Using the attached excerpts from Southwest Airlines Co's 2019 Annual Report answer the following questions. In...

   
 

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Using the attached excerpts from Southwest Airlines Co's 2019 Annual Report answer the following questions. In addition: All numbers are in Smillions (except per share data). Provide calculations when necessary.: www a. Long-term Assets i) What is the net book value (NBV) of Southwest's property, plant and equipment as of December 31, 2019? ii) What is the balance of Southwest's accumulated depreciation account as of December 31, 2019? b. Shares Issued and Outstanding i) How many shares of Common Stock were authorized as of December 31, 2019? How many had been issued as of December 31, 2019? Southwest also has repurchased some of its own shares of stock that had been previously issued (i.e. Treasury Stock). How many shares did Southwest hold as Treasury Stock as of December 31, ii) 2019? ii) How many shares of Southwest's Common Stock were outstanding as of December 31, 2019? c. Common Stock i) i) What is the par value of each share of common stock issued? How much money in excess of the par value of the stock (i.e. Additional Paid in Capital, or APIC) had been contributed by shareholders as of the end of 2019 (hint: this is listed as Capital in Excess of Par Value on the balance sheet)? wwwwm d. Equity analysis: i) i) What is Southwesť's Earnings Per Share (Basic) for the fiscal year ended 12/31/2019? What is the Return on Equity (ROE) for Southwest for the fiscal year ended 12/31/2019? (NOTE: when calculating average equity for the denominator of ROE, for the 12/31/2018 ending equity balance, use the 'reported balance' number, $9,853 million. Average that amount with the 12/31/2019 ending equity balance to calculate average equity for the period) www Southwest Airlines Co. Consolidated Balance Sheet (in millions, except share data) December 31, 2019 December 31, 2018 ASSETS Current assets: Cash and cash equivalents Short-term investments 2,548 1,524 1,854 1,835 Accounts and other receivables 1,086 529 568 Inventories of parts and supplies, at cost Prepaid expenses and other current assets 461 287 310 Total current assets 5,974 5,028 Property and equipment, at cost: Flight equipment Ground property and equipment Deposits on flight equipment purchase contracts 21,629 21,753 5,672 248 4,960 775 Assets constructed for others 164 1,768 27,713 10,688 29,256 Less allowance for depreciation and amortization 9,731 17,025 19,525 Goodwill 970 970 Operating lease right-of-use assets 1,349 Other assets 577 720 25,895 26,243 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued liabilities 1,574 1,749 1,416 1,749 Current operating lease liabilities Air traffic liability Current maturities of long-term debt 353 4,457 4,134 819 606 Total current liabilities 8,952 7,905 Long-term debt less current maturities Air traffic liability - noncurrent Deferred income taxes 1,846 1,053 2,771 936 2,364 164 2,427 Construction obligation Noncurrent operating lease liabilities Other noncurrent liabilities 1,701 978 706 650 Stockholders' equity: Common stock, $1.00 par value: 2,000,000,000 shares authorized; 807,611,634 shares issued in 2019 and 2018 Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost: 288,547,318 and 255,008,275 shares in 2019 and 2018 respectively 808 808 1,581 1,510 17,945 15,967 (61) 20 (10,441) 9,832 25,895 (8,452) 9,853 26,243 Total stockholders' equity Southwest Airlines Co. Consolidated Statement of Income (in millions, except per share amounts) Year ended December 31, 2019 2018 2017 OPERATING REVENUES: Passenger 20,776 $ 20,455 S 19,763 Freight 172 175 173 Other 1,480 1,335 1,210 Total operating revenues 22,428 21,965 21,146 OPERATING EXPENSES: Salaries, wages, and benefits 8,293 7,649 7,305 Fuel and oil 4,347 4,616 4,076 Maintenance materials and repairs 1,223 1,107 1,001 Landing fees and airport rentals 1,363 1,334 1,292 Depreciation and amortization 1,219 1,201 1,218 Other operating expenses 3.026 2,852 2,847 Total operating expenses 19,471 18,759 17,739 OPERATING INCOME 2,957 3,206 3,407 OTHER EXPENSES (INCOME): Interest expense 118 131 114 Capitalized interest (36) (38) (49) Interest income (90) (69) (35) Other (gains) losses, net 8. 18 112 Total other expenses (income) 42 142 INCOME BEFORE INCOME TAXES 2,957 3,164 3,265 PROVISION (BENEFIT) FOR INCOME TAXES 657 699 (92) NET INCOME 24 2,300 2,465 %24 3,357 NET INCOME PER SHARE, BASIC %24 4.28 4.30 %24 5.58 NET INCOME PER SHARE, DILUTED $ 4.27 4.29 $ 5.57 Southwest Airlines Co. Consolidated Statement of Stockholders' Equity (in millions, except per share amounts) Year ended December 31, 2019, 2018, and 2017 Capital in excess of par value Accumulated other Retained comprehensive Treasury earnings income (loss) Common Stock stock Total Balance at December 31, 2016 808 $ 1,410 $ 10,761 S (323) $ (4,872) S 7,784 Repurchase of common stock (1,600) (1,600) Issuance of common and treasury stock pursuant to Employee stock plans 4 10 14 Share-based compensation 37 37 Cash dividends, S.475 per share (286) (286) Comprehensive income 3,357 335 3,692 | Balance at December 31, 2017 (as reported) 808 $ 1,451 S 13,832 S 12 $ (6,462) S 9,641 Cumulative effect of adopting Accounting Standards Update No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (See Note 2 to the Consolidated Financial Statements for additional information) 18 (18) Balance after adjustment for the new accounting standard 808 S 1,451 S 13,850 S (6) S (6,462) $ 9,641 Repurchase of common stock (2,000) (2,000) Issuance of common and treasury stock pursuant to Employee stock plans 13 10 23 Share-based compensation 46 46 (348) 2,465 Cash dividends, S.605 per share (348) Comprehensive income 26 2,491 Balance at December 31, 2018 (as reported) 808 $ 1,510 $ 15,967 $ 20 $ (8,452) $ 9,853 Cumulative effect of adopting Accounting Standards Update No. 2016-02, Leases, codified in Accounting Standards Codification 842 (See Note 2 to the Consolidated Financial Statements for additional information) 55 55 Balance after adjustment for the new accounting $ 808 $ 1.510 S 16,022 S 20 $ (8,452) $ 9,908 standard Repurchase of common stock (2,000) (2,000) Issuance of common and treasury stock pursuant to Employee stock plans Share-based compensation Cash dividends, S.700 per share 16 11 27 55 55 (377) (377) Comprehensive income 2,300 (81) 2,219 Balance at December 31, 2019 808 $ 1,581 S 17,945 S (61) $ (10,441) $ 9,832 Using the attached excerpts from Southwest Airlines Co's 2019 Annual Report answer the following questions. In addition: All numbers are in Smillions (except per share data). Provide calculations when necessary.: www a. Long-term Assets i) What is the net book value (NBV) of Southwest's property, plant and equipment as of December 31, 2019? ii) What is the balance of Southwest's accumulated depreciation account as of December 31, 2019? b. Shares Issued and Outstanding i) How many shares of Common Stock were authorized as of December 31, 2019? How many had been issued as of December 31, 2019? Southwest also has repurchased some of its own shares of stock that had been previously issued (i.e. Treasury Stock). How many shares did Southwest hold as Treasury Stock as of December 31, ii) 2019? ii) How many shares of Southwest's Common Stock were outstanding as of December 31, 2019? c. Common Stock i) i) What is the par value of each share of common stock issued? How much money in excess of the par value of the stock (i.e. Additional Paid in Capital, or APIC) had been contributed by shareholders as of the end of 2019 (hint: this is listed as Capital in Excess of Par Value on the balance sheet)? wwwwm d. Equity analysis: i) i) What is Southwesť's Earnings Per Share (Basic) for the fiscal year ended 12/31/2019? What is the Return on Equity (ROE) for Southwest for the fiscal year ended 12/31/2019? (NOTE: when calculating average equity for the denominator of ROE, for the 12/31/2018 ending equity balance, use the 'reported balance' number, $9,853 million. Average that amount with the 12/31/2019 ending equity balance to calculate average equity for the period) www Southwest Airlines Co. Consolidated Balance Sheet (in millions, except share data) December 31, 2019 December 31, 2018 ASSETS Current assets: Cash and cash equivalents Short-term investments 2,548 1,524 1,854 1,835 Accounts and other receivables 1,086 529 568 Inventories of parts and supplies, at cost Prepaid expenses and other current assets 461 287 310 Total current assets 5,974 5,028 Property and equipment, at cost: Flight equipment Ground property and equipment Deposits on flight equipment purchase contracts 21,629 21,753 5,672 248 4,960 775 Assets constructed for others 164 1,768 27,713 10,688 29,256 Less allowance for depreciation and amortization 9,731 17,025 19,525 Goodwill 970 970 Operating lease right-of-use assets 1,349 Other assets 577 720 25,895 26,243 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued liabilities 1,574 1,749 1,416 1,749 Current operating lease liabilities Air traffic liability Current maturities of long-term debt 353 4,457 4,134 819 606 Total current liabilities 8,952 7,905 Long-term debt less current maturities Air traffic liability - noncurrent Deferred income taxes 1,846 1,053 2,771 936 2,364 164 2,427 Construction obligation Noncurrent operating lease liabilities Other noncurrent liabilities 1,701 978 706 650 Stockholders' equity: Common stock, $1.00 par value: 2,000,000,000 shares authorized; 807,611,634 shares issued in 2019 and 2018 Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Treasury stock, at cost: 288,547,318 and 255,008,275 shares in 2019 and 2018 respectively 808 808 1,581 1,510 17,945 15,967 (61) 20 (10,441) 9,832 25,895 (8,452) 9,853 26,243 Total stockholders' equity Southwest Airlines Co. Consolidated Statement of Income (in millions, except per share amounts) Year ended December 31, 2019 2018 2017 OPERATING REVENUES: Passenger 20,776 $ 20,455 S 19,763 Freight 172 175 173 Other 1,480 1,335 1,210 Total operating revenues 22,428 21,965 21,146 OPERATING EXPENSES: Salaries, wages, and benefits 8,293 7,649 7,305 Fuel and oil 4,347 4,616 4,076 Maintenance materials and repairs 1,223 1,107 1,001 Landing fees and airport rentals 1,363 1,334 1,292 Depreciation and amortization 1,219 1,201 1,218 Other operating expenses 3.026 2,852 2,847 Total operating expenses 19,471 18,759 17,739 OPERATING INCOME 2,957 3,206 3,407 OTHER EXPENSES (INCOME): Interest expense 118 131 114 Capitalized interest (36) (38) (49) Interest income (90) (69) (35) Other (gains) losses, net 8. 18 112 Total other expenses (income) 42 142 INCOME BEFORE INCOME TAXES 2,957 3,164 3,265 PROVISION (BENEFIT) FOR INCOME TAXES 657 699 (92) NET INCOME 24 2,300 2,465 %24 3,357 NET INCOME PER SHARE, BASIC %24 4.28 4.30 %24 5.58 NET INCOME PER SHARE, DILUTED $ 4.27 4.29 $ 5.57 Southwest Airlines Co. Consolidated Statement of Stockholders' Equity (in millions, except per share amounts) Year ended December 31, 2019, 2018, and 2017 Capital in excess of par value Accumulated other Retained comprehensive Treasury earnings income (loss) Common Stock stock Total Balance at December 31, 2016 808 $ 1,410 $ 10,761 S (323) $ (4,872) S 7,784 Repurchase of common stock (1,600) (1,600) Issuance of common and treasury stock pursuant to Employee stock plans 4 10 14 Share-based compensation 37 37 Cash dividends, S.475 per share (286) (286) Comprehensive income 3,357 335 3,692 | Balance at December 31, 2017 (as reported) 808 $ 1,451 S 13,832 S 12 $ (6,462) S 9,641 Cumulative effect of adopting Accounting Standards Update No. 2017-12, Targeted Improvements to Accounting for Hedging Activities (See Note 2 to the Consolidated Financial Statements for additional information) 18 (18) Balance after adjustment for the new accounting standard 808 S 1,451 S 13,850 S (6) S (6,462) $ 9,641 Repurchase of common stock (2,000) (2,000) Issuance of common and treasury stock pursuant to Employee stock plans 13 10 23 Share-based compensation 46 46 (348) 2,465 Cash dividends, S.605 per share (348) Comprehensive income 26 2,491 Balance at December 31, 2018 (as reported) 808 $ 1,510 $ 15,967 $ 20 $ (8,452) $ 9,853 Cumulative effect of adopting Accounting Standards Update No. 2016-02, Leases, codified in Accounting Standards Codification 842 (See Note 2 to the Consolidated Financial Statements for additional information) 55 55 Balance after adjustment for the new accounting $ 808 $ 1.510 S 16,022 S 20 $ (8,452) $ 9,908 standard Repurchase of common stock (2,000) (2,000) Issuance of common and treasury stock pursuant to Employee stock plans Share-based compensation Cash dividends, S.700 per share 16 11 27 55 55 (377) (377) Comprehensive income 2,300 (81) 2,219 Balance at December 31, 2019 808 $ 1,581 S 17,945 S (61) $ (10,441) $ 9,832

Answer rating: 100% (QA)

Solution a Long term assets i Net Book Value of the assets is the value of the assets after deducti... View the full answer