Southwest Airlines 2003 Annual Report Download - page 62

A rollforward of the amounts included in "Accumulated other comprehensive income (loss)", net of taxes for
2003, 2002, and 2001, is shown below:
Fuel Accumulated oth
e
hedge comprehensive
(In millions) derivatives Other income (loss)
Balance at December 31, 2001 (31)$ (1)$ (32
)
$
2002 changes in fair value 110 (2) 108
Reclassification to earnings (22) - (22
)
Balance at December 31, 2002 57 (3) 54
2003 changes in fair value 157 2 159
Reclassification to earnings (91) - (91
)
Balance at December 31, 2003 123$ (1)$ 122$
12. COMMON STOCK
The Company has one class of common stock. Holders of shares of common stock are entitled to receive
dividends when and if declared by the Board of Directors and are entitled to one vote per share on all matters
submitted to a vote of the shareholders.
At December 31, 2003, the Company had common stock reserved for issuance pursuant to Employee stock
benefit plans (242 million shares authorized of which 55 million shares have not yet been granted) and upon
exercise of rights (408 million shares) pursuant to the Common Share Purchase Rights Agreement, as amended
(Agreement).
Pursuant to the Agreement, each outstanding share of the Company's common stock is accompanied by one
common share purchase right (Right). Each Right is exercisable only in the event of a proposed takeover, as
defined by the Agreement. The Company may redeem the Rights at $.0022 per Right prior to the time that 15
percent of the common stock has been acquired by a person or group. The Agreement is not applicable to a
fully-financed or cash tender offer for all of the Company's shares of common stock, which remains open for
at least 60 calendar days, is at a price equal to the higher of (a) 65% over the average closing price of the
common stock during the 90 days preceding the offer and (b) the highest closing price during the 52 weeks
preceding the offer, and is accompanied by a written fairness opinion of a nationally recognized investment
banking firm. If the Company is acquired, as defined in the Agreement, each Right will entitle its holder to
purchase for $3.29 that number of the acquiring company's or the Company's common shares, as provided in the
Agreement, having a market value of two times the exercise price of the Right. The Rights will expire no later
than July 30, 2005.
On January 18, 2001, the Company’s Board of Directors declared a three-for-two stock split, distributing 254
million shares on February 15, 2001. Unless otherwise stated, all share and per share data presented in the
accompanying consolidated financial statements and notes thereto have been restated to give effect to this stock
split.
In January 2004, the Company’s Board of Directors authorized the repurchase of up to $300 million of the
Company’s common stock, utilizing present and anticipated proceeds from the exercise of Employee stock
options. Repurchases will be made in accordance with applicable securities laws in the open market or in private
transactions from time to time, depending on market conditions.
13. STOCK PLANS
The Company has stock plans covering Employees subject to collective bargaining agreements (collective
bargaining plans) and stock plans covering Employees not subject to collective bargaining agreements (other
Employee plans). None of the collective bargaining plans were required to be approved by shareholders.
Options granted to Employees under collective bargaining plans are granted at or above the fair market value
of the Company’s common stock on the date of grant, generally have terms ranging from six to twelve years,
and vest primarily in accordance with the period covered by the respective collective bargaining agreement.
Neither Executive Officers nor members of the Company’s Board of Directors are eligible to participate in
any of these collective bargaining plans. Options granted to Employees through other Employee plans are
granted at the fair market value of the Company’s common stock on the date of grant, have ten-year terms,