Here are a few of the highlights I gleamed from the 10K for those SWA watchers out there. Look forward to seeing some of you poolies in Jan 
...we'll keep our fingers crossed.
- Thus far, based on recent RASM and booking trends, the Company expects year-over-year unit revenue growth again in fourth quarter 2003. On a customary seasonal basis, however, the Company expects fourth quarter 2003 RASM to decline from third quarter 2003.
- Consolidated freight revenues increased by $3 million, or 15.0 percent, due to increases in freight and cargo revenues primarily from an increase in the number of shipments. This increase more than offset a decrease in mail revenues.
(As a side note SWA is developing new technology(scanner & software must be able to track each mail bundle at each phase of flight) that will allow us to take much more mail in the future. Whatever reductions in mail cargo have occurred in the past, this new technology will allow this to increase.)
- Other revenues were flat compared to third quarter 2002 as a 29.4 percent increase in commissions earned from programs the Company sponsors with certain business partners, such as the Company sponsored Bank One (formerly First USA) Visa card, was offset by a 35.4 percent decline in charter revenue.
- Operating expenses per ASM were 7.51 cents, a 1.8 percent increase compared to 7.38 cents for third quarter 2002
- For fourth quarter 2003, the Company has fuel hedges in place for 87 percent of its expected fuel consumption with a combination of derivative instruments that effectively cap prices under $24 per barrel of crude oil. Based on these hedge positions and prevailing market prices, the Company currently expects fourth quarter 2003 average jet fuel cost per gallon to exceed the third quarter 2003 average jet fuel cost per gallon of 72.8 cents.
- Approximately 55 percent of revenues in third quarter 2003 were derived through the Company's web site at www.southwest.com versus 50 percent of revenues in third quarter 2002
- Landing fees and other rentals per ASM increased 6.1 percent compared to third quarter 2002. Approximately 56 percent of the increase was in rentals expense primarily due to the Company's expansion of gate and counter space at several airports. The remainder of the increase was in landing fees, primarily due to an increase in Southwest's share of landing fee rates at certain airports as a result of capacity reductions by other airlines.
- Other operating expenses per ASM decreased 7.7 percent. Approximately half of the increase was due to decreased aviation insurance costs.
- Aircraft rentals per ASM decreased 3.8 percent compared to third quarter 2002 primarily due to the increase in ASMs relative to the number of leased aircraft. Although ASMs increased 3.4 percent, the number of leased aircraft declined by one, as a result of a retirement in second quarter 2003. All of the aircraft acquired in 2002 and 2003 are owned by the Company. Approximately 23.1 percent of the Company's aircraft fleet were under operating lease at September 30, 2003, compared to 24.3 percent at September 30, 2002. The Company owns all 18 of the aircraft it has put into service over the past twelve months. This, along with the retirement of two owned and one leased aircraft, has increased the Company's percentage of aircraft owned or on capital lease to 76.9 percent at September 30, 2003 from 75.7 percent at September 30, 2002.
- Average passenger fare increased 3.2 percent to $86.56 primarily due to moderate fare increases taken by the Company.
- Maintenance materials and repairs per ASM increased 3.4 percent primarily due to an increase in contract rates per hour flown for outsourced engine maintenance. The Company outsources all of its engine maintenance work for 737-300 and 737-500 aircraft and expense is based on the number of hours flown for those aircraft and the rate charged per hour flown.
- the Company has four remaining 737-700 aircraft deliveries for fourth quarter 2003. Also, in October 2003, the Company exercised one Boeing 737-700 option for 2005 delivery and four 2006 options for accelerated delivery to 2004. The Company also entered into an agreement to lease a new Boeing 737-700 beginning in 2004. These changes bring the Company's total firm orders to 46 aircraft for 2004 plus one leased aircraft. The following table details the Company's current firm orders, options, and purchase rights through 2012.
- On aircraft delivered from the manufacturer, the Company has the option, which must be exercised two years prior to the contractual delivery date, to substitute -600s or -800s for the -700s. Aggregate funding needed for firm commitments, as of September 30, 2003, was approximately $3.3 billion, subject to adjustments for inflation, due as follows: $234 million remaining in 2003, $1.1 billion in 2004, $700 million in 2005, $645 million in 2006, $523 million in 2007, and $95 million thereafter
- The Company has various options available to meet its capital and operating commitments, including cash on hand at September 30, 2003 of $2.0 billion and internally generated funds. The Company has two fully available unsecured revolving credit facilities from which it can borrow up to $575 million from a group of banks. One of the facilities, for half of the total amount, was renewed for an additional year during April 2003. This facility now expires in April 2004. The other facility, for half of the amount, expires in April 2005. The Company will also consider various borrowing or leasing options to maximize earnings and supplement cash requirements.
Sorry for the length. Also I heard yesterday but couldn't find it in print profit sharing districution for the quarter was around $30M. This money is taken out before the declared profit is announced so add this to the $106M that was earned & that is what profit actually occurred.
cheers,
...we'll keep our fingers crossed.- Thus far, based on recent RASM and booking trends, the Company expects year-over-year unit revenue growth again in fourth quarter 2003. On a customary seasonal basis, however, the Company expects fourth quarter 2003 RASM to decline from third quarter 2003.
- Consolidated freight revenues increased by $3 million, or 15.0 percent, due to increases in freight and cargo revenues primarily from an increase in the number of shipments. This increase more than offset a decrease in mail revenues.
(As a side note SWA is developing new technology(scanner & software must be able to track each mail bundle at each phase of flight) that will allow us to take much more mail in the future. Whatever reductions in mail cargo have occurred in the past, this new technology will allow this to increase.)
- Other revenues were flat compared to third quarter 2002 as a 29.4 percent increase in commissions earned from programs the Company sponsors with certain business partners, such as the Company sponsored Bank One (formerly First USA) Visa card, was offset by a 35.4 percent decline in charter revenue.
- Operating expenses per ASM were 7.51 cents, a 1.8 percent increase compared to 7.38 cents for third quarter 2002
- For fourth quarter 2003, the Company has fuel hedges in place for 87 percent of its expected fuel consumption with a combination of derivative instruments that effectively cap prices under $24 per barrel of crude oil. Based on these hedge positions and prevailing market prices, the Company currently expects fourth quarter 2003 average jet fuel cost per gallon to exceed the third quarter 2003 average jet fuel cost per gallon of 72.8 cents.
- Approximately 55 percent of revenues in third quarter 2003 were derived through the Company's web site at www.southwest.com versus 50 percent of revenues in third quarter 2002
- Landing fees and other rentals per ASM increased 6.1 percent compared to third quarter 2002. Approximately 56 percent of the increase was in rentals expense primarily due to the Company's expansion of gate and counter space at several airports. The remainder of the increase was in landing fees, primarily due to an increase in Southwest's share of landing fee rates at certain airports as a result of capacity reductions by other airlines.
- Other operating expenses per ASM decreased 7.7 percent. Approximately half of the increase was due to decreased aviation insurance costs.
- Aircraft rentals per ASM decreased 3.8 percent compared to third quarter 2002 primarily due to the increase in ASMs relative to the number of leased aircraft. Although ASMs increased 3.4 percent, the number of leased aircraft declined by one, as a result of a retirement in second quarter 2003. All of the aircraft acquired in 2002 and 2003 are owned by the Company. Approximately 23.1 percent of the Company's aircraft fleet were under operating lease at September 30, 2003, compared to 24.3 percent at September 30, 2002. The Company owns all 18 of the aircraft it has put into service over the past twelve months. This, along with the retirement of two owned and one leased aircraft, has increased the Company's percentage of aircraft owned or on capital lease to 76.9 percent at September 30, 2003 from 75.7 percent at September 30, 2002.
- Average passenger fare increased 3.2 percent to $86.56 primarily due to moderate fare increases taken by the Company.
- Maintenance materials and repairs per ASM increased 3.4 percent primarily due to an increase in contract rates per hour flown for outsourced engine maintenance. The Company outsources all of its engine maintenance work for 737-300 and 737-500 aircraft and expense is based on the number of hours flown for those aircraft and the rate charged per hour flown.
- the Company has four remaining 737-700 aircraft deliveries for fourth quarter 2003. Also, in October 2003, the Company exercised one Boeing 737-700 option for 2005 delivery and four 2006 options for accelerated delivery to 2004. The Company also entered into an agreement to lease a new Boeing 737-700 beginning in 2004. These changes bring the Company's total firm orders to 46 aircraft for 2004 plus one leased aircraft. The following table details the Company's current firm orders, options, and purchase rights through 2012.
- On aircraft delivered from the manufacturer, the Company has the option, which must be exercised two years prior to the contractual delivery date, to substitute -600s or -800s for the -700s. Aggregate funding needed for firm commitments, as of September 30, 2003, was approximately $3.3 billion, subject to adjustments for inflation, due as follows: $234 million remaining in 2003, $1.1 billion in 2004, $700 million in 2005, $645 million in 2006, $523 million in 2007, and $95 million thereafter
- The Company has various options available to meet its capital and operating commitments, including cash on hand at September 30, 2003 of $2.0 billion and internally generated funds. The Company has two fully available unsecured revolving credit facilities from which it can borrow up to $575 million from a group of banks. One of the facilities, for half of the total amount, was renewed for an additional year during April 2003. This facility now expires in April 2004. The other facility, for half of the amount, expires in April 2005. The Company will also consider various borrowing or leasing options to maximize earnings and supplement cash requirements.
Sorry for the length. Also I heard yesterday but couldn't find it in print profit sharing districution for the quarter was around $30M. This money is taken out before the declared profit is announced so add this to the $106M that was earned & that is what profit actually occurred.
cheers,
