þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended June 30, 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 July 27, 2010: 745,946,155
|
|
June 30, 2010
|
December 31, 2009
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 989 | $ | 1,114 | ||||
Short-term investments
|
2,135 | 1,479 | ||||||
Accounts and other receivables
|
277 | 169 | ||||||
Inventories of parts and supplies, at cost
|
226 | 221 | ||||||
Deferred income taxes
|
252 | 291 | ||||||
Prepaid expenses and other current assets
|
92 | 84 | ||||||
Total current assets
|
3,971 | 3,358 | ||||||
Property and equipment, at cost:
|
||||||||
Flight equipment
|
13,923 | 13,719 | ||||||
Ground property and equipment
|
2,024 | 1,922 | ||||||
Deposits on flight equipment purchase contracts
|
235 | 247 | ||||||
16,182 | 15,888 | |||||||
Less allowance for depreciation and amortization
|
5,555 | 5,254 | ||||||
10,627 | 10,634 | |||||||
Other assets
|
389 | 277 | ||||||
$ | 14,987 | $ | 14,269 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 787 | $ | 732 | ||||
Accrued liabilities
|
942 | 729 | ||||||
Air traffic liability
|
1,486 | 1,044 | ||||||
Current maturities of long-term debt
|
123 | 190 | ||||||
Total current liabilities
|
3,338 | 2,695 | ||||||
Long-term debt less current maturities
|
3,324 | 3,325 | ||||||
Deferred income taxes
|
2,192 | 2,200 | ||||||
Deferred gains from sale and leaseback of aircraft
|
95 | 102 | ||||||
Other non-current liabilities
|
490 | 493 | ||||||
Stockholders' equity:
|
||||||||
Common stock
|
808 | 808 | ||||||
Capital in excess of par value
|
1,221 | 1,216 | ||||||
Retained earnings
|
5,075 | 4,971 | ||||||
Accumulated other comprehensive loss
|
(641 | ) | (578 | ) | ||||
Treasury stock, at cost
|
(915 | ) | (963 | ) | ||||
Total stockholders' equity
|
5,548 | 5,454 | ||||||
$ | 14,987 | $ | 14,269 | |||||
See accompanying notes.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
OPERATING REVENUES:
|
||||||||||||||||
Passenger
|
$ | 3,016 | $ | 2,506 | $ | 5,511 | $ | 4,758 | ||||||||
Freight
|
33 | 29 | 63 | 58 | ||||||||||||
Other
|
119 | 81 | 224 | 156 | ||||||||||||
Total operating revenues
|
3,168 | 2,616 | 5,798 | 4,972 | ||||||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Salaries, wages, and benefits
|
946 | 863 | 1,810 | 1,699 | ||||||||||||
Fuel and oil
|
933 | 726 | 1,754 | 1,423 | ||||||||||||
Maintenance materials and repairs
|
194 | 190 | 360 | 373 | ||||||||||||
Aircraft rentals
|
45 | 47 | 92 | 93 | ||||||||||||
Landing fees and other rentals
|
206 | 179 | 396 | 345 | ||||||||||||
Depreciation and amortization
|
154 | 150 | 308 | 300 | ||||||||||||
Other operating expenses
|
327 | 338 | 661 | 666 | ||||||||||||
Total operating expenses
|
2,805 | 2,493 | 5,381 | 4,899 | ||||||||||||
OPERATING INCOME
|
363 | 123 | 417 | 73 | ||||||||||||
OTHER EXPENSES (INCOME):
|
||||||||||||||||
Interest expense
|
42 | 47 | 83 | 92 | ||||||||||||
Capitalized interest
|
(5 | ) | (5 | ) | (10 | ) | (11 | ) | ||||||||
Interest income
|
(4 | ) | (3 | ) | (6 | ) | (8 | ) | ||||||||
Other (gains) losses, net
|
146 | (23 | ) | 150 | - | |||||||||||
Total other expenses
|
179 | 16 | 217 | 73 | ||||||||||||
INCOME BEFORE INCOME TAXES
|
184 | 107 | 200 | - | ||||||||||||
PROVISION FOR INCOME TAXES
|
72 | 16 | 77 | - | ||||||||||||
NET INCOME
|
$ | 112 | $ | 91 | $ | 123 | $ | - | ||||||||
NET INCOME PER SHARE, BASIC
|
$ | .15 | $ | .12 | $ | .17 | $ | - | ||||||||
