Southwest Airlines 2015 Annual Report Download - page 127
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Company contributions to all defined contribution plans expensed in 2015, 2014, and 2013, reflected
as a component of Salaries, wages, and benefits, were $945 million, $644 million, and $497 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, 2015 and 2014:
(in millions) 2015 2014
APBO at beginning of period $ 169 $ 138
Service cost 11 10
Interest cost 7 7
Benefits paid (6) (4)
Actuarial loss 20 21
Settlements $ — $ (3)
APBO at end of period $ 201 $ 169
All plans are unfunded, and benefits are paid as they become due. Estimated future benefit payments
expected to be paid are $5 million in 2016, $6 million in 2017, $7 million in 2018, $8 million in 2019,
$9 million in 2020, and $71 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, 2015 and 2014.
(in millions) 2015 2014
Funded status $ (201) $ (169)
Unrecognized net actuarial gain (31) (53)
Unrecognized prior service cost 9 12
Accumulated other comprehensive income 22 41
Cost recognized on Consolidated Balance Sheet $ (201) $ (169)
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