2021 Q4 Form 10-Q Financial Statement

#000009238021000160 Filed on October 26, 2021

View on sec.gov

Income Statement

Concept 2021 Q4 2021 Q3 2021 Q2
Revenue $5.051B $4.679B $4.008B
YoY Change 150.92% 160.96% 297.62%
Cost Of Revenue $1.413B $1.366B $1.206B
YoY Change 114.09% 98.84% 126.69%
Gross Profit $3.638B $3.313B $2.802B
YoY Change 168.88% 199.55% 488.66%
Gross Profit Margin 72.03% 70.81% 69.91%
Selling, General & Admin $2.433B $2.372B $2.047B
YoY Change 41.54% 27.32% 10.41%
% of Gross Profit 66.88% 71.6% 73.05%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $323.0M $322.0M $315.0M
YoY Change 2.54% 1.9% 0.64%
% of Gross Profit 8.88% 9.72% 11.24%
Operating Expenses $3.428B $3.356B $2.948B
YoY Change 34.17% 25.88% 12.99%
Operating Profit $210.0M $733.0M $594.0M
YoY Change -117.96% -151.95% -152.71%
Interest Expense -$108.0M -$104.0M -$106.0M
YoY Change 8.0% 8.33% 32.5%
% of Operating Profit -51.43% -14.19% -17.85%
Other Income/Expense, Net $6.000M -$133.0M -$92.00M
YoY Change -109.52% 1.53% -17.86%
Pretax Income $77.00M $600.0M $502.0M
YoY Change -105.79% -138.91% -140.52%
Income Tax $9.000M $154.0M $154.0M
% Of Pretax Income 11.69% 25.67% 30.68%
Net Earnings $68.00M $446.0M $348.0M
YoY Change -107.49% -138.55% -138.03%
Net Earnings / Revenue 1.35% 9.53% 8.68%
Basic Earnings Per Share $0.75 $0.59
Diluted Earnings Per Share $112.2K $0.73 $0.57
COMMON SHARES
Basic Shares Outstanding 591.9M shares 592.0M shares 591.0M shares
Diluted Shares Outstanding 607.0M shares 615.0M shares

Balance Sheet

Concept 2021 Q4 2021 Q3 2021 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $15.50B $16.00B $16.88B
YoY Change 16.27% 9.9% 16.73%
Cash & Equivalents $12.48B $12.98B $14.12B
Short-Term Investments $3.024B $3.024B $2.751B
Other Short-Term Assets $638.0M $560.0M $521.0M
YoY Change 116.27% 125.81% 133.63%
Inventory $537.0M $511.0M $464.0M
Prepaid Expenses
Receivables $58.00M $67.00M $81.00M
Other Receivables $77.00M $154.0M $42.00M
Total Short-Term Assets $18.04B $18.55B $19.19B
YoY Change 18.87% 15.01% 20.89%
LONG-TERM ASSETS
Property, Plant & Equipment $14.84B $15.06B $15.24B
YoY Change -6.25% -6.23% -6.19%
Goodwill $970.0M $970.0M $970.0M
YoY Change 0.0% 0.0% 0.0%
Intangibles $295.0M $295.0M $295.0M
YoY Change 0.0% 0.0% 0.0%
Long-Term Investments
YoY Change
Other Assets $882.0M $919.0M $837.0M
YoY Change 22.16% 35.35% 26.44%
Total Long-Term Assets $18.28B $18.56B $19.02B
YoY Change -5.83% -4.7% -3.58%
TOTAL ASSETS
Total Short-Term Assets $18.04B $18.55B $19.19B
Total Long-Term Assets $18.28B $18.56B $19.02B
Total Assets $36.32B $37.11B $38.21B
YoY Change 5.01% 4.23% 7.33%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $1.282B $1.229B $1.378B
YoY Change 37.7% 25.41% 42.06%
Accrued Expenses $1.624B $1.687B $2.353B
YoY Change -28.11% -8.12% -0.8%
Deferred Revenue $5.566B $5.751B $6.312B
YoY Change 46.86% 45.52% 26.54%
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $453.0M $225.0M $2.166B
YoY Change 105.91% -68.75% 211.65%
Total Short-Term Liabilities $9.164B $9.135B $12.48B
YoY Change 22.09% 17.06% 33.28%
LONG-TERM LIABILITIES
Long-Term Debt $10.27B $11.01B $9.188B
YoY Change 1.61% 8.66% 3.18%
Other Long-Term Liabilities $1.224B $1.098B $1.120B
YoY Change -1.84% -10.95% 55.12%
Total Long-Term Liabilities $1.224B $1.098B $1.120B
YoY Change -1.84% -10.95% 55.12%
TOTAL LIABILITIES
Total Short-Term Liabilities $9.164B $9.135B $12.48B
Total Long-Term Liabilities $1.224B $1.098B $1.120B
Total Liabilities $10.39B $10.23B $13.60B
YoY Change 18.68% 13.23% 34.84%
SHAREHOLDERS EQUITY
Retained Earnings $15.77B $15.71B $15.26B
YoY Change 6.75% 0.13% -9.39%
Common Stock $5.112B $5.139B $5.157B
YoY Change 0.65% 1.5% 2.18%
Preferred Stock
YoY Change
Treasury Stock (at cost) $10.86B $10.86B $10.87B
YoY Change -0.14% -0.14% -0.15%
Treasury Stock Shares 296.0M shares
Shareholders Equity $10.41B $10.25B $9.688B
YoY Change
Total Liabilities & Shareholders Equity $36.32B $37.11B $38.21B
YoY Change 5.01% 4.23% 7.33%

Cashflow Statement

Concept 2021 Q4 2021 Q3 2021 Q2
OPERATING ACTIVITIES
Net Income $68.00M $446.0M $348.0M
YoY Change -107.49% -138.55% -138.03%
Depreciation, Depletion And Amortization $323.0M $322.0M $315.0M
YoY Change 2.54% 1.9% 0.64%
Cash From Operating Activities $247.0M -$575.0M $2.005B
YoY Change -141.44% -45.24% 123.52%
INVESTING ACTIVITIES
Capital Expenditures -$183.0M -$138.0M -$95.00M
YoY Change 103.33% 55.06% -15.18%
Acquisitions
YoY Change
Other Investing Activities $0.00 -$273.0M -$374.0M
YoY Change -100.0% -20.87% -184.23%
Cash From Investing Activities -$183.0M -$412.0M -$469.0M
YoY Change -301.1% -5.07% -241.27%
FINANCING ACTIVITIES
Cash Dividend Paid $0.00 $0.00
YoY Change
Common Stock Issuance & Retirement, Net $0.00 $0.00
YoY Change -100.0%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -564.0M -$157.0M $617.0M
YoY Change 4.25% -112.64% -91.41%
NET CHANGE
Cash From Operating Activities 247.0M -$575.0M $2.005B
Cash From Investing Activities -183.0M -$412.0M -$469.0M
Cash From Financing Activities -564.0M -$157.0M $617.0M
Net Change In Cash -500.0M -$1.144B $2.153B
YoY Change -52.2% 372.73% -74.4%
FREE CASH FLOW
Cash From Operating Activities $247.0M -$575.0M $2.005B
Capital Expenditures -$183.0M -$138.0M -$95.00M
Free Cash Flow $430.0M -$437.0M $2.100B
YoY Change -184.98% -54.53% 108.13%

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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 September 30, 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 always 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 and nine months ended September 30, 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><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 Comprehensive Income (Loss), for the nine months ended September 30, 2021, Payroll support and voluntary Employee programs, net, includes the correction of previously under accrued 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 nine months ended September 30, 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 Standards 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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90 aircraft
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86 aircraft
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86 aircraft
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70 aircraft
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36 aircraft
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30 aircraft
CY2021Q3 luv Other Commitment Number Of Aircrafts To Be Purchased Year Eight
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50 aircraft
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60 aircraft
CY2021Q3 luv Other Commitment Number Of Aircrafts To Be Purchased Year Ten
OtherCommitmentNumberOfAircraftsToBePurchasedYearTen
10 aircraft
CY2021Q3 luv Other Commitment Number Of Aircrafts To Be Purchased
OtherCommitmentNumberOfAircraftsToBePurchased
660 aircraft
CY2021Q3 us-gaap Other Commitments Future Minimum Payments Remainder Of Fiscal Year
OtherCommitmentsFutureMinimumPaymentsRemainderOfFiscalYear
33000000 USD

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