Alaska Airlines and Horizon Air 2007 Annual Report Download - page 158

2007 compared to $240.3 million during 2006.
We obtained debt financing of $196.1 million for
six new B737-800 aircraft and received $6.1
million of cash upon the issuance of common
stock through stock option exercises and our
employee stock purchase plan. Additionally, we
borrowed $85.8 million using our pre-delivery
payment facility. Offsetting these cash inflows
were normal long-term debt payments of $132.2
million and the $62.8 million repurchase of
2.6 million shares of our common stock.
We plan to meet our significant capital and
operating commitments through internally
generated funds from operations and cash and
marketable securities on hand, additional debt
financing, and availability of credit under our
pre-delivery payment facility. We have financing
already in place for deliveries of B737-800s
through 2009 and, subsequent to December 31,
2007, we closed financing on 13 of our Q400s,
resulting in cash proceeds of $193 million.
Bank Line-of-Credit Facility
Alaska has a $185 million variable-rate credit
facility that expires in March 2010. As of
December 31, 2007, there are no outstanding
borrowings on this credit facility and the
Company has no immediate plans to borrow
using this credit facility. See Note 5 in the
consolidated financial statements for further
discussion.
Pre-delivery Payment Facility
Alaska’s $172 million variable-rate revolving loan
facility is available to provide a portion of the
pre-delivery funding requirements of Alaska’s
purchase of new Boeing 737-800 aircraft under
the current aircraft purchase agreement. The
maximum available amount is reduced to $152
million beginning in August 2009. The facility
expires on August 31, 2011. The interest rate is
based on one-month LIBOR plus a specified
margin. Any borrowings will be secured by
Alaska’s rights under the Boeing purchase
agreement. The principal amounts outstanding
on the facility relate to specified aircraft and will
be repaid at the time that Alaska takes delivery
of the aircraft, if not sooner. As of December 31,
2007, $85.8 million was outstanding.
CONTRACTUAL OBLIGATIONS,
COMMITMENTS AND OFF-BALANCE SHEET
ARRANGEMENTS
Aircraft Purchase Commitments
At December 31, 2007, we had firm orders to
purchase 46 aircraft requiring future aggregate
payments of approximately $1.0 billion, as set
forth below. Alaska also has committed to
delivery of one new B737-800 aircraft in 2008
under an operating lease arrangement. Alaska
has options to acquire 45 additional B737s and
Horizon has options to acquire 20 Q400s.
Alaska and Horizon expect to finance the firm
orders and, to the extent exercised, the option
aircraft with leases, long-term debt or internally
generated cash.
During 2007, Alaska took delivery of 14 B737-
800s, all of which were paid for with cash on
hand. Six were subsequently financed with fixed
and variable-rate debt arrangements. Horizon
took delivery of 13 Q400s, all of which were paid
for with cash on hand. During 2007, Alaska sold
and leased back 20 MD-80 aircraft.
The following table summarizes aircraft purchase commitments and payments by year, as of
December 31, 2007:
Delivery Period - Firm Orders
Aircraft 2008 2009 2010 2011 Total
Boeing 737-800 ............................ 16 6 6 3 31
Bombardier Q400 ........................... 3 12 — — 15
Total ..................................... 19 18 6 3 46
Payments (Millions) .......................... $491.6 $355.3 $157.9 $44.9 $1,049.7
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