XML 42 R24.htm IDEA: XBRL DOCUMENT
v3.22.0.1

EMPLOYEE RETIREMENT PLANS | 12 Months Ended
--- | ---
Dec. 31, 2021
Retirement Benefits [Abstract] |
EMPLOYEE RETIREMENT PLANS | EMPLOYEE RETIREMENT PLANS Defined Contribution Plans Southwest has defined contribution plans covering substantially all of its Employees. Contributions under all defined contribution plans are primarily based on Employee compensation and performance of the Company. The Company sponsors Employee savings plans under section 401(k) of the Internal Revenue Code of 1986, as amended. The Southwest Airlines Co. 401(k) Plan includes Company matching contributions and the Southwest Airlines Pilots Retirement Saving Plan has non-elective Company contributions. In addition, the Southwest Airlines Co. ProfitSharing Plan (ProfitSharing Plan) is a defined contribution plan to which the Company may contribute a percentage of its eligible pre-tax profits, as defined, on an annual basis. No Employee contributions to the ProfitSharing Plan are allowed. Amounts associated with the Company's defined contribution plans expensed in 2021, 2020, and 2019, reflected as a component of Salaries, wages, and benefits, were $749 million, $561 million, and $1.2 billion, respectively. Postretirement Benefit Plans The Company provides postretirement benefits to qualified retirees in the form of medical and dental coverage. Employees must meet minimum levels of service and age requirements as set forth by the Company, or as specified in collective-bargaining agreements with specific workgroups. Employees meeting these requirements, as defined, may use accrued unused sick time to pay for medical and dental premiums from the age of retirement until age 65. The following table shows the change in the accumulated postretirement benefit obligation ("APBO") for the years ended December 31, 2021 and 2020:
(in millions) |  | 2021 |  | 2020
APBO at beginning of period |  | $ | 428 |  |  | $ | 288 |
Service cost |  | 25 |  |  | 22 |
Interest cost |  | 10 |  |  | 10 |
Benefits paid |  | (24) |  |  | (10) |
Actuarial (gain)/loss |  | (109) |  |  | 63 |
Curtailment |  | — |  |  | 53 |
Special termination benefits |  | — |  |  | 2 |
APBO at end of period |  | $ | 330 |  |  | $ | 428 |
During 2021, the Company recorded a $109 million actuarial gain as a decrease to the APBO with an offset to AOCI. This actuarial gain is reflected above and resulted from changes in certain key assumptions used to determine the Company’s year-end obligation. The assumption changes that resulted in the largest portion of the actuarial gain were the expected participation and retirement rates in the Plan for future qualifying retirees, which reflect lower expectations as to utilization of benefits based on recent history, combined with census data and other demographic changes. All plans are unfunded, and benefits are paid as they become due. Estimated future benefit payments expected to be paid are $21 million in 2022, $20 million in 2023, $19 million in 2024, $20 million in 2025, $21 million in 2026, and $115 million for the next five years thereafter. The following table reconciles the funded status of the plans to the accrued postretirement benefit cost recognized in Other non-current liabilities on the Company’s Consolidated Balance Sheet at December 31, 2021 and 2020.
(in millions) |  | 2021 |  | 2020
Funded status |  | $ | (330) |  |  | $ | (428) |
Unrecognized net actuarial (gain) loss |  | (69) |  |  | 40 |
Unrecognized prior service cost |  | 3 |  |  | 3 |
Accumulated other comprehensive income (loss) |  | 66 |  |  | (43) |
Consolidated Balance Sheet liability |  | $ | (330) |  |  | $ | (428) |
The consolidated periodic postretirement benefit cost for the years ended December 31, 2021, 2020, and 2019, included the following:
(in millions) |  | 2021 |  | 2020 |  | 2019
Service cost |  | $ | 25 |  |  | $ | 22 |  |  | $ | 17 |
Interest cost |  | 10 |  |  | 10 |  |  | 10 |
Amortization of prior service cost |  | — |  |  | 1 |  |  | 1 |
Amortization of net gain |  | — |  |  | — |  |  | (2) |
Curtailment |  | — |  |  | 53 |  |  | — |
Special termination benefits |  | — |  |  | 2 |  |  | — |
Net periodic postretirement benefit cost |  | $ | 35 |  |  | $ | 88 |  |  | $ | 26 |
Service cost and Special termination benefits are recognized within Salaries, wages, and benefits expense, and all other costs are recognized in Other (gains) losses, net in the Consolidated Statement of Income (Loss). Unrecognized prior service cost is expensed using a straight-line amortization of the cost over the average future service of Employees expected to receive benefits under the plans. Actuarial gains are amortized utilizing the minimum amortization method. The following actuarial assumptions were used to account for the Company’s postretirement benefit plans at December 31, 2021, 2020, and 2019:
|  | 2021 |  | 2020 |  | 2019
Weighted-average discount rate |  | 2.90 | % |  | 2.45 | % |  | 3.30 | %
Assumed healthcare cost trend rate (a) |  | 6.25 | % |  | 6.75 | % |  | 7.13 | %
(a)The assumed healthcare cost trend rate is expected to be 6.25% for 2022, then decline gradually to 4.75% by 2028 and remain level thereafter. The selection of a discount rate is made annually and is selected by the Company based upon comparison of the expected future cash flows associated with the Company’s future payments under its consolidated postretirement obligations to a yield curve created using high quality bonds that closely match those expected future cash flows. This rate increased during 2021 due to market conditions. The assumed healthcare trend rate is also reviewed at least annually and is determined based upon both historical experience with the Company’s healthcare benefits paid and expectations of how those trends may or may not change in future years.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 55 -Paragraph 17 -URI http://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section S99 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(i) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (o) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (p) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 3 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (q) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(1) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (l) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(2) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration