Southwest Airlines Returns Value To Shareholders

Southwest Airlines Co. (NYSE: LUV) (the "Company") announces the Southwest Airlines Board of Directors, at its meeting held today, increased the Company's quarterly dividend by 12.5 percent and authorized a new $2.0 billion share repurchase program. The quarterly dividend will increase to $.18 per share from $.16 per share, beginning with the 171^st consecutive quarterly dividend declared today to Shareholders of record at the close of business on June 5, 2019, on all shares then issued and outstanding. The dividend will be paid on June 26, 2019.

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated: "We have consistently produced strong margins, returns on capital, and cash flows. I'm pleased to announce the Board's decision today to increase our quarterly dividend by 12.5 percent to $.18 per share, or $.72 per share annualized, which amounts to approximately $391 million¹, and an approximate 1.4 percent dividend yield². I am also pleased that the Board authorized a new $2.0 billion share repurchase program upon the completion of the remaining $400 million under the May 2018 $2.0 billion share repurchase authorization. 

"This share repurchase authorization, combined with our annual dividends, continues our consistent track record of Shareholder returns. Since 2010, we have returned more than $11 billion of value to Shareholders through share repurchases and dividends. Our long-term financial goals remain unchanged: maintain a strong balance sheet, investment-grade credit ratings, and ample liquidity; generate robust operating and free cash flows; grow earnings, margins, and capital returns; and maintain healthy Shareholder returns."

The Company has repurchased approximately 21.7 million shares under the May 2018 $2.0 billion share repurchase authorization through March 31, 2019. During second quarter 2019, the Company has made share repurchases totaling $450 million, which includes a $400 million accelerated share repurchase program ("Second Quarter 2019 ASR Program") launched on April 29, 2019. The specific number of shares that the Company ultimately will repurchase under the Second Quarter 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 July 2019. Subsequent to the launch of the Second Quarter 2019 ASR Program, the Company has $400 million remaining under the May 2018 $2.0 billion share repurchase authorization. The Company also entered into an additional open market share repurchase plan for the purchase of up to an additional $50 million of its shares of common stock depending on market prices.

The Company's future share repurchases under today's $2.0 billion repurchase authorization will be made in accordance with applicable securities laws in open market, private, or accelerated repurchase transactions from time to time, depending on market conditions, but may be discontinued at any time.

¹Based on approximately 543 million shares of common stock outstanding on May 13, 2019.
²Based on the closing stock price of $51.65 on May 14, 2019.

Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's expectations and goals with respect to the return of value to Shareholders and (ii) the Company's financial outlook, position, strategies, goals, and expectations. These forward-looking statements are based on the Company's current intent, expectations, and projections and are not guarantees of future performance. These statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the impact of governmental regulations and other governmental actions related to the Company and its operations, in particular with respect to the Boeing 737 MAX aircraft, and any related changes in consumer behavior; (ii) the Company's dependence on third parties and the impact on the Company's operations and results of operations of any related third party delays or non-performance; (iii) the impact of changes in consumer behavior, economic conditions, actions of competitors (including without limitation pricing, scheduling, capacity, and network decisions, and consolidation and alliance activities), extreme or severe weather and natural disasters, fears of terrorism or war, and other factors beyond the Company's control, on the Company's business decisions, plans, strategies, and results; (iv) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (v) the impact of fuel price volatility, volatility of commodities used by the Company for hedging jet fuel, and any changes to the Company's fuel hedging strategies and positions, on the Company's business plans and results of operations; and (vi) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2019.

SW-DSR

SOURCE Southwest Airlines Co.