Southwest Airlines Returns Value To Shareholders

Southwest Airlines Co. (LUV) (the "Company") announces the Southwest Airlines Board of Directors, at its meeting held today, increased the Company's quarterly dividend by 12.5 percent and authorized a new $2.0 billion share repurchase program. The quarterly dividend will increase to $.18 per share from $.16 per share, beginning with the 171st consecutive quarterly dividend declared today to Shareholders of record at the close of business on June 5, 2019, on all shares then issued and outstanding. The dividend will be paid on June 26, 2019.

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated: "We have consistently produced strong margins, returns on capital, and cash flows. I'm pleased to announce the Board's decision today to increase our quarterly dividend by 12.5 percent to $.18 per share, or $.72 per share annualized, which amounts to approximately $391 million1, and an approximate 1.4 percent dividend yield2. I am also pleased that the Board authorized a new $2.0 billion share repurchase program upon the completion of the remaining $400 million under the May 2018 $2.0 billion share repurchase authorization.

"This share repurchase authorization, combined with our annual dividends, continues our consistent track record of Shareholder returns. Since 2010, we have returned more than $11 billion of value to Shareholders through share repurchases and dividends. Our long-term financial goals remain unchanged: maintain a strong balance sheet, investment-grade credit ratings, and ample liquidity; generate robust operating and free cash flows; grow earnings, margins, and capital returns; and maintain healthy Shareholder returns."

The Company has repurchased approximately 21.7 million shares under the May 2018 $2.0 billion share repurchase authorization through March 31, 2019. During second quarter 2019, the Company has made share repurchases totaling $450 million, which includes a $400 million accelerated share repurchase program ("Second Quarter 2019 ASR Program") launched on April 29, 2019. The specific number of shares that the Company ultimately will repurchase under the Second Quarter 2019 ASR Program will be determined based generally on a discount to the volume-weighted average price per share of the Company's common stock during a calculation period to be completed no later than July 2019. Subsequent to the launch of the Second Quarter 2019 ASR Program, the Company has $400 million remaining under the May 2018 $2.0 billion share repurchase authorization. The Company also entered into an additional open market share repurchase plan for the purchase of up to an additional $50 million of its shares of common stock depending on market prices.

The Company's future share repurchases under today's $2.0 billion repurchase authorization 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.