2021 Q1 Form 10-Q Financial Statement

#000009238021000101 Filed on April 27, 2021

View on sec.gov

Income Statement

Concept 2021 Q1 2020 Q1
Revenue $2.052B $4.234B
YoY Change -51.54% -17.77%
Cost Of Revenue $782.0M $1.209B
YoY Change -35.32% -10.31%
Gross Profit $1.270B $3.025B
YoY Change -58.02% -20.42%
Gross Profit Margin 61.89% 71.45%
Selling, General & Admin $1.744B $2.126B
YoY Change -17.97% -6.34%
% of Gross Profit 137.32% 70.28%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $312.0M $311.0M
YoY Change 0.32% 4.71%
% of Gross Profit 24.57% 10.28%
Operating Expenses $2.519B $3.135B
YoY Change -19.65% -32.49%
Operating Profit $199.0M -$110.0M
YoY Change -280.91% -121.78%
Interest Expense -$101.0M -$6.000M
YoY Change 1583.33% -119.35%
% of Operating Profit -50.75%
Other Income/Expense, Net -$53.00M -$34.00M
YoY Change 55.88% 3300.0%
Pretax Income $146.0M -$144.0M
YoY Change -201.39% -128.57%
Income Tax $30.00M -$50.00M
% Of Pretax Income 20.55%
Net Earnings $116.0M -$94.00M
YoY Change -223.4% -124.29%
Net Earnings / Revenue 5.65% -2.22%
Basic Earnings Per Share $0.20 -$0.18
Diluted Earnings Per Share $0.19 -$0.18
COMMON SHARES
Basic Shares Outstanding 591.0M shares 515.0M shares
Diluted Shares Outstanding 609.0M shares 515.0M shares

Balance Sheet

Concept 2021 Q1 2020 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $14.35B $5.545B
YoY Change 158.76% 43.62%
Cash & Equivalents $11.97B $3.940B
Short-Term Investments $2.377B $1.605B
Other Short-Term Assets $367.0M $256.0M
YoY Change 43.36% -27.68%
Inventory $448.0M $518.0M
Prepaid Expenses
Receivables $132.0M $579.0M
Other Receivables $8.000M $38.00M
Total Short-Term Assets $16.10B $7.028B
YoY Change 129.08% 28.18%
LONG-TERM ASSETS
Property, Plant & Equipment $15.65B $16.99B
YoY Change -7.89% -4.41%
Goodwill $970.0M $970.0M
YoY Change 0.0% 0.0%
Intangibles $295.0M $296.0M
YoY Change -0.34% -5.43%
Long-Term Investments
YoY Change
Other Assets $743.0M $620.0M
YoY Change 19.84% -14.48%
Total Long-Term Assets $19.39B $19.86B
YoY Change -2.34% -5.33%
TOTAL ASSETS
Total Short-Term Assets $16.10B $7.028B
Total Long-Term Assets $19.39B $19.86B
Total Assets $35.49B $26.89B
YoY Change 32.02% 1.61%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.094B $1.043B
YoY Change 4.89% -26.13%
Accrued Expenses $1.665B $1.037B
YoY Change 60.56% -23.19%
Deferred Revenue $4.906B $5.036B
YoY Change -2.58%
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $225.0M $2.795B
YoY Change -91.95% 389.49%
Total Short-Term Liabilities $8.182B $10.24B
YoY Change -20.11% 17.4%
LONG-TERM LIABILITIES
Long-Term Debt $10.55B $2.288B
YoY Change 360.93% -12.07%
Other Long-Term Liabilities $1.123B $694.0M
YoY Change 61.82% 14.14%
Total Long-Term Liabilities $1.123B $694.0M
YoY Change 61.82% 14.14%
TOTAL LIABILITIES
Total Short-Term Liabilities $8.182B $10.24B
Total Long-Term Liabilities $1.123B $694.0M
Total Liabilities $9.305B $10.94B
YoY Change -14.91% 17.19%
SHAREHOLDERS EQUITY
Retained Earnings $14.91B $17.76B
YoY Change -16.02% 8.81%
Common Stock $5.108B $2.390B
YoY Change 113.72% 2.97%
Preferred Stock
YoY Change
Treasury Stock (at cost) $10.87B $10.89B
YoY Change -0.17% 21.69%
Treasury Stock Shares
Shareholders Equity $9.093B $9.075B
YoY Change
Total Liabilities & Shareholders Equity $35.49B $26.89B
YoY Change 32.02% 1.61%

Cashflow Statement

Concept 2021 Q1 2020 Q1
OPERATING ACTIVITIES
Net Income $116.0M -$94.00M
YoY Change -223.4% -124.29%
Depreciation, Depletion And Amortization $312.0M $311.0M
YoY Change 0.32% 4.71%
Cash From Operating Activities $645.0M -$377.0M
YoY Change -271.09% -134.12%
INVESTING ACTIVITIES
Capital Expenditures -$95.00M -$224.0M
YoY Change -57.59% 40.0%
Acquisitions
YoY Change
Other Investing Activities -$106.0M $219.0M
YoY Change -148.4% -32.41%
Cash From Investing Activities -$201.0M -$5.000M
YoY Change 3920.0% -103.05%
FINANCING ACTIVITIES
Cash Dividend Paid $0.00 $188.0M
YoY Change -100.0% 5.62%
Common Stock Issuance & Retirement, Net $0.00 $451.0M
YoY Change -100.0% -9.8%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities $464.0M $1.774B
YoY Change -73.84% -327.73%
NET CHANGE
Cash From Operating Activities $645.0M -$377.0M
Cash From Investing Activities -$201.0M -$5.000M
Cash From Financing Activities $464.0M $1.774B
Net Change In Cash $908.0M $1.392B
YoY Change -34.77% 184.08%
FREE CASH FLOW
Cash From Operating Activities $645.0M -$377.0M
Capital Expenditures -$95.00M -$224.0M
Free Cash Flow $740.0M -$153.0M
YoY Change -583.66% -112.09%

Facts In Submission

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BASIS OF PRESENTATION<div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">Southwest Airlines Co. (the "Company" or "Southwest") operates Southwest Airlines, a major passenger airline that provides scheduled air transportation in the United States and near-international markets. The unaudited Condensed Consolidated Financial Statements include accounts of the Company and its wholly owned subsidiaries.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">The accompanying unaudited Condensed Consolidated Financial Statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States ("GAAP") for complete financial statements. The unaudited Condensed Consolidated Financial Statements for the interim periods ended March 31, 2021 and 2020 include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods. This includes all normal and recurring adjustments and elimination of significant intercompany transactions. Financial results for the Company and airlines in general can be seasonal in nature. In many years, the Company's revenues, as well as its Operating income and Net income, have been better in its second and third fiscal quarters than in its first and fourth fiscal quarters. However, beginning in early 2020, as a result of the COVID-19 pandemic, the Company's results have not been in line with such historical trends. See Note 2 for further information. Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers and changes in consumer behavior, unemployment levels, corporate travel budgets, global pandemics such as COVID-19, extreme or severe weather and natural disasters, fears of terrorism or war, governmental actions, and other factors beyond the Company's control. These and other factors, such as the price of jet fuel in some periods, the nature of the Company's fuel hedging program, and the periodic volatility of commodities used by the Company for hedging jet fuel, have created, and may continue to create, significant volatility in the Company's financial results. See Note 4 for further information on fuel and the Company's hedging program. Operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for future quarters or for the year ended December 31, 2021. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020. </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%"> </span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss), for the three months ended March 31, 2021, Payroll support and voluntary Employee programs, net, includes the correction of previously underaccrued payroll tax credits, related to fourth quarter 2020, of $88 million, pre-tax. Other gains and losses, net, includes gains of $60 million, pre-tax, to correct investment gains related to prior periods previously recorded in Accumulated other comprehensive income (loss) ("AOCI"). </span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">In the unaudited Condensed Consolidated Statement of Stockholders' Equity, for the three months ended March 31, 2021, the Company recorded a decrease of $19 million, net of tax, in AOCI and a corresponding increase in Retained earnings to correct the amount of the impact of the cumulative effect of adopting Accounting Standard Update ("ASU") 2016-01, Financial Instruments in 2018.</span></div><div style="text-align:justify"><span><br/></span></div><div style="text-align:justify"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:11pt;font-weight:400;line-height:120%">These corrections are not considered material to prior period financial statements and are not expected to be material to the full year 2021 financial statements.</span></div>
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OtherDeferredCompensationArrangementsLiabilityClassifiedNoncurrent
319000000 USD
CY2020Q4 us-gaap Other Deferred Compensation Arrangements Liability Classified Noncurrent
OtherDeferredCompensationArrangementsLiabilityClassifiedNoncurrent
353000000 USD
CY2021Q1 us-gaap Other Sundry Liabilities Noncurrent
OtherSundryLiabilitiesNoncurrent
77000000 USD
CY2020Q4 us-gaap Other Sundry Liabilities Noncurrent
OtherSundryLiabilitiesNoncurrent
88000000 USD
CY2021Q1 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
1123000000 USD
CY2020Q4 us-gaap Other Liabilities Noncurrent
OtherLiabilitiesNoncurrent
1247000000 USD
CY2020Q4 luv Vendor Prepayment
VendorPrepayment
600000000 USD
CY2021Q1 luv Deferred Revenue Related To Vendor Prepayment
DeferredRevenueRelatedToVendorPrepayment
323000000 USD
CY2021Q1 luv Amount Of Deferred Revenue From Vendor Prepayment That Would Have Been Receivable At Period End
AmountOfDeferredRevenueFromVendorPrepaymentThatWouldHaveBeenReceivableAtPeriodEnd
106000000 USD
CY2021Q1 luv Cash Tax Refund Expected From Cares Act Loss Carry Back Provision
CashTaxRefundExpectedFromCARESActLossCarryBackProvision
470000000 USD
CY2021Q1 luv Cares Act Loss Carryback Period
CARESActLossCarrybackPeriod
P5Y
CY2021Q1 luv Total Number Of Boeing737 Max7 Firm Orders Added To Purchase Agreement Per Supplemental Agreement No12
TotalNumberOfBoeing737MAX7FirmOrdersAddedToPurchaseAgreementPerSupplementalAgreementNo12
100 aircraft
CY2021Q1 luv Number Of Boeing737 Max7 Firm Orders Added To Purchase Agreement Per Supplemental Agreement No12 To Be Delivered In2022
NumberOfBoeing737MAX7FirmOrdersAddedToPurchaseAgreementPerSupplementalAgreementNo12ToBeDeliveredIn2022
30 aircraft
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Third Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnThirdAnniversary
1000000000.0 USD
CY2021Q1 luv Total Number Of Boeing737 Max Options Added To Purchase Agreement Per Supplemental Agreement No12
TotalNumberOfBoeing737MAXOptionsAddedToPurchaseAgreementPerSupplementalAgreementNo12
155 aircraft
CY2021Q1 luv Total Number Of Boeing737 Max8 Firm Orders Converted To737 Max7 Firm Orders Per Supplemental Agreement No12
TotalNumberOfBoeing737MAX8FirmOrdersConvertedTo737MAX7FirmOrdersPerSupplementalAgreementNo12
70 aircraft
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Due In Remainder Of Fiscal Year
UnrecordedUnconditionalPurchaseObligationDueInRemainderOfFiscalYear
0 USD
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Balance On First Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFirstAnniversary
700000000 USD
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Second Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnSecondAnniversary
1100000000 USD
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Fourth Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFourthAnniversary
1100000000 USD
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Balance On Fifth Anniversary
UnrecordedUnconditionalPurchaseObligationBalanceOnFifthAnniversary
1200000000 USD
CY2021Q1 us-gaap Unrecorded Unconditional Purchase Obligation Due After Five Years
UnrecordedUnconditionalPurchaseObligationDueAfterFiveYears
7200000000 USD
CY2021Q1 luv Numberof Aircraft Grounded Under Emergency Order
NumberofAircraftGroundedUnderEmergencyOrder
34
CY2021Q1 luv After Tax Potential Concessionsand Other Considerations Announced July2019
AfterTaxPotentialConcessionsandOtherConsiderationsAnnouncedJuly2019
4900000000 USD
CY2021Q1 luv Pre Tax Potential Concessionsand Other Considerations Announced January2020
PreTaxPotentialConcessionsandOtherConsiderationsAnnouncedJanuary2020
2600000000 USD
CY2021Q1 luv Numberof Aircraft Grounded Under Emergency Order
NumberofAircraftGroundedUnderEmergencyOrder
34
CY2021Q1 luv Numberof Aircraft Not Delivered Dueto Grounding Under Emergency Order
NumberofAircraftNotDeliveredDuetoGroundingUnderEmergencyOrder
41 aircraft
CY2021Q1 us-gaap Depreciation And Amortization
DepreciationAndAmortization
312000000 USD
CY2021Q1 us-gaap Payments To Acquire Productive Assets
PaymentsToAcquireProductiveAssets
95000000 USD
CY2021Q1 us-gaap Increase Decrease In Contract With Customer Liability
IncreaseDecreaseInContractWithCustomerLiability
599000000 USD

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