Southwest Airlines 2014 Annual Report Download - page 138
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No Employee contributions to the ProfitSharing Plan are allowed. AirTran Employees became eligible
to participate in Southwest’s ProfitSharing Plan beginning January 1, 2012.
Company contributions to all defined contribution plans expensed in 2014, 2013, and 2012,
reflected as a component of Salaries, wages, and benefits, were $644 million, $497 million, and $370
million, respectively.
Postretirement benefit plans
The Company provides postretirement benefits to qualified retirees in the form of medical and
dental coverage. Employees must meet minimum levels of service and age requirements as set forth by
the Company, or as specified in collective bargaining agreements with specific workgroups.
Employees meeting these requirements, as defined, may use accrued unused sick time to pay for
medical and dental premiums from the age of retirement until age 65.
The following table shows the change in the accumulated postretirement benefit obligation
(APBO) for the years ended December 31, 2014 and 2013:
(in millions) 2014 2013
APBO at beginning of period $ 138 $ 148
Service cost 10 30
Interest cost 7 4
Benefits paid (4) (3)
Actuarial (gain)/loss 21 (41)
Settlements $ (3) $ —
APBO at end of period $ 169 $ 138
All plans are unfunded, and benefits are paid as they become due. Estimated future benefit
payments expected to be paid are $5 million in 2015, $6 million in 2016, $7 million in 2017, $7 million
in 2018, $8 million in 2019, and $55 million for the next five years thereafter.
The funded status (the difference between the fair value of plan assets and the projected benefit
obligations) of the Company’s consolidated benefit plans are recognized in the Consolidated Balance
Sheet, with a corresponding adjustment to AOCI. The following table reconciles the funded status of
the plans to the accrued postretirement benefit cost recognized in Other non-current liabilities on the
Company’s Consolidated Balance Sheet at December 31, 2014 and 2013.
(in millions) 2014 2013
Funded status $ (169) $ (138)
Unrecognized net actuarial gain (53) (80)
Unrecognized prior service cost 12 15
Accumulated other comprehensive income 41 65
Cost recognized on Consolidated Balance Sheet $ (169) $ (138)
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