Southwest Airlines Announces Pricing Of Upsized Offerings Of Common Stock And 1.250% Convertible Senior Notes Due 2025

Southwest Airlines Co. (NYSE: LUV) (the "Company") today announced it has priced its underwritten public offering of 70,000,000 shares of common stock of the Company at a public offering price of $28.50 per share (the "Common Stock Offering") and its underwritten public offering of $2.0 billionaggregate principal amount of 1.250% Convertible Senior Notes due 2025 (the "Convertible Notes" and such offering, the "Convertible Notes Offering"). The size of the Common Stock Offering was increased from the previously announced 55,000,000 shares of common stock of the Company, and the aggregate principal amount of the Convertible Notes Offering was increased from the previously announced $1.0 billion. The gross proceeds to the Company from the Common Stock Offering and the Convertible Notes Offering, before deducting underwriting discounts and other offering expenses, are expected to be approximately $4.0 billion.

The Company has granted the underwriters a 30-day option to purchase up to 10,500,000 additional shares of common stock at the public offering price less the underwriting discount in the Common Stock Offering (reflecting an increase from the previously announced option of up to 8,250,000 additional shares of common stock) and a 30-day option to purchase up to $300 million aggregate principal amount of additional Convertible Notes, solely to cover over-allotments, in the Convertible Notes Offering (reflecting an increase from the previously announced option of up to $150 millionaggregate principal amount of additional Convertible Notes). The Convertible Notes will be convertible by holders if certain conditions are met, based on an initial conversion rate of 25.9909 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $38.48 per share, representing a premium of 35% above the offering price per share in the Common Stock Offering.  The Company will settle conversions of the Convertible Notes in cash, shares of common stock, or a combination thereof at the Company's election.

The Company expects to use the net proceeds from the Common Stock Offering and the Convertible Notes Offering for general corporate purposes. Each of the Common Stock Offering and the Convertible Notes Offering is expected to close on May 1, 2020, subject to customary closing conditions. Neither of the closings of the Common Stock Offering or the Convertible Notes Offering is conditioned upon the closing of the other offering.

Morgan Stanley, BofA Securities, J.P. Morgan, BNP Paribas, and Citigroup are acting as the joint book-running managers for the Common Stock Offering and the Convertible Notes Offering, and Morgan Stanley, BofA Securities, and J.P. Morgan are acting as representatives of the underwriters of the offerings. A shelf registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission ("SEC") and has become effective. Each of the Common Stock Offering and the Convertible Notes Offering may be made only by means of a prospectus supplement and an accompanying base prospectus. The preliminary prospectus supplements and accompanying base prospectus relating to each of the Common Stock Offering and the Convertible Notes Offering have been filed, and final prospectus supplements will be filed, with the SEC and will be available on the SEC's website at www.sec.gov. Copies of the preliminary prospectus supplements and accompanying base prospectus relating to the Common Stock Offering and the Convertible Notes Offering may be obtained from (1) Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, Attention: Prospectus Department, (2) BofA Securities, NC1-004-03-43, 200 North College Street, 3rd floor, Charlotte NC  28255-0001, Attention: Prospectus Department, or via email: dg.prospectus_requests@bofa.com, or (3) J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or via telephone: 1-866-803-9204.