Southwest Airlines 1996 Annual Report Download - page 40

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40
Future minimum lease payments under capital leases and noncancelable operating leases,
with initial or remaining terms in excess of one year, at December 31, 1996 were (in thousands):
CAPITAL
LEASES
OPERATING
LEASES
1997 $25,858 $243,253
1998 32,026 223,479
1999 20,245 215,553
2000 16,871 213,798
2001 17,391 208,460
After 2001 155,360 2,342,794
Total minimum lease payments 267,751 $3,447,337
Less amount representing interest 102,141
Present value of minimum lease
payments 165,610
Less current portion 12,317
Long-term portion $153,293
The aircraft leases can generally be renewed, at rates based on fair market value at the
end of the lease term, for one to five years. Most aircraft leases have purchase options at or near
the end of the lease term at fair market value, but generally not to exceed a stated percentage of
the lessor’s defined cost of the aircraft.
6. COMMON STOCK
At December 31, 1996, the Company had common stock reserved for issuance pursuant
to Employee stock benefit plans (35,257,962 shares) and upon exercise of rights (180,370,052
shares) pursuant to the Common Stock Rights Agreement, as amended (Agreement).
Effective July 18, 1996, the Company amended and restated the Agreement. The
principal purpose of the amendment and restatement was to extend the Agreement by ten years.
Pursuant to the Agreement, each outstanding share of the Company’s common stock is
accompanied by one common share purchase right (Right). Each Right entitles its holder to
purchase one share of common stock at an exercise price of $16.67 and is exercisable only in the
event of a proposed takeover, as defined by the Agreement. The Company may redeem the