Southwest Airlines 2014 Annual Report Download - page 117

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recorded by the Company for this transaction were included as a component of Acquisition and
integration costs in the Company’s Consolidated Statement of Income and were included as a
component of Other, net in Cash flows from operating activities in the Company’s Consolidated
Statement of Cash Flows, and the corresponding liability for this transaction is included as a
component of Current liabilities and Other noncurrent liabilities in the Company’s Consolidated
Balance Sheet. A rollforward of the Company’s B717 lease/sublease liability for 2014 and 2013 is
shown below:
(in millions) B717 lease/sublease liability
Balance at December 31, 2012 $ 128
Lease/sublease accretion 6
Lease/sublease payments, net (a) (12)
Balance at December 31, 2013 $ 122
Lease/sublease accretion 5
Lease/sublease expense adjustment 22
Lease/sublease payments, net (a) (86)
Balance at December 31, 2014 $ 63
(a) Includes lease conversion cost payments
The Company halted service of its B717 fleet as of December 28, 2014, and as a result recorded an
additional $9 million charge associated with the extension of the time between when the Company
removed the aircraft from revenue service and when they enter the conversion process.
8. COMMON STOCK
The Company has one class of capital stock, its common stock. Holders of shares of common
stock are entitled to receive dividends when and if declared by the Board of Directors and are entitled
to one vote per share on all matters submitted to a vote of the Shareholders. At December 31, 2014, the
Company had 47 million shares of common stock reserved for issuance pursuant to Employee equity
plans (of which 20 million shares had not been granted) through various share-based compensation
arrangements. See Note 9 to the Consolidated Financial Statements for information regarding the
Company’s equity plans.
9. STOCK PLANS
Share-based compensation
The Company accounts for share-based compensation utilizing fair value. The Consolidated
Statement of Income for the years ended December 31, 2014, 2013, and 2012, reflects share-based
compensation expense of $21 million, $18 million, and $16 million, respectively. The total tax benefit
recognized in earnings from share-based compensation arrangements for the years ended December 31,
2014, 2013, and 2012, was not material. As of December 31, 2014, there was $33 million of total
unrecognized compensation cost related to share-based compensation arrangements, which is expected
to be recognized over a weighted-average period of 1.1 years.
109