Executive Officer
|
Exhibit 31.2
|
-
|
Rule
13a-14(a) Certification of Chief Financial Officer
|
Exhibit
32.1
|
-
|
Section
1350 Certifications of Chief Executive Officer and
Chief
|
Financial
Officer
|
THE
BOEING COMPANY
|
SOUTHWEST
AIRLINES CO.
|
|
By:
/s/
Shinko Wiles
|
By:
/s/
Laura Wright
|
|
Its:
Attorney-In-Fact
|
Its:
CFO & SVP - Finance
|
Base
Aircraft Price
|
Special
Features
|
Aircraft
Basic Price
|
Base
Year Dollars
|
||
Block
A, B, C, D & E Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
F & G Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
H Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
I Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
J Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
K Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
K-W Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
L Aircraft
|
***
|
***
|
***
|
July
1992
|
|
Block
T Aircraft
|
***
|
***
|
***
|
July
1999
|
|
Block
T-W Aircraft
|
***
|
***
|
***
|
July
1999
|
|
Block
T-W-1 / T-W-1a Aircraft
|
***
|
***
|
***
|
July
1999
|
|
Block
T-W-2 / T-W-2a Aircraft
|
***
|
***
|
***
|
July
1999
|
|
Block
K-W Aircraft: Block K airplanes with production winglets
installation
|
|||||
Block
T-W Aircraft: Block T airplanes with production winglets
installation
|
|||||
Block
T-W-1 / T-W-1a Aircraft: Firm Aircraft contracted to deliver from
May 1,
2006 through June 2008 at the signing
|
|||||
of
SA-47 -- (T-W-1a Aircraft -- Advance Payment Schedule per LA
6-1162-JGM-669)
|
|||||
Block
T-W-2 / T-W-2a Aircraft: U-W-1 Option Aircraft which becomes Firm
Aircraft
after signing of SA-47 and
|
|||||
Firm
Aircaft contracted to deliver in July 2008 and on at the signing
of SA47
--
|
|||||
(T-W-2a
Aircraft -- Advance Payment Schedule per LA
6-1162-JGM-669)
|
|||||
Page
|
SA
|
||
Number
|
Number
|
||
ARTICLES
|
|||
1.
|
Subject
Matter of Sale
|
1-1
|
SA-13
|
2.
|
Delivery,
Title and Risk
|
||
of
Loss
|
2-1
|
SA-28
|
|
3.
|
Price
of Aircraft
|
3-1
|
SA-47
|
4.
|
Taxes
|
4-1
|
|
5.
|
Payment
|
5-1
|
|
6.
|
Excusable
Delay
|
6-1
|
|
7.
|
Changes
to the Detail
|
||
Specification
|
7-1
|
SA-1
|
|
8.
|
Federal
Aviation Requirements and
|
||
Certificates
and Export License
|
8-1
|
||
9.
|
Representatives,
Inspection,
|
||
Flights
and Test Data
|
9-1
|
||
10.
|
Assignment,
Resale or Lease
|
10-1
|
|
11.
|
Termination
for Certain Events
|
11-1
|
|
12.
|
Product
Assurance; Disclaimer and
|
||
Release;
Exclusion of Liabilities;
|
|||
Customer
Support; Indemnification
|
|||
and
Insurance
|
12-1
|
||
13.
|
Buyer
Furnished Equipment and
|
||
Spare
Parts
|
13-1
|
||
14.
|
Contractual
Notices and Requests
|
14-1
|
|
15.
|
Miscellaneous
|
15-1
|
SA
|
||
Number
|
||
TABLE
|
||
1.
|
Aircraft
Information Table
|
SA-48
|
(page
1 only)
|
||
2.
|
Option
Aircraft Information Table
|
SA-47
|
EXHIBITS
|
A
|
Aircraft
Configuration
|
SA-47
|
B
|
Product
Assurance Document
|
SA-1
|
C
|
Customer
Support Document
|
|
D
|
Price
Adjustments Due to
|
|
Economic
Fluctuations - Aircraft
|
||
E
|
Buyer
Furnished Equipment
|
|
Provisions
Document
|
||
F
|
Defined
Terms Document
|
1810-1
|
Waiver
of Aircraft Demonstration Flight
|
SA
|
||||
Number
|
||||
RESTRICTED
LETTER AGREEMENTS
|
||||
6-1162-RLL-932R2
|
Promotional
Support
|
SA-13
|
||
6-1162-RLL-933R20
|
***
|
SA-47
|
||
6-1162-RLL-934R3
|
Disclosure
of Confidential
|
SA-14
|
||
Information
|
||||
6-1162-RLL-935R1
|
Performance
Guarantees
|
SA-1
|
||
6-1162-NIW-890
|
***
|
SA-39
|
||
6-1162-RLL-936R4
|
Certain
Contractual Matters
|
SA-4
|
||
6-1162-RLL-937
|
Alternate
Advance Payment Schedule
|
|||
6-1162-RLL-938
|
***
|
|||
6-1162-RLL-939R1
|
Certification
Flight Test Aircraft
|
SA-1
|
||
6-1162-RLL-940R1
|
Training
Matters
|
SA-1
|
||
6-1162-RLL-941R2
|
Other
Matters
|
SA-13
|
||
6-1162-RLL-942
|
Open
Configuration Matters
|
|||
6-1162-RLL-943R1
|
Substitution
Rights
|
SA-6
|
||
6-1162-RLL-944
|
Airframe
Maintenance Material Cost
|
|||
Protection
Program
|
||||
6-1162-RLL-945
|
Comparison
of 737-7H4 and 737-3H4
|
|||
Block
Fuel Burn
|
||||
6-1162-RLL-1855R3
|
Additional
Contractual Matters
|
SA-4
|
||
6-1162-RLL-1856
|
***
|
SA-1
|
||
6-1162-RLL-1857
|
Service
Ready Validation Program Field Test
|
SA-1
|
||
6-1162-RLL-1858R1
|
Escalation
Matters
|
SA-4
|
SA
|
||
Number
|
||
RESTRICTED
LETTER AGREEMENTS
|
||
6-1162-RLL-2036
|
Amortization
of Costs for
|
|
Customer
Unique Changes
|
SA-1
|
|
6-1162-RLL-2037
|
Reconciliation
of the Aircraft
|
SA-1
|
Basic
Price
|
||
6-1162-RLL-2073
|
Maintenance
Training Matters
|
SA-1
|
6-1162-KJJ-054R1
|
Business
Matters
|
|
6-1162-KJJ-055R1
|
Structural
Matters
|
SA-25
|
6-1162-KJJ-056
|
Noise
and Emission Matters
|
SA-13
|
6-1162-KJJ-057
|
Product
Development Matters
|
SA-13
|
6-1162-KJJ-058
|
Additional
Substitution Rights
|
SA-13
|
6-1162-KJJ-150
|
Flight
Control Computer & Mode
|
SA-14
|
Control
Panel Spares Matter
|
||
6-1162-MSA-185R3
|
Delivery
Change Contractual
|
SA-21
|
Matters
|
||
6-1162-JMG-669R7
|
***
|
SA-47
|
6-1162-JMG-747R1
|
***
|
SA-36
|
6-1162-CHL-217
|
Rescheduled
Flight Test Aircraft
|
SA-32
|
6-1162-NIW-606R1
|
***
SA-36
|
|
6-1162-NIW-640
|
Early
Delivery of Two April 2004
|
SA-35
|
Aircraft
|
||
6-1162-NIW-889
|
Warranty
- Exterior Color Schemes
|
SA-39
|
and
Markings for YA143 and on
|
||
6-1162-NIW-1142
|
***
|
SA-43
|
6-1162-NIW-1369
|
***
|
SA-46
|
Memorandum
|
By:
|
/s/
Gary C. Kelly
|
|
Gary
C. Kelly
|
||
Chief
Executive Officer and
|
||
Vice
Chairman of the Board
|
||
of
Directors
|
||
By:
|
/s/
Laura H. Wright
|
Laura
H. Wright
|
|
Chief
Financial Officer
|
|
By:
|
/s/
Gary C. Kelly
|
Gary
C. Kelly
|
|
Chief
Executive Officer and
|
|
Vice
Chairman of the Board
|
|
of
Directors
|
|
By:
|
/s/
Laura H. Wright
|
Laura
H. Wright
|
|
Chief
Financial Officer
|
|