What is a cash flow waterfall?

A cash flow waterfall is a bar chart that walks from operating cash flow through capital expenditure to free cash flow, then shows how the remaining cash is allocated — acquisitions, buybacks, dividends, debt, and other financing — ending at the net change in cash. Each step is colour-coded: green bars add to the running total, red bars subtract.

How does Southwest Airlines (LUV) spend its free cash flow?

For TTM through Q2 2026, Southwest Airlines generated $2.53B of operating cash flow and -$455M of free cash flow — a free cash flow margin of -18% of operating cash flow. The waterfall breaks down how the remaining cash was allocated across investing and financing activities.

How much did Southwest Airlines (LUV) return via buybacks and dividends?

The waterfall shows buybacks (share repurchases) and dividends paid as separate steps in the financing section. Together these represent Southwest Airlines's shareholder returns for TTM through Q2 2026. You can compare these against free cash flow to assess the capital-return payout ratio.

Southwest Airlines (LUV) Cash Flow Waterfall

Operating CF

$2.53B

Capex

-$2.99B

Free Cash Flow

-$455M

FCF Margin

-18.0%

Cash flow waterfall for Southwest Airlines (LUV) — TTM through Q2 2026

Free cash flow: -$455M

Note: Other Investing is large — driven mainly by purchases or sales of investments.

Cash flow breakdown for Southwest Airlines (LUV) — TTM through Q2 2026

Line item	Amount	Running total
Operating Cash Flow	$2.53B	$2.53B
Capital Expenditure	-$2.99B	-$455M
Free Cash Flow	-$455M	-$455M
Acquisitions	$192M	-$263M
Other Investing	$618M	$355M
Share Buybacks	-$1.55B	-$1.2B
Dividends Paid	-$370M	-$1.57B
Net Debt Change	$1.32B	-$248M
Other Financing & FX	$564M	$316M
Net Cash Increase	$316M	$316M

Operating Cash Flow$2.53B
Capital Expenditure-$2.99B
Free Cash Flow-$455M
Acquisitions$192M
Other Investing$618M
Share Buybacks-$1.55B
Dividends Paid-$370M
Net Debt Change$1.32B
Other Financing & FX$564M
Net Cash Increase$316M

Want to see what drove the FCF change?Free Cash Flow Bridge

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