What changed in this filing

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Item 1. Financial Statements

2023-10-30 compared with 2023-07-28 · 195 added, 205 removed, 630 unchanged (39% of the section changed)

3 unchanged sentences

(in millions)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Current assets:

40 unchanged sentences

Southwest Airlines Co.

Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Comprehensive Income (Loss)

(in millions, except per share amounts)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

4 unchanged sentences

Total operating revenues 6,525 6,220 19,268 17,642

OPERATING EXPENSES, NET:

OPERATING EXPENSES:

Salaries, wages, and benefits 2,728 2,322 7,991 6,771

4 unchanged sentences

Other operating expenses 958 819 2,868 2,343

Total operating expenses, net 6,242 5,570 12,232 10,415

Total operating expenses 6,408 5,825 18,640 16,240

OPERATING INCOME 117 395 628 1,402

11 unchanged sentences

NET INCOME PER SHARE, DILUTED $ 0.31 $ 0.44 $ 1.15 $ 1.21

COMPREHENSIVE INCOME $ 544 $ 674 $ 238 $ 899

COMPREHENSIVE INCOME (LOSS) $ 336 $ ( 223 ) $ 574 $ 676

WEIGHTED AVERAGE SHARES OUTSTANDING

19 unchanged sentences

Balance at June 30, 2023 $ 888 $ 4,103 $ 16,571 $ 58 $ ( 10,831 ) $ 10,789

Issuance of common and treasury stock pursuant to Employee stock plans — 9 — — 4 13

Share-based compensation — 23 — — — 23

Cash dividends, $ 0.18 per share

— — ( 107 ) — — ( 107 )

Comprehensive income — — 193 143 — 336

Balance at September 30, 2023 $ 888 $ 4,135 $ 16,657 $ 201 $ ( 10,827 ) $ 11,054

Common Stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Treasury stock Total

10 unchanged sentences

Balance at June 30, 2022 $ 888 $ 3,966 $ 16,311 $ 805 $ ( 10,850 ) $ 11,120

Issuance of common and treasury stock pursuant to Employee stock plans — 9 — — 4 13

Share-based compensation — 14 — — — 14

Comprehensive income (loss) — — 277 ( 500 ) — ( 223 )

Balance at September 30, 2022 $ 888 $ 3,989 $ 16,588 $ 305 $ ( 10,846 ) $ 10,924

See accompanying notes.

2 unchanged sentences

(in millions)

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2023 2022 2023 2022

5 unchanged sentences

Unrealized mark-to-market adjustment on available for sale securities — — ( 4 ) 7

Unrealized/realized (gain) loss on fuel derivative instruments 6 ( 20 ) 6 15

Unrealized/realized (gain) on fuel derivative instruments ( 21 ) ( 26 ) ( 14 ) ( 11 )

Deferred income taxes 57 76 214 250

21 unchanged sentences

Other, net ( 1 ) 1 4 6

Net cash provided by (used in) financing activities 10 ( 215 ) ( 253 ) ( 530 )

Net cash used in financing activities ( 213 ) ( 1,905 ) ( 466 ) ( 2,435 )

NET CHANGE IN CASH AND CASH EQUIVALENTS 339 ( 2,791 ) 5 ( 2,037 )

13 unchanged sentences

Financial Derivative Instruments

Comprehensive Income

Comprehensive Income (Loss)

Net Income Per Share

13 unchanged sentences

This disruption and subsequent recovery efforts resulted in the cancellation of more than 16,700 flights during the period from December 21 through December 31, 2022.

These events also created a deceleration in bookings, primarily isolated to January and February 2023, as well as increased first quarter 2023 expenses by approximately $ 55 million, which are included in the accompanying unaudited Condensed Consolidated Statement of Comprehensive Income for the six months ended June 30, 2023.

These first quarter 2023 expenses included reimbursements to Customers impacted by the cancellations for costs they incurred in excess of the amounts accrued as of December 31, 2022, adjustments to the estimated value of Rapid Rewards points offered as a gesture of goodwill to Customers as a result of changes in the estimates of the points expected to be redeemed, and additional premium pay and additional compensation for Employees directly or indirectly impacted by the cancellations and recovery efforts.

There were no material impacts to operating revenues or expenses for the three months ended June 30, 2023 as a result of this disruption.

There were no material impacts to operating revenues or expenses beyond first quarter 2023 as a result of this disruption.

The accompanying unaudited Condensed Consolidated Financial Statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles in the United States ("GAAP") for complete financial statements.

The unaudited Condensed Consolidated Financial Statements for the interim periods ended June 30, 2023 and 2022 include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods.

The unaudited Condensed Consolidated Financial Statements for the interim periods ended September 30, 2023 and 2022 include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods.

This includes all normal and recurring adjustments and elimination of significant intercompany transactions.

Financial results for the Company and airlines in general can be seasonal in nature.

In many years, the Company's revenues, as well as its Operating income and Net income, have been better in its second and third fiscal quarters than in its first and fourth fiscal quarters.

In many years, the Company's revenues, as well as its Operating income and Net income, have performed better in its second and third fiscal quarters than in its first and fourth fiscal quarters.

Air travel is also significantly impacted by general economic conditions, the amount of disposable income available to consumers and changes in consumer behavior, unemployment levels, corporate travel budgets, global pandemics such as COVID-19, extreme or severe weather and natural disasters, fears of terrorism or war, governmental actions, and other factors beyond the Company's control.

1 unchanged sentence

See Note 3 for further information on fuel and the Company's hedging program.

