þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended December 31, 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)
|
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock ($1.00 par value)
|
|
New York Stock Exchange
|
Large accelerated filer
|
|
þ
|
|
Accelerated filer
|
|
¨
|
|
Non-accelerated filer
|
|
¨
|
|
Smaller reporting company
|
|
¨
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|
|
|
|
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|
PART I
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|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
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||
Item 2.
|
||
Item 3.
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Item 4.
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||
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PART II
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Item 5.
|
||
Item 6.
|
||
Item 7.
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||
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||
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||
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Item 7A.
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Item 8.
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||
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||
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Item 9.
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||
Item 9A.
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Item 9B.
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||
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PART III
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
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||
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PART IV
|
|
Item 15.
|
||
Item 1.
|
Business
|
Year
|
|
Cost
(Millions)
|
|
Average
Cost Per
Gallon
|
|
Percentage of
Operating
Expenses
|
|||||
2003
|
|
$
|
920
|
|
|
$
|
0.80
|
|
|
16.5
|
%
|
2004
|
|
$
|
1,106
|
|
|
$
|
0.92
|
|
|
18.1
|
%
|
2005
|
|
$
|
1,470
|
|
|
$
|
1.13
|
|
|
21.4
|
%
|
2006
|
|
$
|
2,284
|
|
|
$
|
1.64
|
|
|
28.0
|
%
|
2007
|
|
$
|
2,690
|
|
|
$
|
1.80
|
|
|
29.7
|
%
|
2008
|
|
$
|
3,713
|
|
|
$
|
2.44
|
|
|
35.1
|
%
|
2009
|
|
$
|
3,044
|
|
|
$
|
2.12
|
|
|
30.2
|
%
|
2010
|
|
$
|
3,620
|
|
|
$
|
2.51
|
|
|
32.6
|
%
|
2011
|
|
$
|
5,644
|
|
|
$
|
3.19
|
|
|
37.7
|
%
|
2012
|
|
$
|
6,120
|
|
|
$
|
3.30
|
|
|
37.2
|
%
|
2013
|
|
$
|
5,763
|
|
|
$
|
3.16
|
|
|
35.1
|
%
|
2014
|
|
$
|
5,293
|
|
|
$
|
2.93
|
|
|
32.3
|
%
|
First Quarter 2014
|
|
$
|
1,314
|
|
|
$
|
3.10
|
|
|
33.3
|
%
|
Second Quarter 2014
|
|
$
|
1,425
|
|
|
$
|
3.03
|
|
|
33.6
|
%
|
Third Quarter 2014
|
|
$
|
1,386
|
|
|
$
|
2.97
|
|
|
33.1
|
%
|
Fourth Quarter 2014
|
|
$
|
1,167
|
|
|
$
|
2.63
|
|
|
29.1
|
%
|
•
|
“Wanna Get Away” fares are generally the lowest fares and are subject to advance purchase requirements. They are nonrefundable but, subject to compliance with Southwest’s No Show policy, funds may be applied to future travel on Southwest. As discussed below under “Operating Strategies and Initiatives - Ancillary Services and Fees,” Southwest has a No Show policy associated with Wanna Get Away tickets that are not canceled or changed at least ten minutes prior to a flight’s scheduled departure.
|
•
|
“Anytime” fares are refundable and changeable, and funds may also be applied toward future travel on Southwest. Anytime fares also include a higher frequent flyer point multiplier under Southwest’s Rapid Rewards
®
frequent flyer program than do Wanna Get Away fares.
|
•
|
“Business Select” fares are refundable and changeable, and funds may be applied toward future travel on Southwest. Business Select fares also include additional perks, when available, such as priority boarding in the first 15 boarding positions within boarding group “A,” a higher frequent flyer point multiplier than other Southwest fares (including twice as many points per dollar spent as compared with Wanna Get Away fares), “Fly By
®
” priority security and ticket counter access in select airports, and one complimentary adult beverage coupon for the day of travel (for Customers of legal drinking age).
|
•
|
The Company converted AirTran international service to Southwest beginning with the launch of Southwest international service on July 1, 2014, with service to Jamaica (Montego Bay), The Bahamas (Nassau), and Aruba (Oranjestad). Southwest service to Mexico (Cabo San Lucas/Los Cabos and Cancun) commenced on August 10, 2014, and service to Mexico City and Dominican Republic (Punta Cana) began on November 2, 2014, establishing a Southwest presence in all cities in Southwest’s and AirTran’s combined network. AirTran’s final passenger service occurred on December 28, 2014.
|
•
|
The Company continued to transfer AirTran Employees to Southwest. As of
December 31, 2014
,
all
AirTran Employees had been converted to Southwest Employees.
|
•
|
The Company removed the remaining
66
AirTran Boeing 717-200 aircraft from service, enabling the Company to once again operate an all-Boeing 737 fleet, with the expected efficiencies associated with operating a single aircraft type.
|
•
|
The Company continued to convert AirTran 737-700 aircraft to the Southwest livery. As of
December 31, 2014
,
47
out of a total of
52
AirTran 737-700 aircraft had completed the conversion process and re-entered service as Southwest aircraft. The remaining
five
AirTran 737-700 aircraft have been removed from service to begin the conversion process and are scheduled to re-enter service as Southwest aircraft in early 2015.
|
•
|
The Company completed the integration of booking and frequent flyer functions into southwest.com, referring all Customers who visit airtran.com to southwest.com. The Company transferred AirTran Customers’ A+ Rewards account history and any A+ Rewards credits that had not expired as of November 1, 2014, into Southwest Rapid Rewards accounts.
|
•
|
installation of blended winglets, which reduce drag and increase fuel efficiency, on all Boeing 737-700 and 737-800 aircraft in Southwest’s fleet and on a majority of Southwest’s 737-300 aircraft;
|
•
|
upgrading of the Company’s 737-800 fleet during the 2014-2015 timeframe with newly designed, split scimitar winglets;
|
•
|
periodic engine washes;
|
•
|
use of electric ground power for aircraft air and power at the gate and for ground support equipment at select locations;
|
•
|
deployment of auto-throttle and vertical navigation to maintain optimum cruising speeds;
|
•
|
implementation of new engine start procedures to support the introduction of new single engine taxi procedures;
|
•
|
adjustment of the timing of auxiliary power unit starts on originating flights to reduce auxiliary power unit usage;
|
•
|
fuel planning initiatives to safely reduce loading of excess fuel;
|
•
|
Evolve
aircraft cabin interior retrofit featuring lighter seats;
|
•
|
reduced aircraft engine idle speed while on the ground, which also increases engine life;
|
•
|
galley refresh with dry goods weight reduction;
|
•
|
Company Optimized Routes (flying the best wind routes to take advantage of tailwinds or to minimize headwinds);
|
•
|
improved flight planning algorithms to better match aircraft Flight Management System (flying at the most efficient altitude);
|
•
|
substitution of Pilot flight bags with lighter Electronic Flight Bag tablets; and
|
•
|
Real Time Descent Winds (automatic uplink of up-to-date wind data to the aircraft allowing crews to time the descent to minimize thrust inputs).
|
Employee Group
|
Approximate Number of Employees
|
Representatives
|
Status of Agreement
|
Southwest Pilots
|
7,500
|
Southwest Airlines Pilots’ Association (“SWAPA”)
|
In negotiations
|
Southwest Flight Attendants
|
11,850
|
Transportation Workers of America, AFL-CIO, Local 556 (“TWU 556”)
|
In negotiations
|
Southwest Ramp, Operations, Provisioning, Freight Agents
|
10,000
|
Transportation Workers of America, AFL-CIO, Local 555 (“TWU 555”)
|
In negotiations
|
Southwest Customer Service Agents, Customer Representatives
|
5,800
|
International Association of Machinists and Aerospace Workers, AFL-CIO (“IAM 142”)
|
Amendable December 2018
|
Southwest Material Specialists (formerly known as Stock Clerks)
|
250
|
International Brotherhood of Teamsters, Local 19 (“IBT 19”)
|
In negotiations
|
Southwest Mechanics
|
2,100
|
Aircraft Mechanics Fraternal Association (“AMFA”)
|
In negotiations
|
Southwest Aircraft Appearance Technicians
|
200
|
AMFA
|
Amendable February 2017
|
Southwest Facilities Maintenance Technicians
|
40
|
AMFA
|
In negotiations
|
Southwest Dispatchers
|
250
|
Transportation Workers of America, AFL-CIO, Local 550 (“TWU 550”)
|
Amendable November 2015
|
Southwest Flight Simulator Technicians
|
30
|
International Brotherhood of Teamsters (“IBT”)
|
Amendable October 2015
|
Southwest Flight Crew Training Instructors
|
70
|
Transportation Workers of America, AFL-CIO, Local 557 (“TWU 557”)
|
Amendable December 2015
|
Southwest Meteorologists
|
6
|
TWU 550
|
In November 2014, the Southwest Meteorologists voted in favor of union representation.
|
AirTran Flight Attendants
|
350
|
Association of Flight Attendants-CWA (“AFA”)
|
The parties have negotiated an interim collective bargaining agreement to be effective until affected former AirTran Employees complete Southwest training and become Southwest Flight Attendants.
|
Item 1A.
|
Risk Factors
|
•
|
increases in airport rates and charges;
|
•
|
limitations on airport gate capacity or use of other airport facilities;
|
•
|
limitations on route authorities;
|
•
|
actions and decisions that create difficulties in obtaining access at slot-controlled airports;
|
•
|
actions and decisions that create difficulties in obtaining operating permits and approvals;
|
•
|
changes to environmental regulations;
|
•
|
new or increased taxes or fees, such as the July 2014 increased Transportation Security Fee discussed above under “Regulation - Aviation Taxes”;
|
•
|
changes to laws that affect the services that can be offered by airlines in particular markets and at particular airports;
|
•
|
restrictions on competitive practices;
|
•
|
changes in laws that increase costs for safety, security, compliance, or other Customer Service standards, such as the FAA regulations with respect to Pilot flight/duty time limitations and rest requirements discussed above under “Business - Regulation”;
|
•
|
changes in laws that may limit the Company's ability to enter into fuel derivative contracts to hedge against increases in fuel prices;
|
•
|
changes in laws that may limit or regulate the Company’s ability to promote the Company’s business or fares; and
|
•
|
the adoption of more restrictive locally-imposed noise regulations.
|
•
|
adverse weather and natural disasters;
|
•
|
outbreaks of disease;
|
•
|
changes in consumer preferences, perceptions, spending patterns, or demographic trends (including, without limitation, changes in government travel patterns due to government shutdowns or sequestration);
|
•
|
actual or potential disruptions in the air traffic control system (including, without limitation, as a result of potential FAA budget cuts due to government shutdowns or sequestration);
|
•
|
changes in the competitive environment due to industry consolidation, industry bankruptcies, and other factors;
|
•
|
air traffic congestion and other air traffic control issues; and
|
•
|
actual or threatened war, terrorist attacks, and political instability.
|
Type
|
|
Seats
|
|
Average
Age
(Yrs)
|
|
Number of
Aircraft
|
|
Number
Owned (1)
|
|
Number
Leased
|
||||
717-200 (2)
|
|
117
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
737-300
|
|
137 or 143
|
|
21
|
|
|
120
|
|
|
76
|
|
|
44
|
|
737-500
|
|
122
|
|
23
|
|
|
13
|
|
|
10
|
|
|
3
|
|
737-700
|
|
143
|
|
10
|
|
|
447
|
|
|
389
|
|
|
58
|
|
737-800
|
|
175
|
|
1
|
|
|
85
|
|
|
78
|
|
|
7
|
|
Totals
|
|
|
|
|
|
665
|
|
|
553
|
|
|
112
|
|
(1)
|
As discussed further in Note
6
to the Consolidated Financial Statements,
163
of the Company's aircraft were pledged as collateral as of
December 31, 2014
.
|
(2)
|
The Company removed
36
B717s from service which were awaiting conversion at December 31, 2014.
|
|
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
|
|
|||||||
2015
|
—
|
|
|
19
|
|
—
|
|
16
|
|
|
—
|
|
—
|
|
|
—
|
|
|
35
|
|
2016
|
31
|
|
|
—
|
|
11
|
|
4
|
|
|
—
|
|
—
|
|
|
—
|
|
|
46
|
|
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)
|
19
|
|
35
|
|
20
|
|
|
30
|
|
170
|
|
(2)
|
191
|
|
|
521
|
|
Name
|
Position
|
Age
|
Gary C. Kelly
|
Chairman of the Board, President, & Chief Executive Officer
|
59
|
Robert E. Jordan
|
Executive Vice President & Chief Commercial Officer
|
54
|
Jeff Lamb
|
Executive Vice President & Chief People & Administrative Officer
|
52
|
Ron Ricks
|
Executive Vice President & Chief Legal & Regulatory Officer
|
65
|
Michael G. Van de Ven
|
Executive Vice President & Chief Operating Officer
|
53
|
Tammy Romo
|
Senior Vice President Finance & Chief Financial Officer
|
52
|
Period
|
|
Dividend
|
|
High
|
|
Low
|
||||||
2014
|
|
|
|
|
|
|
||||||
1st Quarter
|
|
$
|
0.04000
|
|
|
$
|
24.17
|
|
|
$
|
18.78
|
|
2nd Quarter
|
|
0.06000
|
|
|
27.70
|
|
|
22.35
|
|
|||
3rd Quarter
|
|
0.06000
|
|
|
35.49
|
|
|
25.86
|
|
|||
4th Quarter
|
|
0.06000
|
|
|
43.19
|
|
|
28.40
|
|
|||
2013
|
|
|
|
|
|
|
||||||
1st Quarter
|
|
$
|
0.01000
|
|
|
$
|
13.58
|
|
|
$
|
10.36
|
|
2nd Quarter
|
|
0.04000
|
|
|
14.56
|
|
|
12.45
|
|
|||
3rd Quarter
|
|
0.04000
|
|
|
14.82
|
|
|
12.58
|
|
|||
4th Quarter
|
|
0.04000
|
|
|
19.00
|
|
|
14.48
|
|
|
|
12/31/2009
|
|
12/31/2010
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
||||||||||||
Southwest Airlines Co.
|
|
$
|
100
|
|
|
$
|
114
|
|
|
$
|
75
|
|
|
$
|
90
|
|
|
$
|
167
|
|
|
$
|
377
|
|
S&P 500
|
|
$
|
100
|
|
|
$
|
115
|
|
|
$
|
117
|
|
|
$
|
136
|
|
|
$
|
179
|
|
|
$
|
204
|
|
NYSE ARCA Airline
|
|
$
|
100
|
|
|
$
|
141
|
|
|
$
|
98
|
|
|
$
|
135
|
|
|
$
|
214
|
|
|
$
|
320
|
|
Issuer Purchases of Equity Securities (1)
|
|
||||||||||||||||
|
|
(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
|
|
||||||||
October 1, 2014 through
October 31, 2014
|
|
1,107,489
|
|
|
$
|
—
|
|
(2
|
)
|
1,107,489
|
|
|
$
|
580,356,300
|
|
|
|
November 1, 2014 through
November 30, 2014
|
|
3,810,008
|
|
|
$
|
—
|
|
(3
|
)
|
3,810,008
|
|
|
$
|
380,356,300
|
|
(3
|
)
|
December 1, 2014 through
December 31, 2014
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
380,356,300
|
|
|
||
Total
|
|
4,917,497
|
|
|
|
|
4,917,497
|
|
|
|
|
(1)
|
In May 2014, the Company’s Board of Directors authorized the repurchase of up to $1 billion of the Company’s common stock. Repurchases are made in accordance with applicable securities laws in open market, private, or in accelerated repurchase transactions from time to time, depending on market conditions, and may be discontinued at any time.
|
(2)
|
Under an accelerated share repurchase program entered into by the Company with a third party financial institution in third quarter 2014 ("Third Quarter ASR Program"), the Company paid
$200 million
and received an initial delivery of
5,040,323
shares during third quarter 2014, representing an estimated 75 percent of the shares to be purchased by the Company under the Third Quarter ASR Program based on a price of
$29.76
per share, which was the closing price of the Company’s common stock on the New York Stock Exchange on August 15, 2014. Final settlement of this Third Quarter ASR Program occurred in October 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 October 2014. Upon settlement, the third party financial institution delivered
1,107,489
additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the
6,147,812
shares repurchased under the Third Quarter ASR Program, upon completion of the Third Quarter ASR Program in October 2014, was
$32.53
.
|
(3)
|
Under an accelerated share repurchase program entered into by the Company with a third party financial institution in
fourth quarter 2014
("Fourth Quarter ASR Program"), the Company paid
$200 million
and received an initial delivery of
3,810,008
shares during fourth quarter 2014, representing an estimated 75 percent of the shares to be purchased by the Company under the Fourth Quarter ASR Program based on a price of
$39.37
per share, which was the closing price of the Company’s common stock on the New York Stock Exchange on November 11, 2014. The specific number of shares that the Company ultimately will repurchase under the Fourth 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 first quarter 2015. 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.
|
|
|
Year ended December 31,
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Financial Data (in millions, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
|
$
|
18,605
|
|
|
$
|
17,699
|
|
|
$
|
17,088
|
|
|
$
|
15,658
|
|
|
$
|
12,104
|
|
Operating expenses
|
|
16,380
|
|
|
16,421
|
|
|
16,465
|
|
|
14,965
|
|
|
11,116
|
|
|||||
Operating income
|
|
2,225
|
|
|
1,278
|
|
|
623
|
|
|
693
|
|
|
988
|
|
|||||
Other expenses (income) net
|
|
409
|
|
|
69
|
|
|
(62
|
)
|
|
370
|
|
|
243
|
|
|||||
Income before taxes
|
|
1,816
|
|
|
1,209
|
|
|
685
|
|
|
323
|
|
|
745
|
|
|||||
Provision for income taxes
|
|
680
|
|
|
455
|
|
|
264
|
|
|
145
|
|
|
286
|
|
|||||
Net income
|
|
$
|
1,136
|
|
|
$
|
754
|
|
|
$
|
421
|
|
|
$
|
178
|
|
|
$
|
459
|
|
Net income per share, basic
|
|
$
|
1.65
|
|
|
$
|
1.06
|
|
|
$
|
0.56
|
|
|
$
|
0.23
|
|
|
$
|
0.62
|
|
Net income per share, diluted
|
|
$
|
1.64
|
|
|
$
|
1.05
|
|
|
$
|
0.56
|
|
|
$
|
0.23
|
|
|
$
|
0.61
|
|
Cash dividends per common share
|
|
$
|
0.2200
|
|
|
$
|
0.1300
|
|
|
$
|
0.0345
|
|
|
$
|
0.0180
|
|
|
$
|
0.0180
|
|
Total assets at period-end
|
|
$
|
20,200
|
|
|
$
|
19,345
|
|
|
$
|
18,596
|
|
|
$
|
18,068
|
|
|
$
|
15,463
|
|
Long-term obligations at period-end
|
|
$
|
2,434
|
|
|
$
|
2,191
|
|
|
$
|
2,883
|
|
|
$
|
3,107
|
|
|
$
|
2,875
|
|
Stockholders’ equity at period-end
|
|
$
|
6,775
|
|
|
$
|
7,336
|
|
|
$
|
6,992
|
|
|
$
|
6,877
|
|
|
$
|
6,237
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue passengers carried
|
|
110,496,912
|
|
|
108,075,976
|
|
|
109,346,509
|
|
|
103,973,759
|
|
|
88,191,322
|
|
|||||
Enplaned passengers
|
|
135,767,188
|
|
|
133,155,030
|
|
|
133,978,100
|
|
|
127,551,012
|
|
|
106,227,521
|
|
|||||
Revenue passenger miles (RPMs) (000s) (1)
|
|
108,035,133
|
|
|
104,348,216
|
|
|
102,874,979
|
|
|
97,582,530
|
|
|
78,046,967
|
|
|||||
Available seat miles (ASMs) (000s) (2)
|
|
131,003,957
|
|
|
130,344,072
|
|
|
128,137,110
|
|
|
120,578,736
|
|
|
98,437,092
|
|
|||||
Load factor (3)
|
|
82.5
|
%
|
|
80.1
|
%
|
|
80.3
|
%
|
|
80.9
|
%
|
|
79.3
|
%
|
|||||
Average length of passenger haul (miles)
|
|
978
|
|
|
966
|
|
|
941
|
|
|
939
|
|
|
885
|
|
|||||
Average aircraft stage length (miles)
|
|
721
|
|
|
703
|
|
|
693
|
|
|
679
|
|
|
648
|
|
|||||
Trips flown
|
|
1,255,502
|
|
|
1,312,785
|
|
|
1,361,558
|
|
|
1,317,977
|
|
|
1,114,451
|
|
|||||
Average passenger fare
|
|
$
|
159.80
|
|
|
$
|
154.72
|
|
|
$
|
147.17
|
|
|
$
|
141.90
|
|
|
$
|
130.27
|
|
Passenger revenue yield per RPM (cents) (4)
|
|
16.34
|
|
|
16.02
|
|
|
15.64
|
|
|
15.12
|
|
|
14.72
|
|
|||||
Operating revenue per ASM (cents) (5)
|
|
14.20
|
|
|
13.58
|
|
|
13.34
|
|
|
12.99
|
|
|
12.30
|
|
|||||
Passenger revenue per ASM (cents) (6)
|
|
13.48
|
|
|
12.83
|
|
|
12.56
|
|
|
12.24
|
|
|
11.67
|
|
|||||
Operating expenses per ASM (cents) (7)
|
|
12.50
|
|
|
12.60
|
|
|
12.85
|
|
|
12.41
|
|
|
11.29
|
|
|||||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.46
|
|
|
8.18
|
|
|
8.07
|
|
|
7.73
|
|
|
7.61
|
|
|||||
Operating expenses per ASM, excluding fuel and
profitsharing (cents)
|
|
8.19
|
|
|
8.01
|
|
|
7.98
|
|
|
7.65
|
|
|
7.45
|
|
|||||
Fuel costs per gallon, including fuel tax
|
|
$
|
2.93
|
|
|
$
|
3.16
|
|
|
$
|
3.30
|
|
|
$
|
3.19
|
|
|
$
|
2.51
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
2.92
|
|
|
$
|
3.12
|
|
|
$
|
3.28
|
|
|
$
|
3.19
|
|
|
$
|
2.39
|
|
Fuel consumed, in gallons (millions)
|
|
1,801
|
|
|
1,818
|
|
|
1,847
|
|
|
1,764
|
|
|
1,437
|
|
|||||
Active fulltime equivalent Employees
|
|
46,278
|
|
|
44,831
|
|
|
45,861
|
|
|
45,392
|
|
|
34,901
|
|
|||||
Aircraft at end of period (8)
|
|
665
|
|
|
681
|
|
|
694
|
|
|
698
|
|
|
548
|
|
(1)
|
A revenue passenger mile is one paying passenger flown one mile. Also referred to as “traffic,” which is a measure of demand for a given period.
|
(2)
|
An available seat mile is one seat (empty or full) flown one mile. Also referred to as “capacity,” which is a measure of the space available to carry passengers in a given period.
|
(3)
|
Revenue passenger miles divided by available seat miles.
|
(4)
|
Calculated as passenger revenue divided by revenue passenger miles. Also referred to as “yield,” this is the average cost paid by a paying passenger to fly one mile, which is a measure of revenue production and fares.
|
(5)
|
Calculated as operating revenue divided by available seat miles. Also referred to as “operating unit revenues,” this is a measure of operating revenue production based on the total available seat miles flown during a particular period.
|
(6)
|
Calculated as passenger revenue divided by available seat miles. Also referred to as “passenger unit revenues,” this is a measure of passenger revenue production based on the total available seat miles flown during a particular period.
|
(7)
|
Calculated as operating expenses divided by available seat miles. Also referred to as “unit costs” or “cost per available seat mile,” this is the average cost to fly an aircraft seat (empty or full) one mile, which is a measure of cost efficiencies.
|
(8)
|
Aircraft in the Company's fleet at end of period, less Boeing 717-200s removed from service in preparation for transition out of the fleet.
|
|
Year ended December 31,
|
|
Percent
|
|||||||
|
2014
|
|
2013
|
|
Change
|
|||||
Fuel and oil expense, unhedged
|
$
|
5,321
|
|
|
$
|
5,645
|
|
|
|
|
Add (Deduct): Fuel hedge losses (gains) included in Fuel and oil expense
|
(28
|
)
|
|
118
|
|
|
|
|||
Fuel and oil expense, as reported
|
$
|
5,293
|
|
|
$
|
5,763
|
|
|
|
|
Deduct: Net impact from fuel contracts
|
(28
|
)
|
|
(84
|
)
|
|
|
|||
Fuel and oil expense, non-GAAP
|
$
|
5,265
|
|
|
$
|
5,679
|
|
|
(7.3
|
)%
|
|
|
|
|
|
|
|||||
Total operating expenses, as reported
|
$
|
16,380
|
|
|
$
|
16,421
|
|
|
|
|
Add (Deduct): Reclassification between Fuel and oil and Other (gains) losses, net,
associated with current period settled contracts
|
(4
|
)
|
|
3
|
|
|
|
|||
Deduct: Contracts settling in the current period, but for which gains have been
recognized in a prior period*
|
(24
|
)
|
|
(87
|
)
|
|
|
|||
Deduct: Acquisition and integration costs
|
(126
|
)
|
|
(86
|
)
|
|
|
|||
Deduct: Labor ratification bonus
|
(9
|
)
|
|
—
|
|
|
|
|||
Total operating expenses, non-GAAP
|
$
|
16,217
|
|
|
$
|
16,251
|
|
|
(0.2
|
)%
|
|
|
|
|
|
|
|||||
Operating income, as reported
|
$
|
2,225
|
|
|
$
|
1,278
|
|
|
|
|
Add (Deduct): Reclassification between Fuel and oil and Other (gains) losses, net,
associated with current period settled contracts
|
4
|
|
|
(3
|
)
|
|
|
|||
Add: Contracts settling in the current period, but for which gains have been recognized in
a prior period*
|
24
|
|
|
87
|
|
|
|
|||
Add: Acquisition and integration costs
|
126
|
|
|
86
|
|
|
|
|||
Add: Labor ratification bonus
|
9
|
|
|
—
|
|
|
|
|||
Operating income, non-GAAP
|
$
|
2,388
|
|
|
$
|
1,448
|
|
|
64.9
|
%
|
|
|
|
|
|
|
|||||
Net income, as reported
|
$
|
1,136
|
|
|
$
|
754
|
|
|
|
|
Add (Deduct): Mark-to-market impact from fuel contracts settling in future periods
|
251
|
|
|
(103
|
)
|
|
|
|||
Add: Ineffectiveness from fuel hedges settling in future periods
|
5
|
|
|
11
|
|
|
|
|||
Add: Other net impact of fuel contracts settling in the current or a prior period
(excluding reclassifications)
|
24
|
|
|
87
|
|
|
|
|||
Income tax impact of fuel contracts
|
(104
|
)
|
|
2
|
|
|
|
|||
Add: Acquisition and integration costs (a)
|
79
|
|
|
54
|
|
|
|
|||
Add: Labor ratification bonus (a)
|
6
|
|
|
—
|
|
|
|
|||
Net income, non-GAAP
|
$
|
1,397
|
|
|
$
|
805
|
|
|
73.5
|
%
|
|
|
|
|
|
|
|||||
Net income per share, diluted, as reported
|
$
|
1.64
|
|
|
$
|
1.05
|
|
|
|
|
Add: Net impact to net income above from fuel contracts divided by
dilutive shares (a)
|
0.25
|
|
|
—
|
|
|
|
|||
Add: Impact of special items, net (a)
|
0.12
|
|
|
0.07
|
|
|
|
|||
Net income per share, diluted, non-GAAP
|
$
|
2.01
|
|
|
$
|
1.12
|
|
|
79.5
|
%
|
|
|
|
|
|
|
|||||
Operating expenses per ASM (Cents)
|
|
12.50
|
¢
|
|
|
12.60
|
¢
|
|
|
|
Deduct: Fuel expense divided by ASMs
|
(4.04
|
)
|
|
(4.42
|
)
|
|
|
|||
Deduct: Impact of special items
|
(0.10
|
)
|
|
(0.07
|
)
|
|
|
|||
Operating expenses per ASM, non-GAAP, excluding fuel and special items (cents)
|
|
8.36
|
¢
|
|
|
8.11
|
¢
|
|
3.1
|
%
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||
|
December 31, 2014
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||
Operating Income, as reported
|
$
|
2,225
|
|
|
$
|
1,278
|
|
|
$
|
623
|
|
Add: Net impact from fuel contracts
|
28
|
|
|
84
|
|
|
32
|
|
|||
Add: Acquisition and integration costs
|
126
|
|
|
86
|
|
|
183
|
|
|||
Add: Labor ratification bonus
|
9
|
|
|
—
|
|
|
—
|
|
|||
Operating Income, non-GAAP
|
$
|
2,388
|
|
|
$
|
1,448
|
|
|
$
|
838
|
|
Net adjustment for aircraft leases (1)
|
133
|
|
|
143
|
|
|
117
|
|
|||
Adjustment for fuel hedge premium expense
|
(62
|
)
|
|
(60
|
)
|
|
(36
|
)
|
|||
Adjusted Operating Income, non-GAAP
|
$
|
2,459
|
|
|
$
|
1,531
|
|
|
$
|
919
|
|
|
|
|
|
|
|
||||||
Average invested capital (2)
|
$
|
11,470
|
|
|
$
|
11,664
|
|
|
$
|
12,580
|
|
Equity adjustment for hedge accounting
|
104
|
|
|
50
|
|
|
145
|
|
|||
Adjusted average invested capital
|
$
|
11,574
|
|
|
$
|
11,714
|
|
|
$
|
12,725
|
|
|
|
|
|
|
|
||||||
ROIC, pre-tax
|
21.2
|
%
|
|
13.1
|
%
|
|
7.2
|
%
|
|
|
Year ended
|
|
|
||||||
(in millions, except per share amounts)
|
|
December 31,
|
|
|
||||||
GAAP
|
|
2014
|
|
2013
|
|
Percent Change
|
||||
Operating income
|
|
$
|
2,225
|
|
|
$
|
1,278
|
|
|
74.1
|
Net income
|
|
$
|
1,136
|
|
|
$
|
754
|
|
|
50.7
|
Net income per share, diluted
|
|
$
|
1.64
|
|
|
$
|
1.05
|
|
|
56.2
|
|
|
|
|
|
|
|
|
|
||
Non-GAAP
|
|
|
|
|
|
|
||||
Operating income
|
|
$
|
2,388
|
|
|
$
|
1,448
|
|
|
64.9
|
Net income
|
|
$
|
1,397
|
|
|
$
|
805
|
|
|
73.5
|
Net income per share, diluted
|
|
$
|
2.01
|
|
|
$
|
1.12
|
|
|
79.5
|
See the previous Note Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures.
|
•
|
At Washington Reagan National Airport, the Company acquired
54
additional slots (for
27
additional daily roundtrip flights) during
first quarter 2014
, which were divested in connection with the merger between AMR Corporation, the parent company of American Airlines, Inc., and US Airways Group, Inc., increasing Southwest's service at Reagan from
17
daily departures to
44
daily departures, currently servicing
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.
|
•
|
At New York LaGuardia Airport, in the wake of the Company's acquisition of
twelve
additional slots (for
six
additional daily roundtrip flights) announced in
fourth quarter 2013
, the Company increased service between LaGuardia and Nashville, Houston (Hobby), Chicago (Midway), and Akron-Canton which commenced in
May 2014
.
|
•
|
With the repeal of the Wright Amendment federal flight restrictions at Dallas Love Field on
October 13, 2014
, to destinations within the 50 States and to the District of Columbia, Southwest commenced service to
seven
new nonstop destinations from Love Field. Service from Love Field to
eight
additional nonstop destinations commenced on
November 2, 2014
, and service to
two
additional nonstop destinations began on
January 6, 2015
. This brings the total number of nonstop destinations out of Love Field to
33
compared with
16
prior to the repeal. Additionally, in January 2015, the Company announced that beginning in April 2015, it will offer daily nonstop flights to nine new cities from Dallas Love Field, including Memphis, Milwaukee, and Seattle, and will increase the number of nonstop flights to recently introduced destinations added after the October 2014 expiration of the Wright Amendment restrictions on long-haul flying at Love Field. The new flights will be made possible through a long-term sublease agreement that will transfer usage of two gates in the newly rebuilt 20-gate facility from United Airlines to Southwest.
|
Employee Group
|
Approximate Number of Employees
|
Representatives
|
Amendable Date
|
Southwest Pilots
|
7,500
|
Southwest Airlines Pilots’ Association (“SWAPA”)
|
August 2012
|
Southwest Flight Attendants
|
11,850
|
Transportation Workers of America, AFL-CIO, Local 556 (“TWU 556”)
|
May 2013
|
Southwest Ramp, Operations, Provisioning, Freight Agents
|
10,000
|
Transportation Workers of America, AFL-CIO, Local 555 (“TWU 555”)
|
June 2011
|
Southwest Material Specialists (formerly known as Stock Clerks)
|
250
|
International Brotherhood of Teamsters, Local 19 (“IBT 19”)
|
August 2013
|
Southwest Mechanics
|
2,100
|
Aircraft Mechanics Fraternal Association (“AMFA”)
|
August 2012
|
Southwest Facilities Maintenance Technicians
|
40
|
AMFA
|
N/A
|
Year
|
|
Fair value of fuel
derivative contracts
at December 31, 2014
|
|
Amount of losses deferred
in AOCI at December 31,
2014 (net of tax)
|
||||
2015
|
|
$
|
(242
|
)
|
|
$
|
(219
|
)
|
2016
|
|
(472
|
)
|
|
(347
|
)
|
||
2017
|
|
(287
|
)
|
|
(157
|
)
|
||
2018
|
|
—
|
|
|
(17
|
)
|
||
Total
|
|
$
|
(1,001
|
)
|
|
$
|
(740
|
)
|
|
Estimated economic jet fuel price per gallon,
including taxes |
|
Average Brent Crude Oil
price per barrel
|
1Q 2015 (2)
|
Full Year 2015 (2)
|
$30
|
$1.15 - $1.20
|
$1.15 - $1.25
|
$40
|
$1.50 - $1.55
|
$1.45 - $1.55
|
Current Market (1)
|
$1.85 - $1.90
|
$1.95 - $2.05
|
$60
|
$2.15 - $2.20
|
$2.10 - $2.20
|
$70
|
$2.45 - $2.50
|
$2.40 - $2.50
|
Estimated Fuel Hedge Premium Expense (3)
|
$25 - $30 million
|
$120 - $130 million
|
|
Year ended December 31,
|
||||||
(in millions)
|
2014
|
|
2013
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
251
|
|
|
$
|
(103
|
)
|
Ineffectiveness from fuel hedges settling in future periods
|
5
|
|
|
11
|
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
(4
|
)
|
|
3
|
|
||
Premium cost of fuel contracts
|
62
|
|
|
60
|
|
||
Other
|
(5
|
)
|
|
(3
|
)
|
||
|
$
|
309
|
|
|
$
|
(32
|
)
|
|
|
Year ended
December 31,
|
|
Percent
Change
|
|||||||
|
|
2013
|
|
2012
|
|
||||||
Fuel and oil expense, unhedged
|
|
$
|
5,645
|
|
|
$
|
5,963
|
|
|
|
|
Add: Fuel hedge losses included in Fuel and oil expense
|
|
118
|
|
|
157
|
|
|
|
|||
Fuel and oil expense, as reported
|
|
$
|
5,763
|
|
|
$
|
6,120
|
|
|
|
|
Deduct: Net impact from fuel contracts
|
|
(84
|
)
|
|
(32
|
)
|
|
|
|||
Fuel and oil expense, non-GAAP
|
|
$
|
5,679
|
|
|
$
|
6,088
|
|
|
(6.7
|
)%
|
|
|
|
|
|
|
|
|||||
Total operating expenses, as reported
|
|
$
|
16,421
|
|
|
$
|
16,465
|
|
|
|
|
Add (Deduct): Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period
settled contracts
|
|
3
|
|
|
(42
|
)
|
|
|
|||
Add (Deduct): Contracts settling in the current period, but for which gains and/or (losses) have been recognized in
a prior period*
|
|
(87
|
)
|
|
10
|
|
|
|
|||
Deduct: Acquisition and Integration costs
|
|
(86
|
)
|
|
(183
|
)
|
|
|
|||
Total operating expenses, non-GAAP
|
|
$
|
16,251
|
|
|
$
|
16,250
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|||||
Operating income, as reported
|
|
$
|
1,278
|
|
|
$
|
623
|
|
|
|
|
Add (Deduct): Reclassification between Fuel and oil and Other (gains) losses, net, associated with current period
settled contracts
|
|
(3
|
)
|
|
42
|
|
|
|
|||
Add (Deduct): Contracts settling in the current period, but for which gains and/or (losses) have been recognized in
a prior period*
|
|
87
|
|
|
(10
|
)
|
|
|
|||
Add: Acquisition and Integration costs
|
|
86
|
|
|
183
|
|
|
|
|||
Operating income, non-GAAP
|
|
$
|
1,448
|
|
|
$
|
838
|
|
|
72.8
|
%
|
|
|
|
|
|
|
|
|||||
Net income, as reported
|
|
$
|
754
|
|
|
$
|
421
|
|
|
|
|
Deduct: Mark-to-market impact from fuel contracts settling in future periods
|
|
(103
|
)
|
|
(221
|
)
|
|
|
|||
Add: Ineffectiveness from fuel hedges settling in future periods
|
|
11
|
|
|
42
|
|
|
|
|||
Add (Deduct): Other net impact of fuel contracts settling in the current
or a prior period (excluding reclassifications)
|
|
87
|
|
|
(10
|
)
|
|
|
|||
Income tax impact of fuel contracts
|
|
2
|
|
|
73
|
|
|
|
|||
Add: Acquisition and Integration costs (a)
|
|
54
|
|
|
112
|
|
|
|
|||
Net income, non-GAAP
|
|
$
|
805
|
|
|
$
|
417
|
|
|
93.0
|
%
|
|
|
|
|
|
|
|
|||||
Net income per share, diluted, as reported
|
|
$
|
1.05
|
|
|
$
|
0.56
|
|
|
|
|
Deduct:
Net impact to net income above from fuel contracts divided by dilutive shares (a)
|
|
—
|
|
|
(0.15
|
)
|
|
|
|||
Add: Impact of special items, net (a)
|
|
0.07
|
|
|
0.15
|
|
|
|
|||
Net income per share, diluted, non-GAAP
|
|
$
|
1.12
|
|
|
$
|
0.56
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|||||
Operating expenses per ASM (cents)
|
|
|
12.60
|
¢
|
|
|
12.85
|
¢
|
|
|
|
Deduct: Fuel expense divided by ASMs (cents)
|
|
(4.42
|
)
|
|
(4.78
|
)
|
|
|
|||
Deduct: Impact of special items, net (cents)
|
|
(0.07
|
)
|
|
(0.14
|
)
|
|
|
|||
Operating expenses per ASM, non-GAAP, excluding fuel and special items (cents)
|
|
|
8.11
|
¢
|
|
|
7.93
|
¢
|
|
2.3
|
%
|
(a)
|
Amounts net of tax
|
|
Year ended December 31,
|
||||||
(in millions)
|
2013
|
|
2012
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
(103
|
)
|
|
$
|
(221
|
)
|
Ineffectiveness from fuel hedges settling in future periods
|
11
|
|
|
42
|
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
3
|
|
|
(42
|
)
|
||
Premium cost of fuel contracts
|
60
|
|
|
36
|
|
||
Other
|
(3
|
)
|
|
4
|
|
||
|
$
|
(32
|
)
|
|
$
|
(181
|
)
|
Share repurchases
|
|
Shares received
|
|
Cash paid
|
||
|
|
|
|
|
||
Open market purchases
|
|
750,000
|
|
$
|
19,643,700
|
|
Second Quarter ASR Program
|
|
7,411,977
|
|
200,000,000
|
|
|
Third Quarter ASR Program
|
|
6,147,812
|
|
200,000,000
|
|
|
Fourth Quarter ASR Program
|
|
3,810,008
|
(1)
|
200,000,000
|
|
|
Total
|
|
18,119,797
|
|
$
|
619,643,700
|
|
|
|
Obligations by period (in millions)
|
||||||||||||||||||
Contractual obligations
|
|
2015
|
|
2016 - 2017
|
|
2018 - 2019
|
|
Beyond 2019
|
|
|
Total
|
|||||||||
Long-term debt (1)
|
|
$
|
232
|
|
|
$
|
1,023
|
|
|
$
|
737
|
|
|
$
|
455
|
|
|
$
|
2,447
|
|
Interest commitments - fixed (2)
|
|
102
|
|
|
163
|
|
|
84
|
|
|
82
|
|
|
431
|
|
|||||
Interest commitments - floating (3)
|
|
15
|
|
|
31
|
|
|
22
|
|
|
—
|
|
|
68
|
|
|||||
Operating lease commitments (4)
|
|
684
|
|
|
1,228
|
|
|
926
|
|
|
2,317
|
|
|
5,155
|
|
|||||
Capital lease commitments (5)
|
|
33
|
|
|
87
|
|
|
87
|
|
|
202
|
|
|
409
|
|
|||||
Aircraft purchase commitments (6)
|
|
836
|
|
|
2,384
|
|
|
2,136
|
|
|
5,692
|
|
|
11,048
|
|
|||||
Other commitments
|
|
230
|
|
|
131
|
|
|
17
|
|
|
64
|
|
|
442
|
|
|||||
Total contractual obligations
|
|
$
|
2,132
|
|
|
$
|
5,047
|
|
|
$
|
4,009
|
|
|
$
|
8,812
|
|
|
$
|
20,000
|
|
(1)
|
Includes principal only and includes
$68 million
in
2015
associated with the Company’s convertible senior notes due
2016
. See Note
6
to the Consolidated Financial Statements.
|
(2)
|
Related to fixed-rate debt only.
|
(3)
|
Interest obligations associated with floating-rate debt (either at issuance or through swaps) is estimated utilizing forward interest rate curves as of
December 31, 2014
and can be subject to significant fluctuation.
|
(4)
|
Includes Love Field Modernization Program commitment amounts, and includes the impact of the Boeing 717 lease/sublease transaction entered into in
2012
. See Note
7
to the Consolidated Financial Statements.
|
(5)
|
Includes interest on capital leases.
|
(6)
|
Firm orders from Boeing and commitments with other parties.