NET INCOME PER SHARE, DILUTED
|
$ | .15 | $ | .12 | $ | .17 | $ | - | ||||||||
WEIGHTED AVERAGE SHARES
|
||||||||||||||||
OUTSTANDING:
|
||||||||||||||||
Basic
|
745 | 741 | 744 | 741 | ||||||||||||
Diluted
|
746 | 741 | 745 | 741 | ||||||||||||
See accompanying notes.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Net income
|
$ | 112 | $ | 91 | $ | 123 | $ | - | ||||||||
Adjustments to reconcile net income to
|
||||||||||||||||
cash provided by operating activities:
|
||||||||||||||||
Depreciation and amortization
|
154 | 150 | 308 | 300 | ||||||||||||
Unrealized (gain) loss on fuel derivative instruments
|
166 | (3 | ) | 187 | 67 | |||||||||||
Deferred income taxes
|
63 | 16 | 75 | (5 | ) | |||||||||||
Amortization of deferred gains on sale and
|
||||||||||||||||
leaseback of aircraft
|
(3 | ) | (4 | ) | (7 | ) | (7 | ) | ||||||||
Changes in certain assets and liabilities:
|
||||||||||||||||
Accounts and other receivables
|
(42 | ) | (6 | ) | (108 | ) | (28 | ) | ||||||||
Other current assets
|
5 | (28 | ) | (14 | ) | (18 | ) | |||||||||
Accounts payable and accrued liabilities
|
279 | 104 | 195 | 104 | ||||||||||||
Air traffic liability
|
86 | (43 | ) | 442 | 244 | |||||||||||
Cash collateral received from (provided to) fuel
|
||||||||||||||||
derivative counterparties
|
130 | (125 | ) | 135 | (185 | ) | ||||||||||
Other, net
|
(410 | ) | (17 | ) | (423 | ) | (52 | ) | ||||||||
Net cash provided by operating activities
|
540 | 135 | 913 | 420 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Purchases of property and equipment, net
|
(159 | ) | (187 | ) | (298 | ) | (272 | ) | ||||||||
Purchases of short-term investments
|
(1,800 | ) | (1,394 | ) | (3,180 | ) | (3,090 | ) | ||||||||
Proceeds from sales of short-term investments
|
1,349 | 1,203 | 2,546 | 2,347 | ||||||||||||
Other, net
|
- | 1 | - | 1 | ||||||||||||
Net cash used in investing activities
|
(610 | ) | (377 | ) | (932 | ) | (1,014 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Proceeds from sale and leaseback transactions
|
- | 208 | - | 381 | ||||||||||||
Issuance of long-term debt
|
- | 332 | - | 332 | ||||||||||||
Proceeds from Employee stock plans
|
23 | 4 | 35 | 8 | ||||||||||||
Payments of long-term debt and capital lease obligations
|
(25 | ) | (7 | ) | (85 | ) | (41 | ) | ||||||||
Payment of revolving credit facility
|
- | (400 | ) | - | (400 | ) | ||||||||||
Payment of credit line borrowing
|
(44 | ) | (91 | ) | (44 | ) | (91 | ) | ||||||||
Payments of cash dividends
|
(3 | ) | (3 | ) | (10 | ) | (10 | ) | ||||||||
Other, net
|
(2 | ) | - | (2 | ) | (7 | ) | |||||||||
Net cash provided by (used in) financing activities
|
(51 | ) | 43 | (106 | ) | 172 | ||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(121 | ) | (199 | ) | (125 | ) | (422 | ) | ||||||||
CASH AND CASH EQUIVALENTS AT
|
||||||||||||||||
BEGINNING OF PERIOD
|
1,110 | 1,145 | 1,114 | 1,368 | ||||||||||||
CASH AND CASH EQUIVALENTS
|
||||||||||||||||
AT END OF PERIOD
|
$ | 989 | $ | 946 | $ | 989 | $ | 946 | ||||||||
CASH PAYMENTS FOR:
|
||||||||||||||||
Interest, net of amount capitalized
|
$ | 33 | $ | 42 | $ | 68 | $ | 78 | ||||||||
Income taxes
|
$ | 39 | $ | 3 | $ | 39 | $ | 4 | ||||||||
See accompanying notes.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
NUMERATOR:
|
||||||||||||||||
Net income
|
$ | 112 | $ | 91 | $ | 123 | $ | - | ||||||||
DENOMINATOR:
|
||||||||||||||||
Weighted-average shares
|
||||||||||||||||
outstanding, basic
|
745 | 741 | 744 | 741 | ||||||||||||
Dilutive effect of Employee stock
|
||||||||||||||||
options
|
1 | - | 1 | - | ||||||||||||
Adjusted weighted-average shares
|
||||||||||||||||
outstanding, diluted
|
746 | 741 | 745 | 741 | ||||||||||||
NET INCOME PER SHARE:
|
||||||||||||||||
Basic
|
$ | .15 | $ | .12 | $ | .17 | $ | - | ||||||||
Diluted
|
$ | .15 | $ | .12 | $ | .17 | $ | - | ||||||||
Antidilutive stock options
|
||||||||||||||||
excluded from calculations
|
72 | 79 | 74 | 79 |
Fuel hedged as
|
||||
of June 30, 2010
|
||||
Period
|
(gallons in millions)
|
|||
Second half 2010
|
465 | |||
2011
|
1,056 | |||
2012
|
887 | |||
2013
|
750 | |||
2014
|
700 |
Balance Sheet
|
June 30,
|
December 31,
|
|||||||
(in millions)
|
Location
|
2010
|
2009
|
||||||
Cash collateral deposits provided
|
Offset against Other
|
||||||||
to counterparty - noncurrent
|
deferred liabilities
|
$ | 100 | $ | 238 | ||||
Cash collateral deposits provided
|
Offset against Accrued
|
||||||||
to counterparty - current
|
liabilities
|
95 | 92 | ||||||
Due to third parties for settled fuel contracts
|
Accrued liabilities
|
17 | 15 | ||||||
Net unrealized losses from fuel
|
Accumulated other
|
||||||||
hedges, net of tax
|
comprehensive loss
|
619 | 580 |
Six months ended June 30,
|
||||||||
(In millions)
|
2010
|
2009
|
||||||
Net income
|
$ | 123 | $ | - | ||||
Unrealized gain/(loss) on derivative instruments,
|
||||||||
net of deferred taxes of ($24) and $100
|
(39 | ) | 161 | |||||
Unrealized gain/(loss) on interest rate swaps,
|
||||||||
net of deferred taxes of ($14) and $15
|
(22 | ) | 25 | |||||
Other, net of deferred taxes of ($1) and $1
|
(2 | ) | 1 | |||||
Total other comprehensive income/(loss)
|
(63 | ) | 187 | |||||
Comprehensive income
|
$ | 60 | $ | 187 |
Fuel
|
Interest
|
Accumulated other
|
||||||||||||||
hedge
|
rate
|
comprehensive
|
||||||||||||||
(In millions)
|
derivatives
|
derivatives
|
Other
|
income (loss)
|
||||||||||||
Balance at March 31, 2010
|
$ | (521 | ) | $ | (20 | ) | $ | 23 | $ | (518 | ) | |||||
Changes in fair value
|
(172 | ) | (21 | ) | (4 | ) | (197 | ) | ||||||||
Reclassification to earnings
|
74 | - | - | 74 | ||||||||||||
Balance at June 30, 2010
|
$ | (619 | ) | (41 | ) | 19 | $ | (641 | ) |
Fuel
|
Interest
|
Accumulated other
|
||||||||||||||
hedge
|
rate
|
comprehensive
|
||||||||||||||
(In millions)
|
derivatives
|
derivatives
|
Other
|
income (loss)
|
||||||||||||
Balance at December 31, 2009
|
$ | (580 | ) | $ | (19 | ) | $ | 21 | $ | (578 | ) | |||||
Changes in fair value
|
(188 | ) | (22 | ) | (2 | ) | (212 | ) | ||||||||
Reclassification to earnings
|
149 | - | - | 149 | ||||||||||||
Balance at June 30, 2010
|
$ | (619 | ) | (41 | ) | 19 | $ | (641 | ) |
June 30,
|
December 31,
|
|||||||
(In millions)
|
2010
|
2009
|
||||||
Retirement plans
|
$ | 106 | $ | 46 | ||||
Aircraft rentals
|
79 | 112 | ||||||
Vacation pay
|
198 | 190 | ||||||
Advances and deposits
|
26 | 32 | ||||||
Fuel derivative contracts
|
126 | 32 | ||||||
Workers compensation
|
135 | 130 | ||||||
Other
|
272 | 187 | ||||||
Accrued liabilities
|
$ | 942 | $ | 729 |
(In millions)
|
Carrying value
|
Estimated fair value
|
||||||
Credit line borrowing
|
$ | 11 | $ | 11 | ||||
10.5% Notes due 2011
|
403 | 441 | ||||||
Term Loan Agreement due 2020 - 5.223%
|
481 | 423 | ||||||
Term Loan Agreement due 2019 - 6.64%
|
297 | 308 | ||||||
Term Loan Agreement due 2019 - 6.84%
|
119 | 118 | ||||||
French Credit Agreements due 2012
|
18 | 18 | ||||||
6.5% Notes due 2012
|
403 | 428 | ||||||
5.25% Notes due 2014
|
387 | 409 | ||||||
5.75% Notes due 2016
|
309 | 327 | ||||||
5.125% Notes due 2017
|
343 | 350 | ||||||
French Credit Agreements due 2017
|
77 | 77 | ||||||
Pass Through Certificates due 2022
|
437 | 450 | ||||||
7.375% Debentures due 2027
|
118 | 124 | ||||||
Fuel derivative contracts
|
(365 | ) | (365 | ) |
Three months ended June 30,
|
Per ASM
|
Percent
|
||||||||||||||
2010
|
2009
|
Change
|
Change
|
|||||||||||||
Salaries, wages, and benefits
|
3.71 | ¢ | 3.38 | ¢ | .33 | ¢ | 9.8 | |||||||||
Fuel and oil
|
3.66 | 2.84 | .82 | 28.9 | ||||||||||||
Maintenance materials
|
||||||||||||||||
and repairs
|
.76 | .74 | .02 | 2.7 | ||||||||||||
Aircraft rentals
|
.18 | .19 | (.01 | ) | (5.3 | ) | ||||||||||
Landing fees and other rentals
|
.81 | .70 | .11 | 15.7 | ||||||||||||
Depreciation
|
.61 | .59 | .02 | 3.4 | ||||||||||||
Other operating expenses
|
1.28 | 1.32 | (.04 | ) | (3.0 | ) | ||||||||||
Total
|
11.01 | ¢ | 9.76 | ¢ | 1.25 | ¢ | 12.8 |
Fair value
|
Amount of
|
|||||||
(liability) of fuel
|
(losses) deferred
|
|||||||
derivative contracts
|
in AOCI at June 30, 2010
|
|||||||
Year
|
at June 30, 2010
|
(net of tax)
|
||||||
2010
|
$ | (114 | ) | $ | (146 | ) | ||
2011
|
(229 | ) | (221 | ) | ||||
2012
|
(125 | ) | (125 | ) | ||||
2013
|
(33 | ) | (121 | ) | ||||
2014
|
136 | (6 | ) | |||||
Total
|
$ | (365 | ) | $ | (619 | ) |
Three months ended June 30,
|
||||||||
(In millions)
|
2010
|
2009
|
||||||
Mark-to-market impact from fuel contracts settling in future
|
||||||||
periods - included in Other (gains) losses, net
|
$ | 57 | $ | (37 | ) | |||
Ineffectiveness from fuel hedges settling in future periods -
|
||||||||
included in Other (gains) losses, net
|
51 | (24 | ) | |||||
Realized ineffectiveness and mark-to-market (gains) or
|
||||||||
losses - included in Other (gains) losses, net
|
7 | (2 | ) | |||||
Premium cost of fuel contracts included in Other (gains) losses, net
|
30 | 37 | ||||||
Other
|
1 | 3 | ||||||
$ | 146 | $ | (23 | ) |
Six months ended June 30,
|
Per ASM
|
Percent
|
||||||||||||||
2010
|
2009
|
Change
|
Change
|
|||||||||||||
Salaries, wages, and benefits
|
3.76 | ¢ | 3.42 | ¢ | .34 | ¢ | 9.9 | |||||||||
Fuel and oil
|
3.65 | 2.86 | .79 | 27.6 | ||||||||||||
Maintenance materials
|
||||||||||||||||
and repairs
|
.75 | .75 | - | - | ||||||||||||
Aircraft rentals
|
.19 | .19 | - | - | ||||||||||||
Landing fees and other rentals
|
.82 | .69 | .13 | 18.8 | ||||||||||||
Depreciation
|
.64 | .60 | .04 | 6.7 | ||||||||||||
Other operating expenses
|
1.38 | 1.34 | .04 | 3.0 | ||||||||||||
Total
|
11.19 | ¢ | 9.85 | ¢ | 1.34 | ¢ | 13.6 |
Average
|
Number
|
Number
|
Number
|
|||||||||||||||||||
737 Type
|
Seats
|
Age (Yrs)
|
of Aircraft
|
Owned
|
Leased
|
|||||||||||||||||
-300 | 137 | 18.6 | 173 | 106 | 67 | |||||||||||||||||
-500 | 122 | 19.2 | 25 | 16 | 9 | |||||||||||||||||
-700 | 137 | 6.5 | 346 | 326 | 20 | |||||||||||||||||
TOTALS
|
10.9 | 544 | 448 | 96 |
|
(i)
|
changes in the price of aircraft fuel, the impact of hedge accounting, and any changes to the Company’s fuel hedging strategies and positions;
|
|
(ii)
|
economic uncertainty, which can significantly impact the demand for air travel and related revenues;
|
|
(iii)
|
the impact of fuel prices and economic conditions on the Company’s overall business plan and strategies;
|
|
(iv)
|
actions of competitors, including, without limitation, pricing, scheduling, and capacity decisions, and consolidation and alliance activities;
|
(v)
|
the Company’s ability to timely and effectively prioritize its strategic initiatives and related expenditures;
|
(vi)
|
the Company’s ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and the impact of technological initiatives on the Company’s operations and reporting;
|
|
(vii)
|
the Company’s dependence on third parties to assist with implementation of certain of its initiatives;
|
|
(viii)
|
the impact of governmental legislation and regulation on the Company’s operations, fuel hedging strategies, and costs; 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. 65 to Purchase Agreement No. 1810,
|
|
dated January 19, 1994, between The Boeing Company and Southwest. (1)
|
||
10.2
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan
|
|
(incorporated by reference to Exhibit 99 to the Company’s Registration Statement
|
||
on Form S-8 filed May 20, 2010 (File No. 333-166980)).
|
||
10.3
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan Form
|
|
of Notice of Grant and Terms and Conditions for Restricted Stock Unit grants.
|
||
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.DEF
|
XBRL Taxonomy Extension Definition 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.
|
|
July 30, 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. 65 to Purchase Agreement No. 1810,
|
|
dated January 19, 1994, between The Boeing Company and Southwest. (1)
|
||
10.2
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan
|
|
(incorporated by reference to Exhibit 99 to the Company’s Registration Statement
|
||
on Form S-8 filed May 20, 2010 (File No. 333-166980)).
|
||
10.3
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan Form
|
|
of Notice of Grant and Terms and Conditions for Restricted Stock Unit grants.
|
||
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.DEF
|
XBRL Taxonomy Extension Definition 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.
|
Aircraft Delivery Mo. & Yr.
|
Number of Option Aircraft
|
New Option Exercise Date
|
Aug-2011
|
2
|
July 1, 2010
|
Sep-2011
|
1
|
July 1, 2010
|
Oct-2011
|
1
|
July 1, 2010
|
1.
|
The Table of Contents of the Agreement is deleted in its entirety and a new Table of Contents is attached hereto and incorporated into the Agreement by this reference.
|
2.
|
Table 2 is deleted in its entirety and replaced by a new Table 2 which is attached hereto to reflect the changes to the Option Exercise Date for the Revised Exercise Date for Option Aircraft.
|
THE BOEING
COMPANY
|
SOUTHWEST AIRLINES CO. |
By: _/s/ Isabelle Sessions_______ | By: /s/ Scott Topping__________ |
Its: Attorney-In-Fact ________ | Its:_ VP Treasurer ______________ |
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-65 |
EXHIBITS
|
|
|
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 |
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 |
RESTRICTED LETTER AGREEMENTS
|
SA
Number
|
|
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 |
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
|
P.A. No. 1810 | v |
K/SWA
|
SA-65 |
SWA – PA1810 | Page 1 | SA-65 |
APR45652/48432 |
Aircraft
|
Number of
|
Option
|
Adv Payment Base *
|
|
Delivery
|
Option
|
Aircraft
|
Price Per
|
|
Mo. & Yr.
|
Aircraft
|
Block
|
Option Aircraft
|
Option Exercise
|
Aug-2011
|
2
|
U-W-1
|
***
|
July 1, 2010
|
Sep-2011
|
1
|
U-W-1
|
***
|
July 1, 2010
|
Oct-2011
|
1
|
U-W-1
|
***
|
July 1, 2010
|
Feb-2012
|
1
|
U-W-1
|
***
|
October 1, 2010
|
Mar-2012
|
1
|
U-W-1
|
***
|
November 1, 2010
|
Apr-2012
|
1
|
U-W-1
|
***
|
December 1, 2010
|
May-2012
|
1
|
U-W-1
|
***
|
January 3, 2011
|
Jun-2012
|
1
|
U-W-1
|
***
|
February 1, 2011
|
Jul-2012
|
1
|
U-W-1
|
***
|
March 1, 2011
|
Aug-2012
|
1
|
U-W-1
|
***
|
April 1, 2011
|
Sep-2012
|
1
|
U-W-1
|
***
|
May 2, 2011
|
Nov-2012
|
1
|
U-W-1
|
***
|
July 1, 2011
|
Dec-2012
|
1
|
U-W-1
|
***
|
August 1, 2011
|
Jan-2013
|
1
|
U-W-1
|
***
|
October 3, 2011
|
Feb-2013
|
1
|
U-W-1
|
***
|
October 3, 2011
|
Apr-2013
|
1
|
U-W-1
|
***
|
January 2, 2012
|
May-2013
|
1
|
U-W-1
|
***
|
February 1, 2012
|
Jan-2014
|
1
|
U-W-1
|
***
|
September 1, 2012
|
Feb-2014
|
1
|
U-W-1
|
***
|
October 1, 2012
|
Mar-2014
|
2
|
U-W-1
|
***
|
November 1, 2012
|
Apr-2014
|
2
|
U-W-1
|
***
|
December 1, 2012
|
Sep-2014
|
1
|
U-W-1
|
***
|
May 1, 2013
|
Jan-2015
|
1
|
U-W-1
|
***
|
September 1, 2013
|
Feb-2015
|
1
|
U-W-1
|
***
|
October 1, 2013
|
Nov-2015
|
1
|
U-W-1
|
***
|
July 1, 2014
|
Jan-2016
|
1
|
U-W-1
|
***
|
September 1, 2014
|
Mar-2016
|
1
|
U-W-1
|
***
|
November 3, 2014
|
Apr-2016
|
1
|
U-W-1
|
***
|
December 1, 2014
|
May-2016
|
1
|
U-W-1
|
***
|
January 1, 2015
|
Jun-2016
|
1
|
U-W-1
|
***
|
February 2, 2015
|
Jul-2016
|
1
|
U-W-1
|
***
|
March 2, 2015
|
Aug-2016
|
1
|
U-W-1
|
***
|
April 1, 2015
|
Sep-2016
|
1
|
U-W-1
|
***
|
May 1, 2015
|
Oct-2016
|
1
|
U-W-1
|
***
|
June 1, 2015
|
Nov-2016
|
1
|
U-W-1
|
***
|
July 1, 2015
|
Dec-2016
|
1
|
U-W-1
|
***
|
August 3, 2015
|
Jan-2017
|
1
|
U-W-1
|
***
|
September 1, 2015
|
Feb-2017
|
1
|
U-W-1
|
***
|
October 1, 2015
|
Mar-2017
|
1
|
U-W-1
|
***
|
November 2, 2015
|
Apr-2017
|
1
|
U-W-1
|
***
|
December 1, 2015
|
May-2017
|
1
|
U-W-1
|
***
|
Janaury 1, 2016
|
Jun-2017
|
1
|
U-W-1
|
***
|
February 1, 2016
|
Jul-2017
|
1
|
U-W-1
|
***
|
March 1, 2016
|
Aug-2017
|
2
|
U-W-1
|
***
|
April 1, 2016
|
Sep-2017
|
2
|
U-W-1
|
***
|
May 2, 2016
|
Oct-2017
|
2
|
U-W-1
|
***
|
June 1, 2016
|
Nov-2017
|
2
|
U-W-1
|
***
|
July 1, 2016
|
Dec-2017
|
2
|
U-W-1
|
***
|
August 1, 2016
|
Total
|
56
|
|||
|
||||
* Advance Payment Base Price for Option Aircraft scheduled for delivery prior to Jan 2015 is based on 4th Qtr 2005 forecast
|
||||
* Advance Payment Base Price for Option Aircraft scheduled for delivery starting in Jan 2015 is based on 4th Qtr 2007 forecast
|
Participant: |
Date of Grant: |
Number of RSUs Granted: |
Percentage of RSUs Vesting
|
Vesting Date
|
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
|
|