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Southwest Airlines Co (NYS: LUV)

General Company Information


Principal Office Website
P.O. Box 36611 Dallas, TX 75235-161 www.southwest.com

Phone Primary NAICS


214 792-4000 481111 : Scheduled Passenger Air Transportation

Fax Closing Stock Price


214 792-5015 51.15 (as of 01/13/2017)

Auditor Incorporated
Ernst & Young LLP March 1967 , TX, United States

Number of Employees Mergent Dividend Achiever


49,583 (Year End Average Staff as of No

Country Number of Shareholders


United States 13,518 (as of 01/29/2016)

Exchange and Ticker Annual Meeting


NYS : LUV In May

Primary SIC
4512 : Air transportation, scheduled

Business Summary
Southwest Airlines operates
Southwest Airlines (Southwest), a
passenger airline that provides
scheduled air transportation in the
U.S. and near-international markets.
During the year ended Dec 31 2015,
Co. served 97 destinations in 40
states, the

District of Columbia, the


Commonwealth of Puerto Rico, and
seven near-international countries
including Mexico, Jamaica, The
Bahamas, Aruba, Dominican
Republic, Costa Rica, and Belize. Co.
has added its first three destinations
in Central America and
also commenced Southwest service
to a fourth destination in Mexico
(Puerto Vallarta). As of Dec 31 2015,
Southwest operated a total of 704
Boeing 737 aircraft.

Company Financials
Income Statement
Exchange rate used is that of the
Year End reported date

As Reported Annual Income


Statement
Report Date 12/31/2014 12/31/2013 12/31/2012
Currency USD USD USD
Audit Status Not Qualified Not Not
Qualified Qualified
Consolidated Yes Yes Yes
Scale Thousands Thousands Thousands
Passenger revenues 17658000 94.91% 16721000 94.47% 16093000
Freight revenues 175000 0.94% 164000 0.93% 160000
Other revenues 772000 4.15% 814000 4.60% 835000
Total operating revenues 18605000 100.00% 17699000 100.00% 17088000
Salaries, wages & benefits 5434000 29.21% 5035000 28.45% 4749000
Fuel & oil 5293000 28.45% 5763000 32.56% 6120000
Maintenance materials & repairs 978000 5.26% 1080000 6.10% 1132000
Aircraft rentals 295000 1.59% 361000 2.04% 355000
Landing fees & other rentals 1111000 5.97% 1103000 6.23% 1043000
Depreciation & amortization 938000 5.04% 867000 4.90% 844000
Acquisition & integration 126000 0.68% 86000 0.49% 183000
Other operating expenses 2205000 11.85% 2126000 12.01% 2039000
Total operating expenses 16380000 88.04% 16421000 92.78% 16465000
Operating income 2225000 11.96% 1278000 7.22% 623000
Interest expense 130000 0.70% 131000 0.74% 147000
Capitalized interest 23000 0.12% 24000 0.14% 21000
Interest income 7000 0.04% 6000 0.03% 7000
Other gains (losses), net -309000 -1.66% 32000 0.18% 181000
Total other expenses (income) -409000 -2.20% -69000 -0.39% 62000
Income before income taxes 1816000 9.76% 1209000 6.83% 685000
Federal income taxes (benefit) - curren 203000 1.09% 355000 2.01% -45000
State income taxes (benefit) - current 29000 0.16% 44000 0.25% 12000
Total current taxes (benefit) 232000 1.25% 399000 2.25% -33000
Federal income taxes - deferred 421000 2.26% 62000 0.35% 287000
State income taxes (benefit) - deferred 27000 0.15% -6000 -0.03% 10000
Total deferred taxes 448000 2.41% 56000 0.32% 297000
Provision for income taxes 680000 3.65% 455000 2.57% 264000
Net income 1136000 6.11% 754000 4.26% 421000
Weighted average shares outstanding 687000 710000 750000
Weighted average shares outstanding - 696000 718000 757000
Year end shares outstanding 675594.084 1 700474.688 1 730319.489
Net income per share - basic 1.65 1.06 0.56
Net income per share - diluted 1.64 1.05 0.56
Cash dividends declared per common 0.22 0.13 0.035
Number of full time employees - 44831 45861
Total number of employees 46278 44831 45861
Number of common stockholders 13762 13850 13687

Balance Sheet
Exchange rate used is that of the
Year End reported date

As Reported Annual Balance Sheet

Report Date 12/31/2014 12/31/2013 12/31/2012


Currency USD USD USD
Audit Status Not Qualified Not Not
Qualified Qualified
Consolidated Yes Yes Yes
Scale Thousands Thousands Thousands
Cash & cash equivalents 1282000 6% 1355000 7% 1113000
Short-term investments 1706000 8% 1797000 9% 1857000
Accounts & other receivables 365000 2% 419000 2% 332000
Inventories of parts & supplies, at cost 342000 2% 467000 2% 469000
Deferred income taxes 477000 2% 168000 1% 246000
Prepaid expenses & other current asse 232000 1% 250000 1% 210000
Total current assets 4404000 22% 4456000 23% 4227000
Flight equipment 18473000 91% 16937000 88% 16367000
Ground property & equipment 2853000 14% 2666000 14% 2714000
Deposits on flight equipment purchase 566000 3% 764000 4% 416000
Assets constructed for others 621000 3% 453000 2% -
Property & equipment, at cost 22513000 111% 20820000 108% 19497000
Less allowance for depreciation & amor 8221000 41% 7431000 38% 6731000
Property & equipment, net 14292000 71% 13389000 69% 12766000
Goodwill 970000 5% 970000 5% 970000
Derivative contracts 13000 0% 145000 1% 306000
Intangible assets 363000 2% 166000 1% 138000
Non-current investments 35000 0% 44000 0% 41000
Other assets 123000 1% 175000 1% 148000
Other assets 534000 3% 530000 3% 633000
Other assets - - -
Total assets 20200000 100% 19345000 100% 18596000
Accounts payable 1203000 6% 1247000 6% 1107000
Accrued retirement plans - - -
Accrued savings & Profitsharing plans 374000 2% 244000 1% 135000
Accrued aircraft & other lease related 159000 1% 173000 1% 139000
Accrued vacation pay 292000 1% 278000 1% 270000
Accrued health 84000 0% 73000 0% 70000
Accrued advances & deposits - - -
Accrued derivative contracts 174000 1% 12000 0% 50000
Accrued fuel derivative contracts - - -
Accrued workers compensation 165000 1% 161000 1% 159000
Accrued taxes - 65000 0% 67000
Accrued property & other taxes 81000 0% - -
Other accrued expenses 236000 1% 223000 1% 212000
Accrued liabilities 1565000 8% 1229000 6% 1102000
Air traffic liability 2897000 14% 2571000 13% 2170000
Current maturities of long-term debt 258000 1% 629000 3% 271000
Total current liabilities 5923000 29% 5676000 29% 4650000
French credit agreements 36000 0% 46000 0% 56000
Notes 929000 5% 999000 5% 1026000
Convertible senior notes 113000 1% 115000 1% 117000
Aircraft notes payable 324000 2% 411000 2% 620000
Term loan agreement 623000 3% 708000 4% 787000
Pass through certificates 355000 2% 371000 2% 394000
Debentures 134000 1% 136000 1% 138000
Capital leases 199000 1% 56000 0% 37000
Long-term debt including current porti 2713000 13% 2842000 15% 3175000
Less current maturities 258000 1% 629000 3% 271000
Less: debt discount & issuance costs -21000 0% -22000 0% -21000
Long-term debt less current maturities 2434000 12% 2191000 11% 2883000
Deferred income taxes 3259000 16% 2934000 15% 2884000
Deferred gains from sale & leaseback of - - 63000
Construction obligation 554000 3% 437000 2% -
Postretirement benefit liability 169000 1% 138000 1% -
Non-current lease-related obligations 193000 1% 290000 1% -
Other deferred compensation 174000 1% 163000 1% -
Deferred gains from sale and leaseback 53000 0% 65000 0% -
Derivative contracts 622000 3% - -
Other long-term liabilities 44000 0% 115000 1% -
Other noncurrent liabilities 1255000 6% 771000 4% -
Other noncurrent liabilities - - 1124000
Common stock 808000 4% 808000 4% 808000
Capital in excess of par value 1315000 7% 1231000 6% 1210000
Retained earnings 7416000 37% 6431000 33% 5768000
Fuel hedge derivatives -1177000 -6% -20000 0% -63000
Interest rate derivatives -45000 0% -58000 0% -67000
Defined benefit plan items 41000 0% 65000 0% -
Other accumulated other comprehensi 8000 0% 8000 0% 11000
Deferred tax impact 435000 2% 2000 0% -
Accumulated other comprehensive inc -738000 -4% -3000 0% -119000
Less treasury stock, at cost 2026000 10% 1131000 6% 675000
Total stockholders' equity 6775000 34% 7336000 38% 6992000
Ratios
Exchange rate used is that of the
Year End reported date

Profitability Ratios 12/31/2015 12/31/2014 12/31/2013


ROA % (Net) 10.51 5.75 3.97
ROE % (Net) 30.86 16.1 10.52
ROI % (Operating) 41.15 22.68 12.59
EBITDA Margin % 23.08 15.34 12.3
Calculated Tax Rate % 37.31 37.44 37.63
Revenue per Employee 399734 402027 394794

Liquidity Ratios 12/31/2015 12/31/2014 12/31/2013


Quick Ratio 0.48 0.57 0.63
Current Ratio 0.54 0.74 0.79
Net Current Assets % TA -15.87 -7.52 -6.31

Debt Management 12/31/2015 12/31/2014 12/31/2013


LT Debt to Equity 0.35 0.36 0.3
Total Debt to Equity 0.43 0.4 0.38
Interest Coverage 50.81 22.25 12.65

Asset Management 12/31/2015 12/31/2014 12/31/2013


Total Asset Turnover 0.95 0.94 0.93
Receivables Turnover 47.25 47.46 47.13
Inventory Turnover 18.45 18.98 17.75
Accounts Payable Turnover 16.58 15.19 15.04
Accrued Expenses Turnover 9.54 13.32 15.19
Property Plant & Equip Turnover 1.33 1.34 1.35
Cash & Equivalents Turnover 13.84 14.11 14.34

Per Share 12/31/2015 12/31/2014 12/31/2013


Cash Flow per Share 4.9 4.22 3.49
Book Value per Share 11.36 10.03 10.47
12/31/2011 12/31/2010
USD USD
Not Not
Qualified Qualified
Yes Yes
Thousands Thousands
94.18% 14735000 94.11% 11489000 94.92%
0.94% 139000 0.89% 125000 1.03%
4.89% 784000 5.01% 490000 4.05%
100.00% 15658000 100.00% 12104000 100.00%
27.79% 4371000 27.92% 3704000 30.60%
35.81% 5644000 36.05% 3620000 29.91%
6.62% 955000 6.10% 751000 6.20%
2.08% 308000 1.97% 180000 1.49%
6.10% 959000 6.12% 807000 6.67%
4.94% 715000 4.57% 628000 5.19%
1.07% 134000 0.86% - #VALUE!
11.93% 1879000 12.00% 1426000 11.78%
96.35% 14965000 95.57% 11116000 91.84%
3.65% 693000 4.43% 988000 8.16%
0.86% 194000 1.24% 167000 1.38%
0.12% 12000 0.08% 18000 0.15%
0.04% 10000 0.06% 12000 0.10%
1.06% -198000 -1.26% -106000 -0.88%
0.36% -370000 -2.36% -243000 -2.01%
4.01% 323000 2.06% 745000 6.15%
-0.26% 4000 0.03% 198000 1.64%
0.07% 13000 0.08% 19000 0.16%
-0.19% 17000 0.11% 217000 1.79%
1.68% 122000 0.78% 61000 0.50%
0.06% 6000 0.04% 8000 0.07%
1.74% 128000 0.82% 69000 0.57%
1.54% 145000 0.93% 286000 2.36%
2.46% 178000 1.14% 459000 3.79%
774000 746000
775000 747000
772560.643 747434.272
0.23 0.62
0.23 0.61
0.018 0.018
45392 34901
45392 34901
13363 10438

12/31/2011 12/31/2010
USD USD
Not Not
Qualified Qualified
Yes Yes
Thousands Thousands
6% 829000 5% 1261000 8%
10% 2315000 13% 2277000 15%
2% 299000 2% 195000 1%
3% 401000 2% 243000 2%
1% 263000 1% 214000 1%
1% 238000 1% 89000 1%
23% 4345000 24% 4279000 28%
88% 15542000 86% 13991000 90%
15% 2423000 13% 2122000 14%
2% 456000 3% 230000 1%
- -
105% 18421000 102% 16343000 106%
36% 6294000 35% 5765000 37%
69% 12127000 67% 10578000 68%
5% 970000 5% -
2% 253000 1% -
1% 155000 1% -
0% 97000 1% -
1% 121000 1% -
3% 626000 3% -
- 606000 4%
100% 18068000 100% 15463000 100%
6% 1057000 6% 739000 5%
110000 1% 171000 1%
1% - -
1% 57000 0% 27000 0%
1% 248000 1% 200000 1%
0% 56000 0% -
- 33000 0%
0% 85000 0% -
- 79000 1%
1% 162000 1% 142000 1%
0% - -
- -
1% 278000 2% 211000 1%
6% 996000 6% 863000 6%
12% 1836000 10% 1198000 8%
1% 644000 4% 505000 3%
25% 4533000 25% 3305000 21%
0% 71000 0% 87000 1%
6% 1427000 8% 1843000 12%
1% 118000 1% -
3% 713000 4% -
4% 862000 5% 933000 6%
2% 411000 2% 428000 3%
1% 135000 1% 117000 1%
0% 40000 0% -
17% 3777000 21% 3408000 22%
1% 644000 4% 505000 3%
0% -26000 0% -28000 0%
16% 3107000 17% 2875000 19%
16% 2566000 14% 2493000 16%
0% 75000 0% 88000 1%
- -
- -
- -
- -
- -
- -
- -
- -
6% 910000 5% 465000 3%
4% 808000 4% 808000 5%
7% 1222000 7% 1183000 8%
31% 5395000 30% 5399000 35%
0% -183000 -1% -250000 -2%
0% -66000 0% -34000 0%
- -
0% 25000 0% 22000 0%
- -
-1% -224000 -1% -262000 -2%
4% 324000 2% 891000 6%
38% 6877000 38% 6237000 40%
12/31/2012 12/31/2011
2.29 1.06
6.05 2.71
5.98 6.85
9.57 7.64 Profitability trends
38.54 44.89
371586 344951 50

40
12/31/2012 12/31/2011
0.71 0.76 30
0.91 0.96
-2.27 -1.04 20

10
12/31/2012 12/31/2011
0.41 0.45 0
0.45 0.55 12/31/2011 12/31/2012 12/31/2013 12/31/2014
5.24 4.03 ROA % (Net) ROE % (Net)
ROI % (Operating) EBITDA Margin %
12/31/2012 12/31/2011 Calculated Tax Rate %
0.93 0.93
54.01 63.39
19.89 24.43
15.75 17.44
16.25 16.85
1.37 1.38
17.55 14.98

12/31/2012 12/31/2011
2.74 1.79
9.57 8.9
bility trends

/31/2013 12/31/2014 12/31/2015

ROE % (Net)
g) EBITDA Margin %
ate %