þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended March 31, 2010
|
|
or
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ________ to ________
|
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)
|
|
Number of shares of Common Stock outstanding as of the close of business on April 20, 2010: 744,447,409
|
March 31, 2010
|
December 31, 2009
|
|||||||
ASSETS
|
(As adjusted-Note 2)
|
|||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,110 | $ | 1,114 | ||||
Short-term investments
|
1,663 | 1,479 | ||||||
Accounts and other receivables
|
235 | 169 | ||||||
Inventories of parts and supplies, at cost
|
227 | 221 | ||||||
Deferred income taxes
|
291 | 291 | ||||||
Prepaid expenses and other current assets
|
95 | 84 | ||||||
Total current assets
|
3,621 | 3,358 | ||||||
Property and equipment, at cost:
|
||||||||
Flight equipment
|
13,824 | 13,719 | ||||||
Ground property and equipment
|
1,965 | 1,922 | ||||||
Deposits on flight equipment purchase contracts
|
234 | 247 | ||||||
16,023 | 15,888 | |||||||
Less allowance for depreciation and amortization
|
5,402 | 5,254 | ||||||
10,621 | 10,634 | |||||||
Other assets
|
288 | 277 | ||||||
$ | 14,530 | $ | 14,269 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 690 | $ | 746 | ||||
Accrued liabilities
|
657 | 715 | ||||||
Air traffic liability
|
1,400 | 1,044 | ||||||
Current maturities of long-term debt
|
170 | 190 | ||||||
Total current liabilities
|
2,917 | 2,695 | ||||||
Long-term debt less current maturities
|
3,305 | 3,325 | ||||||
Deferred income taxes
|
2,250 | 2,200 | ||||||
Deferred gains from sale and leaseback of aircraft
|
98 | 102 | ||||||
Other non-current liabilities
|
423 | 493 | ||||||
Stockholders' equity:
|
||||||||
Common stock
|
808 | 808 | ||||||
Capital in excess of par value
|
1,219 | 1,216 | ||||||
Retained earnings
|
4,973 | 4,971 | ||||||
Accumulated other comprehensive loss
|
(518 | ) | (578 | ) | ||||
Treasury stock, at cost
|
(945 | ) | (963 | ) | ||||
Total stockholders' equity
|
5,537 | 5,454 | ||||||
$ | 14,530 | $ | 14,269 | |||||
See accompanying notes.
|
Three months ended March 31,
|
||||||||
2010
|
2009
|
|||||||
OPERATING REVENUES:
|
||||||||
Passenger
|
$ | 2,495 | $ | 2,252 | ||||
Freight
|
30 | 30 | ||||||
Other
|
105 | 75 | ||||||
Total operating revenues
|
2,630 | 2,357 | ||||||
OPERATING EXPENSES:
|
||||||||
Salaries, wages, and benefits
|
864 | 836 | ||||||
Fuel and oil
|
821 | 698 | ||||||
Maintenance materials and repairs
|
166 | 184 | ||||||
Aircraft rentals
|
47 | 45 | ||||||
Landing fees and other rentals
|
190 | 166 | ||||||
Depreciation and amortization
|
154 | 150 | ||||||
Other operating expenses
|
334 | 328 | ||||||
Total operating expenses
|
2,576 | 2,407 | ||||||
OPERATING INCOME (LOSS)
|
54 | (50 | ) | |||||
OTHER EXPENSES (INCOME):
|
||||||||
Interest expense
|
41 | 44 | ||||||
Capitalized interest
|
(5 | ) | (6 | ) | ||||
Interest income
|
(3 | ) | (4 | ) | ||||
Other (gains) losses, net
|
4 | 23 | ||||||
Total other expenses (income)
|
37 | 57 | ||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
17 | (107 | ) | |||||
PROVISION (BENEFIT) FOR INCOME TAXES
|
6 | (16 | ) | |||||
NET INCOME (LOSS)
|
$ | 11 | $ | (91 | ) | |||
NET INCOME (LOSS) PER SHARE, BASIC
|
$ | .01 | $ | (.12 | ) | |||
NET INCOME (LOSS) PER SHARE, DILUTED
|
$ | .01 | $ | (.12 | ) | |||
WEIGHTED AVERAGE SHARES
|
||||||||
OUTSTANDING:
|
||||||||
Basic
|
743 | 740 | ||||||
Diluted
|
744 | 740 | ||||||
See accompanying notes.
