Alaska Airlines and Horizon Air 2009 Annual Report Download - page 151

We currently expect capital expenditures to be
approximately $207 million (of which $122
million is expected to be aircraft-related) during
2010 as we take delivery of four new B737-800s
and begin work on an airport terminal move at
Los Angeles International airport.
Cash Provided by Financing Activities
We finance a large portion of our capital
spending with debt financing. Net cash provided
by financing activities was $233.2 million during
2009 compared to $495.8 million during 2008.
We completed sale-leaseback transactions on
six B737-800 aircraft for net proceeds of $230
million, and we received debt proceeds of $10.4
million from our pre-delivery payment facility and
$264.6 million for five new Q400 aircraft and six
new B737-800 aircraft. Offsetting these
proceeds were long-term debt payments of
$135.7 million, $50.3 million of payments on
our pre-delivery payment facility, and a $75
million payment on our bank line-of-credit facility.
Additionally, we repurchased $23.8 million of our
common stock in 2009, compared to a $48.9
million repurchase in 2008.
We plan to meet our capital and operating
commitments through internally generated funds
from operations and cash and marketable
securities on hand, along with additional debt
financing if necessary.
Bank Line-of-Credit Facility
Alaska has a $185 million variable-rate credit
facility that expires in March 2010. The facility
has a requirement for us to maintain a minimum
unrestricted cash and marketable securities
balance of $500 million. There is no outstanding
balance on this facility at December 31, 2009.
We are working to renew this facility and believe
we can do so at terms that will be acceptable to
us. See Note 6 in the consolidated financial
statements for further discussion.
Pre-delivery Payment Facility
Alaska’s $80 million variable-rate revolving loan
facility expiring in August 2011 is available to
provide a portion of the pre-delivery funding
requirements of Alaska’s purchase of Boeing
737-800 aircraft under the current aircraft
purchase agreement. As of December 31, 2009,
there were no outstanding borrowings under this
facility. See Note 6 in the consolidated financial
statements for further discussion.
CONTRACTUAL OBLIGATIONS,
COMMITMENTS AND OFF-BALANCE SHEET
ARRANGEMENTS
Aircraft Purchase Commitments
In April 2009, Alaska entered into an agreement
with Boeing to defer the delivery of a number of
B737-800 aircraft and agreed to purchase an
additional four aircraft to be delivered in 2014
and 2015. In July 2009, Horizon entered into an
agreement with Bombardier to defer all
remaining 2010 and 2011 Q400 deliveries to
2012 and 2013.
Given the revised delivery schedules noted
above, at December 31, 2009, we had firm
orders to purchase 23 aircraft requiring future
aggregate payments of approximately $588.8
million, as set forth below. Alaska has options to
acquire 40 additional B737s and Horizon has
options to acquire 10 Q400s.
The following table summarizes aircraft purchase commitments and payments by year, as of
December 31, 2009:
Delivery Period - Firm Orders
Aircraft 2010 2011 2012 2013
Beyond
2013 Total
Boeing 737-800 ....................................... 4 3 2 2 4 15
Bombardier Q400 ...................................... — — 4 4 — 8
Total ................................................ 4 3 6 6 4 23
Payments (Millions)* .................................... $121.0 $91.0 $144.7 $143.0 $89.1 $588.8
* Includes pre-delivery payments to Boeing and Bombardier as well as final aircraft payments.
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ŠForm 10-K