Alaska Airlines and Horizon Air 2014 Annual Report Download - page 138

The table below reflects total expected capital expenditures and the additional expenditures if options
were exercised. Included in the table are six new aircraft, two of which are options exercises and four of
which are expected new aircraft orders approved by the Board of Directors on February 10, 2015. These
aircraft are expected to be delivered in 2016 and 2017. Additional options will be exercised only if we
believe return on invested capital targets can be met:
2014
Actuals 2015 2016 2017 2018
Aircraft and aircraft purchase deposits - firm $ 498 $ 580 $ 535 $ 485 $ 405
Other flight equipment 131 50 35 25 25
Other property and equipment 65 120 80 80 80
Total property and equipment additions $ 694 $ 750 $ 650 $ 590 $ 510
Option aircraft and aircraft deposits, if exercised $ – $ – $ 35 $ 145 $ 315
Cash used in investing activities was $698 million during 2013, compared to $645 million in 2012. Our
capital expenditures were $566 million, or $48 million higher than in 2012. This is due to the delivery
of nine B737-900ER aircraft, and three Q400 aircraft, compared to four B737-900ER aircraft, three
B737-800 aircraft, and two Q400 aircraft in the prior year.
Cash Used by Financing Activities
Cash used by financing activities was $462 million during 2014, compared to $325 million in 2013.
During the current year, we made debt payments of $119 million, stock repurchases of $348 million,
and cash dividend payments of $68 million, partially offset by proceeds from debt of $51 million. In
2013, we made debt payments of $161 million, stock repurchases of $159 million, and cash dividend
payments of $28 million. In 2012, we made debt payments of $275 million and stock repurchases of
$60 million, which was offset by proceeds from a reimbursement for our Los Angeles International
Airport T6 project of $178 million.
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
The Company has two $100 million credit facilities. Both facilities have variable interest rates based on
LIBOR plus a specified margin. One of the $100 million facilities, which expires in September 2017, is
secured by aircraft. The other $100 million facility is secured by certain accounts receivable, spare
engines, spare parts and ground service equipment, and expires March 2017. The Company has no
immediate plans to borrow using either of these facilities.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS
Aircraft Purchase Commitments
At December 31, 2014, we had firm orders to purchase 76 aircraft. In addition, we had options to
acquire 48 additional B737 aircraft and options to acquire five Q400 aircraft. Also, we have options to
add regional capacity by having SkyWest operate up to 16 more E-175 aircraft than the seven aircraft
we already have committed.
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