|
Three months ended March 31, | ||||||||
2010
|
2009
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income (loss)
|
$ | 11 | $ | (91 | ) | |||
Adjustments to reconcile net income (loss) to
|
||||||||
cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
154 | 150 | ||||||
Unrealized loss on fuel derivative instruments
|
21 | 70 | ||||||
Deferred income taxes
|
12 | (21 | ) | |||||
Amortization of deferred gains on sale and
|
||||||||
leaseback of aircraft
|
(3 | ) | (3 | ) | ||||
Share-based compensation expense
|
3 | 3 | ||||||
Excess tax benefits from share-based
|
||||||||
compensation arrangements
|
2 | 3 | ||||||
Changes in certain assets and liabilities:
|
||||||||
Accounts and other receivables
|
(67 | ) | (22 | ) | ||||
Other current assets
|
(18 | ) | 10 | |||||
Accounts payable and accrued liabilities
|
(85 | ) | - | |||||
Air traffic liability
|
356 | 288 | ||||||
Cash collateral received from (provided to) fuel
|
||||||||
derivative counterparties
|
5 | (60 | ) | |||||
Other, net
|
(18 | ) | (41 | ) | ||||
Net cash provided by operating activities
|
373 | 286 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of property and equipment, net
|
(139 | ) | (85 | ) | ||||
Purchases of short-term investments
|
(1,380 | ) | (1,697 | ) | ||||
Proceeds from sales of short-term investments
|
1,197 | 1,144 | ||||||
Net cash used in investing activities
|
(322 | ) | (638 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Proceeds from sale and leaseback transactions
|
- | 173 | ||||||
Proceeds from Employee stock plans
|
12 | 4 | ||||||
Payments of long-term debt and capital lease obligations
|
( 60 | ) | (35 | ) | ||||
Payments of cash dividends
|
(7 | ) | (7 | ) | ||||
Excess tax benefits from share-based
|
||||||||
compensation arrangements
|
(2 | ) | (3 | ) | ||||
Other, net
|
2 | (3 | ) | |||||
Net cash provided by (used in) financing activities
|
(55 | ) | 129 | |||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(4 | ) | (223 | ) | ||||
CASH AND CASH EQUIVALENTS AT
|
||||||||
BEGINNING OF PERIOD
|
1,114 | 1,368 | ||||||
CASH AND CASH EQUIVALENTS
|
||||||||
AT END OF PERIOD
|
$ | 1,110 | $ | 1,145 | ||||
CASH PAYMENTS FOR:
|
||||||||
Interest, net of amount capitalized
|
$ | 34 | $ | 36 | ||||
Income taxes
|
$ | - | $ | 1 | ||||
See accompanying notes.