|
|
|
Estimated useful life
|
|
Estimated
residual value
|
Airframes and engines
|
|
23 to 25 years
|
|
2 to 20 percent
|
Aircraft parts
|
|
Fleet life
|
|
4 percent
|
Ground property and equipment
|
|
5 to 30 years
|
|
0 to 10 percent
|
|
|
Principal
amount
(in millions)
|
|
Effective
fixed rate
|
|
Final
maturity
|
|
Underlying collateral
|
|||
Term Loan Agreement
|
|
$
|
178
|
|
|
6.315
|
%
|
|
5/6/2019
|
|
14 specified Boeing 737-700 aircraft
|
Term Loan Agreement
|
|
73
|
|
|
6.84
|
%
|
|
7/1/2019
|
|
5 specified Boeing 737-700 aircraft
|
|
Term Loan Agreement
|
|
372
|
|
|
5.223
|
%
|
|
5/9/2020
|
|
21 specified Boeing 737-700 aircraft
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,282
|
|
|
$
|
1,355
|
|
Short-term investments
|
1,706
|
|
|
1,797
|
|
||
Accounts and other receivables
|
365
|
|
|
419
|
|
||
Inventories of parts and supplies, at cost
|
342
|
|
|
467
|
|
||
Deferred income taxes
|
477
|
|
|
168
|
|
||
Prepaid expenses and other current assets
|
232
|
|
|
250
|
|
||
Total current assets
|
4,404
|
|
|
4,456
|
|
||
|
|
|
|
||||
Property and equipment, at cost:
|
|
|
|
|
|
||
Flight equipment
|
18,473
|
|
|
16,937
|
|
||
Ground property and equipment
|
2,853
|
|
|
2,666
|
|
||
Deposits on flight equipment purchase contracts
|
566
|
|
|
764
|
|
||
Assets constructed for others
|
621
|
|
|
453
|
|
||
|
22,513
|
|
|
20,820
|
|
||
Less allowance for depreciation and amortization
|
8,221
|
|
|
7,431
|
|
||
|
14,292
|
|
|
13,389
|
|
||
Goodwill
|
970
|
|
|
970
|
|
||
Other assets
|
534
|
|
|
530
|
|
||
|
$
|
20,200
|
|
|
$
|
19,345
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,203
|
|
|
$
|
1,247
|
|
Accrued liabilities
|
1,565
|
|
|
1,229
|
|
||
Air traffic liability
|
2,897
|
|
|
2,571
|
|
||
Current maturities of long-term debt
|
258
|
|
|
629
|
|
||
Total current liabilities
|
5,923
|
|
|
5,676
|
|
||
|
|
|
|
||||
Long-term debt less current maturities
|
2,434
|
|
|
2,191
|
|
||
Deferred income taxes
|
3,259
|
|
|
2,934
|
|
||
Construction obligation
|
554
|
|
|
437
|
|
||
Other noncurrent liabilities
|
1,255
|
|
|
771
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock, $1.00 par value: 2,000,000,000 shares authorized;
807,611,634 shares issued in 2014 and 2013
|
808
|
|
|
808
|
|
||
Capital in excess of par value
|
1,315
|
|
|
1,231
|
|
||
Retained earnings
|
7,416
|
|
|
6,431
|
|
||
Accumulated other comprehensive loss
|
(738
|
)
|
|
(3
|
)
|
||
Treasury stock, at cost: 132,017,550 and 107,136,946 shares
in 2014 and 2013 respectively
|
(2,026
|
)
|
|
(1,131
|
)
|
||
Total stockholders' equity
|
6,775
|
|
|
7,336
|
|
||
|
$
|
20,200
|
|
|
$
|
19,345
|
|
|
Year ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
OPERATING REVENUES:
|
|
|
|
|
|
||||||
Passenger
|
$
|
17,658
|
|
|
$
|
16,721
|
|
|
$
|
16,093
|
|
Freight
|
175
|
|
|
164
|
|
|
160
|
|
|||
Other
|
772
|
|
|
814
|
|
|
835
|
|
|||
Total operating revenues
|
18,605
|
|
|
17,699
|
|
|
17,088
|
|
|||
|
|
|
|
|
|
||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||
Salaries, wages, and benefits
|
5,434
|
|
|
5,035
|
|
|
4,749
|
|
|||
Fuel and oil
|
5,293
|
|
|
5,763
|
|
|
6,120
|
|
|||
Maintenance materials and repairs
|
978
|
|
|
1,080
|
|
|
1,132
|
|
|||
Aircraft rentals
|
295
|
|
|
361
|
|
|
355
|
|
|||
Landing fees and other rentals
|
1,111
|
|
|
1,103
|
|
|
1,043
|
|
|||
Depreciation and amortization
|
938
|
|
|
867
|
|
|
844
|
|
|||
Acquisition and integration
|
126
|
|
|
86
|
|
|
183
|
|
|||
Other operating expenses
|
2,205
|
|
|
2,126
|
|
|
2,039
|
|
|||
Total operating expenses
|
16,380
|
|
|
16,421
|
|
|
16,465
|
|
|||
|
|
|
|
|
|
||||||
OPERATING INCOME
|
2,225
|
|
|
1,278
|
|
|
623
|
|
|||
|
|
|
|
|
|
||||||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
||||
Interest expense
|
130
|
|
|
131
|
|
|
147
|
|
|||
Capitalized interest
|
(23
|
)
|
|
(24
|
)
|
|
(21
|
)
|
|||
Interest income
|
(7
|
)
|
|
(6
|
)
|
|
(7
|
)
|
|||
Other (gains) losses, net
|
309
|
|
|
(32
|
)
|
|
(181
|
)
|
|||
Total other expenses (income)
|
409
|
|
|
69
|
|
|
(62
|
)
|
|||
|
|
|
|
|
|
||||||
INCOME BEFORE INCOME TAXES
|
1,816
|
|
|
1,209
|
|
|
685
|
|
|||
PROVISION FOR INCOME TAXES
|
680
|
|
|
455
|
|
|
264
|
|
|||
NET INCOME
|
$
|
1,136
|
|
|
$
|
754
|
|
|
$
|
421
|
|
NET INCOME PER SHARE, BASIC
|
$
|
1.65
|
|
|
$
|
1.06
|
|
|
$
|
0.56
|
|
NET INCOME PER SHARE, DILUTED
|
$
|
1.64
|
|
|
$
|
1.05
|
|
|
$
|
0.56
|
|
Cash dividends declared per common share
|
$
|
.2200
|
|
|
$
|
.1300
|
|
|
$
|
.0345
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
NET INCOME
|
|
$
|
1,136
|
|
|
$
|
754
|
|
|
$
|
421
|
|
Unrealized gain (loss) on fuel derivative instruments, net of
deferred taxes of ($430), $31, and $74
|
|
(727
|
)
|
|
52
|
|
|
120
|
|
|||
Unrealized gain (loss) on interest rate derivative instruments, net of deferred taxes of $5, $19, and $0
|
|
8
|
|
|
31
|
|
|
(1
|
)
|
|||
Unrealized gain (loss) on defined benefit plan items, net of deferred taxes of ($8), $15, and ($11)
|
|
(16
|
)
|
|
24
|
|
|
(17
|
)
|
|||
Other, net of deferred taxes of $0, $7, and $3
|
|
—
|
|
|
9
|
|
|
3
|
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
$
|
(735
|
)
|
|
$
|
116
|
|
|
$
|
105
|
|
COMPREHENSIVE INCOME
|
|
$
|
401
|
|
|
$
|
870
|
|
|
$
|
526
|
|
|
|
Year ended December 31, 2014, 2013, and 2012
|
||||||||||||||||||||||
|
|
Common
Stock
|
|
Capital in
excess of
par value
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Treasury
stock
|
|
Total
|
||||||||||||
Balance at December 31, 2011
|
|
$
|
808
|
|
|
$
|
1,222
|
|
|
$
|
5,395
|
|
|
$
|
(224
|
)
|
|
$
|
(324
|
)
|
|
$
|
6,877
|
|
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|
(400
|
)
|
||||||
Issuance of common and treasury stock pursuant to Employee stock plans
|
|
—
|
|
|
(4
|
)
|
|
(22
|
)
|
|
—
|
|
|
49
|
|
|
23
|
|
||||||
Net tax benefit (expense) of options exercised
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)
|
||||||
Share-based compensation
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Cash dividends, $.0345 per share
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
421
|
|
|
105
|
|
|
—
|
|
|
526
|
|
||||||
Balance at December 31, 2012
|
|
$
|
808
|
|
|
$
|
1,210
|
|
|
$
|
5,768
|
|
|
$
|
(119
|
)
|
|
$
|
(675
|
)
|
|
$
|
6,992
|
|
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(540
|
)
|
|
(540
|
)
|
||||||
Issuance of common and treasury stock pursuant to Employee stock plans
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
96
|
|
||||||
Net tax benefit (expense) of options exercised
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||
Share-based compensation
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||
Cash dividends, $.1300 per share
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
754
|
|
|
116
|
|
|
—
|
|
|
870
|
|
||||||
Balance at December 31, 2013
|
|
$
|
808
|
|
|
$
|
1,231
|
|
|
$
|
6,431
|
|
|
$
|
(3
|
)
|
|
$
|
(1,131
|
)
|
|
$
|
7,336
|
|
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(955
|
)
|
|
(955
|
)
|
||||||
Issuance of common and treasury stock pursuant to Employee stock plans
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
100
|
|
||||||
Net tax benefit (expense) of options exercised
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||||
Share-based compensation
|
|
—
|
|
|
21
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
||||||
Cash dividends, $.2200 per share
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
1,136
|
|
|
(735
|
)
|
|
—
|
|
|
401
|
|
||||||
Balance at December 31, 2014
|
|
$
|
808
|
|
|
$
|
1,315
|
|
|
$
|
7,416
|
|
|
$
|
(738
|
)
|
|
$
|
(2,026
|
)
|
|
$
|
6,775
|
|
|
Year ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,136
|
|
|
$
|
754
|
|
|
$
|
421
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
938
|
|
|
867
|
|
|
844
|
|
|||
Unrealized (gain) loss on fuel derivative instruments
|
279
|
|
|
(5
|
)
|
|
(189
|
)
|
|||
Deferred income taxes
|
501
|
|
|
50
|
|
|
251
|
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts and other receivables
|
54
|
|
|
(17
|
)
|
|
(33
|
)
|
|||
Other assets
|
142
|
|
|
(46
|
)
|
|
(104
|
)
|
|||
Accounts payable and accrued liabilities
|
36
|
|
|
343
|
|
|
186
|
|
|||
Air traffic liability
|
326
|
|
|
400
|
|
|
334
|
|
|||
Cash collateral received from (provided to) derivative counterparties
|
(233
|
)
|
|
57
|
|
|
233
|
|
|||
Other, net
|
(277
|
)
|
|
74
|
|
|
121
|
|
|||
Net cash provided by operating activities
|
2,902
|
|
|
2,477
|
|
|
2,064
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(1,748
|
)
|
|
(1,433
|
)
|
|
(1,348
|
)
|
|||
Assets constructed for others
|
(80
|
)
|
|
(14
|
)
|
|
—
|
|
|||
Purchases of short-term investments
|
(3,080
|
)
|
|
(3,135
|
)
|
|
(2,481
|
)
|
|||
Proceeds from sales of short-term and other investments
|
3,185
|
|
|
3,198
|
|
|
2,996
|
|
|||
Other, net
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(1,727
|
)
|
|
(1,384
|
)
|
|
(833
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
300
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from Employee stock plans
|
110
|
|
|
96
|
|
|
27
|
|
|||
Reimbursement for assets constructed for others
|
27
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from termination of interest rate derivative instrument
|
—
|
|
|
—
|
|
|
38
|
|
|||
Payments of long-term debt and capital lease obligations
|
(561
|
)
|
|
(313
|
)
|
|
(578
|
)
|
|||
Payments of cash dividends
|
(139
|
)
|
|
(71
|
)
|
|
(22
|
)
|
|||
Repayment of construction obligation
|
(11
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
(955
|
)
|
|
(540
|
)
|
|
(400
|
)
|
|||
Other, net
|
(19
|
)
|
|
(18
|
)
|
|
(12
|
)
|
|||
Net cash used in financing activities
|
(1,248
|
)
|
|
(851
|
)
|
|
(947
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(73
|
)
|
|
242
|
|
|
284
|
|
|||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,355
|
|
|
1,113
|
|
|
829
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
1,282
|
|
|
$
|
1,355
|
|
|
$
|
1,113
|
|
CASH PAYMENTS FOR:
|
|
|
|
|
|
||||||
Interest
|
$
|
128
|
|
|
$
|
133
|
|
|
$
|
153
|
|
Income taxes
|
$
|
155
|
|
|
$
|
346
|
|
|
$
|
100
|
|
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
|
|
|
|
|
|
||||||
Assets constructed for others
|
$
|
88
|
|
|
$
|
105
|
|
|
$
|
129
|
|
|
Year ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
NUMERATOR:
|
|
|
|
|
|
||||||
Net income
|
$
|
1,136
|
|
|
$
|
754
|
|
|
$
|
421
|
|
Incremental income effect of
interest on 5.25% convertible notes
|
4
|
|
|
3
|
|
|
3
|
|
|||
Net income after assumed conversion
|
$
|
1,140
|
|
|
$
|
757
|
|
|
$
|
424
|
|
|
|
|
|
|
|
||||||
DENOMINATOR:
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding, basic
|
687
|
|
|
710
|
|
|
750
|
|
|||
Dilutive effect of Employee stock options and
restricted stock units
|
3
|
|
|
2
|
|
|
1
|
|
|||
Dilutive effect of 5.25% convertible notes
|
6
|
|
|
6
|
|
|
6
|
|
|||
Adjusted weighted-average shares outstanding, diluted
|
696
|
|
|
718
|
|
|
757
|
|
|||
|
|
|
|
|
|
||||||
NET INCOME PER SHARE:
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
1.65
|
|
|
$
|
1.06
|
|
|
$
|
0.56
|
|
Diluted
|
$
|
1.64
|
|
|
$
|
1.05
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
||||||
Potentially dilutive amounts excluded from calculations:
|
|
|
|
|
|
|
|
||||
Stock options and restricted stock units
|
—
|
|
|
9
|
|
|
35
|
|
|
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
