Southwest Airlines 2014 Annual Report Download - page 106
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3. NET INCOME PER SHARE
The following table sets forth the computation of basic and diluted net income per share (in
millions except per share amounts):
Year ended December 31,
2014 2013 2012
NUMERATOR:
Net income $ 1,136 $ 754 $ 421
Incremental income effect of
interest on 5.25% convertible notes 4 3 3
Net income after assumed conversion $ 1,140 $ 757 $ 424
DENOMINATOR:
Weighted-average shares outstanding, basic 687 710 750
Dilutive effect of Employee stock options and
restricted stock units 3 2 1
Dilutive effect of 5.25% convertible notes 6 6 6
Adjusted weighted-average shares outstanding, diluted 696 718 757
NET INCOME PER SHARE:
Basic $ 1.65 $ 1.06 $ 0.56
Diluted $ 1.64 $ 1.05 $ 0.56
Potentially dilutive amounts excluded from calculations:
Stock options and restricted stock units — 9 35
4. COMMITMENTS AND CONTINGENCIES
Commitments
The Company has contractual obligations and commitments primarily with regard to future
purchases of aircraft, repayment of debt, and lease arrangements. During the year ended December 31,
2014, the Company purchased 33 new 737-800 aircraft from Boeing and 11 used 737-700 aircraft from
third parties. In addition, the Company also leased 11 737-700 aircraft from third parties, retired from
service five of its older aircraft (three 737-300 and two 737-500), and removed 66 of its 717-200
98