|
Three months ended March 31, | ||||||||
2010
|
2009
|
|||||||
NUMERATOR:
|
||||||||
Net income (loss)
|
$ | 11 | $ | (91 | ) | |||
DENOMINATOR:
|
||||||||
Weighted-average shares
|
||||||||
outstanding, basic
|
743 | 740 | ||||||
Dilutive effect of Employee stock
|
||||||||
options
|
1 | - | ||||||
Adjusted weighted-average shares
|
||||||||
outstanding, diluted
|
744 | 740 | ||||||
NET INCOME (LOSS) PER SHARE:
|
||||||||
Basic
|
$ | .01 | $ | (.12 | ) | |||
Diluted
|
$ | .01 | $ | (.12 | ) |
Derivatives not in Cash Flow Hedging Relationships
|
|||||||||
Amount of (Gain) Loss Recognized in Income on Derivatives
|
|||||||||
Three months ended March 31,
|
Location of (Gain) Loss Recognized in Income
|
||||||||
(in millions)
|
2010
|
2009
|
on Derivatives
|
||||||
Fuel derivative contracts
|
$ | (23 | ) | $ | (27 | ) |
Other (gains) losses, net
|
Three months ended March 31, | ||||||||
(In millions)
|
2010
|
2009
|
||||||
Net income (loss)
|
$ | 11 | $ | (91 | ) | |||
Unrealized gain (loss) on derivative instruments,
|
||||||||
net of deferred taxes of $39 and $36
|
59 | 58 | ||||||
Other, net of deferred taxes of $0 and $3
|
1 | 4 | ||||||
Total other comprehensive income
|
60 | 62 | ||||||
Comprehensive income (loss)
|
$ | 71 | $ | (29 | ) |
Fuel
|
Interest
|
Accumulated other
|
||||||||||||||
hedge
|
rate
|
comprehensive
|
||||||||||||||
(In millions)
|
derivatives
|
derivatives
|
Other
|
income (loss)
|
||||||||||||
Balance at December 31, 2009
|
$ | (580 | ) | $ | (19 | ) | $ | 21 | $ | (578 | ) | |||||
2010 changes in fair value
|
(16 | ) | (1 | ) | 2 | (15 | ) | |||||||||
Reclassification to earnings
|
75 | - | - | 75 | ||||||||||||
Balance at March 31, 2010
|
$ | (521 | ) | (20 | ) | 23 | $ | (518 | ) |
March 31,
|
December 31,
|
|||||||
(In millions)
|
2010
|
2009
|
||||||
(As adjusted-Note 2)
|
||||||||
Retirement plans
|
$ | 38 | $ | 32 | ||||
Aircraft rentals
|
74 | 112 | ||||||
Vacation pay
|
193 | 190 | ||||||
Advances and deposits
|
29 | 32 | ||||||
Fuel derivative contracts
|
- | 32 | ||||||
Workers compensation
|
135 | 130 | ||||||
Other
|
188 | 187 | ||||||
Accrued liabilities
|
$ | 657 | $ | 715 |
(In millions)
|
Carrying value
|
Estimated fair value
|
||||||
Credit line borrowing (Note 6)
|
$ | 59 | $ | 59 | ||||
10.5% Notes due 2011
|
400 | 452 | ||||||
Term Loan Agreement due 2020
|
514 | 460 | ||||||
Term Loan Agreement due 2019 - 6.64%
|
313 | 324 | ||||||
Term Loan Agreement due 2019 - 6.84%
|
119 | 122 | ||||||
French Credit Agreements due 2012
|
20 | 20 | ||||||
6.5% Notes due 2012
|
402 | 424 | ||||||
5.25% Notes due 2014
|
378 | 390 | ||||||
5.75% Notes due 2016
|
296 | 303 | ||||||
5.125% Notes due 2017
|
335 | 330 | ||||||
French Credit Agreements due 2017
|
124 | 124 | ||||||
Pass Through Certificates
|
437 | 440 | ||||||
7.375% Debentures due 2027
|
111 | 111 | ||||||
Fuel derivative contracts
|
(397 | ) | (397 | ) |
Three months ended March 31,
|
||||||||||||
2010
|
2009
|
Change
|
||||||||||
Revenue passengers carried
|
19,976,835 | 19,759,690 | 1.1 | % | ||||||||
Enplaned passengers
|
23,694,464 | 23,049,990 | 2.8 | % | ||||||||
Revenue passenger miles (RPMs) (000s)
|
17,161,713 | 16,891,629 | 1.6 | % | ||||||||
Available seat miles (ASMs) (000s)
|
22,619,460 | 24,171,675 | (6.4 | )% | ||||||||
Load factor
|
75.9 | % | 69.9 | % |
6.0 pts
|
|||||||
Average length of passenger haul (miles)
|
859 | 855 | 0.5 | % | ||||||||
Average aircraft stage length (miles)
|
633 | 635 | (0.3 | )% | ||||||||
Trips flown
|
261,892 | 279,135 | (6.2 | )% | ||||||||
Average passenger fare
|
$ | 124.90 | $ | 113.97 | 9.6 | % | ||||||
Passenger revenue yield per RPM (cents)
|
14.54 | 13.33 | 9.1 | % | ||||||||
Operating revenue yield per ASM (cents)
|
11.63 | 9.75 | 19.3 | % | ||||||||
Operating expenses per ASM (cents)
|
11.39 | 9.96 | 14.4 | % | ||||||||
Operating expenses per ASM, excluding fuel (cents) (1)
|
7.76 | 7.07 | 9.8 | % | ||||||||
Fuel costs per gallon, including fuel tax
|
$ | 2.49 | $ | 1.99 | 25.1 | % | ||||||
Fuel costs per gallon, including fuel tax, non-GAAP (1)
|
$ | 2.34 | $ | 1.76 | 33.0 | % | ||||||
Fuel consumed, in gallons (millions)
|
329 | 349 | (5.7 | )% | ||||||||
Active fulltime equivalent Employees
|
34,637 | 35,518 | (2.5 | )% | ||||||||
Aircraft in service at period-end*
|
541 | 539 | 0.4 | % | ||||||||
* Excludes aircraft that have been removed from service and are in storage, held for sale, or for return to the lessor.
|
||||||||||||
(1) See the following reconciliation of GAAP to non-GAAP financial measures.
|
Three months ended March 31, |
Per ASM
|
Percent
|
||||||||||||||
2010
|
2009
|
Change
|
Change
|
|||||||||||||
Salaries, wages, and benefits
|
3.82 | ¢ | 3.46 | ¢ | .36 | ¢ | 10.4 | |||||||||
Fuel and oil
|
3.63 | 2.89 | .74 | 25.6 | ||||||||||||
Maintenance materials and repairs
|
.73 | .76 | (.03 | ) | (3.9 | ) | ||||||||||
Aircraft rentals
|
.21 | .19 | .02 | 10.5 | ||||||||||||
Landing fees and other rentals
|
.84 | .69 | .15 | 21.7 | ||||||||||||
Depreciation
|
.68 | .62 | .06 | 9.7 | ||||||||||||
Other operating expenses
|
1.48 | 1.35 | .13 | 9.6 | ||||||||||||
Total
|
11.39 | ¢ | 9.96 | ¢ | 1.43 | ¢ | 14.4 |
Fair value
|
Amount of
|
|||||||
(liability) of fuel
|
(losses) deferred
|
|||||||
derivative contracts
|
in AOCI at March 31,
|
|||||||
Year
|
at March 31, 2010
|
2010 (net of tax)
|
||||||
2010
|
$ | (70 | ) | $ | (168 | ) | ||
2011
|
$ | (98 | ) | $ | (143 | ) | ||
2012
|
$ | (93 | ) | $ | (101 | ) | ||
2013
|
$ | (136 | ) | $ | (109 | ) | ||
Total
|
$ | (397 | ) | $ | (521 | ) |
Three months ended March 31, | ||||||||
(In millions)
|
2010
|
2009
|
||||||
Mark-to-market impact from fuel contracts settling in future
|
||||||||
periods - included in Other (gains) losses, net
|
$ | (27 | ) | $ | (10 | ) | ||
Ineffectiveness from fuel hedges settling in future periods -
|
||||||||
included in Other (gains) losses, net
|
4 | 15 | ||||||
Realized ineffectiveness and mark-to-market (gains) or
|
||||||||
losses - included in Other (gains) losses, net
|
(4 | ) | (15 | ) | ||||
Premium cost of fuel contracts included in Other (gains) losses, net
|
31 | 32 | ||||||
Other
|
- | 1 | ||||||
$ | 4 | $ | 23 |
Average
|
Number
|
Number
|
Number
|
|||||||||||||||||||
737 Type
|
Seats
|
Age (Yrs)
|
of Aircraft
|
Owned
|
Leased
|
|||||||||||||||||
-300 | 137 | 18.4 | 173 | 106 | 67 | |||||||||||||||||
-500 | 122 | 18.9 | 25 | 16 | 9 | |||||||||||||||||
-700 | 137 | 6.3 | 343 | 323 | 20 | |||||||||||||||||
TOTALS
|
10.7 | 541 | 445 | 96 |
|
(i)
|
the price and availability of aircraft fuel, the impact of hedge accounting, and any changes to the Company’s strategies for addressing fuel price volatility;
|
|
(ii)
|
continued economic uncertainty, which could continue to impact the demand for air travel and the Company’s ability to adjust fares;
|
|