|
2015
|
—
|
|
19
|
—
|
16
|
—
|
—
|
|
—
|
|
35
|
2016
|
31
|
|
—
|
11
|
4
|
—
|
—
|
|
—
|
|
46
|
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)
|
19
|
35
|
20
|
30
|
170
|
(2)
|
191
|
|
521
|
(in millions)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Derivative contracts
|
|
$
|
13
|
|
|
$
|
145
|
|
Intangible assets
|
|
363
|
|
|
166
|
|
||
Non-current investments
|
|
35
|
|
|
44
|
|
||
Other
|
|
123
|
|
|
175
|
|
||
Other assets
|
|
$
|
534
|
|
|
$
|
530
|
|
(in millions)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Accounts payable trade
|
|
$
|
123
|
|
|
$
|
189
|
|
Salaries payable
|
|
160
|
|
|
156
|
|
||
Taxes payable
|
|
163
|
|
|
146
|
|
||
Aircraft maintenance payable
|
|
314
|
|
|
331
|
|
||
Fuel payable
|
|
85
|
|
|
102
|
|
||
Other payable
|
|
358
|
|
|
323
|
|
||
Accounts payable
|
|
$
|
1,203
|
|
|
$
|
1,247
|
|
(in millions)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Profitsharing and savings plans
|
|
$
|
374
|
|
|
$
|
244
|
|
Aircraft and other lease related obligations
|
|
159
|
|
|
173
|
|
||
Vacation pay
|
|
292
|
|
|
278
|
|
||
Health
|
|
84
|
|
|
73
|
|
||
Derivative contracts
|
|
174
|
|
|
12
|
|
||
Workers compensation
|
|
165
|
|
|
161
|
|
||
Property and other taxes
|
|
81
|
|
|
65
|
|
||
Other
|
|
236
|
|
|
223
|
|
||
Accrued liabilities
|
|
$
|
1,565
|
|
|
$
|
1,229
|
|
(in millions)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Postretirement obligation
|
|
$
|
169
|
|
|
$
|
138
|
|
Non-current lease-related obligations
|
|
193
|
|
|
290
|
|
||
Other deferred compensation
|
|
174
|
|
|
163
|
|
||
Deferred gains from sale and leaseback of aircraft
|
|
53
|
|
|
65
|
|
||
Derivative contracts
|
|
622
|
|
|
45
|
|
||
Other
|
|
44
|
|
|
70
|
|
||
Other non-current liabilities
|
|
$
|
1,255
|
|
|
$
|
771
|
|
(in millions)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
5.25% Notes due 2014
|
|
—
|
|
|
357
|
|
||
5.75% Notes due 2016
|
|
313
|
|
|
320
|
|
||
5.25% Convertible Senior Notes due 2016
|
|
113
|
|
|
115
|
|
||
5.125% Notes due 2017
|
|
316
|
|
|
322
|
|
||
Fixed-rate 717 Aircraft Notes payable through 2017—10.37%
|
|
—
|
|
|
41
|
|
||
French Credit Agreements due 2018—1.06%
|
|
36
|
|
|
46
|
|
||
Fixed-rate 737 Aircraft Notes payable through 2018—7.02%
|
|
24
|
|
|
30
|
|
||
2.75% Notes due 2019
|
|
300
|
|
|
—
|
|
||
Term Loan Agreement due 2019—6.315%
|
|
178
|
|
|
210
|
|
||
Term Loan Agreement due 2019—6.84%
|
|
73
|
|
|
85
|
|
||
Term Loan Agreement due 2020—5.223%
|
|
372
|
|
|
413
|
|
||
Floating-rate 737 Aircraft Notes payable through 2020
|
|
300
|
|
|
340
|
|
||
Pass Through Certificates due 2022—6.24%
|
|
355
|
|
|
371
|
|
||
7.375% Debentures due 2027
|
|
134
|
|
|
136
|
|
||
Capital leases (Note 7)
|
|
199
|
|
|
56
|
|
||
|
|
$
|
2,713
|
|
|
$
|
2,842
|
|
Less current maturities
|
|
258
|
|
|
629
|
|
||
Less debt discount and issuance costs
|
|
21
|
|
|
22
|
|
||
|
|
$
|
2,434
|
|
|
$
|
2,191
|
|
(in millions)
|
|
2014
|
|
2013
|
||||
Flight equipment
|
|
$
|
214
|
|
|
$
|
69
|
|
Less: accumulated amortization
|
|
22
|
|
|
12
|
|
||
|
|
$
|
192
|
|
|
$
|
57
|
|
(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
|
|
5
|
|
|
Lease/sublease expense adjustment
|
|
22
|
|
|
Lease/sublease payments, net (a)
|
|
(86
|
)
|
|
Balance at December 31, 2014
|
|
$
|
63
|
|
|
|
All Restricted Stock Units
|
|||||
|
|
Units (000)
|
|
Wtd. Average
Fair Value
(per share)
|
|||
Outstanding December 31, 2011, Unvested
|
|
1,640
|
|
|
$
|
12.27
|
|
Granted
|
|
1,939
|
|
|
8.21
|
|
|
Vested
|
|
(644
|
)
|
|
12.27
|
|
|
Surrendered
|
|
(59
|
)
|
|
10.54
|
|
|
Outstanding December 31, 2012
|
|
2,876
|
|
|
9.57
|
|
|
Granted
|
|
1,139
|
|
|
14.34
|
|
|
Vested
|
|
(1,263
|
)
|
|
10.24
|
|
|
Surrendered
|
|
(168
|
)
|
|
9.11
|
|
|
Outstanding December 31, 2013
|
|
2,584
|
|
|
11.38
|
|
|
Granted
|
|
834
|
|
(a)
|
24.93
|
|
|
Vested
|
|
(1,239
|
)
|
|
11.05
|
|
|
Surrendered
|
|
(102
|
)
|
|
13.18
|
|
|
Outstanding December 31, 2014, Unvested
|
|
2,077
|
|
|
$
|
16.92
|
|
|
|
Stock Option Plans
|
|||||||||||
|
|
Options
(000)
|
|
Wtd.
average
exercise
price
|
|
Wtd.
average
remaining
contractual
term
(years)
|
|
Aggregate
intrinsic
value
(millions)
|
|||||
Outstanding December 31, 2011
|
|
47,324
|
|
|
$
|
14.51
|
|
|
|
|
|
||
Granted
|
|
6
|
|
|
9.00
|
|
|
|
|
|
|||
Exercised
|
|
(573
|
)
|
|
8.00
|
|
|
|
|
|
|||
Surrendered
|
|
(27,847
|
)
|
|
14.85
|
|
|
|
|
|
|||
Outstanding December 31, 2012
|
|
18,910
|
|
|
$
|
14.19
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(6,633
|
)
|
|
13.31
|
|
|
|
|
|
|||
Surrendered
|
|
(3,116
|
)
|
|
14.94
|
|
|
|
|
|
|||
Outstanding December 31, 2013
|
|
9,161
|
|
|
$
|
14.58
|
|
|
|
|
|
||
Granted
|
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
|
(6,636
|
)
|
|
14.36
|
|
|
|
|
|
|||
Surrendered
|
|
(48
|
)
|
|
15.74
|
|
|
|
|
|
|||
Outstanding December 31, 2014
|
|
2,477
|
|
|
$
|
15.17
|
|
|
1.62
|
|
$
|
67
|
|
Vested or expected to vest at December 31, 2014
|
|
2,473
|
|
|
$
|
15.16
|
|
|
1.63
|
|
$
|
67
|
|
Exercisable at December 31, 2014
|
|
2,308
|
|
|
$
|
15.05
|
|
|
1.67
|
|
$
|
63
|
|
|
|
Fuel hedged as of
|
|
|
|
|
|
December 31, 2014
|
|
Derivative underlying commodity type as of
|
|
Period (by year)
|
|
(gallons in millions)
|
|
December 31, 2014
|
|
2015
|
|
—
|
|
(b)
|
|
2016
|
|
885
|
|
(a)
|
Brent crude oil, Heating oil, and Gulf Coast jet fuel
|
2017
|
|
757
|
|
(a)
|
WTI crude and Brent crude oil
|
2018
|
|
—
|
|
(b)
|
|
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
|
|
Balance Sheet
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
||||||||
(in millions)
|
|
location
|
|
12/31/2014
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2013
|
||||||||
Derivatives designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
—
|
|
|
209
|
|
|
—
|
|
|
1
|
|
||||
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
—
|
|
|
—
|
|
|
643
|
|
|
—
|
|
||||
Interest rate derivative contracts
|
|
Other assets
|
|
13
|
|
|
20
|
|
|
—
|
|
|
—
|
|
||||
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
—
|
|
|
—
|
|
|
61
|
|
|
77
|
|
||||
Total derivatives designated as hedges
|
|
$
|
13
|
|
|
$
|
303
|
|
|
$
|
704
|
|
|
$
|
78
|
|
||
Derivatives not designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
—
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
182
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
—
|
|
|
16
|
|
|
—
|
|
|
99
|
|
||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
1,190
|
|
|
9
|
|
|
1,432
|
|
|
21
|
|
||||
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
157
|
|
|
—
|
|
|
273
|
|
|
—
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
1,347
|
|
|
$
|
200
|
|
|
$
|
1,705
|
|
|
$
|
302
|
|
Total derivatives
|
|
|
|
$
|
1,360
|
|
|
$
|
503
|
|
|
$
|
2,409
|
|
|
$
|
380
|
|
|
|
Balance Sheet
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
|
location
|
|
2014
|
|
2013
|
||||
Cash collateral deposits provided to counterparties for fuel
contracts - current
|
|
Offset against Accrued liabilities
|
|
$
|
68
|
|
|
$
|
—
|
|
Cash collateral deposits provided to counterparties for fuel
contracts- noncurrent
|
|
Offset against Other noncurrent liabilities
|
|
198
|
|
|
—
|
|
||
Cash collateral deposits provided to counterparties for interest
rate contracts - noncurrent
|
|
Offset against Other noncurrent liabilities
|
|
—
|
|
|
32
|
|
||
Due to third parties for fuel contracts
|
|
Accrued liabilities
|
|
16
|
|
|
—
|
|
||
Receivable from third parties for fuel contracts - current
|
|
Accounts and other receivables
|
|
—
|
|
|
57
|
|
|
Counterparty (CP)
|
|
|
||||||||||||||||||||||||||||
(in millions)
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
F
|
|
Other
(a)
|
|
Total
|
||||||||||||||||
Fair value of fuel derivatives
|
$
|
(333
|
)
|
|
$
|
(136
|
)
|
|
$
|
(122
|
)
|
|
$
|
(219
|
)
|
|
$
|
(66
|
)
|
|
$
|
(86
|
)
|
|
$
|
(39
|
)
|
|
$
|
(1,001
|
)
|
Cash collateral held (by) CP
|
(50
|
)
|
|
(98
|
)
|
|
(57
|
)
|
|
—
|
|
|
(23
|
)
|
|
(38
|
)
|
|
—
|
|
|
(266
|
)
|
||||||||
Aircraft collateral pledged to CP
|
(134
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(134
|
)
|
||||||||
Letters of credit (LC)
|
(100
|
)
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
||||||||
Option to substitute LC for aircraft
|
<(400)(g)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
N/A
|
|
N/A
|
|
|
|
|
||||||||||||||||
Option to substitute LC for cash
|
(50) to (150)(d)
|
|
>(500)
|
|
(100) to (150)(e)
|
|
(75) to (150) or >(550)(d)
|
|
N/A
|
|
(f)
|
|
|
|
|
||||||||||||||||
If credit rating is investment
grade, fair value of fuel
derivative level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash is provided to CP
|
(50) to (200) or >(600)
|
|
(50) to (100) or >(500)
|
|
>(75)
|
|
(75) to (150) or >(550)
|
|
>(50)
|
|
>(50)
|
|
|
|
|
||||||||||||||||
Cash is received from CP
|
>50
|
|
>150
|
|
>175(c)
|
|
>200
|
|
>30
|
|
>(50)
|
|
|
|
|
||||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(200) to (600)(d)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
N/A
|
|
N/A
|
|
|
|
|
||||||||||||||||
If credit rating is non-investment
grade, fair value of fuel derivative
level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash is provided to CP
|
(0) to (200) or >(600)
|
|
(0) to (100) or >(500)
|
|
(b)
|
|
(0) to (150) or >(550)
|
|
(b)
|
|
(b)
|
|
|
|
|
||||||||||||||||
Cash is received from CP
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
(b)
|
|
|
|
|
||||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(200) to (600)
|
|
(100) to (500)
|
|
N/A
|
|
(150) to (550)
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
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, 2014
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
1,110
|
|
|
$
|
1,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
70
|
|
|
—
|
|
|
70
|
|
|
—
|
|
||||
Certificates of deposit
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Eurodollar Time Deposits
|
|
98
|
|
|
—
|
|
|
98
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
1,450
|
|
|
1,450
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
256
|
|
|
—
|
|
|
256
|
|
|
—
|
|
||||
Noncurrent investments (b)
|
|
|
|
|
|
|
|
|
||||||||
Auction rate securities
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Interest rate derivatives (see Note 10)
|
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
455
|
|
|
—
|
|
|
455
|
|
|
—
|
|
||||
Option contracts (c)
|
|
892
|
|
|
—
|
|
|
—
|
|
|
892
|
|
||||
Other available-for-sale securities
|
|
68
|
|
|
63
|
|
|
—
|
|
|
5
|
|
||||
Total assets
|
|
$
|
4,443
|
|
|
$
|
2,623
|
|
|
$
|
896
|
|
|
$
|
924
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(365
|
)
|
|
$
|
—
|
|
|
$
|
(365
|
)
|
|
$
|
—
|
|
Option contracts (c)
|
|
(1,983
|
)
|
|
—
|
|
|
—
|
|
|
(1,983
|
)
|
||||
Interest rate derivatives (see Note 10)
|
|
(61
|
)
|
|
—
|
|
|
(61
|
)
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(2,409
|
)
|
|
$
|
—
|
|
|
$
|
(426
|
)
|
|
$
|
(1,983
|
)
|
|
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 or (losses) (realized or unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in earnings
|
(439
|
)
|
|
—
|
|
|
—
|
|
|
(439
|
)
|
||||
Included in other comprehensive income
|
(1,091
|
)
|
|
3
|
|
|
—
|
|
|
(1,088
|
)
|
||||
Purchases
|
403
|
|
(a)
|
—
|
|
|
—
|
|
|
403
|
|
||||
Sales
|
(155
|
)
|
(a)
|
(15
|
)
|
|
—
|
|
|
(170
|
)
|
||||
Settlements
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
||||
Balance at December 31, 2014
|
$
|
(1,091
|
)
|
|
$
|
27
|
|
(b)
|
$
|
5
|
|
|
$
|
(1,059
|
)
|
The amount of total losses for the period
included in earnings attributable to the
change in unrealized gains or losses relating
to assets still held at December 31, 2014
|
$
|
(450
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(450
|
)
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||||||
|
Fuel
|
|
Auction rate
|
|
Other
|
|
|
||||||||
(in millions)
|
derivatives
|
|
securities
|
|
securities
|
|
Total
|
||||||||
Balance at December 31, 2012
|
$
|
219
|
|
|
$
|
36
|
|
|
$
|
5
|
|
|
$
|
260
|
|
Total gains or (losses) (realized or unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in earnings
|
71
|
|
|
—
|
|
|
—
|
|
|
71
|
|
||||
Included in other comprehensive income
|
(107
|
)
|
|
3
|
|
|
—
|
|
|
(104
|
)
|
||||
Purchases
|
357
|
|
(a)
|
—
|
|
|
—
|
|
|
357
|
|
||||
Sales
|
(417
|
)
|
(a)
|
—
|
|
|
—
|
|
|
(417
|
)
|
||||
Settlements
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||
Balance at December 31, 2013
|
$
|
172
|
|
|
$
|
39
|
|
(b)
|
$
|
5
|
|
|
$
|
216
|
|
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 December 31, 2013
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86
|
|
(in millions)
|
Carrying value
|
|
Estimated fair value
|
|
Fair value level hierarchy
|
||
5.75% Notes due 2016
|
313
|
|
|
335
|
|
|
Level 2
|
5.25% Convertible Senior Notes due 2016
|
113
|
|
|
318
|
|
|
Level 2
|
5.125% Notes due 2017
|
316
|
|
|
338
|
|
|
Level 2
|
French Credit Agreements due 2018 - 1.06%
|
36
|
|
|
36
|
|
|
Level 3
|
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02%
|
24
|
|
|
25
|
|
|
Level 3
|
2.75% Notes due 2019
|
300
|
|
|
304
|
|
|
Level 2
|
Term Loan Agreement due 2019 - 6.315%
|
178
|
|
|
178
|
|
|
Level 3
|
Term Loan Agreement due 2019 - 6.84%
|
73
|
|
|
79
|
|
|
Level 3
|
Term Loan Agreement due 2020 - 5.223%
|
372
|
|
|
367
|
|
|
Level 3
|
Floating-rate 737 Aircraft Notes payable through 2020
|
300
|
|
|
293
|
|
|
Level 3
|
Pass Through Certificates due 2022 - 6.24%
|
355
|
|
|
410
|
|
|
Level 2
|
7.375% Debentures due 2027
|
134
|
|
|
160
|
|
|
Level 2
|
(in millions)
|
Fuel derivatives
|
|
Interest rate derivatives
|
|
Defined benefit plan items
|
|
Other
|
|
Deferred tax impact
|
|
Accumulated other
comprehensive income (loss) |
||||||||||||
Balance at December 31, 2012
|
$
|
(103
|
)
|
|
$
|
(108
|
)
|
|
$
|
26
|
|
|
$
|
(8
|
)
|
|
$
|
74
|
|
|
$
|
(119
|
)
|
changes in fair value
|
(82
|
)
|
|
22
|
|
|
39
|
|
|
16
|
|
|
—
|
|
|
(5
|
)
|
||||||
Reclassification to earnings
|
165
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
(72)
|
|
|
121
|
|
||||||
Balance at December 31, 2013
|
$
|
(20
|
)
|
|
$
|
(58
|
)
|
|
$
|
65
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
changes in fair value
|
(1,191
|
)
|
|
(10
|
)
|
|
(24
|
)
|
|
—
|
|
|
454
|
|
|
(771
|
)
|
||||||
Reclassification to earnings
|
34
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
|
36
|
|
||||||
Balance at December 31, 2014
|
$
|
(1,177
|
)
|
|
$
|
(45
|
)
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
435
|
|
|
$
|
(738
|
)
|
Year ended December 31, 2014
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized gain on fuel derivative instruments
|
|
$
|
34
|
|
|
Fuel and oil expense
|
|
|
12
|
|
|
Less: Tax expense
|
|
|
|
$
|
22
|
|
|
Net of tax
|
Unrealized gain on interest rate derivative instruments
|
|
$
|
23
|
|
|
Interest expense
|
|
|
9
|
|
|
Less: Tax expense
|
|
|
|
$
|
14
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
36
|
|
|
Net of tax
|
(in millions)
|
|
2014
|
|
2013
|
||||
APBO at beginning of period
|
|
$
|
138
|
|
|
$
|
148
|
|
Service cost
|
|
10
|
|
|
30
|
|
||
Interest cost
|
|
7
|
|
|
4
|
|
||
Benefits paid
|
|
(4
|
)
|
|
(3
|
)
|
||
Actuarial (gain)/loss
|
|
21
|
|
|
(41
|
)
|
||
Settlements
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
APBO at end of period
|
|
$
|
169
|
|
|
$
|
138
|
|
(in millions)
|
|
2014
|
|
2013
|
||||
Funded status
|
|
$
|
(169
|
)
|
|
$
|
(138
|
)
|
Unrecognized net actuarial gain
|
|
(53
|
)
|
|
(80
|
)
|
||
Unrecognized prior service cost
|
|
12
|
|
|
15
|
|
||
Accumulated other comprehensive income
|
|
41
|
|
|
65
|
|
||
Cost recognized on Consolidated Balance Sheet
|
|
$
|
(169
|
)
|
|
$
|
(138
|
)
|
(in millions)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Service cost
|
|
$
|
10
|
|
|
$
|
30
|
|
|
$
|
20
|
|
Interest cost
|
|
7
|
|
|
4
|
|
|
4
|
|
|||
Amortization of prior service cost
|
|
3
|
|
|
3
|
|
|
—
|
|
|||
Recognized actuarial gain
|
|
(4
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|||
Settlements
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Net periodic postretirement benefit cost
|
|
$
|
15
|
|
|
$
|
33
|
|
|
$
|
19
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Weighted-average discount rate
|
|
4.10
|
%
|
|
5.05
|
%
|
|
2.90
|
%
|
Assumed healthcare cost trend rate (1)
|
|
6.88
|
%
|
|
7.50
|
%
|
|
8.00
|
%
|
(1)
|
The assumed healthcare cost trend rate is assumed to remain at
6.88%
for
2015
, then decline gradually to
5.00%
by
2025
and remain level thereafter.
|
(in millions)
|
|
1% increase
|
|
1% decrease
|
||||
Increase (decrease) in total service and interest costs
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
Increase (decrease) in the APBO
|
|
$
|
24
|
|
|
$
|
(20
|
)
|
(in millions)
|
|
2014
|
|
2013
|
||||
DEFERRED TAX LIABILITIES:
|
|
|
|
|
||||
Accelerated depreciation
|
|
$
|
4,277
|
|
|
$
|
4,069
|
|
Fuel derivative instruments
|
|
—
|
|
|
36
|
|
||
Other
|
|
51
|
|
|
84
|
|
||
Total deferred tax liabilities
|
|
4,328
|
|
|
4,189
|
|
||
DEFERRED TAX ASSETS:
|
|
|
|
|
||||
Fuel derivative instruments
|
|
521
|
|
|
8
|
|
||
Deferred gains from sale and leaseback of aircraft
|
|
20
|
|
|
24
|
|
||
Capital and operating leases
|
|
125
|
|
|
163
|
|
||
Construction obligation
|
|
209
|
|
|
168
|
|
||
Accrued engine maintenance
|
|
83
|
|
|
90
|
|
||
Accrued employee benefits
|
|
334
|
|
|
307
|
|
||
State taxes
|
|
65
|
|
|
74
|
|
||
Business partner income
|
|
90
|
|
|
457
|
|
||
Net operating losses and credit carryforwards
|
|
3
|
|
|
14
|
|
||
Other
|
|
96
|
|
|
118
|
|
||
Total deferred tax assets
|
|
1,546
|
|
|
1,423
|
|
||
Net deferred tax liability
|
|
$
|
2,782
|
|
|
$
|
2,766
|
|
(in millions)
|
|
2014
|
|
2013
|
|
2012
|
||||||
CURRENT:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
203
|
|
|
$
|
355
|
|
|
$
|
(45
|
)
|
State
|
|
29
|
|
|
44
|
|
|
12
|
|
|||
Total current
|
|
232
|
|
|
399
|
|
|
(33
|
)
|
|||
DEFERRED:
|
|
|
|
|
|
|
||||||
Federal
|
|
421
|
|
|
62
|
|
|
287
|
|
|||
State
|
|
27
|
|
|
(6
|
)
|
|
10
|
|
|||
Total deferred
|
|
448
|
|
|
56
|
|
|
297
|
|
|||
|
|
$
|
680
|
|
|
$
|
455
|
|
|
$
|
264
|
|
(in millions)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Tax at statutory U.S. tax rates
|
|
$
|
636
|
|
|
$
|
423
|
|
|
$
|
240
|
|
Nondeductible items
|
|
9
|
|
|
10
|
|
|
10
|
|
|||
State income taxes, net of federal benefit
|
|
37
|
|
|
25
|
|
|
14
|
|
|||
Other, net
|
|
(2
|
)
|
|
(3
|
)
|
|
—
|
|
|||
Total income tax provision
|
|
$
|
680
|
|
|
$
|
455
|
|
|
$
|
264
|
|
|
|
Three months ended
|
|
||||||||||||||
(in millions except per share amounts)
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
||||||||
2014
|
|
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
|
$
|
4,166
|
|
|
$
|
5,011
|
|
|
$
|
4,800
|
|
|
$
|
4,628
|
|
(a)
|
Operating income
|
|
215
|
|
|
775
|
|
|
614
|
|
|
621
|
|
|
||||
Income before income taxes
|
|
244
|
|
|
746
|
|
|
525
|
|
|
302
|
|
|
||||
Net income
|
|
152
|
|
|
465
|
|
|
329
|
|
|
190
|
|
|
||||
Net income per share, basic
|
|
0.22
|
|
|
0.67
|
|
|
0.48
|
|
|
0.28
|
|
(a)
|
||||
Net income per share, diluted
|
|
0.22
|
|
|
0.67
|
|
|
0.48
|
|
|
0.28
|
|
(a)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
|
$
|
4,084
|
|
|
$
|
4,643
|
|
|
$
|
4,545
|
|
|
$
|
4,428
|
|
|
Operating income
|
|
70
|
|
|
433
|
|
|
390
|
|
|
386
|
|
|
||||
Income (loss) before income taxes
|
|
94
|
|
|
363
|
|
|
419
|
|
|
334
|
|
|
||||
Net income (loss)
|
|
59
|
|
|
224
|
|
|
259
|
|
|
212
|
|
|
||||
Net income (loss) per share, basic
|
|
0.08
|
|
|
0.31
|
|
|
0.37
|
|
|
0.30
|
|
|
||||
Net income (loss) per share, diluted
|
|
0.08
|
|
|
0.31
|
|
|
0.37
|
|
|
0.30
|
|
|
Plan Category
|
|
Number of Securities
to be Issued Upon
Exercise of
Outstanding
Options,
Warrants, and
Rights
(a)
|
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants, and
Rights
(b)
|
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding
Securities Reflected
in Column (a))
(c)
|
|
|||||||
Equity Compensation Plans Approved by Security Holders
|
|
4,523,901
|
|
(1
|
)
|
|
$
|
15.18
|
|
(2
|
)
|
|
20,182,382
|
|
(3
|
)
|
Equity Compensation Plans not Approved by Security Holders
|
|
30,434
|
|
|
|
$
|
14.15
|
|
|
|
—
|
|
|
|||
Total
|
|
4,554,335
|
|
|
|
$
|
15.17
|
|
(2
|
)
|
|
20,182,382
|
|
|
(1)
|
Includes
2,446,658
shares of common stock issuable upon exercise of outstanding stock options and
2,077,243
restricted share units settleable in shares of the Company’s common stock.
|
(2)
|
The weighted-average exercise price does not take into account the restricted share units discussed in footnote (1) above because the restricted share units do not have an exercise price upon vesting.
|
(3)
|
Of these shares, (i)
10,590,011
shares remained available for issuance under the Company’s tax-qualified employee stock purchase plan; and (ii)
9,592,371
shares remained available for issuance under the Company’s 2007 Equity Incentive Plan in connection with the exercise of stock options and stock appreciation rights, the settlement of awards of restricted stock, restricted stock units, and phantom shares, and the grant of unrestricted shares of common stock; however, no more than
685,848
shares remain available for grant in connection with awards of unrestricted shares of common stock, stock-settled phantom shares, and awards to non-Employee members of the Board. These shares are in addition to the shares reserved for issuance pursuant to outstanding awards included in column (a).
|
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)).
|
|
|
|
4.1
|
|
Specimen certificate representing common stock of the Company (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-7259)).
|
|
|
|
4.2
|
|
Indenture dated as of February 14, 2005, between the Company and The Bank of New York Trust Company, N.A., Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated February 14, 2005 (File No. 1-7259)).
|
|
|
|
4.3
|
|
Indenture dated as of September 17, 2004, between the Company and Wells Fargo Bank, N.A., Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed October 30, 2002 (File No. 333-100861)).
|
|
|
|
4.4
|
|
Indenture dated as of February 25, 1997, between the Company and U.S. Trust Company of Texas, N.A. (incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-7259)).
|
|
|
|
|
|
The Company is not filing any other instruments evidencing any indebtedness because the total amount of securities authorized under any single such instrument does not exceed 10 percent of its total consolidated assets. Copies of such instruments will be furnished to the Securities and Exchange Commission upon request.
