Alaska Airlines and Horizon Air 2013 Annual Report Download - page 164

in the state of Alaska. Under these agreements,
Alaska pays the carriers an amount which is
based on a determination of their cost of
operating those flights and other factors
intended to approximate market rates for those
services. Future payments (excluding Horizon)
are based on minimum levels of flying by the
third-party carriers, which could differ materially
due to variable payments based on actual levels
of flying and certain costs associated with
operating flights such as fuel.
Engine Maintenance
The Company has a power-by-the-hour (PBH)
maintenance agreement for some of the B737-
700 and B737-900 engines. This agreement
transfers risk to third-party service provider and
fixes the amount the Company pays per flight
hour in exchange for maintenance and repairs
under a predefined maintenance program. Future
payments are based on minimum flight hours.
Contingencies
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
these matters 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.
NOTE 10. SHAREHOLDERS' EQUITY
Dividends
During 2013, the Board of Directors declared
dividends of $0.40 per share. The Company paid
dividends of $28 million to shareholders of
record during 2013.
Subsequent to year-end, the Board of Directors
declared a quarterly cash dividend of $0.25 per
share to be paid on March 11, 2014 to
shareholders of record as of February 25, 2014.
This is a 25% increase from the most recent
quarterly dividends of $0.20 per share.
Common Stock Repurchase
In September 2012, the Board of Directors
authorized a $250 million share repurchase
program, which does not have an expiration
date, but is expected to be completed by
December 2014. In February 2012, the Board of
Directors authorized a $50 million share
repurchase program, which was completed in
September 2012. In June 2011, the Board of
Directors authorized a $50 million share
repurchase program, which was completed in
January 2012. In June 2010, the Board of
Directors authorized a $50 million share
repurchase program, which was completed in
April 2011.
Share repurchase activity for the three years ending December 31 (in millions, except shares):
2013 2012 2011
Shares Amount Shares Amount Shares Amount
$250 million Repurchase Program ......... 2,492,093 $159 202,510 $ 8 — $—
2012 Repurchase Program .............. —— 1,437,101 50 — —
2011 Repurchase Program .............. —— 46,340 2 1,595,000 48
2010 Repurchase Program .............. —— — — 1,023,600 31
Total ................................ 2,492,093 $159 1,685,951 $ 60 2,618,600 $ 79
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