Southwest Airlines (LUV) 10-K risk factor changes: FY2018 vs FY2017

Although the U.S. economy has experienced modest [removed: economic] growth over the course of the past several years, any continuing or future U.S. or global economic uncertainty could negatively affect the Company's results of operations and could cause the Company to adjust its business strategies.

Airlines are inherently dependent upon energy to operate, and jet fuel and oil represented approximately [removed: 22] [added: 25] percent of the Company's operating expenses for [removed: 2017.][added: 2018.]

[removed: Although 2017 fuel prices were moderately higher than 2016 fuel prices, as] [added: As] discussed above under "Business - Cost Structure," the cost of fuel can be extremely volatile and unpredictable, and even a small change in market fuel prices can significantly affect profitability.

The Company's ability to effectively address fuel price increases could be limited by factors such as its historical low-fare reputation, the portion of its Customer base that purchases travel for leisure purposes, the competitive nature of [added: the airline industry generally, and the risk that higher fares will drive a decrease in demand.]

Because the Company uses a variety of different derivative instruments at different price points, the Company is subject to the risk that the fuel derivatives it uses will not provide adequate protection against significant increases in fuel prices and [added: in some cases] could in fact result in hedging losses, and the Company effectively paying higher than market prices for fuel, thus creating additional volatility in the Company's earnings.

In addition, the Company is subject to the risk that its fuel derivatives will [removed: not be effective or that they will] no longer qualify for hedge accounting under applicable accounting standards, which can create additional earnings volatility.

Also, see Note 2 to the Consolidated Financial Statements for information on [removed: future] changes in applicable standards for hedge accounting.

The Company's low-cost position has become even more significant with the increased presence of ULCCs and changes to the [removed: legacy] fare offerings [added: of other carriers, as] discussed above; however, it has become increasingly difficult for the Company to improve upon its industry cost position.

Jet fuel and oil constituted approximately [removed: 22] [added: 25] percent of the Company's operating expenses during [removed: 2017,] [added: 2018,] and the Company's ability to control the cost of fuel is subject to the external factors discussed in the second Risk Factor above.

Salaries, wages, and benefits constituted approximately 41 percent of the Company's operating expenses during [removed: 2017.][added: 2018.]

As discussed further under "Management’s Discussion and Analysis of Financial Condition and Results of Operations," the Company's unionized workforce, which makes up approximately 83 percent of its Employees, has had pay scale increases as a result of contractual rate [removed: increases.][added: increases, which has put pressure on the Company's labor costs.]

[removed: Furthermore,] [added: Additionally,] as indicated above under "Business - Employees," [removed: other Southwest] [added: the majority of Southwest's] unionized [removed: Employees,] [added: Employee work groups,] including its [removed: Mechanics] [added: Flight Attendants; Customer Service Agents, Customer Representatives,] and [added: Source of Support Representatives;] Material [removed: Specialists,] [added: Specialists; Mechanics; Dispatchers; Flight Simulator Technicians; and Meteorologists,] are in unions currently in negotiations for labor [removed: agreements,] [added: agreements or have labor agreements that become amendable in 2019,] which could result in additional pressure on the Company's low-cost structure.

Additionally, the Company cannot control decisions by other [removed: airlines to reduce their capacity.]

When this occurs, [added: certain fixed] airport costs are allocated among a fewer number of total flights, [added: which can result in increased landing fees and other costs for the Company.]

Any aircraft accident or other incident, even if fully insured, could also have a material adverse effect on the public's perception of the [removed: Company.][added: Company, which could harm its reputation and business.]

In the ordinary course of business, the Company's systems will continue to require modification and refinements to address growth and changing business [removed: requirements, including requirements related to international operations.][added: requirements.]

The Company has experienced system interruptions and delays that make its websites and [removed: services] [added: operational systems] unavailable or slow to respond, which can prevent the Company from efficiently processing Customer transactions or providing services, and these could [removed: continue to] occur [added: again] in the future.

The Company's computer and communications systems and [removed: operations] [added: functions] could be damaged or interrupted by catastrophic events such as fires, floods, earthquakes, tornadoes and hurricanes, power loss, computer and telecommunications failures, acts of war or terrorism, computer viruses, security breaches, and similar events or disruptions.

[removed: Any of these] events could cause system interruptions, delays, and loss of critical data, and could prevent the Company from processing Customer transactions or providing services, which could make the Company's business and services less attractive and subject the Company to liability.

Salaries, wages, and benefits represented approximately 41 percent of the Company's operating expenses for the year ended December 31, [removed: 2017.][added: 2018.]

In addition, as of December 31, [removed: 2017,] [added: 2018,] approximately 83 percent of the Company's Employees were represented for collective bargaining purposes by labor unions, making the Company particularly exposed in the event of labor-related job actions.

Employment-related issues that [removed: have,] [added: have impacted,] and continue [removed: to, impact] [added: to impact,] the Company's results of operations, some of which are negotiated items, include hiring/retention rates, pay rates, [removed: outsourcing costs,] [added: outsourcing,] work rules, health care costs, and retirement benefits.

The Company is currently dependent on single aircraft and engine suppliers, as well as single suppliers of certain other parts; therefore, the Company would be materially adversely affected [added: (i)] if it were unable to obtain [removed: additional] [added: timely or sufficient delivery of aircraft or other] equipment [added: from Boeing] or [added: other suppliers or adequate maintenance or other] support from any of these suppliers, [added: (ii)] in the event of a mechanical or regulatory issue associated with [removed: their] [added: the Company's aircraft or] equipment, or [added: (iii)] in the event the pricing and operational attributes of the Company's [added: aircraft or] equipment become less competitive.

The Company is dependent on Boeing as its sole supplier for aircraft and many of its aircraft parts and is dependent on other suppliers for certain other aircraft [removed: parts.][added: parts or other services.]

Therefore, if the Company [removed: was] [added: were] unable to acquire additional aircraft from Boeing, or if Boeing [removed: was] [added: were] unable or unwilling to make timely [added: or adequate] deliveries of aircraft or to provide adequate support for its products, the Company's operations would be materially adversely affected.

The Company is also dependent on sole [added: or limited] suppliers for aircraft engines and certain other aircraft parts and [removed: would therefore] [added: services and would, therefore,] also be materially adversely affected in the event of the unavailability of, [added: inadequate support for,] or a mechanical or regulatory issue associated with, engines and other parts.

[removed: Any] [added: Developing and expanding data security and privacy requirements could increase the Company's operating costs, and any] failure of the Company to maintain the security of certain [removed: Customer-related] [added: Customer, Employee, and business-related] information could result in damage to the Company's reputation and could be costly to remediate.

This information is subject to the [added: continually evolving] risk of intrusion, tampering, and theft.

Although the Company maintains systems to [added: prevent or] defend against [removed: this from occurring,] these [added: risks, these] systems require ongoing monitoring and updating as technologies change, and security could be compromised, [added: personal or] confidential information could be misappropriated, or system disruptions could occur.

The Company's results of operations could be adversely impacted if it is unable to [removed: grow or to] effectively execute its strategic plans.

[removed: As a result, the] [added: The] Company is reliant on the success of its revenue strategies [added: and other strategic plans and initiatives] to help offset certain increasing costs.

The timely and effective execution of the Company's strategic plans could be negatively affected by (i) the Company's ability to timely and effectively implement, transition, and maintain related information technology systems and infrastructure; (ii) the Company's ability to effectively balance its investment of incremental operating expenses and capital expenditures related to its strategies against the need to effectively control costs; and (iii) the Company's dependence on third parties with respect to [added: the execution of] its strategic plans.

The airline industry has faced on-going security concerns and related cost burdens; further threatened or actual terrorist attacks, or other hostilities, [added: even if not made directly on the airline industry,] could significantly harm the airline industry and the Company's operations.

Additional terrorist attacks or other hostilities, even if not made directly on the airline industry, or the fear of such attacks or other hostilities (including elevated national threat [added: warnings, government travel] warnings [added: to certain destinations, travel restrictions,] or selective cancellation or redirection of flights due to terror threats) would likely have a further significant negative impact on the Company and the airline industry.

Similarly, the federal government singularly controls all U.S. airspace, and airlines are [removed: completely] dependent on the FAA operating that airspace in a safe and efficient manner.

[removed: Because] [added: Further, because] expenses of a flight do not vary significantly with the number of passengers carried, a relatively small change in the number of passengers can have a disproportionate effect on an airline’s operating and financial results.

Therefore, any general reduction in airline passenger traffic [removed: as a result of any of the factors listed above] could adversely affect the Company's results of operations.

| • | adverse weather and natural disasters such as the [removed: hurricanes and earthquakes] [added: weather-related disruptions] in third quarter [removed: 2017,] [added: 2018,] which resulted in approximately [removed: $100 million in reduced revenues for the Company as a result of approximately 5,000] [added: 2,200] canceled flights; |

| • | changes in consumer preferences, perceptions, spending patterns, or demographic trends (including, without limitation, changes in [removed: government] travel patterns due to government shutdowns or sequestration); |

| • | actual or potential disruptions in the air traffic control system (including, [removed: without limitation,] [added: for example,] as a result of [removed: potential] [added: inadequate] FAA [removed: budget cuts] [added: staffing levels] due to government shutdowns or sequestration); |

airlines to reduce their capacity.

With respect to any insurance claims, policy coverages and claims are subject to acceptance by the many insurers involved and may require arbitration and/or mediation to effectively settle the claims over prolonged periods of time.

Any of these

In addition, in response to these types of threats, there has been heightened legislative and regulatory focus on data privacy and security in the United States and elsewhere.

As a result, the Company must address a growing and fast-evolving set of legal requirements in this area.

This regulatory environment is increasingly challenging and may present material obligations and risks to the Company's business, including significantly expanded compliance burdens, costs, and enforcement risks.

The Company has a dedicated cyber–security team and program that focuses on current and emerging data security and data privacy matters.

The Company continues to assess and invest in the growing needs of the cyber–security team through the allocation of skilled personnel, ongoing training, and support of the adoption and implementation of technologies coupled with cyber–security risk management frameworks.

The Company carries a cyber-security insurance policy with regards to data protection and business interruption associated with both security breaches from malicious parties and from certain system failures.

However, available cyber-security insurance with regards to data protection and business interruption could be more expensive in the future and/or have material differences in coverage than insurance that has historically been provided and may not be adequate to protect the Company's risk of loss.

| • | actual or perceived delays at various airports resulting from government shutdowns (including, for example, longer wait-times at TSA checkpoints due to inadequate TSA staffing levels); |

| • | delays in deliveries of new aircraft (including, without limitation, due to the closure of the FAA's aircraft registry during government shutdowns); |

| | |

| --- | --- |

The Company's

Due to the government shutdown in late 2018 and early 2019, the Company's ETOPS application process was delayed subject to the government reopening and the FAA's related ability to resume normal certification activities.

Further, as discussed above under "Business - Competition," the longer stage length of the Company's expected Hawaiian routes, as compared with the Company's average stage length of its other routes, could put pressure on the Company's revenues per available seat mile.

The Company’s reputation and brand could be harmed if it were to experience significant negative publicity, including through social media.

The Company operates in a public-facing industry with significant exposure to social media.

Negative publicity, whether or not justified, can spread rapidly through social media.

To the extent that the Company is unable to respond timely and appropriately to negative publicity, the Company’s reputation and brand can be harmed.

Damage to the Company’s overall reputation and brand could have a negative impact on its financial results.

the airline industry generally, and the risk that higher fares will drive a decrease in demand.

Additionally, the majority of Southwest's unionized Employees, including its Pilots; Flight Attendants; Ramp, Operations, Provisioning, and Freight Agents; Aircraft Appearance Technicians; and Flight Crew Training Instructors, ratified new collective-bargaining agreements during 2016, which have put pressure on the Company's low-cost structure.

which can result in increased landing fees and other costs for the Company.

Southwest has historically been regarded as a growth airline.

However, organic growth remains challenging because (i) the opportunities for domestic expansion are limited; (ii) the Company's international network is relatively small

and international expansion presents unique challenges; and (iii) the Company has faced an increased presence of other low-cost, low-fare carriers.

In addition, in instances where the airline industry shrinks, many airport operating costs are essentially unchanged and must be shared by the remaining operating carriers, which can therefore increase the Company's costs.

| • | air traffic congestion and other air traffic control issues; |

With the expansion of the Company's international flight offerings, the U.S. Customs and Border Protection ("CBP") has become an increasingly important federal agency.

The Company's expansion of its operations into non-U.S. jurisdictions also expands the scope of the laws to which the Company is subject, both domestically and internationally.

For the [removed: 45th] [added: 46th] consecutive year, the Company was profitable, recording GAAP and non-GAAP results for [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] as noted in the following tables.

| (in millions, except per share amounts) | | [removed: December 31,] [added: 2018] | | | | [added: 2017] | | | | [added: Percent Change] |

| [removed: GAAP] | [removed: |] 2017 | | | | 2016 | | | | [added: Per ASM | | | |] Percent [removed: Change] | [added: |]

| Net income per share, diluted | | $ | [removed: 5.79] [added: 4.29] | | | $ | [removed: 3.55] [added: 5.57] | | | [removed: 63.1] [added: (23.0)] |

| Net income per share, diluted | | $ | [removed: 3.50] [added: 4.24] | | | $ | [removed: 3.75] [added: 3.51] | | | [removed: (6.7)] [added: 20.8] |

[removed: Net] [added: Operating] income for the year ended December 31, [removed: 2017,] [added: 2018,] was [removed: $3.5] [added: $3.2] billion, a [removed: 55.4] [added: decrease of 5.9] percent [removed: increase] year-over-year, [removed: or $5.79 per diluted share,] and non-GAAP [removed: Net] [added: Operating] income was [removed: $2.1 billion, an 11.1 percent decrease year-over-year, or $3.50 per diluted share.][added: also $3.2 billion.]

The increase in [removed: GAAP Net income] [added: rate] was [removed: primarily] driven by a [removed: $1.4] [added: prior year $1.3] billion reduction in Provision for income taxes related to the Tax Cuts and Jobs Act legislation enacted in December 2017, which resulted in a re-measurement of the Company's deferred tax assets and liabilities at the new federal corporate tax rate of 21 percent.

[removed: Operating] [added: Net] income for the year ended December 31, [removed: 2017] [added: 2018,] was [removed: $3.52] [added: $2.47] billion, a [removed: decrease of 6.5] [added: 26.6] percent [added: decrease] year-over-year, [removed: and non-GAAP Operating] [added: as compared to the 2017 record Net] income [removed: was $3.46] [added: of $3.36] billion.

[removed: Prior year results included $356 million of contract ratification bonuses accrued in] Salaries, wages, and benefits expense [added: in 2016 included $356 million of accrued ratification bonuses,] associated with [removed: tentative] collective-bargaining agreements reached with multiple unionized workgroups.

For the twelve months ended December 31, [removed: 2017,] [added: 2018,] the Company's earnings performance, combined with its actions to manage invested capital, produced a [removed: 25.9] [added: 23.6] percent pre-tax non-GAAP return on invested capital ("ROIC"), [added: or 18.4 percent on an after-tax basis,] compared with the Company's [added: pre-tax] ROIC of [removed: 30.0] [added: 27.6 percent, or 17.6] percent [added: on an after-tax basis,] for the twelve months ended December 31, [removed: 2016.][added: 2017.]

The [removed: primary] cause of the year-over-year decline in [added: pre-tax] ROIC was the decrease in Operating income for the twelve months ended December 31, [removed: 2017,] [added: 2018,] compared with the twelve months ended December 31, [removed: 2016.][added: 2017, as well as the increase in Equity, driven by the impacts of Tax Reform.]

During [removed: 2017,] [added: 2018,] the Company continued to return value to its Shareholders.

The Company returned [removed: $1.9] [added: $2.3] billion to Shareholders through [removed: $274] [added: $332] million in dividend payments and [removed: $1.6] [added: $2.0] billion through four separate accelerated share repurchase [removed: programs and other open market repurchases.][added: programs.]

During [removed: November 2017,] [added: October 2018,] the Company launched the Fourth Quarter [removed: 2017] [added: 2018] ASR Program by advancing [removed: $250] [added: $500] million to a financial institution in a privately negotiated transaction.

[removed: The Company received 4.1] million shares in total under the Fourth Quarter [removed: 2017] [added: 2018] ASR Program, which was completed in [removed: January] [added: December] 2018.

The [removed: purchase was] [added: Company entered into the following accelerated share repurchases during 2018, which were each] recorded as a treasury share purchase for purposes of calculating earnings per share.

On January [removed: 31, 2018,] [added: 28, 2019,] the Company launched a new accelerated share repurchase program by advancing $500 million to a financial institution in a privately negotiated transaction ("First Quarter [removed: 2018] [added: 2019] ASR Program").

The specific number of shares that the Company ultimately will repurchase under the First Quarter [removed: 2018] [added: 2019] ASR Program will be determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period to be completed no later than [removed: May 2018.][added: April 2019.]

Subsequent to the launch of the First Quarter [removed: 2018] [added: 2019] ASR Program, the Company has $850 million remaining under its May [removed: 2017] [added: 2018] $2.0 billion share repurchase authorization.

[removed: With the addition of these new markets, the] [added: The] Company now serves [removed: 100] [added: 99] destinations across 40 states and ten near-international countries, and operates over 4,000 departures a day.

Additionally, the Company [added: has] announced plans to begin [removed: selling tickets in 2018 for] service to Hawaii, subject to requisite governmental approvals, including approval from the [removed: FAA] [added: Federal Aviation Administration (the "FAA")] for Extended Operations ("ETOPS"), a regulatory requirement to operate between the U.S. mainland and the Hawaiian Islands.

During [removed: 2017,] [added: 2018,] the Company took delivery of [removed: 39] [added: 26] new 737-800 aircraft [removed: from Boeing, 13] [added: and 18] new 737 MAX 8 aircraft from Boeing, [removed: and 18] [added: as well as 1] pre-owned Boeing 737-700 aircraft from [added: a] third [removed: parties.][added: party.]

[removed: The Company] [added: | 4. | An Aircraft grounding charge] recorded [added: in third quarter 2017, as] a [removed: charge] [added: result] of [removed: $63 million related to] the [removed: leased portion] [added: Company grounding its remaining Boeing 737-300 aircraft on September 29, 2017. The loss was a result] of the [removed: Classic fleet, representing the] remaining net lease payments due and certain lease return requirements that could have to be performed on these leased aircraft prior to their return to the [removed: lessors,] [added: lessors] as of the cease-use date. [added: The Company had not budgeted for the lease return requirements, as they were subject to negotiation with third party lessors; |]

For [removed: 2018,] [added: 2019,] the Company's current firm aircraft commitments [added: and forecasted Boeing 737-700 retirements] would result in [removed: 750] [added: approximately 775] aircraft by year-end [removed: 2018.][added: 2019.]

[removed: Currently,] [added: As of December 31, 2018,] the Company [removed: has] [added: had] firm orders in place [added: with Boeing] for [removed: 197] [added: 219] 737 MAX 8 aircraft and 30 737 MAX 7 aircraft.

The Company currently plans to grow its [removed: 2018] [added: 2019] available seat miles [removed: in the low] [added: no more than] five [removed: percent range,] [added: percent,] year-over-year, with first [removed: half 2018 year-over-year growth in the low three percent range and second half 2018] [added: quarter 2019] year-over-year growth in the [removed: low seven] [added: 3.5 to 4] percent range.

The Company continues to expect the retirement of its [removed: Classic aircraft] [added: Boeing 737-300 ("Classic") aircraft, the last of which took place at the end of third quarter 2017,] to produce significant incremental cost savings and improvements in pre-tax results of at least $200 million, cumulatively, by the end of 2020.

[removed: The Company continues to expect] [added: As expected,] the new reservation system [removed: to produce] [added: produced] incremental benefits in pretax results of approximately $200 million in [removed: 2018.][added: 2018 through the deployment of certain revenue management tools and techniques.]

Passenger revenues for 2017 increased by [removed: $547] [added: $695] million, or [removed: 2.9] [added: 3.6] percent, compared with 2016.

[removed: Holding Load factor and Passenger yield constant, the] [added: This] increase was [removed: primarily attributable to a 3.6 percent increase in capacity,] partially offset by approximately $100 million in reduced revenues as a result of the hurricanes and earthquakes during third quarter 2017.

Based on current trends, the Company currently expects Freight revenues in first quarter [removed: 2018] [added: 2019] to increase, compared with first quarter [removed: 2017.][added: 2018.]

Other [removed: revenues] [added: operating expenses] for 2017 increased by [removed: $197] [added: $144] million, or [removed: 11.9] [added: 5.3] percent, compared with 2016.

[removed: Approximately 70 percent of the increase was] [added: Other revenues for 2018 increased by $125 million, or 10.3 percent, compared with 2017, primarily] due to an increase in [removed: revenue] [added: revenues] associated with cardholder spend on the Company's co-branded Chase® Visa credit [removed: card, and the remainder of the increase was due to higher ancillary revenues primarily as a result of EarlyBird Check-In revenues of $358 million in 2017, an increase of $29 million, or 8.7 percent, compared with 2016.][added: card.]

The Company currently expects Other revenues in first quarter [removed: 2018] [added: 2019] to increase, compared with first quarter [removed: 2017.][added: 2018.]

Based on revenue and booking trends thus far in first quarter [removed: 2018,] [added: 2019, and assuming no further significant impact on bookings from] the [added: recent government shutdown, the] Company [removed: is] currently [removed: expecting] [added: estimates] first quarter [removed: 2018] [added: 2019] operating unit revenues to increase in the [removed: one] [added: four] to [removed: two] [added: five] percent range, compared with first quarter [removed: 2017.][added: 2018.]

Operating expenses for 2017 increased by [removed: $991] [added: $972] million, or [removed: 5.9] [added: 5.8] percent, compared with 2016, while capacity increased 3.6 percent over the same period.

| | Year ended December 31, | | | | | | | | [removed: Per ASM] | | | | [removed: Percent] | |

| (in cents, except for percentages) | [removed: 2017] | | | | [removed: 2016] [added: As Recast] | | | | change | | | | change | |

| Salaries, wages, and benefits | | [removed: 4.76] [added: 4.74] | ¢ | | | 4.57 | ¢ | | | [removed: 0.19] [added: 0.17] | ¢ | | [removed: 4.2] [added: 3.7] | % |

| Fuel and oil | [removed: 2.56] [added: 2.65] | | | | [removed: 2.46] [added: 2.56] | | | | [removed: 0.10] [added: 0.09] | | | | [removed: 4.1] [added: 3.5] | |

The fiscal years ended December 31, 2017 and 2016 reflect recast financial information related to the Company's January 1, 2018, adoption of the New Revenue Standard, the New Retirement Standard, and the New Hedging Standard, as detailed in Note 2 to the Consolidated Financial Statements.

| | | December 31, | | | | | | | | |

| GAAP | | | | | | As Recast | | | | |

| Operating income | | $ | 3,206 | | | $ | 3,407 | | | (5.9) |

| Net income | | $ | 2,465 | | | $ | 3,357 | | | (26.6) |

| Operating income | | $ | 3,167 | | | $ | 3,347 | | | (5.4) |

| Net income | | $ | 2,435 | | | $ | 2,116 | | | 15.1 |

Diluted earnings per share for 2018 was $4.29, as compared to the 2017 record diluted earnings per share of $5.57.

Non-GAAP Net income was a record of $2.44 billion, a 15.1 percent increase year-over-year.

Non-GAAP diluted earnings per share for 2018 was a record of $4.24.

The decrease in GAAP Net income was primarily driven by a prior year $1.3 billion adjustment to reduce the Company's Provision for income taxes related to the Tax Cuts and Jobs Act legislation enacted in December 2017 ("Tax Reform"), which resulted in a re-measurement of the Company's deferred tax assets and liabilities at the new federal corporate tax rate of 21 percent.

The decrease in Operating income was primarily driven by higher market jet fuel prices.

These factors were partially offset by a 3.5 percent increase in Passenger revenues driven by a 3.9 percent increase in capacity, as strong demand enabled the Company to fill the majority of the additional seats offered.

The increase in after-tax ROIC was primarily due to the reduction in the federal corporate tax rate in 2018.

