þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended June 30, 2015
|
|
or
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from ________ to ________
|
TEXAS
|
74-1563240
|
(State or other jurisdiction of
|
(IRS Employer
|
incorporation or organization)
|
Identification No.)
|
P.O. Box 36611
|
|
Dallas, Texas
|
75235-1611
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,772
|
|
|
$
|
1,282
|
|
Short-term investments
|
1,360
|
|
|
1,706
|
|
||
Accounts and other receivables
|
462
|
|
|
365
|
|
||
Inventories of parts and supplies, at cost
|
326
|
|
|
342
|
|
||
Deferred income taxes
|
421
|
|
|
477
|
|
||
Prepaid expenses and other current assets
|
255
|
|
|
232
|
|
||
Total current assets
|
4,596
|
|
|
4,404
|
|
||
|
|
|
|
||||
Property and equipment, at cost:
|
|
|
|
|
|
||
Flight equipment
|
19,148
|
|
|
18,473
|
|
||
Ground property and equipment
|
2,972
|
|
|
2,853
|
|
||
Deposits on flight equipment purchase contracts
|
658
|
|
|
566
|
|
||
Assets constructed for others
|
745
|
|
|
621
|
|
||
|
23,523
|
|
|
22,513
|
|
||
Less allowance for depreciation and amortization
|
8,663
|
|
|
8,221
|
|
||
|
14,860
|
|
|
14,292
|
|
||
Goodwill
|
970
|
|
|
970
|
|
||
Other assets
|
649
|
|
|
534
|
|
||
|
$
|
21,075
|
|
|
$
|
20,200
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,134
|
|
|
$
|
1,203
|
|
Accrued liabilities
|
1,651
|
|
|
1,565
|
|
||
Air traffic liability
|
3,815
|
|
|
2,897
|
|
||
Current maturities of long-term debt
|
276
|
|
|
258
|
|
||
Total current liabilities
|
6,876
|
|
|
5,923
|
|
||
|
|
|
|
||||
Long-term debt less current maturities
|
2,411
|
|
|
2,434
|
|
||
Deferred income taxes
|
3,290
|
|
|
3,259
|
|
||
Construction obligation
|
632
|
|
|
554
|
|
||
Other noncurrent liabilities
|
708
|
|
|
1,255
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock
|
808
|
|
|
808
|
|
||
Capital in excess of par value
|
1,319
|
|
|
1,315
|
|
||
Retained earnings
|
8,387
|
|
|
7,416
|
|
||
Accumulated other comprehensive loss
|
(664
|
)
|
|
(738
|
)
|
||
Treasury stock, at cost
|
(2,692
|
)
|
|
(2,026
|
)
|
||
Total stockholders' equity
|
7,158
|
|
|
6,775
|
|
||
|
$
|
21,075
|
|
|
$
|
20,200
|
|
|
Three months ended
|
|
Six months ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
608
|
|
|
$
|
465
|
|
|
$
|
1,061
|
|
|
$
|
617
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
250
|
|
|
228
|
|
|
494
|
|
|
449
|
|
||||
Unrealized/realized (gain) loss on fuel derivative instruments
|
74
|
|
|
(7
|
)
|
|
85
|
|
|
(67
|
)
|
||||
Deferred income taxes
|
23
|
|
|
(11
|
)
|
|
43
|
|
|
81
|
|
||||
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts and other receivables
|
41
|
|
|
10
|
|
|
(90
|
)
|
|
(61
|
)
|
||||
Other assets
|
(7
|
)
|
|
(21
|
)
|
|
6
|
|
|
(14
|
)
|
||||
Accounts payable and accrued liabilities
|
(134
|
)
|
|
424
|
|
|
43
|
|
|
448
|
|
||||
Air traffic liability
|
201
|
|
|
153
|
|
|
918
|
|
|
914
|
|
||||
Cash collateral received from (provided to) derivative counterparties
|
(377
|
)
|
|
95
|
|
|
(394
|
)
|
|
106
|
|
||||
Other, net
|
(52
|
)
|
|
2
|
|
|
(87
|
)
|
|
(15
|
)
|
||||
Net cash provided by operating activities
|
627
|
|
|
1,338
|
|
|
2,079
|
|
|
2,458
|
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures
|
(428
|
)
|
|
(481
|
)
|
|
(1,001
|
)
|
|
(876
|
)
|
||||
Assets constructed for others
|
(22
|
)
|
|
(19
|
)
|
|
(44
|
)
|
|
(31
|
)
|
||||
Purchases of short-term investments
|
(562
|
)
|
|
(1,159
|
)
|
|
(877
|
)
|
|
(1,929
|
)
|
||||
Proceeds from sales of short-term and other investments
|
614
|
|
|
803
|
|
|
1,223
|
|
|
1,622
|
|
||||
Other, net
|
(9
|
)
|
|
(1
|
)
|
|
(9
|
)
|
|
(1
|
)
|
||||
Net cash used in investing activities
|
(407
|
)
|
|
(857
|
)
|
|
(708
|
)
|
|
(1,215
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Proceeds from Employee stock plans
|
8
|
|
|
25
|
|
|
21
|
|
|
73
|
|
||||
Proceeds from termination of interest rate derivative instruments
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
||||
Reimbursement for assets constructed for others
|
3
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Payments of long-term debt and capital lease obligations
|
(40
|
)
|
|
(73
|
)
|
|
(92
|
)
|
|
(119
|
)
|
||||
Payments of cash dividends
|
(50
|
)
|
|
(42
|
)
|
|
(131
|
)
|
|
(97
|
)
|
||||
Repayment of construction obligation
|
(3
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||
Repurchase of common stock
|
(380
|
)
|
|
(240
|
)
|
|
(680
|
)
|
|
(555
|
)
|
||||
Other, net
|
(11
|
)
|
|
(8
|
)
|
|
(11
|
)
|
|
(13
|
)
|
||||
Net cash used in financing activities
|
(473
|
)
|
|
(340
|
)
|
|
(881
|
)
|
|
(716
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(253
|
)
|
|
141
|
|
|
490
|
|
|
527
|
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
2,025
|
|
|
1,741
|
|
|
1,282
|
|
|
1,355
|
|
||||
|
|
|
|
|
|
|
|
||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
1,772
|
|
|
$
|
1,882
|
|
|
$
|
1,772
|
|
|
$
|
1,882
|
|
|
|
|
|
|
|
|
|
||||||||
CASH PAYMENTS FOR:
|
|
|
|
|
|
|
|
||||||||
Interest, net of amount capitalized
|
$
|
21
|
|
|
$
|
33
|
|
|
$
|
53
|
|
|
$
|
67
|
|
Income taxes
|
$
|
455
|
|
|
$
|
12
|
|
|
$
|
566
|
|
|
$
|
12
|
|
|
|
|
|
|
|
|
|
||||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
|
|
|
|
|
|
|
|
||||||||
Assets constructed for others
|
$
|
37
|
|
|
$
|
19
|
|
|
$
|
80
|
|
|
$
|
31
|
|
|
|
Fuel hedged as of
|
|
|
|
|
|
June 30, 2015
|
|
Derivative underlying commodity type as of
|
|
Period (by year)
|
|
(gallons in millions)
|
|
June 30, 2015
|
|
Remainder of 2015
|
|
843
|
|
(a)
|
Brent crude oil, Heating oil, and Gulf Coast jet fuel
|
2016
|
|
1,672
|
|
(a)
|
Brent crude oil, Heating oil, and Gulf Coast jet fuel
|
2017
|
|
790
|
|
(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
|
|
6/30/2015
|
|
12/31/2014
|
|
6/30/2015
|
|
12/31/2014
|
||||||||
Derivatives designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
145
|
|
|
$
|
—
|
|
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
38
|
|
|
—
|
|
|
381
|
|
|
643
|
|
||||
Interest rate derivative contracts
|
|
Other assets
|
|
1
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
—
|
|
|
—
|
|
|
54
|
|
|
61
|
|
||||
Total derivatives designated as hedges
|
|
$
|
68
|
|
|
$
|
13
|
|
|
$
|
580
|
|
|
$
|
704
|
|
||
Derivatives not designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
$
|
408
|
|
|
$
|
1,190
|
|
|
$
|
811
|
|
|
$
|
1,432
|
|
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
151
|
|
|
157
|
|
|
317
|
|
|
273
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
559
|
|
|
$
|
1,347
|
|
|
$
|
1,128
|
|
|
$
|
1,705
|
|
Total derivatives
|
|
|
|
$
|
627
|
|
|
$
|
1,360
|
|
|
$
|
1,708
|
|
|
$
|
2,409
|
|
|
|
Balance Sheet
|
|
June 30,
|
|
December 31,
|
||||
(in millions)
|
|
location
|
|
2015
|
|
2014
|
||||
Cash collateral deposits provided to counterparties for fuel
contracts - current
|
|
Offset against Accrued liabilities
|
|
$
|
202
|
|
|
$
|
68
|
|
Cash collateral deposits provided to counterparties for fuel
contracts - noncurrent |
|
Offset against Other noncurrent liabilities
|
|
458
|
|
|
198
|
|
||
Due to third parties for fuel contracts
|
|
Accounts payable
|
|
—
|
|
|
16
|
|
Offsetting of derivative liabilities
|
||||||||||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||||
|
|
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) + (ii)
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) + (ii)
|
||||||||||||
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
Description
|
|
Balance Sheet location
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet (a)
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet (a)
|
||||||||||||
Fuel derivative contracts
|
|
Accrued liabilities
|
|
$
|
956
|
|
|
$
|
(639
|
)
|
|
$
|
317
|
|
|
$
|
1,432
|
|
|
$
|
(1,258
|
)
|
|
$
|
174
|
|
Fuel derivative contracts
|
|
Other noncurrent liabilities
|
|
$
|
698
|
|
|
$
|
(647
|
)
|
|
$
|
51
|
|
|
$
|
916
|
|
|
$
|
(355
|
)
|
|
$
|
561
|
|
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
$
|
54
|
|
|
$
|
—
|
|
|
$
|
54
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
61
|
|
Derivatives in cash flow hedging relationships
|
|||||||||||||||||||||||
|
(Gain) loss recognized in AOCI on derivatives (effective portion)
|
|
(Gain) loss reclassified from AOCI into income (effective portion) (a)
|
|
(Gain) loss recognized in income on derivatives (ineffective portion) (b)
|
||||||||||||||||||
|
Three months ended
|
|
Three months ended
|
|
Three months ended
|
||||||||||||||||||
|
June 30,
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||
(in millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
Fuel derivative contracts
|
$
|
(33
|
)
|
*
|
$
|
(122
|
)
|
*
|
$
|
41
|
|
*
|
$
|
(1
|
)
|
*
|
$
|
(2
|
)
|
|
$
|
(28
|
)
|
Interest rate derivatives
|
(1
|
)
|
*
|
3
|
|
*
|
3
|
|
*
|
3
|
|
*
|
(1
|
)
|
|
—
|
|
||||||
Total
|
$
|
(34
|
)
|
|
$
|
(119
|
)
|
|
$
|
44
|
|
|
$
|
2
|
|
|
$
|
(3
|
)
|
|
$
|
(28
|
)
|
Derivatives not in cash flow hedging relationships
|
|||||||||
|
(Gain) loss
|
|
|
||||||
|
recognized in income on
|
|
|
||||||
|
derivatives
|
|
|
||||||
|
Six months ended
|
|
Location of (gain) loss
|
||||||
|
June 30,
|
|
recognized in income
|
||||||
(in millions)
|
2015
|
|
2014
|
|
on derivatives
|
||||
Fuel derivative contracts
|
$
|
91
|
|
|
$
|
(40
|
)
|
|
Other (gains) losses, net
|
|
Counterparty (CP)
|
|
|
||||||||||||||||||||||||||||
(in millions)
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
F
|
|
Other
(a)
|
|
Total
|
||||||||||||||||
Fair value of fuel derivatives
|
$
|
(536
|
)
|
|
$
|
(112
|
)
|
|
$
|
(104
|
)
|
|
$
|
(178
|
)
|
|
$
|
(32
|
)
|
|
$
|
(45
|
)
|
|
$
|
(21
|
)
|
|
$
|
(1,028
|
)
|
Cash collateral held (by) CP
|
(469
|
)
|
|
(71
|
)
|
|
(8
|
)
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(660
|
)
|
||||||||
Aircraft collateral pledged to CP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Letters of credit (LC)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Option to substitute LC for aircraft
|
<(400)(h)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
N/A
|
|
N/A
|
|
|
|
|
||||||||||||||||
Option to substitute LC for cash
|
N/A
|
|
>(500)
|
|
(100) to (150)(e)
|
|
(75) to (150) or >(550)(d)
|
|
N/A
|
|
(g)
|
|
|
|
|
||||||||||||||||
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)
|
|
>(95)
|
|
(75) to (150) or >(550)
|
|
>(65)
|
|
>(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)(f)
|
|
(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
|
|
|
|
|
|
Three months ended June 30,
|
||||||
(in millions)
|
2015
|
|
2014
|
||||
NET INCOME
|
$
|
608
|
|
|
$
|
465
|
|
Unrealized gain on fuel derivative instruments, net of
deferred taxes of $44 and $72
|
74
|
|
|
121
|
|
||
Unrealized gain on interest rate derivative instruments, net of
deferred taxes of $2 and $-
|
4
|
|
|
—
|
|
||
Other, net of deferred taxes of $- and $1
|
—
|
|
|
2
|
|
||
Total other comprehensive income
|
$
|
78
|
|
|
$
|
123
|
|
COMPREHENSIVE INCOME
|
$
|
686
|
|
|
$
|
588
|
|
|
Six months ended June 30,
|
||||||
(in millions)
|
2015
|
|
2014
|
||||
NET INCOME
|
$
|
1,061
|
|
|
$
|
617
|
|
Unrealized gain on fuel derivative instruments, net of
deferred taxes of $43 and $64
|
71
|
|
|
109
|
|
||
Unrealized gain on interest rate derivative instruments, net of
deferred taxes of $2 and $1
|
3
|
|
|
2
|
|
||
Other, net of deferred taxes of $- and $3
|
—
|
|
|
3
|
|
||
Total other comprehensive income
|
$
|
74
|
|
|
$
|
114
|
|
COMPREHENSIVE INCOME
|
$
|
1,135
|
|
|
$
|
731
|
|
(in millions)
|
Fuel derivatives
|
|
Interest rate derivatives
|
|
Defined benefit plan items
|
|
Other
|
|
Deferred tax
|
|
Accumulated other
comprehensive income (loss)
|
||||||||||||
Balance at March 31, 2015
|
$
|
(1,181
|
)
|
|
$
|
(46
|
)
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
436
|
|
|
$
|
(742
|
)
|
Changes in fair value
|
53
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
34
|
|
||||||
Reclassification to earnings
|
65
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|
44
|
|
||||||
Balance at June 30, 2015
|
$
|
(1,063
|
)
|
|
$
|
(40
|
)
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
390
|
|
|
$
|
(664
|
)
|
(in millions)
|
Fuel derivatives
|
|
Interest rate derivatives
|
|
Defined benefit plan items
|
|
Other
|
|
Deferred tax
|
|
Accumulated other
comprehensive income (loss)
|
||||||||||||
Balance at December 31, 2014
|
$
|
(1,177
|
)
|
|
$
|
(45
|
)
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
435
|
|
|
$
|
(738
|
)
|
Changes in fair value
|
(24
|
)
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
(19
|
)
|
||||||
Reclassification to earnings
|
138
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
93
|
|
||||||
Balance at June 30, 2015
|
$
|
(1,063
|
)
|
|
$
|
(40
|
)
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
390
|
|
|
$
|
(664
|
)
|
Three months ended June 30, 2015
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized gain on fuel derivative instruments
|
|
$
|
65
|
|
|
Fuel and oil expense
|
|
|
24
|
|
|
Less: Tax Expense
|
|
|
|
$
|
41
|
|
|
Net of tax
|
Unrealized gain on interest rate derivative instruments
|
|
$
|
5
|
|
|
Interest expense
|
|
|
2
|
|
|
Less: Tax Expense
|
|
|
|
$
|
3
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
44
|
|
|
Net of tax
|
Six months ended June 30, 2015
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized gain on fuel derivative instruments
|
|
$
|
138
|
|
|
Fuel and oil expense
|
|
|
51
|
|
|
Less: Tax Expense
|
|
|
|
$
|
87
|
|
|
Net of tax
|
Unrealized gain on interest rate derivative instruments
|
|
$
|
10
|
|
|
Interest expense
|
|
|
4
|
|
|
Less: Tax Expense
|
|
|
|
$
|
6
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
93
|
|
|
Net of tax
|
Other assets (in millions)
|
June 30, 2015
|
|
December 31, 2014
|
||||
Derivative contracts
|
$
|
1
|
|
|
$
|
13
|
|
Intangible assets (a)
|
474
|
|
|
363
|
|
||
Non-current investments
|
40
|
|
|
35
|
|
||
Other
|
134
|
|
|
123
|
|
||
Other assets
|
$
|
649
|
|
|
$
|
534
|
|
Accounts payable (in millions)
|
June 30, 2015
|
|
December 31, 2014
|
||||
Accounts payable trade
|
$
|
170
|
|
|
$
|
123
|
|
Salaries payable
|
168
|
|
|
160
|
|
||
Excise and other tax withholdings payable
|
234
|
|
|
163
|
|
||
Aircraft maintenance payable
|
163
|
|
|
314
|
|
||
Fuel payable
|
68
|
|
|
85
|
|
||
Other payables
|
331
|
|
|
358
|
|
||
Accounts payable
|
$
|
1,134
|
|
|
$
|
1,203
|
|
Accrued liabilities (in millions)
|
June 30, 2015
|
|
December 31, 2014
|
||||
Profitsharing and savings plans
|
$
|
319
|
|
|
$
|
374
|
|
Aircraft and other lease related obligations
|
93
|
|
|
159
|
|
||
Vacation pay
|
302
|
|
|
292
|
|
||
Health
|
71
|
|
|
84
|
|
||
Derivative contracts
|
317
|
|
|
174
|
|
||
Workers compensation
|
170
|
|
|
165
|
|
||
Property and income taxes
|
121
|
|
|
81
|
|
||
Other
|
258
|
|
|
236
|
|
||
Accrued liabilities
|
$
|
1,651
|
|
|
$
|
1,565
|
|
Other noncurrent liabilities (in millions)
|
June 30, 2015
|
|
December 31, 2014
|
||||
Postretirement obligation
|
$
|
176
|
|
|
$
|
169
|
|
Non-current lease-related obligations
|
174
|
|
|
193
|
|
||
Other deferred compensation
|
172
|
|
|
174
|
|
||
Deferred gains from sale and leaseback of aircraft
|
48
|
|
|
53
|
|
||
Derivative contracts
|
105
|
|
|
622
|
|
||
Other
|
33
|
|
|
44
|
|
||
Other noncurrent liabilities
|
$
|
708
|
|
|
$
|
1,255
|
|
(in millions)
|
|
B717 lease/sublease liability
|
||
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
|
|
Lease/sublease accretion
|
|
1
|
|
|
Lease/sublease expense adjustment
|
|
4
|
|
|
Lease/sublease payments, net (a)
|
|
(39
|
)
|
|
Balance at June 30, 2015
|
|
$
|
29
|
|
|
|
|
|
Fair value measurements at reporting date using:
|
||||||||||||
|
|
|
|
Quoted prices in
active markets
for identical assets
|
|
Significant
other observable
inputs
|
|
Significant
unobservable
inputs
|
||||||||
Description
|
|
June 30, 2015
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
1,565
|
|
|
$
|
1,565
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
125
|
|
|
—
|
|
|
125
|
|
|
—
|
|
||||
Certificates of deposit
|
|
8
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Eurodollar time deposits
|
|
74
|
|
|
—
|
|
|
74
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
1,150
|
|
|
1,150
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
210
|
|
|
—
|
|
|
210
|
|
|
—
|
|
||||
Noncurrent investments (b)
|
|
|
|
|
|
|
|
|
||||||||
Auction rate securities
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Interest rate derivatives
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
294
|
|
|
—
|
|
|
294
|
|
|
—
|
|
||||
Option contracts (c)
|
|
332
|
|
|
—
|
|
|
—
|
|
|
332
|
|
||||
Other available-for-sale securities
|
|
67
|
|
|
67
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
3,853
|
|
|
$
|
2,782
|
|
|
$
|
712
|
|
|
$
|
359
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(267
|
)
|
|
$
|
—
|
|
|
$
|
(267
|
)
|
|
$
|
—
|
|
Option contracts (c)
|
|
(1,387
|
)
|
|
—
|
|
|
—
|
|
|
(1,387
|
)
|
||||
Interest rate derivatives
|
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(1,708
|
)
|
|
$
|
—
|
|
|
$
|
(321
|
)
|
|
$
|
(1,387
|
)
|
|
|
|
|
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
|
|
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
|
|
