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A More Detailed Analysis of the Financial Reports. Integration of AirTran into Southwest. The Company fully deployed connecting capabilities between the Southwest and AirTran networks allowing Customers of both Southwest and AirTran to book connecting itineraries between the two carriers.
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Integration of AirTran into Southwest • The Company fully deployed connecting capabilities between the Southwest and AirTran networks allowing Customers of both Southwest and AirTran to book connecting itineraries between the two carriers. • Customers can now fly between any of the combined 96 Southwest and AirTran destinations on a single itinerary. • The Company continued to transfer AirTran Employees to Southwest. As of December 31, 2013, approximately 65 percent of AirTran Employees had been converted to Southwest Employees • The Company significantly grew the Southwest network by converting AirTran service to Southwest service in several new markets. The Company has established a Southwest presence in all domestic cities in Southwest’s and AirTran’s combined network.
Southwest’s New Airport Projects • The Company has commitments associated with various airport improvement projects that will impact its future liquidity needs in differing ways. These projects include the construction of new facilities and the rebuilding or modernization of existing facilities. The airports include: • Dallas Love Field • Fort Lauderdale-Hollywood International Airport • Houston Hobby International Airport • Los Angeles International Airport
Advertising Expense • Advertising costs are charged to expense as incurred. Advertising and promotions expense for the years ended December 31, 2013, 2012, and 2011 was $208 million, $223 million, and $237 million, respectively. • Is included as a component of Other operating expense in the accompanying Consolidated Statement of Income.
Software Capitalization • The Company capitalizes certain internal and external costs related to the acquisition and development of internal use software during the application development stages of projects. • The Company amortizes these costs using the straight-line method over the estimated useful life of the software, which typically ranges from five to fifteen years. Costs incurred during the preliminary project or the post-implementation/operation stages of the project are expensed as incurred. • Computer software depreciation expense was $90 million, $59 million, and $55 million for the years ended December 31, 2013, 2012, and 2011, respectively, and is included as a component of Depreciation and amortization expense in the accompanying Consolidated Statement of Income.
Items Looked For • Tried looking for more income statement items like sales or some type of SG&A • Also searched for Air Traffic Liability and Construction Obligation Notes to try to explain what the accounts were but could not find anything
Works Cited • Capital IQ • SEC website • Module 10 • 2013 10-K Earnings Conference Call