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As Of Filer Filing For·On·As Docs:Size 8/02/22 Southwest Airlines Co. 10-Q 6/30/22 82:16M |
Document/Exhibit Description Pages Size 1: 10-Q 2nd Quarter 2022 Form 10-Q HTML 2.68M 2: EX-10.1 EX-10.1 Boeing Supplemental Agreement No. 16 HTML 2.47M 3: EX-10.2 EX-10.2 Boeing Supplemental Agreement No. 17 HTML 753K 4: EX-31.1 EX-31.1 Certification of Chief Executive Officer HTML 27K 5: EX-31.2 EX-31.2 Certification of Chief Financial Officer HTML 27K 6: EX-32.1 EX-32.1 Certification of CEO and CFO HTML 25K 12: R1 Cover HTML 75K 13: R2 Condensed Consolidated Balance Sheet HTML 135K 14: R3 Condensed Consolidated Statement of Comprehensive HTML 114K Income (Loss) 15: R4 Condensed Consolidated Statement of Stockholders' HTML 84K Equity 16: R5 Condensed Consolidated Statement of Cash Flows HTML 123K 17: R6 Basis of Presentation HTML 27K 18: R7 Worldwide Pandemic HTML 54K 19: R8 New Accounting Pronouncements HTML 40K 20: R9 Financial Derivative Instruments HTML 248K 21: R10 Comprehensive Income HTML 96K 22: R11 Revenue HTML 78K 23: R12 Net Income Per Share HTML 58K 24: R13 Fair Value Measurements HTML 153K 25: R14 Supplemental Financial Information HTML 74K 26: R15 Commitment and Contingencies HTML 61K 27: R16 Financing Activities HTML 85K 28: R17 New Accounting Pronouncements (Policies) HTML 58K 29: R18 Worldwide Pandemic (Tables) HTML 46K 30: R19 Financial Derivative Instruments (Tables) HTML 251K 31: R20 Comprehensive Income (Tables) HTML 99K 32: R21 Revenue (Tables) HTML 68K 33: R22 Net Income Per Share (Tables) HTML 57K 34: R23 Fair Value Measurements (Tables) HTML 153K 35: R24 Supplemental Financial Information (Tables) HTML 80K 36: R25 Commitments and Contingencies (Tables) HTML 51K 37: R26 Financing Activities (Tables) HTML 79K 38: R27 Basis of Presentation (Details) HTML 45K 39: R28 Worldwide Pandemic - Payroll Support Program HTML 52K (Details) 40: R29 Worldwide Pandemic - Narrative (Details) HTML 65K 41: R30 New Accounting Pronouncements (Details) HTML 83K 42: R31 Financial Derivative Instruments - Fuel Hedging HTML 30K (Details) 43: R32 Financial Derivative Instruments - Fair Values by HTML 58K Balance Sheet Location (Details) 44: R33 Financial Derivative Instruments - Narrative HTML 28K (Details) 45: R34 Financial Derivative Instruments - Offsetting of HTML 41K Derivative Assets (Details) 46: R35 Financial Derivative Instruments - Offsetting HTML 42K Derivative Liabilities (Details) 47: R36 Financial Derivative Instruments - Location and HTML 49K Amount Recognized in Income by Hedging Relationship (Details) 48: R37 Financial Derivative Instruments - (Gain) Loss by HTML 38K Hedging Relationship (Details) 49: R38 Financial Derivative Instruments - Premiums for HTML 32K Fuel Derivative Contracts (Details) 50: R39 Financial Derivative Instruments - Fair Values of HTML 72K Fuel Derivatives Amounts Posted as Collateral (Details) 51: R40 Comprehensive Income - Differences between Net HTML 56K Income and Comprehensive Income (Loss) (Details) 52: R41 Comprehensive Income - Schedule of AOCI Components HTML 48K (Details) 53: R42 Comprehensive Income - Reclassifications (Details) HTML 54K 54: R43 Revenue - Passenger Revenue Breakout (Details) HTML 37K 55: R44 Revenue - Air Traffic Liability Breakout (Details) HTML 29K 56: R45 Revenue - Air Traffic Liability - Loyalty Program HTML 33K Rollforward (Details) 57: R46 Revenue - Air Traffic Liability Rollforward HTML 31K (Details) 58: R47 Revenue - Narrative (Details) HTML 40K 59: R48 Net Income Per Share (Details) HTML 77K 60: R49 Fair Value Measurements - Measured on Recurring HTML 103K Basis (Details) 61: R50 Fair Value Measurement - Fair Value Assets and HTML 43K Liabilities Measured on Recurring Basis with Unobservable Inputs (Details) 62: R51 Fair Value Measurements - Quantitative Information HTML 46K about Level 3 Fair Value (Details) 63: R52 Fair Value Instruments - Carrying and Estimated HTML 83K Fair Value of Debt (Details) 64: R53 Fair Value Measurements - Narrative (Details) HTML 28K 65: R54 Fair Value Instruments - Convertible Debt HTML 29K (Details) 66: R55 Supplemental Financial Information - Accounts and HTML 37K Other Receivables (Details) 67: R56 Supplemental Financial Information - Other Assets HTML 31K (Details) 68: R57 Supplemental Financial Information - Accounts HTML 38K Payable (Details) 69: R58 Supplemental Financial Information - Accrued HTML 44K Liabilities (Details) 70: R59 Supplemental Financial Information - Other HTML 41K Non-Current Liabilities (Details) 71: R60 Commitments and contingencies - Narrative HTML 70K (Details) 72: R61 Commitment and Contingencies - Long Term Purchase HTML 64K Commitments (Details) 73: R62 Financing Activities - Narrative (Details) HTML 90K 74: R63 Financing Activities - Convertible Debt (Details) HTML 41K 75: R64 Financing Activities - Interest Expense (Details) HTML 36K 76: R65 Financing Activities - Schedule of Extinguishment HTML 53K of Debt (Details) 77: R9999 Uncategorized Items - luv-20220630.htm HTML 42K 80: XML IDEA XML File -- Filing Summary XML 145K 78: XML XBRL Instance -- luv-20220630_htm XML 3.20M 79: EXCEL IDEA Workbook of Financial Reports XLSX 170K 8: EX-101.CAL XBRL Calculations -- luv-20220630_cal XML 220K 9: EX-101.DEF XBRL Definitions -- luv-20220630_def XML 837K 10: EX-101.LAB XBRL Labels -- luv-20220630_lab XML 1.69M 11: EX-101.PRE XBRL Presentations -- luv-20220630_pre XML 1.14M 7: EX-101.SCH XBRL Schema -- luv-20220630 XSD 180K 81: JSON XBRL Instance as JSON Data -- MetaLinks 418± 634K 82: ZIP XBRL Zipped Folder -- 0000092380-22-000048-xbrl Zip 702K
luv-20220630 |
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 ☐ |
June 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | i 13,234 | $ | i 12,480 | |||||||
Short-term investments | i 3,197 | i 3,024 | |||||||||
Accounts and other receivables | i 1,389 | i 1,357 | |||||||||
Inventories of parts and supplies, at cost | i 751 | i 537 | |||||||||
Prepaid expenses and other current assets | i 825 | i 638 | |||||||||
Total current assets | i 19,396 | i 18,036 | |||||||||
Property and equipment, at cost: | |||||||||||
Flight equipment | i 21,598 | i 21,226 | |||||||||
Ground property and equipment | i 6,563 | i 6,342 | |||||||||
Deposits on flight equipment purchase contracts | i 637 | i — | |||||||||
Assets constructed for others | i 12 | i 6 | |||||||||
i 28,810 | i 27,574 | ||||||||||
Less allowance for depreciation and amortization | i 13,216 | i 12,732 | |||||||||
i 15,594 | i 14,842 | ||||||||||
Goodwill | i 970 | i 970 | |||||||||
Operating lease right-of-use assets | i 1,495 | i 1,590 | |||||||||
Other assets | i 847 | i 882 | |||||||||
$ | i 38,302 | $ | i 36,320 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | i 1,908 | $ | i 1,282 | |||||||
Accrued liabilities | i 1,587 | i 1,624 | |||||||||
Current operating lease liabilities | i 242 | i 239 | |||||||||
Air traffic liability | i 6,312 | i 5,566 | |||||||||
Current maturities of long-term debt | i 1,662 | i 453 | |||||||||
Total current liabilities | i 11,711 | i 9,164 | |||||||||
Long-term debt less current maturities | i 8,877 | i 10,274 | |||||||||
Air traffic liability - noncurrent | i 2,206 | i 2,159 | |||||||||
Deferred income taxes | i 2,072 | i 1,770 | |||||||||
Noncurrent operating lease liabilities | i 1,220 | i 1,315 | |||||||||
Other noncurrent liabilities | i 1,096 | i 1,224 | |||||||||
Stockholders' equity: | |||||||||||
Common stock | i 888 | i 888 | |||||||||
Capital in excess of par value | i 3,966 | i 4,224 | |||||||||
Retained earnings | i 16,311 | i 15,774 | |||||||||
Accumulated other comprehensive income | i 805 | i 388 | |||||||||
Treasury stock, at cost | ( i 10,850) | ( i 10,860) | |||||||||
Total stockholders' equity | i 11,120 | i 10,414 | |||||||||
$ | i 38,302 | $ | i 36,320 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
OPERATING REVENUES: | |||||||||||||||||||||||
Passenger | $ | i 6,119 | $ | i 3,569 | $ | i 10,254 | $ | i 5,282 | |||||||||||||||
Freight | i 47 | i 50 | i 89 | i 92 | |||||||||||||||||||
Other | i 562 | i 389 | i 1,079 | i 686 | |||||||||||||||||||
Total operating revenues | i 6,728 | i 4,008 | i 11,422 | i 6,060 | |||||||||||||||||||
OPERATING EXPENSES, NET: | |||||||||||||||||||||||
Salaries, wages, and benefits | i 2,220 | i 1,825 | i 4,450 | i 3,395 | |||||||||||||||||||
Payroll support and voluntary Employee programs, net | i — | ( i 740) | i — | ( i 2,187) | |||||||||||||||||||
Fuel and oil | i 1,636 | i 803 | i 2,640 | i 1,272 | |||||||||||||||||||
Maintenance materials and repairs | i 210 | i 222 | i 420 | i 395 | |||||||||||||||||||
Landing fees and airport rentals | i 388 | i 403 | i 733 | i 716 | |||||||||||||||||||
Depreciation and amortization | i 325 | i 315 | i 649 | i 627 | |||||||||||||||||||
Other operating expenses | i 791 | i 586 | i 1,523 | i 1,049 | |||||||||||||||||||
Total operating expenses, net | i 5,570 | i 3,414 | i 10,415 | i 5,267 | |||||||||||||||||||
OPERATING INCOME | i 1,158 | i 594 | i 1,007 | i 793 | |||||||||||||||||||
OTHER EXPENSES (INCOME): | |||||||||||||||||||||||
Interest expense | i 93 | i 116 | i 186 | i 229 | |||||||||||||||||||
Capitalized interest | ( i 11) | ( i 8) | ( i 20) | ( i 19) | |||||||||||||||||||
Interest income | ( i 28) | ( i 2) | ( i 31) | ( i 4) | |||||||||||||||||||
Other (gains) losses, net | i 68 | ( i 14) | i 212 | ( i 61) | |||||||||||||||||||
Total other expenses (income) | i 122 | i 92 | i 347 | i 145 | |||||||||||||||||||
INCOME BEFORE INCOME TAXES | i 1,036 | i 502 | i 660 | i 648 | |||||||||||||||||||
PROVISION FOR INCOME TAXES | i 276 | i 154 | i 178 | i 185 | |||||||||||||||||||
NET INCOME | $ | i 760 | $ | i 348 | $ | i 482 | $ | i 463 | |||||||||||||||
NET INCOME PER SHARE, BASIC | $ | i 1.29 | $ | i 0.59 | $ | i 0.83 | $ | i 0.78 | |||||||||||||||
NET INCOME PER SHARE, DILUTED | $ | i i 1.20 / | $ | i 0.57 | $ | i 0.77 | $ | i 0.76 | |||||||||||||||
COMPREHENSIVE INCOME | $ | i 674 | $ | i 544 | $ | i 899 | $ | i 723 | |||||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||||||||||||||||||
Basic | i 593 | i 591 | i 593 | i 591 | |||||||||||||||||||
Diluted | i 635 | i 615 | i 640 | i 612 |
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 (See Note 3) | — | ( i 300) | i 55 | — | — | ( i 245) | ||||||||||||||||||||||||||||||||
Issuance of common and treasury stock pursuant to Employee stock plans | — | i — | — | — | i 7 | i 7 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | i 16 | — | — | — | i 16 | ||||||||||||||||||||||||||||||||
Comprehensive income | — | — | ( 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 | ||||||||||||||||||||||||||
Issuance of common and treasury stock pursuant to Employee stock plans | — | i 10 | — | — | i 3 | i 13 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | i 16 | — | — | — | i 16 | ||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | i 760 | ( i 86) | — | i 674 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | i 888 | $ | i 3,966 | $ | i 16,311 | $ | i 805 | $ | ( i 10,850) | $ | i 11,120 | ||||||||||||||||||||||||||
Common Stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock | Total | |||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | i 888 | $ | i 4,191 | $ | i 14,777 | $ | ( i 105) | $ | ( i 10,875) | $ | i 8,876 | ||||||||||||||||||||||||||
Cumulative effect of adopting Accounting Standards Update No. 2016-01, Financial Instruments | — | — | i 19 | ( i 19) | — | i — | ||||||||||||||||||||||||||||||||
Issuance of common and treasury stock pursuant to Employee stock plans | — | ( i 8) | — | — | i 8 | i — | ||||||||||||||||||||||||||||||||
Share-based compensation | — | i 14 | — | — | — | i 14 | ||||||||||||||||||||||||||||||||
Stock warrants | — | i 23 | — | — | — | i 23 | ||||||||||||||||||||||||||||||||
Comprehensive income | — | — | i 116 | i 64 | — | i 180 | ||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | $ | i 888 | $ | i 4,220 | $ | i 14,912 | $ | ( i 60) | $ | ( i 10,867) | $ | i 9,093 | ||||||||||||||||||||||||||
Issuance of common and treasury stock pursuant to Employee stock plans | — | i 11 | — | — | i 2 | i 13 | ||||||||||||||||||||||||||||||||
Share-based compensation | — | i 16 | — | — | — | i 16 | ||||||||||||||||||||||||||||||||
Stock warrants | — | i 22 | — | — | — | i 22 | ||||||||||||||||||||||||||||||||
Comprehensive income (loss) | — | — | i 348 | i 196 | — | i 544 | ||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | i 888 | $ | i 4,269 | $ | i 15,260 | $ | i 136 | $ | ( i 10,865) | $ | i 9,688 | ||||||||||||||||||||||||||
Three months ended | Six months ended | |||||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||
Net income | $ | i 760 | $ | i 348 | $ | i 482 | $ | i 463 | ||||||||||||||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||||||||||||||
Depreciation and amortization | i 325 | i 315 | i 649 | i 627 | ||||||||||||||||||||||
Impairment of long-lived assets | i 15 | i — | i 31 | i — | ||||||||||||||||||||||
Unrealized mark-to-market adjustment on available for sale securities | i 4 | i — | i 7 | i — | ||||||||||||||||||||||
Unrealized/realized (gain) loss on fuel derivative instruments | ( i 20) | ( i 17) | i 15 | ( i 23) | ||||||||||||||||||||||
Deferred income taxes | i 272 | ( i 30) | i 174 | ( i 26) | ||||||||||||||||||||||
Loss on partial extinguishment of convertible and unsecured notes | i 43 | i — | i 116 | i — | ||||||||||||||||||||||
Changes in certain assets and liabilities: | ||||||||||||||||||||||||||
Accounts and other receivables | i 439 | ( i 563) | i 105 | ( i 797) | ||||||||||||||||||||||
Other assets | ( i 1) | i 16 | ( i 45) | i 5 | ||||||||||||||||||||||
Accounts payable and accrued liabilities | i 328 | i 989 | i 506 | i 923 | ||||||||||||||||||||||
Air traffic liability | ( i 92) | i 946 | i 793 | i 1,546 | ||||||||||||||||||||||
Other liabilities | ( i 103) | ( i 64) | ( i 209) | ( i 186) | ||||||||||||||||||||||
Cash collateral received from (provided to) derivative counterparties | ( i 101) | i 48 | i 284 | i 86 | ||||||||||||||||||||||
Other, net | i 37 | i 17 | i 69 | i 32 | ||||||||||||||||||||||
Net cash provided by operating activities | i 1,906 | i 2,005 | i 2,977 | i 2,650 | ||||||||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||
Capital expenditures | ( i 987) | ( i 95) | ( i 1,497) | ( i 190) | ||||||||||||||||||||||
Assets constructed for others | ( i 3) | i — | ( i 6) | i — | ||||||||||||||||||||||
Purchases of short-term investments | ( i 1,545) | ( i 1,651) | ( i 2,470) | ( i 2,975) | ||||||||||||||||||||||
Proceeds from sales of short-term and other investments | i 980 | i 1,277 | i 2,280 | i 2,495 | ||||||||||||||||||||||
Net cash used in investing activities | ( i 1,555) | ( i 469) | ( i 1,693) | ( i 670) | ||||||||||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||
Proceeds from Payroll Support Program loan and warrants | i — | i 625 | i — | i 1,136 | ||||||||||||||||||||||
Proceeds from Employee stock plans | i 13 | i 13 | i 19 | i 26 | ||||||||||||||||||||||
Payments of long-term debt and finance lease obligations | ( i 53) | ( i 43) | ( i 146) | ( i 109) | ||||||||||||||||||||||
Payments for repurchases and conversions of convertible debt | ( i 178) | i — | ( i 409) | i — | ||||||||||||||||||||||
Other, net | i 3 | i 22 | i 6 | i 28 | ||||||||||||||||||||||
Net cash provided by (used in) financing activities | ( i 215) | i 617 | ( i 530) | i 1,081 | ||||||||||||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | i 136 | i 2,153 | i 754 | i 3,061 | ||||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | i 13,098 | i 11,971 | i 12,480 | i 11,063 | ||||||||||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | i 13,234 | $ | i 14,124 | $ | i 13,234 | $ | i 14,124 | ||||||||||||||||||
CASH PAYMENTS FOR: | ||||||||||||||||||||||||||
Interest, net of amount capitalized | $ | i 141 | $ | i 150 | $ | i 161 | $ | i 167 | ||||||||||||||||||
Income taxes | $ | i 7 | $ | i 176 | $ | i 11 | $ | i 177 | ||||||||||||||||||
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS: | ||||||||||||||||||||||||||
Adoption of Accounting Standards Update 2020-06, Debt (See Note 3) | $ | i — | $ | i — | $ | i 245 | $ | i — | ||||||||||||||||||
Right-of-use assets acquired under operating leases | $ | i 3 | $ | i 12 | $ | i 27 | $ | i 230 | ||||||||||||||||||
Flight equipment acquired against supplier credit memo | $ | i — | $ | i 207 | $ | i — | $ | i 512 | ||||||||||||||||||
Assets constructed for others | $ | i — | $ | ( i 341) | $ | i — | $ | ( i 309) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
