þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended June 30, 2014
|
|
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)
|
Large accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,882
|
|
|
$
|
1,355
|
|
Short-term investments
|
2,112
|
|
|
1,797
|
|
||
Accounts and other receivables
|
447
|
|
|
419
|
|
||
Inventories of parts and supplies, at cost
|
435
|
|
|
467
|
|
||
Deferred income taxes
|
165
|
|
|
168
|
|
||
Prepaid expenses and other current assets
|
276
|
|
|
250
|
|
||
Total current assets
|
5,317
|
|
|
4,456
|
|
||
|
|
|
|
||||
Property and equipment, at cost:
|
|
|
|
|
|
||
Flight equipment
|
17,592
|
|
|
16,937
|
|
||
Ground property and equipment
|
2,792
|
|
|
2,666
|
|
||
Deposits on flight equipment purchase contracts
|
688
|
|
|
764
|
|
||
Assets constructed for others
|
515
|
|
|
453
|
|
||
|
21,587
|
|
|
20,820
|
|
||
Less allowance for depreciation and amortization
|
7,860
|
|
|
7,431
|
|
||
|
13,727
|
|
|
13,389
|
|
||
Goodwill
|
970
|
|
|
970
|
|
||
Other assets
|
877
|
|
|
530
|
|
||
|
$
|
20,891
|
|
|
$
|
19,345
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,292
|
|
|
$
|
1,247
|
|
Accrued liabilities
|
1,645
|
|
|
1,229
|
|
||
Air traffic liability
|
3,485
|
|
|
2,571
|
|
||
Current maturities of long-term debt
|
605
|
|
|
629
|
|
||
Total current liabilities
|
7,027
|
|
|
5,676
|
|
||
|
|
|
|
||||
Long-term debt less current maturities
|
2,153
|
|
|
2,191
|
|
||
Deferred income taxes
|
3,017
|
|
|
2,934
|
|
||
Construction obligation
|
468
|
|
|
437
|
|
||
Other noncurrent liabilities
|
710
|
|
|
771
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock
|
808
|
|
|
808
|
|
||
Capital in excess of par value
|
1,263
|
|
|
1,231
|
|
||
Retained earnings
|
6,979
|
|
|
6,431
|
|
||
Accumulated other comprehensive income (loss)
|
111
|
|
|
(3
|
)
|
||
Treasury stock, at cost
|
(1,645
|
)
|
|
(1,131
|
)
|
||
Total stockholders' equity
|
7,516
|
|
|
7,336
|
|
||
|
$
|
20,891
|
|
|
$
|
19,345
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
465
|
|
|
$
|
224
|
|
|
$
|
617
|
|
|
$
|
283
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
228
|
|
|
213
|
|
|
449
|
|
|
422
|
|
||||
Unrealized (gain) loss on fuel derivative instruments
|
(7
|
)
|
|
55
|
|
|
(67
|
)
|
|
33
|
|
||||
Deferred income taxes
|
(11
|
)
|
|
21
|
|
|
81
|
|
|
23
|
|
||||
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts and other receivables
|
10
|
|
|
(51
|
)
|
|
(61
|
)
|
|
(147
|
)
|
||||
Other assets
|
(21
|
)
|
|
6
|
|
|
(14
|
)
|
|
(19
|
)
|
||||
Accounts payable and accrued liabilities
|
424
|
|
|
162
|
|
|
448
|
|
|
282
|
|
||||
Air traffic liability
|
153
|
|
|
199
|
|
|
914
|
|
|
907
|
|
||||
Cash collateral received from (paid to) derivative counterparties
|
95
|
|
|
(53
|
)
|
|
106
|
|
|
(25
|
)
|
||||
Other, net
|
2
|
|
|
2
|
|
|
(15
|
)
|
|
1
|
|
||||
Net cash provided by operating activities
|
1,338
|
|
|
778
|
|
|
2,458
|
|
|
1,760
|
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(500
|
)
|
|
(193
|
)
|
|
(907
|
)
|
|
(727
|
)
|
||||
Purchases of short-term investments
|
(1,159
|
)
|
|
(900
|
)
|
|
(1,929
|
)
|
|
(1,624
|
)
|
||||
Proceeds from sales of short-term and other investments
|
803
|
|
|
793
|
|
|
1,622
|
|
|
1,580
|
|
||||
Other, net
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Net cash used in investing activities
|
(857
|
)
|
|
(300
|
)
|
|
(1,215
|
)
|
|
(771
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Proceeds from Employee stock plans
|
25
|
|
|
13
|
|
|
73
|
|
|
19
|
|
||||
Payments of long-term debt and capital lease obligations
|
(73
|
)
|
|
(52
|
)
|
|
(119
|
)
|
|
(216
|
)
|
||||
Payments of cash dividends
|
(42
|
)
|
|
(28
|
)
|
|
(97
|
)
|
|
(43
|
)
|
||||
Repayment of construction obligation
|
(2
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||
Repurchase of common stock
|
(240
|
)
|
|
(251
|
)
|
|
(555
|
)
|
|
(351
|
)
|
||||
Other, net
|
(8
|
)
|
|
(9
|
)
|
|
(13
|
)
|
|
(22
|
)
|
||||
Net cash used in financing activities
|
(340
|
)
|
|
(327
|
)
|
|
(716
|
)
|
|
(613
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
141
|
|
|
151
|
|
|
527
|
|
|
376
|
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,741
|
|
|
1,338
|
|
|
1,355
|
|
|
1,113
|
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
1,882
|
|
|
$
|
1,489
|
|
|
$
|
1,882
|
|
|
$
|
1,489
|
|
|
|
|
|
|
|
|
|
||||||||
CASH PAYMENTS FOR:
|
|
|
|
|
|
|
|
||||||||
Interest, net of amount capitalized
|
$
|
33
|
|
|
$
|
26
|
|
|
$
|
67
|
|
|
$
|
67
|
|
Income taxes
|
$
|
12
|
|
|
$
|
21
|
|
|
$
|
12
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
||||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
|
|
|
|
|
|
|
|
||||||||
Assets constructed for others
|
$
|
19
|
|
|
$
|
47
|
|
|
$
|
31
|
|
|
$
|
75
|
|
|
|
Fuel hedged as of
|
|
|
|
|
|
June 30, 2014
|
|
Derivative underlying commodity type as of
|
|
Period (by year)
|
|
(gallons in millions)
(a)
|
|
June 30, 2014
|
|
Remainder of 2014
|
|
365
|
|
|
WTI crude, Brent crude oil, and Gulf Coast jet fuel
|
2015
|
|
1,165
|
|
|
Brent crude oil, Heating oil, and Gulf Coast jet fuel
|
2016
|
|
1,089
|
|
|
Brent crude oil and Heating oil
|
2017
|
|
820
|
|
|
WTI crude and Brent crude oil
|
2018
|
|
98
|
|
|
Brent crude oil
|
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
|
|
Balance Sheet
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
||||||||
(in millions)
|
|
location
|
|
6/30/2014
|
|
12/31/2013
|
|
6/30/2014
|
|
12/31/2013
|
||||||||
Derivatives designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
125
|
|
|
$
|
74
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
385
|
|
|
209
|
|
|
3
|
|
|
1
|
|
||||
Interest rate derivative contracts
|
|
Other assets
|
|
17
|
|
|
20
|
|
|
—
|
|
|
—
|
|
||||
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
—
|
|
|
—
|
|
|
72
|
|
|
77
|
|
||||
Total derivatives designated as hedges
|
|
$
|
527
|
|
|
$
|
303
|
|
|
$
|
76
|
|
|
$
|
78
|
|
||
Derivatives not designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
181
|
|
|
$
|
175
|
|
|
$
|
216
|
|
|
$
|
182
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
61
|
|
|
16
|
|
|
107
|
|
|
99
|
|
||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
—
|
|
|
9
|
|
|
—
|
|
|
21
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
242
|
|
|
$
|
200
|
|
|
$
|
323
|
|
|
$
|
302
|
|
Total derivatives
|
|
|
|
$
|
769
|
|
|
$
|
503
|
|
|
$
|
399
|
|
|
$
|
380
|
|
|
|
Balance Sheet
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
|
location
|
|
2014
|
|
2013
|
||||
Cash collateral deposits held from counterparties for fuel
contracts - current
|
|
Offset against Prepaid expenses and other current assets
|
|
$
|
23
|
|
|
$
|
—
|
|
Cash collateral deposits held from counterparties for fuel
contracts - noncurrent
|
|
Offset against Other assets
|
|
82
|
|
|
—
|
|
||
Cash collateral deposits provided to counterparties for interest
rate contracts - noncurrent
|
|
Offset against Other noncurrent liabilities
|
|
32
|
|
|
32
|
|
||
Due to third parties for fuel contracts
|
|
Accounts payable
|
|
2
|
|
|
—
|
|
||
Receivable from third parties for fuel contracts - current
|
|
Accounts and other receivables
|
|
34
|
|
|
57
|
|
||
Deferred premium gain for fuel contracts - noncurrent
|
|
Other noncurrent liabilities
|
|
12
|
|
|
2
|
|
|
Counterparty (CP)
|
|
|
||||||||||||||||||||||||
(in millions)
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
Other
(a)
|
|
Total
|
||||||||||||||
Fair value of fuel derivatives
|
$
|
148
|
|
|
$
|
61
|
|
|
$
|
73
|
|
|
$
|
92
|
|
|
$
|
25
|
|
|
$
|
26
|
|
|
$
|
425
|
|
Cash collateral held from (by) CP
|
105
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|||||||
Aircraft collateral pledged to CP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Letters of credit (LC)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Option to substitute LC for aircraft
|
(250) to (650) (d)
|
|
(100) to (500) (d)
|
|
N/A
|
|
(250) to (650) (d)
|
|
N/A
|
|
|
|
|
||||||||||||||
Option to substitute LC for cash
|
N/A
|
|
>(500)
|
|
(100) to (150) (e)
|
|
(50) to (250) or >(650) (d)
|
|
N/A
|
|
|
|
|
||||||||||||||
If credit rating is investment
grade, fair value of fuel
derivative level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash is provided to CP
|
(50) to (250) or >(650)
|
|
(50) to (100) or >(500)
|
|
>(50)
|
|
(50) to (250) or >(650)
|
|
>(50)
|
|
|
|
|
||||||||||||||
Cash is received from CP
|
>50
|
|
>150
|
|
>175 (c)
|
|
>200
|
|
>30
|
|
|
|
|
||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(250) to (650) (d)
|
|
(100) to (500) (d)
|
|
N/A
|
|
(250) to (650) (d)
|
|
N/A
|
|
|
|
|
||||||||||||||
If credit rating is non-investment
grade, fair value of fuel derivative
level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash is provided to CP
|
(0) to (250) or >(650)
|
|
(0) to (100) or >(500)
|
|
(b)
|
|
(0) to (250) or >(650)
|
|
(b)
|
|
|
|
|
||||||||||||||
Cash is received from CP
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
|
|
|
||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(250) to (650)
|
|
(100) to (500)
|
|
N/A
|
|
(250) to (650)
|
|
N/A
|
|
|
|
|
|
Three months ended June 30,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
NET INCOME
|
$
|
465
|
|
|
$
|
224
|
|
Unrealized gain (loss) on fuel derivative instruments, net of
deferred taxes of $72 and ($90)
|
121
|
|
|
(152
|
)
|
||
Unrealized gain on interest rate derivative instruments, net of
deferred taxes of $- and $9
|
—
|
|
|
15
|
|
||
Other, net of deferred taxes of $1 and $-
|
2
|
|
|
—
|
|
||
Total other comprehensive income (loss)
|
$
|
123
|
|
|
$
|
(137
|
)
|
COMPREHENSIVE INCOME
|
$
|
588
|
|
|
$
|
87
|
|
|
Six months ended June 30,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
NET INCOME
|
$
|
617
|
|
|
$
|
283
|
|
Unrealized gain (loss) on fuel derivative instruments, net of
deferred taxes of $64 and ($91)
|
109
|
|
|
(155
|
)
|
||
Unrealized gain on interest rate derivative instruments, net of
deferred taxes of $1 and $15
|
2
|
|
|
23
|
|
||
Other, net of deferred taxes of $3 and $2
|
3
|
|
|
3
|
|
||
Total other comprehensive income (loss)
|
$
|
114
|
|
|
$
|
(129
|
)
|
COMPREHENSIVE INCOME
|
$
|
731
|
|
|
$
|
154
|
|
(in millions)
|
Fuel derivatives
|
|
Interest rate derivatives
|
|
Defined benefit plan items
|
|
Other
|
|
Deferred tax
|
|
Accumulated other
comprehensive income (loss)
|
||||||||||||
Balance at March 31, 2014
|
$
|
(40
|
)
|
|
$
|
(55
|
)
|
|
$
|
65
|
|
|
$
|
11
|
|
|
$
|
7
|
|
|
$
|
(12
|
)
|
Changes in fair value
|
195
|
|
|
(5
|
)
|
|
—
|
|
|
3
|
|
|
(72
|
)
|
|
121
|
|
||||||
Reclassification to earnings
|
(2
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
||||||
Balance at June 30, 2014
|
$
|
153
|
|
|
$
|
(55
|
)
|
|
$
|
65
|
|
|
$
|
14
|
|
|
$
|
(66
|
)
|
|
$
|
111
|
|
(in millions)
|
Fuel derivatives
|
|
Interest rate derivatives
|
|
Defined benefit plan items
|
|
Other
|
|
Deferred tax
|
|
Accumulated other
comprehensive income (loss)
|
||||||||||||
Balance at December 31, 2013
|
$
|
(20
|
)
|
|
$
|
(58
|
)
|
|
$
|
65
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
Changes in fair value
|
175
|
|
|
(8
|
)
|
|
—
|
|
|
6
|
|
|
(65
|
)
|
|
108
|
|
||||||
Reclassification to earnings
|
(2
|
)
|
|
11
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
6
|
|
||||||
Balance at June 30, 2014
|
$
|
153
|
|
|
$
|
(55
|
)
|
|
$
|
65
|
|
|
$
|
14
|
|
|
$
|
(66
|
)
|
|
$
|
111
|
|
Three months ended June 30, 2014
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized gain on fuel derivative instruments
|
|
$
|
(2
|
)
|
|
Fuel and oil expense
|
|
|
(1
|
)
|
|
Less: Tax Expense
|
|
|
|
$
|
(1
|
)
|
|
Net of tax
|
Unrealized gain on interest rate derivative instruments
|
|
$
|
5
|
|
|
Interest expense
|
|
|
2
|
|
|
Less: Tax Expense
|
|
|
|
$
|
3
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
2
|
|
|
Net of tax
|
Six months ended June 30, 2014
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized gain on fuel derivative instruments
|
|
$
|
(2
|
)
|
|
Fuel and oil expense
|
|
|
(1
|
)
|
|
Less: Tax Expense
|
|
|
|
$
|
(1
|
)
|
|
Net of tax
|
Unrealized gain on interest rate derivative instruments
|
|
$
|
11
|
|
|
Interest expense
|
|
|
4
|
|
|
Less: Tax Expense
|
|
|
|
$
|
7
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
6
|
|
|
Net of tax
|
Other assets (in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Derivative contracts
|
$
|
271
|
|
|
$
|
145
|
|
Intangible assets (a)
|
369
|
|
|
166
|
|
||
Non-current investments
|
39
|
|
|
44
|
|
||
Other
|
198
|
|
|
175
|
|
||
Other assets
|
$
|
877
|
|
|
$
|
530
|
|
Accounts payable (in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Accounts payable trade
|
$
|
221
|
|
|
$
|
189
|
|
Salaries payable
|
157
|
|
|
156
|
|
||
Taxes payable
|
214
|
|
|
146
|
|
||
Aircraft maintenance payable
|
322
|
|
|
331
|
|
||
Fuel payable
|
106
|
|
|
102
|
|
||
Other payables
|
272
|
|
|
323
|
|
||
Accounts payable
|
$
|
1,292
|
|
|
$
|
1,247
|
|
Accrued liabilities (in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Profitsharing and savings plans
|
$
|
391
|
|
|
$
|
244
|
|
Aircraft and other lease related obligations
|
122
|
|
|
173
|
|
||
Vacation pay
|
287
|
|
|
278
|
|
||
Health
|
72
|
|
|
73
|
|
||
Derivative contracts
|
—
|
|
|
12
|
|
||
Workers compensation
|
162
|
|
|
161
|
|
||
Income taxes
|
313
|
|
|
3
|
|
||
Property and other taxes
|
65
|
|
|
62
|
|
||
Other
|
233
|
|
|
223
|
|
||
Accrued liabilities
|
$
|
1,645
|
|
|
$
|
1,229
|
|
Other noncurrent liabilities (in millions)
|
June 30, 2014
|
|
December 31, 2013
|
||||
Postretirement obligation
|
$
|
144
|
|
|
$
|
138
|
|
Non-current lease-related obligations
|
242
|
|
|
290
|
|
||
Other deferred compensation
|
160
|
|
|
163
|
|
||
Deferred gains from sale and leaseback of aircraft
|
59
|
|
|
65
|
|
||
Derivative contracts
|
40
|
|
|
45
|
|
||
Other
|
65
|
|
|
70
|
|
||
Other noncurrent liabilities
|
$
|
710
|
|
|
$
|
771
|
|
(in millions)
|
|
B717 lease/sublease liability
|
||
Balance at December 31, 2012
|
|
$
|
128
|
|
Lease/sublease accretion
|
|
6
|
|
|
Lease/sublease payments, net (a)
|
|
(12
|
)
|
|
Balance at December 31, 2013
|
|
$
|
122
|
|
Lease/sublease accretion
|
|
3
|
|
|
Lease/sublease expense adjustment
|
|
17
|
|
|
Lease/sublease payments, net (a)
|
|
(63
|
)
|
|
Balance at June 30, 2014
|
|
$
|
79
|
|
|
|
|
|
Fair value measurements at reporting date using:
|
||||||||||||
|
|
|
|
Quoted prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
||||||||
Description
|
|
June 30, 2014
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
1,388
|
|
|
$
|
1,388
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
340
|
|
|
—
|
|
|
340
|
|
|
—
|
|
||||
Certificates of deposit
|
|
12
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Eurodollar time deposits
|
|
142
|
|
|
—
|
|
|
142
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
1,880
|
|
|
1,880
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
232
|
|
|
—
|
|
|
232
|
|
|
—
|
|
||||
Noncurrent investments (b)
|
|
|
|
|
|
|
|
|
||||||||
Auction rate securities
|
|
32
|
|
|
—
|
|
|
—
|
|
|
32
|
|
||||
Interest rate derivatives
|
|
17
|
|
|
—
|
|
|
17
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
48
|
|
|
—
|
|
|
48
|
|
|
—
|
|
||||
Option contracts (c)
|
|
704
|
|
|
—
|
|
|
—
|
|
|
704
|
|
||||
Other available-for-sale securities
|
|
64
|
|
|
59
|
|
|
—
|
|
|
5
|
|
||||
Total assets
|
|
$
|
4,859
|
|
|
$
|
3,327
|
|
|
$
|
791
|
|
|
$
|
741
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
|
$
|
(29
|
)
|
|
$
|
—
|
|
Option contracts (c)
|
|
(298
|
)
|
|
—
|
|
|
—
|
|
|
(298
|
)
|
||||
Interest rate derivatives
|
|
(72
|
)
|
|
—
|
|
|
(72
|
)
|
|
—
|
|
||||
Deferred compensation
|
|
(155
|
)
|
|
(155
|
)
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(554
|
)
|
|
$
|
(155
|
)
|
|
$
|
(101
|
)
|
|
$
|
(298
|
)
|
|
|
|
|
Fair value measurements at reporting date using:
|
||||||||||||
|
|
|
|
Quoted prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
||||||||
Description
|
|
December 31, 2013
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
992
|
|
|
$
|
992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
280
|
|
|
—
|
|
|
280
|
|
|
—
|
|
||||
Certificates of deposit
|
|
23
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
Eurodollar time deposits
|
|
60
|
|
|
—
|
|
|
60
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
1,570
|
|
|
1,570
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
227
|
|
|
—
|
|
|
227
|
|
|
—
|
|
||||
Noncurrent investments (b)
|
|
|
|
|
|
|
|
|
||||||||
Auction rate securities
|
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||
Interest rate derivatives
|
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
16
|
|
|
—
|
|
|
16
|
|
|
—
|
|
||||
Option contracts (c)
|
|
458
|
|
|
—
|
|
|
—
|
|
|
458
|
|
||||
Option contracts (d)
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Other available-for-sale securities
|
|
63
|
|
|
58
|
|
|
—
|
|
|
5
|
|
||||
Total assets
|
|
$
|
3,757
|
|
|
$
|
2,620
|
|
|
$
|
626
|
|
|
$
|
511
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
|
$
|
—
|
|
Option contracts (c)
|
|
(274
|
)
|
|
—
|
|
|
—
|
|
|
(274
|
)
|
||||
Option contracts (d)
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
||||
Interest rate derivatives
|
|
(77
|
)
|
|
—
|
|
|
(77
|
)
|
|
—
|
|
||||
Deferred Compensation
|
|
(158
|
)
|
|
(158
|
)
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(538
|
)
|
|
$
|
(158
|
)
|
|
$
|
(85
|
)
|
|
$
|
(295
|
)
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||||||
|
Fuel
|
|
Auction rate
|
|
Other
|
|
|
||||||||
(in millions)
|
derivatives
|
|
securities
|
|
securities
|
|
Total
|
||||||||
Balance at March 31, 2014
|
$
|
206
|
|
|
$
|
32
|
|
|
$
|
5
|
|
|
$
|
243
|
|
Total gains (realized or unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in earnings
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
||||
Included in other comprehensive income