Operating results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for future quarters or for the year ended December 31, 2023.

Operating results for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for future quarters or for the year ended December 31, 2023.

For further information, refer to the Consolidated Financial Statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Certain prior period amounts have been reclassified to conform to the current presentation.

In the unaudited Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2022, the Company has reclassified $ 43 million and $ 116 million from Other (gains) losses, net to Loss on extinguishment of debt.

NEW ACCOUNTING PRONOUNCEMENTS

On January 7, 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848).

This new standard provides optional temporary guidance for entities transitioning away from London Interbank Offered Rate

This standard provides optional temporary guidance for entities transitioning away from London Interbank Offered Rate ("LIBOR") to new reference interest rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions with Topic 848.

These amendments do not apply to any contract modifications made after December 31, 2024, any new hedging relationships entered into after December 31, 2024, or to existing hedging relationships evaluated for effectiveness existing as of December 31, 2024, that apply certain optional practical expedients.

This standard was effective immediately and may be applied (i) on a full retrospective basis as

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

("LIBOR") to new reference interest rates so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions with Topic 848.

This standard was effective immediately and may be applied (i) on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or (ii) on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued.

The Company had no material LIBOR-related contract modifications during the six months ended June 30, 2023.

of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or (ii) on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of the issuance of a final update, up to the date that financial statements are available to be issued.

The Company had no material LIBOR-related contract modifications during the nine months ended September 30, 2023.

FINANCIAL DERIVATIVE INSTRUMENTS

8 unchanged sentences

The level at which the Company is economically hedged for a particular period is also dependent on current market prices for that period, as well as the types of derivative instruments held and the strike prices of those instruments.

For example, the Company may enter into "out-of-the-money" option contracts (including "catastrophic" protection), which may not generate intrinsic gains at settlement if market prices do not rise above the option strike price.

For example, the Company may enter into "out-of-the-money" option contracts (including "catastrophic" protection, which the Company defines as prices significantly higher than historical average levels), which may not generate intrinsic gains at settlement if market prices do not rise above the option strike price.

Therefore, even though the Company may have an economic hedge in place for a particular period, that hedge may not produce any hedging gains at settlement and may even produce hedging losses depending on market prices, the types of instruments held, and the strike prices of those instruments.

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

As of June 30, 2023, the Company had fuel derivative instruments in place to provide coverage at varying price levels.

As of September 30, 2023, the Company had fuel derivative instruments in place to provide coverage at varying price levels.

The following table provides information about the Company’s volume of fuel hedging on an economic basis:

Maximum fuel hedged as of

June 30, 2023 Derivative underlying commodity type as of

Period (by year) (gallons in millions) (a) June 30, 2023

September 30, 2023 Derivative underlying commodity type as of

Period (by year) (gallons in millions) (a) September 30, 2023

Remainder of 2023 271 West Texas Intermediate ("WTI") crude oil, Brent crude oil, and Heating oil

4 unchanged sentences

Upon proper qualification, the Company accounts for its fuel derivative instruments as cash flow hedges.

Qualification is re-evaluated quarterly, and all periodic changes in fair value of the derivatives designated as hedges are recorded in Accumulated other comprehensive income ("AOCI") until the underlying jet fuel is consumed.

Qualification is re-evaluated quarterly, and all periodic changes in fair value of the derivatives designated as hedges

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

are recorded in Accumulated other comprehensive income ("AOCI") until the underlying jet fuel is consumed.

When the Company has sold derivative positions in order to effectively "close" or offset a derivative already held as part of its fuel derivative instrument portfolio, any subsequent changes in fair value of those positions are marked to market through earnings.

2 unchanged sentences

In a situation where it becomes probable that a fuel hedged forecasted transaction will not occur, any gains and/or losses that have been recorded to AOCI would be required to be immediately reclassified into earnings.

The Company did not have any such situations where a derivative ceased to qualify for hedge accounting during 2022, or during the six months ended June 30, 2023.

The Company did not have any such situations where a derivative ceased to qualify for hedge accounting during 2022, or during the nine months ended September 30, 2023.

All cash flows associated with purchasing and selling fuel derivatives are classified as Other operating cash flows in the unaudited Condensed Consolidated Statement of Cash Flows.

The following table presents the location of all assets and liabilities associated with the Company’s derivative instruments within the unaudited Condensed Consolidated Balance Sheet:

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

Asset derivatives Liability derivatives

12 unchanged sentences

In addition, the Company had the following amounts associated with fuel derivative instruments and hedging activities in its unaudited Condensed Consolidated Balance Sheet:

Balance Sheet June 30, December 31,

Balance Sheet September 30, December 31,

(in millions) location 2023 2022

3 unchanged sentences

All of the Company's fuel derivative instruments and interest rate swaps are subject to agreements that follow the netting guidance in the applicable accounting standards for derivatives and hedging.

The types of derivative instruments the Company has determined are subject to netting requirements in the accompanying unaudited Condensed Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty and in the same currency via one net payment or receipt.

The types of derivative

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

instruments the Company has determined are subject to netting requirements in the accompanying unaudited Condensed Consolidated Balance Sheet are those in which the Company pays or receives cash for transactions with the same counterparty and in the same currency via one net payment or receipt.

For cash collateral held by the Company or provided to counterparties, the Company nets such amounts against the fair value of the Company's derivative portfolio by each counterparty.

1 unchanged sentence

If its fuel derivative instruments are in a net asset position with a counterparty, cash collateral amounts held are first netted against current outstanding derivative asset amounts associated with that counterparty until that balance is zero, and then any remainder is applied against the fair value of noncurrent outstanding derivative instruments.

As of June 30, 2023, no cash collateral deposits were provided by or held by the Company based on its outstanding interest rate swap agreements.

As of September 30, 2023, no cash collateral deposits were provided by or held by the Company based on its outstanding interest rate swap agreements.

The Company had the following recognized financial assets and financial liabilities resulting from those transactions that meet the scope of the disclosure requirements as necessitated by applicable accounting guidance for balance sheet offsetting:

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

Offsetting of derivative assets

1 unchanged sentence

(i) (ii) (iii) = (i) + (ii) (i) (ii) (iii) = (i) + (ii)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Description Balance Sheet location Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet Gross amounts of recognized assets Gross amounts offset in the Balance Sheet Net amounts of assets presented in the Balance Sheet

6 unchanged sentences

(i) (ii) (iii) = (i) + (ii) (i) (ii) (iii) = (i) + (ii)

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Description Balance Sheet location Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet Gross amounts of recognized liabilities Gross amounts offset in the Balance Sheet Net amounts of liabilities presented in the Balance Sheet

1 unchanged sentence

Fuel derivative contracts Other assets $ 30 $ ( 30 ) $ — $ — $ — $ —

The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2023 and 2022:

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

The following tables present the impact of derivative instruments and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022:

Location and amount recognized in income on cash flow and fair value hedging relationships

Three months ended June 30, 2023 Three months ended June 30, 2022

Three months ended September 30, 2023 Three months ended September 30, 2022

(in millions) Fuel and oil Other operating expenses Fuel and oil Other operating expenses

5 unchanged sentences

Amount of loss reclassified from AOCI into income — 2 — 2

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

Location and amount recognized in income on cash flow and fair value hedging relationships

Six months ended June 30, 2023 Six months ended June 30, 2022

Nine months ended September 30, 2023 Nine months ended September 30, 2022

(in millions) Fuel and oil Other operating expenses Fuel and oil Other operating expenses

8 unchanged sentences

Three months ended

September 30,

(in millions) 2023 2022

2 unchanged sentences

Total $ ( 182 ) $ 352

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

Derivatives designated and qualified in cash flow hedging relationships

(Gain) loss recognized in AOCI on derivatives, net of tax

Six months ended

Nine months ended

September 30,

(in millions) 2023 2022

5 unchanged sentences

Three months ended Location of (gain) loss recognized in income on derivatives

September 30,

(in millions) 2023 2022

Fuel derivative contracts $ ( 33 ) $ ( 38 ) Other (gains) losses, net

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

Derivatives not designated as hedges

(Gain) loss recognized in income on derivatives

Six months ended Location of (gain) loss recognized in income on derivatives

Nine months ended Location of (gain) loss recognized in income on derivatives

September 30,

(in millions) 2023 2022

Fuel derivative contracts $ ( 26 ) $ ( 23 ) Other (gains) losses, net

The Company also recorded expense associated with premiums paid for fuel derivative contracts that settled/expired during the three and six months ended June 30, 2023 and 2022.

The Company also recorded expense (benefit) associated with premiums paid for fuel derivative contracts that settled/expired during the three and nine months ended September 30, 2023 and 2022.

Gains and/or losses associated with fuel derivatives that qualify for hedge accounting are ultimately recorded to Fuel and oil expense.

Gains and/or losses associated with fuel derivatives that do not qualify for hedge accounting are recorded to Other (gains) and losses, net.

The following tables present the impact of premiums paid for fuel derivative contracts and their location within the unaudited Condensed Consolidated Statement of Comprehensive Income during the period the contract settles:

Premium expense recognized in income on derivatives

Three months ended Location of premium expense recognized in income on derivatives

Premium expense (benefit) recognized in income on derivatives

Three months ended Location of premium expense (benefit) recognized in income on derivatives

September 30,

(in millions) 2023 2022

Fuel derivative contracts designated as hedges $ 30 $ 26 Fuel and oil

Premium expense recognized in income on derivatives

Six months ended Location of premium expense recognized in income on derivatives

Fuel derivative contracts not designated as hedges — ( 14 ) Other (gains) losses, net

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

Premium expense (benefit) recognized in income on derivatives

Nine months ended Location of premium expense (benefit) recognized in income on derivatives

September 30,

(in millions) 2023 2022

Fuel derivative contracts designated as hedges $ 91 $ 79 Fuel and oil

Fuel derivative contracts not designated as hedges $ — $ ( 14 ) Other (gains) losses, net

The fair values of the derivative instruments, depending on the type of instrument, were determined by the use of present value methods or option value models with assumptions about commodity prices based on those observed in underlying markets or provided by third parties.

Included in the Company’s cumulative unrealized losses from fuel hedges as of June 30, 2023, recorded in AOCI, were approximately $ 13 million in unrealized losses, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to June 30, 2023.

Included in the Company’s cumulative unrealized gains from fuel hedges as of September 30, 2023, recorded in AOCI, were approximately $ 77 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to September 30, 2023.

Interest Rate Swaps

6 unchanged sentences

However, the Company has not experienced any significant credit loss as a result of counterparty nonperformance in the past.

To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure with respect

To manage credit risk, the Company selects and periodically reviews counterparties based on credit ratings, limits its exposure with respect to each counterparty, and monitors the market position of the fuel hedging program and its relative market position with each counterparty.

As of September 30, 2023, the Company had agreements with all of its active counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount based on the counterparty's credit rating.

The Company also had agreements with counterparties in which cash deposits and letters of credit were required to be posted as collateral whenever the net fair value of derivatives associated with those counterparties exceeds specific thresholds.

In certain cases, the Company has the ability to substitute among these different forms of collateral at its discretion.

The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of September 30, 2023, at which such postings are triggered:

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

to each counterparty, and monitors the market position of the fuel hedging program and its relative market position with each counterparty.

As of June 30, 2023, the Company had agreements with all of its active counterparties containing early termination rights and/or bilateral collateral provisions whereby security is required if market risk exposure exceeds a specified threshold amount based on the counterparty's credit rating.

In certain cases, the Company has the ability to substitute among these different forms of collateral at its discretion.

The following table provides the fair values of fuel derivatives, amounts posted as collateral, and applicable collateral posting threshold amounts as of June 30, 2023, at which such postings are triggered:

Counterparty (CP)

(in millions) A B C D E F G Other (a) Total

(in millions) A B C D E F G H

Fair value of fuel derivatives $ 120 $ 57 $ 84 $ 28 $ 77 $ 35 $ 60 $ 26 $ 487

Cash collateral held from CP 100 — — — — — — — 100

Option to substitute LC for cash N/A N/A (b)

Option to substitute LC for cash N/A N/A (a)

If credit rating is investment

2 unchanged sentences

Cash is provided to CP >( 100 )

Cash is received from CP > 0 (c)

Cash is received from CP > 0 (b)

If credit rating is non-investment

grade, fair value of fuel derivative level at which:

Cash is received from CP (d)

(a) Individual counterparties with fair value of fuel derivatives < $ 18 million.

(b) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement.

(d) Cash collateral is provided at 100 percent of fair value of fuel derivative contracts.

Cash is received from CP (c)

(a) The Company has the option to substitute letters of credit for 100 percent of cash collateral requirement.

(b) Thresholds may vary based on changes in credit ratings within investment grade.

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

COMPREHENSIVE INCOME

COMPREHENSIVE INCOME (LOSS)

Comprehensive income includes changes in the fair value of certain financial derivative instruments that qualify for hedge accounting and actuarial gains/losses arising from the Company’s postretirement benefit obligation.

The differences between Net income and Comprehensive income for the three and six months ended June 30, 2023 and 2022 were as follows:

Three months ended June 30,

The differences between Net income and Comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022 were as follows:

Three months ended September 30,

(in millions) 2023 2022

NET INCOME $ 193 $ 277

Unrealized loss on fuel derivative instruments, net of

Unrealized gain (loss) on fuel derivative instruments, net of

deferred taxes of $ 41 and ($ 153 )

( 137 ) ( 95 )

Unrealized gain on interest rate derivative instruments, net of

deferred taxes of $ 2 and $ —

Other, net of deferred taxes of $ 4 and $ —

Total other comprehensive loss $ ( 139 ) $ ( 86 )

COMPREHENSIVE INCOME $ 544 $ 674

Six months ended June 30,

Total other comprehensive income (loss) $ 143 $ ( 500 )

COMPREHENSIVE INCOME (LOSS) $ 336 $ ( 223 )

Nine months ended September 30,

(in millions) 2023 2022

NET INCOME $ 717 $ 759

Unrealized gain (loss) on fuel derivative instruments, net of

Unrealized loss on fuel derivative instruments, net of

deferred taxes of ($ 45 ) and ($ 31 )

( 150 ) ( 101 )

Unrealized gain on interest rate derivative instruments, net of

1 unchanged sentence

Other, net of deferred taxes of $ 4 and $ —

Total other comprehensive income (loss) $ ( 286 ) $ 417

Total other comprehensive loss $ ( 143 ) $ ( 83 )

COMPREHENSIVE INCOME $ 574 $ 676

A rollforward of the amounts included in AOCI, net of taxes, is shown below for the three and six months ended June 30, 2023:

A rollforward of the amounts included in AOCI, net of taxes, is shown below for the three and nine months ended September 30, 2023:

(in millions) Fuel derivatives Interest rate derivatives Defined benefit plan items Deferred tax impact Accumulated other comprehensive income (loss)

Balance at March 31, 2023 $ 114 $ ( 32 ) $ 170 $ ( 55 ) $ 197

Balance at June 30, 2023 $ ( 65 ) $ ( 29 ) $ 170 $ ( 18 ) $ 58

Changes in fair value 228 8 — ( 55 ) 181

Reclassification to earnings ( 52 ) 2 — 12 ( 38 )

Balance at June 30, 2023 $ ( 65 ) $ ( 29 ) $ 170 $ ( 18 ) $ 58

Balance at September 30, 2023 $ 111 $ ( 19 ) $ 170 $ ( 61 ) $ 201

(in millions) Fuel derivatives Interest rate derivatives Defined benefit plan items Deferred tax impact Accumulated other comprehensive income (loss)

2 unchanged sentences

Reclassification to earnings ( 93 ) 5 — 17 ( 71 )

Balance at June 30, 2023 $ ( 65 ) $ ( 29 ) $ 170 $ ( 18 ) $ 58

Balance at September 30, 2023 $ 111 $ ( 19 ) $ 170 $ ( 61 ) $ 201

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

The following tables illustrate the significant amounts reclassified out of each component of AOCI for the three and six months ended June 30, 2023:

Three months ended June 30, 2023

(in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income

The following tables illustrate the significant amounts reclassified out of each component of AOCI for the three and nine months ended September 30, 2023:

Three months ended September 30, 2023

(in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

AOCI components

3 unchanged sentences

$ 2 Net of tax

Other — Other

$ ( 4 ) Net of tax

Total reclassifications for the period $ ( 38 ) Net of tax

Six months ended June 30, 2023

(in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income

Nine months ended September 30, 2023

(in millions) Amounts reclassified from AOCI Affected line item in the unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

AOCI components

9 unchanged sentences

Passenger revenue associated with tickets is recognized when the performance obligation to the Customer is satisfied, which is primarily when travel is provided.

