Southwest Airlines 2012 Annual Report Download - page 97

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4. COMMITMENTS AND CONTINGENCIES
The Company’s contractual purchase commitments primarily consist of scheduled aircraft acquisitions
from Boeing. As of December 31, 2012, the Company had the following contractual purchase commitments with
Boeing for aircraft deliveries:
The Boeing Company
737NG
The Boeing Company
737MAX
-700
Firm
Orders
-800
Firm
Orders Options
Firm
Orders Options Total
2013 ............ 20 20
2014 ............ 5 24 15 44
2015 ............ 36 12 48
2016 ............ 31 12 43
2017 ............ 30 25 4 59
2018 ............ 25 28 15 68
2019 ............ 33 33
2020 ............ 34 34
2021 ............ 34 18 52
2022 ............ 30 19 49
2023 ............ 23 23
2024 ............ 23 23
2025 ............ 23 23
Through 2027 ..... 44 44
Total .......... 127(1) 44 92 150(2) 150 563
(1) The Company has flexibility to substitute 737-800s or 737-600s in lieu of 737-700 firm orders.
(2) The Company has the right, under certain conditions, including Boeing’s decision to manufacture a MAX 7
aircraft, to substitute MAX 7 aircraft in place of future MAX 8 deliveries.
The Company’s financial commitments associated with the firm orders in the above aircraft table are as
follows: $619 million in 2013, $967 million in 2014, $1.2 billion in 2015, $1.3 billion in 2016, $1.4 billion in
2017, and $6.5 billion thereafter.
During 2008, the City of Dallas approved the Love Field Modernization Program (“LFMP”), a project to
reconstruct Dallas Love Field (“Airport”) with modern, convenient air travel facilities. Pursuant to a Program
Development Agreement (“PDA”) with the City of Dallas, and the Love Field Airport Modernization
Corporation (or “LFAMC,” a Texas non-profit “local government corporation” established by the City to act on
the City’s behalf to facilitate the development of the LFMP), the Company is managing this project. Although
subject to change, at the current time the project is expected to include the renovation of the Airport airline
terminals and complete replacement of gate facilities with a new 20-gate facility, including infrastructure,
systems and equipment, aircraft parking apron, fueling system, roadways and terminal curbside, baggage
handling systems, passenger loading bridges and support systems, and other supporting infrastructure. Major
construction commenced during 2010. New ticketing and checkin areas opened during fourth quarter 2012 and
12 new gates and new concessions are expected to open in second quarter 2013. Full completion of the project is
scheduled for second half of 2014.
It is currently expected that the total amount spent on the LFMP project will be approximately
$519 million. Although the City of Dallas has received commitments from various sources that are expected to
fund portions of the LFMP project, including the Federal Aviation Administration, the Transportation Security
Administration, and the City’s Aviation Fund, the majority of the funds used are expected to be from the issuance
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