(iii)
|
the impact of fuel prices and economic conditions on the Company’s overall business plan and strategies;
|
|
(iv)
|
competitor capacity decisions;
|
|
(v)
|
the Company’s ability to timely and effectively prioritize its initiatives and related expenditures and its ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support these initiatives;
|
|
(vi)
|
the impact of technological initiatives on the Company’s technology infrastructure, including its payroll and financial reporting areas;
|
|
(vii)
|
the Company’s dependence on third parties to assist with implementation of certain of its initiatives;
|
|
(viii)
|
the impact of governmental regulations on the Company’s operating costs, as well as its operations generally; and
|
|
(ix)
|
other factors as set forth 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 year ended December 31, 2009.
|
a)
|
Exhibits
|
3.1
|
Restated Articles of Incorporation of the Company effective February 3, 1994;
|
|
Articles of Amendment to the Articles of Incorporation of the Company effective
|
||
May 31, 1996; Articles of Amendment to the Articles of Incorporation of the Company
|
||
effective July 2, 1998; Articles of Amendment to the Articles of Incorporation of the
|
||
Company effective June 2, 1999; Articles of Amendment to the Articles of
|
||
Incorporation of the Company effective May 24, 2001; Articles of Amendment to
|
||
the Articles of Incorporation of the Company effective June 5, 2007 (incorporated by
|
||
reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year
|
||
ended December 31, 2009 (File No. 1-7259)).
|
||
3.2
|
Amended and Restated Bylaws of the Company, effective November 19,
|
|
2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report
|
||
on Form 8-K dated November 19, 2009 (File No. 1-7259)).
|
||
10.1
|
Supplemental Agreement No. 64 to Purchase Agreement No. 1810,
|
|
dated January 19, 1994, between The Boeing Company and Southwest. (1)
|
||
18.1
|
Letter from Ernst & Young LLP regarding change in accounting principle.
|
|
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 (2)
|
||
101.INS
|
XBRL Instance Document (2)
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (2)
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (2)
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document (2)
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (2)
|
(1)
|
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.
|
(2)
|
Furnished, not filed.
|
|
SOUTHWEST AIRLINES CO.
|
|
April 23, 2010
|
By
|
/s/ Laura Wright
|
Laura Wright
|
||
Chief Financial Officer
|
||
(On behalf of the Registrant and in
|
||
her capacity as Principal Financial
|
||
and Accounting Officer)
|
||
3.1
|
Restated Articles of Incorporation of the Company effective February 3, 1994;
|
|
Articles of Amendment to the Articles of Incorporation of the Company effective
|
||
May 31, 1996; Articles of Amendment to the Articles of Incorporation of the Company
|
||
effective July 2, 1998; Articles of Amendment to the Articles of Incorporation of the
|
||
Company effective June 2, 1999; Articles of Amendment to the Articles of
|
||
Incorporation of the Company effective May 24, 2001; Articles of Amendment to
|
||
the Articles of Incorporation of the Company effective June 5, 2007 (incorporated by
|
||
reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the year
|
||
ended December 31, 2009 (File No. 1-7259)).