(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 March 31, 2015
|
$
|
(1,245
|
)
|
|
$
|
27
|
|
|
$
|
—
|
|
|
$
|
(1,218
|
)
|
Total gains (realized or unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in earnings
|
85
|
|
|
—
|
|
|
—
|
|
|
85
|
|
||||
Included in other comprehensive income
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||
Purchases
|
182
|
|
(a)
|
—
|
|
|
—
|
|
|
182
|
|
||||
Sales
|
(127
|
)
|
(a)
|
—
|
|
|
—
|
|
|
(127
|
)
|
||||
Balance at June 30, 2015
|
$
|
(1,055
|
)
|
|
$
|
27
|
|
(b)
|
$
|
—
|
|
|
$
|
(1,028
|
)
|
The amount of total gains for the period
included in earnings attributable to the
change in unrealized gains or losses relating
to assets still held at June 30, 2015
|
$
|
85
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
85
|
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||||||
|
Fuel
|
|
Auction rate
|
|
Other
|
|
|
||||||||
(in millions)
|
derivatives
|
|
securities
|
|
securities
|
|
Total
|
||||||||
Balance at December 31, 2014
|
$
|
(1,091
|
)
|
|
$
|
27
|
|
|
$
|
5
|
|
|
$
|
(1,059
|
)
|
Total losses (realized or unrealized)
|
|
|
|
|
|
|
|
|
|
|
|||||
Included in earnings
|
(8
|
)
|
|
—
|
|
|
(1
|
)
|
|
(9
|
)
|
||||
Included in other comprehensive income
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
||||
Purchases
|
244
|
|
(a)
|
—
|
|
|
—
|
|
|
244
|
|
||||
Sales
|
(171
|
)
|
(a)
|
—
|
|
|
(4
|
)
|
|
(175
|
)
|
||||
Balance at June 30, 2015
|
$
|
(1,055
|
)
|
|
$
|
27
|
|
(b)
|
$
|
—
|
|
|
$
|
(1,028
|
)
|
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 June 30, 2015
|
$
|
(8
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8
|
)
|
Quantitative information about Level 3 fair value measurements
|
||||
|
Valuation technique
|
Unobservable input
|
Period (by year)
|
Range
|
Fuel derivatives
|
Option model
|
Implied volatility
|
Third quarter 2015
|
18-33%
|
|
|
|
Fourth quarter 2015
|
26-35%
|
|
|
|
2016
|
23-37%
|
|
|
|
2017
|
17-29%
|
|
|
|
2018
|
19-23%
|
Auction rate securities
|
Discounted cash flow
|
Time to principal recovery
|
|
8 years
|
|
|
Illiquidity premium
|
|
3-4%
|
|
|
Counterparty credit spread
|
|
1-2%
|
(in millions)
|
Carrying value
|
|
Estimated fair value
|
|
Fair value level hierarchy
|
||||
5.75% Notes due 2016
|
$
|
310
|
|
|
$
|
328
|
|
|
Level 2
|
5.25% Convertible Senior Notes due 2016
|
112
|
|
|
264
|
|
|
Level 2
|
||
5.125% Notes due 2017
|
312
|
|
|
331
|
|
|
Level 2
|
||
French Credit Agreements due 2018 - 1.15%
|
31
|
|
|
31
|
|
|
Level 3
|
||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.02%
|
20
|
|
|
21
|
|
|
Level 3
|
||
2.75% Notes due 2019
|
302
|
|
|
308
|
|
|
Level 2
|
||
Term Loan Agreement due 2019 - 6.315%
|
161
|
|
|
167
|
|
|
Level 3
|
||
Term Loan Agreement due 2019 - 6.84%
|
67
|
|
|
72
|
|
|
Level 3
|
||
Term Loan Agreement due 2020 - 5.223%
|
351
|
|
|
347
|
|
|
Level 3
|
||
Floating-rate 737 Aircraft Notes payable through 2020
|
279
|
|
|
275
|
|
|
Level 3
|
||
Pass Through Certificates due 2022 - 6.24%
|
347
|
|
|
395
|
|
|
Level 2
|
||
7.375% Debentures due 2027
|
133
|
|
|
157
|
|
|
Level 2
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
NUMERATOR:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
608
|
|
|
$
|
465
|
|
|
$
|
1,061
|
|
|
$
|
617
|
|
Incremental income effect of interest on 5.25% convertible notes
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
||||
Net income after assumed conversion
|
$
|
609
|
|
|
$
|
466
|
|
|
$
|
1,062
|
|
|
$
|
619
|
|
|
|
|
|
|
|
|
|
||||||||
DENOMINATOR:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding, basic
|
665
|
|
|
690
|
|
|
670
|
|
|
694
|
|
||||
Dilutive effect of Employee stock options and restricted stock units
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
||||
Dilutive effect of 5.25% convertible notes
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
||||
Adjusted weighted-average shares outstanding, diluted
|
673
|
|
|
698
|
|
|
678
|
|
|
703
|
|
||||
|
|
|
|
|
|
|
|
||||||||
NET INCOME PER SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.91
|
|
|
$
|
0.67
|
|
|
$
|
1.58
|
|
|
$
|
0.89
|
|
Diluted
|
$
|
0.90
|
|
|
$
|
0.67
|
|
|
$
|
1.57
|
|
|
$
|
0.88
|
|
|
|
Three months ended June 30,
|
|
|
|
|||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||
Revenue passengers carried
|
|
30,800,742
|
|
|
29,155,114
|
|
|
5.6
|
%
|
|
||
Enplaned passengers
|
|
37,670,284
|
|
|
35,790,140
|
|
|
5.3
|
%
|
|
||
Revenue passenger miles (RPMs) (000s)
(1)
|
|
30,858,381
|
|
|
28,589,997
|
|
|
7.9
|
%
|
|
||
Available seat miles (ASMs) (000s)
(2)
|
|
36,476,030
|
|
|
34,096,212
|
|
|
7.0
|
%
|
|
||
Load factor
(3)
|
|
84.6
|
%
|
|
83.9
|
%
|
|
0.7
|
|
pts
|
||
Average length of passenger haul (miles)
|
|
1,002
|
|
|
981
|
|
|
2.1
|
%
|
|
||
Average aircraft stage length (miles)
|
|
756
|
|
|
723
|
|
|
4.6
|
%
|
|
||
Trips flown
|
|
326,309
|
|
|
327,343
|
|
|
(0.3
|
)%
|
|
||
Seats flown
(4)
|
|
47,612,415
|
|
|
46,662,111
|
|
|
2.0
|
%
|
|
||
Seats per trip
(5)
|
|
145.91
|
|
|
142.55
|
|
|
2.4
|
%
|
|
||
Average passenger fare
|
|
$
|
157.51
|
|
|
$
|
163.00
|
|
|
(3.4
|
)%
|
|
Passenger revenue yield per RPM (cents)
(6)
|
|
15.72
|
|
|
16.62
|
|
|
(5.4
|
)%
|
|
||
Operating revenue per ASM (cents)
(7)
|
|
14.01
|
|
|
14.70
|
|
|
(4.7
|
)%
|
|
||
Passenger revenue per ASM (cents)
(8)
|
|
13.30
|
|
|
13.94
|
|
|
(4.6
|
)%
|
|
||
Operating expenses per ASM (cents)
(9)
|
|
11.04
|
|
|
12.42
|
|
|
(11.1
|
)%
|
|
||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.29
|
|
|
8.25
|
|
|
0.5
|
%
|
|
||
Operating expenses per ASM, excluding fuel and profitsharing (cents)
|
|
7.79
|
|
|
7.88
|
|
|
(1.1
|
)%
|
|
||
Fuel costs per gallon, including fuel tax
|
|
$
|
2.03
|
|
|
$
|
3.03
|
|
|
(33.0
|
)%
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
