Southwest Airlines 2006 Annual Report Download - page 74

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS AND SHAREHOLDERS
SOUTHWEST AIRLINES CO.
We have audited the accompanying consolidated balance sheets of Southwest Airlines Co. as of December 31, 2006
and 2005, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three
years in the period ended December 31, 2006. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Southwest Airlines Co. at December 31, 2006 and 2005, and the consolidated results of its operations
and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally
accepted accounting principles.
As discussed in Note 2 to the consolidated financial statements, in 2006 the Company changed its method of
accounting for scheduled airframe inspection and repairs on a retrospective basis, changed its method of accounting for
share-based compensation using the modified-retrospective method, and changed its method of accounting for postre-
tirement benefit plans.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the effectiveness of Southwest Airlines Co.’s internal control over financial reporting as of December 31, 2006,
based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated January 30, 2007 expressed an unqualified opinion
thereon.
Dallas, TX
January 30, 2007
55