Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

As previously reported, on April 20, 2020, Southwest Airlines Co. (the "Company") entered into definitive documentation with the United States Department of Treasury ("Treasury") with respect to the receipt of funding support pursuant to the Payroll Support Program ("Payroll Support") under the Coronavirus Aid, Relief and Economic Security Act. On April 20, 2020, the Company entered into a payroll support program agreement (the "PSP Agreement") with Treasury, and as consideration for the Payroll Support, the Company issued a promissory note (the "Note") in favor of Treasury and entered into a warrant agreement with Treasury (the "Warrant Agreement" and, together with the PSP Agreement and the Note, the "Payroll Support Documents"), pursuant to which the Company agreed to issue warrants (each, a "Warrant") to purchase common stock of the Company to Treasury in connection with each disbursement of Payroll Support. The Company received disbursements of Payroll Support on each of April 21, 2020, May 29, 2020, and June 30, 2020.

On July 30, 2020, the Company received the fourth and final disbursement of Payroll Support in the amount of $325,918,172, for which the Company provided Treasury consideration in the form of an increase of the Note in an amount of $97,775,452 and a Warrant to purchase up to 268,098 shares of the Company's common stock. After taking into account this fourth installment of Payroll Support, the Company has received the full $3,259,181,720 of expected Payroll Support, for which the Company has provided Treasury with a Note in the aggregate amount of $947,754,516 and Warrants to purchase up to 2,598,724 shares of the Company's common stock.

A description of the Payroll Support Documents can be found in Note 13 to the Company's unaudited Condensed Consolidated Financial Statements included in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and a copy of each Payroll Support Document was filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses