Southwest Airlines Returns Value To Shareholders

Southwest Airlines Co. (NYSE: LUV) (the "Company") announces the Southwest Airlines Board of Directors, at its meeting held today, increased the Company's quarterly dividend by 25 percent and authorized a new $2.0 billion share repurchase program. The quarterly dividend will increase to $.125 per share from $.10 per share, beginning with the 163^rd consecutive quarterly dividend declared today to Shareholders of record at the close of business on June 7, 2017, on all shares then issued and outstanding. The dividend will be paid on June 28, 2017.

Gary C. Kelly, Chairman of the Board and Chief Executive Officer, stated: "Based on our strong results, cash flow outlook, and investment grade balance sheet, I'm pleased to announce the Board's decision today to increase our quarterly dividend by 25 percent. Annualized, the increased dividend amounts to approximately $300 million¹, and an approximate one percent dividend yield², to our Shareholders. The Board also authorized a new $2.0 billion share repurchase program. Our May 2016 $2.0 billion share repurchase authorization was completed earlier this month.

"Since 2010, we have invested more than $10.0 billion to grow our net fleet by 179 aircraft and expand our network by 32 new destinations; rewarded our Employees with approximately $7.8 billion in profitsharing and benefits on top of base salaries; and returned approximately $6.4 billion to our Shareholders through a combination of dividends and share repurchases. Our strong financial position, performance, and outlook, along with the Board's actions today, fortify our ongoing commitment to return value to our Customers, Employees, and Shareholders."

On May 5, 2017, the Company completed its May 2016 $2.0 billion share repurchase authorization with the launch of a $400 million accelerated share repurchase program ("Second Quarter 2017 ASR Program"). The Company is scheduled to receive an estimated 75 percent of the shares expected to be purchased under the Second Quarter 2017 ASR Program on June 9, 2017. The specific number of shares that the Company ultimately will repurchase under the Second Quarter 2017 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 31, 2017. Under the May 2016 $2.0 billion share repurchase authorization, the Company repurchased approximately 34.6 million shares prior to the launch of the Second Quarter 2017 ASR Program.

The Company's 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.

¹Based on approximately 605 million shares of common stock outstanding on May 15, 2017.
²Based on yesterday's closing stock price of $58.27.

Cautionary Statement Regarding Forward-Looking Statements
This 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 expectations and goals with respect to the return of value to Shareholders and (ii) the Company's financial outlook. 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) the impact of economic conditions, consumer behavior, fuel prices, actions of competitors (including without limitation pricing, scheduling, capacity, and network decisions and consolidation and alliance activities), governmental actions, and other factors beyond the Company's control, 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; and (iii) 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, 2016.

SW-DSR

SOURCE Southwest Airlines Co.