|
166
|
|
|
—
|
|
|
—
|
|
|
166
|
|
||||
Purchases
|
79
|
|
(a)
|
—
|
|
|
—
|
|
|
79
|
|
||||
Sales
|
(73
|
)
|
(a)
|
—
|
|
|
—
|
|
|
(73
|
)
|
||||
Settlements
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Balance at June 30, 2014
|
$
|
406
|
|
|
$
|
32
|
|
(b)
|
$
|
5
|
|
|
$
|
443
|
|
The amount of total gains for the period
included in earnings attributable to the
change in unrealized gains or losses relating
to assets still held at June 30, 2014
|
$
|
36
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||||||
|
Fuel
|
|
Auction rate
|
|
Other
|
|
|
||||||||
(in millions)
|
derivatives
|
|
securities
|
|
securities
|
|
Total
|
||||||||
Balance at December 31, 2013
|
$
|
172
|
|
|
$
|
39
|
|
|
$
|
5
|
|
|
$
|
216
|
|
Total gains (realized or unrealized)
|
|
|
|
|
|
|
|
|
|
|
|||||
Included in earnings
|
105
|
|
|
—
|
|
|
—
|
|
|
105
|
|
||||
Included in other comprehensive income
|
144
|
|
|
2
|
|
|
—
|
|
|
146
|
|
||||
Purchases
|
100
|
|
(a)
|
—
|
|
|
—
|
|
|
100
|
|
||||
Sales
|
(100
|
)
|
(a)
|
(9
|
)
|
|
—
|
|
|
(109
|
)
|
||||
Settlements
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||
Balance at June 30, 2014
|
$
|
406
|
|
|
$
|
32
|
|
(b)
|
$
|
5
|
|
|
$
|
443
|
|
The amount of total gains for the period
included in earnings attributable to the
change in unrealized gains or losses relating
to assets still held at June 30, 2014
|
$
|
98
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
98
|
|
Quantitative information about Level 3 fair value measurements
|
||||
|
Valuation technique
|
Unobservable input
|
Period (by year)
|
Range
|
Fuel derivatives
|
Option model
|
Implied volatility
|
Third quarter 2014
|
8-19%
|
|
|
|
Fourth quarter 2014
|
12-19%
|
|
|
|
2015
|
12-20%
|
|
|
|
2016
|
11-19%
|
|
|
|
2017
|
11-16%
|
|
|
|
2018
|
11-14%
|
Auction rate securities
|
Discounted cash flow
|
Time to principal recovery
|
|
8 years
|
|
|
Illiquidity premium
|
|
3%
|
|
|
Counterparty credit spread
|
|
1-3%
|
(in millions)
|
Carrying value
|
|
Estimated fair value
|
|
Fair value level hierarchy
|
||||
5.25% Notes due 2014
|
$
|
352
|
|
|
$
|
355
|
|
|
Level 2
|
5.75% Notes due 2016
|
317
|
|
|
348
|
|
|
Level 2
|
||
5.25% Convertible Senior Notes due 2016
|
114
|
|
|
226
|
|
|
Level 2
|
||
5.125% Notes due 2017
|
319
|
|
|
348
|
|
|
Level 2
|
||
Fixed-rate 717 Aircraft Notes payable through 2017 - 10.38%
|
7
|
|
|
8
|
|
|
Level 2
|
||
French Credit Agreements due 2018 - 1.03%
|
41
|
|
|
41
|
|
|
Level 3
|
||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02%
|
27
|
|
|
28
|
|
|
Level 3
|
||
Term Loan Agreement due 2019 - 6.315%
|
195
|
|
|
201
|
|
|
Level 3
|
||
Term Loan Agreement due 2019 - 6.84%
|
79
|
|
|
85
|
|
|
Level 3
|
||
Term Loan Agreement due 2020 - 5.223%
|
393
|
|
|
378
|
|
|
Level 3
|
||
Floating-rate 737 Aircraft Notes payable through 2020
|
320
|
|
|
322
|
|
|
Level 3
|
||
Pass Through Certificates due 2022 - 6.24%
|
363
|
|
|
420
|
|
|
Level 2
|
||
7.375% Debentures due 2027
|
135
|
|
|
164
|
|
|
Level 2
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
NUMERATOR:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
465
|
|
|
$
|
224
|
|
|
$
|
617
|
|
|
$
|
283
|
|
Incremental income effect of interest on 5.25% convertible notes
|
1
|
|
|
1
|
|
|
2
|
|
|
1
|
|
||||
Net income after assumed conversion
|
$
|
466
|
|
|
$
|
225
|
|
|
$
|
619
|
|
|
$
|
284
|
|
|
|
|
|
|
|
|
|
||||||||
DENOMINATOR:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding, basic
|
690
|
|
|
714
|
|
|
694
|
|
|
719
|
|
||||
Dilutive effect of Employee stock options and restricted stock units
|
2
|
|
|
2
|
|
|
3
|
|
|
2
|
|
||||
Dilutive effect of 5.25% convertible notes
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
||||
Adjusted weighted-average shares outstanding, diluted
|
698
|
|
|
722
|
|
|
703
|
|
|
727
|
|
||||
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.67
|
|
|
$
|
0.31
|
|
|
$
|
0.89
|
|
|
$
|
0.39
|
|
Diluted
|
$
|
0.67
|
|
|
$
|
0.31
|
|
|
$
|
0.88
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
||||||||
Potentially dilutive amounts excluded from calculations:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock options and restricted stock units
|
—
|
|
|
10
|
|
|
—
|
|
|
15
|
|
|
|
Three months ended June 30,
|
|
|
|
|||||||
|
|
2014
|
|
2013
|
|
Change
|
||||||
Revenue passengers carried
|
|
29,155,114
|
|
|
28,960,367
|
|
|
0.7
|
%
|
|
||
Enplaned passengers
|
|
35,790,140
|
|
|
35,530,779
|
|
|
0.7
|
%
|
|
||
Revenue passenger miles (RPMs) (000s)
(1)
|
|
28,589,997
|
|
|
27,929,506
|
|
|
2.4
|
%
|
|
||
Available seat miles (ASMs) (000s)
(2)
|
|
34,096,212
|
|
|
34,231,243
|
|
|
(0.4
|
)%
|
|
||
Load factor
(3)
|
|
83.9
|
%
|
|
81.6
|
%
|
|
2.3
|
|
pts
|
||
Average length of passenger haul (miles)
|
|
981
|
|
|
964
|
|
|
1.8
|
%
|
|
||
Average aircraft stage length (miles)
|
|
723
|
|
|
708
|
|
|
2.1
|
%
|
|
||
Trips flown
|
|
327,343
|
|
|
343,592
|
|
|
(4.7
|
)%
|
|
||
Average passenger fare
|
|
$
|
163.00
|
|
|
$
|
151.23
|
|
|
7.8
|
%
|
|
Passenger revenue yield per RPM (cents)
(4)
|
|
16.62
|
|
|
15.68
|
|
|
6.0
|
%
|
|
||
Operating revenue per ASM (cents)
(5)
|
|
14.70
|
|
|
13.56
|
|
|
8.4
|
%
|
|
||
Passenger revenue per ASM (cents)
(6)
|
|
13.94
|
|
|
12.79
|
|
|
9.0
|
%
|
|
||
Operating expenses per ASM (cents)
(7)
|
|
12.42
|
|
|
12.30
|
|
|
1.0
|
%
|
|
||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.25
|
|
|
7.95
|
|
|
3.8
|
%
|
|
||
Operating expenses per ASM, excluding fuel and profitsharing (cents)
|
|
7.88
|
|
|
7.72
|
|
|
2.1
|
%
|
|
||
Fuel costs per gallon, including fuel tax
|
|
$
|
3.03
|
|
|
$
|
3.11
|
|
|
(2.6
|
)%
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
3.02
|
|
|
$
|
3.06
|
|
|
(1.3
|
)%
|
|
Fuel consumed, in gallons (millions)
|
|
469
|
|
|
478
|
|
|
(1.9
|
)%
|
|
||
Active fulltime equivalent Employees
|
|
45,508
|
|
|
45,216
|
|
|
0.6
|
%
|
|
||
Aircraft at end of period
(8)
|
|
683
|
|
|
698
|
|
|
(2.1
|
)%
|
|
|
|
Six months ended June 30,
|
|
|
|
|||||||
|
|
2014
|
|
2013
|
|
Change
|
||||||
Revenue passengers carried
|
|
54,210,923
|
|
|
54,164,301
|
|
|
0.1
|
%
|
|
||
Enplaned passengers
|
|
66,446,721
|
|
|
66,243,404
|
|
|
0.3
|
%
|
|
||
Revenue passenger miles (RPMs) (000s)
(1)
|
|
52,745,314
|
|
|
51,686,249
|
|
|
2.0
|
%
|
|
||
Available seat miles (ASMs) (000s)
(2)
|
|
64,570,794
|
|
|
65,032,668
|
|
|
(0.7
|
)%
|
|
||
Load factor
(3)
|
|
81.7
|
%
|
|
79.5
|
%
|
|
2.2
|
|
pts
|
||
Average length of passenger haul (miles)
|
|
973
|
|
|
954
|
|
|
2.0
|
%
|
|
||
Average aircraft stage length (miles)
|
|
717
|
|
|
701
|
|
|
2.3
|
%
|
|
||
Trips flown
|
|
626,981
|
|
|
662,106
|
|
|
(5.3
|
)%
|
|
||
Average passenger fare
|
|
$
|
160.21
|
|
|
$
|
151.73
|
|
|
5.6
|
%
|
|
Passenger revenue yield per RPM (cents)
(4)
|
|
16.47
|
|
|
15.90
|
|
|
3.6
|
%
|
|
||
Operating revenue per ASM (cents)
(5)
|
|
14.21
|
|
|
13.42
|
|
|
5.9
|
%
|
|
||
Passenger revenue per ASM (cents)
(6)
|
|
13.45
|
|
|
12.64
|
|
|
6.4
|
%
|
|
||
Operating expenses per ASM (cents)
(7)
|
|
12.68
|
|
|
12.65
|
|
|
0.2
|
%
|
|
||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.44
|
|
|
8.12
|
|
|
3.9
|
%
|
|
||
Operating expenses per ASM, excluding fuel and profitsharing (cents)
|
|
8.20
|
|
|
7.98
|
|
|
2.8
|
%
|
|
||
Fuel costs per gallon, including fuel tax
|
|
$
|
3.06
|
|
|
$
|
3.23
|
|
|
(5.3
|
)%
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
3.05
|
|
|
$
|
3.17
|
|
|
(3.8
|
)%
|
|
Fuel consumed, in gallons (millions)
|
|
892
|
|
|
910
|
|
|
(2.0
|
)%
|
|
||
Active fulltime equivalent Employees
|
|
45,508
|
|
|
45,216
|
|
|
0.6
|
%
|
|
||
Aircraft at period-end
(8)
|
|
683
|
|
|
698
|
|
|
(2.1
|
)%
|
|
|
Three months ended June 30,
|
|
Percent
|
|
Six months ended June 30,
|
|
Percent
|
||||||||||||
|
2014
|
|
2013
|
|
Change
|
|
2014
|
|
2013
|
|
Change
|
||||||||
Fuel and oil expense, unhedged
|
$
|
1,444
|
|
|
$
|
1,442
|
|
|
|
|
$
|
2,776
|
|
|
$
|
2,847
|
|
|
|
Add (Deduct): Fuel hedge (gains) losses included in Fuel and oil expense
|
(19
|
)
|
|
47
|
|
|
|
|
(37
|
)
|
|
99
|
|
|
|
||||
Fuel and oil expense, as reported
|
$
|
1,425
|
|
|
$
|
1,489
|
|
|
|
|
$
|
2,739
|
|
|
$
|
2,946
|
|
|
|
Deduct: Net impact from fuel contracts
|
(6
|
)
|
|
(20
|
)
|
|
|
|
(14
|
)
|
|
(49
|
)
|
|
|
||||
Fuel and oil expense, non-GAAP (economic)
|
$
|
1,419
|
|
|
$
|
1,469
|
|
|
(3.4)%
|
|
$
|
2,725
|
|
|
$
|
2,897
|
|
|
(5.9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total operating expenses, as reported
|
$
|
4,236
|
|
|
$
|
4,210
|
|
|
|
|
$
|
8,187
|
|
|
$
|
8,224
|
|
|
|
Add: Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period settled contracts
|
—
|
|
|
7
|
|
|
|
|
—
|
|
|
7
|
|
|
|
||||
Deduct: Contracts settling in the current period, but for which gains have been recognized in a prior period*
|
(6
|
)
|
|
(27
|
)
|
|
|
|
(14
|
)
|
|
(56
|
)
|
|
|
||||
Deduct: Acquisition and integration costs
|
(38
|
)
|
|
(26
|
)
|
|
|
|
(56
|
)
|
|
(39
|
)
|
|
|
||||
Total operating expenses, non-GAAP
|
$
|
4,192
|
|
|
$
|
4,164
|
|
|
0.7%
|
|
$
|
8,117
|
|
|
$
|
8,136
|
|
|
(0.2)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income, as reported
|
$
|
775
|
|
|
$
|
433
|
|
|
|
|
$
|
991
|
|
|
$
|
503
|
|
|
|
Deduct: Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period settled contracts
|
—
|
|
|
(7
|
)
|
|
|
|
—
|
|
|
(7
|
)
|
|
|
||||
Add: Contracts settling in the current period, but for which gains have been recognized in a prior period*
|
6
|
|
|
27
|
|
|
|
|
14
|
|
|
56
|
|
|
|
||||
Add: Acquisition and integration costs
|
38
|
|
|
26
|
|
|
|
|
56
|
|
|
39
|
|
|
|
||||
Operating income, non-GAAP
|
$
|
819
|
|
|
$
|
479
|
|
|
71.0%
|
|
$
|
1,061
|
|
|
$
|
591
|
|
|
79.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income, as reported
|
$
|
465
|
|
|
$
|
224
|
|
|
|
|
$
|
617
|
|
|
$
|
283
|
|
|
|
Add (Deduct): Mark-to-market impact from fuel contracts settling in future periods
|
16
|
|
|
25
|
|
|
|
|
(40
|
)
|
|
(35
|
)
|
|
|
||||
Add (Deduct): Ineffectiveness from fuel hedges settling in future periods
|
(28
|
)
|
|
3
|
|
|
|
|
(41
|
)
|
|
12
|
|
|
|
||||
Add: Other net impact of fuel contracts settling in the current or a prior period (excluding reclassifications)
|
6
|
|
|
27
|
|
|
|
|
14
|
|
|
56
|
|
|
|
||||
Add (Deduct): Income tax impact of fuel contracts
|
2
|
|
|
(21
|
)
|
|
|
|
26
|
|
|
(12
|
)
|
|
|
||||
Add: Acquisition and integration costs, net (a)
|
24
|
|
|
16
|
|
|
|
|
35
|
|
|
24
|
|
|
|
||||
Net income, non-GAAP
|
$
|
485
|
|
|
$
|
274
|
|
|
77.0%
|
|
$
|
611
|
|
|
$
|
328
|
|
|
86.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share, diluted, as reported
|
$
|
0.67
|
|
|
$
|
0.31
|
|
|
|
|
$
|
0.88
|
|
|
$
|
0.39
|
|
|
|
Add (Deduct): Net impact to net income above from fuel contracts divided by dilutive shares (a)
|
(0.01
|
)
|
|
0.05
|
|
|
|
|
(0.06
|
)
|
|
0.03
|
|
|
|
||||
Add: Impact of special items, net (a)
|
0.04
|
|
|
0.02
|
|
|
|
|
0.05
|
|
|
0.03
|
|
|
|
||||
Net income per share, diluted, non-GAAP
|
$
|
0.70
|
|
|
$
|
0.38
|
|
|
84.2%
|
|
$
|
0.87
|
|
|
$
|
0.45
|
|
|
93.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses per ASM (cents)
|
|
12.42
|
¢
|
|
|
12.30
|
¢
|
|
|
|
|
12.68
|
¢
|
|
|
12.65
|
¢
|
|
|
Deduct: Fuel expense divided by ASMs
|
(4.17
|
)
|
|
(4.35
|
)
|
|
|
|
(4.24
|
)
|
|
(4.53
|
)
|
|
|
||||
Deduct: Impact of special items
|
(0.11
|
)
|
|
(0.08
|
)
|
|
|
|
(0.09
|
)
|
|
(0.06
|
)
|
|
|
||||
Operating expenses per ASM, non-GAAP, excluding fuel and special items (cents)
|
|
8.14
|
¢
|
|
|
7.87
|
¢
|
|
3.4%
|
|
|
8.35
|
¢
|
|
|
8.06
|
¢
|
|
3.6%
|
|
|
|
|
||||
|
Twelve Months Ended
|
|
Twelve Months Ended
|
||||
|
June 30, 2014
|
|
June 30, 2013
|
||||
Operating income, as reported
|
$
|
1,766
|
|
|
$
|
645
|
|
Net impact from fuel contracts
|
49
|
|
|
92
|
|
||
Acquisition and integration costs
|
103
|
|
|
198
|
|
||
Operating income, non-GAAP
|
$
|
1,918
|
|
|
$
|
935
|
|
Net adjustment for aircraft leases (1)
|
140
|
|
|
127
|
|
||
Adjustment for fuel hedge accounting
|
(78
|
)
|
|
(35
|
)
|
||
Adjusted Operating income, non-GAAP
|
$
|
1,980
|
|
|
$
|
1,027
|
|
|
|
|
|
||||
Average invested capital (2)
|
$
|
11,581
|
|
|
$
|
11,937
|
|
Equity adjustment for hedge accounting
|
(25
|
)
|
|
132
|
|
||
Adjusted average invested capital
|
$
|
11,556
|
|
|
$
|
12,069
|
|
|
|
|
|
||||
ROIC, pre-tax
|
17.1
|
%
|
|
8.5
|
%
|
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
||||||||||||||
(in millions, except per share amounts)
|
|
June 30,
|
|
|
|
June 30,
|
|
|
||||||||||||||
GAAP
|
|
2014
|
|
2013
|
|
Percent Change
|
|
2014
|
|
2013
|
|
Percent Change
|
||||||||||
Operating income
|
|
$
|
775
|
|
|
$
|
433
|
|
|
79.0
|
%
|
|
$
|
991
|
|
|
$
|
503
|
|
|
97.0
|
%
|
Net income
|
|
$
|
465
|
|
|
$
|
224
|
|
|
107.6
|
%
|
|
$
|
617
|
|
|
$
|
283
|
|
|
118.0
|
%
|
Net income per share, diluted
|
|
$
|
0.67
|
|
|
$
|
0.31
|
|
|
116.1
|
%
|
|
$
|
0.88
|
|
|
$
|
0.39
|
|
|
125.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income
|
|
$
|
819
|
|
|
$
|
479
|
|
|
71.0
|
%
|
|
$
|
1,061
|
|
|
$
|
591
|
|
|
79.5
|
%
|
Net income
|
|
$
|
485
|
|
|
$
|
274
|
|
|
77.0
|
%
|
|
$
|
611
|
|
|
$
|
328
|
|
|
86.3
|
%
|
Net income per share, diluted
|
|
$
|
0.70
|
|
|
$
|
0.38
|
|
|
84.2
|
%
|
|
$
|
0.87
|
|
|
$
|
0.45
|
|
|
93.3
|
%
|
•
|
At Washington Reagan National Airport, the Company announced new nonstop service beginning
November 2, 2014
, increasing the carrier's service from
17
departures to
44
departures per day by year's end, to
14
destinations: Atlanta, Akron/Canton, Austin, Chicago Midway, Dallas Love Field, Houston Hobby, Fort Myers, Indianapolis, Kansas City, Milwaukee, Nashville, New Orleans, St. Louis, and Tampa Bay. This increase in service was made possible by the acquisition of 54 additional slots (for 27 additional daily roundtrip flights), divested in connection with the merger between AMR Corporation, the parent company of American Airlines, Inc., and US Airways Group, Inc.
|
•
|
At Dallas Love Field, the Company announced it will begin serving
seven
new nonstop destinations beginning
October 13, 2014
and
eight
nonstop destinations beginning
November 2, 2014
. These routes were made possible by the official repeal of the Wright Amendment federal flight restrictions at Love Field, which come to an end on
October 13, 2014
.
|
•
|
Mobile boarding passes are now available for Customers traveling throughout the United States, marking the completion of the domestic rollout of the technology, which will make getting through the airport quicker and greener.
|
|
Three months ended June 30,
|
|
Per ASM
|
|
Percent
|
|||||||||
(in cents, except for percentages)
|
2014
|
|
2013
|
|
change
|
|
change
|
|||||||
Salaries, wages, and benefits
|
|
4.12
|
¢
|
|
|
3.79
|
¢
|
|
|
0.33
|
¢
|
|
8.7
|
%
|
Fuel and oil
|
4.17
|
|
|
4.35
|
|
|
(0.18
|
)
|
|
(4.1
|
)
|
|||
Maintenance materials and repairs
|
0.69
|
|
|
0.82
|
|
|
(0.13
|
)
|
|
(15.9
|
)
|
|||
Aircraft rentals
|
0.22
|
|
|
0.27
|
|
|
(0.05
|
)
|
|
(18.5
|
)
|
|||
Landing fees and other rentals
|
0.86
|
|
|
0.85
|
|
|
0.01
|
|
|
1.2
|
|
|||
Depreciation and amortization
|
0.67
|
|
|
0.62
|
|
|
0.05
|
|
|
8.1
|
|
|||
Acquisition and integration
|
0.11
|
|
|
0.08
|
|
|
0.03
|
|
|
37.5
|
|
|||
Other operating expenses
|
1.58
|
|
|
1.52
|
|
|
0.06
|
|
|
3.9
|
|
|||
Total
|
|
12.42
|
¢
|
|
|
12.30
|
¢
|
|
|
0.12
|
¢
|
|
1.0
|
%
|
Period
|
Average percent of estimated fuel consumption covered by fuel derivative contracts at varying WTI/Brent Crude Oil, Heating Oil, and Gulf Coast Jet Fuel-equivalent price levels
|
|
Third quarter 2014
|
Approx. 35%
|
|
Full year 2014
|
Approx. 25%
|
|
2015
|
Approx. 40%
|
|
2016
|
Approx. 40%
|
|
2017
|
Approx. 40%
|
|
2018
|
Approx. 5%
|
Year
|
|
Fair value (liability) of fuel derivative contracts at June 30, 2014
|
|
Amount of gains (losses) deferred in AOCI at June 30, 2014 (net of tax)
|
||||
Remainder of 2014
|
|
$
|
27
|
|
|
$
|
12
|
|
2015
|
|
140
|
|
|
—
|
|
||
2016
|
|
161
|
|
|
41
|
|
||
2017
|
|
87
|
|
|
38
|
|
||
2018
|
|
$
|
10
|
|
|
$
|
5
|
|
Total
|
|
$
|
425
|
|
|
$
|
96
|
|
|
Estimated economic jet fuel price per gallon,
including taxes |
|
Average Brent Crude Oil price per barrel
|
3Q 2014 (2)
|
Full Year 2014 (2)
|
$85
|
$2.50 - $2.55
|
$2.75 - $2.80
|
$95
|
$2.70 - $2.75
|
$2.85 - $2.90
|
Current Market (1)
|
$2.95 - $3.00
|
$3.00 - $3.05
|
$115
|
$3.15 - $3.20
|
$3.10 - $3.15
|
$125
|
$3.30 - $3.35
|
$3.20 - $3.25
|
Estimated Premium Costs (3)
|
$15M
|
$60M - $70M
|
|
Three months ended June 30,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
16
|
|
|
$
|
25
|
|
Ineffectiveness from fuel hedges settling in future periods
|
(28
|
)
|
|
3
|
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
—
|
|
|
7
|
|
||
Premium cost of fuel contracts
|
17
|
|
|
12
|
|
||
Other
|
(2
|
)
|
|
—
|
|
||
|
$
|
3
|
|
|
$
|
47
|
|
|
Six months ended June 30,
|
|
Per ASM
|
|
Percent
|
|||||||||
(in cents, except for percentages)
|
2014
|
|
2013
|
|
change
|
|
change
|
|||||||
Salaries, wages, and benefits
|
|
4.15
|
¢
|
|
|
3.81
|
¢
|
|
|
0.34
|
¢
|
|
8.9
|
%
|
Fuel and oil
|
4.24
|
|
|
4.53
|
|
|
(0.29
|
)
|
|
(6.4
|
)
|
|||
Maintenance materials and repairs
|
0.75
|
|
|
0.88
|
|
|
(0.13
|
)
|
|
(14.8
|
)
|
|||
Aircraft rentals
|
0.24
|
|
|
0.28
|
|
|
(0.04
|
)
|
|
(14.3
|
)
|
|||
Landing fees and other rentals
|
0.87
|
|
|
0.86
|
|
|
0.01
|
|
|
1.2
|
|
|||
Depreciation and amortization
|
0.70
|
|
|
0.65
|
|
|
0.05
|
|
|
7.7
|
|
|||
Acquisition and integration
|
0.09
|
|
|
0.06
|
|
|
0.03
|
|
|
50.0
|
|
|||
Other operating expenses
|
1.64
|
|
|
1.58
|
|
|
0.06
|
|
|
3.8
|
|
|||
Total
|
|
12.68
|
¢
|
|
|
12.65
|
¢
|
|
|
0.03
|
¢
|
|
0.2
|
%
|
|
Six months ended June 30,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
(40
|
)
|
|
$
|
(35
|
)
|
Ineffectiveness from fuel hedges settling in future periods
|
(41
|
)
|
|
12
|
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
—
|
|
|
7
|
|
||
Premium cost of fuel contracts
|
34
|
|
|
17
|
|
||
Other
|
(3
|
)
|
|
—
|
|
||
|
$
|
(50
|
)
|
|
$
|
1
|
|
|
The Boeing Company
737 NG
|
|
|
The Boeing Company
737 MAX
|
|
|
|||||||
|
-700 Firm Orders
|
|
-800 Firm Orders
|
Options
|
Additional -700 A/C
|
|
-7
Firm Orders |
-8
Firm Orders |
|
Options
|
|
Total
|
|
2014
|
—
|
|
33
|
—
|
17
|
|
—
|
—
|
|
—
|
|
50
|
(3)
|
2015
|
—
|
|
19
|
—
|
6
|
|
—
|
—
|
|
—
|
|
25
|
|
2016
|
31
|
|
—
|
12
|
—
|
|
—
|
—
|
|
—
|
|
43
|
|
2017
|
15
|
|
—
|
12
|
—
|
|
—
|
14
|
|
—
|
|
41
|
|
2018
|
10
|
|
—
|
12
|
—
|
|
—
|
13
|
|
—
|
|
35
|
|
2019
|
—
|
|
—
|
—
|
—
|
|
15
|
10
|
|
—
|
|
25
|
|
2020
|
—
|
|
—
|
—
|
—
|
|
14
|
22
|
|
—
|
|
36
|
|
2021
|
—
|
|
—
|
—
|
—
|
|
1
|
33
|
|
18
|
|
52
|
|
2022
|
—
|
|
—
|
—
|
—
|
|
—
|
30
|
|
19
|
|
49
|
|
2023
|
—
|
|
—
|
—
|
—
|
|
—
|
24
|
|
23
|
|
47
|
|
2024
|
—
|
|
—
|
—
|
—
|
|
—
|
24
|
|
23
|
|
47
|
|
2025
|
—
|
|
—
|
—
|
—
|
|
—
|
—
|
|
36
|
|
36
|
|
2026
|
—
|
|
—
|
—
|
—
|
|
—
|
—
|
|
36
|
|
36
|
|
2027
|
—
|
|
—
|
—
|
—
|
|
—
|
—
|
|
36
|
|
36
|
|
Total
|
56
|
(1)
|
52
|
36
|
23
|
|
30
|
170
|
(2)
|
191
|
|
558
|
|
|
|
|
|
Average
|
|
Number
|
|
Number
|
|
Number
|
||||
Type
|
|
Seats
|
|
Age (Yrs)
|
|
of Aircraft
|
|
Owned
|
|
Leased
|
||||
717-200
|
|
117
|
|
13
|
|
|
47
|
|
|
10
|
|
|
37
|
|
737-300
|
|
137 or 143
|
|
21
|
|
|
122
|
|
|
76
|
|
|
46
|
|
737-500
|
|
122
|
|
23
|
|
|
14
|
|
|
9
|
|
|
5
|
|
737-700
|
|
137 or 143
|
|
10
|
|
|
434
|
|
|
383
|
|
|
51
|
|
737-800
|
|
175
|
|
1
|
|
|
66
|
|
|
59
|
|
|
7
|
|
TOTALS
|
|
|
|
|
|
683
|
|
|
537
|
|
|
146
|
|
Issuer Purchases of Equity Securities (1) (2)
|
||||||||||||||
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
||||||
|
|
|
|
|
|
Total number of
|
|
Maximum dollar
|
||||||
|
|
|
|
|
|
shares purchased
|
|
value of shares that
|
||||||
|
|
Total number
|
|
Average
|
|
as part of publicly
|
|
may yet be purchased
|
||||||
|
|
of shares
|
|
price paid
|
|
announced plans
|
|
under the plans
|
||||||
Period
|
|
purchased
|
|
per share
|
|
or programs
|
|
or programs
|
||||||
April 1, 2014 through
April 30, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
20,068,782
|
|
May 1, 2014 through
May 31, 2014
|
|
8,567,575
|
|
(2)(3)(4)
|
$
|
—
|
|
(2)(3)(4)
|
8,567,575
|
|
|
$
|
800,000,000
|
|
June 1, 2014 through
June 30, 2014
|
|
750,000
|
|
|
$
|
26.19
|
|
|
750,000
|
|
|
$
|
780,356,300
|
|
Total
|
|
9,317,575
|
|
|
|
|
9,317,575
|
|
|
|
(1)
|
In January 2008, the Company’s Board of Directors authorized the repurchase of up to $500 million of the Company’s common stock. Through February 15, 2008, the Company had repurchased 4.4 million shares for a total of approximately $54 million, at which time repurchases under the program were suspended. On August 5, 2011, the Company’s Board of Directors authorized the Company to resume a share repurchase program and approved the Company’s repurchase, on a discretionary basis, of a total of up to $500 million of the Company’s common stock following such authorization. On May 16, 2012, the Company’s Board of Directors increased the previous share repurchase authorization by an additional $500 million to a total of $1.0 billion. On May 15, 2013, the Company's Board of Directors further increased the previous share repurchase authorization by an additional $500 million to a total of $1.5 billion.
|
(2)
|
During the period from May 1, 2014 through May 9, 2014, the Company repurchased 826,867 shares of its common stock on the open market at an average price of $24.27 per share. Following these open market repurchases, the Company had completed its then-existing share repurchase authorization. On May 14, 2014, the Company’s Board of Directors authorized the repurchase of up to $1 billion of the Company’s common stock in a new share repurchase authorization. Repurchases are made in accordance with applicable securities laws in open market, private, or accelerated repurchase transactions from time to time, depending on market conditions, and may be discontinued at any time.
|
(3)
|
Under an accelerated share repurchase program entered into by the Company with a third party financial institution in first quarter 2014 (“First Quarter ASR Program”), the Company paid $200 million and received an initial delivery of 6,893,382 shares during first quarter 2014, representing an estimated 75 percent of the shares to be purchased by the Company under the First Quarter ASR Program based on a price of $21.76 per share, which was the closing price of the Company’s common stock on the New York Stock Exchange on February 21, 2014. Final settlement of this First Quarter ASR Program occurred in May 2014 and was determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period completed in May 2014. Upon settlement, the third party financial institution delivered 1,719,030 additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the 8,612,412 shares repurchased under the First Quarter ASR Program, upon completion of the First Quarter ASR Program in May 2014, was $23.22.
|
(4)
|
Following the Board of Directors’ authorization of the Company’s new $1 billion share repurchase program on May 14, 2014, under the Second Quarter ASR Program the Company paid $200 million and received an initial delivery of 6,021,678 shares during second quarter 2014, representing an estimated 75 percent of the shares to be purchased by the Company under the Second Quarter ASR Program based on a price of $24.91 per share, which was the closing price of the Company's common stock on the New York Stock Exchange on May 14, 2014. The specific number of shares that the Company ultimately will repurchase under the Second Quarter ASR Program will be determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period to be completed in third quarter 2014. At settlement, under certain circumstances, the third party financial institution may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the third party financial institution.
|
3.1
|
Restated Certificate of Formation of the Company, effective May 18, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (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. 87 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
10.2
|
Southwest Airlines Co. Deferred Compensation Plan for Senior Leadership and Non-Employee Members of the Southwest Airlines Co. Board of Directors (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated May 13, 2014 (File No. 1-7259)). (2)
|
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. (2)
|
10.4
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan Form of Notice of Grant and Terms and Conditions for Performance-Based Restricted Stock Unit grants. (2)
|
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. (3)
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(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 Commissi
on.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
(3)
|
Furnished, not filed.
|
|
SOUTHWEST AIRLINES CO.
|
|
|
|
|
July 30, 2014
|
By
|
/s/ Tammy Romo
|
|
|
|
|
|
Tammy Romo
|
|
|
Senior Vice President Finance & Chief Financial Officer
|
|
|
(On behalf of the Registrant and in
|
|
|
her capacity as Principal Financial
|
|
|
and Accounting Officer)
|
3.1
|
Restated Certificate of Formation of the Company, effective May 18, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (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. 87 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
10.2
|
Southwest Airlines Co. Deferred Compensation Plan for Senior Leadership and Non-Employee Members of the Southwest Airlines Co. Board of Directors (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K dated May 13, 2014 (File No. 1-7259)). (2)
|
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. (2)
|
10.4
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan Form of Notice of Grant and Terms and Conditions for Performance-Based Restricted Stock Unit grants. (2)
|
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. (3)
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and has been filed separately with the Securities a
nd Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
(3)
|
Furnished, not filed.
|
Supplemental Agreement No. 87
|
|
to
|
|
Purchase Agreement No. 1810
|
|
between
|
|
THE BOEING COMPANY
|
|
and
|
|
SOUTHWEST AIRLINES CO.
|
|
Relating to Boeing Model 737-7H4 and 737-8H4 Aircraft
|
P.A. No. 1810
|
SA-87-1
|
|
THE BOEING COMPANY
|
SOUTHWEST aIRLINES cO.
|
|
|
|
|
By:
/s/ Jeff Solomon
|
By: _
/s/ Chris Monroe
_______
|
|
|
Its:
Attorney‑In‑Fact
|
Chris Monroe
Its:
VP, Treasurer
_____________
|
P.A. No. 1810
|
SA-87-2
|
|
|
TABLE OF CONTENTS
|
|
|
|
|
Page
|
SA
|
|
|
Number
|
Number
|
1.
|
Subject Matter of Sale 1-1
|
SA-82
|
|
|
|
2.
|
Delivery, Title and Risk
|
|
|
of Loss 2-1
|
SA-28
|
3.
|
Price of Aircraft 3‑1
|
SA-82
|
|
|
|
4.
|
Taxes 4-1
|
|
|
|
|
5.
|
Payment 5‑1
|
|
|
|
|
6.
|
Excusable Delay 6‑1
|
|
7.
|
Changes to the Detail
|
|
|
Specification 7-1
|
SA-73
|
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
|
|
P.A. No. 1810
|
i
|
|
K/SWA
|
|
SA-87
|
|
TABLE OF CONTENTS
|
|
|
|
SA
|
|
|
Number
|
1a
|
Aircraft Information Table - Block 700LUV Aircraft
|
SA-85
|
|
|
|
1b
|
Aircraft Information Table - Block 700LUV Aircraft
|
SA-82
|
|
|
|
1c
|
Aircraft Information Table - Block 800LUV Aircraft
|
SA-87
|
|
(non-ETOPS Configuration)
|
|
A-5
|
Aircraft Configuration - Block 700LUV Aircraft
|
SA-75
|
|
|
|
A-6
|
Aircraft Configuration - Block 800LUV Aircraft
|
SA-75
|
|
|
|
A-7
|
Aircraft Configuration - Block 800LUV Aircraft
|
SA-84
|
|
(non-ETOPS Configuration)
|
|
|
|
|
B
|
***
|
SA-75
|
|
|
|
C
|
Customer Support Document
|
|
|
|
|
C-2
|
737-800 Customer Support Document
|
SA-75
|
|
|
|
D-2
|
Economic Price Adjustment
|
SA-75
|
|
ECI-MFG/CPI (July 2011 Base Price)
|
|
|
|
|
E
|
Buyer Furnished Equipment
|
SA-75
|
|
Provisions Document
|
|
|
Attachment A - 737-7H4 Aircraft (through 2012)
|
|
|
Attachment B - 737-8H4 Aircraft (2012-2018)
|
SA-87
|
|
|
|
F
|
Defined Terms Document
|
|
1810-1R1
|
Waiver of Aircraft Demonstration Flight
|
SA-75
|
P.A. No. 1810
|
ii
|
|
K/SWA
|
|
SA-87
|
|
TABLE OF CONTENTS
|
|
|
|
SA
|
|
|
Number
|
RESTRICTED LETTER AGREEMENTS
|
|
|
|
|
|
6‑1162‑RLL‑932R3
|
***
|
SA-75
|
|
|
|
6‑1162‑RLL‑934R5
|
Disclosure of Confidential
|
SA-75
|
|
Information
|
|
|
|
|
6‑1162‑RLL‑941R3
|
Other Matters
|
SA-75
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
SWA-PA-1810-LA-1001315R3
|
***
|
SA-85
|
|
Attachment A
|
SA-87
|
|
|
|
SWA-PA-1810-LA-1003498 R1
|
***
|
SA-75
|
|
|
|
SWA-PA-1810-LA-1003490R2
|
***
|
SA-82
|
|
|
|
SWA-PA-1810-LA-1003367R1
|
***
|
SA-75
|
|
|
|
SWA-PA-1810-LA-1105883
|
Aircraft Model Substitution
|
SA-75
|
|
|
|
SWA-PA-1810-LA-1105884
|
Option Aircraft
|
SA-75
|
|
Attachment B - Option Aircraft Information Table
|
SA-83
|
|
|
|
SWA-PA-1810-LA-1105885R2
|
***
|
SA-84
|
|
|
|
SWA-PA-1810-LA-1105886R1
|
***
|
SA-82
|
|
|
|
|
|
|
SWA-PA-1810-LA-1105887
|
***
|
SA-75
|
|
|
|
P.A. No. 1810
|
iii
|
|
K/SWA
|
|
SA-87
|
|
TABLE OF CONTENTS
|
|
|
|
SA
|
|
|
Number
|
SWA-PA-1810-LA-1105888R4
|
***
|
SA-85
|
|
|
|
SWA-PA-1810-LA-1105889
|
***
|
SA-75
|
|
|
|
SWA-PA-01810/03729-LA-1301169
|
***
|
SA-83
|
|
|
|
SWA-PA-1810-LA-1303010
|
***
|
SA-85
|
ADDITIONAL LETTERS (FOR REFERENCE) -
INACTIVE (as of SA-82)
|
6-1162-MSA-288 Business Offer - Enhanced Ground Proximity
|
Warning System (EGPWS) - Activiation - Peaks
|
and Obstacles Feature
|
(
Not applicable to Block 700LUV & Block 800LUV Aircraft)
|
|
6-1162-JMG-501R2 Business Offer - ACARS package
|
(
Not applicable to Block 700LUV & Block 800LUV Aircraft)
|
Table
|
Title
|
Last Updated under SA
|
Current Status
|
1
|
Aircraft Information Table
|
SA-75
|
Inactive
|
2
|
Option Aircraft Information
|
SA-74
|
Deleted under
|
|
Table
|
|
SA-75
|
Exhibits
|
Title
|
Last Updated under SA
|
Current Status
|
A
|
Aircraft Configuration - 737- 700
|
SA-36
|
Inactive
|
A-Winglet
|
Aircraft Configuration
|
SA-36
|
Inactive
|
A-1-Winglet
|
Aircraft Configuration
|
SA-36
|
Inactive
|
A-1A
|
Aircraft Configuration - 737-700 Block T-W-2c
|
SA-36
|
Inactive
|
A-2
|
Aircraft Configuration - 737-700 Block T-W-2 / T-W-2a
|
SA-47
|
Inactive
|
A-3
|
Aircraft Configuration - 737-700 Block T-W-2 / T-W-2a
|
SA-61
|
Inactive
|
P.A. No. 1810
|
iv
|
|
K/SWA
|
|
SA-87
|
|
TABLE OF CONTENTS
|
|
Exhibits
|
Title
|
Last Updated under SA
|
Current Status
|
A-4
|
Aircraft Configuration - 737-700 Block T-W-2b Aircraft
|
SA-66
|
Inactive
|
C.2
|
737-800 Customer Support Variables
|
SA-71
|
Deleted under SA-75
|
D
|
Price Adjustment Due to
Economic Fluctuations - Aircraft Price Adjustment
(July 1992 Base Price)
|
|
Inactive
|
D-1
|
Price Adjustment Due to Economic Fluctuations - Aircraft Price Adjustment
(July 1999 Base Price)
|
SA-13
|
Inactive
|
E.2
|
737-800 Buyer Furnished Equipment Provisions Document
|
SA-73
|
Deleted under SA-75
|
Letter Agreement
|
Title
|
Last Updated under SA
|
Current Status
|
6‑1162‑RLL‑933R21
|
Option Aircraft
|
SA-60
|
Deleted under SA-75
|
6‑1162‑RLL‑935R1
|
Performance Guarantees
|
SA-1
|
Inactive
|
6‑1162‑RLL‑936R4
|
Certain Contractual Matters
|
SA-4
|
Inactive
|
6‑1162‑RLL‑937
|
Alternate Advance Payment Schedule
|
|
Inactive
|
6‑1162‑RLL‑938
|
***
|
|
Inactive
|
6‑1162‑RLL‑939R1
|
Certification Flight Test Aircraft
|
SA-1
|
Inactive
|
6‑1162‑RLL‑940R1
|
Training Matters
|
SA-1
|
Inactive
|
6‑1162‑RLL‑942
|
Open Configuration Matters
|
|
Inactive
|
6‑1162‑RLL‑943R1
|
Substitution Rights
|
SA-6
|
Deleted under SA 75
|
6‑1162‑RLL‑944
|
***
|
|
Inactive
|
6-1162-RLL-945
|
Comparison of 737-7H4 and 737-3H4 Block Fuel Burn
|
|
Inactive
|
6-1162-RLL-1855R3
|
Additional Contractual Matters
|
SA-4
|
Inactive
|
6-1162-RLL-1856
|
***
|
SA-1
|
Inactive
|
6-1162-RLL-1857
|
Service Ready Validation Program Field Test
|
SA-1
|
Inactive
|
6-1162-RLL-1858R1
|
Escalation Matters
|
SA-4
|
Inactive
|
6-1162-RLL-2036
|
Amortization of Costs for Customer Unique Changes
|
SA-1
|
Inactive
|
P.A. No. 1810
|
v
|
|
K/SWA
|
|
SA-87
|
|
TABLE OF CONTENTS
|
|
P.A. No. 1810
|
vi
|
|
K/SWA
|
|
SA-87
|
Airframe Model/MTOW:
737-800
|
174200 pounds
|
|
|
Detail Specification:
D019A001SWA38P-1 Rev C (3/29/2013)
|
|
|||||||||||||||||||
Engine Model/Thrust:
CFM56-7B27
|
27300 pounds
|
Note 1
|
|
Base Aircraft Price Base Year/Escalation Formula:
|
Jul-11
|
ECI-MFG/CPI
|
|
|
||||||||||||||||
Base Aircraft Price:
|
***
|
|
|
Engine Price Base Year/Escalation Formula:
|
N/A
|
N/A
|
|
|||||||||||||||||
Special Features: ***
|
|
|
|
|
|
|
|
|
||||||||||||||||
Add'l Features/Changes ***
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total Special Features (Exhibit A-7) ***
|
|
|
|
|
|
|
|
|||||||||||||||||
Sub-Total of Airframe and Features: ***
|
|
|
Aircraft Price Escalation Data:
|
|
|
|
||||||||||||||||||
Engine Price (Per Aircraft):
|
***
|
|
|
Base Year Index (ECI):
|
|
***
|
|
|||||||||||||||||
Aircraft Basic Price (Excluding BFE/SPE): ***
|
|
|
Base Year Index (CPI):
|
|
***
|
|
||||||||||||||||||
Buyer Furnished Equipment (BFE) Estimate: ***
|
|
|
|
|
|
|
|
|||||||||||||||||
Seller Purchased Equipment (SPE) Estimate: ***
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Escalation
|
Aircraft
|
|
|
Escalation Estimate
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||||||||||||||||
Delivery
|
Number of
|
Factor
|
Serial
|
Escalation
|
Sub-Block
|
Adv Payment Base
|
At Signing
|
24 Mos.
|
21/18/12/9/6 Mos.
|
Total
|
||||||||||||||
Date
|
Aircraft
|
(Airframe)
|
Number
|
Forecast
|
Note 2
|
Price Per A/P
|
***
|
***
|
***
|
***
|
||||||||||||||
Sep-2013
|
3
|
***
|
36933, 36912, 36914
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Nov-2013
|
3
|
***
|
36915, 33939, 42526
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Dec-2013
|
3
|
***
|
36917, 36919, 36731
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Mar-2014
|
2
|
***
|
37004, 36896
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Apr-2014
|
3
|
***
|
42384, 36894, 36895
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
May-2014
|
3
|
***
|
36897, 42385, 42521
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Jun-2014
|
4
|
***
|
36898, 36905, 42522, 42523
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Jun-2014
|
2
|
***
|
60082, 60083
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Jul-2014
|
1
|
***
|
36911
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Jul-2014
|
3
|
***
|
60084, 60085, 60086
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Aug-2014
|
6
|
***
|
36907, 42524,35973, 42525, 36935, 42528
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Sep-2014
|
2
|
***
|
42527, 42531
|
***
|
|
***
|
***
|
***
|
***
|
***
|
SWA-PA-01810
|
|
SA-87
|
63879 / 63887 / 64110 / 64111 / 66379 /
68788
|
Boeing Proprietary
|
Page 1
|
Table 1c to
|
Purchase Agreement No. PA-1810
|
Aircraft Delivery, Description, Price and Advance Payments
|
Block 800LUV Aircraft (non-ETOPS Configuration)
|
|
|
Escalation
|
Aircraft
|
|
|
Escalation Estimate
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||||||||||||||||
Delivery
|
Number of
|
Factor
|
Serial
|
Escalation
|
Sub-Block
|
Adv Payment Base
|
At Signing
|
24 Mos.
|
21/18/12/9/6 Mos.
|
Total
|
||||||||||||||
Date
|
Aircraft
|
(Airframe)
|
Number
|
Forecast
|
Note 2
|
Price Per A/P
|
***
|
***
|
***
|
***
|
||||||||||||||
Oct-2014
|
2
|
***
|
36909, 36920
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Nov-2014
|
1
|
***
|
36971
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Dec-2014
|
2
|
***
|
37037, 37045
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Dec-2014
|
2
|
***
|
42529, 42530
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Jan-2015
|
2
|
***
|
36899, 42535
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Feb-2015
|
3
|
***
|
36901, 36654, 36906
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Mar-2015
|
2
|
***
|
36902, 36936
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Apr-2015
|
2
|
***
|
36649, 36652
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
May-2015
|
2
|
***
|
36903, 36657
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Jun-2015
|
2
|
***
|
36655, 36656
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Nov-2015
|
3
|
***
|
36937, 36715, 36940
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Dec-2015
|
3
|
***
|
36941, 36734, 35976
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||||
Total:
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
1) ***
|
|
2) The sub-block identifier is used to denote applicability of certain business terms as referenced in Letter Agreement SWA-PA-1810-LA-1105888R4 to the Purchase Agreement.
|
SWA-PA-01810
|
|
SA-87
|
63879 / 63887 / 64110 / 64111 / 66379 /
68788
|
Boeing Proprietary
|
Page 2
|
Attachment B to Exhibit E of PA 1810
|
|
|
BUYER FURNISHED EQUIPMENT VARIABLES
|
|
relating to
|
|
BOEING MODEL737-7H4 and 737-8H4 AIRCRAFT
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 1
|
|
Preliminary On-Dock Dates
Month of Delivery
|
||||||
Item
|
Mar 2012
|
Apr 2012
|
May 2012
|
Jun-2012
|
Jul 2012
|
Aug 2012
|
Sep 2012
|
Seats
|
1/23/2012
|
2/21/2012
|
3/22/2012
|
4/20/2012
|
5/22/2012
|
6/21/2012
|
7/23/2012
|
Galleys/Furnishings
|
1/16/2012
|
2/14/2012
|
3/15/2012
|
4/13/2012
|
5/15/2012
|
6/14/2012
|
7/16/2012
|
Antennas & Mounting Equipment
|
11/23/2011
|
12/21/2011
|
1/23/2012
|
2/20/2012
|
3/22/2012
|
4/20/2012
|
5/23/2012
|
Avionics
|
1/16/2012
|
2/14/2012
|
3/15/2012
|
4/13/2012
|
5/15/2012
|
6/14/2012
|
7/16/2012
|
Cabin Systems Equipment
|
1/16/2012
|
2/14/2012
|
3/15/2012
|
4/13/2012
|
5/15/2012
|
6/14/2012
|
7/16/2012
|
Miscellaneous Emergency Equipment
|
1/16/2012
|
2/14/2012
|
3/15/2012
|
4/13/2012
|
5/15/2012
|
6/14/2012
|
7/16/2012
|
Textiles/Raw Material
|
9/29/2011
|
10/28/2011
|
12/1/2011
|
1/10/2012
|
2/9/2012
|
3/9/2012
|
4/9/2012
|
Cargo Systems
(Single Aisle Programs)
|
1/3/2012
|
1/31/2012
|
3/1/2012
|
3/30/2012
|
5/1/2012
|
5/31/2012
|
7/2/2012
|
Provision Kits
(Single Aisle Programs)
|
9/2/2011
|
9/30/2011
|
11/1/2011
|
11/30/2011
|
1/3/2012
|
1/31/2012
|
3/2/2012
|
Radomes (Single Aisle Programs)
|
12/16/2011
|
1/13/2012
|
2/15/2012
|
3/13/2012
|
4/16/2012
|
5/14/2012
|
6/15/2012
|
|
Preliminary On-Dock Dates
Month of Delivery
|
||||||
Item
|
Oct 2012
|
Nov 2012
|
Dec 2012
|
Jan-2013
|
Feb-2013
|
Mar-2013
|
Apr-2013
|
Seats
|
8/23/2012
|
9/20/2012
|
10/23/2012
|
11/20/2012
|
12/13/2012
|
1/23/2013
|
2/20/2013
|
Galleys/Furnishings
|
8/16/2012
|
9/13/2012
|
10/16/2012
|
11/13/2012
|
12/6/2012
|
1/16/2013
|
2/13/2013
|
Antennas & Mounting Equipment
|
6/22/2012
|
7/20/2012
|
8/23/2012
|
9/20/2012
|
10/12/2012
|
11/21/2012
|
12/20/2012
|
Avionics
|
8/16/2012
|
9/13/2012
|
10/16/2012
|
11/13/2012
|
12/6/2012
|
1/16/2013
|
2/13/2013
|
Cabin Systems Equipment
|
8/16/2012
|
9/13/2012
|
10/16/2012
|
11/13/2012
|
12/6/2012
|
1/16/2013
|
2/13/2013
|
Miscellaneous Emergency Equipment
|
8/16/2012
|
9/13/2012
|
10/16/2012
|
11/13/2012
|
12/6/2012
|
1/16/2013
|
2/13/2013
|
Textiles/Raw Material
|
5/10/2012
|
6/7/2012
|
7/11/2012
|
8/8/2012
|
8/29/2012
|
10/1/2012
|
10/29/2013
|
Cargo Systems
(Single Aisle Programs)
|
8/2/2012
|
8/30/2012
|
10/2/2012
|
10/30/2012
|
11/21/2012
|
1/2/2013
|
1/30/2013
|
Provision Kits
(Single Aisle Programs)
|
4/2/2012
|
4/30/2012
|
6/1/2012
|
6/29/2012
|
7/20/2012
|
9/4/2012
|
10/1/2012
|
Radomes (Single Aisle Programs)
|
7/16/2012
|
8/13/2012
|
9/17/2012
|
10/12/2012
|
11/6/2012
|
12/17/2012
|
1/13/2013
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 2
|
|
Preliminary On-Dock Dates
Month of Delivery
|
||||||
Item
|
|
|
|
|
Sep 2013
|
Oct 2013
|
Nov 2013
|
Seats
|
|
|
|
|
7/23/2013
|
8/22/2013
|
9/20/2013
|
Galleys/Furnishings
|
|
|
|
|
7/16/2013
|
8/15/2013
|
9/13/2013
|
Antennas & Mounting Equipment
|
|
|
|
|
5/23/2013
|
6/21/2013
|
7/19/2013
|
Avionics
|
|
|
|
|
7/16/2013
|
8/15/2013
|
9/13/2013
|
Cabin Systems Equipment
|
|
|
|
|
7/16/2013
|
8/15/2013
|
9/13/2013
|
Miscellaneous Emergency Equipment
|
|
|
|
|
7/16/2013
|
8/15/2013
|
9/13/2013
|
Textiles/Raw Material
|
|
|
|
|
4/9/2013
|
5/9/2013
|
6/7/2013
|
Cargo Systems
(Single Aisle Programs)
|
|
|
|
|
7/2/2013
|
8/1/2013
|
8/30/2013
|
Provision Kits
(Single Aisle Programs)
|
|
|
|
|
3/1/2013
|
4/1/2013
|
4/30/2013
|
Radomes (Single Aisle Programs)
|
|
|
|
|
6/17/2013
|
7/15/2013
|
8/13/2013
|
|
Preliminary On-Dock Dates
Month of Delivery
|
||||||
Item
|
Dec 2013
|
|
|
Mar-2014
|
Apr 2014
|
May 2014
|
Jun 2014
|
Seats
|
10/23/2013
|
|
|
1/23/2014
|
2/20/2014
|
3/21/2014
|
4/22/2014
|
Galleys/Furnishings
|
10/16/2013
|
|
|
1/16/2014
|
2/13/2014
|
3/14/2014
|
4/15/2014
|
Antennas & Mounting Equipment
|
8/23/2013
|
|
|
11/22/2013
|
12/20/2013
|
1/21/2014
|
2/21/2014
|
Avionics
|
10/16/2013
|
|
|
1/16/2014
|
2/13/2014
|
3/14/2014
|
4/15/2014
|
Cabin Systems Equipment
|
10/16/2013
|
|
|
1/16/2014
|
2/13/2014
|
3/14/2014
|
4/15/2014
|
Miscellaneous Emergency Equipment
|
10/16/2013
|
|
|
1/16/2014
|
2/13/2014
|
3/14/2014
|
4/15/2014
|
Textiles/Raw Material
|
7/11/2013
|
|
|
10/1/2013
|
10/29/2013
|
11/27/2013
|
1/9/2014
|
Cargo Systems
(Single Aisle Programs)
|
10/2/2013
|
|
|
1/2/2014
|
1/30/2014
|
3/1/2014
|
4/2/2014
|
Provision Kits
(Single Aisle Programs)
|
6/3/2013
|
|
|
9/3/2013
|
9/30/2013
|
11/1/2013
|
12/2/2013
|
Radomes (Single Aisle Programs)
|
10/11/2013
|
|
|
12/16/2013
|
1/13/2014
|
2/14/2014
|
3/14/2014
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 3
|
|
Preliminary On-Dock Dates
Month of Delivery
|
||||||
Item
|
Jul 2014
|
Aug 2014
|
Sep 2014
|
Oct 2014
|
Nov 2014
|
Dec 2014
|
Jan 2015
|
Seats
|
5/21/2014
|
6/20/2014
|
7/23/2014
|
8/21/2014
|
9/23/2014
|
10/24/2014
|
11/18/2014
|
Galleys/Furnishings
|
5/14/2014
|
6/13/2014
|
7/16/2014
|
8/14/2014
|
9/16/2014
|
10/17/2014
|
11/11/2014
|
Antennas & Mounting Equipment
|
3/21/2014
|
6/13/2014
|
5/23/2014
|
6/20/2014
|
7/23/2014
|
8/25/2014
|
9/18/2014
|
Avionics
|
5/14/2014
|
4/21/2014
|
7/16/2014
|
8/14/2014
|
9/16/2014
|
10/17/2014
|
11/11/2014
|
Cabin Systems Equipment
|
5/14/2014
|
4/21/2014
|
7/16/2014
|
8/14/2014
|
9/16/2014
|
10/17/2014
|
11/11/2014
|
Miscellaneous Emergency Equipment
|
5/14/2014
|
4/21/2014
|
7/16/2014
|
8/14/2014
|
9/16/2014
|
10/17/2014
|
11/11/2014
|
Textiles/Raw Material
|
2/7/2014
|
3/10/2014
|
4/9/2014
|
5/8/2014
|
6/10/2014
|
7/14/2014
|
8/6/2014
|
Cargo Systems
(Single Aisle Programs)
|
5/1/2014
|
5/30/2014
|
7/2/2014
|
7/31/2014
|
9/2/2014
|
10/3/2014
|
10/28/2014
|
Provision Kits
(Single Aisle Programs)
|
1/2/2014
|
1/30/2014
|
3/3/2014
|
3/31/2014
|
5/2/2014
|
8/4/2014
|
6/27/2014
|
Radomes (Single Aisle Programs)
|
4/14/2014
|
5/13/2014
|
6/16/2014
|
7/14/2014
|
8/15/2014
|
9/17/2014
|
10/10/2014
|
|
Preliminary On-Dock Dates
Month of Delivery
|
|||||
Item
|
Feb 2015
|
Mar 2015
|
Apr 2015
|
May 2015
|
Jun 2015
|
|
Seats
|
12/15/2014
|
1/22/2015
|
2/19/2015
|
3/23/2015
|
4/21/2015
|
|
Galleys/Furnishings
|
12/8/2014
|
1/15/2015
|
2/12/2015
|
3/16/2015
|
4/14/2015
|
|
Antennas & Mounting Equipment
|
10/15/2014
|
11/21/2014
|
12/19/2014
|
1/23/2015
|
2/23/2015
|
|
Avionics
|
12/8/2014
|
1/15/2015
|
2/12/2015
|
3/16/2015
|
4/14/2015
|
|
Cabin Systems Equipment
|
12/8/2014
|
1/15/2015
|
2/12/2015
|
3/16/2015
|
4/14/2015
|
|
Miscellaneous Emergency Equipment
|
12/8/2014
|
1/15/2015
|
2/12/2015
|
3/16/2015
|
4/14/2015
|
|
Textiles/Raw Material
|
8/29/2014
|
11/17/2014
|
10/28/2014
|
12/1/2014
|
1/8/2015
|
|
Cargo Systems
(Singe Aisle Programs)
|
11/24/2014
|
1/2/2015
|
1/29/2015
|
3/2/2015
|
3/31/2015
|
|
Provision Kits
(Single Aisle Programs)
|
7/24/2014
|
9/2/2014
|
9/29/2014
|
11/2/2015
|
11/25/2014
|
|
Radomes (Single Aisle Programs)
|
11/7/2014
|
12/15/2014
|
1/12/2015
|
2/16/2015
|
3/16/2015
|
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 4
|
|
Preliminary On-Dock Dates
Month of Delivery
|
|||||
Item
|
|
|
|
Nov 2015
|
Dec 2015
|
Jan 2016
|
Seats
|
|
|
|
9/22/2015
|
10/22/2015
|
11/18/2015
|
Galleys/Furnishings
|
|
|
|
9/15/2015
|
10/15/2015
|
11/11/2015
|
Antennas & Mounting Equipment
|
|
|
|
7/22/2015
|
8/21/2015
|
9/18/2016
|
Avionics
|
|
|
|
9/15/2015
|
10/15/2015
|
11/11/2015
|
Cabin Systems Equipment
|
|
|
|
9/15/2015
|
10/15/2015
|
11/11/2015
|
Miscellaneous Emergency Equipment
|
|
|
|
9/15/2015
|
10/15/2015
|
11/11/2015
|
Textiles/Raw Material
|
|
|
|
6/9/2015
|
7/10/2015
|
8/6/2015
|
Cargo Systems
(Single Aisle Programs)
|
|
|
|
9/1/2015
|
10/1/2015
|
10/28/2015
|
Provision Kits
(Single Aisle Programs)
|
|
|
|
5/1/2015
|
6/1/2015
|
6/29/2015
|
Radomes (Single Aisle Programs)
|
|
|
|
8/14/2015
|
9/15/2015
|
10/12/2015
|
|
Preliminary On-Dock Dates
Month of Delivery
|
|||||
Item
|
Feb 2016
|
Mar 2016
|
Apr 2016
|
May 2016
|
Jun 2016
|
Jul 2016
|
Seats
|
12/15/2015
|
1/21/2016
|
2/19/2016
|
3/23/2016
|
4/21/2016
|
5/20/2016
|
Galleys/Furnishings
|
12/8/2015
|
1/14/2016
|
2/12/2016
|
3/16/2016
|
4/14/2016
|
5/13/2016
|
Antennas & Mounting Equipment
|
10/15/2015
|
11/20/2015
|
12/18/2015
|
1/22/2016
|
2/22/2016
|
3/21/2016
|
Avionics
|
12/8/2015
|
1/14/2016
|
2/12/2016
|
3/16/2016
|
4/14/2016
|
5/13/2016
|
Cabin Systems Equipment
|
12/8/2015
|
1/14/2016
|
2/12/2016
|
3/16/2016
|
4/14/2016
|
5/13/2016
|
Miscellaneous Emergency Equipment
|
12/8/2015
|
1/14/2016
|
2/12/2016
|
3/16/2016
|
4/14/2016
|
5/13/2016
|
Textiles/Raw Material
|
8/31/2015
|
9/29/2015
|
10/28/2015
|
12/2/2015
|
1/11/2016
|
2/9/2016
|
Cargo Systems
(Single Aisle Programs)
|
11/24/2015
|
12/23/2015
|
1/29/2016
|
3/2/2016
|
3/31/2016
|
4/29/2016
|
Provision Kits
(Single Aisle Programs)
|
7/24/2015
|
8/24/2015
|
9/29/2015
|
11/2/2105
|
12/1/2015
|
12/23/2015
|
Radomes (Single Aisle Programs)
|
11/9/2015
|
12/14/2015
|
1/12/2016
|
2/16/2016
|
3/14/2016
|
4/13/2016
|
|
Preliminary On-Dock Dates
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 5
|
|
Month of Delivery
|
|||||
Item
|
Aug 2016
|
Sep 2016
|
Oct 2016
|
Nov 2016
|
Dec 2016
|
Jan 2017
|
Seats
|
6/22/2015
|
7/21/2016
|
8/23/2016
|
9/22/2016
|
10/21/2016
|
11/18/2016
|
Galleys/Furnishings
|
6/15/2016
|
7/14/2016
|
8/16/2016
|
9/15/2016
|
10/14/2016
|
11/11/2016
|
Antennas & Mounting Equipment
|
4/22/2016
|
5/20/2016
|
6/23/2016
|
7/22/2016
|
8/22/2106
|
9/19/2016
|
Avionics
|
6/15/2016
|
7/14/2016
|
8/16/2016
|
9/15/2016
|
10/14/2016
|
11/11/2016
|
Cabin Systems Equipment
|
6/15/2016
|
7/14/2016
|
8/16/2016
|
9/15/2016
|
10/14/2016
|
11/11/2016
|
Miscellaneous Emergency Equipment
|
6/15/2016
|
7/14/2016
|
8/16/2016
|
9/15/2016
|
10/14/2016
|
11/11/2016
|
Textiles/Raw Material
|
3/10/2016
|
4/7/2016
|
5/10/2016
|
6/9/2016
|
7/11/2016
|
8/9/2016
|
Cargo Systems
(Single Aisle Programs)
|
6/1/2016
|
7/1/2016
|
8/2/2016
|
9/1/2016
|
10/1/2016
|
10/28/2016
|
Provision Kits
(Single Aisle Programs)
|
2/1/2016
|
3/1/2016
|
4/1/2016
|
5/2/2016
|
6/1/2016
|
6/28/2016
|
Radomes (Single Aisle Programs)
|
5/16/2016
|
5/13/2016
|
7/15/2016
|
8/15/2016
|
9/14/2016
|
10/11/2016
|
|
Preliminary On-Dock Dates
Month of Delivery
|
|||||
Item
|
Feb 2017
|
Mar 2017
|
Apr 2017
|
May 2017
|
Jun 2017
|
|
Seats
|
12/14/2016
|
1/23/2017
|
2/20/2017
|
3/23/2017
|
4/20/2017
|
|
Galleys/Furnishings
|
12/7/2016
|
1/16/2017
|
2/13/2017
|
3/16/2017
|
4/13/2017
|
|
Antennas & Mounting Equipment
|
10/14/2016
|
11/23/2016
|
12/20/2016
|
1/23/2017
|
2/20/2017
|
|
Avionics
|
12/7/2016
|
1/16/2017
|
2/13/2017
|
3/16/2017
|
4/13/2017
|
|
Cabin Systems Equipment
|
12/7/2016
|
1/16/2017
|
2/13/2017
|
3/16/2017
|
4/13/2017
|
|
Miscellaneous Emergency Equipment
|
12/7/2016
|
1/16/2017
|
2/13/2017
|
3/16/2017
|
4/13/2017
|
|
Textiles/Raw Material
|
8/30/2016
|
9/29/2016
|
10/27/2016
|
12/1/2016
|
1/9/2017
|
|
Cargo Systems
(Single Aisle Programs)
|
11/23/2016
|
1/3/2017
|
1/30/2017
|
3/2/2017
|
3/30/3017
|
|
Provision Kits
(Single Aisle Programs)
|
7/22/2016
|
9/2/2016
|
9/30/2016
|
11/2/2016
|
11/30/2016
|
|
Radomes (Single Aisle Programs)
|
12/14/2016
|
1/23/2017
|
1/13/2017
|
2/16/2017
|
3/13/2017
|
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 6
|
Attachment B to Exhibit E of PA 1810
|
|
SA
87
|
|
BOEING PROPRIETARY
|
Page 7
|
Attachment A to SWA-PA-1810-LA1001315R3
|
|
|
Page 1
of 2
|
|
|
***
|
|
|
|
|||
|
|
|
|
|
|
|
Letter Agmt SWA-PA-1810-LA-1001315R3; paragraph 3
|
|
|
||||
No.
|
Model
|
Aircraft Block
|
MSN's
|
Current Delivery Mo.
|
Base Year
|
***
|
1
|
737-700
|
T-W-2b
|
36962
|
July-11
|
1999
|
***
|
2
|
737-700
|
T-W-2b
|
36963
|
July-11
|
1999
|
***
|
3
|
737-700
|
T-W-2b
|
36965
|
August-11
|
1999
|
***
|
4
|
737-700
|
T-W-2b
|
36967
|
October-11
|
1999
|
***
|
5
|
737-800
|
800LUV
|
36980
|
March-12
|
2011
|
***
|
6
|
737-800
|
800LUV
|
36983
|
April-12
|
2011
|
***
|
7
|
737-800
|
800LUV
|
36985
|
May-12
|
2011
|
***
|
8
|
737-800
|
800LUV
|
36987
|
May-12
|
2011
|
***
|
9
|
737-800
|
800LUV
|
36990
|
July-12
|
2011
|
***
|
10
|
737-800
|
800LUV
|
36992
|
August-12
|
2011
|
***
|
11
|
737-800
|
800LUV
|
36994
|
September-12
|
2011
|
***
|
12
|
737-800
|
800LUV
|
37003
|
November-12
|
2011
|
***
|
13
|
737-800
|
800LUV
|
37009
|
December-12
|
2011
|
***
|
14
|
737-800
|
800LUV
|
36973
|
March-13
|
2011
|
***
|
15
|
737-800
|
800LUV
|
36998
|
March-13
|
2011
|
***
|
16
|
737-800
|
800LUV
|
36908
|
April-13
|
2011
|
***
|
17
|
737-800
|
800LUV
|
36933
|
September-13
|
2011
|
***
|
18
|
737-800
|
800LUV
|
42526
|
November-13
|
2011
|
***
|
19
|
737-800
|
800LUV
|
37004
|
March-14
|
2011
|
***
|
20
|
737-800
|
800LUV
|
42521
|
May-14
|
2011
|
|
21
|
737-800
|
800LUV
|
42522
|
June-14
|
2011
|
|
22
|
737-800
|
800LUV
|
60082
|
June-14
|
2011
|
|
23
|
737-800
|
800LUV
|
60083
|
June-14
|
2011
|
|
24
|
737-800
|
800LUV
|
42523
|
June-14
|
2011
|
|
25
|
737-800
|
800LUV
|
60084
|
July-14
|
2011
|
|
26
|
737-800
|
800LUV
|
60085
|
July-14
|
2011
|
|
27
|
737-800
|
800LUV
|
60086
|
July-14
|
2011
|
|
28
|
737-800
|
800LUV
|
42524
|
August-14
|
2011
|
|
29
|
737-800
|
800LUV
|
42525
|
August-14
|
2011
|
|
30
|
737-800
|
800LUV
|
36935
|
August-14
|
2011
|
|
31
|
737-800
|
800LUV
|
42527
|
September-14
|
2011
|
|
32
|
737-800
|
800LUV
|
42528
|
August-14
|
2011
|
|
33
|
737-800
|
800LUV
|
42531
|
September-14
|
2011
|
|
34
|
737-800
|
800LUV
|
36909
|
October-14
|
2011
|
|
35
|
737-800
|
800LUV
|
42529
|
December-14
|
2011
|
|
36
|
737-800
|
800LUV
|
42530
|
December-14
|
2011
|
|
37
|
737-800
|
800LUV
|
37045
|
December-14
|
2011
|
|
38
|
737-800
|
800LUV
|
37037
|
December-14
|
2011
|
|
39
|
737-800
|
800LUV
|
42535
|
January-15
|
2011
|
|
40
|
737-800
|
800LUV
|
36940
|
November-15
|
2011
|
|
41
|
737-700
|
700LUV
|
36938
|
April-16
|
2011
|
|
42
|
737-700
|
700LUV
|
36939
|
May-16
|
2011
|
|
43
|
737-700
|
700LUV
|
36945
|
July-16
|
2011
|
|
44
|
737-700
|
700LUV
|
36977
|
September-16
|
2011
|
|
45
|
737-700
|
700LUV
|
42532
|
January-17
|
2011
|
|
46
|
737-700
|
700LUV
|
36910
|
January-17
|
2011
|
|
47
|
737-700
|
700LUV
|
36970
|
February-17
|
2011
|
|
48
|
737-700
|
700LUV
|
36969
|
February-17
|
2011
|
|
|
|
SA-87
|
Attachment A to SWA-PA-1810-LA1001315R3
|
|
|
Page 2
of 2
|
|
|
|
|
SA-87
|
|
|
Exhibit 10.3
|
Percentage of RSUs Vesting
|
Vesting Date
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
|
Exhibit 10.4
|
[Performance Target(s)]
|
Number of PBRSUs Vesting
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
By:
|
/s/ Gary C. Kelly
|
|
|
Gary C. Kelly
|
|
|
Chief Executive Officer
|
|
By:
|
/s/ Tammy Romo
|
|
|
Tammy Romo
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/ Gary C. Kelly
|
|
|
Gary C. Kelly
|
|
|
Chief Executive Officer
|
|
By:
|
/s/ Tammy Romo
|
|
|
Tammy Romo
|
|
|
Chief Financial Officer
|