(dollars in millions, shares in thousands) | Grant | Promissory Note | Warrants | Total Payroll Support Proceeds | Warrants (shares) | Warrant strike price | Promissory Note Maturity Date | ||||||||||||||||
PSP1 | $ | i 2,337 | $ | i 976 | $ | i 40 | $ | i 3,354 | i 2,676 | $ i 36.47/share | April 19, 2030 | ||||||||||||
PSP2 | $ | i 1,393 | $ | i 566 | $ | i 27 | $ | i 1,987 | i 1,223 | $ i 46.28/share | January 15, 2031 | ||||||||||||
PSP3 | $ | i 1,310 | $ | i 526 | $ | i 18 | $ | i 1,852 | i 899 | $ i 58.51/share | April 23, 2031 | ||||||||||||
Total | $ | i 5,040 | $ | i 2,068 | $ | i 85 | $ | i 7,193 | i 4,798 |
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) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Maximum fuel hedged as of | |||||||||||||||||
June 30, 2022 | Derivative underlying commodity type as of | ||||||||||||||||
Period (by year) | (gallons in millions) (a) | June 30, 2022 | |||||||||||||||
Remainder of 2022 | i 610 | WTI crude oil, Brent crude oil, and Heating oil | |||||||||||||||
2023 | i 769 | WTI crude oil and Brent crude oil | |||||||||||||||
2024 | i 358 | WTI crude oil | |||||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Asset derivatives | Liability derivatives | |||||||||||||||||||||||||||||||
Balance Sheet | Fair value at | Fair value at | Fair value at | Fair value at | ||||||||||||||||||||||||||||
(in millions) | location | 6/30/2022 | 12/31/2021 | 6/30/2022 | 12/31/2021 | |||||||||||||||||||||||||||
Derivatives designated as hedges (a) | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | i 797 | $ | i 409 | $ | — | $ | — | |||||||||||||||||||||||
Fuel derivative contracts (gross) | Other assets | i 372 | i 287 | — | — | |||||||||||||||||||||||||||
Interest rate derivative contracts | Other assets | i 11 | — | — | — | |||||||||||||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | — | — | i — | i 4 | |||||||||||||||||||||||||||
Total derivatives designated as hedges | $ | i 1,180 | $ | i 696 | $ | i — | $ | i 4 | ||||||||||||||||||||||||
Derivatives not designated as hedges (a) | ||||||||||||||||||||||||||||||||
Fuel derivative contracts (gross) | Prepaid expenses and other current assets | $ | i 125 | $ | — | $ | i 167 | $ | — | |||||||||||||||||||||||
Total derivatives | $ | i 1,305 | $ | i 696 | $ | i 167 | $ | i 4 |
Balance Sheet | June 30, | December 31, | ||||||||||||||||||
(in millions) | location | 2022 | 2021 | |||||||||||||||||
Cash collateral deposits held from counterparties for fuel contracts - current | Offset against Prepaid expenses and other current assets | $ | i 297 | $ | i 80 | |||||||||||||||
Cash collateral deposits held from counterparties for fuel contracts - noncurrent | Offset against Other assets | i 162 | i 95 | |||||||||||||||||
Receivable from third parties for fuel contracts | Accounts and other receivables | i 125 | i 8 | |||||||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Offsetting of derivative assets | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) = (i) + (ii) | (i) | (ii) | (iii) = (i) + (ii) | ||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
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 922 | $ | ( i 464) | (b) | $ | i 458 | $ | i 409 | $ | ( i 80) | $ | i 329 | |||||||||||||||||||||||||||||||||
Fuel derivative contracts | Other assets | $ | i 372 | $ | ( i 162) | $ | i 210 | (a) | $ | i 287 | $ | ( i 95) | $ | i 192 | (a) | ||||||||||||||||||||||||||||||||
Interest rate derivative contracts | Other assets | $ | i 11 | $ | i — | $ | i 11 | (a) | $ | i — | $ | i — | $ | i — | (a) |
Offsetting of derivative liabilities | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
(i) | (ii) | (iii) = (i) + (ii) | (i) | (ii) | (iii) = (i) + (ii) | ||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
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 464 | $ | ( i 464) | (b) | $ | i — | $ | i 80 | $ | ( i 80) | $ | i — | |||||||||||||||||||||||||||||||||
Fuel derivative contracts | Other assets | $ | i 162 | $ | ( i 162) | $ | i — | (a) | $ | i 95 | $ | ( i 95) | $ | i — | (a) | ||||||||||||||||||||||||||||||||
Interest rate derivative contracts | Other noncurrent liabilities | $ | i — | $ | i — | $ | i — | $ | i 4 | $ | i — | $ | i 4 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Location and amount recognized in income on cash flow and fair value hedging relationships | ||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2022 | Three months ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||
(in millions) | Fuel and oil | Other operating expenses | Fuel and oil | Other operating expenses | ||||||||||||||||||||||||||||||||||
Total | $ | ( i 306) | $ | i 2 | $ | i 12 | $ | i 1 | ||||||||||||||||||||||||||||||
(Gain) loss on cash flow hedging relationships: | ||||||||||||||||||||||||||||||||||||||
Commodity contracts: | ||||||||||||||||||||||||||||||||||||||
Amount of (gain) loss reclassified from AOCI into income | ( i 306) | i — | i 12 | i — | ||||||||||||||||||||||||||||||||||
Interest contracts: | ||||||||||||||||||||||||||||||||||||||
Amount of loss reclassified from AOCI into income | i — | i 2 | i — | i 1 | ||||||||||||||||||||||||||||||||||
Location and amount recognized in income on cash flow and fair value hedging relationships | ||||||||||||||||||||||||||||||||||||||
Six months ended June 30, 2022 | Six months ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||
(in millions) | Fuel and oil | Other (gains)/losses, net | Other operating expenses | Fuel and oil | Other (gains)/losses, net | Other operating expenses | ||||||||||||||||||||||||||||||||
Total | $ | ( i 508) | $ | i — | $ | i 3 | $ | i 28 | $ | i 6 | $ | i 2 | ||||||||||||||||||||||||||
(Gain) loss on cash flow hedging relationships | ||||||||||||||||||||||||||||||||||||||
Commodity contracts: | ||||||||||||||||||||||||||||||||||||||
Amount of (gain) loss reclassified from AOCI into income | ( i 508) | i — | i — | i 28 | i 6 | i — | ||||||||||||||||||||||||||||||||
Interest contracts: | ||||||||||||||||||||||||||||||||||||||
Amount of loss reclassified from AOCI into income | i — | i — | i 3 | i — | 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 | |||||||||||
June 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Fuel derivative contracts | $ | ( i 140) | $ | ( i 192) | |||||||
Interest rate derivatives | ( i 7) | i 6 | |||||||||
Total | $ | ( i 147) | $ | ( i 186) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Derivatives designated and qualified in cash flow hedging relationships | |||||||||||
(Gain) loss recognized in AOCI on derivatives, net of tax | |||||||||||
Six months ended | |||||||||||
June 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Fuel derivative contracts | $ | ( i 792) | $ | ( i 275) | |||||||
Interest rate derivatives | ( i 12) | ( i 4) | |||||||||
Total | $ | ( i 804) | $ | ( i 279) |
Derivatives not designated as hedges | |||||||||||||||||
(Gain) loss recognized in income on derivatives | |||||||||||||||||
Three months ended | Location of gain recognized in income on derivatives | ||||||||||||||||
June 30, | |||||||||||||||||
(in millions) | 2022 | 2021 | |||||||||||||||
Fuel derivative contracts | $ | ( i 20) | $ | ( i 12) | Other (gains) losses, net | ||||||||||||
Derivatives not designated as hedges | |||||||||||||||||
(Gain) loss recognized in income on derivatives | |||||||||||||||||
Six months ended | Location of (gain) loss recognized in income on derivatives | ||||||||||||||||
June 30, | |||||||||||||||||
(in millions) | 2022 | 2021 | |||||||||||||||
Fuel derivative contracts | $ | i 15 | $ | ( i 16) | Other (gains) losses, net | ||||||||||||
Premium expense recognized in income on derivatives | |||||||||||||||||
Three months ended | Location of premium expense recognized in income on derivatives | ||||||||||||||||
June 30, | |||||||||||||||||
(in millions) | 2022 | 2021 | |||||||||||||||
Fuel derivative contracts designated as hedges | $ | i 26 | $ | i 14 | Fuel and oil | ||||||||||||
Fuel derivative contracts not designated as hedges | i — | i 10 | Other (gains) losses, net | ||||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial
Statements (unaudited) |
Premium expense recognized in income on derivatives | |||||||||||||||||