|
||
3.2
|
Amended and Restated Bylaws of the Company, effective November 19,
|
|
2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report
|
||
on Form 8-K dated November 19, 2009 (File No. 1-7259)).
|
||
10.1
|
Supplemental Agreement No. 64 to Purchase Agreement No. 1810,
|
|
dated January 19, 1994, between The Boeing Company and Southwest. (1)
|
||
18.1
|
Letter from Ernst & Young LLP regarding change in accounting principle.
|
|
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 (2)
|
||
101.INS
|
XBRL Instance Document (2)
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (2)
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (2)
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document (2)
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (2)
|
(1)
|
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.
|
(2)
|
Furnished, not filed.
|
ARTICLES
|
Page
Number
|
SA
Number
|
|
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
|
TABLE
|
SA Number
|
|
1.
|
Aircraft Information Table
|
SA-63
|
2.
|
Option Aircraft Information Table
|
SA-63
|
EXHIBITS
|
SA Number
|
|
A
|
Aircraft Configuration
|
SA-61
|
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
|
LETTER AGREEMENTS
|
|
1810-1
|
Waiver of Aircraft Demonstration Flight
|
RESTRICTED LETTER AGREEMENTS
|
SA Number
|
|
6-1162-RLL-932R2
|
Promotional Support
|
SA-13
|
6-1162-RLL-933R21
|
Option Aircraft
|
SA-60
|
6-1162-RLL-934R3
|
Disclosure of Confidential Information
|
SA-14
|
6-1162-RLL-935R1
|
Performance Guarantees
|
SA-1
|
6-1162-NIW-890
|
***
|
SA-39
|
6-1162-RLL-936R4
|
Certain Contractual Matters
|
SA-4
|
RESTRICTED LETTER AGREEMENTS CONT’D
|
SA Number
|
|
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
|
***
|
|
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
|
6-1162-RLL-2036
|
Amortization of Costs for Customer Unique Changes
|
SA-1
|
6-1162-RLL-2037
|
Reconciliation of the Aircraft Basic Price
|
SA-1
|
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 Control Panel Spares Matter
|
SA-14
|
6-1162-MSA-185R3
|
Delivery Change Contractual Matters
|
SA-21
|
RESTRICTED LETTER AGREEMENTS CON’T
|
SA Number
|
|
6-1162-JMG-669R8
|
***
|
SA-54
|
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 Aircraft
|
SA-35
|
6-1162-NIW-889
|
Warranty - Exterior Color Schemes and Markings for YA143 and on
|
SA-39
|
6-1162-NIW-1142
|
***
|
SA-43
|
6-1162-NIW-1369
|
***
|
SA-46
|
6-1162-NIW-1983
|
***
|
SA-62
|
SWA-PA-1810-LA-1000419
|
*** |
SA64
|
Subject:
|
***
|
Reference:
|
Purchase Agreement No. PA-1810 (
Purchase Agreement
) between The Boeing Company (
Boeing
) and Southwest Airlines Co. (
Customer
) relating to Model 737-700 aircraft (
Aircraft
)
|
1.
|
***
|
2.
|
Assignment.
|
3.
|
Confidential Treatment
|
THE BOEING COMPANY
|
||
By
|
/s/ Isabelle Sessions
|
|
Its
|
Attorney-In-Fact
|
|
ACCEPTED AND AGREED TO this
|
||
Date:
|
March 19, 2010
|
|
SOUTHWEST AIRLINES, CO.
|
||
By
|
/s/ Scott Topping
|
|
Its
|
V.P. Treasurer
|
By:
|
/s/ Gary C.
Kelly
|
|
Gary
C. Kelly
|
||
Chief
Executive Officer
|
||
By:
|
/s/ Laura H.
Wright
|
Laura
H. Wright
|
|
Chief
Financial Officer
|
|
By:
|
/s/ Gary C.
Kelly
|
Gary
C. Kelly
|
|
Chief
Executive Officer
|
|
By:
|
/s/ Laura H. Wright
|
Laura
H. Wright
|
|
Chief
Financial Officer
|
|