UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of
Report (Date of earliest event
reported): October
15, 2009
Southwest
Airlines Co.
__________________________________________
(Exact
name of registrant as specified in its charter)
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Texas
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1-7259
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74-1563240
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_____________________
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_____________
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______________
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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P.
O. Box 36611, Dallas, Texas
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75235-1611
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_________________________________
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___________
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (214)
792-4000
Not
Applicable
______________________________________________
Former
name or former address, if changed since last report
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the
filing
obligation of the registrant under any of the following provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR
230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR
240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the
Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the
Exchange
Act (17 CFR 240.13e-4(c))
| Item 2.02 | Results of Operations and Financial Condition. |
On
October 15, 2009, the Registrant issued a press release announcing its financial
results for the third quarter 2009. As discussed further in Item 4.02(a)
of this Form 8-K, the registrant also announced that it will be restating
results for the three and six month periods ended June 30,2009. The
press release is furnished herewith as Exhibit 99.1 and is incorporated by
reference into this Item 2.02.
The
information furnished in this Item 2.02 shall not be deemed "filed" for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section, nor shall such information be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, regardless of any general incorporation language in such filing, except
as shall be expressly set forth by specific reference in such
filing.
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Item 4.02
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Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review.
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(a) On October 14, 2009, the
Company determined that its financial statements for the three and six
months ended June 30, 2009, contained an error with respect to one rule
within ASC Topic 815 (originally issued as SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities,” as amended). Specifically, in
conjunction with facilitating the implementation of new hedge accounting
software in April 2009, existing hedging instruments were de-designated and
re-designated as new hedges. Included in the re-designation however,
were certain derivative instruments that were in a net written option position
that would not qualify as hedges according to ASC Topic 815.
The result of
this error was that a portion of the increase in fair value of these derivatives
was deferred as part of Accumulated Other Comprehensive Income/Loss (AOCI), when
in fact those increases should have been recognized in earnings in second
quarter 2009. This would have increased GAAP Net income by $37
million. The net increase in fair value related to these
instruments, totaling $57 million, before taxes, during second quarter 2009,
relates entirely to unrealized changes in fair value as substantially all
of the instruments will not settle until periods subsequent to
2009. Since the Company classifies these unrealized noncash changes
in fair value as a component of Other (gains) losses, net in the unaudited
Condensed Consolidated Statement of Income, this error also had no impact on the
Company's operating income for the quarter or the six month period ended
June 30, 2009, nor did it impact the Company's net cash flows for second
quarter 2009. The impact on the Company's unaudited Condensed Consolidated
Balance Sheet as of June 30, 2009 would have been an increase to AOCI of
$35 million, an increase to Retained earnings of $37 million, a decrease to
Accrued liabilities of $5 million, and an increase to Deferred income taxes of
$3 million. This error had no impact on any financial statements prior to those
issued for second quarter 2009.
Based on
the foregoing, on October 14, 2009, the Audit Committee of the Company’s Board
of Directors, upon the recommendation of management and after discussion with
the Company’s independent accountants, concluded that the Company’s unaudited
consolidated financial statements as of and for the three and six month periods
ended June 30, 2009 should no longer be relied upon. The Audit Committee also
concluded that these unaudited consolidated financial statements should be
restated to reflect these presentation changes.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits:
99.1
Registrant’s Third Quarter 2009 Earnings Release.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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SOUTHWEST
AIRLINES CO.
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October
15, 2009
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By
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/s/ Laura
Wright
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Laura
Wright
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Chief
Financial Officer
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(Principal
Financial and
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Accounting
Officer)
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Exhibit
Index
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Exhibit
No.
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Description
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99.1
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Registrant's
Third Quarter 2009 Earnings
Release.
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