This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Southwest Airlines Returns Value To Shareholders

Stocks in this article: LUV

DALLAS, May 14, 2014 /PRNewswire/ -- Southwest Airlines (NYSE: LUV) (the "Company") announces the Southwest Airlines Board of Directors, at its meeting held today, increased the Company's quarterly dividend by 50 percent and authorized a new $1 billion share repurchase program.  Under the new $1 billion share repurchase authorization, an initial $200 million of Southwest common stock will be repurchased under an accelerated share repurchase program.  The quarterly dividend will increase to $.06 per share from $.04 per share, beginning with the 151 st consecutive quarterly dividend declared today to Shareholders of record at the close of business on June 4, 2014 on all shares then issued and outstanding.  The dividend will be paid on June 25, 2014.  Annualized, this increased dividend amounts to over $160 million based on approximately 692 million 1 shares of common stock outstanding.

Gary C. Kelly, Chairman of the Board, President, and CEO, stated: "The actions taken today by our Board are in recognition of our strong financial position and performance, strong cash flow outlook, and dedication to returning value to our Shareholders. The Board authorized an increase in our quarterly dividend payment to $.06 per share from $.04 per share.  Based on yesterday's closing stock price of $24.98, this would provide an approximate one percent annual dividend yield to our Shareholders.  The Board also authorized a new $1 billion share repurchase program.  Last week, we completed our previous total $1.5 billion share repurchase authorization, bringing the cumulative return to Shareholders through share repurchases and dividends, since August 2011, to approximately $1.7 billion.  

"Today's announcement enables us to further Southwest's long-standing commitment to deploy capital back to our Shareholders, while preserving our financial strength.  We have maintained an investment-grade credit rating for over 30 years, the only U.S. airline with such a distinction.  Our balance sheet and liquidity remain strong with cash and short-term investments of approximately $3.7 billion 1, and a fully available unsecured revolving credit line of $1 billion.  As of April 30, 2014, we have reduced our debt and capital lease obligations, net, by approximately $1.5 billion since the acquisition of AirTran, and intend to repay an additional $470 million in debt and capital lease obligations for the remainder of this year. 

"With the upcoming repeal of the Wright Amendment, launch of international service, launch of service from the additional slots acquired at New York's LaGuardia Airport and Reagan Washington National Airport, and the planned completion of the AirTran integration, 2014 is a monumental year for Southwest and our Shareholders.  We are very pleased with the successful execution of our major strategic initiatives thus far, which have contributed significantly to our profits.  The momentum from our record first quarter 2014 results continued into April, with strong traffic and revenue trends.  Based on these trends and our current outlook, we are on track with our plan to achieve a 15 percent pre-tax return on invested capital, excluding special items, this year." 

As of May 9, 2014, the Company completed its previous total $1.5 billion share repurchase authorization, including $200 million, or approximately 8.6 million shares, under an accelerated share repurchase program launched in February 2014.  Under the total $1.5 billion share repurchase authorization, the Company repurchased approximately 126 million shares, which has reduced its shares outstanding by over 15 percent since August 2011.  The Company intends to execute an agreement today to implement a new $200 million accelerated share repurchase program.  The remaining $800 million of authorized share repurchases under the new program 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.

1 As of May 12, 2014

Cautionary Statement Regarding Forward-Looking StatementsThis 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 financial plans, goals, and expectations; (ii) the Company's financial outlook and targets and projected results of operations; (iii) the Company's expectations with respect to liquidity and capital expenditures (including its plans for the repayment of debt and capital lease obligations); (iv) the Company's network plans, opportunities, and expectations; and (v) the Company's integration of AirTran. 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) demand for the Company's services and the impact of economic conditions, fuel prices, and actions of competitors (including, without limitation, pricing, scheduling, and capacity decisions and consolidation and alliance activities) on the Company's business decisions, plans, and strategies; (ii) 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; (iii) the Company's ability to timely and effectively prioritize its strategic initiatives and related expenditures; (iv) the Company's ability to successfully integrate AirTran and realize the expected synergies and other benefits from the integration; (v) the impact of governmental action and regulation related to the Company's operations; (vi) the Company's dependence on third parties with respect to certain of its initiatives; and (vii) 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, 2013.

SOURCE Southwest Airlines

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs