þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2016
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or
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________ to ________
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TEXAS
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74-1563240
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(State or other jurisdiction of
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(IRS Employer
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incorporation or organization)
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Identification No.)
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P.O. Box 36611
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Dallas, Texas
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75235-1611
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock ($1.00 par value)
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New York Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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¨
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 1.
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Business
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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
|
%
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2006
|
|
$
|
2,284
|
|
|
$
|
1.64
|
|
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28.0
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%
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2007
|
|
$
|
2,690
|
|
|
$
|
1.80
|
|
|
29.7
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%
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2008
|
|
$
|
3,713
|
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|
$
|
2.44
|
|
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35.1
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%
|
2009
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|
$
|
3,044
|
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|
$
|
2.12
|
|
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30.2
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%
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2010
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$
|
3,620
|
|
|
$
|
2.51
|
|
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32.6
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%
|
2011
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$
|
5,644
|
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|
$
|
3.19
|
|
|
37.7
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%
|
2012
|
|
$
|
6,120
|
|
|
$
|
3.30
|
|
|
37.2
|
%
|
2013
|
|
$
|
5,763
|
|
|
$
|
3.16
|
|
|
35.1
|
%
|
2014
|
|
$
|
5,293
|
|
|
$
|
2.93
|
|
|
32.3
|
%
|
2015
|
|
$
|
3,616
|
|
|
$
|
1.90
|
|
|
23.0
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%
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2016
|
|
$
|
3,647
|
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|
$
|
1.82
|
|
|
21.9
|
%
|
First Quarter 2016
|
|
$
|
852
|
|
|
$
|
1.80
|
|
|
21.9
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%
|
Second Quarter 2016
|
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$
|
903
|
|
|
$
|
1.75
|
|
|
22.0
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%
|
Third Quarter 2016
|
|
$
|
941
|
|
|
$
|
1.83
|
|
|
21.2
|
%
|
Fourth Quarter 2016
|
|
$
|
952
|
|
|
$
|
1.90
|
|
|
22.5
|
%
|
|
|
Year ended December 31,
|
||||||||
|
|
2016
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|
2015
|
|
2014
|
|
2013
|
|
2012
|
Available seat miles per fuel gallon consumed
|
|
74.4
|
|
73.9
|
|
72.8
|
|
71.7
|
|
69.4
|
•
|
“Wanna Get Away” fares are generally the lowest fares and are typically 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 without a change fee. Southwest’s No Show policy applies if a Customer has booked a nonrefundable fare anywhere in his/her itinerary and that portion of the flight is not used and not canceled or changed by the Customer at least ten minutes prior to scheduled departure. In such event, subject to certain exceptions, all unused funds on the full itinerary will be forfeited, and the remaining reservation will be canceled. The intent of the No Show policy is to promote Customer behavior that will enable Southwest to re-sell the open seat prior to 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. The Company's frequent flyer program is discussed below under "Rapid Rewards Frequent Flyer Program."
|
•
|
“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/or ticket counter access in participating airports, and one complimentary adult beverage coupon for the day of travel (for Customers of legal drinking age).
|
•
|
installation of blended winglets, which reduce drag and increase fuel efficiency, on all Boeing 737-700 and 737-800 aircraft in Southwest’s fleet;
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•
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upgrading of the Company’s 737-800 fleet 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;
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•
|
deployment of auto-throttle and vertical navigation to maintain optimum cruising speeds;
|
•
|
implementation of engine start procedures to support the Company's single engine taxi procedures;
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•
|
adjustment of the timing of auxiliary power unit starts on originating flights to reduce auxiliary power unit usage;
|
•
|
implementation of fuel planning initiatives to safely reduce loading of excess fuel;
|
•
|
aircraft cabin interior retrofitting to reduce weight;
|
•
|
reduction of aircraft engine idle speed while on the ground, which also increases engine life;
|
•
|
galley refreshes with dry goods weight reduction;
|
•
|
Company optimized routes (flying the best wind routes to take advantage of tailwinds or to minimize headwinds);
|
•
|
improvements in flight planning algorithms to better match the Company's aircraft flight management system (and thereby enabling the Company to fly at the most efficient altitudes);
|
•
|
substitution of Pilot and Flight Attendant flight bags with lighter Electronic Flight Bag tablets; and
|
•
|
implementation of Real Time Descent Winds (automatic uplinking of up-to-date wind data to the aircraft allowing crews to time the descent to minimize thrust inputs).
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Employee Group
|
Approximate Number of Employees
|
Representatives
|
Status of Agreement
|
Southwest Pilots
|
7,900
|
Southwest Airlines Pilots’ Association (“SWAPA”)
|
Amendable September 2020
|
Southwest Flight Attendants
|
13,800
|
Transportation Workers of America, AFL-CIO, Local 556 (“TWU 556”)
|
Amendable November 2018
|
Southwest Ramp, Operations, Provisioning, Freight Agents
|
12,000
|
Transportation Workers of America, AFL-CIO, Local 555 (“TWU 555”)
|
Amendable February 2021
|
Southwest Customer Service Agents, Customer Representatives, and Source of Support Representatives
|
7,400
|
International Association of Machinists and Aerospace Workers, AFL-CIO (“IAM 142”)
|
Amendable December 2018
|
Southwest Material Specialists (formerly known as Stock Clerks)
|
300
|
International Brotherhood of Teamsters, Local 19 (“IBT 19”)
|
In negotiations
|
Southwest Mechanics
|
2,400
|
Aircraft Mechanics Fraternal Association (“AMFA”)
|
In negotiations
|
Southwest Aircraft Appearance Technicians
|
200
|
AMFA
|
Amendable November 2020
|
Southwest Facilities Maintenance Technicians
|
40
|
AMFA
|
In negotiations
|
Southwest Dispatchers
|
340
|
Transportation Workers of America, AFL-CIO, Local 550 (“TWU 550”)
|
Amendable June 2019
|
Southwest Flight Simulator Technicians
|
40
|
International Brotherhood of Teamsters (“IBT”)
|
Amendable April 2019
|
Southwest Flight Crew Training Instructors
|
90
|
Transportation Workers of America, AFL-CIO, Local 557 (“TWU 557”)
|
Amendable December 2019
|
Southwest Meteorologists
|
8
|
TWU 550
|
Amendable June 2019
|
•
|
increases in airport rates and charges;
|
•
|
limitations on airport gate capacity or use of other airport facilities such as the 2016 reallocation of slots at John Wayne Airport in Orange County, California, which caused the Company to reduce service at that airport;
|
•
|
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;
|
•
|
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;
|
•
|
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 (a)
|
|
Number
Leased
|
||||
737-300
|
|
137 or 143
|
|
22
|
|
|
87
|
|
(b)
|
57
|
|
|
30
|
|
737-700
|
|
143
|
|
13
|
|
|
494
|
|
|
397
|
|
|
97
|
|
737-800
|
|
175
|
|
2
|
|
|
142
|
|
|
135
|
|
|
7
|
|
Totals
|
|
|
|
12
|
|
|
723
|
|
|
589
|
|
|
134
|
|
(a)
|
As discussed further in Note
6
to the Consolidated Financial Statements,
202
of the Company's aircraft were pledged as collateral as of
December 31, 2016
, for secured borrowings and/or in the case that the Company has obligations related to its fuel derivative instruments with counterparties that exceed certain thresholds.
|
(b)
|
Of the total,
77
737-300 aircraft have 143 seats and
10
have 137 seats.
|
|
The Boeing Company
|
|
|
|||||||||||||||
|
-800 Firm Orders
|
-800 Options
|
|
-7
Firm Orders |
-8
Firm Orders |
|
-8
Options |
|
Additional -700s
|
|
Total
|
|||||||
2017
|
39
|
|
—
|
|
|
—
|
|
14
|
|
|
—
|
|
|
14
|
|
|
67
|
|
2018
|
21
|
|
9
|
|
|
—
|
|
13
|
|
|
—
|
|
|
4
|
|
|
47
|
|
2019
|
—
|
|
—
|
|
|
15
|
|
—
|
|
|
5
|
|
|
—
|
|
|
20
|
|
2020
|
—
|
|
—
|
|
|
14
|
|
—
|
|
|
8
|
|
|
—
|
|
|
22
|
|
2021
|
—
|
|
—
|
|
|
1
|
|
13
|
|
|
18
|
|
|
—
|
|
|
32
|
|
2022
|
—
|
|
—
|
|
|
—
|
|
15
|
|
|
19
|
|
|
—
|
|
|
34
|
|
2023
|
—
|
|
—
|
|
|
—
|
|
34
|
|
|
23
|
|
|
—
|
|
|
57
|
|
2024
|
—
|
|
—
|
|
|
—
|
|
41
|
|
|
23
|
|
|
—
|
|
|
64
|
|
2025
|
—
|
|
—
|
|
|
—
|
|
40
|
|
|
36
|
|
|
—
|
|
|
76
|
|
2026
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
2027
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|
60
|
|
9
|
|
(a)
|
30
|
|
170
|
|
(b)
|
191
|
|
|
18
|
|
(c)
|
478
|
|
Item 4.
|
Mine Safety Disclosures
|
Name
|
Position
|
Age
|
Gary C. Kelly
|
Chairman of the Board & Chief Executive Officer
|
61
|
Thomas M. Nealon
|
President
|
55
|
Michael G. Van de Ven
|
Chief Operating Officer
|
55
|
Robert E. Jordan
|
Executive Vice President & Chief Commercial Officer
|
56
|
Jeff Lamb
|
Executive Vice President Corporate Services
|
54
|
Tammy Romo
|
Executive Vice President & Chief Financial Officer
|
54
|
Gregory D. Wells
|
Executive Vice President Daily Operations
|
58
|
Mark R. Shaw
|
Senior Vice President, General Counsel, & Corporate Secretary
|
54
|
Period
|
|
Dividend
|
|
High
|
|
Low
|
||||||
2016
|
|
|
|
|
|
|
||||||
1st Quarter
|
|
$
|
0.07500
|
|
|
$
|
45.39
|
|
|
$
|
33.96
|
|
2nd Quarter
|
|
0.10000
|
|
|
48.00
|
|
|
36.48
|
|
|||
3rd Quarter
|
|
0.10000
|
|
|
45.00
|
|
|
35.42
|
|
|||
4th Quarter
|
|
0.10000
|
|
|
51.31
|
|
|
36.91
|
|
|||
2015
|
|
|
|
|
|
|
||||||
1st Quarter
|
|
$
|
0.06000
|
|
|
$
|
47.17
|
|
|
$
|
38.26
|
|
2nd Quarter
|
|
0.07500
|
|
|
44.19
|
|
|
33.02
|
|
|||
3rd Quarter
|
|
0.07500
|
|
|
40.87
|
|
|
31.36
|
|
|||
4th Quarter
|
|
0.07500
|
|
|
51.34
|
|
|
37.00
|
|
|
|
12/31/2011
|
|
12/31/2012
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
||||||||||||
Southwest Airlines Co.
|
|
$
|
100
|
|
|
$
|
120
|
|
|
$
|
222
|
|
|
$
|
502
|
|
|
$
|
514
|
|
|
$
|
600
|
|
S&P 500
|
|
$
|
100
|
|
|
$
|
116
|
|
|
$
|
153
|
|
|
$
|
177
|
|
|
$
|
176
|
|
|
$
|
197
|
|
NYSE ARCA Airline
|
|
$
|
100
|
|
|
$
|
138
|
|
|
$
|
218
|
|
|
$
|
327
|
|
|
$
|
277
|
|
|
$
|
356
|
|
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, 2016 through
October 31, 2016
|
|
1,709,877
|
|
|
$
|
—
|
|
(2
|
)
|
1,709,877
|
|
|
$
|
1,250,000,000
|
|
|
November 1, 2016 through
November 30, 2016
|
|
—
|
|
|
$
|
—
|
|
(3
|
)
|
—
|
|
|
$
|
950,000,000
|
|
|
December 1, 2016 through
December 31, 2016
|
|
4,723,420
|
|
|
$
|
—
|
|
(3
|
)
|
4,723,420
|
|
|
$
|
950,000,000
|
|
|
Total
|
|
6,433,297
|
|
|
|
|
6,433,297
|
|
|
|
|
(1)
|
On
May 18, 2016
, the Company’s Board of Directors authorized the repurchase of up to
$2.0 billion
of the Company’s common stock. 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 third quarter 2016 (the "Third Quarter 2016 ASR Program"), the Company paid
$250 million
and received an initial delivery of
4,956,384
shares during third quarter 2016, representing an estimated 75 percent of the shares to be purchased by the Company under the Third Quarter 2016 ASR Program based on a price of
$37.83
per share, which was the closing price of the Company’s common stock on the New York Stock Exchange on July 22, 2016. Final settlement of this Third Quarter 2016 ASR Program occurred in October 2016 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 2016. Upon settlement, the third party financial institution delivered
1,709,877
additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the
6,666,261
shares repurchased under the Third Quarter 2016 ASR Program, upon completion of the Third Quarter 2016 ASR Program in October 2016, was
$37.5023
.
|
(3)
|
Under an accelerated share repurchase program entered into by the Company with a third party financial institution in fourth quarter 2016 (the "Fourth Quarter 2016 ASR Program"), the Company paid $300 million in November 2016 and received an initial delivery of
4,723,420
shares during December 2016, representing an estimated 75 percent of the shares to be purchased by the Company under the Fourth Quarter 2016 ASR Program based on a volume-weighted average price of
$47.6350
per share of the Company’s common stock on the New York Stock Exchange during a calculation period between November 18, 2016 and December 8, 2016. The specific number of shares that the Company ultimately will repurchase under the Fourth Quarter 2016 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 February 2017. 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,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Financial Data (in millions, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating revenues
|
|
$
|
20,425
|
|
|
$
|
19,820
|
|
|
$
|
18,605
|
|
|
$
|
17,699
|
|
|
$
|
17,088
|
|
Operating expenses
|
|
16,665
|
|
|
15,704
|
|
|
16,380
|
|
|
16,421
|
|
|
16,465
|
|
|||||
Operating income
|
|
3,760
|
|
|
4,116
|
|
|
2,225
|
|
|
1,278
|
|
|
623
|
|
|||||
Other expenses (income) net
|
|
213
|
|
|
637
|
|
|
409
|
|
|
69
|
|
|
(62
|
)
|
|||||
Income before taxes
|
|
3,547
|
|
|
3,479
|
|
|
1,816
|
|
|
1,209
|
|
|
685
|
|
|||||
Provision for income taxes
|
|
1,303
|
|
|
1,298
|
|
|
680
|
|
|
455
|
|
|
264
|
|
|||||
Net income
|
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
$
|
1,136
|
|
|
$
|
754
|
|
|
$
|
421
|
|
Net income per share, basic
|
|
$
|
3.58
|
|
|
$
|
3.30
|
|
|
$
|
1.65
|
|
|
$
|
1.06
|
|
|
$
|
0.56
|
|
Net income per share, diluted
|
|
$
|
3.55
|
|
|
$
|
3.27
|
|
|
$
|
1.64
|
|
|
$
|
1.05
|
|
|
$
|
0.56
|
|
Cash dividends per common share
|
|
$
|
0.3750
|
|
|
$
|
0.2850
|
|
|
$
|
0.2200
|
|
|
$
|
0.1300
|
|
|
$
|
0.0345
|
|
Total assets at period-end (1)
|
|
$
|
23,286
|
|
|
$
|
21,312
|
|
|
$
|
19,723
|
|
|
$
|
19,177
|
|
|
$
|
18,350
|
|
Long-term obligations at period-end
|
|
$
|
2,821
|
|
|
$
|
2,541
|
|
|
$
|
2,434
|
|
|
$
|
2,191
|
|
|
$
|
2,883
|
|
Stockholders’ equity at period-end
|
|
$
|
8,441
|
|
|
$
|
7,358
|
|
|
$
|
6,775
|
|
|
$
|
7,336
|
|
|
$
|
6,992
|
|
Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue passengers carried
|
|
124,719,765
|
|
|
118,171,211
|
|
|
110,496,912
|
|
|
108,075,976
|
|
|
109,346,509
|
|
|||||
Enplaned passengers
|
|
151,740,357
|
|
|
144,574,882
|
|
|
135,767,188
|
|
|
133,155,030
|
|
|
133,978,100
|
|
|||||
Revenue passenger miles (RPMs) (000s) (2)
|
|
124,797,986
|
|
|
117,499,879
|
|
|
108,035,133
|
|
|
104,348,216
|
|
|
102,874,979
|
|
|||||
Available seat miles (ASMs) (000s) (3)
|
|
148,522,051
|
|
|
140,501,409
|
|
|
131,003,957
|
|
|
130,344,072
|
|
|
128,137,110
|
|
|||||
Load factor (4)
|
|
84.0
|
%
|
|
83.6
|
%
|
|
82.5
|
%
|
|
80.1
|
%
|
|
80.3
|
%
|
|||||
Average length of passenger haul (miles)
|
|
1,001
|
|
|
994
|
|
|
978
|
|
|
966
|
|
|
941
|
|
|||||
Average aircraft stage length (miles)
|
|
760
|
|
|
750
|
|
|
721
|
|
|
703
|
|
|
693
|
|
|||||
Trips flown
|
|
1,311,149
|
|
|
1,267,358
|
|
|
1,255,502
|
|
|
1,312,785
|
|
|
1,361,558
|
|
|||||
Seats flown (5)
|
|
193,167,695
|
|
|
184,955,094
|
|
|
179,733,055
|
|
|
183,563,527
|
|
|
184,208,891
|
|
|||||
Seats per trip (6)
|
|
147.33
|
|
|
145.94
|
|
|
143.16
|
|
|
139.83
|
|
|
135.92
|
|
|||||
Average passenger fare (11)
|
|
$
|
149.09
|
|
|
$
|
154.85
|
|
|
$
|
159.80
|
|
|
$
|
154.72
|
|
|
$
|
147.17
|
|
Passenger revenue yield per RPM (cents) (7)(11)
|
|
14.90
|
|
|
15.57
|
|
|
16.34
|
|
|
16.02
|
|
|
15.64
|
|
|||||
Operating revenue per ASM (cents) (8)
|
|
13.75
|
|
|
13.98
|
|
|
14.20
|
|
|
13.58
|
|
|
13.34
|
|
|||||
Passenger revenue per ASM (cents) (9)(11)
|
|
12.52
|
|
|
13.02
|
|
|
13.48
|
|
|
12.83
|
|
|
12.56
|
|
|||||
Operating expenses per ASM (cents) (10)
|
|
11.22
|
|
|
11.18
|
|
|
12.50
|
|
|
12.60
|
|
|
12.85
|
|
|||||
Operating expenses per ASM, excluding fuel (cents)
|
|
8.76
|
|
|
8.60
|
|
|
8.46
|
|
|
8.18
|
|
|
8.07
|
|
|||||
Operating expenses per ASM, excluding fuel and profitsharing (cents)
|
|
8.37
|
|
|
8.16
|
|
|
8.19
|
|
|
8.01
|
|
|
7.98
|
|
|||||
Fuel costs per gallon, including fuel tax
|
|
$
|
1.82
|
|
|
$
|
1.90
|
|
|
$
|
2.93
|
|
|
$
|
3.16
|
|
|
$
|
3.30
|
|
Fuel costs per gallon, including fuel tax, economic
|
|
$
|
1.92
|
|
|
$
|
2.07
|
|
|
$
|
2.92
|
|
|
$
|
3.12
|
|
|
$
|
3.28
|
|
Fuel consumed, in gallons (millions)
|
|
1,996
|
|
|
1,901
|
|
|
1,801
|
|
|
1,818
|
|
|
1,847
|
|
|||||
Active fulltime equivalent Employees
|
|
53,536
|
|
|
49,583
|
|
|
46,278
|
|
|
44,381
|
|
|
45,861
|
|
|||||
Aircraft at end of period
|
|
723
|
|
|
704
|
|
|
665
|
|
|
681
|
|
|
694
|
|
(1)
|
Historical amounts have been restated to align with current presentation.
|
(2)
|
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.
|
(3)
|
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.
|
(4)
|
Revenue passenger miles divided by available seat miles.
|
(5)
|
Seats flown is calculated using total number of seats available by aircraft type multiplied by the total trips flown by the same aircraft type during a particular period.
|
(6)
|
Seats per trip is calculated using seats flown divided by trips flown. Also referred to as “gauge.”
|
(7)
|
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.
|
(8)
|
Calculated as operating revenues divided by available seat miles. Also referred to as "operating unit revenues" or "RASM," this is a measure of operating revenue production based on the total available seat miles flown during a particular period. Year ended 2015 RASM excludes a $172 million one-time special revenue adjustment. Including the special revenue adjustment, RASM would have been 14.11 cents for the year ended 2015. Additional information regarding this special item is provided in the Note Regarding Use of Non-GAAP Financial Measures and a reconciliation of revenue excluding special items related to accounting changes in the accompanying pages.
|
(9)
|
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.
|
(10)
|
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.
|
(11)
|
Refer to Note 1 to the Consolidated Financial Statements for additional information regarding the impact from the Company's July 2015 amended co-branded credit card agreement with Chase Bank USA, N.A.
|
|
|
Year ended
|
|
|
||||||
(in millions, except per share amounts)
|
|
December 31,
|
|
|
||||||
GAAP
|
|
2016
|
|
2015
|
|
Percent Change
|
||||
Operating income
|
|
$
|
3,760
|
|
|
$
|
4,116
|
|
|
(8.6)
|
Net income
|
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
2.9
|
Net income per share, diluted
|
|
$
|
3.55
|
|
|
$
|
3.27
|
|
|
8.6
|
|
|
|
|
|
|
|
|
|
||
Non-GAAP
|
|
|
|
|
|
|
||||
Operating income
|
|
$
|
3,957
|
|
|
$
|
3,957
|
|
|
—
|
Net income
|
|
$
|
2,370
|
|
|
$
|
2,355
|
|
|
0.6
|
Net income per share, diluted
|
|
$
|
3.75
|
|
|
$
|
3.52
|
|
|
6.5
|
•
|
The Company's Flight Crew Training Instructors, represented by Transport Workers Union ("TWU") Local 557, ratified a new collective-bargaining agreement with the Company. The newly ratified contract becomes amendable in December 2019.
|
•
|
The Company's Ramp, Operations, Provisioning, and Freight Agents, represented by TWU Local 555, ratified a new collective-bargaining agreement with the Company. The newly ratified contract becomes amendable in February 2021.
|
•
|
The Company's Pilots, represented by the Southwest Airlines Pilots' Association, ratified a new collective-bargaining agreement. The newly ratified contract becomes amendable in September 2020.
|
•
|
The Company's Flight Attendants, represented by TWU Local 556, ratified a new collective-bargaining agreement with the Company. The newly ratified contract becomes amendable in November 2018.
|
•
|
The Company's Aircraft Appearance Technicians, represented by the Aircraft Mechanics Fraternal Association ("AMFA"), ratified a new collective-bargaining agreement with the Company. The newly ratified contract becomes amendable in November 2020.
|
•
|
The Company's Facilities Maintenance Technicians, represented by AMFA, reached a tentative collective-bargaining agreement with the Company, which was announced in October 2016. The Facilities Maintenance Technicians failed to ratify this agreement, as announced by the Company on December 29, 2016, and the parties will continue negotiations.
|
|
Year ended December 31,
|
|
Per ASM
|
|
Percent
|
|||||||||
(in cents, except for percentages)
|
2016
|
|
2015
|
|
change
|
|
change
|
|||||||
Salaries, wages, and benefits
|
|
4.57
|
¢
|
|
|
4.54
|
¢
|
|
|
0.03
|
¢
|
|
0.7
|
%
|
Fuel and oil
|
2.46
|
|
|
2.58
|
|
|
(0.12
|
)
|
|
(4.7
|
)
|
|||
Maintenance materials and repairs
|
0.70
|
|
|
0.72
|
|
|
(0.02
|
)
|
|
(2.8
|
)
|
|||
Aircraft rentals
|
0.15
|
|
|
0.17
|
|
|
(0.02
|
)
|
|
(11.8
|
)
|
|||
Landing fees and other rentals
|
0.82
|
|
|
0.83
|
|
|
(0.01
|
)
|
|
(1.2
|
)
|
|||
Depreciation and amortization
|
0.82
|
|
|
0.72
|
|
|
0.10
|
|
|
13.9
|
|
|||
Acquisition and integration
|
—
|
|
|
0.03
|
|
|
(0.03
|
)
|
|
n.m.
|
|
|||
Other operating expenses
|
1.70
|
|
|
1.59
|
|
|
0.11
|
|
|
6.9
|
|
|||
Total
|
|
11.22
|
¢
|
|
|
11.18
|
¢
|
|
|
0.04
|
¢
|
|
0.4
|
%
|
Employee Group
|
Approximate Number of Employees
|
Representatives
|
Amendable Date
|
Southwest Material Specialists (formerly known as Stock Clerks)
|
300
|
International Brotherhood of Teamsters, Local 19 (“IBT 19”)
|
August 2013
|
Southwest Mechanics
|
2,400
|
Aircraft Mechanics Fraternal Association (“AMFA”)
|
August 2012
|
Southwest Facilities Maintenance Technicians
|
40
|
AMFA
|
N/A
|
|
|
Maximum percent of estimated fuel consumption covered by
|
||||
|
|
fuel derivative contracts at varying West Texas Intermediate/Brent Crude Oil,
|
||||
Period
|
|
Heating Oil, and Gulf Coast Jet Fuel-equivalent price levels (1)
|
||||
2017
|
|
63%
|
||||
2018
|
|
57%
|
||||
2019
|
|
15%
|
Year
|
|
Fair value (liability) of fuel
derivative contracts
at December 31, 2016
|
|
Amount of gains (losses) deferred
in AOCI at December 31,
2016 (net of tax)
|
||||
2017
|
|
$
|
(452
|
)
|
|
$
|
(302
|
)
|
2018
|
|
105
|
|
|
(15
|
)
|
||
2019
|
|
21
|
|
|
3
|
|
||
Total
|
|
$
|
(326
|
)
|
|
$
|
(314
|
)
|
|
Estimated economic jet fuel price per gallon,
including taxes |
|
Average Brent Crude Oil
price per barrel
|
1Q 2017 (2)
|
Full Year 2017 (2)
|
$35
|
$1.50 - $1.55
|
$1.50 - $1.55
|
$45
|
$1.75 - $1.80
|
$1.75 - $1.80
|
Current Market (1)
|
$1.95 - $2.00
|
$2.00 - $2.05
|
$70
|
$2.20 - $2.25
|
$2.25 - $2.30
|
$80
|
$2.30 - $2.35
|
$2.35 - $2.40
|
Estimated premium costs (3)
|
$30 - $35 million
|
$135 - $140 million
|
|
Year ended December 31,
|
||||||
(in millions)
|
2016
|
|
2015
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
9
|
|
|
$
|
373
|
|
Ineffectiveness from fuel hedges settling in future periods
|
(11
|
)
|
|
(9
|
)
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
5
|
|
|
72
|
|
||
Premium cost of fuel contracts
|
153
|
|
|
124
|
|
||
Other
|
6
|
|
|
(4
|
)
|
||
|
$
|
162
|
|
|
$
|
556
|
|
|
Year ended December 31,
|
||||||
(in millions)
|
2015
|
|
2014
|
||||
Mark-to-market impact from fuel contracts settling in future periods
|
$
|
373
|
|
|
$
|
251
|
|
Ineffectiveness from fuel hedges settling in future periods
|
(9
|
)
|
|
5
|
|
||
Realized ineffectiveness and mark-to-market (gains) or losses
|
72
|
|
|
(4
|
)
|
||
Premium cost of fuel contracts
|
124
|
|
|
62
|
|
||
Other
|
(4
|
)
|
|
(5
|
)
|
||
|
$
|
556
|
|
|
$
|
309
|
|
|
Year ended December 31,
|
|
Percent
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Total operating revenues, as reported
|
$
|
20,425
|
|
|
$
|
19,820
|
|
|
|
|
Deduct: Special revenue adjustment
|
—
|
|
|
(172
|
)
|
|
|
|||
Operating revenues, non-GAAP
|
$
|
20,425
|
|
|
$
|
19,648
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|||||
Fuel and oil expense, unhedged
|
$
|
2,827
|
|
|
$
|
3,362
|
|
|
|
|
Add: Fuel hedge (gains) losses included in Fuel and oil expense
|
820
|
|
|
254
|
|
|
|
|||
Fuel and oil expense, as reported
|
$
|
3,647
|
|
|
$
|
3,616
|
|
|
|
|
Add: Net impact from fuel contracts
|
202
|
|
|
323
|
|
|
|
|||
Fuel and oil expense, non-GAAP (economic)
|
$
|
3,849
|
|
|
$
|
3,939
|
|
|
(2.3
|
)%
|
|
|
|
|
|
|
|||||
Total operating expenses, as reported
|
$
|
16,665
|
|
|
$
|
15,704
|
|
|
|
|
Deduct: Union contract bonuses
|
(356
|
)
|
|
(334
|
)
|
|
|
|||
Add: Reclassification between Fuel and oil and Other (gains) losses, net,
associated with current period settled contracts
|
5
|
|
|
72
|
|
|
|
|||
Add: Contracts settling in the current period, but for which gains and/or (losses)
have been recognized in a prior period*
|
197
|
|
|
251
|
|
|
|
|||
Deduct: Acquisition and integration costs
|
—
|
|
|
(39
|
)
|
|
|
|||
Add: Litigation settlement
|
—
|
|
|
37
|
|
|
|
|||
Deduct: Asset impairment
|
(21
|
)
|
|
—
|
|
|
|
|||
Deduct: Lease termination expense
|
(22
|
)
|
|
—
|
|
|
|
|||
Total operating expenses, non-GAAP
|
$
|
16,468
|
|
|
$
|
15,691
|
|
|
5.0
|
%
|
|
|
|
|
|
|
|||||
Operating income, as reported
|
$
|
3,760
|
|
|
$
|
4,116
|
|
|
|
|
Deduct: Special revenue adjustment
|
—
|
|
|
(172
|
)
|
|
|
|||
Add: Union contract bonuses
|
356
|
|
|
334
|
|
|
|
|||
Deduct: Reclassification between Fuel and oil and Other (gains) losses, net,
associated with current period settled contracts
|
(5
|
)
|
|
(72
|
)
|
|
|
|||
Deduct: Contracts settling in the current period, but for which gains and/or (losses)
have been recognized in a prior period*
|
(197
|
)
|
|
(251
|
)
|
|
|
|||
Add: Acquisition and integration costs
|
—
|
|
|
39
|
|
|
|
|||
Deduct: Litigation settlement
|
—
|
|
|
(37
|
)
|
|
|
|||
Add: Asset impairment
|
21
|
|
|
—
|
|
|
|
|||
Add: Lease termination expense
|
22
|
|
|
—
|
|
|
|
|||
Operating income, non-GAAP
|
$
|
3,957
|
|
|
$
|
3,957
|
|
|
—
|
%
|
|
|
|
|
|
|
|||||
Net income, as reported
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
|
|
Deduct: Special revenue adjustment
|
—
|
|
|
(172
|
)
|
|
|
|||
Add: Union contract bonuses
|
356
|
|
|
334
|
|
|
|
|||
Add: Mark-to-market impact from fuel contracts settling in future periods
|
9
|
|
|
373
|
|
|
|
|||
Deduct: Ineffectiveness from fuel hedges settling in future periods
|
(11
|
)
|
|
(9
|
)
|
|
|
|||
Deduct: Other net impact of fuel contracts settling in the current or a prior period
(excluding reclassifications)
|
(197
|
)
|
|
(251
|
)
|
|
|
|||
Add: Acquisition and integration costs
|
—
|
|
|
39
|
|
|
|
|||
Deduct: Litigation settlement
|
—
|
|
|
(37
|
)
|
|
|
|||
Add: Asset impairment
|
21
|
|
|
—
|
|
|
|
|||
Add: Lease termination expense
|
22
|
|
|
—
|
|
|
|
|||
Deduct: Net income tax impact from fuel and special items (1)
|
(74
|
)
|
|
(103
|
)
|
|
|
|||
Net income, non-GAAP
|
$
|
2,370
|
|
|
$
|
2,355
|
|
|
0.6
|
%
|
|
Year ended December 31,
|
|
Percent
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Net income per share, diluted, as reported
|
$
|
3.55
|
|
|
$
|
3.27
|
|
|
|
|
Add (Deduct): Net impact to net income above from fuel contracts divided by dilutive shares
|
(0.31
|
)
|
|
0.17
|
|
|
|
|||
Add: Impact of special items
|
0.63
|
|
|
0.24
|
|
|
|
|||
Deduct: Net income tax impact of fuel and special items (1)
|
(0.12
|
)
|
|
(0.16
|
)
|
|
|
|||
Net income per share, diluted, non-GAAP
|
$
|
3.75
|
|
|
$
|
3.52
|
|
|
6.5
|
%
|
|
|
|
|
|
|
|||||
Operating expenses per ASM (cents)
|
|
11.22
|
¢
|
|
|
11.18
|
¢
|
|
|
|
Deduct: Fuel expense divided by ASMs
|
(2.46
|
)
|
|
(2.58
|
)
|
|
|
|||
Deduct: Impact of special items
|
(0.27
|
)
|
|
(0.24
|
)
|
|
|
|||
Operating expenses per ASM, excluding Fuel and oil and special items (cents), non-GAAP
|
|
8.49
|
¢
|
|
|
8.36
|
¢
|
|
1.6
|
%
|
|
Year Ended
|
|
Year Ended
|
|
Year Ended
|
||||||
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||
Operating income, as reported
|
$
|
3,760
|
|
|
$
|
4,116
|
|
|
$
|
2,225
|
|
Special revenue adjustment (1)
|
—
|
|
|
(172
|
)
|
|
—
|
|
|||
Union contract bonuses
|
356
|
|
|
334
|
|
|
9
|
|
|||
Net impact from fuel contracts
|
(202
|
)
|
|
(323
|
)
|
|
28
|
|
|||
Acquisition and integration costs
|
—
|
|
|
39
|
|
|
126
|
|
|||
Litigation settlement
|
—
|
|
|
(37
|
)
|
|
—
|
|
|||
Asset impairment
|
21
|
|
|
—
|
|
|
—
|
|
|||
Lease termination expense
|
22
|
|
|
—
|
|
|
—
|
|
|||
Operating income, non-GAAP
|
3,957
|
|
|
3,957
|
|
|
2,388
|
|
|||
Net adjustment for aircraft leases (2)
|
111
|
|
|
114
|
|
|
133
|
|
|||
Adjustment for fuel hedge accounting
|
(152
|
)
|
|
(124
|
)
|
|
(62
|
)
|
|||
Adjusted Operating income, non-GAAP
|
$
|
3,916
|
|
|
$
|
3,947
|
|
|
$
|
2,459
|
|
|
|
|
|
|
|
||||||
Average invested capital (3)
|
$
|
12,152
|
|
|
$
|
11,037
|
|
|
$
|
11,470
|
|
Equity adjustment for hedge accounting
|
886
|
|
|
1,027
|
|
|
104
|
|
|||
Adjusted average invested capital
|
$
|
13,038
|
|
|
$
|
12,064
|
|
|
$
|
11,574
|
|
|
|
|
|
|
|
||||||
ROIC, pre-tax
|
30.0
|
%
|
|
32.7
|
%
|
|
21.2
|
%
|
1.
