Alaska Airlines and Horizon Air 2007 Annual Report Download - page 180

Aircraft Commitments
In June 2005, Alaska entered into an aircraft
purchase agreement to acquire B737-800
aircraft with deliveries beginning in January 2006
and continuing through April 2011. The purchase
agreement also includes options rights to
purchase additional aircraft under similar terms.
As of December 31, 2007, Alaska was
committed to purchasing 31 B737-800 aircraft,
16 of which will be delivered in 2008. Alaska has
also entered into operating lease arrangements
for two B737-800 aircraft and has committed to
an operating lease for an additional B737-800
aircraft to be delivered in the first quarter of
2008.
Horizon entered into an aircraft purchase
agreement in 2007 to acquire 15 Q400 aircraft
with deliveries beginning in June 2008 and
continuing through August 2009. The purchase
agreement also includes options to purchase an
additional 20 Q400 aircraft.
At December 31, 2007, the Company had firm
purchase commitments for 46 total aircraft
requiring remaining aggregate payments of
approximately $1.0 billion.
Alaska and Horizon expect to finance the firm
orders and, to the extent exercised, the option
aircraft with leases, long-term debt, and
internally generated cash.
NOTE 7. COMMON STOCK REPURCHASE PROGRAM
In September 2007, the Board of Directors
authorized the Company to repurchase up to
$100 million of its common stock over a period
of twelve months. As of December 31, 2007, the
Company had repurchased 2,593,282 shares of
common stock for a total of $62.8 million under
this authorization, and an additional 1,283,700
shares through February 19, 2008, bringing the
total to 3,876,982 shares. The repurchased
shares have been recorded as treasury stock in
the accompanying consolidated balance sheet.
NOTE 8. EMPLOYEE BENEFIT PLANS
Four defined-benefit and five defined-contribution
retirement plans cover various employee groups
of Alaska and Horizon. The defined-benefit plans
provide benefits based on an employee’s term of
service and average compensation for a
specified period of time before retirement.
Alaska also maintains an unfunded,
noncontributory defined-benefit plan for certain
elected officers and an unfunded,
non-contributory defined-contribution plan for
other elected officers.
In 2006, the Company adopted SFAS No. 158,
Employers’ Accounting for Defined Benefit
Pension and Other Postretirement Plans, an
amendment of FASB Statements No. 87, 88,
106 and 132(R) (SFAS 158). SFAS 158 requires
recognition of the overfunded or underfunded
status of an entity’s defined-benefit pension and
other postretirement plan as an asset or liability
in the financial statements and requires
recognition of the funded status in other
comprehensive income.
Qualified Defined-Benefit Pension Plans
The Company’s pension plans are funded as
required by the Employee Retirement Income
Security Act of 1974 (ERISA). The defined-benefit
plan assets consist primarily of marketable
equity and fixed-income securities. The Company
uses a December 31 measurement date for
these plans.
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