Six months ended | Location of premium expense recognized in income on derivatives | ||||||||||||||||
June 30, | |||||||||||||||||
(in millions) | 2022 | 2021 | |||||||||||||||
Fuel derivative contracts designated as hedges | $ | i 53 | $ | i 29 | Fuel and oil | ||||||||||||
Fuel derivative contracts not designated as hedges | i — | i 21 | Other (gains) losses, net | ||||||||||||||
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 289 | $ | i 148 | $ | i 264 | $ | i 95 | $ | i 131 | $ | i 85 | $ | i 92 | $ | i 23 | $ | i 1,127 | |||||||||||||||||||||||||||||||||||||||||
Cash collateral held from CP | i 356 | i 7 | i 37 | i — | i 40 | i 19 | i — | i — | i 459 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Three months ended June 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
NET INCOME | $ | i 760 | $ | i 348 | |||||||
Unrealized
gain (loss) on fuel derivative instruments, net of deferred taxes of ($ i 29) and $ i 61 | ( i 95) | i 201 | |||||||||
Unrealized
gain (loss) on interest rate derivative instruments, net of deferred taxes of $ i 3 and ($ i 1) | i 9 | ( i 5) | |||||||||
Total other comprehensive income (loss) | $ | ( i 86) | $ | i 196 | |||||||
COMPREHENSIVE INCOME | $ | i 674 | $ | i 544 |
Six months ended June 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
NET INCOME | $ | i 482 | $ | i 463 | |||||||
Unrealized
gain on fuel derivative instruments, net of deferred taxes of $ i 122 and $ i 92 | i 403 | i 301 | |||||||||
Unrealized
gain on interest rate derivative instruments, net of deferred taxes of $ i 5 and $ i 1 | i 14 | i 6 | |||||||||
Other,
net of deferred taxes of $ i — and ($ i 13) | i — | ( i 47) | |||||||||
Total other comprehensive income | $ | i 417 | $ | i 260 | |||||||
COMPREHENSIVE INCOME | $ | i 899 | $ | i 723 |
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Deferred tax | Accumulated other comprehensive income | ||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | i 1,141 | $ | ( i 50) | $ | i 66 | $ | ( i 266) | $ | i 891 | |||||||||||||||||||||||||
Changes in fair value | i 182 | i 10 | — | ( i 45) | i 147 | ||||||||||||||||||||||||||||||
Reclassification to earnings | ( i 306) | i 2 | — | (a) | i 71 | ( i 233) | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | i 1,017 | $ | ( i 38) | $ | i 66 | $ | ( i 240) | $ | i 805 |
(in millions) | Fuel derivatives | Interest rate derivatives | Defined benefit plan items | Deferred tax | Accumulated other comprehensive income | ||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | i 492 | $ | ( i 57) | $ | i 66 | $ | ( i 113) | $ | i 388 | |||||||||||||||||||||||||
Changes in fair value | i 1,033 | i 16 | — | ( i 245) | i 804 | ||||||||||||||||||||||||||||||
Reclassification to earnings | ( i 508) | i 3 | — | (a) | i 118 | ( i 387) | |||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | i 1,017 | $ | ( i 38) | $ | i 66 | $ | ( i 240) | $ | i 805 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Three months ended June 30, 2022 | ||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income | ||||||||||||
AOCI components | ||||||||||||||
Unrealized gain on fuel derivative instruments | $ | ( i 306) | Fuel and oil expense | |||||||||||
( i 71) | Less: Tax expense | |||||||||||||
$ | ( i 235) | 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 233) | Net of tax |
Six months ended June 30, 2022 | ||||||||||||||
(in millions) | Amounts reclassified from AOCI | Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income | ||||||||||||
AOCI components | ||||||||||||||
Unrealized gain on fuel derivative instruments | $ | ( i 508) | Fuel and oil expense | |||||||||||
( i 119) | Less: Tax expense | |||||||||||||
$ | ( i 389) | Net of tax | ||||||||||||
Unrealized loss on interest rate derivative instruments | $ | i 3 | Other operating expenses | |||||||||||
i 1 | Less: Tax expense | |||||||||||||
$ | i 2 | Net of tax | ||||||||||||
Total reclassifications for the period | $ | ( i 387) | Net of tax |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Passenger non-loyalty | $ | i 5,118 | $ | i 2,875 | $ | i 8,482 | $ | i 4,230 | |||||||||||||||
Passenger loyalty - air transportation | i 821 | i 549 | i 1,445 | i 826 | |||||||||||||||||||
Passenger ancillary sold separately | i 180 | i 145 | i 327 | i 226 | |||||||||||||||||||
Total passenger revenues | $ | i 6,119 | $ | i 3,569 | $ | i 10,254 | $ | i 5,282 |
Balance as of | |||||||||||
(in millions) | June 30, 2022 | December 31, 2021 | |||||||||
Air traffic liability - passenger travel and ancillary passenger services | $ | i 3,634 | $ | i 2,936 | |||||||
Air traffic liability - loyalty program | i 4,884 | i 4,789 | |||||||||
Total Air traffic liability | $ | i 8,518 | $ | i 7,725 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Air traffic liability - loyalty program - beginning balance | $ | i 4,884 | $ | i 4,623 | $ | i 4,789 | $ | i 4,447 | |||||||||||||||
Amounts deferred associated with points awarded | i 842 | i 656 | i 1,579 | i 1,121 | |||||||||||||||||||
Revenue recognized from points redeemed - Passenger | ( i 821) | ( i 549) | ( i 1,445) | ( i 826) | |||||||||||||||||||
Revenue recognized from points redeemed - Other | ( i 21) | ( i 11) | ( i 39) | ( i 23) | |||||||||||||||||||
Air traffic liability - loyalty program - ending balance | $ | i 4,884 | $ | i 4,719 | $ | i 4,884 | $ | i 4,719 |
Air traffic liability | |||||
Balance at December 31, 2021 | $ | i 7,725 | |||
Current period sales (passenger travel, ancillary services, flight loyalty, and partner loyalty) | i 11,086 | ||||
Revenue from amounts included in contract liability opening balances | ( i 3,029) | ||||
Revenue from current period sales | ( i 7,264) | ||||
Balance at June 30, 2022 | $ | i 8,518 |
Air traffic liability | |||||
Balance at December 31, 2020 | $ | i 7,133 | |||
Current period sales (passenger travel, ancillary services, flight loyalty, and partner loyalty) | i 6,851 | ||||
Revenue from amounts included in contract liability opening balances | ( i 1,600) | ||||
Revenue from current period sales | ( i 3,705) | ||||
Balance at June 30, 2021 | $ | i 8,679 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
NUMERATOR: | ||||||||||||||||||||||||||
Net income | $ | i 760 | $ | i 348 | $ | i 482 | $ | i 463 | ||||||||||||||||||
Add: Interest expense | i 4 | (a) | i — | i 8 | (a) | i — | ||||||||||||||||||||
Net income attributable to common stockholders | i 764 | i 348 | i 490 | i 463 | ||||||||||||||||||||||
DENOMINATOR: | ||||||||||||||||||||||||||
Weighted-average shares outstanding, basic | i 593 | i 591 | i 593 | i 591 | ||||||||||||||||||||||
Dilutive effects of Convertible Notes | i 41 | (a) | i 22 | (b) | i 46 | (a) | i 19 | (b) | ||||||||||||||||||
Dilutive effect of stock warrants | i — | i 1 | i — | i 1 | ||||||||||||||||||||||
Dilutive effect of restricted stock units | i 1 | i 1 | i 1 | i 1 | ||||||||||||||||||||||
Adjusted weighted-average shares outstanding, diluted | i 635 | i 615 | i 640 | i 612 | ||||||||||||||||||||||
NET INCOME PER SHARE: | ||||||||||||||||||||||||||
Basic | $ | i 1.29 | $ | i 0.59 | $ | i 0.83 | $ | i 0.78 | ||||||||||||||||||
Diluted | $ | i i 1.20 / | $ | i 0.57 | $ | i 0.77 | $ | i 0.76 | ||||||||||||||||||
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 | June 30, 2022 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
Assets | (in millions) | |||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Cash equivalents (a) | $ | i 12,964 | $ | i 12,964 | $ | i — | $ | i — | ||||||||||||||||||
Commercial paper | i 270 | i — | i 270 | i — | ||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Treasury bills | i 2,432 | i 2,432 | i — | i — | ||||||||||||||||||||||
Certificates of deposit | i 90 | i — | i 90 | i — | ||||||||||||||||||||||
Time deposits | i 675 | i — | i 675 | i — | ||||||||||||||||||||||
Fuel derivatives: | ||||||||||||||||||||||||||
Option contracts (b) | i 1,294 | i — | i — | i 1,294 | ||||||||||||||||||||||
Interest rate derivatives (see Note 4) | i 11 | i — | i 11 | i — | ||||||||||||||||||||||
Equity Securities | i 225 | i 225 | i — | i — | ||||||||||||||||||||||
Total assets | $ | i 17,961 | $ | i 15,621 | $ | i 1,046 | $ | i 1,294 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Fuel derivatives: | ||||||||||||||||||||||||||
Option contracts (b) | $ | ( i 167) | $ | i — | $ | i — | $ | ( i 167) | ||||||||||||||||||
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, 2021 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
Assets | (in millions) | |||||||||||||||||||||||||
Cash equivalents: | ||||||||||||||||||||||||||
Cash equivalents (a) | $ | i 12,340 | $ | i 12,340 | $ | i — | $ | i — | ||||||||||||||||||
Commercial paper | i 90 | i — | i 90 | i — | ||||||||||||||||||||||
Time deposits | i 50 | i — | i 50 | i — | ||||||||||||||||||||||
Short-term investments: | ||||||||||||||||||||||||||
Treasury bills | i 2,399 | i 2,399 | i — | i — | ||||||||||||||||||||||
Time deposits | i 625 | i — | i 625 | i — | ||||||||||||||||||||||
Fuel derivatives: | ||||||||||||||||||||||||||
Option contracts (b) | i 696 | i — | i — | i 696 | ||||||||||||||||||||||
Equity Securities | i 288 | i 288 | i — | i — | ||||||||||||||||||||||
Total assets | $ | i 16,488 | $ | i 15,027 | $ | i 765 | $ | i 696 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Interest rate derivatives (see Note 4) | $ | ( i i 4 / ) | $ | i i — / | $ | ( i i 4 / ) | $ | i i — / | ||||||||||||||||||
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 March 31, 2022 | $ | i 1,273 | |||||||||||||||
Total gains for the period | |||||||||||||||||
Included in earnings | i 20 | (a) | |||||||||||||||
Included in other comprehensive income | i 182 | ||||||||||||||||
Sales | ( i 16) | (b) | |||||||||||||||
Settlements | ( i 332) | ||||||||||||||||
Balance at June 30, 2022 | $ | i 1,127 | |||||||||||||||
The amount of total gains for the period included
in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022 | $ | i 20 | (a) | ||||||||||||||
The
amount of total gains for the period included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022 | $ | i 115 |
Fair value measurements using significant unobservable inputs (Level 3) | |||||||||||||||||
(in millions) | Fuel derivatives | ||||||||||||||||
Balance at December 31, 2021 | $ | i 696 | |||||||||||||||
Total gains (losses) for the period | |||||||||||||||||
Included in earnings | ( i 15) | (a) | |||||||||||||||
Included in other comprehensive income | i 1,033 | ||||||||||||||||
Sales | ( i 26) | (b) | |||||||||||||||
Settlements | ( i 561) | ||||||||||||||||
Balance at June 30, 2022 | $ | i 1,127 | |||||||||||||||
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022 | $ | ( i 15) | (a) | ||||||||||||||
The amount of total gains for the period included in other comprehensive income attributable to the change in unrealized gains or losses relating to assets still held at June 30, 2022 | $ | i 672 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
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 | Third quarter 2022 | i 28- i 68% | i 48 | % | ||||||||||||||||||||||||||
Fourth quarter 2022 | i 44- i 65% | i 53 | % | |||||||||||||||||||||||||||||
2023 | i 38- i 58% | i 50 | % | |||||||||||||||||||||||||||||
2024 | i 34- i 48% | i 39 | % | |||||||||||||||||||||||||||||
(in millions) | Carrying value | Estimated fair value | Fair value level hierarchy | ||||||||||||||
i 2.75%
Notes due November 2022 | $ | i 300 | $ | i 300 | Level 2 | ||||||||||||
Pass Through Certificates due August 2022 - i 6.19% | i 33 | i 33 | Level 2 | ||||||||||||||
i 4.75% Notes due 2023 | i 1,247 | i 1,259 | Level 2 | ||||||||||||||
i 1.25% Convertible Notes due 2025 | i 1,795 | i 2,121 | Level 2 | ||||||||||||||
i 5.25% Notes due 2025 | i 1,549 | i 1,582 | Level 2 | ||||||||||||||
i 3.00% Notes due 2026 | i 300 | i 281 | Level 2 | ||||||||||||||
i 3.45% Notes due 2027 | i 300 | i 282 | Level 2 | ||||||||||||||
i 5.125% Notes due 2027 | i 1,944 | i 1,963 | Level 2 | ||||||||||||||
i 7.375% Debentures due 2027 | i 115 | i 126 | Level 2 | ||||||||||||||
i 2.625% Notes due 2030 | i 500 | i 423 | Level 2 | ||||||||||||||
i 1.000% PSP1 due 2030 | i 976 | i 900 | Level 3 | ||||||||||||||
i 1.000% PSP2 due 2031 | i 566 | i 510 | Level 3 | ||||||||||||||
i 1.000% PSP3 due 2031 | i 526 | i 470 | Level 3 |
Southwest
Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
(in millions) | June 30, 2022 | December 31, 2021 | ||||||||||||
Trade receivables | $ | i 59 | $ | i 58 | ||||||||||
Credit card receivables | i 166 | i 83 | ||||||||||||
Business partners and other suppliers | i 541 | i 432 | ||||||||||||
Taxes receivable (a) | i 219 | i 699 | ||||||||||||
Fuel hedging and receivables | i 125 | i 8 | ||||||||||||
Other | i 279 | i 77 | ||||||||||||
Accounts and other receivables | $ | i 1,389 | $ | i 1,357 |
(in millions) | June 30, 2022 | December 31, 2021 | ||||||||||||
Derivative contracts | $ | i 221 | $ | i 192 | ||||||||||
Intangible assets, net | i 295 | i 295 | ||||||||||||
Other | i 331 | i 395 | ||||||||||||
Other assets | $ | i 847 | $ | i 882 |
(in millions) | June 30, 2022 | December 31, 2021 | ||||||||||||
Accounts payable trade | $ | i 395 | $ | i 156 | ||||||||||
Salaries payable | i 340 | i 287 | ||||||||||||
Taxes payable excluding income taxes | i 318 | i 200 | ||||||||||||
Aircraft maintenance payable | i 69 | i 42 | ||||||||||||
Fuel payable | i 260 | i 170 | ||||||||||||
Other payable | i 526 | i 427 | ||||||||||||
Accounts payable | $ | i 1,908 | $ | i 1,282 |
(in millions) | June 30, 2022 | December 31, 2021 | ||||||||||||
Voluntary Separation Program | $ | i 79 | $ | i 92 | ||||||||||
Profitsharing and savings plans | i 154 | i 262 | ||||||||||||
Vacation pay | i 463 | i 451 | ||||||||||||
Health | i 231 | i 152 | ||||||||||||
Workers compensation | i 155 | i 141 | ||||||||||||
Property and income taxes | i 58 | i 65 | ||||||||||||
Interest | i 96 | i 46 | ||||||||||||
Deferred supplier payments (b) | i — | i 80 | ||||||||||||
Other | i 351 | i 335 | ||||||||||||
Accrued liabilities | $ | i 1,587 | $ | i 1,624 |
(in millions) | June 30, 2022 | December 31, 2021 | ||||||||||||
Voluntary Separation Program | $ | i 190 | $ | i 233 | ||||||||||
Postretirement obligation | i 334 | i 330 | ||||||||||||
Other deferred compensation | i 302 | i 369 | ||||||||||||
Other | i 270 | i 292 | ||||||||||||
Other noncurrent liabilities | $ | i 1,096 | $ | i 1,224 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
The Boeing Company | |||||||||||||||||||||||||||||||||||||||||||||||
-7 Firm Orders | -8 Firm Orders | -7 or -8 Options | Total | ||||||||||||||||||||||||||||||||||||||||||||
2022 | i 14 | i 95 | i 5 | i 114 | (c) | ||||||||||||||||||||||||||||||||||||||||||
2023 | i 86 | i — | i 4 | i 90 | |||||||||||||||||||||||||||||||||||||||||||
2024 | i 30 | i — | i 56 | i 86 | |||||||||||||||||||||||||||||||||||||||||||
2025 | i 30 | i — | i 56 | i 86 | |||||||||||||||||||||||||||||||||||||||||||
2026 | i 15 | i 15 | i 40 | i 70 | |||||||||||||||||||||||||||||||||||||||||||
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 15 | i 45 | i — | i 60 | |||||||||||||||||||||||||||||||||||||||||||
2031 | i — | i 10 | i — | i 10 | |||||||||||||||||||||||||||||||||||||||||||
i 240 | (a) | i 225 | (b) | i 167 | i 632 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
(in millions) | June 30, 2022 | December 31, 2021 | |||||||||
Equity component: | |||||||||||
Carrying amount of Convertible Notes | $ | i — | $ | i 311 | |||||||
Carrying amount of issuance costs | i — | ( i 11) | |||||||||
Net carrying amount | $ | i — | $ | i 300 | |||||||
Liability component: | |||||||||||
Principal amount | $ | i 1,795 | $ | i 2,097 | |||||||
Unamortized debt discount | i — | ( i 255) | |||||||||
Net carrying amount | $ | i 1,795 | $ | i 1,842 |
Southwest Airlines Co. Notes to Condensed Consolidated Financial Statements (unaudited) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Non-cash amortization of the debt discount | $ | i — | $ | i 19 | $ | i — | $ | i 37 | |||||||||||||||
Non-cash amortization of debt issuance costs | i 3 | i 2 | i 7 | i 4 | |||||||||||||||||||
Contractual coupon interest | i 6 | i 7 | i 12 | i 15 | |||||||||||||||||||
Total interest expense | $ | i 9 | $ | i 28 | $ | i 19 | $ | i 56 |
Three months ended June 30, 2022 | |||||||||||||||||||||||
(in millions) | Cash payment | Principal repayment | Loss on extinguishment (a) | Non-cash amortization of debt discount and (issuance) costs | |||||||||||||||||||
i 1.25%
Convertible Notes due 2025 | $ | i 178 | $ | i 138 | $ | i 42 | $ | ( i 2) | |||||||||||||||
i 5.125%
Notes due 2027 | $ | i 27 | $ | i 26 | $ | i 1 | $ | i — | |||||||||||||||
i 4.75%
Notes due 2023 | i 3 | i 3 | i — | i — | |||||||||||||||||||
i 5.25%
Notes due 2025 | i 1 | i 1 | i — | i — | |||||||||||||||||||
Total | $ | i 209 | $ | i 168 | $ | i 43 | $ | ( i 2) |
Six months ended June 30, 2022 | |||||||||||||||||||||||
(in millions) | Cash payment | Principal repayment | Loss on extinguishment (a) | Non-cash amortization of debt discount and (issuance) costs | |||||||||||||||||||
i 1.25%
Convertible Notes due 2025 | $ | i 409 | $ | i 302 | $ | i 112 | $ | ( i 5) | |||||||||||||||
i 5.125%
Notes due 2027 | $ | i 61 | $ | i 56 | $ | i 4 | $ | i 1 | |||||||||||||||
i 4.75%
Notes due 2023 | i 3 | i 3 | i — | i — | |||||||||||||||||||
i 5.25%
Notes due 2025 | i 1 | i 1 | i — | i — | |||||||||||||||||||
Total | $ | i 474 | $ | i 362 | $ | i 116 | $ | ( i 4) |
Three months ended June 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 Change to 2021 | 2019 | 2022 Change to 2019 | ||||||||||||||||||||||||||||||||||
Revenue passengers carried (000s) | 33,224 | 26,158 | 27.0 | % | 34,924 | (4.9) | % | |||||||||||||||||||||||||||||||
Enplaned passengers (000s) | 41,284 | 32,786 | 25.9 | % | 42,569 | (3.0) | % | |||||||||||||||||||||||||||||||
Revenue passenger miles (RPMs) (in millions)(a) | 32,523 | 27,689 | 17.5 | % | 34,528 | (5.8) | % | |||||||||||||||||||||||||||||||
Available
seat miles (ASMs) (in millions)(b) | 37,322 | 33,414 | 11.7 | % | 39,985 | (6.7) | % | |||||||||||||||||||||||||||||||
Load factor(c) | 87.1 | % | 82.9 | % | 4.2 | pts. | 86.4 | % | 0.7 | pts. | ||||||||||||||||||||||||||||
Average length of passenger haul (miles) | 979 | 1,059 | (7.6) | % | 989 | (1.0) | % | |||||||||||||||||||||||||||||||
Average aircraft stage length (miles) | 727 | 794 | (8.4) | % | 750 | (3.1) | % | |||||||||||||||||||||||||||||||
Trips flown | 326,848 | 268,879 | 21.6 | % | 347,684 | (6.0) | % | |||||||||||||||||||||||||||||||
Seats flown (000s)(d) | 50,758 | 41,836 | 21.3 | % | 52,398 | (3.1) | % | |||||||||||||||||||||||||||||||
Seats
per trip(e) | 155.3 | 155.6 | (0.2) | % | 150.7 | 3.1 | % | |||||||||||||||||||||||||||||||
Average passenger fare | $ | 184.17 | $ | 136.46 | 35.0 | % | $ | 157.10 | 17.2 | % | ||||||||||||||||||||||||||||
Passenger
revenue yield per RPM (cents)(f) | 18.81 | 12.89 | 45.9 | % | 15.89 | 18.4 | % | |||||||||||||||||||||||||||||||
Operating revenues per ASM (cents)(g) | 18.03 | 11.99 | 50.4 | % | 14.78 | 22.0 | % | |||||||||||||||||||||||||||||||
Passenger
revenue per ASM (cents)(h) | 16.39 | 10.68 | 53.5 | % | 13.72 | 19.5 | % | |||||||||||||||||||||||||||||||
Operating expenses per ASM (cents)(i) | 14.92 | 10.22 | 46.0 | % | 12.36 | 20.7 | % | |||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding fuel (cents) | 10.54 | 7.81 | 35.0 | % | 9.52 | 10.7 | % | |||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding fuel and profitsharing (cents) | 10.32 | 7.56 | 36.5 | % | 9.09 | 13.5 | % | |||||||||||||||||||||||||||||||
Fuel costs per gallon, including fuel tax | $ | 3.36 | $ | 1.88 | 78.7 | % | $ | 2.13 | 57.7 | % | ||||||||||||||||||||||||||||
Fuel costs per gallon, including fuel tax, economic | $ | 3.36 | $ | 1.92 | 75.0 | % | $ | 2.13 | 57.7 | % | ||||||||||||||||||||||||||||
Fuel consumed, in gallons (millions) | 486 | 426 | 14.1 | % | 532 | (8.6) | % | |||||||||||||||||||||||||||||||
Active fulltime equivalent Employees(j) | 62,333 | 54,448 | 14.5 | % | 59,793 | 4.2 | % | |||||||||||||||||||||||||||||||
Aircraft
at end of period(k) | 730 | 736 | (0.8) | % | 753 | (3.1) | % |
Six months ended June 30, | ||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2022 Change to 2021 | 2019 | 2022 Change to 2019 | ||||||||||||||||||||||||||||||||||
Revenue passengers carried (000s) | 59,253 | 40,383 | 46.7 | % | 66,220 | (10.5) | % | |||||||||||||||||||||||||||||||
Enplaned passengers (000s) | 73,289 | 50,713 | 44.5 | % | 80,382 | (8.8) | % | |||||||||||||||||||||||||||||||
Revenue passenger miles (RPMs) (in millions)(a) | 59,006 | 42,565 | 38.6 | % | 65,232 | (9.5) | % | |||||||||||||||||||||||||||||||
Available
seat miles (ASMs) (in millions)(b) | 71,706 | 56,561 | 26.8 | % | 77,871 | (7.9) | % | |||||||||||||||||||||||||||||||
Load factor(c) | 82.3 | % | 75.3 | % | 7.0 | pts. | 83.8 | % | (1.5) | pts. | ||||||||||||||||||||||||||||
Average length of passenger haul (miles) | 996 | 1,054 | (5.5) | % | 985 | 1.1 | % | |||||||||||||||||||||||||||||||
Average aircraft stage length (miles) | 745 | 785 | (5.1) | % | 751 | (0.8) | % | |||||||||||||||||||||||||||||||
Trips flown | 614,599 | 461,280 | 33.2 | % | 674,074 | (8.8) | % | |||||||||||||||||||||||||||||||
Seats flown (000s)(d) | 95,305 | 71,627 | 33.1 | % | 101,871 | (6.4) | % | |||||||||||||||||||||||||||||||
Seats
per trip(e) | 155.1 | 155.3 | (0.1) | % | 151.1 | 2.6 | % | |||||||||||||||||||||||||||||||
Average passenger fare | $ | 173.06 | $ | 130.79 | 32.3 | % | $ | 154.50 | 12.0 | % | ||||||||||||||||||||||||||||
Passenger
revenue yield per RPM (cents)(f) | 17.38 | 12.41 | 40.0 | % | 15.68 | 10.8 | % | |||||||||||||||||||||||||||||||
Operating revenues per ASM (cents)(g) | 15.93 | 10.71 | 48.7 | % | 14.20 | 12.2 | % | |||||||||||||||||||||||||||||||
Passenger
revenue per ASM (cents)(h) | 14.30 | 9.34 | 53.1 | % | 13.14 | 8.8 | % | |||||||||||||||||||||||||||||||
Operating expenses per ASM (cents)(i) | 14.52 | 9.31 | 56.0 | % | 12.31 | 18.0 | % | |||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding fuel (cents) | 10.84 | 7.06 | 53.5 | % | 9.55 | 13.5 | % | |||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding fuel and profitsharing (cents) | 10.68 | 6.87 | 55.5 | % | 9.21 | 16.0 | % | |||||||||||||||||||||||||||||||
Fuel costs per gallon, including fuel tax | $ | 2.86 | $ | 1.78 | 60.7 | % | $ | 2.09 | 36.8 | % | ||||||||||||||||||||||||||||
Fuel costs per gallon, including fuel tax, economic | $ | 2.86 | $ | 1.83 | 56.3 | % | $ | 2.09 | 36.8 | % | ||||||||||||||||||||||||||||
Fuel consumed, in gallons (millions) | 923 | 712 | 29.6 | % | 1,026 | (10.0) | % | |||||||||||||||||||||||||||||||
Active fulltime equivalent Employees(j) | 62,333 | 54,448 | 14.5 | % | 59,793 | 4.2 | % | |||||||||||||||||||||||||||||||
Aircraft
at end of period(k) | 730 | 736 | (0.8) | % | 753 | (3.1) | % |
Three months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP | 2022 | 2021 | 2022 Change to 2021 | 2019 | 2022 Change to 2019 | ||||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,158 | $ | 594 | 94.9 | % | $ | 968 | 19.6 | % | |||||||||||||||||||||||||||||||||||||
Net income | $ | 760 | $ | 348 | 118.4 | % | $ | 741 | 2.6 | % | |||||||||||||||||||||||||||||||||||||
Net income per share, diluted | $ | 1.20 | $ | 0.57 | 110.7 | % | $ | 1.37 | (12.3) | % | |||||||||||||||||||||||||||||||||||||
Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 1,173 | $ | (162) | n.m. | $ | 968 | 21.2 | % | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 825 | $ | (206) | n.m. | $ | 741 | 11.3 | % | ||||||||||||||||||||||||||||||||||||||
Net income per share, diluted | $ | 1.30 | $ | (0.35) | n.m. | $ | 1.37 | (4.9) | % |
Six months ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
GAAP | 2022 | 2021 | 2022 Change to 2021 | 2019 | 2022 Change to 2019 | ||||||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,007 | $ | 793 | 27.0 | % | $ | 1,473 | (31.6) | % | |||||||||||||||||||||||||||||||||||||
Net income | $ | 482 | $ | 463 | 4.1 | % | $ | 1,128 | (57.3) | % | |||||||||||||||||||||||||||||||||||||
Net income per share, diluted | $ | 0.77 | $ | 0.76 | 0.7 | % | $ | 2.06 | (62.9) | % | |||||||||||||||||||||||||||||||||||||
Non-GAAP | |||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 1,038 | $ | (1,431) | n.m. | $ | 1,473 | (29.5) | % | ||||||||||||||||||||||||||||||||||||||
Net income (loss) | $ | 633 | $ | (1,221) | n.m. | $ | 1,128 | (43.9) | % | ||||||||||||||||||||||||||||||||||||||
Net income per share, diluted | $ | 1.00 | $ | (2.07) | n.m. | $ | 2.06 | (51.4) | % |
3Q 2022 Estimation | |||||||||||||||||
Operating revenue compared with 2019 (a) | Up 8% to 12% | ||||||||||||||||
ASMs compared with 2019 (b) | ~Flat | ||||||||||||||||
Economic fuel costs per gallon (c)(d) | $3.25 to $3.35 | ||||||||||||||||
Fuel hedging premium expense per gallon | $0.02 | ||||||||||||||||
Fuel hedging cash settlement gains per gallon | $0.46 | ||||||||||||||||
ASMs per gallon (fuel efficiency) | 76 to 78 | ||||||||||||||||
CASM-X (e) compared with 2019 (f) | Up 12% to 15% | ||||||||||||||||
Scheduled debt repayments (millions) | ~$55 | ||||||||||||||||
Interest expense (millions) | ~$90 | ||||||||||||||||
Aircraft (g) | 741 |
2022 Estimation | |||||||||||
ASMs compared with 2019 (b) | Down ~4% | ||||||||||
Economic fuel costs per gallon (c)(d) | $2.95 to $3.05 | ||||||||||
Fuel hedging premium expense per gallon | $0.04 | ||||||||||
Fuel hedging cash settlement gains per gallon | $0.51 | ||||||||||
CASM-X (e) compared with 2019 (f) | Up 12% to 16% | ||||||||||
Scheduled debt repayments (millions) | ~$820 | ||||||||||
Interest expense (millions) | ~$360 | ||||||||||
Aircraft (g) | 765 | ||||||||||
Effective tax rate | 24% to 26% | ||||||||||
Capital spending (billions) (h) | ~$4.0 |
Three months ended June 30, | Per ASM change | Percent change | |||||||||||||||||||||
(in cents, except for percentages) | 2022 | 2021 | |||||||||||||||||||||
Salaries, wages, and benefits | 5.95 | ¢ | 5.46 | ¢ | 0.49 | ¢ | 9.0 | % | |||||||||||||||
Payroll support and voluntary Employee programs, net | — | (2.22) | 2.22 | n.m. | |||||||||||||||||||
Fuel and oil | 4.38 | 2.41 | 1.97 | 81.7 | |||||||||||||||||||
Maintenance materials and repairs | 0.56 | 0.66 | (0.10) | (15.2) | |||||||||||||||||||
Landing fees and airport rentals | 1.04 | 1.21 | (0.17) | (14.0) | |||||||||||||||||||
Depreciation and amortization | 0.87 | 0.94 | (0.07) | (7.4) | |||||||||||||||||||
Other operating expenses | 2.12 | 1.76 | 0.36 | 20.5 | |||||||||||||||||||
Total | 14.92 | ¢ | 10.22 | ¢ | 4.70 | ¢ | 46.0 | % |
Three months ended June 30, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Economic fuel costs per gallon | $ | 3.36 | $ | 1.92 | |||||||||||||
Fuel hedging premium expense (in millions) | $ | 26 | $ | 24 | |||||||||||||
Fuel hedging premium expense per gallon | $ | 0.05 | $ | 0.06 | |||||||||||||
Fuel hedging cash settlement gain per gallon | $ | 0.68 | $ | 0.02 |
Estimated economic fuel
price per gallon, including taxes and fuel hedging premiums | ||||||||
Average Brent Crude Oil price per barrel | 3Q 2022 (b) | 4Q 2022 (b) | ||||||
$80 | $2.85 - $2.95 | $2.75 - $2.85 | ||||||
$90 | $3.05 - $3.15 | $2.95 - $3.05 | ||||||
Current Market (a) | $3.25 - $3.35 | $3.00 - $3.10 | ||||||
$110 | $3.45 - $3.55 | $3.35 - $3.45 | ||||||
$120 | $3.70 - $3.80 | $3.60 - $3.70 | ||||||
$130 | $4.00 - $4.10 | $3.85 - $3.95 | ||||||
Fair market value of fuel derivative instruments | $235 million | $195 million | ||||||
Estimated premium costs | $13 million | $13 million |
Period | Maximum fuel hedged percentage (c) | |||||||
2022 | 63% (a) | |||||||
2023 | 39% (b) | |||||||
2024 | 17% (b) |
Year | Fair
value of fuel derivative contracts at June 30, 2022 | Amount of gains deferred in AOCI at June 30, 2022 (net of tax) | ||||||||||||
Remainder of 2022 | $ | 495 | $ | 373 | ||||||||||
2023 | 497 | 328 | ||||||||||||
2024 | 135 | 79 | ||||||||||||
Total | $ | 1,127 | $ | 780 |
Three months ended June 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Mark-to-market impact from fuel contracts settling in current and future periods | $ | (20) | $ | (11) | |||||||
Premium cost of fuel contracts not designated as hedges | — | 10 | |||||||||
Unrealized mark-to-market adjustment on available for sale securities | 4 | — | |||||||||
Mark-to-market impact on deferred compensation plan investments | 39 | (17) | |||||||||
Loss on partial extinguishment of convertible and unsecured notes | 43 | — | |||||||||
Other | 2 | 4 | |||||||||
$ | 68 | $ | (14) |
Six months ended June 30, | Per ASM | Percent | |||||||||||||||||||||
(in cents, except for percentages) | 2022 | 2021 | change | change | |||||||||||||||||||
Salaries, wages, and benefits | 6.20 | ¢ | 6.00 | ¢ | 0.20 | ¢ | 3.3 | % | |||||||||||||||
Payroll support and voluntary Employee programs, net | — | (3.87) | 3.87 | n.m. | |||||||||||||||||||
Fuel and oil | 3.68 | 2.25 | 1.43 | 63.6 | |||||||||||||||||||
Maintenance materials and repairs | 0.59 | 0.70 | (0.11) | (15.7) | |||||||||||||||||||
Landing fees and airport rentals | 1.02 | 1.27 | (0.25) | (19.7) | |||||||||||||||||||
Depreciation and amortization | 0.90 | 1.11 | (0.21) | (18.9) | |||||||||||||||||||
Other operating expenses | 2.13 | 1.85 | 0.28 | 15.1 | |||||||||||||||||||
Total | 14.52 | ¢ | 9.31 | ¢ | 5.21 | ¢ | 56.0 | % |
Six months ended June 30, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Economic fuel costs per gallon | $ | 2.86 | $ | 1.83 | |||||||||||||
Fuel hedging premium expense (in millions) | $ | 53 | $ | 50 | |||||||||||||
Fuel hedging premium expense per gallon | $ | 0.06 | $ | 0.07 | |||||||||||||
Fuel hedging cash settlement gains per gallon | $ | 0.61 | $ | 0.01 |
Six months ended June 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Mark-to-market impact from fuel contracts settling in current and future periods | $ | 15 | $ | (9) | |||||||
Premium cost of fuel contracts not designated as hedges | — | 21 | |||||||||
Unrealized mark-to-market adjustment on available for sale securities | 7 | — | |||||||||
Mark-to-market impact on deferred compensation plan investment | 72 | (18) | |||||||||
Correction on investment gains related to prior periods | — | (60) | |||||||||
Loss on partial extinguishment of convertible and unsecured notes | 116 | — | |||||||||
Other | 2 | 5 | |||||||||
$ | 212 | $ | (61) |
Three months ended June 30, | Percent | Six months ended June 30, | Percent | ||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Fuel and oil expense, unhedged | $ | 1,942 | $ | 802 | $ | 3,148 | $ | 1,266 | |||||||||||||||||||||||||||
Add: Premium cost of fuel contracts designated as hedges | 26 | 14 | 53 | 29 | |||||||||||||||||||||||||||||||
Deduct: Fuel hedge gains included in Fuel and oil expense, net | (332) | (13) | (561) | (23) | |||||||||||||||||||||||||||||||
Fuel and oil expense, as reported | $ | 1,636 | $ | 803 | $ | 2,640 | $ | 1,272 | |||||||||||||||||||||||||||
Add: Fuel hedge contracts settling in the current period, but for which losses were reclassified from AOCI (a) | — | 5 | — | 14 | |||||||||||||||||||||||||||||||
Add: Premium cost of fuel contracts not designated as hedges | — | 10 | — | 21 | |||||||||||||||||||||||||||||||
Fuel and oil expense, excluding special items (economic) | $ | 1,636 | $ | 818 | 100.0 | $ | 2,640 | $ | 1,307 | 102.0 | |||||||||||||||||||||||||
Total operating expenses, net, as reported | $ | 5,570 | $ | 3,414 | $ | 10,415 | $ | 5,267 | |||||||||||||||||||||||||||
Add: Payroll support and voluntary Employee programs, net | — | 740 | — | 2,187 | |||||||||||||||||||||||||||||||
Add: Fuel hedge contracts settling in the current period, but for which losses were reclassified from AOCI (a) | — | 5 | — | 14 | |||||||||||||||||||||||||||||||
Add: Interest rate swap agreements terminated in a prior period, but for which losses were reclassified from AOCI (a) | — | 1 | — | 2 | |||||||||||||||||||||||||||||||
Add: Premium cost of fuel contracts not designated as hedges | — | 10 | — | 21 | |||||||||||||||||||||||||||||||
Deduct: Impairment of long-lived assets | (15) | $ | — | $ | (31) | $ | — | ||||||||||||||||||||||||||||
Total operating expenses, excluding special items | $ | 5,555 | $ | 4,170 | 33.2 | $ | 10,384 | $ | 7,491 | 38.6 | |||||||||||||||||||||||||
Deduct: Fuel and oil expense, excluding special items (economic) | (1,636) | (818) | (2,640) | (1,307) | |||||||||||||||||||||||||||||||
Operating expenses, excluding Fuel and oil expense and special items | $ | 3,919 | $ | 3,352 | 16.9 | $ | 7,744 | $ | 6,184 | 25.2 | |||||||||||||||||||||||||
Deduct: Profitsharing expense | (81) | (85) | (118) | (109) | |||||||||||||||||||||||||||||||
Operating expenses, excluding Fuel and oil expense, special items, and profitsharing | $ | 3,838 | $ | 3,267 | 17.5 | $ | 7,626 | $ | 6,075 | 25.5 | |||||||||||||||||||||||||
Operating income, as reported | $ | 1,158 | $ | 594 | $ | 1,007 | $ | 793 | |||||||||||||||||||||||||||
Deduct: Payroll support and voluntary Employee programs, net | — | (740) | — | (2,187) | |||||||||||||||||||||||||||||||
Deduct: Fuel hedge contracts settling in the current period, but for which losses were reclassified from AOCI (a) | — | (5) | — | (14) | |||||||||||||||||||||||||||||||
Deduct: Interest rate swap agreements terminated in a prior period, but for which losses were reclassified from AOCI (a) | — | (1) | — | (2) | |||||||||||||||||||||||||||||||
Deduct: Premium cost of fuel contracts not designated as hedges | — | (10) | — | (21) | |||||||||||||||||||||||||||||||
Add: Impairment of long-lived assets | 15 | — | 31 | $ | — | ||||||||||||||||||||||||||||||
Operating income (loss), excluding special items | $ | 1,173 | $ | (162) | n.m. | $ | 1,038 | $ | (1,431) | n.m. | |||||||||||||||||||||||||
Three months ended June 30, | Percent | Six months ended June 30, | Percent | ||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Other (gains) losses, net, as reported | $ | 68 | $ | (14) | $ | 212 | $ | (61) | |||||||||||||||||||||||||||
Add (Deduct): Mark-to-market impact from fuel contracts settling in current and future periods (a) | 20 | 11 | (15) | 9 | |||||||||||||||||||||||||||||||
Deduct: Premium cost of fuel contracts not designated as hedges | — | (10) | — | (21) | |||||||||||||||||||||||||||||||
Deduct: Unrealized mark-to-market adjustment on available for sale securities | (4) | — | (7) | — | |||||||||||||||||||||||||||||||
Deduct: Loss on partial extinguishment of convertible and unsecured notes | (43) | — | (116) | — | |||||||||||||||||||||||||||||||
Other (gains) losses, net, excluding special items | $ | 41 | $ | (13) | n.m. | $ | 74 | $ | (73) | n.m. | |||||||||||||||||||||||||
Income before income taxes, as reported | $ | 1,036 | $ | 502 | $ | 660 | $ | 648 | |||||||||||||||||||||||||||
Deduct: Payroll support and voluntary Employee programs, net | — | (740) | — | (2,187) | |||||||||||||||||||||||||||||||
Deduct: Fuel hedge contracts settling in the current period, but for which losses were reclassified from AOCI (a) | — | (5) | — | (14) | |||||||||||||||||||||||||||||||
Deduct: Interest rate swap agreements terminated in a prior period, but for which losses were reclassified from AOCI (a) | — | (1) | — | (2) | |||||||||||||||||||||||||||||||
Add (Deduct): Mark-to-market impact from fuel contracts settling in current and future periods (a) | (20) | (11) | 15 | (9) | |||||||||||||||||||||||||||||||
Add: Impairment of long-lived assets | 15 | — | 31 | — | |||||||||||||||||||||||||||||||
Add: Unrealized mark-to-market adjustment on available for sale securities | 4 | — | 7 | — | |||||||||||||||||||||||||||||||
Add: Loss on partial extinguishment of convertible and unsecured notes | 43 | — | 116 | — | |||||||||||||||||||||||||||||||
Income (loss) before income taxes, excluding special items | $ | 1,078 | $ | (255) | n.m. | $ | 829 | $ | (1,564) | n.m. | |||||||||||||||||||||||||
Provision for income taxes, as reported | $ | 276 | $ | 154 | $ | 178 | $ | 185 | |||||||||||||||||||||||||||
Add (Deduct): Net income (loss) tax impact of fuel and special items (b) | (23) | (203) | 18 | (528) | |||||||||||||||||||||||||||||||
Provision (benefit) for income taxes, net, excluding special items | $ | 253 | $ | (49) | n.m. | $ | 196 | $ | (343) | n.m. | |||||||||||||||||||||||||
Three months ended June 30, | Percent | Six months ended June 30, | Percent | ||||||||||||||||||||||||||||||||
2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
Net income, as reported | $ | 760 | $ | 348 | $ | 482 | $ | 463 | |||||||||||||||||||||||||||
Deduct: Payroll support and voluntary Employee programs, net | — | (740) | — | (2,187) | |||||||||||||||||||||||||||||||
Deduct: Fuel hedge contracts settling in the current period, but for which losses were reclassified from AOCI (a) | — | (5) | — | (14) | |||||||||||||||||||||||||||||||
Deduct: Interest rate swap agreements terminated in a prior period, but for which losses were reclassified from AOCI (a) | — | (1) | — | (2) | |||||||||||||||||||||||||||||||
Add (Deduct): Mark-to-market impact from fuel contracts settling in current and future periods (a) | (20) | (11) | 15 | (9) | |||||||||||||||||||||||||||||||
Add: Loss on partial extinguishment of convertible and unsecured notes | 43 | — | 116 | — | |||||||||||||||||||||||||||||||
Add: Impairment of long-lived assets | 15 | — | 31 | — | |||||||||||||||||||||||||||||||
Add: Unrealized mark-to-market adjustment on available for sale securities | 4 | — | 7 | — | |||||||||||||||||||||||||||||||
Add (Deduct): Net income (loss) tax impact of special items (b) | 23 | 203 | (18) | 528 | |||||||||||||||||||||||||||||||
Net income (loss), excluding special items | $ | 825 | $ | (206) | n.m. | $ | 633 | $ | (1,221) | n.m. | |||||||||||||||||||||||||
Net income per share, diluted, as reported | $ | 1.20 | $ | 0.57 | $ | 0.77 | $ | 0.76 | |||||||||||||||||||||||||||
Add (Deduct): Impact of special items | 0.08 | (1.21) | 0.24 | (3.59) | |||||||||||||||||||||||||||||||
Add (Deduct): Net impact of net income (loss) above from fuel contracts divided by dilutive shares | (0.03) | (0.03) | 0.02 | (0.04) | |||||||||||||||||||||||||||||||
Add (Deduct): Net income (loss) tax impact of special items (b) | 0.05 | 0.33 | (0.03) | 0.87 | |||||||||||||||||||||||||||||||
Deduct: GAAP to Non-GAAP diluted weighted average shares difference (c) | — | (0.01) | — | (0.07) | |||||||||||||||||||||||||||||||
Net income (loss) per share, diluted, excluding special items | $ | 1.30 | $ | (0.35) | n.m. | $ | 1.00 | $ | (2.07) | n.m. | |||||||||||||||||||||||||
Operating expenses per ASM (cents) | 14.92 | ¢ | 10.22 | ¢ | 14.52 | ¢ | 9.31 | ¢ | |||||||||||||||||||||||||||
Add (Deduct): Impact of special items | (0.04) | 2.22 | (0.05) | 3.87 | |||||||||||||||||||||||||||||||
Deduct: Fuel and oil expense divided by ASMs | (4.38) | (2.41) | (3.68) | (2.25) | |||||||||||||||||||||||||||||||
Deduct: Profitsharing expense divided by ASMs | (0.22) | (0.25) | (0.16) | (0.19) | |||||||||||||||||||||||||||||||
Operating expenses per ASM, excluding Fuel and oil expense, profitsharing, and special items (cents) | 10.28 | ¢ | 9.78 | ¢ | 5.1 | 10.63 | ¢ | 10.74 | ¢ | (1.0) |
Average
Age (Yrs) | Number of Aircraft | Number Owned | Number Leased | |||||||||||||||||||||||||||||
Type | Seats | |||||||||||||||||||||||||||||||
737-700 | 143 | 18 | 442 | (a) | 360 | 82 | ||||||||||||||||||||||||||
737-800 | 175 | 7 | 207 | 190 | 17 | |||||||||||||||||||||||||||
737 -8 | 175 | 2 | 81 | 52 | 29 | |||||||||||||||||||||||||||
Totals | 13 | 730 | 602 | 128 |
3.1 | |||||
3.2 | |||||
10.1 | |||||
10.2 | |||||
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. | ||||||||
August 1, 2022 | 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 | ||
---|---|---|---|---|
4/23/31 | ||||
1/15/31 | ||||
4/19/30 | ||||
5/1/25 | ||||
2/1/25 | ||||
4/1/23 | ||||
3/8/23 | ||||
12/31/22 | ||||
9/30/22 | ||||
9/7/22 | ||||
Filed as of: | 8/2/22 | |||
Filed on: | 8/1/22 | |||
7/28/22 | 8-K | |||
7/27/22 | ||||
7/21/22 | 8-K | |||
7/5/22 | ||||
For Period end: | 6/30/22 | |||
6/27/22 | ||||
6/3/22 | ||||
4/22/22 | ||||
3/31/22 | 10-Q | |||
3/28/22 | ||||
3/24/22 | ||||
1/1/22 | ||||
12/31/21 | 10-K | |||
12/22/21 | ||||
12/15/21 | 4 | |||
10/27/21 | 4 | |||
9/30/21 | 10-Q | |||
9/28/21 | ||||
9/27/21 | ||||
9/17/21 | ||||
9/3/21 | ||||
8/26/21 | ||||
7/9/21 | ||||
6/30/21 | 10-Q, 3 | |||
5/3/21 | ||||
3/31/21 | 10-Q | |||
1/7/21 | ||||
12/31/20 | 10-K | |||
11/1/20 | ||||
10/21/20 | ||||
10/7/20 | ||||
10/1/20 | ||||
9/7/20 | ||||
8/17/20 | S-3ASR | |||
8/5/20 | ||||
7/2/20 | ||||
6/22/20 | ||||
6/1/20 | 4, 8-K | |||
5/1/20 | 4, 424B5, 8-K | |||
3/12/20 | 8-K | |||
3/11/20 | ||||
2/19/20 | ||||
2/14/20 | SC 13G | |||
1/29/20 | 4 | |||
12/31/19 | 10-K | |||
9/13/19 | ||||
7/11/19 | ||||
6/30/19 | 10-Q | |||
6/10/19 | ||||
5/15/19 | 4, 8-K, DEF 14A | |||
5/9/19 | ||||
3/13/19 | ||||
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 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/06/24 Southwest Airlines Co. 10-K 12/31/23 113:49M 2/07/23 Southwest Airlines Co. 10-K 12/31/22 110:20M 8/02/22 Southwest Airlines Co. S-8 8/02/22 5:118K Donnelley … Solutions/FA |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/21/16 Southwest Airlines Co. 8-K:5,9 11/17/16 2:178K Donnelley … Solutions/FA 7/27/12 Southwest Airlines Co. 10-Q 6/30/12 48:13M |