|
A one-time $172 million Special revenue adjustment in July 2015 as a result of the Agreement with Chase and the resulting required change in accounting methodology. This increase to revenue represented a nonrecurring required acceleration of revenues associated with the adoption of Accounting Standards Update 2009-13;
|
2.
|
Union contract bonuses recorded for certain workgroups. As the bonuses would only be paid at ratification of the associated tentative agreement and would not represent an ongoing expense to the Company, management believes its results for the associated periods are more usefully compared if the impacts of ratification bonus amounts are excluded from results. Generally, union contract agreements cover a specified three- to five- year period, although such contracts officially never expire, and the agreed upon terms remain in place until a revised agreement is reached, which can be several years following the amendable date;
|
3.
|
Expenses associated with the Company’s acquisition and integration of AirTran. Such expenses were primarily incurred during the acquisition and integration period of the two companies from 2011 through 2015 as a result
|
4.
|
A gain resulting from a litigation settlement received in January 2015. This cash settlement meaningfully lowered Other operating expenses during the applicable period and the Company does not expect a similar impact on its cost structure in the future;
|
5.
|
A noncash impairment charge related to leased slots at Newark Liberty International Airport as a result of the FAA announcement in April 2016 that this airport was being changed to a Level 2 schedule-facilitated airport from its previous designation as Level 3; and
|
6.
|
Lease termination costs recorded during 2016 as a result of the Company acquiring
five
of its Boeing 737-300 aircraft off operating leases, as part of the Company’s strategic effort to phase out its Classic aircraft from operations by the end of third quarter 2017 in the most economically advantageous manner possible. The Company had not budgeted for these early lease termination costs, as they were subject to negotiations being concluded with the third party lessors. The Company recorded the fair value of the aircraft, as well as any associated remaining obligations to the balance sheet as debt.
|
Share repurchases
|
|
Shares received
|
|
Cash paid
|
||
May 2016 Accelerated Share Repurchase Program
|
|
12,268,280
|
|
$
|
500,000,000
|
|
Third Quarter 2016 Accelerated Share Repurchase Program
|
|
6,666,261
|
|
250,000,000
|
|
|
Fourth Quarter 2016 Accelerated Share Repurchase Program
|
|
4,723,420
|
(1)
|
300,000,000
|
|
|
Total
|
|
23,657,961
|
|
$
|
1,050,000,000
|
|
|
|
Obligations by period (in millions)
|
||||||||||||||||||
Contractual obligations
|
|
2017
|
|
2018 - 2019
|
|
2020 - 2021
|
|
Thereafter
|
|
Total
|
||||||||||
Long-term debt (1)
|
|
$
|
497
|
|
|
$
|
777
|
|
|
$
|
823
|
|
|
$
|
611
|
|
|
$
|
2,708
|
|
Interest commitments - fixed (2)
|
|
79
|
|
|
105
|
|
|
58
|
|
|
89
|
|
|
331
|
|
|||||
Interest commitments - floating (3)
|
|
26
|
|
|
63
|
|
|
30
|
|
|
18
|
|
|
137
|
|
|||||
Operating lease commitments (4)
|
|
592
|
|
|
904
|
|
|
542
|
|
|
1,297
|
|
|
3,335
|
|
|||||
Capital lease commitments (5)
|
|
80
|
|
|
158
|
|
|
152
|
|
|
353
|
|
|
743
|
|
|||||
Aircraft purchase commitments (6)
|
|
1,127
|
|
|
1,507
|
|
|
1,773
|
|
|
5,119
|
|
|
9,526
|
|
|||||
Other commitments
|
|
172
|
|
|
186
|
|
|
79
|
|
|
7
|
|
|
444
|
|
|||||
Total contractual obligations
|
|
$
|
2,573
|
|
|
$
|
3,700
|
|
|
$
|
3,457
|
|
|
$
|
7,494
|
|
|
$
|
17,224
|
|
(1)
|
Includes principal only. See Note
6
to the Consolidated Financial Statements.
|
(2)
|
Related to fixed-rate debt (either at issuance or through swaps) 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, 2016
, and can be subject to significant fluctuation.
|
(4)
|
Includes Love Field Modernization Program commitment amounts, and includes the impact of the B717 lease/sublease transaction entered into in
2012
. See Note
7
to the Consolidated Financial Statements.
|
(5)
|
Includes principal and interest on capital leases.
|
(6)
|
Firm orders from Boeing.
|
|
|
Estimated useful life
|
|
Estimated
residual value
|
Airframes and engines
|
|
23 to 25 years
|
|
2 to 20 percent
|
Aircraft parts
|
|
Fleet life
|
|
4 percent
|
Assets constructed for others
|
|
25 to 30 years
|
|
17 to 25 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
|
|
$
|
106
|
|
|
6.315
|
%
|
|
5/6/2019
|
|
14 specified Boeing 737-700 aircraft
|
Term Loan Agreement
|
|
28
|
|
|
4.84
|
%
|
|
7/1/2019
|
|
4 specified Boeing 737-700 aircraft
|
|
Term Loan Agreement
|
|
284
|
|
|
5.223
|
%
|
|
5/9/2020
|
|
21 specified Boeing 737-700 aircraft
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,680
|
|
|
$
|
1,583
|
|
Short-term investments
|
1,625
|
|
|
1,468
|
|
||
Accounts and other receivables
|
546
|
|
|
474
|
|
||
Inventories of parts and supplies, at cost
|
337
|
|
|
311
|
|
||
Prepaid expenses and other current assets
|
310
|
|
|
188
|
|
||
Total current assets
|
4,498
|
|
|
4,024
|
|
||
|
|
|
|
||||
Property and equipment, at cost:
|
|
|
|
|
|
||
Flight equipment
|
20,275
|
|
|
19,462
|
|
||
Ground property and equipment
|
3,779
|
|
|
3,219
|
|
||
Deposits on flight equipment purchase contracts
|
1,190
|
|
|
1,089
|
|
||
Assets constructed for others
|
1,220
|
|
|
915
|
|
||
|
26,464
|
|
|
24,685
|
|
||
Less allowance for depreciation and amortization
|
9,420
|
|
|
9,084
|
|
||
|
17,044
|
|
|
15,601
|
|
||
Goodwill
|
970
|
|
|
970
|
|
||
Other assets
|
774
|
|
|
717
|
|
||
|
$
|
23,286
|
|
|
$
|
21,312
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
1,178
|
|
|
$
|
1,188
|
|
Accrued liabilities
|
1,985
|
|
|
2,591
|
|
||
Air traffic liability
|
3,115
|
|
|
2,990
|
|
||
Current maturities of long-term debt
|
566
|
|
|
637
|
|
||
Total current liabilities
|
6,844
|
|
|
7,406
|
|
||
|
|
|
|
||||
Long-term debt less current maturities
|
2,821
|
|
|
2,541
|
|
||
Deferred income taxes
|
3,374
|
|
|
2,490
|
|
||
Construction obligation
|
1,078
|
|
|
757
|
|
||
Other noncurrent liabilities
|
728
|
|
|
760
|
|
||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock, $1.00 par value: 2,000,000,000 shares authorized;
807,611,634 shares issued in 2016 and 2015
|
808
|
|
|
808
|
|
||
Capital in excess of par value
|
1,410
|
|
|
1,374
|
|
||
Retained earnings
|
11,418
|
|
|
9,409
|
|
||
Accumulated other comprehensive loss
|
(323
|
)
|
|
(1,051
|
)
|
||
Treasury stock, at cost: 192,450,855 and 160,010,017 shares
in 2016 and 2015 respectively
|
(4,872
|
)
|
|
(3,182
|
)
|
||
Total stockholders' equity
|
8,441
|
|
|
7,358
|
|
||
|
$
|
23,286
|
|
|
$
|
21,312
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
OPERATING REVENUES:
|
|
|
|
|
|
||||||
Passenger
|
$
|
18,594
|
|
|
$
|
18,299
|
|
|
$
|
17,658
|
|
Freight
|
171
|
|
|
179
|
|
|
175
|
|
|||
Special revenue adjustment
|
—
|
|
|
172
|
|
|
—
|
|
|||
Other
|
1,660
|
|
|
1,170
|
|
|
772
|
|
|||
Total operating revenues
|
20,425
|
|
|
19,820
|
|
|
18,605
|
|
|||
|
|
|
|
|
|
||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
||||
Salaries, wages, and benefits
|
6,798
|
|
|
6,383
|
|
|
5,434
|
|
|||
Fuel and oil
|
3,647
|
|
|
3,616
|
|
|
5,293
|
|
|||
Maintenance materials and repairs
|
1,045
|
|
|
1,005
|
|
|
978
|
|
|||
Aircraft rentals
|
229
|
|
|
238
|
|
|
295
|
|
|||
Landing fees and other rentals
|
1,211
|
|
|
1,166
|
|
|
1,111
|
|
|||
Depreciation and amortization
|
1,221
|
|
|
1,015
|
|
|
938
|
|
|||
Acquisition and integration
|
—
|
|
|
39
|
|
|
126
|
|
|||
Other operating expenses
|
2,514
|
|
|
2,242
|
|
|
2,205
|
|
|||
Total operating expenses
|
16,665
|
|
|
15,704
|
|
|
16,380
|
|
|||
|
|
|
|
|
|
||||||
OPERATING INCOME
|
3,760
|
|
|
4,116
|
|
|
2,225
|
|
|||
|
|
|
|
|
|
||||||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
||||
Interest expense
|
122
|
|
|
121
|
|
|
130
|
|
|||
Capitalized interest
|
(47
|
)
|
|
(31
|
)
|
|
(23
|
)
|
|||
Interest income
|
(24
|
)
|
|
(9
|
)
|
|
(7
|
)
|
|||
Other (gains) losses, net
|
162
|
|
|
556
|
|
|
309
|
|
|||
Total other expenses (income)
|
213
|
|
|
637
|
|
|
409
|
|
|||
|
|
|
|
|
|
||||||
INCOME BEFORE INCOME TAXES
|
3,547
|
|
|
3,479
|
|
|
1,816
|
|
|||
PROVISION FOR INCOME TAXES
|
1,303
|
|
|
1,298
|
|
|
680
|
|
|||
NET INCOME
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
$
|
1,136
|
|
NET INCOME PER SHARE, BASIC
|
$
|
3.58
|
|
|
$
|
3.30
|
|
|
$
|
1.65
|
|
NET INCOME PER SHARE, DILUTED
|
$
|
3.55
|
|
|
$
|
3.27
|
|
|
$
|
1.64
|
|
Cash dividends declared per common share
|
$
|
.3750
|
|
|
$
|
.2850
|
|
|
$
|
.2200
|
|
|
|
Year ended December 31,
|
||||||||||
|
|
2016
|
|
2015
|
|
2014
|
||||||
NET INCOME
|
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
$
|
1,136
|
|
Unrealized gain (loss) on fuel derivative instruments, net of
deferred taxes of $432, ($181), and ($430)
|
|
735
|
|
|
(308
|
)
|
|
(727
|
)
|
|||
Unrealized gain on interest rate derivative instruments, net of
deferred taxes of $5, $6, and $5
|
|
7
|
|
|
9
|
|
|
8
|
|
|||
Unrealized loss on defined benefit plan items, net of deferred taxes
of ($13), ($7), and ($8)
|
|
(23
|
)
|
|
(12
|
)
|
|
(16
|
)
|
|||
Other, net of deferred taxes of $5, $-, and $-
|
|
9
|
|
|
(2
|
)
|
|
—
|
|
|||
OTHER COMPREHENSIVE INCOME (LOSS)
|
|
$
|
728
|
|
|
$
|
(313
|
)
|
|
$
|
(735
|
)
|
COMPREHENSIVE INCOME
|
|
$
|
2,972
|
|
|
$
|
1,868
|
|
|
$
|
401
|
|
|
|
Year ended December 31, 2016, 2015, and 2014
|
||||||||||||||||||||||
|
|
Common
Stock
|
|
Capital in
excess of
par value
|
|
Retained
earnings
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Treasury
stock
|
|
Total
|
||||||||||||
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
|
|
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,180
|
)
|
|
(1,180
|
)
|
||||||
Issuance of common and treasury stock pursuant to Employee stock plans
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
30
|
|
||||||
Net tax benefit (expense) of options exercised
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||||
Share-based compensation
|
|
—
|
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||||
Cash dividends, $.2850 per share
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
|
—
|
|
|
—
|
|
|
(188
|
)
|
||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
2,181
|
|
|
(313
|
)
|
|
—
|
|
|
1,868
|
|
||||||
Balance at December 31, 2015
|
|
$
|
808
|
|
|
$
|
1,374
|
|
|
$
|
9,409
|
|
|
$
|
(1,051
|
)
|
|
$
|
(3,182
|
)
|
|
$
|
7,358
|
|
Repurchase of common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,750
|
)
|
|
(1,750
|
)
|
||||||
Issuance of common and treasury stock pursuant to Employee stock plans
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
20
|
|
||||||
Conversion of 5.25% senior notes to common stock
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
48
|
|
|
43
|
|
||||||
Share-based compensation
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||
Cash dividends, $.3750 per share
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
|
—
|
|
|
—
|
|
|
(235
|
)
|
||||||
Comprehensive income
|
|
—
|
|
|
—
|
|
|
2,244
|
|
|
728
|
|
|
—
|
|
|
2,972
|
|
||||||
Balance at December 31, 2016
|
|
$
|
808
|
|
|
$
|
1,410
|
|
|
$
|
11,418
|
|
|
$
|
(323
|
)
|
|
$
|
(4,872
|
)
|
|
$
|
8,441
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
$
|
1,136
|
|
Adjustments to reconcile net income to cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
1,221
|
|
|
1,015
|
|
|
938
|
|
|||
Loss on asset impairment
|
21
|
|
|
—
|
|
|
—
|
|
|||
Unrealized/realized (gain) loss on fuel derivative instruments
|
(200
|
)
|
|
113
|
|
|
279
|
|
|||
Deferred income taxes
|
455
|
|
|
(109
|
)
|
|
501
|
|
|||
Changes in certain assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts and other receivables
|
(50
|
)
|
|
(88
|
)
|
|
54
|
|
|||
Other assets
|
(119
|
)
|
|
103
|
|
|
142
|
|
|||
Accounts payable and accrued liabilities
|
226
|
|
|
961
|
|
|
36
|
|
|||
Air traffic liability
|
125
|
|
|
94
|
|
|
326
|
|
|||
Cash collateral received from (provided to) derivative counterparties
|
535
|
|
|
(570
|
)
|
|
(233
|
)
|
|||
Other, net
|
(165
|
)
|
|
(462
|
)
|
|
(277
|
)
|
|||
Net cash provided by operating activities
|
4,293
|
|
|
3,238
|
|
|
2,902
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Capital expenditures
|
(2,038
|
)
|
|
(2,041
|
)
|
|
(1,748
|
)
|
|||
Assets constructed for others
|
(109
|
)
|
|
(102
|
)
|
|
(80
|
)
|
|||
Purchases of short-term investments
|
(2,388
|
)
|
|
(1,986
|
)
|
|
(3,080
|
)
|
|||
Proceeds from sales of short-term and other investments
|
2,263
|
|
|
2,223
|
|
|
3,185
|
|
|||
Other, net
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
|||
Net cash used in investing activities
|
(2,272
|
)
|
|
(1,913
|
)
|
|
(1,727
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds from issuance of long-term debt
|
515
|
|
|
500
|
|
|
300
|
|
|||
Proceeds from Employee stock plans
|
29
|
|
|
46
|
|
|
110
|
|
|||
Reimbursement for assets constructed for others
|
107
|
|
|
24
|
|
|
27
|
|
|||
Proceeds from termination of interest rate derivative instrument
|
—
|
|
|
12
|
|
|
—
|
|
|||
Payments of long-term debt and capital lease obligations
|
(523
|
)
|
|
(213
|
)
|
|
(561
|
)
|
|||
Payments of convertible debt
|
(68
|
)
|
|
—
|
|
|
—
|
|
|||
Payments of cash dividends
|
(222
|
)
|
|
(180
|
)
|
|
(139
|
)
|
|||
Repayment of construction obligation
|
(9
|
)
|
|
(10
|
)
|
|
(11
|
)
|
|||
Repurchase of common stock
|
(1,750
|
)
|
|
(1,180
|
)
|
|
(955
|
)
|
|||
Other, net
|
(3
|
)
|
|
(23
|
)
|
|
(19
|
)
|
|||
Net cash used in financing activities
|
(1,924
|
)
|
|
(1,024
|
)
|
|
(1,248
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
97
|
|
|
301
|
|
|
(73
|
)
|
|||
|
|
|
|
|
|
||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
1,583
|
|
|
1,282
|
|
|
1,355
|
|
|||
|
|
|
|
|
|
||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
1,680
|
|
|
$
|
1,583
|
|
|
$
|
1,282
|
|
|
|
|
|
|
|
||||||
CASH PAYMENTS FOR:
|
|
|
|
|
|
||||||
Interest, net of amount capitalized
|
$
|
100
|
|
|
$
|
105
|
|
|
$
|
128
|
|
Income taxes
|
$
|
902
|
|
|
$
|
1,440
|
|
|
$
|
155
|
|
|
|
|
|
|
|
||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS:
|
|
|
|
|
|
||||||
Flight equipment acquired through the assumption of debt
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Flight equipment under capital leases
|
$
|
307
|
|
|
$
|
193
|
|
|
$
|
153
|
|
Assets constructed for others
|
$
|
196
|
|
|
$
|
192
|
|
|
$
|
88
|
|
(in millions, except per share amounts)
|
Year ended December 31, 2016
|
||
Depreciation and amortization expense
|
$
|
123
|
|
Net income *
|
$
|
(66
|
)
|
Net income per basic share
|
$
|
(0.11
|
)
|
Net income per diluted share
|
$
|
(0.10
|
)
|
|
|
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
|||||||||||||
(in millions)
|
Weighted-average useful life (in years)
|
|
Gross carrying
amount
|
|
Accumulated
amortization
|
|
Gross carrying amount
|
|
Accumulated Amortization
|
|||||||||
Customer relationships/marketing agreements
|
9
|
|
|
$
|
38
|
|
|
$
|
32
|
|
|
$
|
38
|
|
|
$
|
30
|
|
Trademarks/trade names
|
6
|
|
|
36
|
|
|
36
|
|
|
36
|
|
|
34
|
|
||||
Owned domestic slots (a)
|
Indefinite
|
|
|
295
|
|
|
—
|
|
|
303
|
|
|
n/a
|
|
||||
Leased domestic slots (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
3
|
|
||||
Gate leasehold rights (b)
|
15
|
|
|
180
|
|
|
55
|
|
|
180
|
|
|
43
|
|
||||
Total
|
13
|
|
|
$
|
549
|
|
|
$
|
123
|
|
|
$
|
574
|
|
|
$
|
110
|
|
(in millions, except per share amounts)
|
Year ended December 31, 2016
|
|
Year ended December 31, 2015
|
||||
Passenger revenue
|
$
|
(250
|
)
|
|
$
|
(89
|
)
|
Special revenue adjustment
|
—
|
|
|
172
|
|
||
Other revenue
|
794
|
|
|
344
|
|
||
Operating revenues
|
$
|
544
|
|
|
$
|
427
|
|
Net income
|
$
|
293
|
|
|
$
|
227
|
|
Net income per basic share
|
$
|
0.47
|
|
|
$
|
0.34
|
|
Net income per diluted share
|
$
|
0.46
|
|
|
$
|
0.34
|
|
(in millions, except per share amounts)
|
|
Year ended December 31, 2015
|
Year ended December 31, 2014
|
||||
Passenger revenue
|
|
$
|
115
|
|
$
|
55
|
|
Net income
|
|
$
|
61
|
|
$
|
29
|
|
Net income per basic share
|
|
$
|
0.09
|
|
$
|
0.04
|
|
Net income per diluted share
|
|
$
|
0.09
|
|
$
|
0.04
|
|
|
Year ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
NUMERATOR:
|
|
|
|
|
|
||||||
Net income
|
$
|
2,244
|
|
|
$
|
2,181
|
|
|
$
|
1,136
|
|
Incremental income effect of
interest on 5.25% convertible notes (a)
|
2
|
|
|
4
|
|
|
4
|
|
|||
Net income after assumed conversion
|
$
|
2,246
|
|
|
$
|
2,185
|
|
|
$
|
1,140
|
|
|
|
|
|
|
|
||||||
DENOMINATOR:
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding, basic
|
627
|
|
|
661
|
|
|
687
|
|
|||
Dilutive effect of Employee stock options and
restricted stock units
|
1
|
|
|
2
|
|
|
3
|
|
|||
Dilutive effect of 5.25% convertible notes (a)
|
5
|
|
|
6
|
|
|
6
|
|
|||
Adjusted weighted-average shares outstanding, diluted
|
633
|
|
|
669
|
|
|
696
|
|
|||
|
|
|
|
|
|
||||||
NET INCOME PER SHARE:
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
3.58
|
|
|
$
|
3.30
|
|
|
$
|
1.65
|
|
Diluted
|
$
|
3.55
|
|
|
$
|
3.27
|
|
|
$
|
1.64
|
|
|
|
|
|
|
|
|
The Boeing Company
|
|
|
|||||||||||||||
|
-800 Firm Orders
|
-800 Options
|
|
-7
Firm Orders |
-8
Firm Orders |
|
-8
Options |
|
Additional -700s
|
|
Total
|
|||||||
2017
|
39
|
|
—
|
|
|
—
|
|
14
|
|
|
—
|
|
|
14
|
|
|
67
|
|
2018
|
21
|
|
9
|
|
|
—
|
|
13
|
|
|
—
|
|
|
4
|
|
|
47
|
|
2019
|
—
|
|
—
|
|
|
15
|
|
—
|
|
|
5
|
|
|
—
|
|
|
20
|
|
2020
|
—
|
|
—
|
|
|
14
|
|
—
|
|
|
8
|
|
|
—
|
|
|
22
|
|
2021
|
—
|
|
—
|
|
|
1
|
|
13
|
|
|
18
|
|
|
—
|
|
|
32
|
|
2022
|
—
|
|
—
|
|
|
—
|
|
15
|
|
|
19
|
|
|
—
|
|
|
34
|
|
2023
|
—
|
|
—
|
|
|
—
|
|
34
|
|
|
23
|
|
|
—
|
|
|
57
|
|
2024
|
—
|
|
—
|
|
|
—
|
|
41
|
|
|
23
|
|
|
—
|
|
|
64
|
|
2025
|
—
|
|
—
|
|
|
—
|
|
40
|
|
|
36
|
|
|
—
|
|
|
76
|
|
2026
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
36
|
|
|
—
|
|
|
36
|
|
2027
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|
60
|
|
9
|
|
(a)
|
30
|
|
170
|
|
(b)
|
191
|
|
|
18
|
|
(c)
|
478
|
|
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Derivative contracts
|
|
$
|
120
|
|
|
$
|
9
|
|
Intangible assets, net
|
|
426
|
|
|
464
|
|
||
Capital lease receivable
|
|
90
|
|
|
94
|
|
||
Other
|
|
138
|
|
|
150
|
|
||
Other assets
|
|
$
|
774
|
|
|
$
|
717
|
|
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Accounts payable trade
|
|
$
|
138
|
|
|
$
|
178
|
|
Salaries payable
|
|
200
|
|
|
173
|
|
||
Taxes payable
|
|
184
|
|
|
179
|
|
||
Aircraft maintenance payable
|
|
26
|
|
|
168
|
|
||
Fuel payable
|
|
95
|
|
|
48
|
|
||
Other payable
|
|
535
|
|
|
442
|
|
||
Accounts payable
|
|
$
|
1,178
|
|
|
$
|
1,188
|
|
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Profitsharing and savings plans
|
|
$
|
645
|
|
|
$
|
655
|
|
Aircraft and other lease related obligations
|
|
55
|
|
|
74
|
|
||
Vacation pay
|
|
355
|
|
|
309
|
|
||
Union bonuses
|
|
188
|
|
(a)
|
329
|
|
||
Health
|
|
96
|
|
|
86
|
|
||
Derivative contracts
|
|
158
|
|
|
643
|
|
||
Workers compensation
|
|
183
|
|
|
187
|
|
||
Property and income taxes
|
|
68
|
|
|
62
|
|
||
Other
|
|
237
|
|
|
246
|
|
||
Accrued liabilities
|
|
$
|
1,985
|
|
|
$
|
2,591
|
|
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Postretirement obligation
|
|
$
|
256
|
|
|
$
|
201
|
|
Non-current lease-related obligations
|
|
125
|
|
|
165
|
|
||
Other deferred compensation
|
|
204
|
|
|
179
|
|
||
Deferred gains from sale and leaseback of aircraft
|
|
30
|
|
|
43
|
|
||
Derivative contracts
|
|
35
|
|
|
74
|
|
||
Other
|
|
78
|
|
|
98
|
|
||
Other noncurrent liabilities
|
|
$
|
728
|
|
|
$
|
760
|
|
(in millions)
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
5.25% Convertible Senior Notes due November 2016
|
|
$
|
—
|
|
|
$
|
111
|
|
5.75% Notes due December 2016
|
|
—
|
|
|
307
|
|
||
5.125% Notes due 2017
|
|
301
|
|
|
309
|
|
||
French Credit Agreements due 2018 - 2.23%
|
|
14
|
|
|
25
|
|
||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03%
|
|
8
|
|
|
17
|
|
||
2.75% Notes due 2019
|
|
301
|
|
|
303
|
|
||
Term Loan Agreement payable through 2019 - 6.315%
|
|
106
|
|
|
143
|
|
||
Term Loan Agreement payable through 2019 - 4.84%
|
|
28
|
|
|
36
|
|
||
2.65% Notes due 2020
|
|
492
|
|
|
494
|
|
||
Term Loan Agreement payable through 2020 - 5.223%
|
|
284
|
|
|
329
|
|
||
737 Aircraft Notes payable through 2020
|
|
206
|
|
|
257
|
|
||
Term Loan Agreements payable through 2021 - 7.94%
|
|
20
|
|
|
—
|
|
||
Pass Through Certificates due 2022 - 6.24%
|
|
324
|
|
|
340
|
|
||
Term Loan Agreement payable through 2026 - 2.36%
|
|
215
|
|
|
—
|
|
||
3.00% Notes due 2026
|
|
300
|
|
|
—
|
|
||
7.375% Debentures due 2027
|
|
130
|
|
|
132
|
|
||
Capital leases
|
|
681
|
|
|
395
|
|
||
|
|
$
|
3,410
|
|
|
$
|
3,198
|
|
Less current maturities
|
|
566
|
|
|
637
|
|
||
Less debt discount and issuance costs
|
|
23
|
|
|
20
|
|
||
|
|
$
|
2,821
|
|
|
$
|
2,541
|
|
(in millions)
|
|
2016
|
|
2015
|
||||
Flight equipment
|
|
$
|
923
|
|
|
$
|
435
|
|
Less: accumulated amortization
|
|
82
|
|
|
29
|
|
||
|
|
$
|
841
|
|
|
$
|
406
|
|
|
|
All Restricted Stock Units
|
|||||
|
|
Units (000)
|
|
Wtd. Average
Fair Value
(per share)
|
|||
Outstanding December 31, 2013, Unvested
|
|
2,584
|
|
|
$
|
11.38
|
|
Granted
|
|
834
|
|
(a)
|
24.93
|
|
|
Vested
|
|
(1,239
|
)
|
|
11.05
|
|
|
Surrendered
|
|
(102
|
)
|
|
13.18
|
|
|
Outstanding December 31, 2014
|
|
2,077
|
|
|
16.92
|
|
|
Granted
|
|
561
|
|
(b)
|
45.80
|
|
|
Vested
|
|
(1,095
|
)
|
|
13.33
|
|
|
Surrendered
|
|
(58
|
)
|
|
25.49
|
|
|
Outstanding December 31, 2015
|
|
1,485
|
|
|
30.17
|
|
|
Granted
|
|
675
|
|
(c)
|
37.29
|
|
|
Vested
|
|
(665
|
)
|
|
23.29
|
|
|
Surrendered
|
|
(56
|
)
|
|
36.29
|
|
|
Outstanding December 31, 2016, Unvested
|
|
1,439
|
|
|
$
|
36.52
|
|
|
|
Fuel hedged as of
|
|
|
|
|
|
December 31, 2016
|
|
Derivative underlying commodity type as of
|
|
Period (by year)
|
|
(gallons in millions) (a)
|
|
December 31, 2016
|
|
2017
|
|
1,281
|
|
|
WTI crude and Brent crude oil
|
2018
|
|
1,185
|
|
|
Brent crude oil
|
2019
|
|
305
|
|
|
Brent crude oil
|
|
|
|
|
Asset derivatives
|
|
Liability derivatives
|
||||||||||||
|
|
Balance Sheet
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
|
Fair value at
|
||||||||
(in millions)
|
|
location
|
|
12/31/2016
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2015
|
||||||||
Derivatives designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
44
|
|
|
$
|
—
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
126
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
4
|
|
|
107
|
|
|
412
|
|
|
526
|
|
||||
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
—
|
|
|
55
|
|
|
—
|
|
|
658
|
|
||||
Interest rate derivative contracts
|
|
Other assets
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
—
|
|
|
—
|
|
|
35
|
|
|
49
|
|
||||
Total derivatives designated as hedges
|
|
$
|
137
|
|
|
$
|
168
|
|
|
$
|
491
|
|
|
$
|
1,233
|
|
||
Derivatives not designated as hedges*
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivative contracts (gross)
|
|
Prepaid expenses and other current assets
|
|
$
|
54
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Fuel derivative contracts (gross)
|
|
Other assets
|
|
52
|
|
|
5
|
|
|
52
|
|
|
—
|
|
||||
Fuel derivative contracts (gross)
|
|
Accrued liabilities
|
|
201
|
|
|
1,395
|
|
|
262
|
|
|
1,854
|
|
||||
Fuel derivative contracts (gross)
|
|
Other noncurrent liabilities
|
|
—
|
|
|
330
|
|
|
—
|
|
|
352
|
|
||||
Total derivatives not designated as hedges
|
|
|
|
$
|
307
|
|
|
$
|
1,769
|
|
|
$
|
314
|
|
|
$
|
2,232
|
|
Total derivatives
|
|
|
|
$
|
444
|
|
|
$
|
1,937
|
|
|
$
|
805
|
|
|
$
|
3,465
|
|
|
|
Balance Sheet
|
|
December 31,
|
|
December 31,
|
||||
(in millions)
|
|
location
|
|
2016
|
|
2015
|
||||
Cash collateral deposits held from counterparties for fuel contracts - current
|
|
Offset against Prepaid expenses and other current assets
|
|
$
|
4
|
|
|
$
|
—
|
|
Cash collateral deposits held from counterparties for fuel contracts - noncurrent
|
|
Offset against Other assets
|
|
6
|
|
|
—
|
|
||
Cash collateral deposits provided to counterparties for fuel
contracts - current
|
|
Offset against Accrued liabilities
|
|
311
|
|
|
235
|
|
||
Cash collateral deposits provided to counterparties for fuel
contracts- noncurrent
|
|
Offset against Other noncurrent liabilities
|
|
—
|
|
|
600
|
|
||
Due to third parties for fuel contracts
|
|
Accounts payable
|
|
75
|
|
|
46
|
|
|
|
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
|
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) + (ii)
|
|
(i)
|
|
(ii)
|
|
(iii) = (i) + (ii)
|
|
||||||||||||
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
|
||||||||||||||||||||
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
|
|
Gross amounts of recognized liabilities
|
|
Gross amounts offset in the Balance Sheet
|
|
Net amounts of liabilities presented in the Balance Sheet
|
|
||||||||||||
Fuel derivative contracts
|
|
Prepaid expenses and other current assets
|
|
$
|
48
|
|
|
$
|
(48
|
)
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
Fuel derivative contracts
|
|
Other assets
|
|
$
|
58
|
|
|
$
|
(58
|
)
|
|
$
|
—
|
|
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
Fuel derivative contracts
|
|
Accrued liabilities
|
|
$
|
674
|
|
|
$
|
(516
|
)
|
|
$
|
158
|
|
(a)
|
$
|
2,380
|
|
|
$
|
(1,737
|
)
|
|
$
|
643
|
|
(a)
|
Fuel derivative contracts
|
|
Other noncurrent liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
$
|
1,010
|
|
|
$
|
(985
|
)
|
|
$
|
25
|
|
(a)
|
Interest rate derivative contracts
|
|
Other noncurrent liabilities
|
|
$
|
35
|
|
|
$
|
—
|
|
|
$
|
35
|
|
(a)
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
49
|
|
(a)
|
|
Counterparty (CP)
|
|
|
||||||||||||||||||||||||||||
(in millions)
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
F
|
|
Other
(a)
|
|
Total
|
||||||||||||||||
Fair value of fuel derivatives
|
$
|
(298
|
)
|
|
$
|
(78
|
)
|
|
$
|
36
|
|
|
$
|
(5
|
)
|
|
$
|
3
|
|
|
$
|
12
|
|
|
$
|
4
|
|
|
$
|
(326
|
)
|
Cash collateral held from (by) CP
|
(279
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
(301
|
)
|
||||||||
Aircraft collateral pledged to CP
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Letters of credit (LC)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Option to substitute LC for aircraft
|
(200) to (600)(h)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
(150) to (550)(d)
|
|
N/A
|
|
|
|
|
||||||||||||||||
Option to substitute LC for cash
|
N/A
|
|
>(500)(e)
|
|
(225) to (275)(e)
|
|
(75) to (150) or >(550)(e)
|
|
(125) to (150) or >(550)(e)
|
|
(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)
|
|
>(125)
|
|
(75) to (150) or >(550)
|
|
(125) to (150) or >(550)
|
|
>(100)
|
|
|
|
|
||||||||||||||||
Cash is received from CP
|
>50(c)
|
|
>150(c)
|
|
>175(c)
|
|
>250(c)
|
|
>75(c)
|
|
>0(c)
|
|
|
|
|
||||||||||||||||
Aircraft or cash can be pledged to
CP as collateral
|
(200) to (600)(f)
|
|
(100) to (500)(d)
|
|
N/A
|
|
(150) to (550)(d)
|
|
(150) to (550)(d)
|
|
N/A
|
|
|
|
|
||||||||||||||||
If credit rating is non-investment
grade, fair value of fuel derivative
level at which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash is provided to CP
|
(0) to (200) or >(600)
|
|
(0) to (100) or >(500)
|
|
(b)
|
|
(0) to (150) or >(550)
|
|
(0) to (150) or >(550)
|
|
(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)
|
|
(150) to (550)
|
|
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, 2016
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Assets
|
|
(in millions)
|
||||||||||||||
Cash equivalents
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents (a)
|
|
$
|
1,344
|
|
|
$
|
1,344
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commercial paper
|
|
325
|
|
|
—
|
|
|
325
|
|
|
—
|
|
||||
Certificates of deposit
|
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
|
||||||||
Treasury bills
|
|
1,345
|
|
|
1,345
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
|
280
|
|
|
—
|
|
|
280
|
|
|
—
|
|
||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
42
|
|
|
—
|
|
|
42
|
|
|
—
|
|
||||
Option contracts (b)
|
|
239
|
|
|
—
|
|
|
—
|
|
|
239
|
|
||||
Option contracts (c)
|
|
163
|
|
|
—
|
|
|
—
|
|
|
163
|
|
||||
Other available-for-sale securities
|
|
83
|
|
|
83
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
3,832
|
|
|
$
|
2,772
|
|
|
$
|
658
|
|
|
$
|
402
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Fuel derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Swap contracts (c)
|
|
$
|
(110
|
)
|
|
$
|
—
|
|
|
$
|
(110
|
)
|
|
$
|
—
|
|
Option contracts (b)
|
|
(96
|
)
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
||||
Option contracts (c)
|
|
(564
|
)
|
|
—
|
|
|
—
|
|
|
(564
|
)
|
||||
Interest rate derivatives (see Note 10)
|
|
(35
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
||||
Total liabilities
|
|
$
|
(805
|
)
|
|
$
|
—
|
|
|
$
|
(145
|
)
|
|
$
|
(660
|
)
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||
|
Fuel
|
|
Other
|
|
|
||||||
(in millions)
|
derivatives
|
|
securities
|
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
(1,676
|
)
|
|
$
|
27
|
|
|
$
|
(1,649
|
)
|
Total gains (losses) (realized or unrealized)
|
|
|
|
|
|
|
|
|
|||
Included in earnings
|
175
|
|
|
(2
|
)
|
|
173
|
|
|||
Included in other comprehensive income
|
201
|
|
|
8
|
|
|
209
|
|
|||
Purchases
|
221
|
|
(a)
|
—
|
|
|
221
|
|
|||
Sales
|
(61
|
)
|
(a)
|
(33
|
)
|
|
(94
|
)
|
|||
Settlements
|
882
|
|
|
—
|
|
|
882
|
|
|||
Balance at December 31, 2016
|
$
|
(258
|
)
|
|
$
|
—
|
|
|
$
|
(258
|
)
|
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, 2016
|
$
|
93
|
|
|
$
|
—
|
|
|
$
|
93
|
|
|
Fair value measurements using significant
unobservable inputs (Level 3)
|
||||||||||
|
Fuel
|
|
Other
|
|
|
||||||
(in millions)
|
derivatives
|
|
securities
|
|
Total
|
||||||
Balance at December 31, 2014
|
$
|
(1,091
|
)
|
|
$
|
32
|
|
|
$
|
(1,059
|
)
|
Total losses (realized or unrealized)
|
|
|
|
|
|
|
|
|
|||
Included in earnings
|
(646
|
)
|
|
(1
|
)
|
|
(647
|
)
|
|||
Included in other comprehensive income
|
(858
|
)
|
|
—
|
|
|
(858
|
)
|
|||
Purchases
|
750
|
|
(a)
|
—
|
|
|
750
|
|
|||
Sales
|
(196
|
)
|
(a)
|
(4
|
)
|
|
(200
|
)
|
|||
Settlements
|
365
|
|
|
—
|
|
|
365
|
|
|||
Balance at December 31, 2015
|
$
|
(1,676
|
)
|
|
$
|
27
|
|
|
$
|
(1,649
|
)
|
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, 2015
|
$
|
(428
|
)
|
|
$
|
—
|
|
|
$
|
(428
|
)
|
Quantitative information about Level 3 fair value measurements
|
||||
|
Valuation technique
|
Unobservable input
|
Period (by year)
|
Range
|
Fuel derivatives
|
Option model
|
Implied volatility
|
2017
|
16-36%
|
|
|
|
2018
|
20-31%
|
|
|
|
2019
|
18-24%
|
(in millions)
|
Carrying value
|
|
Estimated fair value
|
|
Fair value level hierarchy
|
||||
5.125% Notes due 2017
|
$
|
301
|
|
|
$
|
303
|
|
|
Level 2
|
French Credit Agreements due 2018 - 2.23%
|
14
|
|
|
14
|
|
|
Level 3
|
||
Fixed-rate 737 Aircraft Notes payable through 2018 - 7.03%
|
8
|
|
|
8
|
|
|
Level 3
|
||
2.75% Notes due 2019
|
301
|
|
|
306
|
|
|
Level 2
|
||
Term Loan Agreement payable through 2019 - 6.315%
|
106
|
|
|
107
|
|
|
Level 3
|
||
Term Loan Agreement payable through 2019 - 4.84%
|
28
|
|
|
29
|
|
|
Level 3
|
||
2.65% Notes due 2020
|
492
|
|
|
493
|
|
|
Level 2
|
||
Term Loan Agreement payable through 2020 - 5.223%
|
284
|
|
|
284
|
|
|
Level 3
|
||
737 Aircraft Notes payable through 2020
|
206
|
|
|
204
|
|
|
Level 3
|
||
Term Loan Agreements payable through 2021 - 7.94%
|
20
|
|
|
22
|
|
|
Level 3
|
||
Pass Through Certificates due 2022 - 6.24%
|
324
|
|
|
362
|
|
|
Level 2
|
||
Term Loan Agreement payable through 2026 - 2.36%
|
215
|
|
|
215
|
|
|
Level 3
|
||
3.00% Notes due 2026
|
300
|
|
|
284
|
|
|
Level 2
|
||
7.375% Debentures due 2027
|
130
|
|
|
156
|
|
|
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, 2014
|
$
|
(1,177
|
)
|
|
$
|
(45
|
)
|
|
$
|
41
|
|
|
$
|
8
|
|
|
$
|
435
|
|
|
$
|
(738
|
)
|
Changes in fair value
|
(867
|
)
|
|
(5
|
)
|
|
(19
|
)
|
|
(2
|
)
|
|
329
|
|
|
(564
|
)
|
||||||
Reclassification to earnings
|
378
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
(147)
|
|
|
251
|
|
||||||
Balance at December 31, 2015
|
$
|
(1,666
|
)
|
|
$
|
(30
|
)
|
|
$
|
22
|
|
|
$
|
6
|
|
|
$
|
617
|
|
|
$
|
(1,051
|
)
|
Changes in fair value
|
194
|
|
|
(3
|
)
|
|
(36
|
)
|
|
14
|
|
|
(63
|
)
|
|
106
|
|
||||||
Reclassification to earnings
|
973
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
(366)
|
|
|
622
|
|
||||||
Balance at December 31, 2016
|
$
|
(499
|
)
|
|
$
|
(18
|
)
|
|
$
|
(14
|
)
|
|
$
|
20
|
|
|
$
|
188
|
|
|
$
|
(323
|
)
|
Year ended December 31, 2016
|
||||||
(in millions)
|
|
Amounts reclassified from AOCI
|
|
Affected line item in the Consolidated Statement of Comprehensive Income
|
||
AOCI components
|
|
|
||||
Unrealized loss on fuel derivative instruments
|
|
$
|
973
|
|
|
Fuel and oil expense
|
|
|
360
|
|
|
Less: Tax expense
|
|
|
|
$
|
613
|
|
|
Net of tax
|
Unrealized loss on interest rate derivative instruments
|
|
$
|
15
|
|
|
Interest expense
|
|
|
6
|
|
|
Less: Tax expense
|
|
|
|
$
|
9
|
|
|
Net of tax
|
|
|
|
|
|
||
Total reclassifications for the period
|
|
$
|
622
|
|
|
Net of tax
|
(in millions)
|
|
2016
|
|
2015
|
||||
APBO at beginning of period
|
|
$
|
201
|
|
|
$
|
169
|
|
Service cost
|
|
13
|
|
|
11
|
|
||
Interest cost
|
|
9
|
|
|
7
|
|
||
Benefits paid
|
|
(6
|
)
|
|
(6
|
)
|
||
Actuarial loss
|
|
38
|
|
|
20
|
|
||
Plan amendments
|
|
1
|
|
|
—
|
|
||
APBO at end of period
|
|
$
|
256
|
|
|
$
|
201
|
|
(in millions)
|
|
2016
|
|
2015
|
||||
Funded status
|
|
$
|
(256
|
)
|
|
$
|
(201
|
)
|
Unrecognized net actuarial (gain)/loss
|
|
7
|
|
|
(31
|
)
|
||
Unrecognized prior service cost
|
|
7
|
|
|
9
|
|
||
Accumulated other comprehensive income (loss)
|
|
(14
|
)
|
|
22
|
|
||
Cost recognized on Consolidated Balance Sheet
|
|
$
|
(256
|
)
|
|
$
|
(201
|
)
|
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Service cost
|
|
$
|
13
|
|
|
$
|
11
|
|
|
$
|
10
|
|
Interest cost
|
|
9
|
|
|
7
|
|
|
7
|
|
|||
Amortization of prior service cost
|
|
3
|
|
|
3
|
|
|
3
|
|
|||
Recognized actuarial gain
|
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|||
Settlements
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Net periodic postretirement benefit cost
|
|
$
|
25
|
|
|
$
|
18
|
|
|
$
|
15
|
|
|
|
2016
|
|
2015
|
|
2014
|
|||
Weighted-average discount rate
|
|
4.25
|
%
|
|
4.50
|
%
|
|
4.10
|
%
|
Assumed healthcare cost trend rate (1)
|
|
7.08
|
%
|
|
7.08
|
%
|
|
6.88
|
%
|
(1)
|
The assumed healthcare cost trend rate is assumed to remain at
7.08%
for
2017
, then decline gradually to
5.19%
by
2027
and remain level thereafter.
|
(in millions)
|
|
1% increase
|
|
1% decrease
|
||||
Increase (decrease) in total service and interest costs
|
|
$
|
4
|
|
|
$
|
(3
|
)
|
Increase (decrease) in the APBO
|
|
$
|
36
|
|
|
$
|
(31
|
)
|
(in millions)
|
|
2016
|
|
2015
|
||||
DEFERRED TAX LIABILITIES:
|
|
|
|
|
||||
Accelerated depreciation
|
|
$
|
4,726
|
|
|
$
|
4,429
|
|
Other
|
|
134
|
|
|
62
|
|
||
Total deferred tax liabilities
|
|
4,860
|
|
|
4,491
|
|
||
DEFERRED TAX ASSETS:
|
|
|
|
|
||||
Fuel derivative instruments
|
|
233
|
|
|
750
|
|
||
Construction obligation
|
|
402
|
|
|
289
|
|
||
Accrued employee benefits
|
|
451
|
|
|
541
|
|
||
Other
|
|
400
|
|
|
421
|
|
||
Total deferred tax assets
|
|
1,486
|
|
|
2,001
|
|
||
Net deferred tax liability
|
|
$
|
3,374
|
|
|
$
|
2,490
|
|
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
CURRENT:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
778
|
|
|
$
|
1,292
|
|
|
$
|
203
|
|
State
|
|
69
|
|
|
114
|
|
|
29
|
|
|||
Total current
|
|
847
|
|
|
1,406
|
|
|
232
|
|
|||
DEFERRED:
|
|
|
|
|
|
|
||||||
Federal
|
|
426
|
|
|
(97
|
)
|
|
421
|
|
|||
State
|
|
30
|
|
|
(11
|
)
|
|
27
|
|
|||
Total deferred
|
|
456
|
|
|
(108
|
)
|
|
448
|
|
|||
|
|
$
|
1,303
|
|
|
$
|
1,298
|
|
|
$
|
680
|
|
(in millions)
|
|
2016
|
|
2015
|
|
2014
|
||||||
Tax at statutory U.S. tax rates
|
|
$
|
1,241
|
|
|
$
|
1,218
|
|
|
$
|
636
|
|
State income taxes, net of federal benefit
|
|
64
|
|
|
66
|
|
|
37
|
|
|||
Other, net
|
|
(2
|
)
|
|
14
|
|
|
7
|
|
|||
Total income tax provision
|
|
$
|
1,303
|
|
|
$
|
1,298
|
|
|
$
|
680
|
|
|
|
Three months ended
|
||||||||||||||
(in millions except per share amounts)
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Operating revenues (a)
|
|
$
|
4,826
|
|
|
$
|
5,384
|
|
|
$
|
5,139
|
|
|
$
|
5,076
|
|
Operating income
|
|
944
|
|
|
1,276
|
|
|
695
|
|
|
846
|
|
||||
Income before income taxes
|
|
816
|
|
|
1,304
|
|
|
618
|
|
|
809
|
|
||||
Net income (b)
|
|
513
|
|
|
820
|
|
|
388
|
|
|
522
|
|
||||
Net income per share, basic (a)(b)
|
|
0.80
|
|
|
1.30
|
|
|
0.63
|
|
|
0.85
|
|
||||
Net income per share, diluted (a)(b)
|
|
0.79
|
|
|
1.28
|
|
|
0.62
|
|
|
0.84
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
March 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
||||||||
2015
|
|
|
|
|
|
|
|
|
||||||||
Operating revenues (a)
|
|
$
|
4,414
|
|
|
$
|
5,111
|
|
|
$
|
5,318
|
|
|
$
|
4,977
|
|
Operating income
|
|
780
|
|
|
1,085
|
|
|
1,225
|
|
|
1,026
|
|
||||
Income before income taxes
|
|
723
|
|
|
977
|
|
|
933
|
|
|
847
|
|
||||
Net income
|
|
453
|
|
|
608
|
|
|
584
|
|
|
536
|
|
||||
Net income per share, basic (a)
|
|
0.67
|
|
|
0.91
|
|
|
0.89
|
|
|
0.83
|
|
||||
Net income per share, diluted (a)
|
|
0.66
|
|
|
0.90
|
|
|
0.88
|
|
|
0.82
|
|
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
|
|
1,748,323
|
|
(1
|
)
|
|
$
|
9.02
|
|
(2
|
)
|
|
31,456,389
|
|
(3
|
)
|
Equity Compensation Plans not Approved by Security Holders
|
|
4,300
|
|
|
|
$
|
10.10
|
|
|
|
—
|
|
|
|||
Total
|
|
1,752,623
|
|
|
|
$
|
9.02
|
|
(2
|
)
|
|
31,456,389
|
|
|
(1)
|
Includes
308,913
shares of common stock issuable upon exercise of outstanding stock options and
1,439,410
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)
9,373,779
shares remained available for issuance under the Company’s tax-qualified employee stock purchase plan; and (ii)
22,082,610
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
1,237,899
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
|
|
Second Amended and Restated Bylaws of the Company, effective November 17, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 21, 2016 (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 filed 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 (File No. 1-7259)); Supplemental Agreements Nos. 82 and 83 (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, 2013 (File No. 1-7259)); Supplemental Agreement No. 84 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (File No. 1-7259)); Supplemental Agreement No. 85 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-7259)); Supplemental Agreement No. 86 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File No. 1-7259)); Supplemental Agreement No. 87 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 1-7259)); Supplemental Agreement No. 88 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 1-7259)); Supplemental Agreements Nos. 89 and 90 (incorporated by reference to Exhibits 10.1(a) and 10.1(b), respectively, to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 1-7259)); Supplemental Agreement No. 91 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 1-7259)); Supplemental Letter Agreement No. 1810-LA-1501773 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 1-7259)); Supplemental Agreement No. 92 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 1-7259)); Supplemental Agreement No. 93 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (File No. 1-7259)); Supplemental Agreement No. 94 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 1-7259)); Supplemental Agreements Nos. 95, 96, and 97 (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 September 30, 2016 (File No. 1-7259)). (1)
|
|
|
|
10.1(a)
|
|
Supplemental Agreement No. 98 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
|
|
|
10.1(b)
|
|
Supplemental Agreement No. 99 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
|
|
|
10.2
|
|
Form of Amended and Restated Executive Service Recognition Plan Executive Employment Agreement between the Company and certain Officers of the Company (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.3
|
|
Letter Agreement between Southwest Airlines Co. and Gary C. Kelly, effective as of February 1, 2011 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed February 1, 2011 (File No. 1-7259)). (2)
|
|
|
|
10.4
|
|
Southwest Airlines Co. Amended and Restated Severance Plan for Directors (as amended and restated effective May 19, 2009) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 (File No. 1-7259)).
|
|
|
|
10.5
|
|
Southwest Airlines Co. Outside Director Incentive Plan (as amended and restated effective May 16, 2007) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 1-7259)).
|
10.6
|
|
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)).
|
|
|
|
10.7
|
|
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)
|
|
|
|
10.8
|
|
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)
|
|
|
|
10.9
|
|
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)
|
|
|
|
10.10
|
|
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)
|
|
|
|
10.11
|
|
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)
|
|
|
|
10.12
|
|
Amended and Restated Southwest Airlines Co. 2005 Excess Benefit Plan (as amended and restated, effective as of March 1, 2016) (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 1-7259)). (2)
|
|
|
|
10.13
|
|
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 filed January 22, 2009 (File No. 1-7259)).
|
|
|
|
10.14
|
|
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)
|
|
|
|
10.15
|
|
$1,000,000,000 Revolving Credit Facility Agreement among the Company, the Banks party thereto, Barclays Bank PLC, as Syndication Agent, Bank of America, N.A., BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., U.S. Bank National Association, and Wells Fargo Bank, N.A., as Documentation Agents, JPMorgan Chase Bank, N.A. and Citibank, N.A., as Co-Administrative Agents, and JPMorgan Chase Bank, N.A., as Paying Agent, dated as of August 3, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 9, 2016 (File No. 1-7259)).
|
|
|
|
10.16
|
|
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)); Supplemental Agreement No. 4 (incorporated by reference to Exhibit 10.18(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 1-7259)); Supplemental Agreement No. 5 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 1-7259)). (1)
|
|
|
|
10.17
|
|
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 filed January 30, 2013 (File No. 1-7259)). (2)
|
|
|
|
10.18
|
|
Southwest Airlines Co. Deferred Compensation Plan for Senior Leadership and Non-Employee Members of the Southwest Airlines Co. Board of Directors (as amended and restated, effective as of March 1, 2016) (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 1-7259)). (2)
|
|
|
|
10.19
|
|
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 7, 2017
|
By
|
/s/ Tammy Romo
|
|
|
|
|
|
Tammy Romo
|
|
|
Executive Vice President & Chief Financial Officer
|
|
|
(On behalf of the Registrant and in
|
|
|
her capacity as Principal Financial
|
|
|
and Accounting Officer)
|
Signature
|
|
Title
|
/s/ GARY C. KELLY
|
|
Chairman of the Board & Chief Executive Officer (Principal Executive Officer)
|
Gary C. Kelly
|
|
|
|
|
|
/s/ TAMMY ROMO
|
|
Executive Vice President & Chief Financial Officer (Principal Financial & Accounting Officer)
|
Tammy Romo
|
|
|
|
|
|
/s/ RON RICKS
|
|
Vice Chairman of the Board
|
Ron Ricks
|
|
|
|
|
|
/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/ THOMAS W. GILLIGAN
|
|
Director
|
Thomas W. Gilligan
|
|
|
|
|
|
/s/ GRACE D. LIEBLEIN
|
|
Director
|
Grace D. Lieblein
|
|
|
|
|
|
/s/ NANCY B. LOEFFLER
|
|
Director
|
Nancy B. Loeffler
|
|
|
|
|
|
/s/ JOHN T. MONTFORD
|
|
Director
|
John T. Montford
|
|
|
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
|
|
Second Amended and Restated Bylaws of the Company, effective November 17, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 21, 2016 (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 filed 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
|
|
|
|
|
|
(File No. 1-7259)); Supplemental Agreements Nos. 82 and 83 (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, 2013 (File No. 1-7259)); Supplemental Agreement No. 84 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 (File No. 1-7259)); Supplemental Agreement No. 85 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-7259)); Supplemental Agreement No. 86 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 (File No. 1-7259)); Supplemental Agreement No. 87 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (File No. 1-7259)); Supplemental Agreement No. 88 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 (File No. 1-7259)); Supplemental Agreements Nos. 89 and 90 (incorporated by reference to Exhibits 10.1(a) and 10.1(b), respectively, to the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 1-7259)); Supplemental Agreement No. 91 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 1-7259)); Supplemental Letter Agreement No. 1810-LA-1501773 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 (File No. 1-7259)); Supplemental Agreement No. 92 (incorporated by reference to Exhibit 10.1(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 1-7259)); Supplemental Agreement No. 93 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (File No. 1-7259)); Supplemental Agreement No. 94 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 1-7259)); Supplemental Agreements Nos. 95, 96, and 97 (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 September 30, 2016 (File No. 1-7259)). (1)
|
|
|
|
10.1(a)
|
|
Supplemental Agreement No. 98 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
|
|
|
10.1(b)
|
|
Supplemental Agreement No. 99 to Purchase Agreement No. 1810, dated January 19, 1994, between The Boeing Company and the Company. (1)
|
|
|
|
10.2
|
|
Form of Amended and Restated Executive Service Recognition Plan Executive Employment Agreement between the Company and certain Officers of the Company (incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-7259)). (2)
|
|
|
|
10.3
|
|
Letter Agreement between Southwest Airlines Co. and Gary C. Kelly, effective as of February 1, 2011 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed February 1, 2011 (File No. 1-7259)). (2)
|
|
|
|
10.4
|
|
Southwest Airlines Co. Amended and Restated Severance Plan for Directors (as amended and restated effective May 19, 2009) (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 (File No. 1-7259)).
|
|
|
|
10.5
|
|
Southwest Airlines Co. Outside Director Incentive Plan (as amended and restated effective May 16, 2007) (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 (File No. 1-7259)).
|
|
|
|
10.6
|
|
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)).
|
|
|
|
10.7
|
|
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)
|
|
|
|
10.8
|
|
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)
|
|
|
|
10.9
|
|
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)
|
|
|
|
10.10
|
|
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)
|
|
|
|
10.11
|
|
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)
|
|
|
|
10.12
|
|
Amended and Restated Southwest Airlines Co. 2005 Excess Benefit Plan (as amended and restated, effective as of March 1, 2016) (incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 1-7259)). (2)
|
|
|
|
10.13
|
|
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 filed January 22, 2009 (File No. 1-7259)).
|
|
|
|
10.14
|
|
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)
|
|
|
|
10.15
|
|
$1,000,000,000 Revolving Credit Facility Agreement among the Company, the Banks party thereto, Barclays Bank PLC, as Syndication Agent, Bank of America, N.A., BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., U.S. Bank National Association, and Wells Fargo Bank, N.A., as Documentation Agents, JPMorgan Chase Bank, N.A., and Citibank, N.A., as Co-Administrative Agents, and JPMorgan Chase Bank, N.A., as Paying Agent, dated as of August 3, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 9, 2016 (File No. 1-7259)).
|
|
|
|
10.16
|
|
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)); Supplemental Agreement No. 4 (incorporated by reference to Exhibit 10.18(a) to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 1-7259)); Supplemental Agreement No. 5 (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (File No. 1-7259)). (1)
|
|
|
|
10.17
|
|
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 filed January 30, 2013 (File No. 1-7259)). (2)
|
|
|
|
10.18
|
|
Southwest Airlines Co. Deferred Compensation Plan for Senior Leadership and Non-Employee Members of the Southwest Airlines Co. Board of Directors (as amended and restated, effective as of March 1, 2016) (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (File No. 1-7259)). (2)
|
|
|
|
10.19
|
|
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. 98
|
|
|
|
|
|
to
|
|
|
|
|
|
Purchase Agreement No. 1810
|
|
|
|
|
|
between
|
|
|
|
|
|
THE BOEING COMPANY
|
|
|
|
|
|
and
|
|
|
|
|
|
SOUTHWEST AIRLINES CO
|
|
|
|
|
|
Relating to Boeing Model 737-7H4 and 737-8H4 Aircraft
|
|
RECITALS
:
|
1.
|
TABLE OF CONTENTS
.
|
P.A. No. 1810
|
SA-98-
1
|
|
|
BOEING PROPRIETARY
|
|
2.
|
TABLES
.
|
3.
|
LETTER AGREEMENTS
.
|
4.
|
***
|
THE BOEING COMPANY
|
SOUTHWEST AIRLINES CO.
|
|
|
By:
/s/ Kyle L. Kersavage
|
By:
/s/ Chris Monroe
|
|
Chris Monroe
|
Its:
Attorney‑In‑Fact
|
Its:
VP, Treasurer
|
P.A. No. 1810
|
SA-98-
2
|
|
|
BOEING PROPRIETARY
|
|
|
TABLE OF CONTENTS
|
|
|
|
Page
Number
|
SA
Number
|
ARTICLES
|
|
|
|
|
|
|
|
1.
|
Subject Matter of Sale
|
1-1
|
SA-92
|
|
|
|
|
2.
|
Delivery, Title and Risk
of Loss
|
2-1
|
SA-28
|
|
|
|
|
3.
|
Price of Aircraft
|
3-1
|
SA-92
|
|
|
|
|
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-
98
|
|
TABLE OF CONTENTS
|
|
|
|
|
|
SA
Number
|
|
|
|
|
|
TABLE
|
|
|
|
|
|
|
|
|
|
1b
|
|
Aircraft Information Table - Block 800LUV Aircraft
|
|
SA-82
|
|
|
|
|
|
1c
|
|
Aircraft Information Table - Block 800LUV Aircraft
(non-ETOPS Configuration)
|
|
SA-98
|
|
|
|
|
|
1d
|
|
Aircraft Information Table - Block 800LUV Aircraft
(non-ETOPS Configuration)
|
|
SA-98
|
|
|
|
|
|
EXHIBITS
|
|
|
|
|
|
|
|
|
|
A-6
|
|
Aircraft Configuration - Block 800LUV Aircraft
|
|
SA-75
|
|
|
|
|
|
A-7
|
|
Aircraft Configuration - Block 800LUV Aircraft
(non-ETOPS Configuration)
|
|
SA-84
|
|
|
|
|
|
B
|
|
***
|
|
SA-75
|
|
|
|
|
|
C
|
|
Customer Support Document
|
|
SA-75
|
|
|
|
|
|
C-2
|
|
737-800 Customer Support Document
|
|
SA-75
|
|
|
|
|
|
D-2
|
|
Economic Price Adjustment
ECI-MFG/CPI (July 2011 Base Price)
|
|
SA-75
|
|
|
|
|
|
E
|
|
Buyer Furnished Equipment
Provisions Document
Attachment A - 737-7H4 Aircraft (through 2012)
Attachment B - 737-8H4 Aircraft (2012-2018)
|
|
SA-92
|
|
|
|
|
|
F
|
|
Defined Terms Document
|
|
|
|
|
|
|
|
LETTER AGREEMENTS
|
|
|
||
|
|
|
|
|
1810-1R1
|
|
Waiver of Aircraft Demonstration Flight
|
|
SA-75
|
P.A. No. 1810
|
ii
|
|
K/SWA
|
|
SA-
98
|
|
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-1001315R4
|
|
***
|
|
SA-92
|
|
|
Attachment A
|
|
SA-98
|
|
|
|
|
|
SWA-PA-1810-LA-1003498R1
|
|
***
|
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1003490R4
|
|
***
|
|
SA-92
|
|
|
|
|
|
SWA-PA-1810-LA-1003367R1
|
|
***
|
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1105883
|
|
Aircraft Model Substitution
|
|
SA-92
|
|
|
|
|
|
SWA-PA-1810-LA-1105884R2
|
|
Option Aircraft
|
|
SA-92
|
|
Attachment A - Model 737-8H4 Aircraft
|
|
SA-92
|
|
|
Attachment B - Option Aircraft Information Table
|
|
SA-98
|
|
|
|
|
|
|
SWA-PA-1810-LA-1105885R3
|
|
***
|
|
SA-90
|
|
|
|
|
|
SWA-PA-1810-LA-1105886R2
|
|
***
|
|
SA-92
|
|
|
|
|
|
SWA-PA-1810-LA-1105887
|
|
***
|
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1105888R5
|
|
***
|
|
SA-92
|
|
|
|
|
|
SWA-PA-1810-LA-1105889
|
|
***
|
|
SA-75
|
|
|
|
|
|
SWA-PA-1810-LA-1303010R1
|
|
***
|
|
SA-92
|
|
|
|
|
|
SWA-PA-1810-LA-1504814
|
|
***
|
|
SA-92
|
P.A. No. 1810
|
iii
|
|
K/SWA
|
|
SA-
98
|
|
TABLE OF CONTENTS
|
|
ADDITIONAL LETTERS (FOR REFERENCE) -
INACTIVE (as of SA-82)
|
|
6-1162-MSA-288
|
Business Offer - Enhanced Ground Proximity
|
|
Warning System (EGPWS) - Activation - 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
|
1a
|
Aircraft Information Table - Block 700LUV Aircraft
|
SA-91
|
Deleted Under SA-92
|
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
|
A-5
|
Aircraft Configuration - Block 700LUV Aircraft
|
SA-75
|
Deleted under SA-92
|
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 -
|
SA-13
|
Inactive
|
P.A. No. 1810
|
iv
|
|
K/SWA
|
|
SA-
98
|
|
TABLE OF CONTENTS
|
|
Exhibits
|
Title
|
Last Updated under SA
|
Current Status
|
|
Aircraft Price Adjustment
(July 1999 Base Price)
|
|
|
E.2
|
737-800 Buyer Furnished Equipment Provisions Document
|
SA-73
|
Deleted under SA-75
|
Letter Agreement
|
Title
|
Last Updated
under SA
|
Current Status
|
6‑1162‑RLL‑933R21
|
Option Aircraft
|
SA-60
|
Deleted under SA-75
|
6‑1162‑RLL‑935R1
|
Performance Guarantees
|
SA-1
|
Inactive
|
6‑1162‑RLL‑936R4
|
Certain Contractual Matters
|
SA-4
|
Inactive
|
6‑1162‑RLL‑937
|
Alternate Advance Payment Schedule
|
|
Inactive
|
6‑1162‑RLL‑938
|
***
|
|
Inactive
|
6‑1162‑RLL‑939R1
|
Certification Flight Test Aircraft
|
SA-1
|
Inactive
|
6‑1162‑RLL‑940R1
|
Training Matters
|
SA-1
|
Inactive
|
6‑1162‑RLL‑942
|
Open Configuration Matters
|
|
Inactive
|
6‑1162‑RLL‑943R1
|
Substitution Rights
|
SA-6
|
Deleted under SA 75
|
6‑1162‑RLL‑944
|
***
|
|
Inactive
|
6-1162-RLL-945
|
Comparison of 737-7H4 and 737-3H4 Block Fuel Burn
|
|
Inactive
|
6-1162-RLL-1855R3
|
Additional Contractual Matters
|
SA-4
|
Inactive
|
6-1162-RLL-1856
|
***
|
SA-1
|
Inactive
|
6-1162-RLL-1857
|
Service Ready Validation Program Field Test
|
SA-1
|
Inactive
|
6-1162-RLL-1858R1
|
Escalation Matters
|
SA-4
|
Inactive
|
6-1162-RLL-2036
|
Amortization of Costs for Customer Unique Changes
|
SA-1
|
Inactive
|
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
|
P.A. No. 1810
|
v
|
|
K/SWA
|
|
SA-
98
|
|
TABLE OF CONTENTS
|
|
P.A. No. 1810
|
vi
|
|
K/SWA
|
|
SA-
98
|
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):
|
***
|
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-
98
|
63879 63887 64110 64111 66379 68788 70150 73631 82233 88233
93899
|
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
|
***
|
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
|
4
|
***
|
36977, 36923, 41530, 36666
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2016
|
2
|
***
|
38812, 38813
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2016
|
3
|
***
|
36670, 38814, 41531
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2016
|
2
|
***
|
36925, 36944
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2016
|
1
|
***
|
38816
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2016
|
3
|
***
|
36975, 36943, 36976
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jan-2017
|
2
|
***
|
42532, 36910
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2017
|
3
|
***
|
36969, 36970, 36922
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Mar-2017
|
3
|
***
|
36972, 36949, 36946
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Apr-2017
|
2
|
***
|
36974, 36927
|
***
|
|
***
|
***
|
***
|
***
|
***
|
SWA-PA-01810
|
|
SA-
98
|
63879 63887 64110 64111 66379 68788 70150 73631 82233 88233
93899
|
Boeing Proprietary
|
Page
2
|
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
***
|
|||||||
Jun-2017
|
1
|
***
|
42534
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Aug-2017
|
1
|
***
|
36926
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2017
|
2
|
***
|
36951, 36968
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2018
|
2
|
***
|
42545, 42533
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Mar-2018
|
1
|
***
|
36928
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Apr-2018
|
2
|
***
|
36952, 36954
|
***
|
|
***
|
***
|
***
|
***
|
***
|
May-2018
|
1
|
***
|
36957
|
***
|
|
***
|
***
|
***
|
***
|
***
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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-
98
|
63879 63887 64110 64111 66379 68788 70150 73631 82233 88233
93899
|
Boeing Proprietary
|
Page
3
|
Table 1d to
|
Purchase Agreement No. PA-01810
|
Aircraft Delivery, Description, Price and Advance Payments
|
Block 800LUV Aircraft (non-ETOPS Configuration)
|
Airframe Model/MTOW:
|
|
737-800
|
|
174,200 pounds
|
|
Detail Specification:
|
D019A001SWA38 (1/9/2015)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engine Model/Thrust:
|
|
CFM56-7B27
|
|
27,300 pounds
|
|
Base Aircraft Price Base Year/Escalation Formula:
|
|
|
Jul-11
|
|
ECI-MFG/CPI
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Airframe Price:
|
|
|
***
|
|
Engine Price Base Year/Escalation Formula:
|
N/A
|
N/A
|
||||||||
|
|||||||||||||||
Optional Features:
|
|
|
***
|
|
|||||||||||
|
|||||||||||||||
Sub-Total of Airframe and Features:
|
|
***
|
|
Airframe 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:
|
|
|
|
***
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Deposit per Exercised Option Aircraft (OPEX):
|
|
|
|
***
|
Delivery
Date
|
Number of
Aircraft
|
Escalation
Factor
(Airframe)
|
Aircraft
Serial
Number
|
Escalation
Forecast
|
|
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-2016
|
2
|
***
|
63593, 63594
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
May-2017
|
1
|
***
|
63592
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
May-2017
|
1
|
***
|
63575
|
***
|
|
***
|
***
|
***
|
***
|
***
|
May-2017
|
1
|
***
|
63576
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jun-2017
|
2
|
***
|
63577, 63578
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jun-2017
|
2
|
***
|
63596, 63595
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Jun-2017
|
2
|
***
|
63571, 63586
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jul-2017
|
1
|
***
|
63581
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Jul-2017
|
2
|
***
|
63598, 63599
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Aug-2017
|
1
|
***
|
63587
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Sep-2017
|
3
|
***
|
63572, 63573,
63574
|
***
|
|
***
|
***
|
***
|
***
|
***
|
SWA-PA-01810 82233 / 88233 / 93899
|
|
SA-
98
|
|
Boeing Proprietary
|
Page
1
|
Table 1d 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
|
|
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
***
|
|||||||
Oct-2017
|
1
|
***
|
63579
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2017
|
1
|
***
|
63597
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Nov-2017
|
1
|
***
|
63580
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2017
|
2
|
***
|
63582, 63583
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2017
|
4
|
***
|
63600, 63601,
63602, 36993
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Jan-2018
|
1
|
***
|
64115
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Jan-2018
|
2
|
***
|
63584, 63585
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Feb-2018
|
2
|
***
|
64171, 64172
|
***
|
PEX
|
***
|
***
|
***
|
***
|
***
|
Mar-2018
|
1
|
***
|
64174
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Apr-2018
|
1
|
***
|
64248
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
May-2018
|
2
|
***
|
63588, 63589
|
***
|
|
***
|
***
|
***
|
***
|
***
|
May-2018
|
2
|
***
|
64251, 64250
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
Jun-2018
|
2
|
***
|
63590, 63591
|
***
|
|
***
|
***
|
***
|
***
|
***
|
Total:
|
40
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
1) ***
|
|
|
|
|
|
|
|
|
|
|
SWA-PA-01810 82233 / 88233 / 93899
|
|
SA-
98
|
|
Boeing Proprietary
|
Page
2
|
Attachment B To
|
Letter Agreement SWA-PA-1810-LA-1105884R2
|
Option Aircraft Delivery, Description, Price and Advance Payments
|
Airframe Model/MTOW:
|
737-800
|
174,200 pounds
|
|
Detail Specification:
|
D019A001SWA38 (1/9/2015)
|
|||||||||||||
|
||||||||||||||||||
Engine Model/Thrust:
|
|
CFM56-7B27
|
|
|
27,300 pounds
|
|
Base Aircraft Price Base Year/Escalation Formula:
|
J ul-11
|
ECI-MFG/CPI
|
|
|
|||||||
|
||||||||||||||||||
Airframe Price:
|
***
|
|
Engine Price Base Year/Escalation Formula:
|
|
N/A
|
N/A
|
|
|||||||||||
|
||||||||||||||||||
Optional Features:
|
|
|
|
***
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
||||||||||||||||||
Sub-Total of Airframe and Features:
|
***
|
|
Airframe 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:
|
***
|
|||||||||||||||||
|
||||||||||||||||||
Deposit per Aircraft:
|
***
|
Delivery
Date
|
Number of
Aircraft
|
Escalation
Factor
(Airframe)
|
Option
Exercise
Date
|
|
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
***
|
||||||
Jun-2018
|
2
|
***
|
12/1/16
|
|
***
|
***
|
***
|
***
|
***
|
Jul-2018
|
2
|
***
|
1/1/17
|
|
***
|
***
|
***
|
***
|
***
|
Aug-2018
|
3
|
***
|
2/1/17
|
|
***
|
***
|
***
|
***
|
***
|
Sep-2018
|
1
|
***
|
3/1/17
|
|
***
|
***
|
***
|
***
|
***
|
Oct-2018
|
1
|
***
|
4/1/17
|
|
***
|
***
|
***
|
***
|
***
|
Nov-2018
|
1
|
***
|
5/1/17
|
|
***
|
***
|
***
|
***
|
***
|
Dec-2018
|
1
|
***
|
6/1/17
|
|
***
|
***
|
***
|
***
|
***
|
|
|
|
|
|
|
|
|
|
|
Total:
|
11
|
|
|
|
|
|
|
|
|
SWA-PA-01810 82233 / 88233 / 93899
|
|
SA-
98
|
|
Boeing Proprietary
|
Page
3
|
Attachment A to SWA-PA-1810-LA1001315R4
|
Page 1 of 2
|
***
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Letter Agmt SWA-PA-1810-LA-1001315R4; paragraph 3.3
|
|
|
||||
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
|
737-800
|
800LUV
|
36938
|
May-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
|
737-800
|
800LUV
|
42532
|
January-17
|
2011
|
|
46
|
737-800
|
800LUV
|
36910
|
January-17
|
2011
|
|
47
|
737-800
|
800LUV
|
36970
|
February-17
|
2011
|
|
48
|
737-800
|
800LUV
|
36969
|
February-17
|
2011
|
|
|
BOEING PROPRIETARY
|
SA-98
|
Attachment A to SWA-PA-1810-LA1001315R4
|
Page 2 of 2
|
49
|
737-800
|
800LUV
|
36972
|
March-17
|
2011
|
|
50
|
737-800
|
800LUV
|
36927
|
April-17
|
2011
|
|
51
|
737-800
|
800LUV
|
36974
|
April-17
|
2011
|
|
52
|
737-800
|
800LUV
|
36925
|
November-16
|
2011
|
*
|
53
|
737-800
|
800LUV
|
36975
|
December-16
|
2011
|
*
|
54
|
737-800
|
800LUV
|
36976
|
December-16
|
2011
|
*
|
55
|
737-800
|
800LUV
|
36926
|
August-17
|
2011
|
&
|
56
|
737-800
|
800LUV
|
42533
|
February-18
|
2011
|
|
57
|
737-800
|
800LUV
|
42545
|
February-18
|
2011
|
|
58
|
737-800
|
800LUV
|
42534
|
June-17
|
2011
|
&&
|
59
|
737-800
|
800LUV
|
63592 +
|
May-17
|
2011
|
|
60
|
737-800
|
800LUV
|
63593 +
|
December-16
|
2011
|
**
|
61
|
737-800
|
800LUV
|
63594 +
|
December-16
|
2011
|
**
|
62
|
737-800
|
800LUV
|
63595 +
|
June-17
|
2011
|
&&
|
|
|
|
|
|
|
|
*Accelerated in SA-92
|
|
|
|
|
||
**Accelerated in SA-93
|
|
|
|
|
||
&
Accelerated in SA-94
|
|
|
|
|
||
&&Accelerated in SA-98
|
|
|
|
|
||
+MSN Identified in SA-94
|
|
|
|
|
|
BOEING PROPRIETARY
|
SA-98
|
Supplemental Agreement No. 99
|
|
to
|
|
Purchase Agreement No. 1810
|
|
between
|
|
THE BOEING COMPANY
|
|
and
|
|
SOUTHWEST AIRLINES CO.
|
|
Relating to Boeing Model 737-7H4 and 737-8H4 Aircraft
|
RECITALS
:
|
1.
|
TABLE OF CONTENTS
.
|
P.A. No. 1810
|
SA-99-
1
|
|
|
BOEING PROPRIETARY
|
|
[Signature page follows]
|
|
[Remainder of page intentionally left blank]
|
P.A. No. 1810
|
SA-99-
2
|
|
|
BOEING PROPRIETARY
|
|
THE BOEING COMPANY
|
SOUTHWEST AIRLINES CO.
|
|
|
By:
/s/ Kyle L. Kersavage
|
By:
/s/ Chris Monroe
|
|
Chris Monroe
|
Its:
Attorney‑In‑Fact
|
Its:
VP, Treasurer
|
|
|
P.A. No. 1810
|
SA-99-
3
|
|
|
BOEING PROPRIETARY
|
|
TABLE OF CONTENTS
|
|
|
Page
Number
|
SA
Number
|
|
|
|
|
ARTICLES
|
|
|
|
|
|
|
|
1.
|
Subject Matter of Sale
|
1-1
|
SA-92
|
|
|||
2.
|
Delivery, Title and Risk
|
|
|
|
of Loss
|
2-1
|
SA-28
|
|
|||
3.
|
Price of Aircraft
|
3-1
|
SA-92
|
|
|||
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-
99
|
|
|
SA
Number
|
|
|
|
TABLE
|
|
|
|
|
|
1b
|
Aircraft Information Table - Block 800LUV Aircraf
|
SA-82
|
|
|
|
1c
|
Aircraft Information Table - Block 800LUV Aircraft
(non-ETOPS Configuration)
|
SA-98
|
|
|
|
1d
|
Aircraft Information Table - Block 800LUV Aircraft
(non-ETOPS Configuration)
|
SA-99
|
|
|
|
EXHIBITS
|
|
|
|
|
|
A-6
|
Aircraft Configuration - Block 800LUV Aircraft
|
SA-75
|
|
|
|
A-7
|
Aircraft Configuration - Block 800LUV Aircraft
(non-ETOPS Configuration)
|
SA-84
|
|
|
|
B
|
***
|
SA-75
|
|
|
|
C
|
Customer Support Document
|
SA-75
|
|
|
|
C-2
|
737-800 Customer Support Document
|
SA-75
|
|
|
|
D-2
|
Economic Price Adjustment
ECI-MFG/CPI (July 2011 Base Price)
|
SA-75
|
|
|
|
E
|
Buyer Furnished Equipment
Provisions Document
Attachment A - 737-7H4 Aircraft (through 2012)
Attachment B - 737-8H4 Aircraft (2012-2018)
|
SA-75
|
|
|
|
F
|
Defined Terms Document
|
SA-92
|
|
|
|
LETTER AGREEMENTS
|
|
|
|
|
|
1810-1R1
|
Waiver of Aircraft Demonstration Flight
|
SA-75
|
P.A. No. 1810
|
ii
|
|
K/SWA
|
|
SA-
99
|
|
|
|
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-1001315R4
|
|
***
|
SA-92
|
|
|
Attachment A
|
SA-98
|
|
|
|
|
SWA-PA-1810-LA-1003498R1
|
|
***
|
SA-75
|
|
|
|
|
SWA-PA-1810-LA-1003490R4
|
|
***
|
SA-92
|
|
|
|
|
SWA-PA-1810-LA-1003367R1
|
|
***
|
SA-75
|
|
|
|
|
SWA-PA-1810-LA-1105883
|
|
Aircraft Model Substitution
|
SA-75
|
|
|
|
|
SWA-PA-1810-LA-1105884R2
|
|
Option Aircraft
|
SA-92
|
|
Attachment A - Model 737-8H4 Aircraft
|
SA-92
|
|
|
Attachment B - Option Aircraft Information Table
|
SA-99
|
|
|
|
|
|
SWA-PA-1810-LA-1105885R3
|
|
***
|
SA-90
|
|
|
|
|
SWA-PA-1810-LA-1105886R2
|
|
***
|
SA-92
|
|
|
|
|
SWA-PA-1810-LA-1105887
|
|
***
|
SA-75
|
|
|
|
|
SWA-PA-1810-LA-1105888R5
|
|
***
|
SA-92
|
|
|
|
|
SWA-PA-1810-LA-1105889
|
|
***
|
SA-75
|
|
|
|
|
SWA-PA-1810-LA-1303010R1
|
|
***
|
SA-92
|
|
|
|
|
SWA-PA-1810-LA-1504814
|
|
***
|
SA-92
|
P.A. No. 1810
|
iii
|
|
K/SWA
|
|
SA-
99
|
ADDITIONAL LETTERS (FOR REFERENCE) -
INACTIVE (as of SA-82)
|
|
6-1162-MSA-288
|
Business Offer - Enhanced Ground Proximity
|
|
Warning System (EGPWS) - Activation - 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
|
1a
|
Aircraft Information Table - Block 700LUV Aircraft
|
SA-91
|
Deleted Under SA-92
|
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
|
A-5
|
Aircraft Configuration - Block 700LUV Aircraft
|
SA-75
|
Deleted under SA-92
|
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
|
P.A. No. 1810
|
iv
|
|
K/SWA
|
|
SA-
99
|
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
|
P.A. No. 1810
|
v
|
|
K/SWA
|
|
SA-
99
|
P.A. No. 1810
|
vi
|
|
K/SWA
|
|
SA-
99
|
Table 1d to
|
Purchase Agreement No. PA-01810
|
Aircraft Delivery, Description, Price and Advance Payments
|
Block 800LUV Aircraft (non-ETOPS Configuration)
|
Airframe Model/MTOW:
|
737-800
|
|
174,200 pounds
|
|
|
Detail Specification:
|
D019A001SWA38 (1/9/2015)
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||||||
Engine Model/Thrust:
|
|
CFM56-7B27
|
|
27,300 pounds
|
|
Airframe Price Base Year/Escalation Formula:
|
Jul-11
|
|
ECI-MFG/CPI
|
|||||||||||||
|
|
|
|
|
|
|
||||||||||||||||
Airframe Price:
|
***
|
|
Engine Price Base Year/Escalation Formula:
|
N/A
|
|
N/A
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||
Optional Features:
|
***
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||
Sub-Total of Airframe and Features:
|
|
***
|
|
Airframe 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:
|
***
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposit per Exercised Option Aircraft (OPEX):
|
***
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Escalation
|
Aircraft
|
|
|
Escalation Estimate
|
Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
|
|||||||||||||||
Delivery
|
Number of
|
Factor
|
Serial
|
Escalation
|
|
Adv Payment Base
|
At Signing
|
24 Mos.
|
21/18/12/9/6 Mos.
|
Total
|
||||||||||||
Date
|
Aircraft
|
(Airframe)
|
Number
|
Forecast
|
|
Price Per A/P
|
***
|
***
|
***
|
***
|
||||||||||||
Dec-2016
|
2
|
***
|
63593, 63594
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
May-2017
|
1
|
***
|
63592
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
May-2017
|
1
|
***
|
63575
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
May-2017
|
1
|
***
|
63576
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Jun-2017
|
2
|
***
|
63577, 63578
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Jun-2017
|
2
|
***
|
63596, 63595
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Jun-2017
|
2
|
***
|
63571, 63586
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Jul-2017
|
1
|
***
|
63581
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Jul-2017
|
2
|
***
|
63598, 63599
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Aug-2017
|
1
|
***
|
63587
|
***
|
|
***
|
***
|
***
|
***
|
***
|
||||||||||||
Sep-2017
|
3
|
***
|
63572, 63573, 63574
|
***
|
|
***
|
***
|
***
|
***
|
***
|
SWA-PA-01810 82233 / 88233 / 93899
|
|
SA-
99
|
|
Boeing Proprietary
|
Page
1
|
Table 1d 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
(Aircraft)
|
Aircraft
Serial
Number
|
Escalation
Forecast
|
|
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.
***
|
|
|||||||||||||||||||
Oct-2017
|
1
|
***
|
63579
|
***
|
|
***
|
***
|
***
|
***
|
|
||||||||||||
Oct-2017
|
1
|
***
|
63597
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
Nov-2017
|
1
|
***
|
63580
|
***
|
|
***
|
***
|
***
|
***
|
|
||||||||||||
Dec-2017
|
2
|
***
|
63582, 63583
|
***
|
|
***
|
***
|
***
|
***
|
|
||||||||||||
Dec-2017
|
4
|
***
|
63600, 63601,
63602, 36993
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
Jan-2018
|
1
|
***
|
64115
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
Jan-2018
|
2
|
***
|
63584, 63585
|
***
|
|
***
|
***
|
***
|
***
|
|
||||||||||||
Feb-2018
|
2
|
***
|
64171, 64172
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
Mar-2018
|
1
|
***
|
64174
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
Apr-2018
|
1
|
***
|
64248
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
May-2018
|
2
|
***
|
63588, 63589
|
***
|
|
***
|
***
|
***
|
***
|
|
||||||||||||
May-2018
|
2
|
***
|
64251, 64250
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
Jun-2018
|
2
|
***
|
63590, 63591
|
***
|
|
***
|
***
|
***
|
***
|
|
||||||||||||
Jun-2018
|
2
|
***
|
64350, 64349
|
***
|
OPEX
|
***
|
***
|
***
|
***
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1) ***
|
|
|
|
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SWA-PA-01810 82233 / 88233 / 93899
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SA-
99
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Boeing Proprietary
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Page
2
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Attachment B To
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Letter Agreement SWA PA-1810-LA-1105884R2
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Option Aircraft Delivery, Description, Price and Advance Payments
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Airframe Model/MTOW:
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737-800
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174,200 pounds
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Detail Specification:
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D019A001SWA38 (1/9/2015)
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Engine Model/Thrust:
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CFM56-7B27
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27,300 pounds
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Airframe Price Base Year/Escalation Formula:
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Jul-11
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ECI-MFG/CPI
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|||||
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Airframe Price:
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***
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Engine Price Base Year/Escalation Formula:
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N/A
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N/A
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Optional Features Estimate:
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***
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Sub-Total of Airframe and Features:
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***
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Airframe Escalation Data:
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Engine Price (Per Aircraft):
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***
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Base Year Index (ECI):
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***
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Aircraft Basic Price (Excluding BFE/SPE):
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***
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Base Year Index (CPI):
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***
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Buyer Furnished Equipment (BFE) Estimate:
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***
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Seller Purchased Equipment (SPE) Estimate:
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***
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Deposit per Aircraft:
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***
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Delivery
Date
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Number of
Aircraft
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Escalation
Factor
(Airframe)
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Option
Exercise
Date
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Escalation Estimate
Adv Payment Base
Price Per A/P
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Advance Payment Per Aircraft (Amts. Due/Mos. Prior to Delivery):
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At Signing
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24 Mos.
***
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21/18/12/9/6 Mos.
***
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Total
***
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||||||
Jul-2018
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2
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***
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1/1/17
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***
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***
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***
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***
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***
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Aug-2018
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3
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***
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2/1/17
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***
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***
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***
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***
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***
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Sep-2018
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1
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***
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3/1/17
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***
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***
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***
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***
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***
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Oct-2018
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1
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***
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4/1/17
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***
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***
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***
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***
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***
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Nov-2018
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1
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***
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5/1/17
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***
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***
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***
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***
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***
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Dec-2018
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1
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***
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6/1/17
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***
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***
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***
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***
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***
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Total:
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9
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SA-
99
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SWA-PA-01810 82233-1F.TXT
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BOEING PROPRIETARY
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Page 1
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Name
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State or Other Jurisdiction of Incorporation
or Organization
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AirTran Airways 717 Leasing Corporation
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Delaware
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AirTran Airways, Inc.
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Delaware
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AirTran Holdings, LLC
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Texas
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AirTran Risk Management, Inc.
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Delaware
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Southwest Jet Fuel Co.
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Texas
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Triple Crown Insurance Co., Ltd.
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Bermuda
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By:
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/s/ Gary C. Kelly
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Gary C. Kelly
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Chairman of the Board & Chief Executive Officer
(Principal Executive Officer)
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By:
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/s/ Tammy Romo
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Tammy Romo
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Executive Vice President Finance & Chief Financial Officer
(Principal Financial & Accounting Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By:
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/s/ Gary C. Kelly
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Gary C. Kelly
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Chairman of the Board & Chief Executive Officer
(Principal Executive Officer)
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By:
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/s/ Tammy Romo
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Tammy Romo
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Executive Vice President Finance & Chief Financial Officer
(Principal Financial & Accounting Officer)
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