Southwest Airlines 2007 Annual Report Download

Consolidated Highlights (GAAP)
(Dollars In Millions, Except Per Share Amounts) 2007 2006 CHANGE
Operating revenues $9,861 $9,086 8.5 %
Operating expenses $9,070 $8,152 11.3 %
Operating income $791 $934 (15.3) %
Operating margin 8.0 % 10.3 % (2.3) pts.
Net income $645 $499 29.3 %
Net margin 6.5 % 5.5 % 1.0 pts.
Net income per share——basic $.85 $.63 34.9 %
Net income per share——diluted $.84 $.61 37.7 %
Stockholders’ equity $6,941 $6,449 7.6 %
Return on average stockholders’ equity 9.6 % 7.6 % 2.0 pts.
Stockholders’ equity per common share outstanding $9.44 $8.24 14.6 %
Revenue passengers carried 88,713,472 83,814,823 5.8 %
Revenue passenger miles (RPMs) (000s) 72,318,812 67,691,289 6.8 %
Available seat miles (ASMs) (000s) 99,635,967 92,663,023 7.5 %
Passenger load factor 72.6 % 73.1 % (0.5) pts.
Passenger revenue yield per RPM 13.08 ¢ 12.93 ¢ 1.2 %
Operating revenue yield per ASM 9.90 ¢ 9.81 ¢ 0.9 %
Operating expenses per ASM 9.10 ¢ 8.80 ¢ 3.4 %
Size of eet at yearend 520 481 8.1 %
Fulltime equivalent Employees at yearend 34,378 32,664 5.2 %
$700
$600
$500
$400
$300
$200
$372
$226$215$248
$484
$425
$499
$578
$645
$471
Net Margin GAAP
10%
8%
6%
4%
2%
non-GAAP
See table for a reconciliation of non-GAAP to GAAP results.
Net Income (in millions) GAAP non-GAAP
See table for a reconciliation of non-GAAP to GAAP results.
Reconciliation of Reported Amounts to non-GAAP Items
(See Note on page 14.) (unaudited)
$372 $215 $484
Net income, as reported
(in millions)
$645
$471
$425
(59)(2) 11
Impact of fuel contracts, net (197)88
$499
-
(144) -
Impact of government
grant proceedings, net -
-22-
Other net (9) 23
$578$226 $248
Net income——non-GAAP
2003 2004 2005 2006 2007
20032004 2005 2006 2007 2003 2004 2005 2006 2007
6.3%
3.8%
3.3% 3.8%
5.5%
6.4% 5.6% 6.5% 6.5%
4.8%
Southwest Airlines Co. provides single-class, comfortable air transportation which targets both business and leisure travelers.
SWA is a profitable, highly efficient, high-quality airline with a schedule that fits our Customers’ needs. Our warm, caring, and
spirited Employees deliver an outstanding Customer Experience for our Valued Customers. The Company, incorporated in Texas,
commenced Customer Service on June 18, 1971, with three Boeing 737 aircraft serving three Texas cities——Dallas, Houston, and
San Antonio. At yearend 2007, Southwest operated 520 Boeing 737 aircraft and provided service to 64 airports in 32 states
throughout the United States. Southwest has one of the lowest operating cost structures in the domestic airline industry
and consistently offers low and simple fares. We currently offer 3,400+ flights a day. Southwest has had the best cumulative
Customer Satisfaction record among those carriers with whom we compete since the Department of Transportation has kept
these statistics. LUV is our stock exchange symbol, selected to represent both our home at Dallas Love Field and the unique,
warm, and LUVing relationships among Employees, Shareholders, and Customers.