The Company received 9.8

The Company has also announced its intent to begin service to four Hawaiian airports: Honolulu International Airport, Lihue Airport, Kona International Airport at Keahole, and Kahului Airport, from four initial gateway airports in California: Oakland Metropolitan Airport, San Diego International Airport, Mineta San Jose International Airport, and Sacramento International Airport.

The Company has further announced its decision to cease service at Benito Juárez Mexico City International Airport, with the last day of service scheduled on March 30, 2019.

2018 Compared with 2017

The increase was largely due to a 3.9 percent increase in capacity, as strong demand enabled the Company to fill the majority of the additional seats offered.

Passenger revenues for 2018 included an estimated $130 million negative impact to revenue due to temporarily lower passenger yields from an aggressive May 2018 fare sale for June through October 2018 travel, which was offered in conjunction with the Company’s broad marketing efforts following the Flight 1380 accident.

On April 17, 2018, Southwest Airlines Flight 1380 from New York-LaGuardia to Dallas Love Field suffered an uncontained failure of its port CFM56-7B engine, resulting in a Customer fatality.

On a unit basis, Passenger revenues decreased 0.4 percent, year-over-year, driven by a slight decrease in Load factor to 83.4 percent, partially offset by a 0.1 percent increase in Passenger revenue yield.

The increase in yield was largely due to the successful deployment of several revenue management enhancements enabled by the Company's new reservation system, an improved fare environment in second half 2018, and strong passenger demand for low fares.

Operating unit revenues for 2018 were flat compared with 2017.

| | 2018 | | | | 2017 | | | | Per ASM | | | | Percent | |

| Salaries, wages, and benefits | | 4.79 | ¢ | | | 4.74 | ¢ | | | 0.05 | ¢ | | 1.1 | % |

| Fuel and oil | 2.89 | | | | 2.65 | | | | 0.24 | | | | 9.1 | |

| Maintenance materials and repairs | 0.69 | | | | 0.65 | | | | 0.04 | | | | 6.2 | |

| Depreciation and amortization | 0.75 | | | | 0.79 | | | | (0.04 | | ) | | (5.1 | ) |

| Other operating expenses | 1.79 | | | | 1.86 | | | | (0.07 | | ) | | (3.8 | ) |

| Total | | 11.74 | ¢ | | | 11.53 | ¢ | | | 0.21 | ¢ | | 1.8 | % |

See Note

Regarding Use of Non-GAAP Financial Measures and the Reconciliation of Reported Amounts to Non-GAAP Financial Measures for additional detail regarding non-GAAP financial measures.

These increases more than offset the impact in 2017 of the $1,000 per Employee bonus awarded as a result of Tax Reform, which totaled $70 million in the 2017 results.

The following table sets

| Southwest Flight Attendants | 15,200 | Transportation Workers of America, AFL-CIO, Local 556 ("TWU 556") | November 2018 |

| Southwest Customer Service Agents, Customer Representatives, and Source of Support Representatives | 7,400 | International Association of Machinists and Aerospace Workers, AFL-CIO ("IAM 142") | December 2018 |

| Southwest Flight Simulator Technicians | 50 | International Brotherhood of Teamsters ("IBT") | May 2019. The Company reached a tentative agreement with IBT in February 2019. If ratified by the Company's Flight Simulator Technicians, the contract will become amendable in 2024. |

On both a dollar and per ASM basis, the increases were attributable to higher market jet fuel prices, partially offset by the recognition of $168 million in net hedging gains in 2018 versus the recognition of $416 million in net hedging losses in 2017.

However, these cash settlement totals exclude the impact from derivatives that did not qualify for hedge accounting for both periods, and gains and/or losses recognized from hedge ineffectiveness in 2017.

| Operating income | | $ | 3,515 | | | $ | 3,760 | | | (6.5) |

| Net income | | $ | 3,488 | | | $ | 2,244 | | | 55.4 |

| Operating income | | $ | 3,455 | | | $ | 3,957 | | | (12.7) |

| Net income | | $ | 2,107 | | | $ | 2,370 | | | (11.1) |

The decrease in Operating Income was driven by a 7.7 percent increase in Salaries, wages, and benefits expense, primarily due to wage rate increases resulting from amended collective-bargaining agreements reached with multiple unionized workgroups, coupled with an 8.0 percent increase in Fuel and oil expense, primarily due to increases in market prices.

These factors were partially offset by a 2.9 percent increase in Passenger revenues driven by strong demand for low-fare air travel and a 3.6 percent year-over-year capacity growth, holding Load factor and Passenger yield constant.

During 2017, the Company began scheduled service to new international destinations of Grand Cayman Island and Providenciales, Turks & Caicos, as well as new domestic service to Cincinnati/Northern Kentucky International airport.

The Company also retired its remaining 87 Boeing 737-300 ("Classic") aircraft, which included 61 Classic aircraft grounded in September 2017 as part of an accelerated retirement schedule.

See Part I, Item 2 for further information.

The new reservation system, which represented the largest technology project in the Company's history, was designed to improve flight scheduling and inventory management, enable operational enhancements to manage flight disruptions, such as those caused by extreme weather conditions, enable revenue enhancements, further schedule optimization, support additional international growth, and enable other foundational and operational capabilities.

During November 2017, the Company's Facilities Maintenance Technicians, represented by Aircraft Mechanics Fraternal Association ("AMFA"), ratified a tentative collective-bargaining agreement with the Company.

The newly ratified contract becomes amendable in November 2022.

On a unit basis, Passenger revenues decreased 0.6 percent, year-over-year, largely driven by a 0.5 percent decrease in Passenger revenue yield due to the industry's competitive domestic fare environment.

The Company currently expects EarlyBird Check-in revenues to have a similar year-over-year growth rate in 2018, as compared with 2017.

Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers, is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017.

Therefore, the Company will adopt the standard as of January 1, 2018, utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented.

As such, in the Company's first quarter 2018 Form 10–Q, both first quarter 2018 results and first quarter 2017 results will be presented under the new standard.

On the Consolidated Statement of Income, the estimated impact of this ASU for full year 2017 and 2016 will be a decrease to Operating revenues of approximately $25 million and $135 million, respectively, and a decrease to Operating expenses of approximately $40 million in each year.

The ASU will also result in the reclassification of certain ancillary revenues from Other revenues to Passenger revenues for each period.

| Aircraft rentals | 0.13 | | | | 0.15 | | | | (0.02 | | ) | | (13.3 | ) |

| Other operating expenses | 1.75 | | | | 1.70 | | | | 0.05 | | | | 2.9 | |

| Total | | 11.48 | ¢ | | | 11.22 | ¢ | | | 0.26 | ¢ | | 2.3 | % |

The year-over-year projections do not reflect the potential impact of Fuel and oil expense, special items, and profitsharing expense in both years because the Company cannot reliably predict or estimate those items or expenses or their impact to its financial statements in future periods, especially considering the significant volatility of the Fuel and oil expense line item.

Accordingly, the Company believes a reconciliation of non-GAAP financial measures to the equivalent GAAP financial measures for projected results is not meaningful or available without unreasonable effort.

The year-over-year projection does not reflect the potential impact of profitsharing expense in both years because the Company cannot reliably predict or estimate that expense or its impact to the Company's financial statements in future periods.

See the above discussion in Company Overview regarding an agreement reached during the year.

| 2018 | 78% | | | | |

| Beyond 2020 (b) | 11% | | | | |

The Company believes its coverage related to first quarter 2018 is best reflected within the jet fuel forecast price sensitivity table provided below.

(b) The Company's coverage for 2021 was approximately 11 percent of estimated fuel consumption.

The coverage beyond 2021 was not significant.

| Beyond 2020 | | 19 | | | | — | | |

| Total | | $ | 248 | | | $ | 2 | |

Based on forward market prices and the amounts in the above table (and excluding any other subsequent changes to the fuel hedge portfolio), the Company's jet fuel costs per gallon could exceed market (i.e., unhedged) prices during some of these future periods.

This is based primarily on expected future cash settlements associated with fuel derivatives, but excludes any impact associated with the ineffectiveness of fuel hedges or fuel derivatives that are marked to market because they do not qualify for hedge accounting.

| $65 | $0.07 | $2.05 - $2.10 | $0.06 | $2.00 - $2.05 |

| Current Market (a) | $0.07 | $2.10 - $2.15 | $0.06 | $2.10 - $2.15 |

| $75 | $0.07 | $2.25 - $2.30 | $0.06 | $2.30 - $2.35 |

| $80 | $0.07 | $2.30 - $2.35 | $0.06 | $2.35 - $2.40 |

| $85 | $0.07 | $2.35 - $2.40 | $0.06 | $2.45 - $2.50 |

As of December 31, [removed: 2017,] [added: 2018,] the Company operated a total of [removed: 122] [added: 123] aircraft under operating and capital lease.

The Company also has [removed: 78] [added: 75] aircraft under operating and capital lease that have been subleased to another carrier.

The Company believes there can be significant risk in not hedging against the possibility of such fuel price increases, especially in energy [added: markets in which prices are high and/or rising.]

The Company expects to consume approximately [removed: 2.1] [added: 2.2] billion gallons of jet fuel in [removed: 2018.][added: 2019.]

Based on this anticipated usage, a change in jet fuel prices of just one cent per gallon would impact the Company’s Fuel and oil expense by approximately [removed: $21] [added: $22] million for [removed: 2018,] [added: 2019,] excluding any impact associated with fuel derivative instruments held.

As of December 31, [removed: 2017,] [added: 2018,] the Company held a net position of fuel derivative instruments that represented a hedge for a portion of its anticipated jet fuel purchases for future periods.

The gross fair value of outstanding financial derivative instruments related to the Company’s jet fuel market price risk at December 31, [removed: 2017,] [added: 2018,] was [removed: a net] [added: an] asset of [removed: $248] [added: $138] million.

[removed: In addition, $15 million in] [added: No] cash collateral deposits were [added: provided by or] held by the Company in connection with these instruments based on their fair value as of December 31, [removed: 2017.][added: 2018.]

An immediate 10 percent increase or decrease in underlying fuel-related commodity prices from the December 31, [removed: 2017,] [added: 2018,] prices would correspondingly change the fair value of the commodity derivative instruments in place by approximately [removed: $214] [added: $114] million.

This sensitivity analysis uses industry standard valuation models and holds all inputs constant at December 31, [removed: 2017,] [added: 2018,] levels, except underlying futures prices.

The Company’s credit exposure related to fuel derivative instruments is represented by the fair value of contracts that are [added: in] an asset position to the Company.

As of December 31, [removed: 2017,] [added: 2018,] the Company had eight counterparties in which the derivatives held were [removed: a net] [added: an] asset.

At December 31, [removed: 2017,] [added: 2018,] the Company had agreements with all of its active counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount based on the counterparty’s credit rating.

[removed: The] Company also had agreements with counterparties in which cash deposits, letters of credit, and/or pledged aircraft are required to be posted as collateral whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds.

Refer to the counterparty credit risk and collateral table provided in Note 10 to the Consolidated Financial Statements for the fair values of fuel derivatives, [removed: amounts held as collateral,] and applicable collateral posting threshold amounts as of December 31, [removed: 2017,] [added: 2018,] at which such postings are triggered.

Due to the Company's investment grade credit rating, terms of the Company’s current fuel hedging agreements with counterparties, and the types of derivatives held as of December 31, [removed: 2017,] [added: 2018,] in the Company's judgment, it does not have cash collateral exposure.

As of December 31, [removed: 2017,] [added: 2018,] no cash collateral deposits were provided by or held by the Company based on its outstanding interest rate swap agreements.

While the Company uses financial leverage, it strives to maintain a strong balance sheet and has a "BBB+" rating with Fitch, a "BBB+" rating with Standard & Poor’s, and an "A3" credit rating with Moody’s as of December 31, [removed: 2017,] [added: 2018,] all of which are considered "investment grade." [removed: The Company’s French Credit Agreements due 2018 do not give rise] [added: As disclosed in Note 10] to [removed: significant fair value risk but do give rise] [added: the Consolidated Financial Statements, the Company has converted certain of its long-term debt] to [added: floating rate debt by entering into an] interest rate [removed: risk because this borrowing was originally issued as floating-rate debt.][added: swap agreement.]

As of December 31, [removed: 2017,] [added: 2018,] excluding the notes or debentures that have been converted to a floating rate, the Company’s fixed-rate senior unsecured notes outstanding included its $300 million 2.75% senior unsecured notes due 2022, its $300 million 3.00% senior unsecured notes due 2026, its $100 million 7.375% senior unsecured notes due 2027, and its $300 million 3.45% senior unsecured notes due 2027.

As a result of the gain realized on this transaction, which is being amortized over the remaining term of the corresponding notes, and based on projected interest rates at the date of termination, the Company does not believe its future interest expense, based on projected future interest rates at the date of termination, associated with these notes will significantly differ from the expense it would have recorded had [removed: the notes remained at floating rates.]

The following table displays the characteristics of the Company’s secured fixed rate debt as of December 31, [removed: 2017:][added: 2018:]

| Term Loan Agreement | | $ | [removed: 66] [added: 23] | | | 6.315 | % | | 5/6/2019 | | 14 specified Boeing 737-700 aircraft |

| Term Loan Agreement | | [removed: 19] [added: 10] | | | | 4.84 | % | | 7/1/2019 | | 4 specified Boeing 737-700 aircraft |

| Term Loan Agreement | | [removed: 237] [added: 187] | | | | 5.223 | % | | 5/9/2020 | | 21 specified Boeing 737-700 aircraft |

The carrying value of the Company’s floating rate debt totaled [removed: $1.0 billion,] [added: $994 million,] and this debt had a weighted-average maturity of [removed: 3.04] [added: 2.12] years at floating rates averaging [removed: 2.42] [added: 3.48] percent for the year ended December 31, [removed: 2017.][added: 2018.]

In total, the Company’s fixed-rate debt and floating rate debt represented [removed: 13] [added: 11] percent and 5 percent, respectively, of [added: its] consolidated noncurrent assets at December 31, [removed: 2017.][added: 2018.]

The Company also has some risk associated with changing interest rates due to the short-term nature of its invested cash, which totaled [removed: $1.5] [added: $1.9] billion, and short-term investments, which totaled $1.8 billion at December 31, [removed: 2017.][added: 2018.]

A hypothetical 10 percent change in market interest rates as of December 31, [removed: 2017,] [added: 2018,] would not have a material effect on the fair value of the Company’s fixed-rate debt instruments.

Assuming floating market rates in effect as of December 31, [removed: 2017] [added: 2018] were held constant throughout a 12-month period, a hypothetical 10 percent change in those rates would have an immaterial impact on the Company’s net earnings and cash flows.

Utilizing these assumptions and considering the Company’s cash balance (excluding the impact of cash collateral deposits held [added: from] or provided to counterparties, if applicable), short-term investments, and floating-rate debt outstanding at December 31, [removed: 2017,] [added: 2018,] an increase in rates would have a net positive effect on the Company’s earnings and cash flows, while a decrease in rates would have a net negative effect on the Company’s earnings and cash flows.

As of December 31, [removed: 2017,] [added: 2018,] the Company was in compliance with this covenant and there were no amounts outstanding under the revolving credit facility.

As of December 31, [removed: 2017,] [added: 2018,] the Company was in compliance with all credit card processing agreements.

The

the notes remained at floating rates.

In addition, the Company has 15 remaining Classic aircraft under operating leases which were grounded in September 2017.

markets in which prices are high and/or rising.

In addition, as disclosed in Note 10 to the Consolidated Financial Statements, the Company has converted certain of its long-term debt to floating rate debt by entering into an interest rate swap agreement.

Although there is interest rate risk associated with these floating rate borrowings, the risk of the French Credit Agreements due 2018 is somewhat mitigated by the fact that the Company may prepay this debt under certain conditions.

Defendants [removed: have] appealed that decision.

AirTran denies all allegations of wrongdoing, including those in the Consolidated Amended [removed: Complaint, and intends to defend vigorously any and all such allegations.][added: Complaint.]

The CID seeks information and documents about the Company’s capacity from January 2010 to the date of the [removed: CID] [added: CID,] including public statements and communications with third parties about capacity.

In June 2015, the Company also received a letter from the Connecticut Attorney General requesting information about [removed: capacity; and on August 21, 2015, the Attorney General of the State of Ohio issued an investigative demand seeking information and documents about the Company’s capacity from December 2013 to the date of the CID.][added: capacity.]

The Company is cooperating fully with the DOJ CID and [removed: these two] [added: the] state [removed: inquiries.][added: inquiry.]

Since then, a number of similar class action complaints were filed in the United States District Courts for the Central District of California, the Northern District of California, the District of Columbia, the Middle District of Florida, the Southern District of Florida, the Northern District of Georgia, the Northern District of Illinois, the Southern District [removed: of Indiana, the Eastern District of Louisiana, the District of Minnesota, the District of New Jersey, the Eastern District of New York, the Southern District of New York, the Middle District of North Carolina, the District of Oklahoma, the Eastern District of Pennsylvania, the Northern District of Texas, the District of Vermont, and the Eastern District of Wisconsin.]

[added: On December 20, 2017, the Company reached an agreement to settle] these cases with a proposed class of all persons who purchased domestic airline transportation services from July 1, 2011, to the date of the settlement.

The following information regarding the Company’s executive officers is as of February 1, [removed: 2018.][added: 2019.]

| Gary C. Kelly | Chairman of the Board & Chief Executive Officer | [removed: 62] [added: 63] |

| Thomas M. Nealon | President | [removed: 56] [added: 57] |

| Michael G. Van de Ven | Chief Operating Officer | [removed: 56] [added: 57] |

| Robert E. Jordan | Executive Vice President Corporate Services | [removed: 57] [added: 58] |

| Tammy Romo | Executive Vice President & Chief Financial Officer | [removed: 55] [added: 56] |

| Andrew M. Watterson | Executive Vice President & Chief Revenue Officer | [removed: 51] [added: 52] |

| Gregory D. Wells | Executive Vice President Daily Operations | [removed: 59] [added: 60] |

Mr. Wells has over [removed: 35] [added: 36] years of experience with the Company.

Mr. Shaw also served as [added: Executive] Vice President, [added: Chief Legal & Regulatory Officer, & Corporate Secretary from August 2018 to November 2018, Senior Vice President,] General Counsel, & Corporate Secretary from [added: July 2015 to August 2018, Vice President, General Counsel, & Corporate Secretary from] February 2013 to July [removed: 2015] [added: 2015,] and as Associate General Counsel - Corporate & Transactions from February 2008 to February 2013.

On March 9, 2018, the Court of Appeals affirmed the district court’s order granting summary judgment to AirTran and Delta, and on June 8, 2018, the Court of Appeals denied plaintiffs' petition for rehearing and rehearing en banc.

On November 5, 2018, the plaintiffs petitioned the Supreme Court for a writ of certiorari, which the Supreme Court denied on January 7, 2019.

of Indiana, the Eastern District of Louisiana, the District of Minnesota, the District of New Jersey, the Eastern District of New York, the Southern District of New York, the Middle District of North Carolina, the District of Oklahoma, the Eastern District of Pennsylvania, the Northern District of Texas, the District of Vermont, and the Eastern District of Wisconsin.

The Court granted preliminary approval of the settlement on January 3, 2018.

The plaintiffs provided notice to the settlement class pursuant to a notice program approved by the Court, and the deadline for class members to opt out or object was January 4, 2019.

The fairness hearing for the settlement is scheduled for March 22, 2019.

| Mark R. Shaw | Executive Vice President & Chief Legal & Regulatory Officer | 56 |

Shaw has served as the Company's Executive Vice President & Chief Legal & Regulatory Officer since November 2018.

On June 30, 2010, the plaintiffs filed a motion to certify a class, which AirTran and Delta opposed.

On June 18, 2012, the parties filed a Stipulation and Order that plaintiffs abandoned their claim that AirTran and Delta conspired to reduce capacity.

On August 31, 2012, AirTran and Delta moved for summary judgment on all of plaintiffs' remaining claims.

On April 13, 2017, the plaintiffs filed a notice of appeal from the district court's judgment, and on April 24, 2017, AirTran filed a conditional notice of cross-appeal to appeal the Court's order certifying a class.

The appeals of the class certification and summary judgment orders have been consolidated.

The Court has scheduled oral argument for the appeals on March 7, 2018.

On December 20, 2017, the Company reached an agreement to settle

The Court granted preliminary approval of the settlement on January 3, 2018, and it is anticipated that the Court will establish a schedule for providing notice to the class, for class members to object or opt out, and for a final fairness hearing.

| Mark R. Shaw | Senior Vice President, General Counsel, & Corporate Secretary | 55 |

Shaw has served as the Company's Senior Vice President, General Counsel, & Corporate Secretary since July 2015.

10-K 1 [removed: luv-12312017x10k.htm] [added: luv-12312018x10k.htm] FORM 10-K

| | For the fiscal year ended December 31, [removed: 2017] [added: 2018] |

[removed: ][added: ]

Indicate by checkmark whether the registrant has submitted electronically [removed: and posted on its corporate Website, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

The aggregate market value of the common stock held by non-affiliates of the registrant was approximately [removed: $37,211,057,645] [added: $29,086,256,077] computed by reference to the closing sale price of the common stock on the New York Stock Exchange on June 30, [removed: 2017,] [added: 2018,] the last trading day of the registrant’s most recently completed second fiscal quarter.

Number of shares of common stock outstanding as of the close of business on February [removed: 5, 2018: 587,950,973] [added: 1, 2019: 552,688,849] shares

Portions of the Definitive Proxy Statement for the Company’s Annual Meeting of Shareholders to be held May [removed: 16, 2018,] [added: 15, 2019,] are incorporated into Part III of this Annual Report on Form 10-K.

| Item 1. | [removed: [Business](#s8CACB078D01F5E199D575A9D4BB07FE5)] [added: [Business](#sC5F96C2468025E74AB4681A7D20948E4)] | [removed: [4](#s8CACB078D01F5E199D575A9D4BB07FE5)] [added: [3](#sC5F96C2468025E74AB4681A7D20948E4)] |

| Item 1A. | [Risk [removed: Factors](#s3E305E87B5855E8982B98D3E49F5701D)] [added: Factors](#s5344C52FD2DC54B2B32FDF7E5E3D6723)] | [removed: [21](#s3E305E87B5855E8982B98D3E49F5701D)] [added: [21](#s5344C52FD2DC54B2B32FDF7E5E3D6723)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s5FB7FE874FC75715AEEBA4D9A455ECB1)] [added: Comments](#sC84CD27107B050B698B147A9C37246A2)] | [removed: [27](#s5FB7FE874FC75715AEEBA4D9A455ECB1)] [added: [28](#sC84CD27107B050B698B147A9C37246A2)] |

| Item 2. | [removed: [Properties](#sD416F1B3E7875626A1D705FEB3EF0F70)] [added: [Properties](#s317CA29BDA3C5B048977CC1DE771D505)] | [removed: [28](#sD416F1B3E7875626A1D705FEB3EF0F70)] [added: [29](#s317CA29BDA3C5B048977CC1DE771D505)] |

| Item 3. | [Legal [removed: Proceedings](#s4DB798FAC67E50F4860BCF3825ABFDAA)] [added: Proceedings](#sDEC1C2A28E435DCC9CE1A2C33B478F51)] | [removed: [30](#s4DB798FAC67E50F4860BCF3825ABFDAA)] [added: [30](#sDEC1C2A28E435DCC9CE1A2C33B478F51)] |

| Item 4. | [Mine Safety [removed: Disclosures](#sA175203B0A34516FA8080ADC8963A7C4)] [added: Disclosures](#s649B4E9206C85BCF8B9DFD131CF1C36B)] | [removed: [31](#sA175203B0A34516FA8080ADC8963A7C4)] [added: [31](#s649B4E9206C85BCF8B9DFD131CF1C36B)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#sC9DEE18549CD52CAAE2BC1E67F6F4767)] [added: Securities](#s21FCCC45C117557DB3416E9BDD8E8FB2)] | [removed: [34](#sC9DEE18549CD52CAAE2BC1E67F6F4767)] [added: [34](#s21FCCC45C117557DB3416E9BDD8E8FB2)] |

| Item 6. | [Selected Financial [removed: Data](#sFB36BCF4E1135BFC8F2B9EA3C96F0C10)] [added: Data](#s2DB33F0C533E57B5AACB790AAE6CB99A)] | [removed: [37](#sFB36BCF4E1135BFC8F2B9EA3C96F0C10)] [added: [37](#s2DB33F0C533E57B5AACB790AAE6CB99A)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s754993E3789753CAB06975084773D1CF)] [added: Operations](#s46F28C8C2E7A59BB88CBE46DB857D870)] | [removed: [39](#s754993E3789753CAB06975084773D1CF)] [added: [39](#s46F28C8C2E7A59BB88CBE46DB857D870)] |

| | [Liquidity and Capital [removed: Resources](#sD22CB1608B015F4494A8884142337F65)] [added: Resources](#s597952F7C1D852E1A54020C263F45163)] | [removed: [55](#sD22CB1608B015F4494A8884142337F65)] [added: [53](#s597952F7C1D852E1A54020C263F45163)] |

| | [Off-Balance Sheet Arrangements, Contractual Obligations, and Contingent Liabilities and [removed: Commitments](#s4A68CD19FD055BB2A88E418FE3AD8F46)] [added: Commitments](#sFE636152E166577CA26393AE066115B1)] | [removed: [57](#s4A68CD19FD055BB2A88E418FE3AD8F46)] [added: [55](#sFE636152E166577CA26393AE066115B1)] |

| | [Critical Accounting Policies and [removed: Estimates](#s12F63C13861357CA84F311F13222B664)] [added: Estimates](#sDD884E9767575B57991007E3E7D2B5F9)] | [removed: [59](#s12F63C13861357CA84F311F13222B664)] [added: [58](#sDD884E9767575B57991007E3E7D2B5F9)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sFBDDEAC6295F5D138A2E613ABF686CED)] [added: Risk](#s0AEDD58057D35C3E85A4500561F333C9)] | [removed: [66](#sFBDDEAC6295F5D138A2E613ABF686CED)] [added: [62](#s0AEDD58057D35C3E85A4500561F333C9)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s011A96757716573AB6AC9366F7FE8CFA)] [added: Data](#s54E2DDEF0C685B428B3215B8EC9D8C33)] | [removed: [71](#s011A96757716573AB6AC9366F7FE8CFA)] [added: [67](#s54E2DDEF0C685B428B3215B8EC9D8C33)] |

| | [Southwest Airlines Co. Consolidated Balance [removed: Sheet](#sCDC9D9947F165AD1A3308B39CAD0E327)] [added: Sheet](#s33B13B8384B75C7384C1C7F26AF5ECE9)] | [removed: [71](#sCDC9D9947F165AD1A3308B39CAD0E327)] [added: [67](#s33B13B8384B75C7384C1C7F26AF5ECE9)] |

| | [Southwest Airlines Co. Consolidated Statement of [removed: Income](#sD0F271D1667655F4AD0F5DE4AD45DF8A)] [added: Income](#sB30730CA82D65531B7511E7219A40686)] | [removed: [72](#sD0F271D1667655F4AD0F5DE4AD45DF8A)] [added: [68](#sB30730CA82D65531B7511E7219A40686)] |

| | [Southwest Airlines Co. Consolidated Statement of Comprehensive [removed: Income](#sFBBAD60C18395E82BF9B297ED8266DC6)] [added: Income](#sCECB26A4C6195C8A9E62E912314842ED)] | [removed: [73](#sFBBAD60C18395E82BF9B297ED8266DC6)] [added: [69](#sCECB26A4C6195C8A9E62E912314842ED)] |

| | [Southwest Airlines Co. Consolidated Statement of Stockholders’ [removed: Equity](#s88FA8807426450E8A969C647DA9B47E0)] [added: Equity](#s81C95B7A4F8F5D23B24834AB00E2364F)] | [removed: [73](#s88FA8807426450E8A969C647DA9B47E0)] [added: [70](#s81C95B7A4F8F5D23B24834AB00E2364F)] |

| | [Southwest Airlines Co. Consolidated Statement of Cash [removed: Flows](#s769371C3879959ACB3C1B7A2BBFF5BD7)] [added: Flows](#s2171592FCE48538DAE131A2994B8ED42)] | [removed: [74](#s769371C3879959ACB3C1B7A2BBFF5BD7)] [added: [71](#s2171592FCE48538DAE131A2994B8ED42)] |

| | [Notes to Consolidated Financial [removed: Statements](#sCDCD4FFF862D548395A9F9800C6333A2)] [added: Statements](#s20874495F97B5009A542A999E2776F58)] | [removed: [75](#sCDCD4FFF862D548395A9F9800C6333A2)] [added: [72](#s20874495F97B5009A542A999E2776F58)] |

| Item 9. | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s97D550C19E6B5EF29F2376AEA8C5CB27)] [added: Disclosure](#s25422A4A1D655AA0BA5E7941ED9F08CE)] | [removed: [113](#s97D550C19E6B5EF29F2376AEA8C5CB27)] [added: [119](#s25422A4A1D655AA0BA5E7941ED9F08CE)] |

| Item 9A. | [Controls and [removed: Procedures](#s6B3216642AEF5916823437033EAF7176)] [added: Procedures](#sEBEA4EE99E7953C8A862AD6A34208724)] | [removed: [113](#s6B3216642AEF5916823437033EAF7176)] [added: [119](#sEBEA4EE99E7953C8A862AD6A34208724)] |

| Item 9B. | [Other [removed: Information](#s574C9B1403BE5D0381C85B62858A4CCB)] [added: Information](#sE2BA0BA4B8E352FCA8A1D15F3F4D458C)] | [removed: [114](#s574C9B1403BE5D0381C85B62858A4CCB)] [added: [120](#sE2BA0BA4B8E352FCA8A1D15F3F4D458C)] |

| Item 10. | [Directors, Executive Officers, and Corporate [removed: Governance](#s7402175E0A03502B93380C13BB51CB50)] [added: Governance](#s3E92A4C731D454F7884BD8AAE6D0BC1A)] | [removed: [115](#s7402175E0A03502B93380C13BB51CB50)] [added: [121](#s3E92A4C731D454F7884BD8AAE6D0BC1A)] |

| Item 11. | [Executive [removed: Compensation](#s3B84D45FAA675D2DA0B56F343C6B9244)] [added: Compensation](#s81B546ECEB885F0EBEF80627AEA85D1B)] | [removed: [115](#s3B84D45FAA675D2DA0B56F343C6B9244)] [added: [121](#s81B546ECEB885F0EBEF80627AEA85D1B)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sC4CD0C4AFB745F97AE9E71FA6F4259D2)] [added: Matters](#sA9EA5FDDF0D35C8D848F7D4510E33935)] | [removed: [115](#sC4CD0C4AFB745F97AE9E71FA6F4259D2)] [added: [121](#sA9EA5FDDF0D35C8D848F7D4510E33935)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s22B906B229DF52FF92461553EB18B793)] [added: Independence](#s9AD40753E70A57AEB75B3FE1183616B3)] | [removed: [116](#s22B906B229DF52FF92461553EB18B793)] [added: [122](#s9AD40753E70A57AEB75B3FE1183616B3)] |

| Item 14. | [Principal Accounting Fees and [removed: Services](#s885DF2B30426532484C332CEC211B4DF)] [added: Services](#s972182E576BF50C99ECD2CF4004CB5B9)] | [removed: [116](#s885DF2B30426532484C332CEC211B4DF)] [added: [122](#s972182E576BF50C99ECD2CF4004CB5B9)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#sC8195BF6911152768E2FF1CB1C2CCC99)] [added: Schedules](#sBE2F49BC55F859D491FA8E97E22996A8)] | [removed: [117](#sC8195BF6911152768E2FF1CB1C2CCC99)] [added: [123](#sBE2F49BC55F859D491FA8E97E22996A8)] |

| Item 16. | [Form 10-K [removed: Summary](#s75cecd6c78874e1d965cdbeec0f3ee9c)] [added: Summary](#s8F58B16784EB54C58EF8AA1721B6953D)] | [removed: [122](#s75cecd6c78874e1d965cdbeec0f3ee9c)] [added: [128](#s8F58B16784EB54C58EF8AA1721B6953D)] |

At December 31, [removed: 2017,] [added: 2018,] Southwest operated a total of [removed: 706] [added: 750] Boeing 737 aircraft and served [removed: 100] [added: 99] destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and ten near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.

[removed: During 2017, the] [added: The] Company [removed: announced plans to begin selling tickets in 2018 for] [added: is continuing its efforts towards its planned inaugural] service to [removed: Hawaii,] [added: Hawaii in 2019,] subject to requisite governmental approvals, including approval from the Federal Aviation Administration [removed: ("FAA")] [added: (the "FAA")] for Extended Operations ("ETOPS"), a regulatory requirement to operate between the U.S. mainland and the Hawaiian Islands.

The Company [added: has] further announced its decision to cease service at [removed: Bishop] [added: Benito Juárez Mexico City] International [removed: Airport in Flint, Michigan,] [added: Airport,] with the last day of service [added: scheduled] on [removed: June 6, 2018.][added: March 30, 2019.]

| [Signatures](#sDCD3099FDB58573A857F2419DD24BF88) | | [129](#sDCD3099FDB58573A857F2419DD24BF88) |

The Company has announced its intent to serve Honolulu International Airport, Lihue Airport, Kona International Airport at Keahole, and Kahului Airport from four initial California cities: Oakland, San Diego, San Jose, and Sacramento.

In June 2018, the Company ceased service at Bishop International Airport in Flint, Michigan.

The U.S. airline industry continued to benefit from modest economic growth during 2018, despite a very competitive domestic fare environment.

The airline industry also experienced a less stable fuel environment in 2018, as compared with recent years, with year-over-year fuel prices significantly higher throughout most of 2018, before easing in fourth quarter 2018.

Also in response to competitive ULCC pricing, some carriers removed their fare floors for certain routes, leading to a lower fare offering across the industry.

The Company continues to focus on adding depth to schedule offerings in certain key cities, which is expected to benefit operational efficiency and give Customers additional options to reach their final destination.

The Company plans to continue its route network and schedule optimization efforts through the addition of new markets and itineraries, while also pruning less profitable flights from its schedule.

For example, Hawaii is an attractive leisure destination for the Company's California Customers, and the Company has announced its intent to serve Honolulu International Airport, Lihue Airport, Kona International Airport at Keahole, and Kahului Airport from four initial California cities: Oakland, San Diego, San Jose, and Sacramento.

In order to complement the Company’s network, during 2018, the Company entered into an agreement with Alaska Airlines to lease 12 slots at New York's LaGuardia Airport and eight slots at Washington Reagan National Airport through 2028.

In addition, Southwest Airlines Cargo® began shipping cargo to select international destinations beginning in 2018, including Mexico City, Cancun, Cabo San Lucas/Los Cabos, Puerto Vallarta, Montego Bay, and San Jose, Costa Rica.

Southwest's point-

| 2009* | | $ | 3,193 | | | $ | 2.22 | | | 31.2 | % |

| 2010* | | $ | 3,755 | | | $ | 2.61 | | | 33.4 | % |

| 2011* | | $ | 5,751 | | | $ | 3.25 | | | 38.2 | % |

| 2012* | | $ | 6,156 | | | $ | 3.32 | | | 37.3 | % |

| 2013* | | $ | 5,823 | | | $ | 3.19 | | | 35.3 | % |

| 2014* | | $ | 5,355 | | | $ | 2.97 | | | 32.6 | % |

| 2015* | | $ | 3,740 | | | $ | 1.96 | | | 23.6 | % |

| 2016* | | $ | 3,801 | | | $ | 1.90 | | | 22.7 | % |

| 2017* | | $ | 4,076 | | | $ | 1.99 | | | 23.0 | % |

| 2018 | | $ | 4,616 | | | $ | 2.20 | | | 24.6 | % |

| First Quarter 2018 | | $ | 1,018 | | | $ | 2.07 | | | 23.5 | % |

| Second Quarter 2018 | | $ | 1,202 | | | $ | 2.21 | | | 25.2 | % |

| Third Quarter 2018 | | $ | 1,205 | | | $ | 2.24 | | | 25.2 | % |

| Fourth Quarter 2018 | | $ | 1,192 | | | $ | 2.25 | | | 24.4 | % |

*Effective as of January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2017-12, Targeted Improvements to Accounting for Hedging Activities, and ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.

See Note 2 to the Consolidated Financial Statements for further information.

For example, the Company previously retired all Boeing 737-300 aircraft from its fleet and has begun scheduled service with the Boeing 737 MAX 8 aircraft.

In 2019, the Company expects to continue its fleet modernization initiative through the scheduled delivery of an additional 37 Boeing 737 MAX 8 aircraft and the Company's initial delivery of seven Boeing 737 MAX 7 aircraft.

During 2018, the Company implemented a variable pricing model for EarlyBird Check-In based on the length of the flight and the historical popularity of EarlyBird Check-In on the route.

Inflight Entertainment Portal and WiFi Service

Southwest offers inflight entertainment and connectivity service on WiFi-enabled aircraft on the majority of its fleet.

In 2018, Southwest refreshed its suite of complimentary offerings onboard its inflight entertainment portal to offer Free Movies and Free App Messaging while onboard any WiFi-enabled aircraft, and Free Music while onboard a majority of WiFi-enabled aircraft.

The inflight entertainment service allows Customers to enjoy gate-to-gate entertainment directly on their personal wireless devices.

The free inflight entertainment offerings include approximately 30 free movies-on-demand per month and free app messaging via iMessage or WhatsApp.

The Company also continues to offer free access to its live and on-demand television product on most of its flights.

The Company’s new collaboration with iHeartRadio brings a free digital music and live streaming radio service to Customers within the onboard entertainment portal on the majority of Southwest domestic flights.

Customers can listen to hundreds of live radio stations, pick from artist radio channels, listen to selected playlists, and listen to podcasts.

Customers may also use their iHeartRadio app while onboard, and existing subscribers to the All Access and Plus products have access to their entire music library and saved playlists.

| [Signatures](#sA39960FC1A0D566D8115C04C75632BDC) | | [123](#sA39960FC1A0D566D8115C04C75632BDC) |

For the 45th consecutive year, the Company was profitable, earning $3.5 billion in net income.

The Company expanded its international footprint during 2017, with the commencement of service to Owen Roberts International Airport in Grand Cayman and Providenciales International Airport in Turks and Caicos, both from Fort Lauderdale-Hollywood International Airport.

The Company also commenced service to Cincinnati/Northern Kentucky International Airport in 2017, giving the Company’s Customers access to a full complement of the top 50 markets across the 48 contiguous United States.

In January 2018, the Company announced its intent to begin service at a new commercial aircraft facility at Paine Field in Everett, Washington, scheduled to be completed in 2018.

In 2017, the Company completed its deployment of a new single reservation system, the largest technology project in the Company's history.

Further, in 2017, the Company became the first airline in North America to offer scheduled service utilizing Boeing's new, more fuel efficient, 737 MAX 8 aircraft.

The Company also retired its remaining Boeing 737-300 aircraft.

The U.S. airline industry benefited from modest economic growth during 2017 and was further aided by a relatively stable fuel environment.

The Basic Economy product provides for a lower

During 2017, the Company commenced international service out of Oakland, San Diego, Nashville, and St. Louis.

The Company has also concentrated its service to Cuba in Havana and ceased operations during 2017 to Varadero and Santa Clara, Cuba.

In 2017, to further support its near-international operations, the Company opened a new five-gate international concourse at Fort Lauderdale-Hollywood International Airport (FLL).

The Company expanded its international flight schedule for South Florida to a total of nine international nonstop destinations including Montego Bay, Jamaica; Belize City, Belize; Cancun, Mexico; Grand Cayman; Havana, Cuba; Nassau, The Bahamas; San Jose, Costa Rica; Punta Cana, Dominican Republic; and Turks and Caicos.

Additional information regarding the Company’s involvement with construction of the new concourse at FLL is provided below under "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and in Note 4 to the Consolidated Financial Statements.

Approximately $595 million, approximately $383 million, and approximately $287 million of the Company's operating revenues in 2017, 2016, and 2015, respectively, were attributable to foreign operations.

The remainder of the Company's operating revenues, approximately $20.6 billion, approximately $20.0 billion, and approximately $19.5 billion in 2017, 2016, and 2015, respectively, were attributable to domestic operations.

The Company's assets are not allocated to a geographic area because the Company's tangible assets primarily consist of flight equipment, the majority of which are interchangeable and are deployed systemwide, with no individual aircraft dedicated to any specific route or region.

| 2009 | | $ | 3,044 | | | $ | 2.12 | | | 30.2 | % |

| 2010 | | $ | 3,620 | | | $ | 2.51 | | | 32.6 | % |

| 2011 | | $ | 5,644 | | | $ | 3.19 | | | 37.7 | % |

| 2012 | | $ | 6,120 | | | $ | 3.30 | | | 37.2 | % |

| 2013 | | $ | 5,763 | | | $ | 3.16 | | | 35.1 | % |

| 2014 | | $ | 5,293 | | | $ | 2.93 | | | 32.3 | % |

| 2015 | | $ | 3,616 | | | $ | 1.90 | | | 23.0 | % |

| 2016 | | $ | 3,647 | | | $ | 1.82 | | | 21.9 | % |

| 2017 | | $ | 3,940 | | | $ | 1.92 | | | 22.3 | % |

| First Quarter 2017 | | $ | 922 | | | $ | 1.89 | | | 21.8 | % |

| Second Quarter 2017 | | $ | 990 | | | $ | 1.84 | | | 22.0 | % |

| Third Quarter 2017 | | $ | 1,003 | | | $ | 1.92 | | | 22.6 | % |

| Fourth Quarter 2017 | | $ | 1,025 | | | $ | 2.04 | | | 22.8 | % |

For example, during 2017, the Company continued to replace its older aircraft with newer aircraft that are less maintenance intensive and more fuel efficient.

The Company retired all remaining Boeing 737-300 aircraft

from its fleet in September 2017 and began scheduled service with its first Boeing 737 MAX 8 aircraft in October 2017.

Southwest has inflight satellite-based WiFi equipped on all of its aircraft.

During 2017, Southwest upgraded its WiFi product to increase onboard bandwidth and refreshed its inflight entertainment portal and television options.

Southwest's onboard entertainment options on WiFi-enabled aircraft for viewing on Customers' personal wireless devices include free access to Southwest's live and on-demand television product (although free live TV may not be available onboard international flights due to licensing restrictions).

Southwest also provides movies-on-demand and offers a Messaging-only option, including all WiFi-enabled stops and connections.

The Messaging service allows access to iMessage and pre-downloaded apps for Viber and WhatsApp.

Customers do not have to purchase WiFi to access television offerings, movies-on-demand, or the Messaging-only service.

Southwest operated a total of [removed: 706] [added: 750] Boeing 737 aircraft as of December 31, [removed: 2017,] [added: 2018,] of which [removed: 53] [added: 51] and [removed: 69] [added: 72] were under operating and capital leases, respectively.

The following table details information on the [removed: 706] [added: 750] aircraft as of December 31, [removed: 2017:][added: 2018:]

| 737-700 | | 143 | | [removed: 14] [added: 15] | | | 512 | | | [removed: 397] [added: 396] | | | [removed: 115] [added: 116] | |

| 737-800 | | 175 | | 3 | | | [removed: 181] [added: 207] | | | [removed: 174] [added: 200] | | | 7 | |

| 737 MAX 8 | | 175 | | [removed: —] [added: 1] | | | [removed: 13] [added: 31] | | | [removed: 13] [added: 31] | | | — | |

| (a) | As discussed further in Note 6 to the Consolidated Financial Statements, [removed: 203] [added: 169] of the Company's aircraft were pledged as collateral as of December 31, [removed: 2017,] [added: 2018,] for secured borrowings and/or in the case that the Company has obligations related to its fuel derivative instruments with counterparties that exceed certain thresholds. |

As of December 31, [removed: 2017,] [added: 2018,] the Company had firm deliveries and options for Boeing [removed: 737-700, 737-800,] 737 MAX [removed: 7,] [added: 7] and 737 MAX 8 aircraft as follows:

| | The Boeing Company | | | | | | | | | | | | | | [removed: |]

| | [removed: \-800 Firm Orders | |] MAX 7 Firm Orders | | [added: |] MAX 8 Firm Orders | | | MAX 8 Options | | | Additional [removed: -700s] [added: MAX 8s] | | | Total | |

| 2019 | [removed: — | |] 7 | | [removed: 15] | [added: 21] | | [added: |] — | | | [removed: —] [added: 16] | | | [removed: 22] [added: 44] | |

| 2020 | — | | [removed: —] | [removed: | 25] [added: 35] | | | — | | | [removed: —] [added: 3] | | | [removed: 25] [added: 38] | |

| 2021 | — | | [removed: —] | [removed: | 34] [added: 44] | | | — | | | — | | | [removed: 34] [added: 44] | |

| 2022 | — | | [removed: —] | [removed: | 17] [added: 27] | | | 14 | | | — | | | [removed: 31] [added: 41] | |

| 2023 | [removed: — | |] 12 | | [added: |] 22 | | | 23 | | | — | | | 57 | |

| 2024 | [removed: — | |] 11 | | [added: |] 30 | | | 23 | | | — | | | 64 | |

| 2025 | — | | [removed: —] | [removed: |] 40 | | | 36 | | | — | | | 76 | |

| 2026 | — | | [removed: —] | [removed: |] — | | | [removed: 36] [added: 19] | | | — | | | [removed: 36] [added: 19] | |

[removed: In 2016, the] [added: The] Company [removed: broke ground on an] [added: owns two] additional headquarters [removed: complex,] [added: buildings, located across the street from the Company's main headquarters building, on land owned by the Company including (a) the energy-efficient, modern building,] called [added: TOPS, which houses certain operational and training functions, including its 24-hour operations and (b)] the Wings Complex, [added: completed in 2018,] consisting of a Leadership Education and Aircrew Development (LEAD) Center [removed: (designed to house] [added: (housing the Company's 15 Boeing 737] flight simulators and classroom space for Pilot training), an additional office building, and a parking garage.

As of December 31, [removed: 2017,] [added: 2018,] the Company operated seven Customer Support and Services call centers.

| Totals | | | | 11 | | | 750 | | | 627 | | | 123 | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| | 30 | | | 219 | | (a) | 115 | | | 19 | | (b) | 383 | |

In 2018, the Company announced its intent to build a new aircraft maintenance facility, scheduled to be completed in 2021, subject to FAA approvals, at Baltimore-Washington International Airport.

| Totals | | | | 11 | | | 706 | | | 584 | | | 122 | |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 2018 | 26 | | — | | 14 | | | — | | | 4 | | | 44 | |

| 2027 | — | | — | | — | | | 23 | | | — | | | 23 | |

| | 26 | | 30 | | 197 | | (a) | 155 | | | 4 | | (b) | 412 | |

The Company owns an additional headquarters building, located across the street from the Company's main headquarters building, on land owned by the Company.

This energy-efficient, modern building, called TOPS, houses certain operational and training functions, including its 24-hour operations.

The Wings Complex is scheduled to be completed in 2018 and is also located across the street from the Company's main headquarters building on land owned by the Company.

The Company began moving its Boeing 737 flight simulators to the LEAD Center during 2017 and expects to have 15 Boeing 737 flight simulators in the LEAD Center by mid-2018.

The [added: Company’s common stock is listed on the New York Stock Exchange ("NYSE") and is traded under the symbol "LUV." The] Company currently intends to continue declaring dividends on a quarterly basis for the foreseeable future; however, the Company’s Board of Directors may elect to alter the timing, amount, and payment of dividends on the basis of operational results, financial condition, cash requirements, future prospects, and other factors deemed relevant by the Board.

As of February [removed: 5, 2018,] [added: 1, 2019,] there were approximately [removed: 12,531] [added: 12,267] holders of record of the Company’s common stock.

The following graph compares the cumulative total shareholder return on the Company’s common stock over the five-year period ended December 31, [removed: 2017,] [added: 2018,] with the cumulative total return during such period of the Standard and Poor’s 500 Stock Index and the NYSE ARCA Airline Index.

