Southwest Airlines Reports First Quarter Earnings Up 26.6%

Apr 19, 2001, 01:00 ET from Southwest Airlines

    DALLAS, April 19 /PRNewswire/ -- Southwest Airlines' (NYSE:   LUV) net
 income for first quarter 2001 was $121.0 million, compared to first quarter
 2000 net income (before the cumulative effect of an airline industry change in
 accounting principle) of $95.6 million, an increase of 26.6 percent.  After
 giving effect to the three-for-two stock split distributed February 15, 2001,
 diluted net income per share was $.15 for first quarter 2001, compared to
 $.12 (before the change in accounting principle) in first quarter 2000.  All
 share and per share amounts included in the Condensed Consolidated Statement
 of Income have been retroactively restated to give effect to the stock split.
     Total operating revenues for first quarter 2001 increased 15.0 percent to
 $1.43 billion, compared to $1.24 billion for first quarter 2000.  Revenue
 passenger miles (RPMs) increased 12.8 percent in first quarter 2001, compared
 to a 12.0 percent increase in available seat miles (ASMs), resulting in a load
 factor of 67.3 percent versus the first quarter 2000 load factor of
 66.8 percent.  The passenger revenue yield per RPM increased 2.0 percent to
 $.1295 from $.1269 in first quarter 2000.  Operating revenue yield per ASM
 increased 2.6 percent to $.0901 from $.0878 in first quarter 2000.
     Operating expenses per ASM for first quarter 2001 were essentially flat at
 $.0769, compared to $.0768 for first quarter 2000.  Excluding fuel, operating
 expenses per ASM for first quarter 2001 were $.0636, an increase of
 1.1 percent.
     "Other losses" were $11.7 million in first quarter 2001 versus first
 quarter 2000 "other gains" of $4.1 million.  The "other losses" of
 $11.7 million consisted primarily of charges made in accordance with Statement
 of Financial Accounting Standard No. 133, Accounting for Derivative
 Instruments and Hedging Activities (SFAS 133), which the Company adopted on
 January 1, 2001.  SFAS 133 changed how financial derivative instruments, such
 as the Company's fuel hedge contracts, are accounted for in financial
 statements.  As a result of adopting SFAS 133, the Company recorded charges
 for changes in the time value of fuel hedge derivatives and ineffectiveness
 from hedging activities, as defined.  "Other gains" for first quarter 2000 of
 $4.1 million primarily resulted from the favorable conclusion of a lawsuit.
     Herbert D. Kelleher, Chairman, President, and Chief Executive Officer,
 stated:  "We are pleased with our first quarter earnings results, particularly
 in light of the slowing domestic economy and the overall dampening of air
 travel demand.  While Southwest is not completely immune to an economic
 downturn, we are uniquely positioned to do comparatively well as a result of
 our low-fare philosophy and low cost structure.
     "Although February and March load factors were down slightly from the
 historically high levels of a year ago, demand for our low fares by
 increasingly cost conscious air travelers remained quite strong.  Our
 passenger revenue yield per RPM increased 2.0 percent (January 2000 was
 weakened, somewhat, due to Y2K apprehensions).
     "Our overall unit costs were essentially flat with last year.  We
 continued to benefit from a successful fuel hedging program, which resulted in
 a 4.2 percent decline in fuel cost per gallon.  We recognized $24.4 million of
 effective hedging gains in first quarter 2001 'fuel and oil expense' versus
 $3.2 million last year.  Excluding fuel, our unit costs increased modestly to
 $.0636, primarily due to higher unit labor costs.  Profitsharing expense rose
 29.9 percent to $34.8 million for first quarter 2001.
     "We initiated service to West Palm Beach, Florida on January 21, 2001 and
 are pleased with the positive response from our Customers.
     "Although the economy may continue to decelerate, at this juncture, we
 expect to be solidly profitable in the second quarter.  Based on current
 traffic and booking trends thus far in April, and considering an estimated
 increase in available seat miles of 11.6 percent for the second quarter, we
 expect monthly load factors to continue to trend lower versus year-ago levels.
 RPM yields are also softening, compared to first quarter 2001 trends.
     "We are 80 percent hedged for the remainder of 2001 at crude oil prices
 averaging $22 per barrel.  Based on current market prices and hedging
 effectiveness, we estimate our second quarter 2001 jet fuel price per gallon
 to be lower than our second quarter 2000 average cost per gallon of $.78.
 Excluding fuel, we expect a modest year-over-year unit cost increase in second
 quarter 2001, similar to first quarter 2001.
     "We ended first quarter 2001 with $684.7 million in cash on hand, not
 including our available and unused bank credit facility of $475.0 million.
     "It is in difficult times that our Employees' ongoing accomplishments and
 efforts become especially visible.  While overall industry earnings were down
 in first quarter 2001, Southwest produced a very solid earnings performance.
 These results were possible because our wonderful People are devoted to
 maintaining our competitive cost advantage, which enables us to keep our fares
 low, our Profitsharing high, and our jobs secure.  It is because of our
 People's caring dedication and unwavering Southwest Spirit that FORTUNE
 magazine once again listed Southwest as one of the most admired companies in
 America.  Southwest was also recognized in Business Ethics magazine's listing
 of 100 Best Corporate Citizens."
     Southwest Airlines will conduct a conference call to discuss its quarterly
 earnings today at 11:30 a.m. Eastern Time.  A live broadcast of the conference
 call will be available via the World Wide Web at www.southwest.com.
 
     The outlook commentary of this news release contains forward-looking
 statements as defined in the Private Securities Litigation Reform Act of 1995.
 All forward-looking statements involve risks and uncertainties that could
 cause actual results to differ materially from the plans, intentions, and
 expectations reflected in or suggested by the forward-looking statements.
 Some of the factors that could significantly impact revenues, unit revenues,
 unit costs, earnings per share, and capacity include, but are not limited to:
 the airline pricing environment, industry capacity decisions, competitors'
 route decisions, the success of the Company's cost control efforts, the cost
 of crude oil, heating oil, and jet fuel; the success of fuel hedging
 strategies; the results of union contract negotiations and their impact on
 labor costs; operational disruptions as a result of bad weather, industry
 consolidation, air traffic control-related difficulties, and the impact of
 labor issues; the growth of e-commerce ticket sales; the implementation of
 Customer Service improvement strategies; actions of the U.S. and local
 governments; the stability of the U.S. economy; inflation; the economic
 environment of the airline industry and the economic environment in general.
 The Company undertakes no obligation to publicly update or revise any
 forward-looking statements to reflect events or circumstances that may arise
 after the date of this press release.  Additional information regarding these
 and other factors may be contained in the Company's SEC filings, including
 without limitation, the Company's Annual Report on Form 10-K for the year
 ended 2000.
 
 
      SOUTHWEST AIRLINES CO.
      CONDENSED CONSOLIDATED STATEMENT OF INCOME
      (in thousands except per share amounts)
      (unaudited)
 
                                                     Three months ended
                                                          March 31,
                                                                        Percent
                                                2001          2000       Change
 
     OPERATING REVENUES:
       Passenger                             $1,381,276    $1,199,885     15.1
       Freight                                   25,781        27,066     (4.7)
       Other                                     21,560        15,696     37.4
         Total operating revenues             1,428,617     1,242,647     15.0
 
     OPERATING EXPENSES:
       Salaries, wages, and benefits            447,431       381,489     17.3
       Fuel and oil                             209,584       197,071      6.3
       Maintenance materials and repairs         98,524        93,565      5.3
       Agency commissions                        30,494        37,216    (18.1)
       Aircraft rentals                          48,045        49,347     (2.6)
       Landing fees and other rentals            70,018        65,019      7.7
       Depreciation                              77,692        66,698     16.5
       Other operating expenses                 236,672       196,834     20.2
         Total operating expenses             1,218,460     1,087,239     12.1
 
     OPERATING INCOME                           210,157       155,408     35.2
 
     OTHER EXPENSES (INCOME):
       Interest expense                          17,012        17,223     (1.2)
       Capitalized interest                      (6,199)       (7,001)   (11.5)
       Interest income                           (8,882)       (6,649)    33.6
       Other (gains) losses, net                 11,724        (4,138)    n.a.
         Total other expenses (income)           13,655          (565)    n.a.
 
 
     INCOME BEFORE INCOME TAXES AND
      CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                      196,502       155,973     26.0
     PROVISION FOR INCOME TAXES                  75,457        60,330     25.1
 
 
     NET INCOME BEFORE CUMULATIVE EFFECT
      OF CHANGE IN ACCOUNTING PRINCIPLE         121,045        95,643     26.6
     CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE (Net of Income
      Taxes of approx. $14.0 million)               ---       (22,131)     n.a.
     NET INCOME                                $121,045       $73,512     64.7
 
 
     NET INCOME PER SHARE, BASIC BEFORE
      CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                         $.16          $.13
     CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                          ---          (.03)
     NET INCOME PER SHARE, BASIC                   $.16          $.10
 
     NET INCOME PER SHARE, DILUTED BEFORE
      CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                         $.15          $.12
     CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                          ---          (.03)
     NET INCOME PER SHARE, DILUTED                 $.15          $.09
 
     WEIGHTED AVERAGE SHARES OUTSTANDING:
         Basic                                  760,225       745,736
         Diluted                                807,744       789,534
 
 
      SOUTHWEST AIRLINES CO.
      COMPARATIVE CONSOLIDATED OPERATING STATISTICS
      (unaudited)
 
                                                      Three months ended
                                                          March 31,
 
                                               2001         2000     Change
 
     Revenue passengers carried             15,716,020   14,389,276    9.2 %
     Revenue passenger miles (RPMs) (000s)  10,662,391    9,453,201   12.8 %
     Available seat miles (ASMs) (000s)     15,852,999   14,153,959   12.0 %
     Load factor                                 67.3%        66.8%    0.5 pts.
     Average length of passenger haul              678          657    3.2 %
     Trips flown                               231,793      218,615    6.0 %
     Average passenger fare                     $87.89       $83.39    5.4 %
     Passenger revenue yield per RPM             12.95c       12.69c   2.0 %
     Operating revenue yield per ASM              9.01c        8.78c   2.6 %
     Operating expenses per ASM                   7.69c        7.68c   0.1 %
     Operating expenses per ASM, excluding
      fuel                                        6.36c        6.29c   1.1 %
     Fuel costs per gallon, excluding fuel
      tax                                        78.53c       81.98c  (4.2)%
     Number of Employees at period-end          29,563       27,911    5.9 %
     Size of fleet at period-end                   352          315   11.7 %
 
 
      SOUTHWEST AIRLINES CO.
      CONDENSED CONSOLIDATED BALANCE SHEETS
      (in thousands except per share amounts)
      (unaudited)
 
                                          March 31,  December 31,
                                             2001        2000
 
     ASSETS
     Current assets:
       Cash and cash equivalents          $684,678    $522,995
       Accounts receivable                 144,467     138,070
       Inventories of parts and
        supplies, at cost                   78,817      80,564
       Deferred income taxes                28,132      28,005
       Fuel hedge contracts                 63,773      22,515
       Prepaid expenses and other
        current assets                      44,547      39,387
           Total current assets          1,044,414     831,536
 
     Property and equipment, at cost:
       Flight equipment                  7,108,197   6,831,913
       Ground property and equipment       823,835     800,718
       Deposits on flight equipment
        purchase contracts                 286,969     335,164
                                         8,219,001   7,967,795
       Less allowance for depreciation   2,232,500   2,148,070
                                         5,986,501   5,819,725
     Other assets                           34,938      18,311
                                        $7,065,853  $6,669,572
 
     LIABILITIES & STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                   $316,112    $312,716
       Accrued liabilities                 537,755     499,874
       Air traffic liability               504,846     377,061
       Income taxes                         19,572         ---
       Current maturities of long-term
        debt                               110,136     108,752
           Total current liabilities     1,488,421   1,298,403
 
     Long-term debt less current
      maturities                           754,686     760,992
     Deferred income taxes                 891,186     852,865
     Deferred gains from sale and
      leaseback of aircraft                203,728     207,522
     Other deferred liabilities             85,726      98,470
     Stockholders' equity:
       Common stock                        761,826     507,897
       Capital in excess of par value          ---     103,780
       Retained earnings                 2,858,932   2,902,007
       Accumulated other comprehensive
        income                              35,795         ---
       Treasury stock, at cost             (14,447)    (62,364)
            Total stockholders' equity   3,642,106   3,451,320
                                        $7,065,853  $6,669,572
 
 

SOURCE Southwest Airlines
    DALLAS, April 19 /PRNewswire/ -- Southwest Airlines' (NYSE:   LUV) net
 income for first quarter 2001 was $121.0 million, compared to first quarter
 2000 net income (before the cumulative effect of an airline industry change in
 accounting principle) of $95.6 million, an increase of 26.6 percent.  After
 giving effect to the three-for-two stock split distributed February 15, 2001,
 diluted net income per share was $.15 for first quarter 2001, compared to
 $.12 (before the change in accounting principle) in first quarter 2000.  All
 share and per share amounts included in the Condensed Consolidated Statement
 of Income have been retroactively restated to give effect to the stock split.
     Total operating revenues for first quarter 2001 increased 15.0 percent to
 $1.43 billion, compared to $1.24 billion for first quarter 2000.  Revenue
 passenger miles (RPMs) increased 12.8 percent in first quarter 2001, compared
 to a 12.0 percent increase in available seat miles (ASMs), resulting in a load
 factor of 67.3 percent versus the first quarter 2000 load factor of
 66.8 percent.  The passenger revenue yield per RPM increased 2.0 percent to
 $.1295 from $.1269 in first quarter 2000.  Operating revenue yield per ASM
 increased 2.6 percent to $.0901 from $.0878 in first quarter 2000.
     Operating expenses per ASM for first quarter 2001 were essentially flat at
 $.0769, compared to $.0768 for first quarter 2000.  Excluding fuel, operating
 expenses per ASM for first quarter 2001 were $.0636, an increase of
 1.1 percent.
     "Other losses" were $11.7 million in first quarter 2001 versus first
 quarter 2000 "other gains" of $4.1 million.  The "other losses" of
 $11.7 million consisted primarily of charges made in accordance with Statement
 of Financial Accounting Standard No. 133, Accounting for Derivative
 Instruments and Hedging Activities (SFAS 133), which the Company adopted on
 January 1, 2001.  SFAS 133 changed how financial derivative instruments, such
 as the Company's fuel hedge contracts, are accounted for in financial
 statements.  As a result of adopting SFAS 133, the Company recorded charges
 for changes in the time value of fuel hedge derivatives and ineffectiveness
 from hedging activities, as defined.  "Other gains" for first quarter 2000 of
 $4.1 million primarily resulted from the favorable conclusion of a lawsuit.
     Herbert D. Kelleher, Chairman, President, and Chief Executive Officer,
 stated:  "We are pleased with our first quarter earnings results, particularly
 in light of the slowing domestic economy and the overall dampening of air
 travel demand.  While Southwest is not completely immune to an economic
 downturn, we are uniquely positioned to do comparatively well as a result of
 our low-fare philosophy and low cost structure.
     "Although February and March load factors were down slightly from the
 historically high levels of a year ago, demand for our low fares by
 increasingly cost conscious air travelers remained quite strong.  Our
 passenger revenue yield per RPM increased 2.0 percent (January 2000 was
 weakened, somewhat, due to Y2K apprehensions).
     "Our overall unit costs were essentially flat with last year.  We
 continued to benefit from a successful fuel hedging program, which resulted in
 a 4.2 percent decline in fuel cost per gallon.  We recognized $24.4 million of
 effective hedging gains in first quarter 2001 'fuel and oil expense' versus
 $3.2 million last year.  Excluding fuel, our unit costs increased modestly to
 $.0636, primarily due to higher unit labor costs.  Profitsharing expense rose
 29.9 percent to $34.8 million for first quarter 2001.
     "We initiated service to West Palm Beach, Florida on January 21, 2001 and
 are pleased with the positive response from our Customers.
     "Although the economy may continue to decelerate, at this juncture, we
 expect to be solidly profitable in the second quarter.  Based on current
 traffic and booking trends thus far in April, and considering an estimated
 increase in available seat miles of 11.6 percent for the second quarter, we
 expect monthly load factors to continue to trend lower versus year-ago levels.
 RPM yields are also softening, compared to first quarter 2001 trends.
     "We are 80 percent hedged for the remainder of 2001 at crude oil prices
 averaging $22 per barrel.  Based on current market prices and hedging
 effectiveness, we estimate our second quarter 2001 jet fuel price per gallon
 to be lower than our second quarter 2000 average cost per gallon of $.78.
 Excluding fuel, we expect a modest year-over-year unit cost increase in second
 quarter 2001, similar to first quarter 2001.
     "We ended first quarter 2001 with $684.7 million in cash on hand, not
 including our available and unused bank credit facility of $475.0 million.
     "It is in difficult times that our Employees' ongoing accomplishments and
 efforts become especially visible.  While overall industry earnings were down
 in first quarter 2001, Southwest produced a very solid earnings performance.
 These results were possible because our wonderful People are devoted to
 maintaining our competitive cost advantage, which enables us to keep our fares
 low, our Profitsharing high, and our jobs secure.  It is because of our
 People's caring dedication and unwavering Southwest Spirit that FORTUNE
 magazine once again listed Southwest as one of the most admired companies in
 America.  Southwest was also recognized in Business Ethics magazine's listing
 of 100 Best Corporate Citizens."
     Southwest Airlines will conduct a conference call to discuss its quarterly
 earnings today at 11:30 a.m. Eastern Time.  A live broadcast of the conference
 call will be available via the World Wide Web at www.southwest.com.
 
     The outlook commentary of this news release contains forward-looking
 statements as defined in the Private Securities Litigation Reform Act of 1995.
 All forward-looking statements involve risks and uncertainties that could
 cause actual results to differ materially from the plans, intentions, and
 expectations reflected in or suggested by the forward-looking statements.
 Some of the factors that could significantly impact revenues, unit revenues,
 unit costs, earnings per share, and capacity include, but are not limited to:
 the airline pricing environment, industry capacity decisions, competitors'
 route decisions, the success of the Company's cost control efforts, the cost
 of crude oil, heating oil, and jet fuel; the success of fuel hedging
 strategies; the results of union contract negotiations and their impact on
 labor costs; operational disruptions as a result of bad weather, industry
 consolidation, air traffic control-related difficulties, and the impact of
 labor issues; the growth of e-commerce ticket sales; the implementation of
 Customer Service improvement strategies; actions of the U.S. and local
 governments; the stability of the U.S. economy; inflation; the economic
 environment of the airline industry and the economic environment in general.
 The Company undertakes no obligation to publicly update or revise any
 forward-looking statements to reflect events or circumstances that may arise
 after the date of this press release.  Additional information regarding these
 and other factors may be contained in the Company's SEC filings, including
 without limitation, the Company's Annual Report on Form 10-K for the year
 ended 2000.
 
 
      SOUTHWEST AIRLINES CO.
      CONDENSED CONSOLIDATED STATEMENT OF INCOME
      (in thousands except per share amounts)
      (unaudited)
 
                                                     Three months ended
                                                          March 31,
                                                                        Percent
                                                2001          2000       Change
 
     OPERATING REVENUES:
       Passenger                             $1,381,276    $1,199,885     15.1
       Freight                                   25,781        27,066     (4.7)
       Other                                     21,560        15,696     37.4
         Total operating revenues             1,428,617     1,242,647     15.0
 
     OPERATING EXPENSES:
       Salaries, wages, and benefits            447,431       381,489     17.3
       Fuel and oil                             209,584       197,071      6.3
       Maintenance materials and repairs         98,524        93,565      5.3
       Agency commissions                        30,494        37,216    (18.1)
       Aircraft rentals                          48,045        49,347     (2.6)
       Landing fees and other rentals            70,018        65,019      7.7
       Depreciation                              77,692        66,698     16.5
       Other operating expenses                 236,672       196,834     20.2
         Total operating expenses             1,218,460     1,087,239     12.1
 
     OPERATING INCOME                           210,157       155,408     35.2
 
     OTHER EXPENSES (INCOME):
       Interest expense                          17,012        17,223     (1.2)
       Capitalized interest                      (6,199)       (7,001)   (11.5)
       Interest income                           (8,882)       (6,649)    33.6
       Other (gains) losses, net                 11,724        (4,138)    n.a.
         Total other expenses (income)           13,655          (565)    n.a.
 
 
     INCOME BEFORE INCOME TAXES AND
      CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                      196,502       155,973     26.0
     PROVISION FOR INCOME TAXES                  75,457        60,330     25.1
 
 
     NET INCOME BEFORE CUMULATIVE EFFECT
      OF CHANGE IN ACCOUNTING PRINCIPLE         121,045        95,643     26.6
     CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE (Net of Income
      Taxes of approx. $14.0 million)               ---       (22,131)     n.a.
     NET INCOME                                $121,045       $73,512     64.7
 
 
     NET INCOME PER SHARE, BASIC BEFORE
      CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                         $.16          $.13
     CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                          ---          (.03)
     NET INCOME PER SHARE, BASIC                   $.16          $.10
 
     NET INCOME PER SHARE, DILUTED BEFORE
      CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                         $.15          $.12
     CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                          ---          (.03)
     NET INCOME PER SHARE, DILUTED                 $.15          $.09
 
     WEIGHTED AVERAGE SHARES OUTSTANDING:
         Basic                                  760,225       745,736
         Diluted                                807,744       789,534
 
 
      SOUTHWEST AIRLINES CO.
      COMPARATIVE CONSOLIDATED OPERATING STATISTICS
      (unaudited)
 
                                                      Three months ended
                                                          March 31,
 
                                               2001         2000     Change
 
     Revenue passengers carried             15,716,020   14,389,276    9.2 %
     Revenue passenger miles (RPMs) (000s)  10,662,391    9,453,201   12.8 %
     Available seat miles (ASMs) (000s)     15,852,999   14,153,959   12.0 %
     Load factor                                 67.3%        66.8%    0.5 pts.
     Average length of passenger haul              678          657    3.2 %
     Trips flown                               231,793      218,615    6.0 %
     Average passenger fare                     $87.89       $83.39    5.4 %
     Passenger revenue yield per RPM             12.95c       12.69c   2.0 %
     Operating revenue yield per ASM              9.01c        8.78c   2.6 %
     Operating expenses per ASM                   7.69c        7.68c   0.1 %
     Operating expenses per ASM, excluding
      fuel                                        6.36c        6.29c   1.1 %
     Fuel costs per gallon, excluding fuel
      tax                                        78.53c       81.98c  (4.2)%
     Number of Employees at period-end          29,563       27,911    5.9 %
     Size of fleet at period-end                   352          315   11.7 %
 
 
      SOUTHWEST AIRLINES CO.
      CONDENSED CONSOLIDATED BALANCE SHEETS
      (in thousands except per share amounts)
      (unaudited)
 
                                          March 31,  December 31,
                                             2001        2000
 
     ASSETS
     Current assets:
       Cash and cash equivalents          $684,678    $522,995
       Accounts receivable                 144,467     138,070
       Inventories of parts and
        supplies, at cost                   78,817      80,564
       Deferred income taxes                28,132      28,005
       Fuel hedge contracts                 63,773      22,515
       Prepaid expenses and other
        current assets                      44,547      39,387
           Total current assets          1,044,414     831,536
 
     Property and equipment, at cost:
       Flight equipment                  7,108,197   6,831,913
       Ground property and equipment       823,835     800,718
       Deposits on flight equipment
        purchase contracts                 286,969     335,164
                                         8,219,001   7,967,795
       Less allowance for depreciation   2,232,500   2,148,070
                                         5,986,501   5,819,725
     Other assets                           34,938      18,311
                                        $7,065,853  $6,669,572
 
     LIABILITIES & STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable                   $316,112    $312,716
       Accrued liabilities                 537,755     499,874
       Air traffic liability               504,846     377,061
       Income taxes                         19,572         ---
       Current maturities of long-term
        debt                               110,136     108,752
           Total current liabilities     1,488,421   1,298,403
 
     Long-term debt less current
      maturities                           754,686     760,992
     Deferred income taxes                 891,186     852,865
     Deferred gains from sale and
      leaseback of aircraft                203,728     207,522
     Other deferred liabilities             85,726      98,470
     Stockholders' equity:
       Common stock                        761,826     507,897
       Capital in excess of par value          ---     103,780
       Retained earnings                 2,858,932   2,902,007
       Accumulated other comprehensive
        income                              35,795         ---
       Treasury stock, at cost             (14,447)    (62,364)
            Total stockholders' equity   3,642,106   3,451,320
                                        $7,065,853  $6,669,572
 
 SOURCE  Southwest Airlines