Southwest Airlines 2009 Annual Report Download - page 68

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2009
3. NET INCOME PER SHARE
The following table sets forth the computation of net income per share, basic and diluted:
(In millions, except per share amounts) 2009 2008 2007
Net income ............................................ $ 99 $178 $645
Weighted-average shares outstanding, basic ................... 741 735 757
Dilutive effect of Employee stock options .................... — 4 11
Adjusted weighted-average shares outstanding, diluted .......... 741 739 768
Net income per share, basic ................................ $.13 $.24 $.85
Net income per share, diluted .............................. $.13 $.24 $.84
The Company has excluded 79 million, 82 million, and 49 million shares from its calculations of net income
per share, diluted, in 2009, 2008, and 2007, respectively, as they represent antidilutive stock options for the
respective periods presented.
4. COMMITMENTS AND CONTINGENCIES
Purchase commitments
The Company’s contractual purchase commitments primarily consist of scheduled aircraft acquisitions from
Boeing. As of December 31, 2009, the Company had the following contractual purchase commitments with
Boeing for 737-700 aircraft deliveries:
Firm Options
Purchase
Rights Total Commitment
(In millions)
2010 .................................... 10 — — 10 $ 344
2011 .................................... 10 7 — 17 450
2012 .................................... 13 10 — 23 571
2013 .................................... 19 4 — 23 634
2014 .................................... 13 7 — 20 509
2015 .................................... 14 3 — 17 444
2016 .................................... 12 11 — 23 248
2017 .................................... — 17 — 17 —
Through 2018 ............................ — — 54 54 —
Total .................................... 91 59 54 204 $3,200
The Company has the option, which must be exercised 18 months prior to the contractual delivery date, to
substitute 737-600s or 737-800s for the 737-700s.
Contingencies
During the first quarter and early second quarter of 2008, the Company was named as a defendant in two
putative class actions on behalf of persons who purchased air travel from the Company while the Company was
allegedly in violation of FAA safety regulations. Claims alleged by the plaintiffs in these two putative class
actions include breach of contract, breach of warranty, fraud/misrepresentation, unjust enrichment, and negligent
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