Southwest Airline (LUV)

Q4 2010 Earnings Call

January 20, 2011 12:30 pm ET


Laura Wright - Chief Financial Officer, Chief Accounting Officer and Senior Vice President of Finance

Gary Kelly - Chairman, Chief Executive Officer, President and Member of Executive Committee


William Greene - Morgan Stanley

Duane Pfennigwerth - Raymond James & Associates

Glenn Engel - BofA Merrill Lynch

Jamie Baker - JP Morgan Chase & Co

Hunter Keay

Michael Linenberg - Merrill Lynch

Helane Becker - Dahlman Rose & Company, LLC



Welcome to the Southwest Airlines Fourth Quarter 2010 Conference Call. [Operator Instructions] On the call today is Gary Kelly, Southwest's Chairman, President and Chief Executive Officer; and Laura Wright, the company's Senior Vice President of Finance and Chief Financial Officer. Before the company get started, please be advised that this call will include forward-looking statements. Because these statements are based on the company's current intent, expectations and projections, they are not guarantees of future performance, and a variety of factors could cause actual results to differ materially.

This call will also include references to non-GAAP results. Therefore, please see the company's financial results press release in the Investor Relations section of its website at for further information regarding forward-looking statements and for a reconciliation of non-GAAP results to GAAP results.

At this time, I'd like to turn the call over to Gary Kelly for opening remarks. Please go ahead, sir.

Gary Kelly

Thanks, Cynthia. Thanks, everyone, for joining us. We are very pleased to be with you all this morning. 2010 proved to be a very satisfying year. It was an upbeat end to what, I think most would agree, has been a lost decade for the airline industry. Our fourth quarter earnings were very solid. That was despite a 12.7% jet fuel price increase year-over-year. Excluding items, we produced $115 million in earnings, $0.15 a share. That was a 55% and a 50% increase, respectively. We had a very strong revenue performance. We set a number of records. Revenues grew 14.8% year-over-year. Anytime we can get double-digit revenue increases, that's something to be celebrated.

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