DALLAS, Oct. 21, 2021 /PRNewswire/ -- Southwest
Airlines Co. (NYSE: LUV) (the "Company") today reported its third
quarter 2021 financial results:
- Third quarter net income of $446
million, or $.73 per diluted
share, driven by a $763 million
offset of salaries, wages, and benefits expenses related to the
receipt of Payroll Support Program (PSP) proceeds under the
American Rescue Plan Act of 2021
- Excluding special items1, third quarter net loss of
$135 million, or $.23 loss per diluted share
- Third quarter operating revenues of $4.7
billion, down 17.0 percent compared with third quarter
2019
- Ended third quarter with liquidity2 of $17.0 billion, well in excess of debt outstanding
of $11.2 billion
Gary C. Kelly, Chairman of the
Board and Chief Executive Officer, stated, "Third quarter 2021 was
a challenge for us, operationally. Despite the deceleration of
traffic in August and September due to surging COVID-19 cases, the
third quarter 2021 demand and revenue performance was quite strong
and a dramatic improvement from a year ago. That was a bright and
encouraging sign of recovery, and I was especially pleased with
July's revenue and profit performance. We were aggressive with our
capacity plans for third quarter 2021, coming close to pre-pandemic
third quarter 2019 available seat miles. Our active (versus
inactive) and available staffing fell below plan and, along with
other factors, caused us to miss our operational ontime performance
targets, and that created additional cost headwinds. The net
effect, including a revenue penalty of $300
million due to the COVID-19 surge, was a loss of
$135 million, excluding special
items.
"We have reined in our capacity plans to adjust to the current
staffing environment, and our ontime performance has improved,
accordingly. We are aggressively hiring to a goal of approximately
5,000 new Employees by the end of this year, and we are currently
more than halfway toward that goal. Our 2022 capacity planning
reflects more conservative staffing assumptions, as well, all
compared to historical norms. With respect to our fourth quarter
2021 revenue outlook, while there are lingering effects from the
summer COVID-19 surge and recent operational challenges, we are
encouraged with renewed momentum in leisure and business traffic,
revenues, and bookings—especially over the holidays. Except for
higher fuel prices, fourth quarter 2021's overall results are
trending better than third quarter 2021.
"I am very proud of our People. They worked especially hard in
challenging circumstances. We made good progress in our pandemic
recovery in third quarter 2021, and I expect more in fourth
quarter. I'm very excited about the demand recovery and our
prospects for 2022. Our Leadership has an excellent plan with a
laser focus on execution. We are in a very strong financial
position, and I thank all of our People for their resilience, their
resolve, and their devotion to serving our valued Customers."
Revenue Results and Outlook
The Company's third
quarter 2021 operating revenues increased 161.0 percent,
year-over-year, to $4.7 billion, but
decreased 17.0 percent compared with third quarter 2019 due to the
impact of the pandemic. Third quarter 2021 operating revenue per
available seat mile (RASM, or unit revenues) was 12.07 cents, a decrease of 15.7 percent, compared
with third quarter 2019, driven primarily by a passenger revenue
yield decrease of 15.0 percent and a load factor decrease of 2.8
points.
Although less severe than prior waves of rising COVID-19 cases,
the negative effects associated with the Delta variant are
estimated to have impacted August and September 2021 operating revenues by
approximately $100 million and
$200 million, respectively. Despite
the demand deceleration, third quarter 2021 operating revenues and
revenue passengers reached 83 percent and 87 percent of 2019
levels, respectively, which is meaningful progress and a strong
indication of the pent-up demand for air travel. Revenue and
booking trends began to significantly improve in the second half of
September 2021 as COVID-19 cases
declined, which resulted in an improvement in the Company's
September and third quarter 2021 operating revenues as compared
with the Company's previous estimation. September 2021 managed business revenues declined
73 percent compared with September
2019.
The following table presents selected revenue and load factor
results for third quarter 2021:
|
|
|
|
|
|
|
|
|
|
|
July
2021
|
|
August
2021
|
|
September
2021
|
|
3Q
2021
|
Operating revenue
compared with 2019 (a)
|
|
Down
12%
|
|
Down
19%
|
|
Down
22%
|
|
Down
17%
|
Previous
estimation
|
|
(b)
|
|
(b)
|
|
Down 25% to
30%
|
|
Down 18% to
20%
|
Load
factor
|
|
87%
|
|
79%
|
|
75%
|
|
81%
|
Previous
estimation
|
|
(b)
|
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(b)
|
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75% to
80%
|
|
80% to
85%
|
|
(a) The Company
believes that operating revenues compared with 2019 is a more
relevant measure of performance than a year-over-year comparison
due to the significant impacts in 2020 due to the
pandemic.
|
(b) Remains unchanged
from previously provided estimation.
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The Company is encouraged by recent improvements in underlying
revenue trends as COVID-19 cases have declined; however, the
lingering effects from the deceleration in bookings in third
quarter 2021 are estimated to negatively impact fourth quarter 2021
operating revenues by approximately $100
million. For October 2021,
despite the improvement in revenue and booking trends experienced
in the second half of September 2021
continuing, thus far, into this month, October operating revenues
include two headwinds—an estimated $40
million negative impact due to the lingering effects of the
Delta variant and an estimated $75
million negative impact as a result of flight cancellations
from operational challenges experienced earlier this month and
related Customer refunds and gestures of goodwill. Despite these
headwinds, and based on current bookings, the Company's guidance
for October 2021 operating revenues
remains unchanged, as the recent improvement in travel demand
trends offsets the aforementioned headwinds. Business revenues
continue to lag leisure revenue trends; however, the Company is
encouraged by the recent improvement in business travel demand
resulting in steady improvements in business bookings, thus far, in
October 2021. Beyond October 2021, the current booking curve for the
holidays is trending in line with 2019 levels.
The following table presents estimates of revenue and load
factor for October and fourth quarter 2021:
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|
|
|
|
|
Estimated
October 2021
|
|
Estimated
4Q 2021
|
Operating revenue
compared with 2019 (a)
|
|
Down 20% to
30%
|
|
Down 15% to
25%
|
Previous
estimation
|
|
(b)
|
|
(c)
|
Load
factor
|
|
78% to
83%
|
|
80% to
85%
|
Previous
estimation
|
|
75% to
85%
|
|
(c)
|
|
(a) The Company
believes that operating revenues compared with 2019 is a more
relevant measure of performance than a year-over-year comparison
due to the significant impacts in 2020 due to the
pandemic.
|
(b) Remains unchanged
from previously provided estimation.
|
(c) No previous
estimation provided.
|
The Company went live with Sabre's Global Distribution System
(GDS) platform on July 26, 2021,
achieving the Company's goal of enabling industry-standard
corporate bookings through multiple GDS platforms. In addition to
Sabre, the Company is currently accepting corporate bookings
through Amadeus's GDS platform and Travelport's multiple GDS
platforms (Apollo, Worldspan, and Galileo). The Company's
enhancement of its GDS channel strategy is part of its larger
"channel of choice" offering and complements its "direct connect"
strategy, as well as its existing SWABIZ® direct travel management
tool. The goal is to distribute Southwest's everyday low fares to
more business travelers through their preferred channel and grow
the Company's managed business revenues.
Cost Performance and Outlook
Third quarter 2021
operating expenses increased 23.2 percent, year-over-year, to
$3.9 billion, but decreased 18.1
percent compared with third quarter 2019 primarily due to a
$763 million offset of salaries,
wages, and benefits expenses related to the receipt of PSP
proceeds, which was recorded as a special item. Excluding special
items, third quarter 2021 operating expenses increased 40.6
percent, year-over-year, to $4.7
billion. Third quarter 2021 operating expenses per available
seat mile (CASM, or unit costs) decreased 16.8 percent, compared
with third quarter 2019. Excluding special items, third quarter
2021 CASM was comparable with third quarter 2019.
The following table presents economic fuel costs per
gallon1, including the impact of fuel hedging premium
expense and fuel derivative contracts, for third quarter 2021 and
the corresponding prior year period:
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Third
Quarter
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
Economic fuel
costs per gallon
|
|
$2.04
|
|
$1.23
|
|
|
|
|
|
Fuel hedging
premium expense
|
|
$25
million
|
|
$24
million
|
|
|
|
|
|
Fuel hedging
premium expense per gallon
|
|
$0.05
|
|
$0.08
|
|
|
|
|
|
Fuel hedging cash
settlement gains per gallon
|
|
$0.04
|
|
—
|
|
|
|
|
|
The Company's third quarter 2021 available seat miles (ASMs, or
capacity) per gallon (fuel efficiency) declined 4.5 percent,
year-over-year, due to the return to service of more of the
Company's least fuel-efficient aircraft, The Boeing Company
(Boeing) 737-700 (-700). When compared with third quarter 2019,
fuel efficiency improved 5.1 percent in third quarter 2021 due to
the March 2021 return to service of
the Company's most fuel-efficient aircraft, the Boeing 737 MAX
(MAX). The MAX remains critical to the Company's efforts to
modernize its fleet, reduce carbon emissions intensity, and achieve
its goal of carbon neutrality by 2050. The Company expects fourth
quarter 2021 fuel efficiency to be in line with third quarter 2021,
on a nominal basis.
Based on the Company's existing fuel derivative contracts and
market prices as of October 14, 2021,
the following table presents estimates of economic fuel costs per
gallon3, including the estimated impact of fuel hedging
premium expense and fuel derivative contracts, for fourth quarter
2021 and the corresponding prior year period:
|
|
Fourth
Quarter
|
|
|
2021
|
|
2020
|
Economic fuel
costs per gallon
|
|
$2.25 to
$2.35
|
|
$1.25
|
Fuel hedging
premium expense
|
|
$25
million
|
|
$24
million
|
Fuel hedging
premium expense per gallon
|
|
$0.05
|
|
$0.08
|
Fuel hedging cash
settlement gains per gallon
|
|
$0.18
|
|
—
|
As of October 14, 2021, the fair
market value of the Company's fuel derivative contracts for the
remainder of 2021 was an asset of approximately $89 million, and the fair market value settling
in 2022 and beyond was an asset of approximately $824 million. Additional information regarding
the Company's fuel derivative contracts is included in the
accompanying tables.
Excluding fuel and oil expense, third quarter 2021 operating
expenses increased 4.6 percent, year-over-year, and decreased 20.8
percent, compared with third quarter 2019. The Company accrued
$77 million of profitsharing expense
in third quarter 2021, for a total of $186
million year-to-date, compared with no profitsharing accrual
in third quarter 2020. Excluding fuel and oil expense, special
items, and profitsharing, third quarter 2021 operating expenses
increased 22.9 percent, year-over-year, and increased 1.9 percent
compared with third quarter 2019. Third quarter 2021 CASM,
excluding fuel and oil expense, special items, and profitsharing,
decreased 16.1 percent, year-over-year, driven primarily by an
increase in capacity, and increased 3.5 percent compared with third
quarter 2019, which was in line with the Company's expectation. As
expected, approximately four points of the unit cost increase,
compared with third quarter 2019, was attributable to ramp up costs
and premium pay offered to Operations Employees. The Company
realized approximately $185 million
of costs savings in third quarter 2021 from voluntary separation
and extended leave programs and estimates annual 2021 cost savings
from these programs to be in the range of $1.0 billion to $1.1
billion.
Based on current cost trends and reduced capacity plans, fourth
quarter 2021 operating expenses, excluding fuel and oil expense,
special items, and profitsharing, are expected to be comparable
with fourth quarter 2019 levels, and increase in the range of 8
percent to 12 percent on a unit basis4 as compared with
fourth quarter 2019. The Company is experiencing cost increases
primarily due to inflation in labor rates and airport costs.
Additionally, the Company currently expects four to five points of
the unit cost increase in fourth quarter 2021 to be attributable to
investments in the operation to bolster staffing, cost inflation
related to lower productivity, and vaccination incentive pay. The
Company recently launched a Vaccination Participation Pay Program
to incentivize Employees with the equivalent of two days of pay
intended to cover the time needed to become vaccinated.
Third quarter 2021 Other expenses increased $2 million, year-over-year, primarily due to a
$12 million charge on the partial
extinguishment of the Company's convertible notes, partially offset
by an improvement in other gains and losses driven by adjustments
for fuel derivative contracts not designated as fuel hedges for
accounting purposes. Both of these items are excluded from the
Company's non-GAAP results as special items. Additionally, interest
expense in third quarter 2021 increased $4
million, year-over-year, driven by debt incurred since third
quarter 2020.
The Company's third quarter 2021 effective tax rate was 26
percent. The Company currently estimates its annual 2021 effective
tax rate to be approximately 27 percent, compared with its previous
guidance of approximately 26 percent.
Based on the current cost outlook, and despite the current
momentum in revenue trends, the Company does not expect to be
profitable in fourth quarter 2021.
Fleet and Capacity
The Company ended third quarter
2021 with 737 Boeing 737 aircraft, including 69 Boeing 737-8 (-8)
aircraft. During third quarter 2021, the Company took delivery of
one -8 aircraft and does not expect any additional deliveries in
2021. As of September 30, 2021, 24
-700 aircraft remained in temporary storage due to fourth quarter
2021 capacity remaining below fourth quarter 2019 levels. The
Company still expects to return one leased -700 aircraft to the
lessor in fourth quarter 2021, and recently made the decision to
accelerate the retirement of eight -700 owned aircraft from 2022
into fourth quarter 2021, for a total of 18 retirements in 2021.
The Company expects to end 2021 with 728 total aircraft.
During third quarter 2021, the Company exercised eight Boeing
737-7 (-7) options for delivery in 2022, and on October 1, 2021, the Company exercised another
eight -7 options for delivery in 2023. Including the options
exercised on October 1, 2021, the
Company's order book with Boeing contains 399 MAX firm orders (250
-7 and 149 -8) and 252 MAX options (-7 or -8) for years 2021
through 2031. The Company continues to expect that more than half
of the MAX aircraft in its firm order book will replace a
significant amount of its 461 -700 aircraft over the next 10 to 15
years to support the modernization of its fleet, a key component of
its environmental sustainability efforts. Additional information
regarding the Company's aircraft delivery schedule is included in
the accompanying tables.
The Company's third quarter 2021 capacity increased 46.4
percent, year-over-year, due to increased flight activity driven
primarily by increased leisure passenger traffic, but decreased 1.6
percent compared with third quarter 2019. The following table
presents capacity results for third quarter 2021:
|
|
|
|
|
|
|
|
|
|
|
|
July
2021
|
|
August
2021
|
|
|
September
2021
|
|
3Q
2021
|
ASMs
year-over-year
|
|
Up
41%
|
|
Up
38%
|
|
|
Up
65%
|
|
Up
46%
|
Previous
estimation
|
|
(a)
|
|
(a)
|
|
|
(a)
|
|
Up
~47%
|
ASMs compared with
2019
|
|
Down
3%
|
|
Comparable
|
|
|
Down
2%
|
|
Down
2%
|
Previous
estimation
|
|
(a)
|
|
(a)
|
|
|
(a)
|
|
(a)
|
|
(a) Remains unchanged
from previously provided estimation.
|
The Company expects its fourth quarter 2021 capacity to remain
below fourth quarter 2019 levels, and today adjusted its published
flight schedule for December 2021.
Including these adjustments, the following table presents capacity
estimates for fourth quarter 2021:
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
October 2021
|
|
Estimated
November 2021
|
|
|
Estimated
December 2021
|
|
Estimated
4Q 2021
|
ASMs
year-over-year
|
|
Up
~68%
|
|
Up
~42%
|
|
|
Up
~55%
|
|
Up
~54%
|
Previous
estimation
|
|
Up
~73%
|
|
(a)
|
|
|
(a)
|
|
Up
~60%
|
ASMs compared with
2019
|
|
Down
~6%
|
|
Down
~7%
|
|
|
Down
~12%
|
|
Down
~8%
|
Previous
estimation
|
|
Down
~3%
|
|
(a)
|
|
|
(a)
|
|
Down
~5%
|
|
(a) No previous
estimation provided.
|
The Company's flight schedule is published for sale through
April 24, 2022, and the Company
currently expects first quarter 2022 capacity to decrease
approximately 6 percent compared with first quarter 2019.
Liquidity and Capital Deployment
As of
September 30, 2021, the Company had approximately $16.0 billion in cash and short-term investments,
and a fully available revolving secured credit facility of
$1.0 billion. The Company continues
to have unencumbered assets with an estimated value of more than
$11.0 billion, including aircraft
value estimated in the range of $9.0
billion to $9.5 billion, and
approximately $2.0 billion in
non-aircraft assets such as spare engines, ground equipment, and
real estate. In addition, the Company has significant value from
its Rapid Rewards® loyalty program. As of October 20, 2021, the Company had cash and
short-term investments of approximately $16.2 billion.
Net cash used in operations during third quarter 2021 was
$575 million, driven primarily by the
negative financial effects of the Delta variant on travel demand.
Third quarter 2021 capital expenditures were $135 million. The Company continues to estimate
its 2021 capital expenditures to be in the range of $500 million to $600
million, driven primarily by technology, facilities, and
operational investments, as well as aircraft-related capital
expenditures. Based on 72 MAX firm orders planned for 2022, the
Company's contractual aircraft capital expenditures for
20225 are now estimated to be approximately $1.7 billion, compared with its previous guidance
of $1.6 billion. Further, the
Company's total contractual aircraft capital expenditures for all
years 2022 through 2026, which represent 200 MAX firm orders (185
-7 and 15 -8), are estimated to be approximately $6.0 billion. Fleet and other capital investment
plans are expected to continue to evolve as the Company manages
through this pandemic recovery period, and the Company intends to
evaluate the exercise of its remaining 42 MAX options for 2022 as
decision deadlines occur.
As of September 30, 2021, the Company had current and
non-current debt obligations that totaled $11.2 billion. The Company repaid approximately
$188 million in debt and finance
lease obligations during third quarter 2021, including the
extinguishment of $80 million in
principal of its convertible notes for a cash payment of
$121 million. The Company is
currently scheduled to repay approximately $182 million in debt and finance lease
obligations in fourth quarter 2021. Based on current debt
outstanding and current market interest rates, the Company expects
fourth quarter 2021 interest expense to be approximately
$115 million. As of September 30, 2021, the Company was in a net cash
position6 of $4.8 billion,
and its adjusted debt7 to invested capital (leverage)
was 56 percent. The Company remains the only U.S. airline with an
investment-grade credit rating by all three rating agencies.
Awards and Recognitions
- Ranked #1 for Newsweek's America's Best Customer Service in the
Low-Cost Airlines category
- Named a Best Employer for Women 2021 by Forbes
- Named a Best Place to Work for Disability Inclusion after
achieving a top score on Disability:IN's 2021 Disability Equality
Index
- Ranked #1 in the Excellence in Reputation Management category
for the 2021 Gartner Communications Award
Environmental, Social, and Governance (ESG)
- Established a plan of action to reduce Southwest's carbon
emissions intensity by at least 20 percent by 2030 and maintain
carbon neutral growth every year through the end of the decade
- Partnering with Chooose™ and Customers to offset
Southwest's carbon emissions by providing the first U.S.-based
airline carbon offset offer with loyalty points and for every
dollar contributed toward offsetting Southwest's carbon emissions,
Southwest will match the contribution8
- Published a Human Rights Policy which formalizes Southwest's
longstanding support of human rights principles
- Outlined the next steps in Southwest's Continued Commitment to
increase racial and gender diversity in Southwest Leadership
- Assisted with humanitarian efforts to relocate Afghanistan
refugees, operating 93 domestic charter flights carrying more than
11,000 People across the United
States
- Expanded citizenship reporting in the Southwest Airlines One
Report to include the Sustainability Accounting Standards Board
(SASB), United Nations Sustainable Development Goals (UNSDG), and
Global Reporting Initiatives (GRI) Standards
Conference Call
The Company will discuss its third
quarter 2021 results on a conference call at 12:30 p.m. Eastern Time today. To listen to a
live broadcast of the conference call, please go to
http://www.southwestairlinesinvestorrelations.com.
1See Note Regarding Use of Non-GAAP Financial
Measures for additional information on special items. In addition,
information regarding special items and economic results is
included in the accompanying table Reconciliation of Reported
Amounts to Non-GAAP Items (also referred to as "excluding special
items").
2Includes approximately $16.0
billion in cash and short-term investments and a fully
available secured revolving credit line of $1.0 billion.
3Based on the Company's existing fuel derivative
contracts and market prices as of October
14, 2021, fourth quarter 2021 economic fuel costs per gallon
is estimated to be in the range of $2.25 to $2.35.
Economic fuel cost projections do not reflect the potential impact
of special items because the Company cannot reliably predict or
estimate the hedge accounting impact associated with the volatility
of the energy markets, the impact of COVID-19 cases on air travel
demand, or the impact to its financial statements in future
periods. Accordingly, the Company believes a reconciliation of
non-GAAP financial measures to the equivalent GAAP financial
measures for projected results is not meaningful or available
without unreasonable effort. See Note Regarding Use of
Non-GAAP Financial Measures.
4Projections do not reflect the potential impact of fuel
and oil expense, special items, and profitsharing because the
Company cannot reliably predict or estimate those items or expenses
or their impact to its financial statements in future periods,
especially considering the significant volatility of the fuel and
oil expense line item. Accordingly, the Company believes a
reconciliation of non-GAAP financial measures to the equivalent
GAAP financial measures for these projected results is not
meaningful or available without unreasonable effort.
5Net of progress payments made on undelivered MAX
aircraft.
6Net cash position is calculated as the sum of cash and
cash equivalents and short-term investments, less the sum of
short-term and long-term debt.
7Adjusted debt is calculated as short-term and long-term
debt, including the net present value of aircraft rentals related
to operating leases.
8Taxes and fees will not be matched by Southwest or earn
points. Southwest's contribution may be used to purchase offsets
for Southwest from any carbon offset project of Southwest's choice.
Rapid Rewards® Members can earn 10 Rapid Rewards bonus points per
dollar contributed towards the purchase of offsets for Southwest up
to a maximum of 500 Rapid Rewards bonus points per month. Points
will only be awarded to the Rapid Rewards Member's Rapid Rewards
account number entered at the time of the carbon offset
transaction. Terms and conditions apply.
Cautionary Statement Regarding Forward-Looking
Statements
This news release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Specific forward-looking statements include,
without limitation, statements related to (i) the Company's
financial and operational outlook, expectations, and projected
results of operations, including factors and assumptions underlying
the Company's expectations and projections; (ii) the Company's
expectations with respect to its progress towards pandemic
recovery; (iii) the Company's goals with respect to distributing
fares to business travelers and growing managed business revenues;
(iv) the Company's expectations with respect to fuel efficiency,
its 2050 emissions goal, and its fuel costs, and the Company's
related management of risks associated with changing jet fuel
prices, including factors underlying the Company's expectations;
(v) the Company's expectations with respect to the benefits
associated with its voluntary separation and extended leave
programs; (vi) the Company's plans and expectations regarding its
fleet and fleet delivery schedule, including factors and
assumptions underlying the Company's plans and expectations; (vii)
the Company's plans and expectations with respect to capacity and
capacity adjustments; and (viii) the Company's plans, estimates,
and assumptions related to capital spending, in particular with
respect to aircraft spending. These forward-looking statements are
based on the Company's current estimates, intentions, beliefs,
expectations, goals, strategies, and projections for the future and
are not guarantees of future performance. Forward-looking
statements involve risks, uncertainties, assumptions, and other
factors that are difficult to predict and that could cause actual
results to vary materially from those expressed in or indicated by
them. Factors include, among others, (i) any negative developments
related to the COVID-19 pandemic, including, for example, with
respect to the duration, spread, severity, or any recurrence of the
COVID-19 pandemic or any new variant strains of the underlying
virus; the effectiveness, availability, and usage of COVID-19
vaccines; the impact of the recent vaccine Executive Order and
other governmental actions on the Company's business plans and its
ability to retain key Employees; the extent of the impact of
COVID-19 on overall demand for air travel and the Company's related
business plans and decisions; and the impact of the COVID-19
pandemic on the Company's access to capital; (ii) the impact of
labor matters on the Company's business decisions, plans, and
strategies; (iii) the Company's dependence on Boeing with respect
to the Company's operations, strategies, and goals; (iv) the
Company's ability to timely and effectively implement, transition,
and maintain the necessary information technology systems and
infrastructure to support its operations and initiatives; (v) the
impact of extreme or severe weather and natural disasters, actions
of competitors (including, without limitation, pricing, scheduling,
capacity, and network decisions, and consolidation and alliance
activities), governmental actions, consumer perception, economic
conditions, fears of terrorism or war, and other factors beyond the
Company's control, on consumer behavior and the Company's results
of operations and business decisions, plans, strategies, and
results; (vi) the impact of fuel price changes, fuel price
volatility, volatility of commodities used by the Company for
hedging jet fuel, and any changes to the Company's fuel hedging
strategies and positions, on the Company's business plans and
results of operations; (vii) the Company's dependence on third
parties, in particular with respect to its fuel supply, carbon
emissions strategies, and corporate travel enhancements, and the
impact on the Company's operations and results of operations of any
third party delays or non-performance; (viii) the Company's
dependence on its workforce, including its ability to employ
sufficient numbers of qualified Employees to effectively and
efficiently maintain its operations; (ix) impact of the Company's
obligations and restrictions related to its participation in the
U.S. Department of Treasury's payroll support programs and any
related negative impact on the Company's ability to retain key
Employees; and (x) other factors, as described in the Company's
filings with the Securities and Exchange Commission, including the
detailed factors discussed under the heading "Risk Factors" in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, and its Quarterly
Report on Form 10-Q for the quarter ended June 30, 2021.
Southwest
Airlines Co.
Condensed
Consolidated Statement of Income (Loss)
(in millions, except
per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
|
|
September
30,
|
|
|
|
2021
|
|
2020
|
|
Percent
Change
|
|
2021
|
|
2020
|
|
Percent
Change
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
|
Passenger
|
$
|
4,227
|
|
$
|
1,454
|
|
190.7
|
|
$
|
9,508
|
|
$
|
6,003
|
|
58.4
|
Freight
|
47
|
|
41
|
|
14.6
|
|
140
|
|
118
|
|
18.6
|
Other
|
405
|
|
298
|
|
35.9
|
|
1,091
|
|
914
|
|
19.4
|
Total operating
revenues
|
4,679
|
|
1,793
|
|
161.0
|
|
10,739
|
|
7,035
|
|
52.7
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES, NET:
|
|
|
|
|
|
|
|
Salaries, wages, and
benefits
|
2,122
|
|
1,678
|
|
26.5
|
|
5,518
|
|
5,245
|
|
5.2
|
Payroll support and
voluntary Employee programs, net
|
(776)
|
|
(149)
|
|
n.m.
|
|
(2,963)
|
|
(933)
|
|
217.6
|
Fuel and
oil
|
990
|
|
379
|
|
161.2
|
|
2,261
|
|
1,507
|
|
50.0
|
Maintenance materials
and repairs
|
250
|
|
185
|
|
35.1
|
|
646
|
|
597
|
|
8.2
|
Landing fees and
airport rentals
|
376
|
|
308
|
|
22.1
|
|
1,092
|
|
922
|
|
18.4
|
Depreciation and
amortization
|
322
|
|
315
|
|
2.2
|
|
949
|
|
940
|
|
1.0
|
Other operating
expenses
|
662
|
|
488
|
|
35.7
|
|
1,710
|
|
1,405
|
|
21.7
|
Total operating
expenses, net
|
3,946
|
|
3,204
|
|
23.2
|
|
9,213
|
|
9,683
|
|
(4.9)
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS)
|
733
|
|
(1,411)
|
|
n.m.
|
|
1,526
|
|
(2,648)
|
|
n.m.
|
|
|
|
|
|
|
|
|
OTHER EXPENSES
(INCOME):
|
|
|
|
|
|
|
|
Interest
expense
|
115
|
|
111
|
|
3.6
|
|
343
|
|
235
|
|
46.0
|
Capitalized
interest
|
(9)
|
|
(11)
|
|
(18.2)
|
|
(27)
|
|
(23)
|
|
17.4
|
Interest
income
|
(2)
|
|
(4)
|
|
(50.0)
|
|
(6)
|
|
(30)
|
|
(80.0)
|
Other (gains) losses,
net
|
29
|
|
35
|
|
(17.1)
|
|
(32)
|
|
95
|
|
n.m.
|
Total other expenses
(income)
|
133
|
|
131
|
|
1.5
|
|
278
|
|
277
|
|
0.4
|
|
|
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAXES
|
600
|
|
(1,542)
|
|
n.m.
|
|
1,248
|
|
(2,925)
|
|
n.m.
|
PROVISION
(BENEFIT) FOR INCOME TAXES
|
154
|
|
(385)
|
|
n.m.
|
|
339
|
|
(759)
|
|
n.m.
|
NET INCOME
(LOSS)
|
$
|
446
|
|
$
|
(1,157)
|
|
n.m.
|
|
$
|
909
|
|
$
|
(2,166)
|
|
n.m.
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
PER SHARE:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.75
|
|
$
|
(1.96)
|
|
n.m.
|
|
$
|
1.54
|
|
$
|
(3.89)
|
|
n.m.
|
Diluted
|
$
|
0.73
|
|
$
|
(1.96)
|
|
n.m.
|
|
$
|
1.49
|
|
$
|
(3.89)
|
|
n.m.
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING:
|
|
|
|
|
|
|
Basic
|
592
|
|
590
|
|
0.3
|
|
591
|
|
556
|
|
6.3
|
Diluted
|
607
|
|
590
|
|
2.9
|
|
610
|
|
556
|
|
9.7
|
Southwest Airlines
Co.
Reconciliation of
Reported Amounts to Non-GAAP Items (excluding special
items)
(See Note
Regarding Use of Non-GAAP Financial Measures)
(in millions, except
per share amounts)(unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
Percent
|
|
September
30,
|
|
Percent
|
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Fuel and oil
expense, unhedged
|
$
|
999
|
|
$
|
372
|
|
|
|
$
|
2,264
|
|
$
|
1,472
|
|
|
Add: Premium cost of
fuel contracts designated as hedges
|
14
|
|
13
|
|
|
|
43
|
|
51
|
|
|
Deduct: Fuel hedge
gains included in Fuel and oil expense, net
|
(23)
|
|
(6)
|
|
|
|
(46)
|
|
(16)
|
|
|
Fuel and oil
expense, as reported
|
$
|
990
|
|
$
|
379
|
|
|
|
$
|
2,261
|
|
$
|
1,507
|
|
|
Add: Fuel hedge
contracts settling in the current period, but for which losses were
reclassified from AOCI
|
5
|
|
6
|
|
|
|
19
|
|
16
|
|
|
Add: Premium cost of
fuel contracts not designated as hedges
|
11
|
|
11
|
|
|
|
32
|
|
22
|
|
|
Fuel and oil
expense, excluding special items (economic)
|
$
|
1,006
|
|
$
|
396
|
|
154.0
|
|
$
|
2,312
|
|
$
|
1,545
|
|
49.6
|
|
|
|
|
|
|
|
|
Total operating
expenses, net, as reported
|
$
|
3,946
|
|
$
|
3,204
|
|
|
|
$
|
9,213
|
|
$
|
9,683
|
|
|
Add: Payroll support
and voluntary Employee programs, net
|
776
|
|
149
|
|
|
|
2,963
|
|
933
|
|
|
Add: Fuel hedge
contracts settling in the current period, but for which losses were
reclassified from AOCI
|
5
|
|
6
|
|
|
|
19
|
|
16
|
|
|
Add: Interest rate
swap agreements terminated in a prior period, but for which losses
were reclassified from AOCI
|
—
|
|
—
|
|
|
|
2
|
|
—
|
|
|
Add: Premium cost of
fuel contracts not designated as hedges
|
11
|
|
11
|
|
|
|
32
|
|
22
|
|
|
Add: Gain from
aircraft sale-leaseback transactions
|
—
|
|
—
|
|
|
|
—
|
|
222
|
|
|
Total operating
expenses, excluding special items
|
$
|
4,738
|
|
$
|
3,370
|
|
40.6
|
|
$
|
12,229
|
|
$
|
10,876
|
|
12.4
|
Deduct: Fuel and oil
expense, excluding special items (economic)
|
(1,006)
|
|
(396)
|
|
|
|
(2,312)
|
|
(1,545)
|
|
|
Operating
expenses, excluding Fuel and oil expense and special
items
|
$
|
3,732
|
|
$
|
2,974
|
|
25.5
|
|
$
|
9,917
|
|
$
|
9,331
|
|
6.3
|
Deduct: Profitsharing
expense
|
(77)
|
|
—
|
|
|
|
(186)
|
|
—
|
|
|
Operating
expenses, excluding Fuel and oil expense, special items, and
profitsharing
|
$
|
3,655
|
|
$
|
2,974
|
|
22.9
|
|
$
|
9,731
|
|
$
|
9,331
|
|
4.3
|
|
|
|
|
|
|
|
|
Operating income
(loss), as reported
|
$
|
733
|
|
$
|
(1,411)
|
|
|
|
$
|
1,526
|
|
$
|
(2,648)
|
|
|
Deduct: Payroll
support and voluntary Employee programs, net
|
(776)
|
|
(149)
|
|
|
|
(2,963)
|
|
(933)
|
|
|
Deduct: Fuel hedge
contracts settling in the current period, but for which losses were
reclassified from AOCI
|
(5)
|
|
(6)
|
|
|
|
(19)
|
|
(16)
|
|
|
Deduct: Interest rate
swap agreements terminated in a prior period, but for which losses
were reclassified from AOCI
|
—
|
|
—
|
|
|
|
(2)
|
|
—
|
|
|
Deduct: Premium cost
of fuel contracts not designated as hedges
|
(11)
|
|
(11)
|
|
|
|
(32)
|
|
(22)
|
|
|
Deduct: Gain from
aircraft sale-leaseback transactions
|
—
|
|
—
|
|
|
|
—
|
|
(222)
|
|
|
Operating loss,
excluding special items
|
$
|
(59)
|
|
$
|
(1,577)
|
|
(96.3)
|
|
$
|
(1,490)
|
|
$
|
(3,841)
|
|
(61.2)
|
|
|
|
|
|
|
|
|
Other (gains)
losses, net, as reported
|
$
|
29
|
|
$
|
35
|
|
|
|
$
|
(32)
|
|
$
|
95
|
|
|
Add (Deduct):
Mark-to-market impact from fuel contracts settling in current and
future periods
|
(3)
|
|
(23)
|
|
|
|
6
|
|
(40)
|
|
|
Deduct: Premium cost
of fuel contracts not designated as hedges
|
(11)
|
|
(11)
|
|
|
|
(32)
|
|
(22)
|
|
|
Add (Deduct):
Mark-to-market impact from interest rate swap agreements
|
—
|
|
1
|
|
|
|
—
|
|
(28)
|
|
|
Deduct: Loss on
partial extinguishment of convertible notes
|
(12)
|
|
—
|
|
|
|
(12)
|
|
—
|
|
|
Other (gains)
losses, net, excluding special items
|
$
|
3
|
|
$
|
2
|
|
50.0
|
|
$
|
(70)
|
|
$
|
5
|
|
n.m.
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes, as reported
|
$
|
600
|
|
$
|
(1,542)
|
|
|
|
$
|
1,248
|
|
$
|
(2,925)
|
|
|
Deduct: Payroll
support and voluntary Employee programs, net
|
(776)
|
|
(149)
|
|
|
|
(2,963)
|
|
(933)
|
|
|
Deduct: Fuel hedge
contracts settling in the current period, but for which losses were
reclassified from AOCI
|
(5)
|
|
(6)
|
|
|
|
(19)
|
|
(16)
|
|
|
Deduct: Interest rate
swap agreements terminated in a prior period, but for which losses
were reclassified from AOCI
|
—
|
|
—
|
|
|
|
(2)
|
|
—
|
|
|
Deduct: Gain from
aircraft sale-leaseback transactions
|
—
|
|
—
|
|
|
|
—
|
|
(222)
|
|
|
Add (Deduct):
Mark-to-market impact from fuel contracts settling in current and
future periods
|
3
|
|
23
|
|
|
|
(6)
|
|
40
|
|
|
Add (Deduct):
Mark-to-market impact from interest rate swap agreements
|
—
|
|
(1)
|
|
|
|
—
|
|
28
|
|
|
Add: Loss on partial
extinguishment of convertible notes
|
12
|
|
—
|
|
|
|
12
|
|
—
|
|
|
Loss before income
taxes, excluding special items
|
$
|
(166)
|
|
$
|
(1,675)
|
|
(90.1)
|
|
$
|
(1,730)
|
|
$
|
(4,028)
|
|
(57.1)
|
|
|
|
|
|
|
|
|
Provision
(benefit) for income taxes, as reported
|
$
|
154
|
|
$
|
(385)
|
|
|
|
$
|
339
|
|
$
|
(759)
|
|
|
Deduct: Net income
(loss) tax impact of fuel and special items (a)
|
(185)
|
|
(41)
|
|
|
|
(713)
|
|
(350)
|
|
|
Deduct: GAAP to
Non-GAAP tax rate difference (b)
|
—
|
|
(76)
|
|
|
|
—
|
|
(168)
|
|
|
Benefit for income
taxes, net, excluding special items
|
$
|
(31)
|
|
$
|
(502)
|
|
(93.8)
|
|
$
|
(374)
|
|
$
|
(1,277)
|
|
(70.7)
|
|
|
|
|
|
|
|
|
Net income (loss),
as reported
|
$
|
446
|
|
$
|
(1,157)
|
|
|
|
$
|
909
|
|
$
|
(2,166)
|
|
|
Deduct: Payroll
support and voluntary Employee programs, net
|
(776)
|
|
(149)
|
|
|
|
(2,963)
|
|
(933)
|
|
|
Deduct: Fuel hedge
contracts settling in the current period, but for which losses were
reclassified from AOCI
|
(5)
|
|
(6)
|
|
|
|
(19)
|
|
(16)
|
|
|
Deduct: Interest rate
swap agreements terminated in a prior period, but for which losses
were reclassified from AOCI
|
—
|
|
—
|
|
|
|
(2)
|
|
—
|
|
|
Deduct: Gain from
aircraft sale-leaseback transactions
|
—
|
|
—
|
|
|
|
—
|
|
(222)
|
|
|
Add (Deduct):
Mark-to-market impact from fuel contracts settling in current and
future periods
|
3
|
|
23
|
|
|
|
(6)
|
|
40
|
|
|
Add (Deduct):
Mark-to-market impact from interest rate swap agreements
|
—
|
|
(1)
|
|
|
|
—
|
|
28
|
|
|
Add: Loss on partial
extinguishment of convertible notes
|
12
|
|
—
|
|
|
|
12
|
|
—
|
|
|
Add: Net income
(loss) tax impact of special items (a)
|
185
|
|
41
|
|
|
|
713
|
|
350
|
|
|
Add: GAAP to Non-GAAP
tax rate difference (b)
|
—
|
|
76
|
|
|
|
—
|
|
168
|
|
|
Net loss,
excluding special items
|
$
|
(135)
|
|
$
|
(1,173)
|
|
(88.5)
|
|
$
|
(1,356)
|
|
$
|
(2,751)
|
|
(50.7)
|
|
|
|
|
|
|
|
|
Net income (loss)
per share, diluted, as reported
|
$
|
0.73
|
|
$
|
(1.96)
|
|
|
|
$
|
1.49
|
|
$
|
(3.89)
|
|
|
Deduct: Impact of
special items
|
(1.25)
|
|
(0.22)
|
|
|
|
(4.84)
|
|
(1.96)
|
|
|
Deduct: Net impact of
net income (loss) above from fuel contracts divided by dilutive
shares
|
—
|
|
(0.01)
|
|
|
|
(0.04)
|
|
(0.03)
|
|
|
Add: Net income
(loss) tax impact of special items (a)
|
0.30
|
|
0.07
|
|
|
|
1.17
|
|
0.63
|
|
|
Add: GAAP to Non-GAAP
tax rate difference (b)
|
—
|
|
0.13
|
|
|
|
—
|
|
0.30
|
|
|
Deduct: GAAP to
Non-GAAP diluted weighted average shares difference (c)
|
(0.01)
|
|
—
|
|
|
|
(0.07)
|
|
—
|
|
|
Net loss per
share, diluted, excluding special items
|
$
|
(0.23)
|
|
$
|
(1.99)
|
|
(88.4)
|
|
$
|
(2.29)
|
|
$
|
(4.95)
|
|
(53.7)
|
|
(a) Tax amounts for
each individual special item are calculated at the Company's
effective rate for the applicable period and totaled in this line
item.
|
(b) Adjustment
related to GAAP and Non-GAAP tax rate differences, primarily due to
the PSP proceeds being excluded as a special item, and reflecting
the anticipated benefit of carrying back full year 2020 projected
net losses to claim tax refunds against previous cash taxes paid
relating to tax years 2015 through 2019, some of which were at
higher rates than the current year.
|
(c) Adjustment
related to GAAP and Non-GAAP diluted weighted average shares
difference, due to the Company being in a Net income position on a
GAAP basis versus a Net loss position on a Non-GAAP
basis.
|
Southwest Airlines Co.
Comparative Consolidated
Operating Statistics
(unaudited)
Relevant comparative operating statistics for the three and nine
months ended September 30, 2021 and 2020 are included below.
The Company provides these operating statistics because they are
commonly used in the airline industry and, as such, allow readers
to compare the Company's performance against its results for the
prior year period, as well as against the performance of the
Company's peers.
|
Three months
ended
|
|
|
|
Nine months
ended
|
|
|
|
September
30,
|
|
Percent
|
|
September
30,
|
|
Percent
|
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Revenue passengers
carried (000s)
|
29,303
|
|
11,621
|
|
152.2
|
|
69,686
|
|
41,622
|
|
67.4
|
Enplaned passengers
(000s)
|
36,534
|
|
15,064
|
|
142.5
|
|
87,247
|
|
51,833
|
|
68.3
|
Revenue passenger
miles (RPMs) (in millions) (a)
|
31,285
|
|
11,888
|
|
163.2
|
|
73,850
|
|
41,437
|
|
78.2
|
Available seat miles
(ASMs) (in millions) (b)
|
38,756
|
|
26,464
|
|
46.4
|
|
95,316
|
|
79,701
|
|
19.6
|
Load factor
(c)
|
80.7%
|
|
44.9%
|
|
35.8 pts.
|
|
77.5%
|
|
52.0%
|
|
25.5 pts.
|
Average length of
passenger haul (miles)
|
1,068
|
|
1,023
|
|
4.4
|
|
1,060
|
|
996
|
|
6.4
|
Average aircraft
stage length (miles)
|
808
|
|
736
|
|
9.8
|
|
794
|
|
740
|
|
7.3
|
Trips
flown
|
305,758
|
|
231,105
|
|
32.3
|
|
766,979
|
|
696,586
|
|
10.1
|
Seats flown (000s)
(d)
|
47,471
|
|
35,491
|
|
33.8
|
|
119,088
|
|
106,271
|
|
12.1
|
Seats per trip
(e)
|
155.3
|
|
153.6
|
|
1.1
|
|
155.3
|
|
152.6
|
|
1.8
|
Average passenger
fare
|
$
|
144.24
|
|
$
|
125.07
|
|
15.3
|
|
$
|
136.45
|
|
$
|
144.22
|
|
(5.4)
|
Passenger revenue
yield per RPM (cents) (f)
|
13.51
|
|
12.23
|
|
10.5
|
|
12.88
|
|
14.49
|
|
(11.1)
|
RASM (cents)
(g)
|
12.07
|
|
6.78
|
|
78.0
|
|
11.27
|
|
8.83
|
|
27.6
|
PRASM (cents)
(h)
|
10.91
|
|
5.49
|
|
98.7
|
|
9.98
|
|
7.53
|
|
32.5
|
CASM (cents)
(i)
|
10.18
|
|
12.11
|
|
(15.9)
|
|
9.67
|
|
12.15
|
|
(20.4)
|
CASM, excluding Fuel
and oil expense (cents)
|
7.63
|
|
10.67
|
|
(28.5)
|
|
7.29
|
|
10.26
|
|
(28.9)
|
CASM, excluding
special items (cents)
|
12.23
|
|
12.74
|
|
(4.0)
|
|
12.83
|
|
13.65
|
|
(6.0)
|
CASM, excluding Fuel
and oil expense and special items (cents)
|
9.63
|
|
11.24
|
|
(14.3)
|
|
10.40
|
|
11.71
|
|
(11.2)
|
CASM, excluding Fuel
and oil expense, special items, and profitsharing expense
(cents)
|
9.43
|
|
11.24
|
|
(16.1)
|
|
10.21
|
|
11.71
|
|
(12.8)
|
Fuel costs per
gallon, including fuel tax (unhedged)
|
$
|
2.03
|
|
$
|
1.15
|
|
76.5
|
|
$
|
1.88
|
|
$
|
1.49
|
|
26.2
|
Fuel costs per
gallon, including fuel tax
|
$
|
2.01
|
|
$
|
1.18
|
|
70.3
|
|
$
|
1.87
|
|
$
|
1.52
|
|
23.0
|
Fuel costs per
gallon, including fuel tax (economic)
|
$
|
2.04
|
|
$
|
1.23
|
|
65.9
|
|
$
|
1.92
|
|
$
|
1.56
|
|
23.1
|
Fuel consumed, in
gallons (millions)
|
491
|
|
320
|
|
53.4
|
|
1,203
|
|
985
|
|
22.1
|
Active fulltime
equivalent Employees (j)
|
53,984
|
|
57,931
|
|
(6.8)
|
|
53,984
|
|
57,931
|
|
(6.8)
|
Aircraft at end of
period (k)
|
737
|
|
734
|
|
0.4
|
|
737
|
|
734
|
|
0.4
|
|
(a) A revenue
passenger mile is one paying passenger flown one mile. Also
referred to as "traffic," which is a measure of demand for a given
period.
|
(b) An available seat
mile is one seat (empty or full) flown one mile. Also referred to
as "capacity," which is a measure of the space available to carry
passengers in a given period.
|
(c) Revenue passenger
miles divided by available seat miles.
|
(d) Seats flown is
calculated using total number of seats available by aircraft type
multiplied by the total trips flown by the same aircraft type
during a particular period.
|
(e) Seats per trip is
calculated by dividing seats flown by trips flown.
|
(f) Calculated as
passenger revenue divided by revenue passenger miles. Also referred
to as "yield," this is the average cost paid by a paying passenger
to fly one mile, which is a measure of revenue production and
fares.
|
(g) RASM (unit
revenue) - Operating revenue yield per ASM, calculated as operating
revenue divided by available seat miles. Also referred to as
"operating unit revenues," this is a measure of operating revenue
production based on the total available seat miles flown during a
particular period.
|
(h) PRASM (Passenger
unit revenue) - Passenger revenue yield per ASM, calculated as
passenger revenue divided by available seat miles. Also referred to
as "passenger unit revenues," this is a measure of passenger
revenue production based on the total available seat miles flown
during a particular period.
|
(i) CASM (unit costs)
- Operating expenses per ASM, calculated as operating expenses
divided by available seat miles. Also referred to as "unit costs"
or "cost per available seat mile," this is the average cost to fly
an aircraft seat (empty or full) one mile, which is a measure of
cost efficiencies.
|
(j) Included less
than 500 and a total of 10,684 Employees on Extended Emergency Time
Off as of September 30, 2021 and September 30, 2020,
respectively.
|
(k) Included 24
Boeing 737 Next Generation aircraft in temporary storage as of
September 30, 2021. Also included 34 Boeing 737 MAX and 70
Boeing 737 Next Generation aircraft in long-term storage as of
September 30, 2020.
|
Southwest Airlines Co.
Supplemental Information
Compared with 2019
(unaudited)
The Company believes certain comparisons with 2019 are more
relevant measures of performance than year-over-year comparisons
due to the significant impacts in 2020 due to the pandemic.
Therefore, the below supplemental information is provided for
reference.
As
reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
(in millions,
except per share and unit costs)
|
2021
|
|
2019
|
|
Percent
Change
|
|
2021
|
|
2019
|
|
Percent
Change
|
Net income
|
$
|
446
|
|
$
|
659
|
|
(32.3)
|
|
$
|
909
|
|
$
|
1,787
|
|
(49.1)
|
Net income per share,
diluted
|
$
|
0.73
|
|
$
|
1.23
|
|
(40.7)
|
|
$
|
1.49
|
|
$
|
3.29
|
|
(54.7)
|
Operating
revenues
|
$
|
4,679
|
|
$
|
5,639
|
|
(17.0)
|
|
$
|
10,739
|
|
$
|
16,698
|
|
(35.7)
|
Operating
expenses
|
$
|
3,946
|
|
$
|
4,820
|
|
(18.1)
|
|
$
|
9,213
|
|
$
|
14,406
|
|
(36.0)
|
Operating expenses,
excluding Fuel and oil expense
|
$
|
2,956
|
|
$
|
3,730
|
|
(20.8)
|
|
$
|
6,952
|
|
$
|
11,164
|
|
(37.7)
|
Operating expenses,
excluding Fuel and oil expense and profitsharing
|
$
|
2,879
|
|
$
|
3,586
|
|
(19.7)
|
|
$
|
6,766
|
|
$
|
10,761
|
|
(37.1)
|
RASM
(cents)
|
12.07
|
|
14.32
|
|
(15.7)
|
|
11.27
|
|
14.24
|
|
(20.9)
|
Passenger revenue
yield per RPM (cents)
|
13.51
|
|
15.90
|
|
(15.0)
|
|
12.88
|
|
15.76
|
|
(18.3)
|
CASM
(cents)
|
10.18
|
|
12.24
|
|
(16.8)
|
|
9.67
|
|
12.29
|
|
(21.3)
|
CASM, excluding Fuel
and oil expense and profitsharing (cents)
|
7.43
|
|
9.11
|
|
(18.4)
|
|
7.10
|
|
9.18
|
|
(22.7)
|
Fuel costs per
gallon, including fuel tax
|
$
|
2.01
|
|
$
|
2.07
|
|
(2.9)
|
|
$
|
1.87
|
|
$
|
2.09
|
|
(10.5)
|
Revenue passengers
carried (000s)
|
29,303
|
|
33,538
|
|
(12.6)
|
|
69,686
|
|
99,758
|
|
(30.1)
|
Available seat miles
(ASMs)
|
38,756
|
|
39,379
|
|
(1.6)
|
|
95,316
|
|
117,250
|
|
(18.7)
|
Load
factor
|
80.7%
|
|
83.5%
|
|
(2.8) pts.
|
|
77.5%
|
|
83.7%
|
|
(6.2) pts.
|
Adjusted for
special items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
|
|
Nine months ended
September 30,
|
|
|
(in millions,
except per share and unit costs)
|
2021
|
|
2019
|
|
Percent
Change
|
|
2021
|
|
2019
|
|
Percent
Change
|
Net income
(loss)
|
$
|
(135)
|
|
$
|
659
|
|
n.m.
|
|
$
|
(1,356)
|
|
$
|
1,787
|
|
n.m.
|
Net income (loss) per
share, diluted
|
$
|
(0.23)
|
|
$
|
1.23
|
|
n.m.
|
|
$
|
(2.29)
|
|
$
|
3.29
|
|
n.m.
|
Operating
revenues
|
$
|
4,679
|
|
$
|
5,639
|
|
(17.0)
|
|
$
|
10,739
|
|
$
|
16,698
|
|
(35.7)
|
Operating
expenses
|
$
|
4,738
|
|
$
|
4,820
|
|
(1.7)
|
|
$
|
12,229
|
|
$
|
14,406
|
|
(15.1)
|
Operating expenses,
excluding Fuel and oil expense
|
$
|
3,732
|
|
$
|
3,730
|
|
0.1
|
|
$
|
9,917
|
|
$
|
11,164
|
|
(11.2)
|
Operating expenses,
excluding Fuel and oil expense and profitsharing
|
$
|
3,655
|
|
$
|
3,586
|
|
1.9
|
|
$
|
9,731
|
|
$
|
10,761
|
|
(9.6)
|
RASM
(cents)
|
12.07
|
|
14.32
|
|
(15.7)
|
|
11.27
|
|
14.24
|
|
(20.9)
|
Passenger revenue
yield per RPM (cents)
|
13.51
|
|
15.90
|
|
(15.0)
|
|
12.88
|
|
15.76
|
|
(18.3)
|
CASM
(cents)
|
12.23
|
|
12.24
|
|
(0.1)
|
|
12.83
|
|
12.29
|
|
4.4
|
CASM, excluding Fuel
and oil expense and profitsharing (cents)
|
9.43
|
|
9.11
|
|
3.5
|
|
10.21
|
|
9.18
|
|
11.2
|
Fuel costs per
gallon, including fuel tax (economic)
|
$
|
2.04
|
|
$
|
2.07
|
|
(1.4)
|
|
$
|
1.92
|
|
$
|
2.09
|
|
(8.1)
|
Revenue passengers
carried (000s)
|
29,303
|
|
33,538
|
|
(12.6)
|
|
69,686
|
|
99,758
|
|
(30.1)
|
Available seat miles
(ASMs)
|
38,756
|
|
39,379
|
|
(1.6)
|
|
95,316
|
|
117,250
|
|
(18.7)
|
Load
factor
|
80.7%
|
|
83.5%
|
|
(2.8) pts.
|
|
77.5%
|
|
83.7%
|
|
(6.2) pts.
|
Southwest Airlines
Co.
Condensed
Consolidated Balance Sheet
(in
millions)
(unaudited)
|
|
|
|
|
|
|
September 30,
2021
|
|
December 31,
2020
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
12,980
|
|
$
11,063
|
|
Short-term
investments
|
3,024
|
|
2,271
|
|
Accounts and other
receivables
|
1,479
|
|
1,130
|
|
Inventories of parts
and supplies, at cost
|
511
|
|
414
|
|
Prepaid expenses and
other current assets
|
560
|
|
295
|
|
Total
current assets
|
18,554
|
|
15,173
|
|
Property and
equipment, at cost:
|
|
|
Flight
equipment
|
21,262
|
|
20,877
|
|
Ground property and
equipment
|
6,287
|
|
6,083
|
|
Deposits on flight
equipment purchase contracts
|
—
|
|
305
|
|
Assets constructed for
others
|
3
|
|
309
|
|
|
27,552
|
|
27,574
|
|
Less allowance for
depreciation and amortization
|
12,496
|
|
11,743
|
|
|
15,056
|
|
15,831
|
|
Goodwill
|
970
|
|
970
|
|
Operating lease
right-of-use assets
|
1,611
|
|
1,892
|
|
Other
assets
|
919
|
|
722
|
|
|
$
37,110
|
|
$
34,588
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$
1,229
|
|
$
931
|
|
Accrued
liabilities
|
1,687
|
|
2,259
|
|
Current operating lease
liabilities
|
243
|
|
306
|
|
Air traffic
liability
|
5,751
|
|
3,790
|
|
Current maturities of
long-term debt
|
225
|
|
220
|
|
Total
current liabilities
|
9,135
|
|
7,506
|
|
|
|
|
Long-term debt less
current maturities
|
11,013
|
|
10,111
|
|
Air traffic liability
- noncurrent
|
2,485
|
|
3,343
|
|
Deferred income
taxes
|
1,795
|
|
1,634
|
|
Construction
obligation
|
—
|
|
309
|
|
Noncurrent operating
lease liabilities
|
1,334
|
|
1,562
|
|
Other noncurrent
liabilities
|
1,098
|
|
1,247
|
|
Stockholders'
equity:
|
|
|
Common stock
|
888
|
|
888
|
|
Capital in excess of
par value
|
4,251
|
|
4,191
|
|
Retained
earnings
|
15,706
|
|
14,777
|
|
Accumulated other
comprehensive income (loss)
|
267
|
|
(105)
|
|
Treasury stock, at
cost
|
(10,862)
|
|
(10,875)
|
|
Total
stockholders' equity
|
10,250
|
|
8,876
|
|
|
$
37,110
|
|
$
34,588
|
|
Southwest Airlines
Co.
Condensed
Consolidated Statement of Cash Flows
(in millions)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net income
(loss)
|
$
|
446
|
|
$
|
(1,157)
|
|
$
|
909
|
|
$
|
(2,166)
|
|
|
Adjustments to
reconcile net income (loss) to cash provided by (used in) operating
activities:
|
|
|
|
|
|
Depreciation and amortization
|
322
|
|
315
|
|
949
|
|
940
|
|
|
Unrealized/realized (gain) loss on fuel derivative
instruments
|
(2)
|
|
17
|
|
(25)
|
|
25
|
|
|
Deferred
income taxes
|
67
|
|
(298)
|
|
42
|
|
(528)
|
|
|
Gain on
sale-leaseback transactions
|
—
|
|
—
|
|
—
|
|
(222)
|
|
|
Loss on partial
extinguishment of convertible notes
|
12
|
|
—
|
|
12
|
|
—
|
|
|
Changes in certain
assets and liabilities:
|
|
|
|
|
|
Accounts
and other receivables
|
(23)
|
|
(123)
|
|
(819)
|
|
(60)
|
|
|
Other
assets
|
59
|
|
84
|
|
64
|
|
366
|
|
|
Accounts
payable and accrued liabilities
|
(948)
|
|
26
|
|
(25)
|
|
(65)
|
|
|
Air
traffic liability
|
(442)
|
|
216
|
|
1,103
|
|
1,584
|
|
|
Other
liabilities
|
(88)
|
|
(106)
|
|
(275)
|
|
(312)
|
|
|
Cash collateral
received from (provided to) derivative counterparties
|
42
|
|
(5)
|
|
128
|
|
2
|
|
|
Other, net
|
(20)
|
|
(19)
|
|
12
|
|
(95)
|
|
|
Net cash provided by (used in) operating activities
|
(575)
|
|
(1,050)
|
|
2,075
|
|
(531)
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Capital
expenditures
|
(135)
|
|
(89)
|
|
(325)
|
|
(425)
|
|
|
Supplier
proceeds
|
—
|
|
—
|
|
—
|
|
428
|
|
|
Assets constructed
for others
|
(3)
|
|
—
|
|
(3)
|
|
—
|
|
|
Proceeds from
sale-leaseback transactions
|
—
|
|
—
|
|
—
|
|
815
|
|
|
Purchases of
short-term investments
|
(1,525)
|
|
(1,536)
|
|
(4,500)
|
|
(3,881)
|
|
|
Proceeds from sales
of short-term and other investments
|
1,251
|
|
1,191
|
|
3,747
|
|
2,956
|
|
|
Net cash used in investing activities
|
(412)
|
|
(434)
|
|
(1,081)
|
|
(107)
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Issuance of common
stock
|
—
|
|
—
|
|
—
|
|
2,294
|
|
|
Proceeds from
issuance of long-term debt
|
—
|
|
1,125
|
|
—
|
|
5,622
|
|
|
Proceeds from term
loan credit facility
|
—
|
|
—
|
|
—
|
|
3,683
|
|
|
Proceeds from
revolving credit facility
|
—
|
|
—
|
|
—
|
|
1,000
|
|
|
Proceeds from
convertible notes
|
—
|
|
—
|
|
—
|
|
2,300
|
|
|
Proceeds from Payroll
Support Program loan and warrants
|
—
|
|
130
|
|
1,136
|
|
1,016
|
|
|
Proceeds from
Employee stock plans
|
13
|
|
13
|
|
39
|
|
36
|
|
|
Repurchase of common
stock
|
—
|
|
—
|
|
—
|
|
(451)
|
|
|
Payments of long-term
debt and finance lease obligations
|
(67)
|
|
(59)
|
|
(177)
|
|
(295)
|
|
|
Payments of term loan
credit facility
|
—
|
|
—
|
|
—
|
|
(3,683)
|
|
|
Payments of revolving
credit facility
|
—
|
|
—
|
|
—
|
|
(1,000)
|
|
|
Payments of cash
dividends
|
—
|
|
—
|
|
—
|
|
(188)
|
|
|
Payments of
terminated interest rate derivative instruments
|
—
|
|
(31)
|
|
—
|
|
(31)
|
|
|
Payments for
repurchases and conversions of convertible debt
|
(121)
|
|
—
|
|
(121)
|
|
—
|
|
|
Capitalized financing
items
|
—
|
|
44
|
|
—
|
|
(133)
|
|
|
Other, net
|
18
|
|
20
|
|
46
|
|
29
|
|
|
Net cash provided by (used in) financing activities
|
(157)
|
|
1,242
|
|
923
|
|
10,199
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
(1,144)
|
|
(242)
|
|
1,917
|
|
9,561
|
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
14,124
|
|
12,351
|
|
11,063
|
|
2,548
|
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
|
12,980
|
|
$
|
12,109
|
|
$
|
12,980
|
|
$
|
12,109
|
|
|
Southwest Airlines
Co.
Fuel Derivative
Contracts
As of
October 14, 2021
|
|
|
|
|
|
|
|
|
Estimated economic
fuel price per gallon, including taxes and fuel hedging
premiums (d)
|
|
|
|
Average Brent
Crude Oil
price per barrel
|
Fourth Quarter
2021 (c)
|
|
$60
|
$1.80 -
$1.90
|
|
$70
|
$2.05 -
$2.15
|
|
Current Market
(a)
|
$2.25 -
$2.35
|
|
$90
|
$2.35 -
$2.45
|
|
$100
|
$2.50 -
$2.60
|
|
Estimated fuel
hedging premium expense per gallon (b)
|
$0.05
|
|
Estimated premium
costs (b)
|
$25
million
|
|
|
|
|
Period
|
Maximum fuel
hedged (gallons in millions) (e)
|
|
|
|
Remainder of
2021
|
321
|
|
|
|
2022
|
1,220
|
|
|
|
2023
|
769
|
|
|
|
2024
|
358
|
|
|
|
|
(a) Brent crude oil
average market price as of October 14, 2021, was approximately
$83 per barrel for fourth quarter 2021.
|
(b) Fuel hedging
premium expense per gallon is included in the Company's estimated
economic fuel price per gallon estimates above.
|
(c) Based on the
Company's existing fuel derivative contracts and market prices as
of October 14, 2021, fourth quarter 2021 economic fuel costs
are estimated to be in the $2.25 to $2.35 per gallon range,
including fuel hedging premium expense of approximately $25
million, or $0.05 per gallon, and $0.18 per gallon in favorable
cash settlements from fuel derivative contracts. See Note Regarding
Use of Non-GAAP Financial Measures.
|
(d) The Company's
current fuel derivative contracts contain a combination of
instruments based in West Texas Intermediate ("WTI") and Brent
crude oil; however, the economic fuel price per gallon
sensitivities provided assume the relationship between Brent crude
oil and refined products based on market prices as of
October 14, 2021. Economic fuel cost projections do not
reflect the potential impact of special items because the Company
cannot reliably predict or estimate the hedge accounting impact
associated with the volatility of the energy markets, the impact of
COVID-19 cases on air travel demand, or the impact to its financial
statements in future periods. Accordingly, the Company believes a
reconciliation of non-GAAP financial measures to the equivalent
GAAP financial measures for projected results is not meaningful or
available without unreasonable effort. See Note Regarding Use of
Non-GAAP Financial Measures.
|
(e) The Company's
gallons that are covered by derivative contracts represent the
maximum number of gallons hedged for each respective period, which
may be at different strike prices and at strike prices materially
higher than the current market prices. The volume of gallons
covered by derivative contracts that ultimately get exercised in
any given period may vary significantly from the volumes provided,
as market prices and the Company's fuel consumption fluctuates.
Based on the Company's available seat mile plans for annual 2021,
its maximum percent of estimated fuel consumption covered by fuel
derivative contracts is 77 percent. The Company believes that
providing the maximum percent of fuel consumption covered by
derivative contracts in future years relative to 2019 fuel gallons
consumed is a more relevant measure for future coverage, due to
uncertainty regarding available seat mile plans in future years.
Based on 2019 fuel gallons consumed, the Company's maximum percent
of fuel consumption covered by fuel derivative contracts is 59
percent in 2022, 37 percent in 2023, and 17
percent in 2024.
|
Southwest Airlines
Co.
737 Delivery
Schedule
As of October 21,
2021
|
|
|
The Boeing
Company
|
|
|
|
|
|
|
|
-7 Firm
Orders
|
|
-8 Firm
Orders
|
|
-7 or -8
Options
|
|
Additional
-8s
|
|
Total
|
|
2021
|
|
—
|
|
19
|
|
—
|
|
9
|
|
28
|
(a)
|
2022
|
|
72
|
|
—
|
|
42
|
|
—
|
|
114
|
(b)
|
2023
|
|
38
|
|
—
|
|
52
|
|
—
|
|
90
|
(c)
|
2024
|
|
30
|
|
—
|
|
56
|
|
—
|
|
86
|
|
2025
|
|
30
|
|
—
|
|
56
|
|
—
|
|
86
|
|
2026
|
|
15
|
|
15
|
|
40
|
|
—
|
|
70
|
|
2027
|
|
15
|
|
15
|
|
6
|
|
—
|
|
36
|
|
2028
|
|
15
|
|
15
|
|
—
|
|
—
|
|
30
|
|
2029
|
|
20
|
|
30
|
|
—
|
|
—
|
|
50
|
|
2030
|
|
15
|
|
45
|
|
—
|
|
—
|
|
60
|
|
2031
|
|
—
|
|
10
|
|
—
|
|
—
|
|
10
|
|
|
|
250
|
(d)
|
149
|
(e)
|
252
|
|
9
|
(f)
|
660
|
|
|
(a) All 28 -8s were
delivered as of September 30, 2021, consisting of 19 owned and 9
leased aircraft.
|
(b) The Company
exercised eight -7 options for delivery in 2022 during third
quarter 2021.
|
(c) The Company
exercised eight -7 options for delivery in 2023 on October 1,
2021.
|
(d) The delivery
schedule for the -7 is dependent on the FAA issuing required
certifications and approvals to Boeing and the Company. The FAA
will ultimately determine the timing of the -7 certification and
entry into service, and the Company therefore offers no assurances
that current estimations and timelines are correct.
|
(e) The Company has
flexibility to designate firm orders or options as -7s or -8s, upon
written advance notification as stated in the contract.
|
(f) These 9
additional -8 aircraft are leases acquired from various third
parties and delivered as of September 30, 2021.
|
NOTE REGARDING USE OF NON-GAAP FINANCIAL MEASURES
The
Company's unaudited Condensed Consolidated Financial Statements are
prepared in accordance with accounting principles generally
accepted in the United States
("GAAP"). These GAAP financial statements may include (i)
unrealized noncash adjustments and reclassifications, which can be
significant, as a result of accounting requirements and elections
made under accounting pronouncements relating to derivative
instruments and hedging and (ii) other charges and benefits the
Company believes are unusual and/or infrequent in nature and thus
may make comparisons to its prior or future performance
difficult.
As a result, the Company also provides financial information in
this release that was not prepared in accordance with GAAP and
should not be considered as an alternative to the information
prepared in accordance with GAAP. The Company provides supplemental
non-GAAP financial information (also referred to as "excluding
special items"), including results that it refers to as "economic,"
which the Company's management utilizes to evaluate its ongoing
financial performance and the Company believes provides additional
insight to investors as supplemental information to its GAAP
results. The non-GAAP measures provided that relate to the
Company's performance on an economic fuel cost basis include Fuel
and oil expense, non-GAAP; Total operating expenses, non-GAAP;
Operating expenses, non-GAAP excluding Fuel and oil expense;
Operating expenses, non-GAAP excluding Fuel and oil expense and
profitsharing; Operating loss, non-GAAP; Other (gains) losses, net,
non-GAAP; Loss before income taxes, non-GAAP; Benefit for income
taxes, net, non-GAAP; Net loss, non-GAAP; and Net loss per share,
diluted, non-GAAP. The Company's economic Fuel and oil expense
results differ from GAAP results in that they only include the
actual cash settlements from fuel hedge contracts - all reflected
within Fuel and oil expense in the period of settlement. Thus, Fuel
and oil expense on an economic basis has historically been utilized
by the Company, as well as some of the other airlines that utilize
fuel hedging, as it reflects the Company's actual net cash outlays
for fuel during the applicable period, inclusive of settled fuel
derivative contracts. Any net premium costs paid related to option
contracts that are designated as hedges are reflected as a
component of Fuel and oil expense, for both GAAP and non-GAAP
(including economic) purposes in the period of contract settlement.
The Company believes these economic results provide further insight
into the impact of the Company's fuel hedges on its operating
performance and liquidity since they exclude the unrealized,
noncash adjustments and reclassifications that are recorded in GAAP
results in accordance with accounting guidance relating to
derivative instruments, and they reflect all cash settlements
related to fuel derivative contracts within Fuel and oil expense.
This enables the Company's management, as well as investors and
analysts, to consistently assess the Company's operating
performance on a year-over-year or quarter-over-quarter basis after
considering all efforts in place to manage fuel expense. However,
because these measures are not determined in accordance with GAAP,
such measures are susceptible to varying calculations, and not all
companies calculate the measures in the same manner. As a result,
the aforementioned measures, as presented, may not be directly
comparable to similarly titled measures presented by other
companies.
Further information on (i) the Company's fuel hedging
program, (ii) the requirements of accounting for derivative
instruments, and (iii) the causes of hedge ineffectiveness
and/or mark-to-market gains or losses from derivative instruments
is included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2020.
The Company's GAAP results in the applicable periods may include
other charges or benefits that are also deemed "special items,"
that the Company believes make its results difficult to compare to
prior periods, anticipated future periods, or industry trends.
Financial measures identified as non-GAAP (or as excluding special
items) have been adjusted to exclude special items. For the periods
presented, in addition to the items discussed above, special items
include:
- PSP proceeds, which were used to pay a portion of Employee
salaries, wages, and benefits;
- Charges and adjustments to previously accrued amounts related
to the Company's extended leave program;
- Adjustments for prior period losses reclassified from
Accumulated other comprehensive income (loss) ("AOCI") associated
with forward-starting interest rate swap agreements that were
terminated in prior periods related to twelve -8 aircraft
leases;
- Gains associated with the sale-leaseback of ten Boeing 737-800
aircraft and ten Boeing -8 aircraft to third parties;
- Unrealized losses related to twelve forward-starting interest
rate swap agreements. During the first nine months of 2020, the
interest rate swap agreements, which were related to twelve -8
aircraft leases (with deliveries originally scheduled between
June 2020 and September 2020), were de-designated as hedges due
to the scheduled delivery range no longer being probable, resulting
in the mark-to-market changes being recorded to earnings; and
- Losses associated with the partial extinguishment of the
Company's convertible notes.
Because management believes special items can distort the trends
associated with the Company's ongoing performance as an airline,
the Company believes that evaluation of its financial performance
can be enhanced by a supplemental presentation of results that
exclude the impact of special items in order to enhance consistency
and comparativeness with results in prior periods that do not
include such items and as a basis for evaluating operating results
in future periods. The following measures are often provided,
excluding special items, and utilized by the Company's management,
analysts, and investors to enhance comparability of year-over-year
results, as well as to industry trends: Fuel and oil expense,
non-GAAP; Total operating expenses, non-GAAP; Operating expenses,
non-GAAP excluding Fuel and oil expense; Operating expenses,
non-GAAP excluding Fuel and oil expense and profitsharing;
Operating loss, non-GAAP; Other (gains) losses, net, non-GAAP; Loss
before income taxes, non-GAAP; Benefit for income taxes, net,
non-GAAP; Net loss, non-GAAP; and Net loss per share, diluted,
non-GAAP.
SW-QFS
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SOURCE Southwest Airlines Co.