|
|
|
|
10.1
|
|
Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 1-7259)); Supplemental Agreement No. 1 (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-7259)); Supplemental Agreements Nos. 2, 3, and 4 (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-7259)); Supplemental Agreements Nos. 5, 6, and 7 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-7259)); Supplemental Agreements Nos. 8, 9, and 10 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended
|
|
|
December 31, 1999 (File No. 1-7259)); Supplemental Agreements Nos. 11, 12, 13, and 14 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7259)); Supplemental Agreements Nos. 15, 16, 17, 18, and 19 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-7259)); Supplemental Agreements Nos. 20, 21, 22, 23, and 24 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (File No. 1-7259)); Supplemental Agreements Nos. 25, 26, 27, 28, and 29 (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (File No. 1-7259)); Supplemental Agreements Nos. 30, 31, 32, and 33 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-7259)); Supplemental Agreements Nos. 34, 35, 36, 37, and 38 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (File No. 1-7259)); Supplemental Agreements Nos. 39 and 40 (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 1-7259)); Supplemental Agreement No. 41 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 1-7259)); Supplemental Agreements Nos. 42, 43, and 44 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-7259)); Supplemental Agreement No. 45 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File No. 1-7259)); Supplemental Agreements Nos. 46 and 47 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (File No. 1-7259)); Supplemental Agreement No. 48 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (File No. 1-7259)); Supplemental Agreements Nos. 49 and 50 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (File No. 1-7259)); Supplemental Agreement No. 51 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 1-7259)); Supplemental Agreement No. 52 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 1-7259)); Supplemental Agreement No. 53 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 1-7259)); Supplemental Agreements Nos. 54 and 55 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 (File No. 1-7259)); Supplemental Agreement No. 56 (incorporated by reference to Exhibit 10.1 to Southwest’s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 1-7259)); Supplemental Agreements Nos. 57, 58, and 59 (incorporated by reference to Exhibits 10.1, 10.2, and 10.3, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (File No. 1-7259)); Supplemental Agreement No. 60 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 1-7259)); Supplemental Agreement No. 61 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (File No. 1-7259)); Supplemental Agreements Nos. 62 and 63 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 (File No. 1-7259)); Supplemental Agreement No. 64 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 65 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 1-7259)); Supplemental Agreement No. 66 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 1-7259)); Supplemental Agreement No. 67 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 68 (incorporated by reference to Exhibit 10.1(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 69 (incorporated by reference to Exhibit 10.1(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010
|
10.10
|
|
Southwest Airlines Co. 2002 SWAPIA Non-Qualified Stock Option Plan (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed October 30, 2002 (File No. 333-100862)).
|
|
|
|
10.11
|
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (File No. 1-7259)). (2)
|
|
|
|
10.12
|
|
Southwest Airlines Co. 2007 Equity Incentive Plan Form of Notice of Grant and Terms and Conditions for Stock Option Grant (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 1-7259)). (2)
|
|
|
|
10.13
|
|
Southwest Airlines Co. Excess Benefit Plan (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.14
|
|
Amendment No. 1 to the Southwest Airlines Co. Excess Benefit Plan (incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.15
|
|
Amendment No. 2 to the Southwest Airlines Co. Excess Benefit Plan (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.16
|
|
Amended and Restated Southwest Airlines Co. 2005 Excess Benefit Plan (as amended and restated effective for plan years beginning on and after January 1, 2015) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 1-7259)). (2)
|
|
|
|
10.17
|
|
Form of Indemnification Agreement between the Company and its Directors (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 15, 2009 (File No. 1-7259)).
|
|
|
|
10.18
|
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan Form of Notice of Grant and Terms and Conditions for Restricted Stock Unit grants (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 1-7259)). (2)
|
|
|
|
10.19
|
|
$1,000,000,000 Revolving Credit Facility Agreement among the Company, The Banks Party thereto, Morgan Stanley Senior Funding, Inc., as Syndication Agent, Bank of America, N.A., Barclays Bank PLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, and Wells Fargo Bank, N.A., as Documentation Agents, Citibank, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents, and Citibank, N.A., as Paying Agent, dated as of April 2, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 2, 2013 (File No. 1-7259)).
|
|
|
|
10.20
|
|
Purchase Agreement No. 3729 and Aircraft General Terms Agreement, dated December 13, 2011, between The Boeing Company and the Company (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-7259)); Supplemental Agreements Nos. 1 and 2 (incorporated by reference to Exhibits 10.3 and 10.4, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (File No. 1-7259)); Supplemental Agreement No. 3 (incorporated by reference to Exhibit 10.27(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-7259)). (1)
|
|
|
|
10.21
|
|
Southwest Airlines Co. Senior Executive Short Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated January 30, 2013 (File No. 1-7259)). (2)
|
|
|
|
10.22
|
|
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)
|
|
|
|
10.23
|
|
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 (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 1-7259)). (2)
|
|
|
|
21
|
|
Subsidiaries of the Company.
|
|
|
|
23
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
|
|
|
32
|
|
Section 1350 Certification 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 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 Commission.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
(3)
|
This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
|
|
SOUTHWEST AIRLINES CO.
|
|
|
|
|
February 6, 2015
|
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
|
|
|
& Accounting Officer)
|
Signature
|
|
Title
|
/s/ GARY C. KELLY
|
|
Chairman of the Board, President, & Chief Executive Officer (Principal Executive Officer)
|
Gary C. Kelly
|
|
|
|
|
|
/s/ TAMMY ROMO
|
|
Senior Vice President Finance & Chief Financial Officer (Principal Financial & Accounting Officer)
|
Tammy Romo
|
|
|
|
|
|
/s/ DAVID W. BIEGLER
|
|
Director
|
David W. Biegler
|
|
|
|
|
|
/s/ J. VERONICA BIGGINS
|
|
Director
|
J. Veronica Biggins
|
|
|
|
|
|
/s/ DOUGLAS H. BROOKS
|
|
Director
|
Douglas H. Brooks
|
|
|
|
|
|
/s/ WILLIAM H. CUNNINGHAM
|
|
Director
|
William H. Cunningham
|
|
|
|
|
|
/s/ JOHN G. DENISON
|
|
Director
|
John G. Denison
|
|
|
|
|
|
/s/ NANCY B. LOEFFLER
|
|
Director
|
Nancy B. Loeffler
|
|
|
|
|
|
/s/ JOHN T. MONTFORD
|
|
Director
|
John T. Montford
|
|
|
|
|
|
/s/ THOMAS M. NEALON
|
|
Director
|
Thomas M. Nealon
|
|
|
|
|
|
/s/ DANIEL D. VILLANUEVA
|
|
Director
|
Daniel D. Villanueva
|
|
|
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)).
|
|
|
|
4.1
|
|
Specimen certificate representing common stock of the Company (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1994 (File No. 1-7259)).
|
|
|
|
4.2
|
|
Indenture dated as of February 14, 2005, between the Company and The Bank of New York Trust Company, N.A., Trustee (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K dated February 14, 2005 (File No. 1-7259)).
|
|
|
|
4.3
|
|
Indenture dated as of September 17, 2004, between the Company and Wells Fargo Bank, N.A., Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed October 30, 2002 (File No. 333-100861)).
|
|
|
|
4.4
|
|
Indenture dated as of February 25, 1997, between the Company and U.S. Trust Company of Texas, N.A. (incorporated by reference to Exhibit 4.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-7259)).
|
|
|
|
|
|
The Company is not filing any other instruments evidencing any indebtedness because the total amount of securities authorized under any single such instrument does not exceed 10 percent of its total consolidated assets. Copies of such instruments will be furnished to the Securities and Exchange Commission upon request.
|
|
|
|
10.1
|
|
Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1993 (File No. 1-7259)); Supplemental Agreement No. 1 (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1996 (File No. 1-7259)); Supplemental Agreements Nos. 2, 3, and 4 (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-7259)); Supplemental Agreements Nos. 5, 6, and 7 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1998 (File No. 1-7259)); Supplemental Agreements Nos. 8, 9, and 10 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 1999 (File No. 1-7259)); Supplemental Agreements Nos. 11, 12, 13, and 14 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2000 (File No. 1-7259)); Supplemental Agreements Nos. 15, 16, 17, 18, and 19 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 (File No. 1-7259)); Supplemental Agreements Nos. 20, 21, 22, 23, and 24 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (File No. 1-7259)); Supplemental Agreements Nos. 25, 26, 27, 28, and 29 (incorporated by reference to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 (File No. 1-7259)); Supplemental Agreements Nos. 30, 31, 32, and 33 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 1-7259)); Supplemental Agreements Nos. 34, 35, 36, 37, and 38 (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (File No. 1-7259)); Supplemental Agreements Nos. 39 and 40 (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 (File No. 1-7259)); Supplemental Agreement No. 41 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 (File No. 1-7259)); Supplemental Agreements
|
|
|
Nos. 42, 43, and 44 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 (File No. 1-7259)); Supplemental Agreement No. 45 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File No. 1-7259)); Supplemental Agreements Nos. 46 and 47 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (File No. 1-7259)); Supplemental Agreement No. 48 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (File No. 1-7259)); Supplemental Agreements Nos. 49 and 50 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 (File No. 1-7259)); Supplemental Agreement No. 51 (incorporated by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 1-7259)); Supplemental Agreement No. 52 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 1-7259)); Supplemental Agreement No. 53 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 1-7259)); Supplemental Agreements Nos. 54 and 55 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 (File No. 1-7259)); Supplemental Agreement No. 56 (incorporated by reference to Exhibit 10.1 to Southwest’s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 1-7259)); Supplemental Agreements Nos. 57, 58, and 59 (incorporated by reference to Exhibits 10.1, 10.2, and 10.3, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 (File No. 1-7259)); Supplemental Agreement No. 60 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 1-7259)); Supplemental Agreement No. 61 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (File No. 1-7259)); Supplemental Agreements Nos. 62 and 63 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 (File No. 1-7259)); Supplemental Agreement No. 64 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 65 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (File No. 1-7259)); Supplemental Agreement No. 66 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 1-7259)); Supplemental Agreement No. 67 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 68 (incorporated by reference to Exhibit 10.1(b) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 69 (incorporated by reference to Exhibit 10.1(c) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-7259)); Supplemental Agreement No. 70 (incorporated by reference to Exhibit 10.1(d) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-7259)); Supplemental Agreements Nos. 71 and 72 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File No. 1-7259)); Supplemental Agreement No. 73 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (File No. 1-7259)); Supplemental Agreement No. 74 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 (File No. 1-7259)); Supplemental Agreement No. 75 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-7259)); Supplemental Agreements Nos. 76 and 77 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (File No. 1-7259)); Supplemental Agreements Nos. 78 and 79 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 (File No. 1-7259)); Supplemental Agreements Nos. 80 and 81 (incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013
|
|
|
|
10.11
|
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (File No. 1-7259)). (2)
|
|
|
|
10.12
|
|
Southwest Airlines Co. 2007 Equity Incentive Plan Form of Notice of Grant and Terms and Conditions for Stock Option Grant (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 1-7259)). (2)
|
|
|
|
10.13
|
|
Southwest Airlines Co. Excess Benefit Plan (incorporated by reference to Exhibit 10.32 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.14
|
|
Amendment No. 1 to the Southwest Airlines Co. Excess Benefit Plan (incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.15
|
|
Amendment No. 2 to the Southwest Airlines Co. Excess Benefit Plan (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.16
|
|
Amended and Restated Southwest Airlines Co. 2005 Excess Benefit Plan (as amended and restated effective for plan years beginning on and after January 1, 2015) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 1-7259)). (2)
|
|
|
|
10.17
|
|
Form of Indemnification Agreement between the Company and its Directors (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 15, 2009 (File No. 1-7259)).
|
|
|
|
10.18
|
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan Form of Notice of Grant and Terms and Conditions for Restricted Stock Unit grants (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 1-7259)). (2)
|
|
|
|
10.19
|
|
$1,000,000,000 Revolving Credit Facility Agreement among the Company, The Banks Party thereto, Morgan Stanley Senior Funding, Inc., as Syndication Agent, Bank of America, N.A., Barclays Bank PLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, and Wells Fargo Bank, N.A., as Documentation Agents, Citibank, N.A. and JPMorgan Chase Bank, N.A., as Co-Administrative Agents, and Citibank, N.A., as Paying Agent, dated as of April 2, 2013 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 2, 2013 (File No. 1-7259)).
|
|
|
|
10.20
|
|
Purchase Agreement No. 3729 and Aircraft General Terms Agreement, dated December 13, 2011, between The Boeing Company and the Company (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-7259)); Supplemental Agreements Nos. 1 and 2 (incorporated by reference to Exhibits 10.3 and 10.4, respectively, to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 (File No. 1-7259)); Supplemental Agreement No. 3 (incorporated by reference to Exhibit 10.27(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-7259)). (1)
|
|
|
|
10.21
|
|
Southwest Airlines Co. Senior Executive Short Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated January 30, 2013 (File No. 1-7259)). (2)
|
|
|
|
10.22
|
|
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)
|
|
|
|
10.23
|
|
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 (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 1-7259)). (2)
|
|
|
|
21
|
|
Subsidiaries of the Company.
|
|
|
|
23
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
|
|
|
|
31.1
|
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
|
|
|
31.2
|
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
|
|
|
32
|
|
Section 1350 Certification 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 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 Commission.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
(3)
|
This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
|
Supplemental Agreement No. 89
|
|
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-89-1
|
|
3.
|
Attachment A to Letter Agreement No. SWA-PA-1810-LA-1001315R3, *** is deleted in its entirety and a new Attachment A (identified by “SA-89”) is attached hereto and incorporated into the Purchase Agreement by this reference. The new Attachment A reflects the revised delivery month of the Subject Aircraft and ***
|
THE BOEING COMPANY
|
SOUTHWEST AIRLINES CO.
|
|
|
|
|
By:
/s/ Jeff Solomon
|
By:
/s/ Chris Monroe
|
|
Chris Monroe
|
Its:
Attorney‑In‑Fact
|
Its:
VP, Treasurer
|
P.A. No. 1810
|
SA-89-2
|
|
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-89
|
TABLE OF CONTENTS
|
|
|
SA
|
|
Number
|
1a
|
Aircraft Information Table – Block 700LUV Aircraft
|
SA-85
|
|
|
|||
1b
|
Aircraft Information Table – Block 800LUV Aircraft
|
SA-82
|
|
|
|||
1c
|
Aircraft Information Table – Block 800LUV Aircraft
|
SA-89
|
|
|
(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-89
|
TABLE OF CONTENTS
|
|
|
SA
|
|
Number
|
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
|
P.A. No. 1810
|
iii
|
|
K/SWA
|
|
SA-89
|
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
|
|
|
|
Table
|
Title
|
Last Updated under SA
|
Current Status
|
1
|
Aircraft Information Table
|
SA-75
|
Inactive
|
2
|
Option Aircraft Information Table
|
SA-74
|
Deleted under 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-89
|
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
|
SA-1
|
Inactive
|
|
|
|
|
|
|
|
|
P.A. No. 1810
|
v
|
|
K/SWA
|
|
SA-89
|
TABLE OF CONTENTS
|
P.A. No. 1810
|
vi
|
|
K/SWA
|
|
SA-89
|
Table 1c to
|
Purchase Agreement No. PA-01810
|
Aircraft Delivery, Description, Price and Advance Payments
|
Block 800LUV Aircraft (non-ETOPS Configuration)
|
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
|
4
|
***
|
36907, 42525, 36935, 42528
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Sep-2014
|
2
|
***
|
42527, 42531
|
***
|
|
***
|
***
|
***
|
***
|
***
|
SWA-PA-01810
|
|
SA-89
|
63879 / 63887 / 64110 / 64111 / 66379 / 68788 / 70150 /
70766
|
Boeing Proprietary
|
Page 1
|
|
|
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-2014
|
1
|
***
|
36909
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2014
|
1
|
***
|
36920
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2014
|
1
|
***
|
36971
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2014
|
2
|
***
|
37037, 37045
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2014
|
2
|
***
|
42529, 42530
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2014
|
2
|
***
Note 3
|
42524, 35973
|
***
|
|
***
|
***
|
***
|
***
|
***
|
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.
|
||||||||||
3) ***
|
SWA-PA-01810
|
|
SA-89
|
63879 / 63887 / 64110 / 64111 / 66379 / 68788 / 70150 /
70766
|
Boeing Proprietary
|
Page 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
|
December-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
|
September-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
|
|
Supplemental Agreement No. 90
|
|
to
|
|
Purchase Agreement No. 1810
|
|
between
|
|
THE BOEING COMPANY
|
|
and
|
|
SOUTHWEST AIRLINES CO.
|
|
Relating to Boeing Model 737-7H4 and 737-8H4 Aircraft
|
[Remainder of page intentionally left blank.]
|
P.A. No. 1810
|
SA-90-1
|
2.
|
Letter Agreement number SWA-PA-1810-LA-1105884 titled “Option Aircraft” is deleted in its entirety and a new Letter Agreement number SWA-PA-1810-LA-1105884R1 is attached hereto and incorporated into the Purchase Agreement by this reference. The new Letter Agreement:
|
i)
reflects revised delivery months of July 2016 and August 2016 for the Option Positions in a new Attachment B (identified in the footer by “SA-90”); and
|
ii)
corrects the Article 6 reference to paragraph 3.2 to be a reference to paragraph 4.2.
|
i)
Article 2 reference regarding paragraphs 1.1
and
1.9 to be a reference to paragraphs 1.1
through
1.9; and
|
ii)
formatting of provisions related to the *** which is now Article 3.
|
4.
|
Letter Agreement number SWA-PA-1810-LA-1003490R2 titled *** is deleted in its entirety and a new Letter Agreement number SWA-PA-1810-LA-1003490R3 is attached hereto and incorporated into the Purchase Agreement by this reference. The new Letter Agreement corrects the Article 2 reference regarding paragraphs 1.1
and
1.8 to be a reference to paragraphs 1.1
through
1.8.
|
THE BOEING COMPANY
|
SOUTHWEST AIRLINES CO.
|
|
|
|
|
|
|
By:
/s/ Jon W. Lewis
|
By:
/s/ Chris Monroe
|
Jon W. Lewis
|
Chris Monroe
|
(Printed Name)
|
(Printed Name)
|
Its:
Attorney-In-Fact
|
Its:
VP, Treasurer
|
P.A. No. 1810
|
SA-90-2
|
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-90
|
TABLE OF CONTENTS
|
|
|
SA
|
|
Number
|
1810-1R1
|
Waiver of Aircraft Demonstration Flight
|
SA-75
|
P.A. No. 1810
|
ii
|
|
K/SWA
|
|
SA-90
|
TABLE OF CONTENTS
|
|
|
SA
|
|
Number
|
RESTRICTED LETTER AGREEMENTS
|
|||||
|
|||||
6‑1162‑RLL‑932R3
|
***
|
SA-75
|
|||
|
|
|
|||
6‑1162‑RLL‑934R5
|
Disclosure of Confidential Information
|
SA-75
|
|||
|
|
|
|||
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-89
|
||
|
|
|
|
||
SWA-PA-1810-LA-1003498R1
|
***
|
|
SA-75
|
||
|
|
|
|
||
SWA-PA-1810-LA-1003490
R3
|
***
|
|
SA-90
|
||
|
|
|
|
||
SWA-PA-1810-LA-1003367R1
|
***
|
|
SA-75
|
||
|
|
|
|
||
SWA-PA-1810-LA-1105883
|
Aircraft Model Substitution
|
|
SA-75
|
||
|
|||||
SWA-PA-1810-LA-1105884
R1
|
Option Aircraft
|
|
|
|
SA-90
|
|
Attachment A – Model 737-7H4 Aircraft
|
|
|
|
SA-90
|
|
Attachment B – Option Aircraft Information Table
|
|
|
|
SA-90
|
SWA-PA-1810-LA-1105885
R3
|
***
|
SA-90
|
SWA-PA-1810-LA-1105886R1
|
***
|
SA-82
|
|
|
|
|
|
|
SWA-PA-1810-LA-1105887
|
***
|
SA-75
|
|
|
|
|
|
|
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
|
P.A. No. 1810
|
iii
|
|
K/SWA
|
|
SA-90
|
TABLE OF CONTENTS
|
Table
|
Title
|
Last Updated under SA
|
Current Status
|
1
|
Aircraft Information Table
|
SA-75
|
Inactive
|
2
|
Option Aircraft Information Table
|
SA-74
|
Deleted under 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
|
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
|
P.A. No. 1810
|
iv
|
|
K/SWA
|
|
SA-90
|
TABLE OF CONTENTS
|
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
|
6-1162-RLL-2037
|
Reconciliation of the Aircraft Basic Price
|
SA-1
|
Inactive
|
6-1162-RLL-2073
|
Maintenance Training Matters
|
SA-1
|
Inactive
|
6-1162-KJJ-058R1
|
Additional Substitution Rights
|
SA-71
|
Deleted under SA-75
|
6-1162-KJJ-150
|
Flight Control Computer & Mode Control Panel Spares Matter
|
SA-14
|
Inactive
|
6-1162-MSA-185R3
|
Delivery Change Contractual Matters
|
SA-21
|
Inactive
|
6-1162-JMG-747R1
|
***
|
SA-36
|
Inactive
|
6-1162-CHL-217
|
Rescheduled Flight Test Aircraft
|
SA-32
|
Inactive
|
6-1162-NIW-606R1
|
***
|
SA-36
|
Inactive
|
|
|
|
|
|
|
|
|
P.A. No. 1810
|
v
|
|
K/SWA
|
|
SA-90
|
TABLE OF CONTENTS
|
P.A. No. 1810
|
vi
|
|
K/SWA
|
|
SA-90
|
|
|
The Boeing Company
XI
|
|
P. O. Box 3707
xxxxx
|
|
|
Seattle, WA 98124-2207
|
|
|
|
Subject:
|
Option Aircraft
|
Page 1
|
SA-90
|
BOEING PROPRIETARY
|
|
|
|
SWA-PA-1810-LA-1105884
R1
|
Page 2
|
Option Aircraft
|
SA-90
|
BOEING PROPRIETARY
|
|
|
|
SWA-PA-1810-LA-1105884
R1
|
Page 3
|
Option Aircraft
|
SA-90
|
BOEING PROPRIETARY
|
|
|
|
SWA-PA-1810-LA-1105884
R1
|
Page 4
|
Option Aircraft
|
SA-90
|
BOEING PROPRIETARY
|
Attachment A to
|
SWA-PA-1810-LA-1105884
R1
|
Page 1
|
P.A. No. 1810
|
|
SA-90
|
Attachment A to
|
SWA-PA-1810-LA-1105884
R1
|
Page 2
|
P.A. No. 1810
|
|
SA-90
|
Attachment B to
|
Letter Agreement No. SWA-PA-1810-LA-1105884R1
|
Option Aircraft Delivery, Description, Price and Advance Payments
|
Airframe Model/MTOW:
|
737-700
|
154500 pounds
|
|
Detail Specification:
|
|
|
D019A001SWA37P-1 Rev New
|
|
|
Engine Model/Thrust:
|
CFM56-7B24
|
24000 pounds
|
|
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:
|
|
***
|
|
|
|
|
|
|
|
Sub-Total of Aircraft Base Price 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:
|
***
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Non-Refundable Deposit/Aircraft at Def Agreemt:
|
***
|
|
|
|
|
|
|
|
|
Escalation
|
|
|
Escalation Estimate
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||
Delivery
|
Number of
|
Factor
|
|
|
Adv Payment Base
|
At Signing
|
24 Mos.
|
21/18/12/9/6 Mos.
|
Total
|
Date
|
Aircraft
|
(Airframe)
|
|
|
Price Per A/P
|
***
|
***
|
***
|
***
|
Jun-2016
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Jul-2016
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Aug-2016
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Sep-2016
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2016
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2016
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2016
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2016
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2016
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Jan-2017
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2017
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Mar-2017
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Apr-2017
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
|
|
SA 90
|
SWA-PA-01810-LA-1105884R1 (58928-1O.TXT)
|
Boeing Proprietary
|
Page 1
|
Attachment B to
|
Letter Agreement No. SWA-PA-1810-LA-1105884R1
|
Option Aircraft Delivery, Description, Price and Advance Payments
|
|
|
Escalation
|
|
|
Escalation Estimate
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||
Delivery
|
Number of
|
Factor
|
|
|
Adv Payment Base
|
At Signing
|
24 Mos.
|
21/18/12/9/6 Mos.
|
Total
|
Date
|
Aircraft
|
(Airframe)
|
|
|
Price Per A/P
|
***
|
***
|
***
|
***
|
May-2017
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Jun-2017
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2017
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Jan-2018
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2018
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Mar-2018
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Apr-2018
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
May-2018
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Jun-2018
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Jul-2018
|
1
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Aug-2018
|
2
|
***
|
|
|
***
|
***
|
***
|
***
|
***
|
Total:
|
36
|
|
|
|
|
|
|
|
|
|
|
SA 90
|
SWA-PA-01810-LA-1105884R1 (58928-1O.TXT)
|
Boeing Proprietary
|
Page 2
|
|
|
The Boeing Company
XI
|
|
P. O. Box 3707
xxxxx
|
|
|
Seattle, WA 98124-2207
|
|
|
|
Subject:
|
***
|
|
|
Reference:
|
a) Purchase Agreement No. 1810 (
Purchase Agreement
) between The Boeing Company (
Boeing
) and Southwest Airlines Co. (
Buyer
) relating to Model 737-7H4 and 737-8H4 aircraft
|
1.
|
***
|
SWA-PA-1810-LA-1105885
R3
|
Page 1
|
|
***
|
SA-90
|
|
BOEING PROPRIETARY
|
|
|
|
2.
|
***
|
SWA-PA-1810-LA-1105885
R3
|
Page 2
|
|
***
|
SA-90
|
|
BOEING PROPRIETARY
|
|
|
|
3.
|
***
|
4.
|
***
|
5.
|
***
|
6.
|
Assignment
.
|
SWA-PA-1810-LA-1105885
R3
|
Page 3
|
|
***
|
SA-90
|
|
BOEING PROPRIETARY
|
|
|
|
7.
|
Confidentiality.
|
THE BOEING COMPANY
|
||
By
|
/s/ Jon W. Lewis
|
|
|
||
Its
|
Attorney-In-Fact
|
|
|
||
ACCEPTED AND AGREED TO this
|
||
|
||
Date:
|
December 5 , 2014
|
|
|
||
SOUTHWEST AIRLINES CO.
|
||
|
||
By
|
/s/ Chris Monroe
|
|
|
Chris Monroe
|
|
Its
|
VP, Treasurer
|
SWA-PA-1810-LA-1105885
R3
|
Page 4
|
|
***
|
SA-90
|
|
BOEING PROPRIETARY
|
|
|
The Boeing Company
XI
|
|
P. O. Box 3707
xxxxx
|
|
|
Seattle, WA 98124-2207
|
|
|
|
Subject:
|
***
|
Reference:
|
a) Purchase Agreement No. 1810 (
Purchase Agreement
) between The Boeing Company (
Boeing
) and Southwest Airlines Co. (
Buyer
) relating to Model 737-7H4 and 737-8H4 aircraft
|
1.
|
***
|
SWA-PA-1810-LA-1003490
R3
|
Page 1
|
***
|
SA-90
|
BOEING PROPRIETARY
|
|
|
|
2.
|
***
|
3.
|
***
|
SWA-PA-1810-LA-1003490
R3
|
Page 2
|
|
***
|
SA-90
|
|
BOEING PROPRIETARY
|
|
|
|
4.
|
Assignment
.
|
5.
|
Confidentiality
.
|
THE BOEING COMPANY
|
||
|
|
|
By
|
/s/ Jon W. Lewis
|
|
|
||
Its
|
Attorney-In-Fact
|
|
|
||
ACCEPTED AND AGREED TO this
|
||
|
||
Date:
|
December 5, 2014
|
|
|
||
SOUTHWEST AIRLINES CO.
|
||
|
||
By
|
/s/ Chris Monroe
|
|
|
Chris Monroe
|
|
Its
|
VP, Treasurer
|
SWA-PA-1810-LA-1003490
R3
|
Page 3
|
|
***
|
SA-90
|
|
BOEING PROPRIETARY
|
|
|
|
Name
|
|
State or Other Jurisdiction of Incorporation
or Organization
|
|
|
|
AirTran Airways 717 Leasing Corporation
|
|
Delaware
|
AirTran Airways, Inc.
|
|
Delaware
|
AirTran Fuel Services, Inc.
|
|
Delaware
|
AirTran Holdings, LLC
|
|
Texas
|
AirTran Risk Management, Inc.
|
|
Delaware
|
Southwest Jet Fuel Co.
|
|
Texas
|
Triple Crown Insurance Co., Ltd.
|
|
Bermuda
|
|
By:
|
/s/ Gary C. Kelly
|
|
|
Gary C. Kelly
|
|
|
Chairman of the Board, President, & Chief Executive Officer
|
|
By:
|
/s/ Tammy Romo
|
|
|
Tammy Romo
|
|
|
Senior Vice President Finance & 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
|
|
|
Chairman of the Board, President, & Chief Executive Officer
|
|
By:
|
/s/ Tammy Romo
|
|
|
Tammy Romo
|
|
|
Senior Vice President Finance & Chief Financial Officer
|