Southwest Airlines(LUV) - 2024 Q4 - Annual Results

Financial Performance - Fourth quarter 2024 net income was $261 million, or$0.42 per diluted share, while full year net income was $465 million, or$0.76 per diluted share[2]. - Record fourth quarter operating revenues reached $6.9 billion, a 1.6$27.5 billion[10]. - Operating income for Q4 2024 was $278 million, a significant recovery from a loss of$404 million in Q4 2023[40]. - Net income for the year ended December 31, 2024, was $465 million, unchanged from the previous year[40]. - Basic net income per share for Q4 2024 was$0.44, compared to a loss of $0.42 per share in Q4 2023[40]. - The company reported a significant increase in operating income, excluding special items, to$397 million in Q4 2024, up 118.1% from $182 million in Q4 2023[41]. - The company reported a net income, excluding special items, of$356 million for the three months ended December 31, 2024, representing a 50.2% increase from $237 million in the same period of 2023[42]. - Total income before income taxes, excluding special items, was$455 million for the three months ended December 31, 2024, a 47.2% increase from $309 million in the prior year[42]. Revenue and Expenses - Total operating revenues for Q4 2024 reached$6,931 million, a 1.6% increase from $6,822 million in Q4 2023[40]. - Passenger revenue increased by 1.5$6,307 million in Q4 2024, compared to $6,211 million in Q4 2023[40]. - Total operating expenses decreased by 7.9$6,653 million in Q4 2024, down from $7,226 million in Q4 2023[40]. - Operating revenues, excluding special items, increased by 3.3$7,047 million in Q4 2024[41]. - Operating expenses, excluding fuel and oil expense and special items, rose by 6.3% to $5,307 million in Q4 2024[41]. - Fuel and oil expense, as reported, decreased by 25.8$1,264 million in Q4 2024, compared to $1,703 million in Q4 2023[40]. - Operating expenses per ASM, excluding fuel and oil expenses, increased to 12.19 cents for the three months ended December 31, 2024, an 11.1$680 million to shareholders in 2024 through dividends and share repurchases[2]. - The Company returned $680 million to its shareholders in 2024, which included$430 million in dividends and $250 million in share repurchases[29]. - The Company plans to launch an additional$750 million accelerated share repurchase program in the first quarter of 2025[29]. Capital Expenditures and Debt - Full year 2024 capital expenditures were $2.1 billion, with 2025 capital spending estimated between$2.5 billion and $3.0 billion[22]. - The Company paid$1.3 billion during 2024 to retire debt and finance lease obligations, including the early redemption of its $1.3 billion outstanding 5.25$6,699 million as of December 31, 2024, from $8,007 million in 2023[65]. - Adjusted debt as of December 31, 2024, was$7,801 million, down from $8,957 million in 2023[65]. - Leverage ratio (adjusted debt to invested capital) improved to 43$184.81 in Q4 2024 compared to $172.60 in Q4 2023[48]. - Load factor improved by 1.0 percentage points to 79.2$8.7 billion in cash and cash equivalents and short-term investments, along with a fully available revolving credit line of $1.0 billion[29]. - Cash and cash equivalents at the end of the period were$7,509 million, down from $9,288 million at the end of 2023[56]. - The company reported a gain on sale-leaseback transactions of$871 million for the year ended December 31, 2024[56]. - The company incurred a loss on extinguishment of debt amounting to $2 million for the year ended December 31, 2024[56]. Future Outlook - The company is currently 51$500 million, supporting a 2025 CASM-X exit rate in the low-single digits[1]. Recognition and Awards - The company was recognized as the 1 Airline for Economy Class Customer Satisfaction in the J.D. Power 2024 North America Airline Satisfaction Study for the third consecutive year[29].