The comparison assumes $100 was invested on December 31, [removed: 2012,] [added: 2013,] in the Company’s common stock and in each of the foregoing indices and assumes reinvestment of dividends.

[removed: ][added: ]

| | | [removed: 12/31/2012 | | | |] 12/31/2013 | | | | 12/31/2014 | | | | 12/31/2015 | | | | 12/31/2016 | | | | 12/31/2017 | | | [added: | 12/31/2018 | | |]

| December 1, [removed: 2017] [added: 2018] through December 31, [removed: 2017] [added: 2018] | | [removed: 4,280,204] [added: 9,835,633] | | | $ | — | | [removed: (3)(5)] [added: (3)] | [removed: 4,280,204] [added: 9,835,633] | | | $ | 1,350,032,588 | | |

| (1) | On May 17, 2017, the [added: Company's Board of Directors authorized the repurchase of up to $2.0 billion of the Company's common stock. On May 16, 2018, the] Company’s Board of Directors authorized the repurchase of up to [added: an additional] $2.0 billion of the Company’s common [removed: stock.] [added: stock in a new share repurchase authorization, upon the completion of the May 2017 share repurchase authorization.] Repurchases are made in accordance with applicable securities laws in open [removed: market, private,] [added: market] or [removed: accelerated] [added: private, including accelerated,] repurchase transactions from time to time, depending on market conditions, and may be discontinued at any time. |

| (2) | Under an accelerated share repurchase program entered into by the Company with a third party financial institution in third quarter [removed: 2017] [added: 2018] (the "Third Quarter [removed: 2017] [added: 2018] ASR Program"), the Company paid [removed: $300] [added: $500] million and received an initial delivery of [removed: 4,130,592] [added: 6,349,325] shares during August [removed: 2017,] [added: 2018,] representing an estimated 75 percent of the shares to be purchased by the Company under the Third Quarter [removed: 2017] [added: 2018] ASR Program based on a volume-weighted average price of [removed: $54.4716] [added: $59.0614] per [removed: share, which was the closing price] [added: share] of the Company’s common stock on the New York Stock Exchange during a calculation period between August 1, [removed: 2017] [added: 2018] and August [removed: 24, 2017.] [added: 22, 2018.] Final settlement of the Third Quarter [removed: 2017] [added: 2018] ASR Program occurred in October [removed: 2017] [added: 2018] and was determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period completed in October [removed: 2017.] [added: 2018.] Upon settlement, the third party financial institution delivered [removed: 1,206,365] [added: 1,848,814] additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the [removed: 5,336,957] [added: 8,198,139] shares repurchased under the Third Quarter [removed: 2017] [added: 2018] ASR Program, upon completion of the Third Quarter [removed: 2017] [added: 2018] ASR Program in October [removed: 2017,] [added: 2018,] was [removed: $56.2118.] [added: $60.9895.] |

| (3) | Under an accelerated share repurchase program entered into by the Company with a third party financial institution in fourth quarter [removed: 2017] [added: 2018] (the "Fourth Quarter [removed: 2017] [added: 2018] ASR Program"), the Company paid [removed: $250] [added: $500] million in [removed: November 2017] [added: October 2018] and received an initial delivery of [removed: 3,323,537] [added: 7,827,176] shares during December [removed: 2017,] [added: 2018,] representing an estimated 75 percent of the shares to be purchased by the Company under the Fourth Quarter [removed: 2017] [added: 2018] ASR Program based on a [removed: volume-weighted average] price of [removed: $56.4158] [added: $47.91] per [removed: share] [added: share, which was the closing price] of the Company’s common stock on the New York Stock Exchange [removed: during] [added: on October 29, 2018. The third party financial institution delivered an additional 1,472,253 shares to the Company in further partial settlements of the Fourth Quarter 2018 ASR Program in December 2018, which was determined based generally on] a [added: discount to the volume-weighted average price per share of the Company's common stock during] calculation [removed: period between November 8, 2017 and] [added: periods completed in] December [removed: 6, 2017.] [added: 2018.] Final settlement of the Fourth Quarter [removed: 2017] [added: 2018] ASR Program occurred in [removed: January] [added: December] 2018 and was determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period completed in [removed: January] [added: December] 2018. Upon settlement, the third party financial institution delivered [removed: 736,838] [added: 536,204] additional shares of the Company’s common stock to the Company. In total, the average purchase price per share for the [removed: 4,060,375] [added: 9,835,633] shares repurchased under the Fourth Quarter [removed: 2017] [added: 2018] ASR Program, upon completion of the Fourth Quarter [removed: 2017] [added: 2018] ASR Program in [removed: January] [added: December] 2018, was [removed: $61.5707.] [added: $50.8356.] |

| Southwest Airlines Co. | | $ | 100 | | | $ | 226 | | | $ | 232 | | | $ | 271 | | | $ | 359 | | | $ | 257 | |

| S&P 500 | | $ | 100 | | | $ | 114 | | | $ | 115 | | | $ | 129 | | | $ | 157 | | | $ | 150 | |

| NYSE ARCA Airline | | $ | 100 | | | $ | 150 | | | $ | 127 | | | $ | 164 | | | $ | 174 | | | $ | 137 | |

| October 1, 2018 through October 31, 2018 | | 1,848,814 | | | $ | — | | (2)(3) | 1,848,814 | | | $ | 1,350,032,588 | | |

| November 1, 2018 through November 30, 2018 | | — | | | $ | — | | | — | | | $ | 1,350,032,588 | | |

| Total | | 11,684,447 | | | | | | | 11,684,447 | | | | | | |

The Company’s common stock is listed on the New York Stock Exchange ("NYSE") and is traded under the symbol "LUV." The following table shows the high and low prices per share of the Company’s common stock, as reported on the NYSE Composite Tape, and the cash dividends per share declared on the Company’s common stock.

| | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Period | | Dividend | | | | High | | | | Low | | |

| 2017 | | | | | | | | | | | | |

| 1st Quarter | | $ | 0.10000 | | | $ | 59.68 | | | $ | 48.75 | |

| 2nd Quarter | | 0.12500 | | | | 62.74 | | | | 52.89 | | |

| 3rd Quarter | | 0.12500 | | | | 64.39 | | | | 49.76 | | |

| 4th Quarter | | 0.12500 | | | | 66.99 | | | | 52.78 | | |

| 2016 | | | | | | | | | | | | |

| 1st Quarter | | $ | 0.07500 | | | $ | 45.39 | | | $ | 33.96 | |

| 2nd Quarter | | 0.10000 | | | | 48.00 | | | | 36.48 | | |

| 3rd Quarter | | 0.10000 | | | | 45.00 | | | | 35.42 | | |

| 4th Quarter | | 0.10000 | | | | 51.31 | | | | 36.91 | | |

| Southwest Airlines Co. | | $ | 100 | | | $ | 185 | | | $ | 418 | | | $ | 428 | | | $ | 500 | | | $ | 661 | |

| S&P 500 | | $ | 100 | | | $ | 132 | | | $ | 150 | | | $ | 152 | | | $ | 170 | | | $ | 206 | |

| NYSE ARCA Airline | | $ | 100 | | | $ | 158 | | | $ | 237 | | | $ | 201 | | | $ | 258 | | | $ | 274 | |

| October 1, 2017 through October 31, 2017 | | 1,206,365 | | | $ | — | | (2) | 1,206,365 | | | $ | 1,700,000,000 | | |

| November 1, 2017 through November 30, 2017 | | 670,000 | | | $ | — | | (3)(4) | 670,000 | | | $ | 1,410,017,716 | | |

| Total | | 6,156,569 | | | | | | | 6,156,569 | | | | | | |

| | |

| --- | --- |

| (4) | During the period from November 29, 2017 through November 30, 2017, the Company repurchased 670,000 shares of its common stock on the open market at an average price of $59.6751 per share. |

| (5) | During the period from December 1, 2017 through December 15, 2017, the Company repurchased 956,667 shares of its common stock on the open market at an average price of $62.7022 per share. |

The following financial information, for the five years ended December 31, [removed: 2017,] [added: 2018,] has been derived from the Company’s Consolidated Financial Statements.

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Operating revenues | | $ | [removed: 21,171] [added: 21,965] | | | $ | [removed: 20,425] [added: 21,146] | | | $ | [removed: 19,820] [added: 20,289] | | | $ | [removed: 18,605] [added: 19,820] | | | $ | [removed: 17,699] [added: 18,605] | |

| Income before taxes | | [removed: 3,251] [added: 3,164] | | | | [removed: 3,547] [added: 3,265] | | | | [removed: 3,479] [added: 3,450] | | | | [removed: 1,816] [added: 3,479] | | | | [removed: 1,209] [added: 1,816] | | |

| Provision for income taxes | | [removed: (237] [added: 699] | | [removed: )] | | [removed: 1,303] [added: (92] | | [added: )] | | [removed: 1,298] [added: 1,267] | | | | [removed: 680] [added: 1,298] | | | | [removed: 455] [added: 680] | | |

| Net income | | $ | [removed: 3,488] [added: 2,465] | | | $ | [removed: 2,244] [added: 3,357] | | | $ | [removed: 2,181] [added: 2,183] | | | $ | [removed: 1,136] [added: 2,181] | | | $ | [removed: 754] [added: 1,136] | |

| Net income per share, basic | | $ | [removed: 5.80] [added: 4.30] | | | $ | [removed: 3.58] [added: 5.58] | | | $ | [removed: 3.30] [added: 3.48] | | | $ | [removed: 1.65] [added: 3.30] | | | $ | [removed: 1.06] [added: 1.65] | |

| Net income per share, diluted | | $ | [removed: 5.79] [added: 4.29] | | | $ | [removed: 3.55] [added: 5.57] | | | $ | [removed: 3.27] [added: 3.45] | | | $ | [removed: 1.64] [added: 3.27] | | | $ | [removed: 1.05] [added: 1.64] | |

| Cash dividends per common share | | $ | [removed: 0.4750] [added: 0.6050] | | | $ | [removed: 0.3750] [added: 0.4750] | | | $ | [removed: 0.2850] [added: 0.3750] | | | $ | [removed: 0.2200] [added: 0.2850] | | | $ | [removed: 0.1300] [added: 0.2200] | |

| Total assets at period-end | | $ | [removed: 25,110] [added: 26,243] | | | $ | [removed: 23,286] [added: 25,110] | | | $ | [removed: 21,312] [added: 23,286] | | | $ | [removed: 19,723] [added: 21,312] | | | $ | [removed: 19,177] [added: 19,723] | |

| Long-term obligations at period-end | | $ | [removed: 3,320] [added: 2,771] | | | $ | [removed: 2,821] [added: 3,320] | | | $ | [removed: 2,541] [added: 2,821] | | | $ | [removed: 2,434] [added: 2,541] | | | $ | [removed: 2,191] [added: 2,434] | |

| Stockholders’ equity at period-end | | $ | [removed: 10,430] [added: 9,853] | | | $ | [removed: 8,441] [added: 9,641] | | | $ | [removed: 7,358] [added: 7,784] | | | $ | [removed: 6,775] [added: 7,358] | | | $ | [removed: 7,336] [added: 6,775] | |

| Revenue passengers carried | | [removed: 130,256,190] [added: 134,890,243] | | | | [removed: 124,719,765] [added: 130,256,190] | | | | [removed: 118,171,211] [added: 124,719,765] | | | | [removed: 110,496,912] [added: 118,171,211] | | | | [removed: 108,075,976] [added: 110,496,912] | | |

| Enplaned passengers | | [removed: 157,677,218] [added: 163,605,833] | | | | [removed: 151,740,357] [added: 157,677,218] | | | | [removed: 144,574,882] [added: 151,740,357] | | | | [removed: 135,767,188] [added: 144,574,882] | | | | [removed: 133,155,030] [added: 135,767,188] | | |

| Revenue passenger miles (RPMs) (000s) (a) | | [removed: 129,041,420] [added: 133,322,322] | | | | [removed: 124,797,986] [added: 129,041,420] | | | | [removed: 117,499,879] [added: 124,797,986] | | | | [removed: 108,035,133] [added: 117,499,879] | | | | [removed: 104,348,216] [added: 108,035,133] | | |

| Available seat miles (ASMs) (000s) (b) | | [removed: 153,811,072] [added: 159,795,153] | | | | [removed: 148,522,051] [added: 153,811,072] | | | | [removed: 140,501,409] [added: 148,522,051] | | | | [removed: 131,003,957] [added: 140,501,409] | | | | [removed: 130,344,072] [added: 131,003,957] | | |

| Load factor (c) | | [removed: 83.9] [added: 83.4] | | % | | [removed: 84.0] [added: 83.9] | | % | | [removed: 83.6] [added: 84.0] | | % | | [removed: 82.5] [added: 83.6] | | % | | [removed: 80.1] [added: 82.5] | | % |

| Average length of passenger haul (miles) | | [removed: 991] [added: 988] | | | | [removed: 1,001] [added: 991] | | | | [removed: 994] [added: 1,001] | | | | [removed: 978] [added: 994] | | | | [removed: 966] [added: 978] | | |

| Average aircraft stage length (miles) | | [removed: 754] [added: 757] | | | | [removed: 760] [added: 754] | | | | [removed: 750] [added: 760] | | | | [removed: 721] [added: 750] | | | | [removed: 703] [added: 721] | | |

| Trips flown | | [removed: 1,347,893] [added: 1,375,030] | | | | [removed: 1,311,149] [added: 1,347,893] | | | | [removed: 1,267,358] [added: 1,311,149] | | | | [removed: 1,255,502] [added: 1,267,358] | | | | [removed: 1,312,785] [added: 1,255,502] | | |

| Seats flown (d) | | [removed: 200,878,967] [added: 207,223,050] | | | | [removed: 193,167,695] [added: 200,878,967] | | | | [removed: 184,955,094] [added: 193,167,695] | | | | [removed: 179,733,055] [added: 184,955,094] | | | | [removed: 183,563,527] [added: 179,733,055] | | |

| Seats per trip (e) | | [removed: 149.03] [added: 150.70] | | | | [removed: 147.33] [added: 149.03] | | | | [removed: 145.94] [added: 147.33] | | | | [removed: 143.16] [added: 145.94] | | | | [removed: 139.83] [added: 143.16] | | |

| Average passenger fare [removed: (j)] | | $ | [removed: 146.95] [added: 151.64] | | | $ | [removed: 149.09] [added: 151.73] | | | $ | [removed: 154.85] [added: 152.89] | | | $ | [removed: 159.80] [added: 154.85] | | | $ | [removed: 154.72] [added: 159.80] | |

| Passenger revenue yield per RPM (cents) [removed: (f)(j)] [added: (f)] | | [removed: 14.83] [added: 15.34] | | | | [removed: 14.90] [added: 15.32] | | | | [removed: 15.57] [added: 15.28] | | | | [removed: 16.34] [added: 15.57] | | | | [removed: 16.02] [added: 16.34] | | |

| Operating revenue per ASM (cents) [removed: (g)] [added: (g)(j)] | | [removed: 13.76] [added: 13.75] | | | | 13.75 | | | | [removed: 13.98] [added: 13.66] | | | | [removed: 14.20] [added: 13.98] | | | | [removed: 13.58] [added: 14.20] | | |

| Passenger revenue per ASM (cents) [removed: (h)(j)] [added: (h)] | | [removed: 12.44] [added: 12.80] | | | | [removed: 12.52] [added: 12.85] | | | | [removed: 13.02] [added: 12.84] | | | | [removed: 13.48] [added: 13.02] | | | | [removed: 12.83] [added: 13.48] | | |

| Operating expenses per ASM, excluding fuel (cents) | | [removed: 8.92] [added: 8.85] | | | | [removed: 8.76] [added: 8.88] | | | | [removed: 8.60] [added: 8.73] | | | | [removed: 8.46] [added: 8.60] | | | | [removed: 8.18] [added: 8.46] | | |

| Operating expenses per ASM, excluding fuel and profitsharing (cents) | | [removed: 8.56] [added: 8.51] | | | | [removed: 8.37] [added: 8.53] | | | | [removed: 8.16] [added: 8.34] | | | | [removed: 8.19] [added: 8.16] | | | | [removed: 8.01] [added: 8.19] | | |

| Fuel costs per gallon, including fuel tax | | $ | [removed: 1.92] [added: 2.20] | | | $ | [removed: 1.82] [added: 1.99] | | | $ | 1.90 | | | $ | [removed: 2.93] [added: 1.96] | | | $ | [removed: 3.16] [added: 2.97] | |

| Fuel costs per gallon, including fuel tax, economic | | $ | [removed: 2.00] [added: 2.20] | | | $ | [removed: 1.92] [added: 2.06] | | | $ | [removed: 2.07] [added: 2.00] | | | $ | [removed: 2.92] [added: 2.13] | | | $ | [removed: 3.12] [added: 2.95] | |

| Fuel consumed, in gallons (millions) | | [removed: 2,045] [added: 2,094] | | | | [removed: 1,996] [added: 2,045] | | | | [removed: 1,901] [added: 1,996] | | | | [removed: 1,801] [added: 1,901] | | | | [removed: 1,818] [added: 1,801] | | |

| Active fulltime equivalent Employees | | [removed: 56,110] [added: 58,803] | | | | [removed: 53,536] [added: 56,110] | | | | [removed: 49,583] [added: 53,536] | | | | [removed: 46,278] [added: 49,583] | | | | [removed: 44,381] [added: 46,278] | | |

| Aircraft at end of period | | [removed: 706] [added: 750] | | | | [removed: 723] [added: 706] | | | | [removed: 704] [added: 723] | | | | [removed: 665] [added: 704] | | | | [removed: 681] [added: 665] | | |

| (e) | Seats per trip is calculated using seats flown divided by trips flown. [removed: Also referred to as "gauge."] |

| (g) | Calculated as operating revenues divided by available seat miles. Also referred to as "operating unit revenues" or "RASM," this is a measure of operating revenue production based on the total available seat miles flown during a particular period. [removed: Year ended 2015 RASM excludes a $172 million one-time special revenue adjustment. Including the special revenue adjustment, RASM would have been 14.11 cents for the year ended 2015. Additional information regarding this special item is provided in the Note Regarding Use of Non-GAAP Financial Measures.] |

As of January 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09: Revenue from Contracts with Customers (the "New Revenue Standard"), ASU 2017-07: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (the "New Retirement Standard"), and ASU 2017-12: Targeted Improvements to Accounting for Hedging Activities (the "New Hedging Standard").

As a result, certain prior period results have been recast due to the transition methods applied.

See Note 2 to the Consolidated Financial Statements for further information.

| | | | | | | As Recast | | | | As Recast | | | | As Recast (k) | | | | As Recast (k) | | |

| Operating expenses | | 18,759 | | | | 17,739 | | | | 16,767 | | | | 15,821 | | | | 16,437 | | |

| Operating income | | 3,206 | | | | 3,407 | | | | 3,522 | | | | 3,999 | | | | 2,168 | | |

| Other expenses (income) net | | 42 | | | | 142 | | | | 72 | | | | 520 | | | | 352 | | |

| Operating expenses per ASM (cents) (i) | | 11.74 | | | | 11.53 | | | | 11.29 | | | | 11.26 | | | | 12.55 | | |

| (j) | Year ended 2015 RASM excludes a $172 million one-time special revenue adjustment in July 2015 as a result of the Company's amendment of its co-branded credit card agreement with Chase Bank USA, N.A. and the resulting required change in accounting methodology. Including the special revenue adjustment, RASM would have been 14.11 cents for the year ended 2015. |

| | |

| --- | --- |

| (k) | The Company has chosen to not recast 2015 and 2014 results for the New Revenue Standard, as permitted. Therefore, 2015 and 2014 only reflect recast results for the New Retirement Standard and the New Hedging Standard. |

| Operating expenses | | 17,656 | | | | 16,665 | | | | 15,704 | | | | 16,380 | | | | 16,421 | | |

| Operating income | | 3,515 | | | | 3,760 | | | | 4,116 | | | | 2,225 | | | | 1,278 | | |

| Other expenses (income) net | | 264 | | | | 213 | | | | 637 | | | | 409 | | | | 69 | | |

| Operating expenses per ASM (cents) (i) | | 11.48 | | | | 11.22 | | | | 11.18 | | | | 12.50 | | | | 12.60 | | |

| (j) | Refer to Note 1 to the Consolidated Financial Statements for additional information regarding the impact from the Company's July 2015 amended co-branded credit card agreement with Chase Bank USA, N.A. |

| | December 31, [removed: 2017] [added: 2018] | | | | December 31, [removed: 2016] [added: 2017] | | |

| Cash and cash equivalents | $ | [removed: 1,495] [added: 1,854] | | | $ | [removed: 1,680] [added: 1,495] | |

| Short-term investments | [removed: 1,778] [added: 1,835] | | | | [removed: 1,625] [added: 1,778] | | |

| Accounts and other receivables | [removed: 662] [added: 568] | | | | [removed: 546] [added: 662] | | |

| Inventories of parts and supplies, at cost | [removed: 420] [added: 461] | | | | [removed: 337] [added: 420] | | |

| Prepaid expenses and other current assets | [removed: 460] [added: 310] | | | | [removed: 310] [added: 460] | | |

| Total current assets | [removed: 4,815] [added: 5,028] | | | | [removed: 4,498] [added: 4,815] | | |

| Flight equipment | [removed: 21,368] [added: 21,753] | | | | [removed: 20,275] [added: 21,368] | | |

| Ground property and equipment | [removed: 4,399] [added: 4,960] | | | | [removed: 3,779] [added: 4,399] | | |

| Deposits on flight equipment purchase contracts | [removed: 919] [added: 775] | | | | [removed: 1,190] [added: 919] | | |

| Assets constructed for others | [removed: 1,543] [added: 1,768] | | | | [removed: 1,220] [added: 1,543] | | |

| Less allowance for depreciation and amortization | [removed: 9,690] [added: 9,731] | | | | [removed: 9,420] [added: 9,690] | | |

| Other assets | [removed: 786] [added: 720] | | | | [removed: 774] [added: 786] | | |

| Accounts payable | $ | [removed: 1,320] [added: 1,416] | | | $ | [removed: 1,178] [added: 1,320] | |

| Accrued liabilities | [added: $ |] 1,777 | | | [added: $] | [removed: 1,985] [added: (77] | [added: )] | | [added: $ | 1,700 | |]

| Air traffic liability | 3,460 | | | | [removed: 3,115] [added: 35] | | | [added: | 3,495 | | |]

| Current maturities of long-term debt | [removed: 348] [added: 606] | | | | [removed: 566] [added: 348] | | |

| Total current liabilities | [removed: 6,905] [added: 7,905] | | | | [removed: 6,844] [added: 6,863] | | |

| Long-term debt less current maturities | [removed: 3,320] [added: 2,771] | | | | [removed: 2,821] [added: 3,320] | | |

| Deferred income taxes | 2,358 | | | | [removed: 3,374] [added: (239] | | [added: )] | [added: | 2,119 | | |]

| Construction obligation | [removed: 1,390] [added: 1,701] | | | | [removed: 1,078] [added: 1,390] | | |

| Other noncurrent liabilities | [removed: 707] [added: 650] | | | | [removed: 728] [added: 707] | | |

| Common stock, $1.00 par value: 2,000,000,000 shares authorized; 807,611,634 shares issued in [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] | 808 | | | | 808 | | |

| Capital in excess of par value | [removed: 1,451] [added: 1,510] | | | | [removed: 1,410] [added: 1,451] | | |

| Retained earnings | 14,621 | | | | [removed: 11,418] [added: (789] | | [added: )] | [added: | 13,832 | | |]

| Accumulated other comprehensive income (loss) | [removed: 12] | [added: 59] | | | [removed: (323] | [added: (9] | [added: |] ) |

| Treasury stock, at cost: [removed: 219,060,856] [added: 255,008,275] and [removed: 192,450,855] [added: 219,060,856] shares in [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] respectively | [removed: (6,462] [added: (8,452] | | ) | | [removed: (4,872] [added: (6,462] | | ) |

| Total stockholders' equity | [removed: 10,430] [added: 9,853] | | | | [removed: 8,441] [added: 9,641] | | |

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |