Alaska Airlines and Horizon Air 2009 Annual Report Download - page 188
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NOTE 15. EARNINGS (LOSS) PER SHARE (EPS)
Diluted EPS is calculated by dividing net income
(loss) by the average common shares outstanding
plus additional common shares that would have
been outstanding assuming the exercise of
in-the-money stock options and restricted stock
units, using the treasury-stock method. In 2009
and 2007, 2.1 million and 1.7 million stock
options, respectively, were excluded from the
calculation of diluted EPS because they were
antidilutive. As the Company reported a net loss
in 2008, no outstanding stock options or
restricted stock units were used in the calculation
of diluted weighted average shares as the effect
would have been antidilutive.
NOTE 16. CONTINGENCIES
Grievance with International Association of
Machinists
In June 2005, the International Association of
Machinists (IAM) filed a grievance under its
Collective Bargaining Agreement (CBA) with
Alaska alleging that Alaska violated the CBA by,
among other things, subcontracting the ramp
service operation in Seattle. The dispute was
referred to an arbitrator and hearings on the
grievance commenced in January 2007, with a
final hearing date in August 2007. In July 2008,
the arbitrator issued a final decision regarding
basic liability in the matter. In that ruling, the
arbitrator found that Alaska had violated the CBA
and instructed Alaska and the IAM to negotiate a
remedy. In February 2010, the arbitrator issued
a final decision. The decision does not require
Alaska to alter the existing subcontracting
arrangements for ramp service in Seattle. The
award sustains the right to subcontract other
operations in the future so long as the
requirements of the CBA are met. The award
imposes monetary remedies which have not
been fully calculated, but are not expected to be
material.
Other items
The Company is a party to routine litigation
matters incidental to its business and with
respect to which no material liability is expected.
Management believes the ultimate disposition of
the matters discussed above is not likely to
materially affect the Company’s financial position
or results of operations. This forward-looking
statement is based on management’s current
understanding of the relevant law and facts, and
it is subject to various contingencies, including
the potential costs and risks associated with
litigation and the actions of arbitrators, judges
and juries.
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