2.02
|
|
|
$
|
3.02
|
|
|
(33.1
|
)%
|
|
Fuel consumed, in gallons (millions)
|
|
493
|
|
|
469
|
|
|
5.1
|
%
|
|
||
Active fulltime equivalent Employees
|
|
47,645
|
|
|
45,508
|
|
|
4.7
|
%
|
|
||
Aircraft at end of period
(10)
|
|
689
|
|
|
683
|
|
|
0.9
|
%
|
|
|
|
Six months ended June 30,
|
|
|
|
|||||||
|
|
2015
|
|
2014
|
|
Change
|
||||||
Revenue passengers carried
|
|
57,243,738
|
|
|
54,210,923
|
|
|
5.6
|
%
|
|
||
Enplaned passengers
|
|
69,769,242
|
|
|
66,446,721
|
|
|
5.0
|
%
|
|
||
Revenue passenger miles (RPMs) (000s)
(1)
|
|
56,719,247
|
|
|
52,745,314
|
|
|
7.5
|
%
|
|
||
Available seat miles (ASMs) (000s)
(2)
|
|
68,773,495
|
|
|
64,570,794
|
|
|
6.5
|
%
|
|
||
Load factor
(3)
|
|
82.5
|
%
|
|
81.7
|
%
|
|
0.8
|
|
pts
|
||
Average length of passenger haul (miles)
|
|
991
|
|
|
973
|
|
|
1.8
|
%
|
|
||
Average aircraft stage length (miles)
|
|
748
|
|
|
717
|
|
|
4.3
|
%
|
|
||
Trips flown
|
|
622,879
|
|
|
626,981
|
|
|
(0.7
|
)%
|
|
||
Seats flown
(4)
|
|
90,856,819
|
|
|
89,208,921
|
|
|
1.8
|
%
|
|
||
Seats per trip
(5)
|
|
145.87
|
|
|
142.28
|
|
|
2.5
|
%
|
|
||
Average passenger fare
|
|
$
|
157.74
|
|
|
$
|
160.21
|
|
|
(1.5
|
)%
|
|
Passenger revenue yield per RPM (cents)
(6)
|
|
15.92
|
|
|
16.47
|
|
|
(3.3
|
)%
|
|
||
Operating revenue per ASM (cents)
(7)
|
|
13.85
|
|
|
14.21
|
|
|
(2.5
|
)%
|
|
||
Passenger revenue per ASM (cents)
(8)
|
|
13.13
|
|
|
13.45
|
|
|
(2.4
|
)%
|
|
||
Operating expenses per ASM (cents)
(9)
|
|
11.14
|
|
|
12.68
|
|
|
(12.1
|
)%
|
|
||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.40
|
|
|
8.44
|
|
|
(0.5
|
)%
|
|
||
Operating expenses per ASM, excluding fuel and profitsharing (cents)
|
|
7.95
|
|
|
8.20
|
|
|
(3.0
|
)%
|
|
||
Fuel costs per gallon, including fuel tax
|
|
$
|
2.02
|
|
|
$
|
3.06
|
|
|
(34.0
|
)%
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
2.01
|
|
|
$
|
3.05
|
|
|
(34.1
|
)%
|
|
Fuel consumed, in gallons (millions)
|
|
927
|
|
|
892
|
|
|
3.9
|
%
|
|
||
Active fulltime equivalent Employees
|
|
47,645
|
|
|
45,508
|
|
|
4.7
|
%
|
|
||
Aircraft at period-end
(10)
|
|
689
|
|
|
683
|
|
|
0.9
|
%
|
|
|
Three months ended June 30,
|
|
Percent
|
|
Six months ended June 30,
|
|
Percent
|
||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||
Fuel and oil expense, unhedged
|
$
|
962
|
|
|
$
|
1,444
|
|
|
|
|
$
|
1,792
|
|
|
$
|
2,776
|
|
|
|
Add (Deduct): Fuel hedge (gains) losses included in Fuel and oil expense
|
43
|
|
|
(19
|
)
|
|
|
|
90
|
|
|
(37
|
)
|
|
|
||||
Fuel and oil expense, as reported
|
$
|
1,005
|
|
|
$
|
1,425
|
|
|
|
|
$
|
1,882
|
|
|
$
|
2,739
|
|
|
|
Deduct: Net impact from fuel contracts
|
(5
|
)
|
|
(6
|
)
|
|
|
|
(9
|
)
|
|
(14
|
)
|
|
|
||||
Fuel and oil expense, non-GAAP (economic)
|
$
|
1,000
|
|
|
$
|
1,419
|
|
|
(29.5)%
|
|
$
|
1,873
|
|
|
$
|
2,725
|
|
|
(31.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total operating expenses, as reported
|
$
|
4,026
|
|
|
$
|
4,236
|
|
|
|
|
$
|
7,660
|
|
|
$
|
8,187
|
|
|
|
Deduct: Contracts settling in the current period, but for which gains have been recognized in a prior period*
|
(5
|
)
|
|
(6
|
)
|
|
|
|
(9
|
)
|
|
(14
|
)
|
|
|
||||
Deduct: Acquisition and integration costs
|
(3
|
)
|
|
(38
|
)
|
|
|
|
(26
|
)
|
|
(56
|
)
|
|
|
||||
Add: Litigation settlement
|
—
|
|
|
—
|
|
|
|
|
37
|
|
|
—
|
|
|
|
||||
Deduct: Labor ratification bonuses
|
(55
|
)
|
|
—
|
|
|
|
|
(55
|
)
|
|
—
|
|
|
|
||||
Total operating expenses, non-GAAP
|
$
|
3,963
|
|
|
$
|
4,192
|
|
|
(5.5)%
|
|
$
|
7,607
|
|
|
$
|
8,117
|
|
|
(6.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income, as reported
|
$
|
1,085
|
|
|
$
|
775
|
|
|
|
|
$
|
1,865
|
|
|
$
|
991
|
|
|
|
Add: Contracts settling in the current period, but for which gains have been recognized in a prior period*
|
5
|
|
|
6
|
|
|
|
|
9
|
|
|
14
|
|
|
|
||||
Add: Acquisition and integration costs
|
3
|
|
|
38
|
|
|
|
|
26
|
|
|
56
|
|
|
|
||||
Deduct: Litigation settlement
|
—
|
|
|
—
|
|
|
|
|
(37
|
)
|
|
—
|
|
|
|
||||
Add: Labor ratification bonuses
|
55
|
|
|
—
|
|
|
|
|
55
|
|
|
—
|
|
|
|
||||
Operating income, non-GAAP
|
$
|
1,148
|
|
|
$
|
819
|
|
|
40.2%
|
|
$
|
1,918
|
|
|
$
|
1,061
|
|
|
80.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income, as reported
|
$
|
608
|
|
|
$
|
465
|
|
|
|
|
$
|
1,061
|
|
|
$
|
617
|
|
|
|
Add (Deduct): Mark-to-market impact from fuel contracts settling in future periods
|
71
|
|
|
16
|
|
|
|
|
91
|
|
|
(40
|
)
|
|
|
||||
Deduct: Ineffectiveness from fuel hedges settling in future periods
|
(2
|
)
|
|
(28
|
)
|
|
|
|
(15
|
)
|
|
(41
|
)
|
|
|
||||
Add: Other net impact of fuel contracts settling in the current or a prior period (excluding reclassifications)
|
5
|
|
|
6
|
|
|
|
|
9
|
|
|
14
|
|
|
|
||||
Add (Deduct): Income tax impact of fuel contracts
|
(27
|
)
|
|
2
|
|
|
|
|
(31
|
)
|
|
26
|
|
|
|
||||
Add: Acquisition and integration costs (a)
|
2
|
|
|
24
|
|
|
|
|
16
|
|
|
35
|
|
|
|
||||
Deduct: Litigation settlement (a)
|
—
|
|
|
—
|
|
|
|
|
(23
|
)
|
|
—
|
|
|
|
||||
Add: Labor ratification bonuses (a)
|
34
|
|
|
—
|
|
|
|
|
34
|
|
|
—
|
|
|
|
||||
Net income, non-GAAP
|
$
|
691
|
|
|
$
|
485
|
|
|
42.5%
|
|
$
|
1,142
|
|
|
$
|
611
|
|
|
86.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share, diluted, as reported
|
$
|
0.90
|
|
|
$
|
0.67
|
|
|
|
|
$
|
1.57
|
|
|
$
|
0.88
|
|
|
|
Add (Deduct): Net impact to net income above from fuel contracts divided by dilutive shares (a)
|
0.07
|
|
|
(0.01
|
)
|
|
|
|
0.07
|
|
|
(0.06
|
)
|
|
|
||||
Add: Impact of special items (a)
|
0.06
|
|
|
0.04
|
|
|
|
|
0.05
|
|
|
0.05
|
|
|
|
||||
Net income per share, diluted, non-GAAP
|
$
|
1.03
|
|
|
$
|
0.70
|
|
|
47.1%
|
|
$
|
1.69
|
|
|
$
|
0.87
|
|
|
94.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses per ASM (cents)
|
|
11.04
|
¢
|
|
|
12.42
|
¢
|
|
|
|
|
11.14
|
¢
|
|
|
12.68
|
¢
|
|
|
Deduct: Fuel and oil expense divided by ASMs
|
(2.75
|
)
|
|
(4.17
|
)
|
|
|
|
(2.74
|
)
|
|
(4.24
|
)
|
|
|
||||
Deduct: Impact of special items
|
(0.16
|
)
|
|
(0.11
|
)
|
|
|
|
(0.06
|
)
|
|
(0.09
|
)
|
|
|
||||
Operating expenses per ASM, non-GAAP, excluding Fuel and oil and special items (cents)
|
|
8.13
|
¢
|
|
|
8.14
|
¢
|
|
(0.1)%
|
|
|
8.34
|
¢
|
|
|
8.35
|
¢
|
|
(0.1)%
|
|
|
|
|
||||
|
Twelve Months Ended
|
|
Twelve Months Ended
|
||||
|
June 30, 2015
|
|
June 30, 2014
|
||||
Operating income, as reported
|
$
|
3,100
|
|
|
$
|
1,766
|
|
Net impact from fuel contracts
|
23
|
|
|
49
|
|
||
Acquisition and integration costs
|
96
|
|
|
103
|
|
||
Labor ratification bonuses
|
64
|
|
|
—
|
|
||
Litigation settlement
|
(37
|
)
|
|
—
|
|
||
Operating income, non-GAAP
|
$
|
3,246
|
|
|
$
|
1,918
|
|
Net adjustment for aircraft leases (1)
|
117
|
|
|
140
|
|
||
Adjustment for fuel hedge premium expense
|
(76
|
)
|
|
(78
|
)
|
||
Adjusted Operating income, non-GAAP
|
$
|
3,287
|
|
|
$
|
1,980
|
|
|
|
|
|
||||
Average invested capital (2)
|
$
|
11,196
|
|
|
$
|
11,581
|
|
Equity adjustment for hedge accounting
|
473
|
|
|
(25
|
)
|
||
Adjusted average invested capital
|
$
|
11,669
|
|
|
$
|
11,556
|
|
|
|
|
|
||||
ROIC, pre-tax
|
28.2
|
%
|
|
17.1
|
%
|
|
|
Three months ended
|
|
|
|
Six months ended
|
|
|
||||||||||||||
(in millions, except per share amounts)
|
|
June 30,
|
|
|
|
June 30,
|
|
|
||||||||||||||
GAAP
|
|
2015
|
|
2014
|
|
Percent Change
|
|
2015
|
|
2014
|
|
Percent Change
|
||||||||||
Operating income
|
|
$
|
1,085
|
|
|
$
|
775
|
|
|
40.0
|
%
|
|
$
|
1,865
|
|
|
$
|
991
|
|
|
88.2
|
%
|
Net income
|
|
$
|
608
|
|
|
$
|
465
|
|
|
30.8
|
%
|
|
$
|
1,061
|
|
|
$
|
617
|
|
|
72.0
|
%
|
Net income per share, diluted
|
|
$
|
0.90
|
|
|
$
|
0.67
|
|
|
34.3
|
%
|
|
$
|
1.57
|
|
|
$
|
0.88
|
|
|
78.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income
|
|
$
|
1,148
|
|
|
$
|
819
|
|
|
40.2
|
%
|
|
$
|
1,918
|
|
|
$
|
1,061
|
|
|
80.8
|
%
|
Net income
|
|
$
|
691
|
|
|
$
|
485
|
|
|
42.5
|
%
|
|
$
|
1,142
|
|
|
$
|
611
|
|
|
86.9
|
%
|
Net income per share, diluted
|
|
$
|
1.03
|
|
|
$
|
0.70
|
|
|
47.1
|
%
|
|
$
|
1.69
|
|
|
$
|
0.87
|
|
|
94.3
|
%
|
Period
|
Average percent of estimated fuel consumption covered by fuel derivative contracts at varying WTI/Brent Crude Oil, Heating Oil, and Gulf Coast Jet Fuel-equivalent price levels
|
|
Third quarter 2015
|
Approx. 65%
|
|
Full Year 2015
|
Approx. 30%
|
|
2016
|
Approx. 40%
|
|
2017
|
Approx. 40%
|
|
2018 (1)
|
—
|
Year
|
|
Fair value (liability) of fuel derivative contracts at June 30, 2015
|
|
Amount of gains (losses) deferred in AOCI at June 30, 2015 (net of tax)
|
||||
Remainder of 2015
|
|
$
|
(261
|
)
|
|
$
|
(133
|
)
|
2016
|
|
(471
|
)
|
|
(337
|
)
|
||
2017
|
|
(296
|
)
|
|
(182
|
)
|
||
2018
|
|
—
|
|
(a)
|
(17
|
)
|
||
Total
|
|
$
|
(1,028
|
)
|
(b)
|
$
|
(669
|
)
|
|
Estimated economic jet fuel price per gallon,
including taxes |
|
Average Brent Crude Oil price per barrel
|
3Q 2015 (2)
|
Full Year 2015 (2)
|
$40
|
$2.00 - $2.05
|
$1.95 - $2.00
|
$50
|
$2.10 - $2.15
|
$2.05 - $2.10
|
Current Market (1)
|
$2.15 - $2.20
|
$2.10 - $2.15
|
$70
|
$2.40 - $2.45
|
$2.20 - $2.25
|
$80
|
$2.55 - $2.60
|
$2.30 - $2.35
|
Estimated Premium Costs (3)
|
$30M - $35M
|
$120M - $130M
|
|
Three months ended June 30,
|
||||||
(in millions)
|
2015
|
|
2014
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
71
|
|
|
$
|
16
|
|
Ineffectiveness from fuel hedges settling in future periods
|
(2
|
)
|
|
(28
|
)
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
—
|
|
|
—
|
|
||
Premium cost of fuel contracts
|
22
|
|
|
17
|
|
||
Other
|
(3
|
)
|
|
(2
|
)
|
||
|
$
|
88
|
|
|
$
|
3
|
|
|
Six months ended June 30,
|
||||||
(in millions)
|
2015
|
|
2014
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
91
|
|
|
$
|
(40
|
)
|
Ineffectiveness from fuel hedges settling in future periods
|
(15
|
)
|
|
(41
|
)
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
—
|
|
|
—
|
|
||
Premium cost of fuel contracts
|
48
|
|
|
34
|
|
||
Other
|
(3
|
)
|
|
(3
|
)
|
||
|
$
|
121
|
|
|
$
|
(50
|
)
|
|
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
|
—
|
|
21
|
|
—
|
—
|
|
—
|
|
40
|
(3)
|
2016
|
—
|
|
31
|
—
|
|
13
|
|
—
|
—
|
|
—
|
|
44
|
|
2017
|
15
|
|
—
|
12
|
|
14
|
|
—
|
14
|
|
—
|
|
55
|
|
2018
|
10
|
|
—
|
12
|
|
4
|
|
—
|
13
|
|
—
|
|
39
|
|
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
|
25
|
(1)
|
50
|
24
|
|
52
|
|
30
|
170
|
(2)
|
191
|
|
542
|
|
|
|
|
|
Average
|
|
Number
|
|
Number
|
|
Number
|
||||
Type
|
|
Seats
|
|
Age (Yrs)
|
|
of Aircraft
|
|
Owned
|
|
Leased
|
||||
737-300
|
|
137 or 143
|
|
22
|
|
|
119
|
|
(a)
|
75
|
|
|
44
|
|
737-500
|
|
122
|
|
24
|
|
|
12
|
|
|
9
|
|
|
3
|
|
737-700
|
|
143
|
|
11
|
|
|
460
|
|
|
395
|
|
|
65
|
|
737-800
|
|
175
|
|
2
|
|
|
98
|
|
|
91
|
|
|
7
|
|
TOTALS
|
|
|
|
12
|
|
|
689
|
|
|
570
|
|
|
119
|
|
•
|
the Company's network plans and expectations, including its network and schedule optimization plans;
|
•
|
the Company's plans related to labor matters;
|
•
|
the Company’s fleet and capacity plans and expectations;
|
•
|
the Company’s financial outlook and projected results of operations, including specific factors expected to impact the Company’s results of operations;
|
•
|
the Company's plans and expectations with respect to managing risk associated with changing jet fuel prices;
|
•
|
the Company's expectations with respect to liquidity and capital expenditures, including anticipated needs for, and sources of, funds;
|
•
|
the Company's assessment of market risks; and
|
•
|
the Company's plans and expectations related to legal proceedings.
|
•
|
the impact of governmental regulations and other governmental actions related to the Company’s operations;
|
•
|
the Company's ability to maintain positive relations with Employees and Employee representatives;
|
•
|
the Company's dependence on third parties, in particular with respect to its fleet plans;
|
•
|
changes in demand for the Company's services and the impact of economic conditions, fuel prices, and actions of competitors (including, without limitation, pricing, scheduling, and capacity decisions and consolidation and alliance activities) and other factors beyond the Company’s control on the Company's business decisions, plans, and strategies;
|
•
|
other changes in consumer behavior, including with respect to the Company's co-branded credit card;
|
•
|
changes in the price of aircraft fuel, the impact of hedge accounting, and any changes to the Company's fuel hedging strategies and positions;
|
•
|
the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; and
|
•
|
other factors as set forth in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2014.
|
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
|
|
||||||
April 1, 2015 through
April 30, 2015
|
|
2,569,075
|
|
|
$
|
—
|
|
(2)(3)
|
2,569,075
|
|
|
$
|
48,381,506
|
|
|
May 1, 2015 through
May 31, 2015
|
|
1,155,430
|
|
|
$
|
—
|
|
(4)(5)
|
1,155,430
|
|
|
$
|
1,200,000,000
|
|
(1)(5)
|
June 1, 2015 through
June 30, 2015
|
|
8,085,077
|
|
|
$
|
—
|
|
(5)
|
8,085,077
|
|
|
$
|
1,200,000,000
|
|
|
Total
|
|
11,809,582
|
|
|
|
|
11,809,582
|
|
|
|
|
(1)
|
In May 2014, the Company’s Board of Directors authorized the repurchase of up to $1 billion of the Company’s common stock. Following the completion of the May 2014 share repurchase authorization in May 2015, on May 13, 2015, the Company’s Board of Directors authorized the repurchase of up to $1.5 billion of the Company’s common stock in a new share repurchase authorization. Repurchases are made in accordance with applicable securities laws in open market, private, or accelerated repurchase transactions from time to time, depending on market conditions, and may be discontinued at any time.
|
(2)
|
Under an accelerated share repurchase program entered into by the Company with a third party financial institution in first quarter 2015 ("First Quarter ASR Program"), the Company paid $300 million and received an initial delivery of 5,116,148 shares during first quarter 2015, representing an estimated 75 percent of the shares to be purchased by the Company under the First Quarter ASR Program based on a price of $43.9784 per share, which was the volume-weighted average price per share of the Company’s common stock on the New York Stock Exchange between February 13, 2015 and March 2, 2015. Final settlement of this First Quarter ASR Program occurred in April 2015 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 April 2015. Upon settlement, the third party financial institution delivered 1,801,475 additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the 6,917,623 shares repurchased under the First Quarter ASR Program, upon completion of the First Quarter ASR Program in April 2015, was $43.3675.
|
(3)
|
During the period from April 27, 2015 through April 30, 2015, the Company repurchased 767,600 shares of its common stock on the open market at an average price of $41.6555 per share.
|
(4)
|
During the period from May 1, 2015 through May 11, 2015, the Company repurchased 1,155,430 shares of its common stock on the open market at an average price of $41.8029 per share.
|
(5)
|
Following the Board of Directors’ authorization of the Company’s new $1.5 billion share repurchase program on May 13, 2015, under the Second Quarter ASR Program, the Company paid $300 million in May 2015 and received an initial delivery of 5,878,480 shares on June 4, 2015, representing an estimated 75 percent of the shares to be purchased by the Company under the Second Quarter ASR Program based on a price of $38.2752 per share, which was the volume-weighted average price per share of the Company’s common stock on the New York Stock Exchange between May 15, 2015 and June 3, 2015. Final settlement of the Second Quarter ASR Program occurred in June 2015 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 June 2015. Upon settlement, the third party financial institution delivered 2,206,597 additional shares of the Company's common stock to the Company. In total, the average purchase price per share for the 8,085,077 shares repurchased under the Second Quarter ASR Program, upon completion of the Second Quarter ASR Program in June 2015, was $37.1054.
|
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 filed November 20, 2009 (File No. 1-7259)).
|
10.1
|
Supplemental Agreement No. 91 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
10.2
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed May 18, 2015 (File No. 1-7259)). (2)
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
32.1
|
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. (3)
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
SOUTHWEST AIRLINES CO.
|
|
|
|
|
July 31, 2015
|
By
|
/s/ Tammy Romo
|
|
|
|
|
|
Tammy Romo
|
|
|
Executive Vice President Finance & Chief Financial Officer
|
|
|
(On behalf of the Registrant and in
|
|
|
her capacity as Principal Financial
|
|
|
and Accounting Officer)
|
3.1
|
Restated Certificate of Formation of the Company, effective May 18, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 (File No. 1-7259)).
|
3.2
|
Amended and Restated Bylaws of the Company, effective November 19, 2009 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009 (File No. 1-7259)).
|
10.1
|
Supplemental Agreement No. 91 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
10.2
|
Southwest Airlines Co. Amended and Restated 2007 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed May 18, 2015 (File No. 1-7259)). (2)
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer.
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer.
|
32.1
|
Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer. (3)
|
101.INS
|
XBRL Instance Document.
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
Supplemental Agreement No. 91
|
|
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-91-1
|
THE BOEING COMPANY
|
SOUTHWEST AIRLINES CO.
|
By:
/s/ Jon W. Lewis
|
By:
/s/ Chris Monroe
|
Jon W. Lewis
|
Chris Monroe
|
Its:
Attorney-In-Fact
|
Its:
VP, Treasurer
|
P.A. No. 1810
|
SA-91-2
|
TABLE OF CONTENTS
|
||
|
Page
|
SA
|
|
Number
|
Number
|
P.A. No. 1810
|
i
|
|
K/SWA
|
|
SA-91
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
SA
|
|
|
|
Number
|
1a
|
Aircraft Information Table - Block 700LUV Aircraft
|
SA-91
|
|
|
|
1b
|
Aircraft Information Table - Block 800LUV Aircraft
|
SA-82
|
|
|
|
1c
|
Aircraft Information Table - Block 800LUV Aircraft
|
SA-91
|
|
(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-91
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
SA
|
|
|
|
Number
|
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-91
|
|
|
|
|
|
SWA-PA-1810-LA-1003498R1
|
***
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1003490R3
|
***
|
SA-90
|
|
|
|
|
|
SWA-PA-1810-LA-1003367R1
|
***
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1105883
|
Aircraft Model Substitution
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1105884R1
|
Option Aircraft
|
SA-90
|
|
|
Attachment A - Model 737-7H4 Aircraft
|
SA-90
|
|
|
Attachment B - Option Aircraft Information Table
|
SA-90
|
SWA-PA-1810-LA-1105885R3
|
***
|
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-91
|
TABLE OF CONTENTS
|
ADDITIONAL LETTERS (FOR REFERENCE) -
INACTIVE (as of SA-82)
|
||||
6-1162-MSA-288
|
Business Offer - Enhanced Ground Proximity
|
|||
|
Warning System (EGPWS) - Activiation - Peaks
|
|||
|
and Obstacles Feature
|
|||
|
(
Not applicable to Block 700LUV & Block 800LUV Aircraft)
|
|||
|
|
|||
6-1162-JMG-501R2
|
Business Offer - ACARS package
|
|||
|
(
Not applicable to Block 700LUV & Block 800LUV Aircraft)
|
Table
|
Title
|
Last Updated under SA
|
Current Status
|
1
|
Aircraft Information Table
|
SA-75
|
Inactive
|
2
|
Option Aircraft Information 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-91
|
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-91
|
TABLE OF CONTENTS
|
Letter Agreement
|
Title
|
Last Updated under SA
|
Current Status
|
6-1162-NIW-606R1
|
***
|
SA-36
|
Inactive
|
6-1162-NIW-640
|
Early Delivery of Two April 2004 Aircraft
|
SA-35
|
Inactive
|
6-1162-NIW-889
|
Warranty - Exterior Color Schemes and Markings for YA143 and on
|
SA-39
|
Inactive
|
6-1162-NIW-1142
|
***
|
SA-43
|
Inactive
|
6-1162-NIW-1369
|
***
|
SA-46
|
Inactive
|
6-1162-NIW-1983
|
***
|
SA-62
|
Inactive
|
SWA-PA-1810-LA-1000419
|
***
|
SA-64
|
Inactive
|
6-1162-NIW-890R1
|
***
|
SA-75
SA-39
|
Inactive
|
6-1162-KJJ-054R2
|
Business Matters
|
SA-75
|
Inactive
|
6-1162-JMG-669R9
|
***
|
SA-75
SA-75
SA-54
|
Inactive
|
SWA-PA-1810-LA-02710R1
|
***
|
SA-72
|
Inactive
|
P.A. No. 1810
|
vi
|
|
K/SWA
|
|
SA-91
|
Table 1a to
|
Purchase Agreement No. PA-1810
|
Aircraft Delivery, Description, Price and Advance Payments
|
Block 700LUV Aircraft
|
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:
|
***
|
|
|
|
|
Delivery
Date
|
Number of
Aircraft
|
Escalation
Factor
(Airframe)
|
Aircraft
Serial
Number
|
|
Escalation Estimate
Adv Payment Base
Price Per A/P
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||
At Signing
***
|
24 Mos.
***
|
21/18/12/9/6 Mos.
***
|
Total
***
|
||||||
Jan-2017
|
2
|
***
|
42532, 36910
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Feb-2017
|
2
|
***
|
36969, 36970
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2017
|
1
|
***
|
36922
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Mar-2017
|
1
|
***
|
36972
|
|
***
|
***
|
***
|
***
|
***
|
Mar-2017
|
2
|
***
|
36946, 36949
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Apr-2017
|
1
|
***
|
36974
|
|
***
|
***
|
***
|
***
|
***
|
Apr-2017
|
1
|
***
|
36927
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
May-2017
|
1
|
***
|
36975
|
|
***
|
***
|
***
|
***
|
***
|
May-2017
|
2
|
***
|
36925, 36944
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Jun-2017
|
1
|
***
|
36976
|
|
***
|
***
|
***
|
***
|
***
|
Jun-2017
|
1
|
***
|
36943
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Jan-2018
|
1
|
***
|
36926
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Feb-2018
|
1
|
***
|
42545
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2018
|
1
|
***
|
42533
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Mar-2018
|
2
|
***
|
42534, 36928
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Apr-2018
|
3
|
***
|
36968, 36952, 36954
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
May-2018
|
2
|
***
|
36951, 36957
|
Note 1
|
***
|
***
|
***
|
***
|
***
|
Total:
|
25
|
|
|
|
|
|
|
|
|
SWA-PA-01810
|
|
Page 1
|
58928, 60268-1F.TXT
|
Boeing Proprietary
|
SA-91
|
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:
|
***
|
|
Delivery
Date
|
Number of
Aircraft
|
Escalation
Factor
(Airframe)
|
Aircraft
Serial
Number
|
Escalation
Forecast
|
Sub-Block
Note 2
|
Escalation Estimate
Adv Payment Base
Price Per A/P
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||
At Signing
***
|
24 Mos.
***
|
21/18/12/9/6 Mos.
***
|
Total
***
|
|||||||
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
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Sep-2014
|
1
|
***
|
36909
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2014
|
1
|
***
|
36920
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2014
|
1
|
***
|
36971
|
***
|
|
***
|
***
|
***
|
***
|
***
|
SWA-PA-01810
|
|
SA-91
|
63879 / 63887 / 64110 / 64111 / 66379 / 68788 / 70150 /
73631
|
Boeing Proprietary
|
Page 1
|
Table 1c to
Purchase Agreement No. PA-01810
Aircraft Delivery, Description, Price and Advance Payments
Block 800LUV Aircraft (non-ETOPS Configuration)
|
Delivery
Date
|
Number of
Aircraft
|
Escalation
Factor
(Airframe)
|
Aircraft
Serial
Number
|
Escalation
Forecast
|
Sub-Block
Note 2
|
Escalation Estimate
Adv Payment Base
Price Per A/P
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||
At Signing
***
|
24 Mos.
***
|
21/18/12/9/6 Mos.
***
|
Total
***
|
|||||||
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
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jan-2016
|
2
|
***
|
36650, 36735
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2016
|
3
|
***
|
36904, 36932, 36737
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Mar-2016
|
2
|
***
|
36651, 36738
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Apr-2016
|
1
|
***
|
36653
|
***
|
|
***
|
***
|
***
|
***
|
***
|
May-2016
|
5
|
***
|
36658, 36939, 33937, 36938,
36723
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jun-2016
|
1
|
***
|
36916
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jul-2016
|
3
|
***
|
36921, 36945, 33942
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Aug-2016
|
4
|
***
|
36678, 36661, 35965, 36728
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Sep-2016
|
3
|
***
|
36977, 36923, 41530
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2016
|
3
|
***
|
36666, 38812, 38813
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2016
|
3
|
***
|
36670, 38814, 41531
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2016
|
1
|
***
|
38816
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Total:
|
92
|
|
|
|
|
|
|
|
|
|
SWA-PA-01810
|
|
SA-91
|
63879 / 63887 / 64110 / 64111 / 66379 / 68788 / 70150 /
73631
|
Boeing Proprietary
|
Page 2
|
No.
|
Model
|
Aircraft Block
|
MSN's
|
Current Delivery Mo.
|
Base Year
|
Status
|
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
-
800
|
800LUV
|
36938
|
April-16
|
2011
|
|
42
|
737
-
800
|
800LUV
|
36939
|
May-16
|
2011
|
|
43
|
737
-
800
|
800LUV
|
36945
|
July-16
|
2011
|
|
44
|
737
-
800
|
800LUV
|
36977
|
September-16
|
2011
|
|
45
|
737
-
700
|
700LUV
|
42532
|
January-17
|
2011
|
|
46
|
737
-
700
|
700LUV
|
36910
|
January-17
|
2011
|
|
47
|
737
-
700
|
700LUV
|
36970
|
February-17
|
2011
|
|
48
|
737-700
|
700LUV
|
36969
|
February-17
|
2011
|
|
SA-91
|
SA-91
|
|
By:
|
/s/ Gary C. Kelly
|
|
|
Gary C. Kelly
|
|
|
Chief Executive Officer
|
|
By:
|
/s/ Tammy Romo
|
|
|
Tammy Romo
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
By:
|
/s/ Gary C. Kelly
|
|
|
Gary C. Kelly
|
|
|
Chief Executive Officer
|
|
By:
|
/s/ Tammy Romo
|
|
|
Tammy Romo
|
|
|
Chief Financial Officer
|