Revenue is categorized by revenue source as the Company believes it best depicts the nature, amount, timing, and uncertainty of revenue and cash flow.

The following table provides the components of Passenger revenue recognized for the three and nine months ended September 30, 2023 and 2022:

Notes to Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

Revenue is categorized by revenue source as the Company believes it best depicts the nature, amount, timing, and uncertainty of revenue and cash flow.

The following table provides the components of Passenger revenue recognized for the three and six months ended June 30, 2023 and 2022:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

(in millions) 2023 2022 2023 2022

3 unchanged sentences

Total passenger revenues $ 5,912 $ 5,613 $ 17,426 $ 15,867

As of June 30, 2023, and December 31, 2022, the components of Air traffic liability, including contract liabilities based on tickets sold and unused flight credits available to the Customer, both of which are net of recorded breakage, and loyalty points available for redemption, within the unaudited Condensed Consolidated Balance Sheet were as follows:

As of September 30, 2023, and December 31, 2022, the components of Air traffic liability, including contract liabilities based on tickets sold and unused flight credits available to the Customer, both of which are net of recorded breakage, and loyalty points available for redemption, within the unaudited Condensed Consolidated Balance Sheet were as follows:

Balance as of

(in millions) June 30, 2023 December 31, 2022

(in millions) September 30, 2023 December 31, 2022

Air traffic liability - passenger travel and ancillary passenger services $ 4,004 $ 3,061

3 unchanged sentences

These flight credits are typically created as a result of a prior ticket cancellation or exchange, and are reflected net of associated breakage.

Rollforwards of the Company's "Air traffic liability - loyalty program" for the three and six months ended June 30, 2023 and 2022 were as follows (in millions):

Three months ended June 30, Six months ended June 30,

Rollforwards of the Company's "Air traffic liability - loyalty program" for the three and nine months ended September 30, 2023 and 2022 were as follows (in millions):

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

5 unchanged sentences

Air traffic liability includes consideration received for ticket and loyalty related performance obligations which have not been satisfied as of a given date.

Rollforwards of the amounts included in Air traffic liability as of June 30, 2023 and 2022 were as follows (in millions):

Rollforwards of the amounts included in Air traffic liability as of September 30, 2023 and 2022 were as follows (in millions):

Notes to Condensed Consolidated Financial Statements

6 unchanged sentences

Revenue from current period sales ( 12,236 )

Balance at June 30, 2023 $ 9,059

Balance at September 30, 2023 $ 9,000

Air traffic liability

3 unchanged sentences

Revenue from current period sales ( 12,180 )

Balance at June 30, 2022 $ 8,518

Balance at September 30, 2022 $ 8,425

On July 28, 2022, the Company announced that all existing Customer flight credits as of that date, as well as any future flight credits issued, will no longer expire and will thus remain redeemable by Customers.

1 unchanged sentence

As the Company continues to believe that a portion of Customer flight credits issued after July 28, 2022, will not be redeemed, it continues to estimate and record breakage associated with such amounts.

The amount of Customer flight credits represents approximately 7 percent and 9 percent of the total Air traffic liability balance as of June 30, 2023, and December 31, 2022, respectively.

The amount of Customer flight credits represents approximately 7 percent and 9 percent of the total Air traffic liability balance as of September 30, 2023, and December 31, 2022, respectively.

The Company recognized revenue related to the marketing, advertising, and other travel-related benefits of the revenue associated with various loyalty partner agreements including, but not limited to, the Agreement with Chase Bank USA, N.A, within Other operating revenues.

For the three months ended June 30, 2023 and 2022, the Company recognized $ 540 million and $ 522 million, respectively.

For the six months ended June 30, 2023 and 2022, the Company recognized $ 1.1 billion and $ 1.0 billion, respectively.

For the three months ended September 30, 2023 and 2022, the Company recognized $ 526 million and $ 521 million, respectively.

For the nine months ended September 30, 2023 and 2022, the Company recognized $ 1.6 billion and $ 1.5 billion, respectively.

NET INCOME PER SHARE

2 unchanged sentences

Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three and six months ended June 30, 2023 and 2022, an immaterial number of shares related to the Company's restricted stock units and stock warrants were excluded from the denominator because inclusion of such shares would be antidilutive.

For the three and nine months ended September 30, 2023 and 2022, an immaterial number of shares related to the Company's restricted stock units and stock warrants were excluded from the denominator because inclusion of such shares would be antidilutive.

Notes to Condensed Consolidated Financial Statements

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Notes to Condensed Consolidated Financial Statements

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2023 2022 2023 2022

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and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of June 30, 2023, the Company held certain items that are required to be measured at fair value on a recurring basis.

As of September 30, 2023, the Company held certain items that are required to be measured at fair value on a recurring basis.

These included cash equivalents, short-term investments (primarily treasury bills), interest rate derivative contracts, fuel derivative contracts, and available-for-sale securities.

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Assets related to the funded portions of the deferred compensation plans are held in a rabbi trust, and the Company remains liable to these participants for the unfunded portion of the plans.

The Company records changes in the fair value of plan obligations and plan assets, which net to zero, within the Salaries, wages, and benefits line and Other (gains) losses line, respectively, of the unaudited Condensed Consolidated Statement of Comprehensive Income.

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023, and December 31, 2022:

The following tables present the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2023, and December 31, 2022:

Fair value measurements at reporting date using:

Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs

Description June 30, 2023 (Level 1) (Level 2) (Level 3)

Description September 30, 2023 (Level 1) (Level 2) (Level 3)

Assets (in millions)

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Certificates of deposit 17 — 17 —

Time deposits 300 — 300 —

Short-term investments:

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Option contracts (b) $ ( 28 ) $ — $ — $ ( 28 )

(a) Cash equivalents are primarily composed of money market investments.

(a) Cash equivalents are primarily composed of money market investments and treasury bills.

(b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as a net asset.

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(b) In the unaudited Condensed Consolidated Balance Sheet amounts are presented as an asset.

The Company did not have any material assets or liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2023, or the year ended December 31, 2022.

The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2023:

The Company did not have any material assets or liabilities measured at fair value on a nonrecurring basis during the nine months ended September 30, 2023, or the year ended December 31, 2022.

The following tables present the Company’s activity for items measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2023:

Fair value measurements using significant unobservable inputs (Level 3)

(in millions) Fuel derivatives

Balance at March 31, 2023 $ 395

Balance at June 30, 2023 $ 316

Total gains (losses) for the period

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Settlements ( 94 )

Balance at June 30, 2023 $ 316

The amount of total losses for the period

Balance at September 30, 2023 $ 487

The amount of total gains for the period

included in earnings attributable to the

change in unrealized gains or losses relating

to assets still held at June 30, 2023

The amount of total losses for the period

to assets still held at September 30, 2023

The amount of total gains for the period

included in other comprehensive income attributable to the

change in unrealized gains or losses relating

to assets still held at June 30, 2023

to assets still held at September 30, 2023

(a) Included in Other (gains) losses, net, within the unaudited Condensed Consolidated Statement of Comprehensive Income.

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Settlements ( 196 )

Balance at June 30, 2023 $ 316

The amount of total losses for the period

Balance at September 30, 2023 $ 487

The amount of total gains for the period

included in earnings attributable to the

change in unrealized gains or losses relating

to assets still held at June 30, 2023

to assets still held at September 30, 2023

The amount of total losses for the period

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change in unrealized gains or losses relating

to assets still held at June 30, 2023

to assets still held at September 30, 2023

(a) Included in Other (gains) losses, net, within the unaudited Condensed Consolidated Statement of Comprehensive Income.

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Holding other inputs constant, an increase (decrease) in implied volatility would have resulted in a higher (lower) fair value measurement, respectively, for the Company’s derivative option contracts.

The following table presents a range and weighted average of the unobservable inputs utilized in the fair value measurements of the Company’s fuel derivatives classified as Level 3 as of June 30, 2023:

Quantitative information about Level 3 fair value measurements

Valuation technique Unobservable input Period (by year) Range Weighted Average (a)

Fuel derivatives Option model Implied volatility Third quarter 2023 20 - 37 %

Fourth quarter 2023 29 - 35 %

Fuel derivatives Option model Implied volatility Fourth quarter 2023 19 - 41 %

2024 26 - 38 %

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(a) Implied volatility weighted by the notional amount (barrels of fuel) that will settle in respective period.

The carrying amounts and estimated fair values of the Company’s short-term and long-term debt (including current maturities), as well as the applicable fair value hierarchy tier, as of June 30, 2023, are presented in the table below.

The fair values of the Company’s publicly held long-term debt are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets;

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(in millions) Carrying value Estimated fair value Fair value level hierarchy

5.25 % Notes due 2025

1,302 1,287 Level 2

1.25 % Convertible Notes due 2025

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300 278 Level 2

3.00 % Notes due 2026

7.375 % Debentures due 2027

111 104 Level 2

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1,727 1,683 Level 2

7.375 % Debentures due 2027

112 118 Level 2

2.625 % Notes due 2030

2.625 % due 2030

500 414 Level 2

1.000 % PSP1 Loan due 2030

1.000 % Payroll Support Program Loan due 2030 (a)

976 893 Level 3

1.000 % PSP2 Loan due 2031

1.000 % Payroll Support Program Loan due 2031 (a)

566 500 Level 3

1.000 % PSP3 Loan due 2031

1.000 % Payroll Support Program Loan due 2031 (a)

526 457 Level 3

(a) The interest rate will change to Secured Overnight Financing Rate +2% on the fifth anniversary of the loans.

SUPPLEMENTAL FINANCIAL INFORMATION

(in millions) June 30, 2023 December 31, 2022

(in millions) September 30, 2023 December 31, 2022

Trade receivables $ 142 $ 117

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Accounts and other receivables $ 1,467 $ 1,040

(in millions) June 30, 2023 December 31, 2022

(in millions) September 30, 2023 December 31, 2022

Derivative contracts $ 216 $ 174

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Other assets $ 1,016 $ 855

(in millions) June 30, 2023 December 31, 2022

(in millions) September 30, 2023 December 31, 2022

Accounts payable trade $ 329 $ 277

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Notes to Condensed Consolidated Financial Statements

(in millions) June 30, 2023 December 31, 2022

(in millions) September 30, 2023 December 31, 2022

Voluntary Separation Program $ 65 $ 72

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Accrued liabilities $ 2,880 $ 2,043

(in millions) June 30, 2023 December 31, 2022

(in millions) September 30, 2023 December 31, 2022

Voluntary Separation Program $ 83 $ 147

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Other noncurrent liabilities $ 880 $ 969

(a) This amount includes customer reimbursement expenses due to the Company's December 2022 operational disruption and refund submissions that had yet to be processed.

(a) As of December 31, 2022, included customer reimbursement expenses due to the Company's December 2022 operational disruption and refund submissions that had yet to be processed.

As of September 30, 2023, amounts primarily consist of normal current activity.

(b) Primarily consists of anticipated contract labor ratification bonuses and/or accruals.

Also includes non-contract incentive pay.

Included in Salaries, wages and benefits expense for the three and nine months ended September 30, 2023, is incremental expense of $ 96 million and $ 180 million, respectively, for changes in estimate related to the contract ratification bonus for the Company’s Flight Attendants as part of the tentative agreement reached in October 2023 with the Transport Workers Union 556 ("TWU 556").

The cumulative $ 180 million is included in the balance as of September 30, 2023.

The Company began accruing for all of its open labor contracts on April 1, 2022, and this incremental $ 180 million expense extends the timeframe covered by the ratification bonus to the date the Flight Attendant contract became amendable on November 1, 2018, to compensate for missed wage increases over that time period.

For further information on fuel derivative and interest rate derivative contracts, see Note 3.

Other Operating Expenses

Other operating expenses consist of aircraft rentals, distribution costs, advertising expenses, personnel expenses, professional fees, and other operating costs, none of which individually exceeded 10 percent of Total operating expenses, net.

COMMITMENTS AND CONTINGENCIES

Contractual Obligations and Contingent Liabilities and Commitments

During 2022, the Company entered into supplemental agreements with The Boeing Company ("Boeing") to replace the majority of its 2023 Boeing 737 MAX 7 ("-7") firm orders with Boeing 737 MAX 8 ("-8") firm orders, among other adjustments to its near-term order book.

During second quarter 2023, the Company exercised 30 -7 options for delivery in 2024 and converted 24 2024 -7 firm orders to -8 firm orders.

The delivery schedule below reflects commitments, although the timing of future deliveries is uncertain as a result of delays in the manufacturing and certification process.

For purposes of the delivery schedule below, the Company has included the remaining 46 of its 2022 contractual undelivered aircraft within its 2023 commitments, and has not made any further adjustments to this schedule based on current estimations.

The Company continues to plan for approximately 70 -8 aircraft deliveries from Boeing and 26 -700 retirements in 2023.

The Company retains significant flexibility to manage its fleet size, including opportunities to accelerate fleet modernization efforts if growth opportunities do not materialize.

The Company is working to reflow its order book with Boeing.

On October 25, 2023, the Company entered into a supplemental agreement with The Boeing Company ("Boeing") relating to its contractual order book for Boeing 737-7 and Boeing 737-8 aircraft.

Based on the Company's agreement with Boeing, capital commitments associated with firm orders as of October 26, 2023, were:

$ 133 million remaining in 2023, $ 2.1 billion in 2024, $ 1.7 billion in 2025, $ 1.8 billion in 2026, $ 2.6 billion in 2027, $ 2.9 billion in 2028, and $ 5.3 billion thereafter.

Notes to Condensed Consolidated Financial Statements

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Notes to Condensed Consolidated Financial Statements

Additional information regarding the Company's order book is included in the following table as of June 30, 2023:

The Boeing Company

-7 Firm Orders -8 Firm Orders -7 or -8 Options Total

2023 31 105 — 136 (c)

2024 51 35 — 86

2025 30 — 56 86

2026 30 15 40 85

2027 15 15 6 36

2028 15 15 — 30

2029 20 30 — 50

2030 — 55 — 55

192 (a) 270 (b) 102 564

(a) The delivery timing for the -7 is dependent on the Federal Aviation Administration ("FAA") issuing required certifications and approvals to Boeing and the Company.

The FAA will ultimately determine the timing of the -7 certification and entry into service, and the Company therefore offers no assurances that current estimations and timelines are correct.

(b) The Company has flexibility to designate firm orders or options as -7s or -8s, upon written advance notification as stated in the contract.

In addition, the Company has included the remaining 46 of its 2022 contractual undelivered aircraft ( 14 -7s and 32 -8s) within its 2023 commitments.

The Company continues to plan for approximately 70 -8 aircraft deliveries in 2023.

The 2023 order book detail is as follows:

The Boeing Company

Firm Orders -8

Firm Orders Total

2022 Contractual Deliveries Remaining 14 32 46

2023 Contractual Deliveries 17 73 90

2023 Total 31 105 136

Boeing continues to experience delays in fulfilling its commitments with regards to delivery of MAX aircraft to the Company, as a result of both supply chain constraints as well as awaiting achievement of the FAA's certification of the -7, for which Southwest expects to be the launch customer.

Therefore, for purposes of the Company’s aircraft order commitments with Boeing, the Company has assumed that any aircraft that were contractually due but remain undelivered as of December 31, 2022, have been rolled into the Company’s 2023 commitments, until such time as the Company and Boeing revise the aircraft order book.

Based on the Company's existing agreement with Boeing, capital commitments associated with its firm orders as of June 30, 2023, were:

$ 1.2 billion remaining in 2023 (and approximately $ 956 million, which relates to 46 MAX aircraft that were contractually committed for 2022 but were not received), $ 2.1 billion in 2024, $ 992 million in 2025, $ 1.4 billion in 2026, $ 1.1 billion in 2027, $ 1.3 billion in 2028, and $ 4.3 billion thereafter.

Contingencies

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Based on the wide-scale operational disruption for the Company, which led to the cancelation of a significant number of flights between December 21 and December 29, 2022, the Company could be subject to fines and/or penalties resulting from investigations by the Department of Transportation or other government agencies.

On October 27, 2023, the Department of Transportation notified the Company that it has determined the Company had failed to provide adequate customer service assistance, prompt flight status notifications, and proper and prompt refunds and that the assessment of a civil penalty is warranted.

The Company could also face monetary damages or other costs resulting from litigation initiated by Customers and/or Shareholders.

The Company is currently not able to estimate a range of possible loss for such items.

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

The Company is a defendant in class action litigation asserting it has not provided paid short-term military leave to certain employees, in violation of the federal Uniformed Services Employment and Reemployment Rights Act (“USERRA”).

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Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding February 1, 2025, in the event certain conditions are met, as stated in the offering documents.

The Convertible Notes did not meet the criteria to be converted as of the date of the financial statements, and thus are classified as Long-term debt in the accompanying unaudited Condensed Consolidated Balance Sheet as of June 30, 2023.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, at the Company’s election.

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The initial conversion rate was 25.9909 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $ 38.48 per share of common stock).

However, based on the Company's cash dividends declared in May 2023, the bond conversion rate changed to 26.4038 on June 20, 2023.

The net carrying amount and principal amount of the Convertible Notes was $ 1.6 billion as of June 30, 2023 and December 31, 2022.

However, based on the Company's most recent cash dividends declared in August 2023, the bond conversion rate changed to 26.5559 on September 5, 2023.

The net carrying amount and principal amount of the Convertible Notes was $ 1.6 billion as of September 30, 2023 and December 31, 2022.

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

The Company recognized interest expense associated with the Convertible Notes as follows:

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

(in millions) 2023 2022 2023 2022

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The unamortized debt issuance costs are being recognized as non-cash interest expense based on the 5 -year term of the notes, through May 1, 2025, less amounts that were or will be required to be accelerated immediately upon conversion or repurchases.

The Company had no changes to contingencies during the six months ended June 30, 2023.

The effective interest rate associated with the Convertible Notes was approximately 1.9 percent for the three and six months ended June 30, 2023.

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

The following tables present the impact of the partial extinguishment of the Company's Convertible Notes and early prepayment of debt (excluding payments on finance leases) for the three and six months ended June 30, 2022.

No such instances of partial extinguishment or early prepayment of debt occurred for the three and six months ended June 30, 2023.

Three months ended June 30, 2022

(in millions) Cash paid for debt and interest Principal repayment Loss on extinguishment Non-cash amortization of debt discount and (issuance) costs

The Company had no changes to contingencies during the nine months ended September 30, 2023.

The effective interest rate associated with the Convertible Notes was approximately 1.9 percent for the three and nine months ended September 30, 2023.

No such instances of partial extinguishment or early prepayment of debt occurred for the three and nine months ended September 30, 2023.

Three months ended September 30, 2022

(in millions) Cash paid for debt and interest Principal repayment Loss on extinguishment Non-cash amortization of debt discount and (issuance) costs Accrued Interest

1.25 % Convertible Notes due 2025

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5.125 % Notes due 2027

149 143 3 1 2

4.75 % Notes due 2023

1,274 1,247 8 — 19

5.25 % Notes due 2025

227 217 6 — 4

Total $ 1,890 $ 1,791 $ 76 $ ( 2 ) $ 25

Six months ended June 30, 2022

(in millions) Cash paid for debt and interest Principal repayment Loss on extinguishment Non-cash amortization of debt discount and (issuance) costs

Nine months ended September 30, 2022

(in millions) Cash paid for debt and interest Principal repayment Loss on extinguishment Non-cash amortization of debt discount and (issuance) costs Accrued Interest

1.25 % Convertible Notes due 2025

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5.125 % Notes due 2027

209 199 6 2 2

4.75 % Notes due 2023

1,278 1,250 9 — 19

5.25 % Notes due 2025

228 218 6 — 4

Total $ 2,364 $ 2,153 $ 192 $ ( 7 ) $ 26

The Company has access to $ 1.0 billion under its amended and restated revolving credit facility (the "Amended A&R Credit Agreement"), which expires in August 2025.

For the six months ended June 30, 2023 and 2022, there were no amounts outstanding under the Amended A&R Credit Agreement.

Notes to Condensed Consolidated Financial Statements

Southwest Airlines Co.

Notes to Condensed Consolidated Financial Statements

The Company has access to $ 1.0 billion under its amended and restated revolving credit facility (the "Amended A&R Credit Agreement").

In August 2023, this facility was amended to (i) extend the maturity to August 4, 2028, (ii) release all aircraft and other assets constituting collateral securing the loans made under the credit facility, (iii) delete all provisions and terminate all agreements, in each case, relating to the grant of such collateral, (iv) eliminate the role of “Collateral Agent” under the credit facility after giving effect to the amendment, terminations, and releases, (v) eliminate the minimum liquidity covenant, (vi) add a Coverage Ratio financial covenant, (vii) amend the Collateral Coverage Test covenant requiring that a pool of lien-free specified aircraft and related assets have a minimum aggregate appraised value, and add certain covenants with respect to such pool of assets, (viii) amend the pricing and fees, (ix) increase certain materiality thresholds, (x) grant longer grace periods for certain defaults, and (xi) update and amend certain other provisions.

For the nine months ended September 30, 2023 and 2022, there were no amounts outstanding under the Amended A&R Credit Agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements