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As Of Filer Filing For·On·As Docs:Size 4/28/23 Southwest Airlines Co. 10-Q 3/31/23 73:8.8M |
Document/Exhibit Description Pages Size 1: 10-Q 1st Quarter 2023 Form 10-Q HTML 1.84M 2: EX-31.1 EX-31.1 Certification of Chief Executive Officer HTML 25K 3: EX-31.2 EX-31.2 Certification of Chief Financial Officer HTML 25K 4: EX-32 EX-32 Certification of CEO and CFO HTML 23K 10: R1 Cover HTML 73K 11: R2 Condensed Consolidated Balance Sheet HTML 132K 12: R3 Condensed Consolidated Statement of Comprehensive HTML 109K Income 13: R4 Condensed Consolidated Statement of Stockholders' HTML 43K Equity 14: R5 Condensed Consolidated Statement of Stockholders' HTML 22K Equity (Parenthetical) 15: R6 Condensed Consolidated Statement of Cash Flows HTML 114K 16: R7 Basis of Presentation HTML 28K 17: R8 New Accounting Pronouncements HTML 34K 18: R9 Financial Derivative Instruments HTML 187K 19: R10 Comprehensive Income (Loss) HTML 59K 20: R11 Revenue HTML 61K 21: R12 Net Loss Per Share HTML 43K 22: R13 Fair Value Measurements HTML 137K 23: R14 Supplemental Financial Information HTML 76K 24: R15 Commitment and Contingencies HTML 63K 25: R16 Financing Activities HTML 51K 26: R17 New Accounting Pronouncements (Policies) HTML 48K 27: R18 Financial Derivative Instruments (Tables) HTML 194K 28: R19 Comprehensive Income (Loss) (Tables) HTML 62K 29: R20 Revenue (Tables) HTML 57K 30: R21 Net Loss Per Share (Tables) HTML 42K 31: R22 Fair Value Measurements (Tables) HTML 137K 32: R23 Supplemental Financial Information (Tables) HTML 82K 33: R24 Commitments and Contingencies (Tables) HTML 54K 34: R25 Financing Activities (Tables) HTML 44K 35: R26 Basis of Presentation (Details) HTML 42K 36: R27 Financial Derivative Instruments - Fuel Hedging HTML 28K (Details) 37: R28 Financial Derivative Instruments - Fair Values by HTML 49K Balance Sheet Location (Details) 38: R29 Financial Derivative Instruments - Narrative HTML 27K (Details) 39: R30 Financial Derivative Instruments - Offsetting of HTML 42K Derivative Assets (Details) 40: R31 Financial Derivative Instruments - Offsetting HTML 38K Derivative Liabilities (Details) 41: R32 Financial Derivative Instruments - Location and HTML 40K Amount Recognized in Income by Hedging Relationship (Details) 42: R33 Financial Derivative Instruments - (Gain) Loss by HTML 37K Hedging Relationship (Details) 43: R34 Financial Derivative Instruments - Premiums for HTML 26K Fuel Derivative Contracts (Details) 44: R35 Financial Derivative Instruments - Fair Values of HTML 70K Fuel Derivatives Amounts Posted as Collateral (Details) 45: R36 Comprehensive Income (Loss) - Differences between HTML 49K Net Income and Comprehensive Income (Loss) (Details) 46: R37 Comprehensive Income (Loss) - Schedule of AOCI HTML 45K Components (Details) 47: R38 Comprehensive Income (Loss) - Reclassifications HTML 50K (Details) 48: R39 Revenue - Passenger Revenue Breakout (Details) HTML 34K 49: R40 Revenue - Air Traffic Liability Breakout (Details) HTML 27K 50: R41 Revenue - Air Traffic Liability - Loyalty Program HTML 31K Rollforward (Details) 51: R42 Revenue - Air Traffic Liability Rollforward HTML 30K (Details) 52: R43 Revenue - Narrative (Details) HTML 30K 53: R44 Net Loss Per Share (Details) HTML 73K 54: R45 Fair Value Measurements - Measured on Recurring HTML 85K Basis (Details) 55: R46 Fair Value Measurement - Fair Value Assets and HTML 36K Liabilities Measured on Recurring Basis with Unobservable Inputs (Details) 56: R47 Fair Value Measurements - Quantitative Information HTML 49K about Level 3 Fair Value (Details) 57: R48 Fair Value Measurements - Carrying and Estimated HTML 69K Fair Value of Debt (Details) 58: R49 Supplemental Financial Information - Accounts and HTML 35K Other Receivables (Details) 59: R50 Supplemental Financial Information - Other Assets HTML 31K (Details) 60: R51 Supplemental Financial Information - Accounts HTML 42K Payable (Details) 61: R52 Supplemental Financial Information - Accrued HTML 42K Liabilities (Details) 62: R53 Supplemental Financial Information - Other HTML 33K Non-Current Liabilities (Details) 63: R54 Commitments and contingencies - Narrative HTML 66K (Details) 64: R55 Commitment and Contingencies - Long Term Purchase HTML 64K Commitments (Details) 65: R56 Financing Activities - Narrative (Details) HTML 70K 66: R57 Financing Activities - Interest Expense (Details) HTML 31K 67: R58 Financing Activities - Schedule of Debt HTML 49K Extinguishment (Details) 68: R9999 Uncategorized Items - luv-20230331.htm HTML 40K 71: XML IDEA XML File -- Filing Summary XML 132K 69: XML XBRL Instance -- luv-20230331_htm XML 2.28M 70: EXCEL IDEA Workbook of Financial Reports XLSX 132K 6: EX-101.CAL XBRL Calculations -- luv-20230331_cal XML 213K 7: EX-101.DEF XBRL Definitions -- luv-20230331_def XML 672K 8: EX-101.LAB XBRL Labels -- luv-20230331_lab XML 1.56M 9: EX-101.PRE XBRL Presentations -- luv-20230331_pre XML 972K 5: EX-101.SCH XBRL Schema -- luv-20230331 XSD 156K 72: JSON XBRL Instance as JSON Data -- MetaLinks 412± 640K 73: ZIP XBRL Zipped Folder -- 0000092380-23-000024-xbrl Zip 475K
luv-20230331 |
i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
or |
i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ________ to ________ |
i Texas | i 74-1563240 | |||||||
(State or other jurisdiction of | (IRS Employer | |||||||
incorporation or organization) | Identification No.) | |||||||
i P.O. Box 36611 | ||||||||
i Dallas, | i Texas | i 75235-1611 | ||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
i Common Stock ($1.00 par value) | i LUV | i New York Stock Exchange |
i Large accelerated filer | x | Accelerated filer | ☐ | ||||||||
Non-accelerated filer | ☐ | Smaller reporting company | i ☐ | ||||||||
Emerging growth company | i ☐ |
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | i 8,359 | $ | i 9,492 | |||||||
Short-term investments | i 3,315 | i 2,800 | |||||||||
Accounts and other receivables | i 1,250 | i 1,040 | |||||||||
Inventories of parts and supplies, at cost | i 736 | i 790 | |||||||||
Prepaid expenses and other current assets | i 614 | i 686 | |||||||||
Total current assets | i 14,274 | i 14,808 | |||||||||
Property and equipment, at cost: | |||||||||||
Flight equipment | i 24,577 | i 23,725 | |||||||||
Ground property and equipment | i 7,008 | i 6,855 | |||||||||
Deposits on flight equipment purchase contracts | i 283 | i 376 | |||||||||
Assets constructed for others | i 34 | i 28 | |||||||||
i 31,902 | i 30,984 | ||||||||||
Less allowance for depreciation and amortization | i 13,878 | i 13,642 | |||||||||
i 18,024 | i 17,342 | ||||||||||
Goodwill | i 970 | i 970 | |||||||||
Operating lease right-of-use assets | i 1,380 | i 1,394 | |||||||||
Other assets | i 898 | i 855 | |||||||||
$ | i 35,546 | $ | i 35,369 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | i 1,729 | $ | i 2,004 | |||||||
Accrued liabilities | i 2,118 | i 2,043 | |||||||||
Current operating lease liabilities | i 233 | i 225 | |||||||||
Air traffic liability | i 7,217 | i 6,064 | |||||||||
Current maturities of long-term debt | i 32 | i 42 | |||||||||
Total current liabilities | i 11,329 | i 10,378 | |||||||||
Long-term debt less current maturities | i 7,999 | i 8,046 | |||||||||
Air traffic liability - noncurrent | i 1,980 | i 2,186 | |||||||||
Deferred income taxes | i 1,888 | i 1,985 | |||||||||
Noncurrent operating lease liabilities | i 1,112 | i 1,118 | |||||||||
Other noncurrent liabilities | i 936 | i 969 | |||||||||
Stockholders' equity: | |||||||||||
Common stock | i 888 | i 888 | |||||||||
Capital in excess of par value | i 4,058 | i 4,037 | |||||||||
Retained earnings | i 15,995 | i 16,261 | |||||||||
Accumulated other comprehensive income | i 197 | i 344 | |||||||||
Treasury stock, at cost | ( i 10,836) | ( i 10,843) | |||||||||
Total stockholders' equity | i 10,302 | i 10,687 | |||||||||
$ | i 35,546 | $ | i 35,369 |
Three months ended March 31, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
OPERATING REVENUES: | |||||||||||||||||||||||
Passenger | $ | i 5,105 | $ | i 4,135 | |||||||||||||||||||
Freight | i 41 | i 42 | |||||||||||||||||||||
Other | i 560 | i 517 | |||||||||||||||||||||
Total operating revenues | i 5,706 | i 4,694 | |||||||||||||||||||||
OPERATING EXPENSES, NET: | |||||||||||||||||||||||
Salaries, wages, and benefits | i 2,478 | i 2,229 | |||||||||||||||||||||
Fuel and oil | i 1,547 | i 1,004 | |||||||||||||||||||||
Maintenance materials and repairs | i 240 | i 211 | |||||||||||||||||||||
Landing fees and airport rentals | i 408 | i 346 | |||||||||||||||||||||
Depreciation and amortization | i 365 | i 324 | |||||||||||||||||||||
Other operating expenses | i 952 | i 731 | |||||||||||||||||||||
Total operating expenses, net | i 5,990 | i 4,845 | |||||||||||||||||||||
OPERATING LOSS | ( i 284) | ( i 151) | |||||||||||||||||||||
OTHER EXPENSES (INCOME): | |||||||||||||||||||||||
Interest expense | i 66 | i 93 | |||||||||||||||||||||
Capitalized interest | ( i 6) | ( i 9) | |||||||||||||||||||||
Interest income | ( i 125) | ( i 3) | |||||||||||||||||||||
Loss on extinguishment of debt | i — | i 72 | |||||||||||||||||||||
Other (gains) losses, net | ( i 14) | i 72 | |||||||||||||||||||||
Total other expenses (income) | ( i 79) | i 225 | |||||||||||||||||||||
LOSS BEFORE INCOME TAXES | ( i 205) | ( i 376) | |||||||||||||||||||||
BENEFIT FOR INCOME TAXES | ( i 46) | ( i 98) | |||||||||||||||||||||
NET LOSS | $ | ( i 159) | $ | ( i 278) | |||||||||||||||||||
NET LOSS PER SHARE, BASIC | $ | ( i 0.27) | $ | ( i 0.47) | |||||||||||||||||||
NET LOSS PER SHARE, DILUTED | $ | ( i i 0.27 / ) | $ | ( i 0.47) | |||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | ( i 306) | $ | i 225 | |||||||||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||||||||||||||
Basic | i 594 | i 592 | |||||||||||||||||||||
Diluted | i 594 | i 592 |
Common Stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income | Treasury stock | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | i 888 | $ | i 4,037 | $ | i 16,261 | $ | i 344 | $ | ( i 10,843) | $ | i 10,687 | ||||||||||||||||||||||||||
Issuance of common and treasury stock pursuant to Employee stock plans | — | i 1 | — | — | i 7 | i 8 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | i 20 | — | — | — | i 20 | ||||||||||||||||||||||||||||||||
Cash
dividends, $ i 0.18 per share | — | — | ( i 107) | — | — | ( i 107) | ||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | ( i 159) | ( i 147) | — | ( i 306) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | i 888 | $ | i 4,058 | $ | i 15,995 | $ | i 197 | $ | ( i 10,836) | $ | i 10,302 | ||||||||||||||||||||||||||
Common Stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income | Treasury stock | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | i 888 | $ | i 4,224 | $ | i 15,774 | $ | i 388 | $ | ( i 10,860) | $ | i 10,414 | ||||||||||||||||||||||||||
Cumulative effect of adopting Accounting Standards Update No. 2020-06, Debt | — | ( i 300) | i 55 | — | — | ( i 245) | ||||||||||||||||||||||||||||||||
Issuance of common and treasury stock pursuant to Employee stock plans | — | — | — | — | i 7 | i 7 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | i 16 | — | — | — | i 16 | ||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | ( i 278) | i 503 | — | i 225 | ||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | i 888 | $ | i 3,940 | $ | i 15,551 | $ | i 891 | $ | ( i 10,853) | $ | i 10,417 | ||||||||||||||||||||||||||
Three months ended | ||||||||||||||||||||||||||
March 31, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||
Net loss | $ | ( i 159) | $ | ( i 278) | ||||||||||||||||||||||
Adjustments to reconcile net loss to cash provided by operating activities: | ||||||||||||||||||||||||||
Depreciation and amortization | i 365 | i 324 | ||||||||||||||||||||||||
Impairment of long-lived assets | i — | i 16 | ||||||||||||||||||||||||
Unrealized mark-to-market adjustment on available for sale securities | ( i 4) | i 5 | ||||||||||||||||||||||||
Unrealized/realized (gain) loss on fuel derivative instruments | i — | i 34 | ||||||||||||||||||||||||
Deferred income taxes | ( i 52) | ( i 97) | ||||||||||||||||||||||||
Loss on extinguishment of debt | i — | i 72 | ||||||||||||||||||||||||
Changes in certain assets and liabilities: | ||||||||||||||||||||||||||
Accounts and other receivables | ( i 232) | ( i 334) | ||||||||||||||||||||||||
Other assets | i 50 | ( i 44) | ||||||||||||||||||||||||
Accounts payable and accrued liabilities | ( i 72) | i 177 | ||||||||||||||||||||||||
Air traffic liability | i 947 | i 885 | ||||||||||||||||||||||||
Other liabilities | ( i 47) | ( i 105) | ||||||||||||||||||||||||
Cash collateral received from (provided to) derivative counterparties | ( i 30) | i 385 | ||||||||||||||||||||||||
Other, net | ( i 60) | i 31 | ||||||||||||||||||||||||
Net cash provided by operating activities | i 706 | i 1,071 | ||||||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||
Capital expenditures | ( i 1,046) | ( i 510) | ||||||||||||||||||||||||
Assets constructed for others | ( i 6) | ( i 4) | ||||||||||||||||||||||||
Purchases of short-term investments | ( i 2,204) | ( i 925) | ||||||||||||||||||||||||
Proceeds from sales of short-term and other investments | i 1,679 | i 1,300 | ||||||||||||||||||||||||
Net cash used in investing activities | ( i 1,577) | ( i 139) | ||||||||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||
Proceeds from Employee stock plans | i 9 | i 6 | ||||||||||||||||||||||||
Payments of long-term debt and finance lease obligations | ( i 59) | ( i 93) | ||||||||||||||||||||||||
Payments of cash dividends | ( i 214) | i — | ||||||||||||||||||||||||
Payments for repurchases and conversions of convertible debt | i — | ( i 230) | ||||||||||||||||||||||||
Other, net | i 2 | i 3 | ||||||||||||||||||||||||
Net cash used in financing activities | ( i 262) | ( i 314) | ||||||||||||||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | ( i 1,133) | i 618 | ||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | i 9,492 | i 12,480 | ||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | i 8,359 | $ | i 13,098 | ||||||||||||||||||||||
CASH PAYMENTS FOR: | ||||||||||||||||||||||||||
Interest, net of amount capitalized | $ | i 19 | $ | i 20 | ||||||||||||||||||||||
Income taxes | $ | i 2 | $ | i 4 | ||||||||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS: | ||||||||||||||||||||||||||
Adoption of Accounting Standards Update 2020-06, Debt | $ | i — | $ | i 245 | ||||||||||||||||||||||
Right-of-use assets acquired under operating leases | $ | i 47 | $ | i 24 | ||||||||||||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Maximum fuel hedged as of | |||||||||||||||||
March 31, 2023 | Derivative underlying commodity type as of | ||||||||||||||||
Period (by year) | (gallons in millions) (a) | March 31, 2023 | |||||||||||||||
Remainder of 2023 | i 813 | West Texas Intermediate ("WTI") crude oil and Brent crude oil | |||||||||||||||
2024 | i 1,265 | WTI crude oil and Brent crude oil | |||||||||||||||
2025 | i 227 | Brent crude oil | |||||||||||||||
Asset derivatives | ||||||||||||||||||||||||||||||||
Balance Sheet | Fair value at | Fair value at | ||||||||||||||||||||||||||||||
(in millions) | location | 3/31/2023 | 12/31/2022 | |||||||||||||||||||||||||||||
Derivatives designated as hedges (a) | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | i 228 | $ | i 352 | |||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | i 167 | i 160 | |||||||||||||||||||||||||||||
Interest rate derivative contracts | Other assets | i 13 | i 14 | |||||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | i 408 | $ | i 526 | ||||||||||||||||||||||||||||
Southwest Airlines Co. Notes
to Condensed Consolidated Financial Statements (unaudited) |
Balance Sheet | March 31, | December 31, | ||||||||||||||||||
(in millions) | location | 2023 | 2022 | |||||||||||||||||
Cash collateral deposits held from counterparties for fuel contracts - current | Offset against Prepaid expenses and other current assets | $ | i 65 | $ | i 106 | |||||||||||||||
Cash collateral deposits held from counterparties for fuel contracts - noncurrent | Offset against Other assets | i 11 | i — | |||||||||||||||||
Receivable from third parties for fuel contracts | Accounts and other receivables | i 15 | i 34 | |||||||||||||||||
Offsetting of derivative assets | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) = (i) + (ii) | (i) | (ii) | (iii) = (i) + (ii) | ||||||||||||||||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Description | Balance Sheet location | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | Gross amounts of recognized assets | Gross amounts offset in the Balance Sheet | Net amounts of assets presented in the Balance Sheet | ||||||||||||||||||||||||||||||||||||||||
Fuel derivative contracts | Prepaid expenses and other current assets | $ | i 228 | $ | ( i 65) | $ | i 163 | $ | i 352 | $ | ( i 106) | $ | i 246 | ||||||||||||||||||||||||||||||||||
Fuel derivative contracts | Other assets | $ | i 167 | $ | ( i 11) | $ | i 156 | (a) | $ | i 160 | $ | i — | $ | i 160 | (a) | ||||||||||||||||||||||||||||||||
Interest rate derivative contracts | Other assets | $ | i 13 | $ | i — | $ | i 13 | (a) | $ | i 14 | $ | i — | $ | i 14 | (a) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial
Statements (unaudited) |
Offsetting of derivative liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) = (i) + (ii) | (i) | (ii) | (iii) = (i) + (ii) | ||||||||||||||||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
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 | $ | i 65 | $ | ( i 65) | $ | i — | $ | i 106 | $ | ( i 106) | $ | i — | ||||||||||||||||||||||||||||||||||
Fuel derivative contracts | Other assets | $ | i 11 | $ | ( i 11) | $ | i — | $ | i — | $ | i — | $ | i — | ||||||||||||||||||||||||||||||||||
Location and amount recognized in income on cash flow and fair value hedging relationships | ||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2023 | Three months ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||
(in millions) | Fuel and oil | Other operating expenses | Fuel and oil | Other operating expenses | ||||||||||||||||||||||||||||||||||
Total | $ | ( i 28) | $ | i 2 | $ | ( i 203) | $ | i 2 | ||||||||||||||||||||||||||||||
(Gain) loss on cash flow hedging relationships: | ||||||||||||||||||||||||||||||||||||||
Commodity contracts: | ||||||||||||||||||||||||||||||||||||||
Amount of (gain) reclassified from AOCI into income | ( i 28) | i — | ( i 203) | i — | ||||||||||||||||||||||||||||||||||
Interest contracts: | ||||||||||||||||||||||||||||||||||||||
Amount of loss reclassified from AOCI into income | i — | i 2 | i — | i 2 | ||||||||||||||||||||||||||||||||||
Derivatives designated and qualified in cash flow hedging relationships | |||||||||||
(Gain) loss recognized in AOCI on derivatives, net of tax | |||||||||||
Three months ended | |||||||||||
March 31, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
Fuel derivative contracts | $ | i 125 | $ | ( i 654) | |||||||
Interest rate derivatives | i 2 | ( i 4) | |||||||||
Total | $ | i 127 | $ | ( i 658) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Derivatives not designated as hedges | |||||||||||||||||
(Gain) loss recognized in income on derivatives | |||||||||||||||||
Three months ended | Location of (gain) loss recognized in income on derivatives | ||||||||||||||||
March 31, | |||||||||||||||||
(in millions) | 2023 | 2022 | |||||||||||||||
Fuel derivative contracts | $ | i — | $ | i 34 | Other (gains) losses, net | ||||||||||||
Premium expense recognized in income on derivatives | |||||||||||||||||
Three months ended | Location of premium expense recognized in income on derivatives | ||||||||||||||||
March 31, | |||||||||||||||||
(in millions) | 2023 | 2022 | |||||||||||||||
Fuel derivative contracts designated as hedges | $ | i 30 | $ | i 26 | Fuel and oil | ||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Counterparty (CP) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | A | B | C | D | E | F | G | Other (a) | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of fuel derivatives | $ | i 96 | $ | i 51 | $ | i 78 | $ | i 23 | $ | i 55 | $ | i 29 | $ | i 48 | $ | i 15 | $ | i 395 | |||||||||||||||||||||||||||||||||||||||||
Cash collateral held from CP | i 76 | i — | i — | i — | i — | i — | i — | i — | i 76 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Option to substitute LC for cash | N/A | N/A | (b) | (b) | (b) | N/A | (b) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
If
credit rating is investment grade, fair value of fuel derivative level at which: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash is provided to CP | >( i 100) | >( i 50) | >( i 75) | >( i 125) | >( i 40) | >( i 65) | >( i 100) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash is received from CP | > i 0(c) | > i 150(c) | > i 250(c) | > i 125(c) | > i 100(c) | > i 70(c) | > i 100(c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
If
credit rating is non-investment grade, fair value of fuel derivative level at which: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash is received from CP | (d) | (d) | (d) | (d) | (d) | (d) | (d) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
NET LOSS | $ | ( i 159) | $ | ( i 278) | |||||||
Unrealized
gain (loss) on fuel derivative instruments, net of deferred taxes of ($ i 44) and $ i 151 | ( i 147) | i 498 | |||||||||
Unrealized
gain on interest rate derivative instruments, net of deferred taxes of $ i 0 and $ i 2 | i — | i 5 | |||||||||
Total other comprehensive income (loss) | $ | ( i 147) | $ | i 503 | |||||||
COMPREHENSIVE INCOME (LOSS) | $ | ( i 306) | $ | i 225 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Deferred tax impact | Accumulated other comprehensive income | ||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | i 305 | $ | ( i 32) | $ | i 170 | $ | ( i 99) | $ | i 344 | |||||||||||||||||||||||||
Changes in fair value | ( i 163) | ( i 2) | — | i 38 | ( i 127) | ||||||||||||||||||||||||||||||
Reclassification to earnings | ( i 28) | i 2 | — | (a) | i 6 | ( i 20) | |||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | i 114 | $ | ( i 32) | $ | i 170 | $ | ( i 55) | $ | i 197 |
Three months ended March 31, 2023 | ||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) | ||||||||||||
AOCI components | ||||||||||||||
Unrealized (gain) on fuel derivative instruments | $ | ( i 28) | Fuel and oil expense | |||||||||||
( i 6) | Less: Tax expense | |||||||||||||
$ | ( i 22) | Net of tax | ||||||||||||
Unrealized loss on interest rate derivative instruments | $ | i 2 | Other operating expenses | |||||||||||
i — | Less: Tax expense | |||||||||||||
$ | i 2 | Net of tax | ||||||||||||
Total reclassifications for the period | $ | ( i 20) | Net of tax |
Three months ended March 31, | |||||||||||||||||||||||
(in millions) | 2023 | 2022 | |||||||||||||||||||||
Passenger non-loyalty | $ | i 4,082 | $ | i 3,364 | |||||||||||||||||||
Passenger loyalty - air transportation | i 825 | i 624 | |||||||||||||||||||||
Passenger ancillary sold separately | i 198 | i 147 | |||||||||||||||||||||
Total passenger revenues | $ | i 5,105 | $ | i 4,135 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Balance as of | |||||||||||
(in millions) | March 31, 2023 | December 31, 2022 | |||||||||
Air traffic liability - passenger travel and ancillary passenger services | $ | i 4,007 | $ | i 3,061 | |||||||
Air traffic liability - loyalty program | i 5,190 | i 5,189 | |||||||||
Total Air traffic liability | $ | i 9,197 | $ | i 8,250 |
Three months ended March 31, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Air traffic liability - loyalty program - beginning balance | $ | i 5,189 | $ | i 4,789 | |||||||||||||||||||
Amounts deferred associated with points awarded | i 846 | i 736 | |||||||||||||||||||||
Revenue recognized from points redeemed - Passenger | ( i 825) | ( i 624) | |||||||||||||||||||||
Revenue recognized from points redeemed - Other | ( i 20) | ( i 17) | |||||||||||||||||||||
Air traffic liability - loyalty program - ending balance | $ | i 5,190 | $ | i 4,884 |
Air traffic liability | |||||
Balance at December 31, 2022 | $ | i 8,250 | |||
Current period sales (passenger travel, ancillary services, flight loyalty, and partner loyalty) | i 6,072 | ||||
Revenue from amounts included in contract liability opening balances | ( i 2,568) | ||||
Revenue from current period sales | ( i 2,557) | ||||
Balance at March 31, 2023 | $ | i 9,197 |
Air traffic liability | |||||
Balance at December 31, 2021 | $ | i 7,725 | |||
Current period sales (passenger travel, ancillary services, flight loyalty, and partner loyalty) | i 5,038 | ||||
Revenue from amounts included in contract liability opening balances | ( i 1,881) | ||||
Revenue from current period sales | ( i 2,272) | ||||
Balance at March 31, 2022 | $ | i 8,610 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Three months ended March 31, | ||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
NUMERATOR: | ||||||||||||||||||||||||||
Net loss | $ | ( i 159) | $ | ( i 278) | ||||||||||||||||||||||
Add: Interest expense | i — | i — | ||||||||||||||||||||||||
Net loss attributable to common stockholders | ( i 159) | ( i 278) | ||||||||||||||||||||||||
DENOMINATOR: | ||||||||||||||||||||||||||
Weighted-average shares outstanding, basic and diluted | i 594 | i 592 | ||||||||||||||||||||||||
NET LOSS PER SHARE: | ||||||||||||||||||||||||||
Basic | $ | ( i 0.27) | $ | ( i 0.47) | ||||||||||||||||||||||
Diluted | $ | ( i i 0.27 / ) | $ | ( i 0.47) | ||||||||||||||||||||||
Antidilutive amounts excluded from calculations: | ||||||||||||||||||||||||||
Convertible debt | i 42 | i 47 | ||||||||||||||||||||||||
Restricted stock units | i 3 | i — | ||||||||||||||||||||||||
Stock warrants | i 1 | i — |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Southwest Airlines Co. Notes
to Condensed Consolidated Financial Statements (unaudited) |
Fair value measurements at reporting date using: | ||||||||||||||||||||||||||
Quoted prices in active markets for identical assets | Significant other observable inputs | Significant unobservable inputs | ||||||||||||||||||||||||
Description | March 31, 2023 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
Assets | (in millions) | |||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Cash equivalents (a) | $ | i 7,497 | $ | i 7,497 | $ | i — | $ | i — | ||||||||||||||||||
Commercial paper | i 224 | i — | i 224 | i — | ||||||||||||||||||||||
Certificates of deposit | i 13 | i — | i 13 | i — | ||||||||||||||||||||||
Time deposits | i 625 | i — | i 625 | i — | ||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Treasury bills | i 3,116 | i 3,116 | i — | i — | ||||||||||||||||||||||
Certificates of deposit | i 150 | i — | i 150 | i — | ||||||||||||||||||||||
Time deposits | i 49 | i — | i 49 | i — | ||||||||||||||||||||||
Fuel derivatives: | ||||||||||||||||||||||||||
Option contracts (b) | i 395 | i — | i — | i 395 | ||||||||||||||||||||||
Interest rate derivatives (see Note 3) | i 13 | i — | i 13 | i — | ||||||||||||||||||||||
Equity Securities | i 236 | i 236 | i — | i — | ||||||||||||||||||||||
Total assets | $ | i 12,318 | $ | i 10,849 | $ | i 1,074 | $ | i 395 | ||||||||||||||||||
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, 2022 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
Assets | (in millions) | |||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Cash equivalents (a) | $ | i 9,040 | $ | i 9,040 | $ | i — | $ | i — | ||||||||||||||||||
Commercial paper | i 179 | i — | i 179 | i — | ||||||||||||||||||||||
Certificates of deposit | i 23 | i — | i 23 | i — | ||||||||||||||||||||||
Time deposits | i 250 | i — | i 250 | i — | ||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Treasury bills | i 2,226 | i 2,226 | i — | i — | ||||||||||||||||||||||
Certificates of deposit | i 124 | i — | i 124 | i — | ||||||||||||||||||||||
Time deposits | i 450 | i — | i 450 | i — | ||||||||||||||||||||||
Fuel derivatives: | ||||||||||||||||||||||||||
Option contracts (b) | i 512 | i — | i — | i 512 | ||||||||||||||||||||||
Interest rate derivatives (see Note 3) | i 14 | i — | i 14 | i — | ||||||||||||||||||||||
Equity Securities | i 235 | i 235 | i — | i — | ||||||||||||||||||||||
Total assets | $ | i 13,053 | $ | i 11,501 | $ | i 1,040 | $ | i 512 | ||||||||||||||||||
Southwest
Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Fair value measurements using significant unobservable inputs (Level 3) | |||||||||||||||||
(in millions) | Fuel derivatives | ||||||||||||||||
Balance at December 31, 2022 | $ | i 512 | |||||||||||||||
Total gains (losses) for the period | |||||||||||||||||
Included in other comprehensive income | ( i 163) | ||||||||||||||||
Purchases | i 104 | (a) | |||||||||||||||
Settlements | ( i 58) | ||||||||||||||||
Balance at March 31, 2023 | $ | i 395 | |||||||||||||||
The
amount of total losses for the period included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at March 31, 2023 | $ | ( i 145) |
Quantitative information about Level 3 fair value measurements | ||||||||||||||||||||||||||||||||
Valuation technique | Unobservable input | Period (by year) | Range | Weighted Average (a) | ||||||||||||||||||||||||||||
Fuel derivatives | Option model | Implied volatility | Second quarter 2023 | i 26- i 42% | i 35 | % | ||||||||||||||||||||||||||
Third quarter 2023 | i 32- i 43% | i 38 | % | |||||||||||||||||||||||||||||
Fourth quarter 2023 | i 34- i 42% | i 38 | % | |||||||||||||||||||||||||||||
2024 | i 31- i 42% | i 33 | % | |||||||||||||||||||||||||||||
2025 | i 30- i 31% | i 30 | % | |||||||||||||||||||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
(in millions) | Carrying value | Estimated fair value | Fair value level hierarchy | ||||||||||||||
i 1.25%
Convertible Notes due 2025 | i 1,611 | i 1,831 | Level 2 | ||||||||||||||
i 5.25% Notes due 2025 | i 1,302 | i 1,308 | Level 2 | ||||||||||||||
i 3.00% Notes due 2026 | i 300 | i 281 | Level 2 | ||||||||||||||
i 3.45% Notes due 2027 | i 300 | i 281 | Level 2 | ||||||||||||||
i 5.125% Notes due 2027 | i 1,727 | i 1,727 | Level 2 | ||||||||||||||
i 7.375% Debentures due 2027 | i 113 | i 121 | Level 2 | ||||||||||||||
i 2.625% Notes due 2030 | i 500 | i 427 | Level 2 | ||||||||||||||
i 1.000% PSP1 Loan due 2030 | i 976 | i 866 | Level 3 | ||||||||||||||
i 1.000% PSP2 Loan due 2031 | i 566 | i 487 | Level 3 | ||||||||||||||
i 1.000% PSP3 Loan due 2031 | i 526 | i 448 | Level 3 |
(in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Trade receivables | $ | i 64 | $ | i 117 | ||||||||||
Credit card receivables | i 185 | i 85 | ||||||||||||
Business partners and other suppliers | i 545 | i 478 | ||||||||||||
Taxes receivable | i 129 | i 133 | ||||||||||||
Fuel hedging and receivables | i 15 | i 34 | ||||||||||||
Other | i 312 | i 193 | ||||||||||||
Accounts and other receivables | $ | i 1,250 | $ | i 1,040 |
(in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Derivative contracts | $ | i 169 | $ | i 174 | ||||||||||
Intangible assets, net | i 295 | i 296 | ||||||||||||
Equity securities | i 236 | i 261 | ||||||||||||
Other | i 198 | i 124 | ||||||||||||
Other assets | $ | i 898 | $ | i 855 |
(in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Accounts payable trade | $ | i 272 | $ | i 277 | ||||||||||
Salaries, withholdings and payroll taxes | i 368 | i 456 | ||||||||||||
Ticket taxes and fees | i 434 | i 242 | ||||||||||||
Aircraft maintenance payable | i 91 | i 65 | ||||||||||||
Fuel payable | i 113 | i 188 | ||||||||||||
Dividends payable | i — | i 107 | ||||||||||||
Customer reimbursements and refunds (a) | i 17 | i 311 | ||||||||||||
Accrued third party services | i 240 | i 196 | ||||||||||||
Other payable | i 194 | i 162 | ||||||||||||
Accounts payable | $ | i 1,729 | $ | i 2,004 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
(in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Voluntary Separation Program | $ | i 69 | $ | i 72 | ||||||||||
Profitsharing and savings plans | i 32 | i 167 | ||||||||||||
Vacation pay | i 495 | i 484 | ||||||||||||
Health | i 289 | i 261 | ||||||||||||
Workers compensation | i 166 | i 164 | ||||||||||||
Property and income taxes | i 53 | i 37 | ||||||||||||
Interest | i 164 | i 45 | ||||||||||||
Bonus and incentive pay (b) | i 626 | i 563 | ||||||||||||
Other | i 224 | i 250 | ||||||||||||
Accrued liabilities | $ | i 2,118 | $ | i 2,043 |
(in millions) | March 31, 2023 | December 31, 2022 | ||||||||||||
Voluntary Separation Program | $ | i 125 | $ | i 147 | ||||||||||
Postretirement obligation | i 242 | i 241 | ||||||||||||
Other deferred compensation | i 326 | i 331 | ||||||||||||
Other | i 243 | i 250 | ||||||||||||
Other noncurrent liabilities | $ | i 936 | $ | i 969 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
The Boeing Company | |||||||||||||||||||||||||||||||||||||||||||||||
-7 Firm Orders | -8 Firm Orders | -7 or -8 Options | Total | ||||||||||||||||||||||||||||||||||||||||||||
2023 | i 31 | i 105 | i — | i 136 | (c) | ||||||||||||||||||||||||||||||||||||||||||
2024 | i 45 | i 11 | i 30 | i 86 | |||||||||||||||||||||||||||||||||||||||||||
2025 | i 30 | i — | i 56 | i 86 | |||||||||||||||||||||||||||||||||||||||||||
2026 | i 30 | i 15 | i 40 | i 85 | |||||||||||||||||||||||||||||||||||||||||||
2027 | i 15 | i 15 | i 6 | i 36 | |||||||||||||||||||||||||||||||||||||||||||
2028 | i 15 | i 15 | i — | i 30 | |||||||||||||||||||||||||||||||||||||||||||
2029 | i 20 | i 30 | i — | i 50 | |||||||||||||||||||||||||||||||||||||||||||
2030 | i — | i 55 | i — | i 55 | |||||||||||||||||||||||||||||||||||||||||||
2031 | i — | i — | i — | i — | |||||||||||||||||||||||||||||||||||||||||||
i 186 | (a) | i 246 | (b) | i 132 | i 564 |
The Boeing Company | |||||||||||||||||||||||
-7 Firm Orders | -8 Firm Orders | Total | |||||||||||||||||||||
2022 Contractual Deliveries Remaining | i 14 | i 32 | i 46 | ||||||||||||||||||||
2023 Contractual Deliveries | i 17 | i 73 | i 90 | ||||||||||||||||||||
2023 Total | i 31 | i 105 | i 136 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Southwest Airlines Co. Notes
to Condensed Consolidated Financial Statements (unaudited) |
Three months ended March 31, | |||||||||||||||||||||||
(in millions) | 2023 | 2022 | |||||||||||||||||||||
Non-cash amortization of debt issuance costs | i 3 | i 3 | |||||||||||||||||||||
Contractual coupon interest | i 5 | i 6 | |||||||||||||||||||||
Total interest expense | $ | i 8 | $ | i 9 |
Three months ended March 31, 2022 | |||||||||||||||||||||||||||||
(in millions) | Cash paid for debt and interest | Principal repayment | Loss on extinguishment | Non-cash amortization of debt discount and (issuance) costs | Accrued Interest | ||||||||||||||||||||||||
i 1.25%
Convertible Notes due 2025 | $ | i 230 | $ | i 164 | $ | i 69 | $ | ( i 3) | $ | i — | |||||||||||||||||||
i 5.125%
Notes due 2027 | i 34 | i 30 | i 3 | i — | i 1 | ||||||||||||||||||||||||
Total | $ | i 264 | $ | i 194 | $ | i 72 | $ | ( i 3) | $ | i 1 |
Three months ended March 31, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | ||||||||||||||||||||||||||||||||||||
Revenue passengers carried (000s) | 30,231 | 26,029 | 16.1 | % | ||||||||||||||||||||||||||||||||||
Enplaned passengers (000s) | 37,666 | 32,005 | 17.7 | % | ||||||||||||||||||||||||||||||||||
Revenue passenger miles (RPMs) (in millions)(a) | 29,547 | 26,483 | 11.6 | % | ||||||||||||||||||||||||||||||||||
Available
seat miles (ASMs) (in millions)(b) | 38,062 | 34,384 | 10.7 | % | ||||||||||||||||||||||||||||||||||
Load factor(c) | 77.6 | % | 77.0 | % | 0.6 | pts. | ||||||||||||||||||||||||||||||||
Average length of passenger haul (miles) | 977 | 1,017 | (3.9) | % | ||||||||||||||||||||||||||||||||||
Average aircraft stage length (miles) | 715 | 765 | (6.5) | % | ||||||||||||||||||||||||||||||||||
Trips flown | 334,121 | 287,751 | 16.1 | % | ||||||||||||||||||||||||||||||||||
Seats flown (000s)(d) | 52,719 | 44,547 | 18.3 | % | ||||||||||||||||||||||||||||||||||
Seats
per trip(e) | 157.8 | 154.8 | 1.9 | % | ||||||||||||||||||||||||||||||||||
Average passenger fare | $ | 168.88 | $ | 158.88 | 6.3 | % | ||||||||||||||||||||||||||||||||
Passenger
revenue yield per RPM (cents)(f) | 17.28 | 15.62 | 10.6 | % | ||||||||||||||||||||||||||||||||||
Operating revenues per ASM (cents)(g) | 14.99 | 13.65 | 9.8 | % | ||||||||||||||||||||||||||||||||||
Passenger
revenue per ASM (cents)(h) | 13.41 | 12.03 | 11.5 | % | ||||||||||||||||||||||||||||||||||
Operating expenses per ASM (cents)(i) | 15.74 | 14.09 | 11.7 | % | ||||||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding fuel (cents) | 11.67 | 11.17 | 4.5 | % | ||||||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding fuel and profitsharing (cents) | 11.67 | 11.06 | 5.5 | % | ||||||||||||||||||||||||||||||||||
Fuel costs per gallon, including fuel tax | $ | 3.19 | $ | 2.30 | 38.7 | % | ||||||||||||||||||||||||||||||||
Fuel costs per gallon, including fuel tax, economic | $ | 3.19 | $ | 2.30 | 38.7 | % | ||||||||||||||||||||||||||||||||
Fuel consumed, in gallons (millions) | 483 | 436 | 10.8 | % | ||||||||||||||||||||||||||||||||||
Active fulltime equivalent Employees | 69,868 | 58,865 | 18.7 | % | ||||||||||||||||||||||||||||||||||
Aircraft
at end of period(j) | 793 | 722 | 9.8 | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP | 2023 | 2022 | 2023 Change to 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Operating loss | $ | ( i 284) | $ | ( i 151) | 88.1 | % | |||||||||||||||||||||||||||||||||||||||||
Net loss | $ | ( i 159) | $ | ( i 278) | (42.8) | % | |||||||||||||||||||||||||||||||||||||||||
Net loss per share, diluted | $ | ( i i 0.27 / ) | $ | ( i 0.47) | (42.6) | % | |||||||||||||||||||||||||||||||||||||||||
Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||||
Operating loss | $ | (284) | $ | (135) | 110.4 | ||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (163) | $ | (191) | (14.7) | ||||||||||||||||||||||||||||||||||||||||||
Net loss per share, diluted | $ | (0.27) | $ | (0.32) | (15.6) |
2Q
2023 Estimation | |||||||||||||||||
RASM (a), year-over-year | Down 8% to 11% | ||||||||||||||||
ASMs (b), year-over-year | Up ~14% | ||||||||||||||||
Economic fuel costs per gallon (c)(d) | $2.45 to $2.55 | ||||||||||||||||
Fuel hedging premium expense per gallon | $0.06 | ||||||||||||||||
Fuel hedging cash settlement gains per gallon | $0.13 | ||||||||||||||||
ASMs per gallon (fuel efficiency) | 78 to 80 | ||||||||||||||||
CASM-X (e), year-over-year (f) | Up 5% to 8% | ||||||||||||||||
Scheduled debt repayments (millions) | ~$10 | ||||||||||||||||
Interest expense (millions) | ~$65 |
2023
Estimation | |||||||||||
ASMs (b), year-over-year | Up 14% to 15% | ||||||||||
Economic fuel costs per gallon (c)(d) | $2.60 to $2.70 | ||||||||||
Fuel hedging premium expense per gallon | $0.06 | ||||||||||
Fuel hedging cash settlement gains per gallon | $0.10 | ||||||||||
CASM-X (e), year-over-year (f) | Down 2% to 4% | ||||||||||
Scheduled debt repayments (millions) | ~$85 | ||||||||||
Interest expense (millions) | ~$250 | ||||||||||
Aircraft (g) | 814 | ||||||||||
Effective tax rate | 23% to 24% | ||||||||||
Capital spending (billions) (h) | ~$3.5 |
Three months ended March 31, | Per ASM change | Percent change | |||||||||||||||||||||
(in cents, except for percentages) | 2023 | 2022 | |||||||||||||||||||||
Salaries, wages, and benefits | 6.51 | ¢ | 6.48 | ¢ | 0.03 | ¢ | 0.5 | % | |||||||||||||||
Fuel and oil | 4.07 | 2.92 | 1.15 | 39.4 | |||||||||||||||||||
Maintenance materials and repairs | 0.63 | 0.61 | 0.02 | 3.3 | |||||||||||||||||||
Landing fees and airport rentals | 1.07 | 1.01 | 0.06 | 5.9 | |||||||||||||||||||
Depreciation and amortization | 0.96 | 0.94 | 0.02 | 2.1 | |||||||||||||||||||
Other operating expenses | 2.50 | 2.13 | 0.37 | 17.4 | |||||||||||||||||||
Total | 15.74 | ¢ | 14.09 | ¢ | 1.65 | ¢ | 11.7 | % |
Three months ended March 31, | |||||||||||||||||
2023 | 2022 | ||||||||||||||||
Economic fuel costs per gallon | $ | 3.19 | $ | 2.30 | |||||||||||||
Fuel hedging premium expense (in millions) | $ | 30 | $ | 26 | |||||||||||||
Fuel hedging premium expense per gallon | $ | 0.06 | $ | 0.06 | |||||||||||||
Fuel hedging cash settlement gain per gallon | $ | 0.12 | $ | 0.52 |
Estimated
economic fuel price per gallon, including taxes and fuel hedging premiums (b) | ||||||||
Average Brent Crude Oil price per barrel | 2Q 2023 | 2023 | ||||||
$60 | $1.85 - $1.95 | $2.20 - $2.30 | ||||||
$70 | $2.15 - $2.25 | $2.40 - $2.50 | ||||||
$80 | $2.35 - $2.45 | $2.60 - $2.70 | ||||||
Current Market (a) | $2.45 - $2.55 | $2.60 - $2.70 | ||||||
$90 | $2.60 - $2.70 | $2.75 - $2.85 | ||||||
$100 | $2.80 - $2.90 | $2.90 - $3.00 | ||||||
$110 | $3.00 - $3.10 | $3.05 - $3.15 | ||||||
Fair market value | $70 million | $262 million | ||||||
Estimated premium costs | $30 million | $121 million |
Period | Maximum fuel hedged percentage (a)(b) | |||||||
2023 | 50% | |||||||
2024 | 51% | |||||||
2025 | 10% |
Year | Fair
value of fuel derivative contracts at March 31, 2023 | Amount of gains (losses) deferred in AOCI at March 31, 2023 (net of tax) | ||||||||||||
Remainder of 2023 | $ | 187 | $ | 74 | ||||||||||
2024 | 177 | 14 | ||||||||||||
2025 | 31 | (1) | ||||||||||||
Total | $ | 395 | $ | 87 |
Three months ended March 31, | |||||||||||
(in millions) | 2023 | 2022 | |||||||||
Mark-to-market impact from fuel contracts settling in current and future periods | $ | — | $ | 34 | |||||||
Unrealized mark-to-market adjustment on available for sale securities | (4) | 5 | |||||||||
Mark-to-market impact on deferred compensation plan investments | (10) | 33 | |||||||||
$ | (14) | $ | 72 |
Three months ended March 31, | Percent | ||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | |||||||||||||||||||||||||||||||||
Fuel and oil expense, unhedged | $ | 1,575 | $ | 1,207 | |||||||||||||||||||||||||||||||
Add: Premium cost of fuel contracts designated as hedges | 30 | 26 | |||||||||||||||||||||||||||||||||
Deduct: Fuel hedge gains included in Fuel and oil expense, net | (58) | (229) | |||||||||||||||||||||||||||||||||
Fuel and oil expense, as reported (economic) | $ | 1,547 | $ | 1,004 | 54.1 | ||||||||||||||||||||||||||||||
Total operating expenses, net, as reported | $ | 5,990 | $ | 4,845 | |||||||||||||||||||||||||||||||
Deduct: Impairment of long-lived assets | — | $ | (16) | ||||||||||||||||||||||||||||||||
Total operating expenses, excluding special items | $ | 5,990 | $ | 4,829 | 24.0 | ||||||||||||||||||||||||||||||
Deduct: Fuel and oil expense, as reported (economic) | (1,547) | (1,004) | |||||||||||||||||||||||||||||||||
Operating expenses, excluding Fuel and oil expense and special items | $ | 4,443 | $ | 3,825 | 16.2 | ||||||||||||||||||||||||||||||
Deduct: Profitsharing expense | — | (37) | |||||||||||||||||||||||||||||||||
Operating expenses, excluding Fuel and oil expense, special items, and profitsharing | $ | 4,443 | $ | 3,788 | 17.3 | ||||||||||||||||||||||||||||||
Operating loss, as reported | $ | (284) | $ | (151) | |||||||||||||||||||||||||||||||
Add: Impairment of long-lived assets | — | 16 | |||||||||||||||||||||||||||||||||
Operating loss, excluding special items | $ | (284) | $ | (135) | 110.4 | ||||||||||||||||||||||||||||||
Other (gains) losses, net, as reported | $ | (14) | $ | 72 | |||||||||||||||||||||||||||||||
Deduct: Mark-to-market impact from fuel contracts settling in current and future periods (a) | — | (34) | |||||||||||||||||||||||||||||||||
Add (Deduct): Unrealized mark-to-market adjustment on available for sale securities | 4 | (5) | |||||||||||||||||||||||||||||||||
Other (gains) losses, net, excluding special items | $ | (10) | $ | 33 | n.m. | ||||||||||||||||||||||||||||||
Loss before income taxes, as reported | $ | (205) | $ | (376) | |||||||||||||||||||||||||||||||
Add: Mark-to-market impact from fuel contracts settling in current and future periods (a) | — | 34 | |||||||||||||||||||||||||||||||||
Add: Impairment of long-lived assets | — | 16 | |||||||||||||||||||||||||||||||||
Add (Deduct): Unrealized mark-to-market adjustment on available for sale securities | (4) | 5 | |||||||||||||||||||||||||||||||||
Add: Loss on extinguishment of debt | — | 72 | |||||||||||||||||||||||||||||||||
Loss before income taxes, excluding special items | $ | (209) | $ | (249) | (16.1) | ||||||||||||||||||||||||||||||
Benefit for income taxes, as reported | $ | (46) | $ | (98) | |||||||||||||||||||||||||||||||
Add: Net loss tax impact of fuel and special items (b) | — | 40 | |||||||||||||||||||||||||||||||||
Benefit for income taxes, net, excluding special items | $ | (46) | $ | (58) | (20.7) | ||||||||||||||||||||||||||||||
Net loss, as reported | $ | (159) | $ | (278) | |||||||||||||||||||||||||||||||
Add: Mark-to-market impact from fuel contracts settling in current and future periods (a) | — | 34 | |||||||||||||||||||||||||||||||||
Add: Loss on extinguishment of debt | — | 72 | |||||||||||||||||||||||||||||||||
Add (Deduct): Unrealized mark-to-market adjustment on available for sale securities | (4) | 5 | |||||||||||||||||||||||||||||||||
Deduct: Net loss tax impact of special items (b) | — | (40) | |||||||||||||||||||||||||||||||||
Add: Impairment of long-lived assets | — | 16 | |||||||||||||||||||||||||||||||||
Deduct: GAAP to Non-GAAP tax rate difference (c) | — | — | |||||||||||||||||||||||||||||||||
Net loss, excluding special items | $ | (163) | $ | (191) | (14.7) |
Three months ended March 31, | Percent | ||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | |||||||||||||||||||||||||||||||||
Net loss per share, diluted, as reported | $ | (0.27) | $ | (0.47) | |||||||||||||||||||||||||||||||
Add: Impact of special items | — | 0.16 | |||||||||||||||||||||||||||||||||
Add: Net impact of net loss above from fuel contracts divided by dilutive shares | — | 0.06 | |||||||||||||||||||||||||||||||||
Deduct: Net loss tax impact of special items (b) | — | (0.07) | |||||||||||||||||||||||||||||||||
Net loss per share, diluted, excluding special items | $ | (0.27) | $ | (0.32) | (15.6) | ||||||||||||||||||||||||||||||
Operating expenses per ASM (cents) | 15.74 | ¢ | 14.09 | ¢ | |||||||||||||||||||||||||||||||
Deduct: Impact of special items | — | (0.04) | |||||||||||||||||||||||||||||||||
Deduct: Fuel and oil expense divided by ASMs | (4.07) | (2.92) | |||||||||||||||||||||||||||||||||
Deduct: Profitsharing expense divided by ASMs | — | (0.11) | |||||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding Fuel and oil expense, profitsharing, and special items (cents) | 11.67 | ¢ | 11.02 | ¢ | 5.9 |
Average
Age (Yrs) | Number of Aircraft | Number Owned | Number Leased | |||||||||||||||||||||||||||||
Type | Seats | |||||||||||||||||||||||||||||||
737-700 | 143 | 18 | 419 | 379 | 40 | |||||||||||||||||||||||||||
737-800 | 175 | 8 | 207 | 190 | 17 | |||||||||||||||||||||||||||
737 -8 | 175 | 2 | 167 | 138 | 29 | |||||||||||||||||||||||||||
Totals | 12 | 793 | 707 | 86 |
3.1 | |||||
3.2 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
101.INS | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SOUTHWEST AIRLINES CO. | ||||||||
April 28, 2023 | 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) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
5/1/25 | ||||
2/1/25 | ||||
12/31/24 | ||||
12/31/23 | ||||
11/4/23 | ||||
5/22/23 | ||||
5/3/23 | ||||
4/30/23 | ||||
Filed on: | 4/28/23 | |||
4/27/23 | 8-K | |||
4/19/23 | ||||
For Period end: | 3/31/23 | |||
3/23/23 | ||||
3/13/23 | ||||
3/9/23 | ||||
3/7/23 | ||||
2/4/23 | ||||
2/1/23 | 4, 8-K | |||
1/31/23 | ||||
1/27/23 | ||||
1/24/23 | ||||
1/10/23 | ||||
1/9/23 | ||||
12/31/22 | 10-K, ARS | |||
12/30/22 | ||||
12/29/22 | ||||
12/5/22 | ||||
11/28/22 | ||||
11/21/22 | ||||
8/18/22 | ||||
7/28/22 | 8-K | |||
7/5/22 | ||||
6/27/22 | ||||
3/31/22 | 10-Q | |||
1/11/22 | ||||
12/31/21 | 10-K | |||
12/22/21 | ||||
10/27/21 | 4 | |||
9/30/21 | 10-Q | |||
9/27/21 | ||||
9/17/21 | ||||
9/3/21 | ||||
8/26/21 | ||||
7/9/21 | ||||
2/3/21 | 3, 4 | |||
1/7/21 | ||||
10/21/20 | ||||
10/7/20 | ||||
10/1/20 | ||||
8/17/20 | S-3ASR | |||
7/2/20 | ||||
6/22/20 | ||||
6/13/20 | ||||
5/1/20 | 4, 424B5, 8-K | |||
3/12/20 | 8-K | |||
2/19/20 | ||||
2/14/20 | SC 13G | |||
1/29/20 | 4 | |||
9/13/19 | ||||
7/11/19 | ||||
6/10/19 | ||||
5/15/19 | 4, 8-K, DEF 14A | |||
5/9/19 | ||||
3/13/19 | ||||
1/7/19 | ||||
12/20/17 | 4 | |||
8/29/17 | ||||
2/7/17 | 10-K | |||
10/28/16 | ||||
5/11/16 | ||||
3/25/16 | ||||
10/13/15 | ||||
7/1/15 | ||||
6/30/15 | 10-Q | |||
7/1/11 | ||||
10/10/04 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 7/28/23 Southwest Airlines Co. S-3ASR 7/28/23 4:175K Donnelley … Solutions/FA |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/07/23 Southwest Airlines Co. 10-K 12/31/22 110:20M 7/27/12 Southwest Airlines Co. 10-Q 6/30/12 48:13M |