LONG-TERM DEBT

3 Months Ended

6 Months Ended

Jun. 30, 2023

Long-term debt obligations on the condensed consolidated balance sheets (in millions):


	June 30, 2023			December 31, 2022
Fixed-rate notes payable due through 2029	$	95		$	113
Fixed-rate PSP notes payable due through 2031	600			600
Fixed-rate EETC payable due through 2025 & 2027	891			947
Variable-rate notes payable due through 2035	573			514
Less debt issuance costs	(13)			(15)
Total debt	2,146			2,159
Less current portion(a)	257			276
Long-term debt, less current portion	$	1,889		$	1,883

Weighted-average fixed-interest rate	3.5		%	3.5		%
Weighted-average variable-interest rate	6.5		%	5.8		%

(a) Excludes finance lease liabilities recognized within "Current portion of long-term debt and finance leases" in the condensed consolidated balance sheets as of June 30, 2023.

Approximately $265 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at June 30, 2023, resulting in an effective weighted-average interest rate for the full debt portfolio of 3.8%.

In the second quarter, Horizon executed an agreement to finance E175 aircraft scheduled to be delivered in 2023 and 2024. The financing, which covers a portion of the total aircraft cost and is secured by the related aircraft, is funded upon each delivery and will total $247 million over the duration of the agreement. During the six months ended June 30, 2023, the Company incurred new debt associated with this agreement of $134 million, covering six E175 aircraft. This financing activity is reflected as a non-cash transaction within the supplemental disclosures in the condensed consolidated statements of cash flows.

Also during the six months ended June 30, 2023, the Company made scheduled debt payments of $147 million and prepayments of $2 million.

Subsequent to quarter end, Alaska completed a refinancing of an existing 2018 variable-rate loan facility with a total commitment amount of $117 million. The facility is secured by B737 aircraft.

Debt Maturity

At June 30, 2023, long-term debt principal payments for the next five years and thereafter are as follows (in millions):


	Total
Remainder of 2023	$	135
2024	251
2025	304
2026	184
2027	544
Thereafter	741
Total Principal Payments	$	2,159

Bank Lines of Credit

Alaska has three credit facilities totaling $476 million as of June 30, 2023. One of the credit facilities for $150 million expires in March 2025 and is secured by certain accounts receivable, spare engines, spare parts, and ground service equipment. A second credit facility for $250 million expires in June 2024 and is secured by aircraft. Both facilities have variable interest rates based on SOFR plus a specified margin. A third credit facility for $76 million expires in June 2024 and is secured by aircraft.

Alaska has secured letters of credit against the third facility, but has no plans to borrow using either of the other two facilities. All credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million. Alaska was in compliance with this covenant at June 30, 2023.

Subsequent to quarter end, the Company executed an amendment to one of its aircraft-backed credit facilities, extending the term of the agreement from June 2024 to June 2026 and increasing the size of the facility from $250 million to $400 million. There were no changes to the minimum unrestricted cash and marketable securities requirement.

Subsequent Events [Text Block]

Subsequent to quarter end, Alaska executed an agreement with one lessor to exit two additional operating leases and purchase the A321neo aircraft. The transactions are expected to occur in the first quarter of 2024 and will result in cash outflows of approximately $130 million. The agreements were not contractually obligated as of June 30, 2023 and are not reflected within the consolidated financial statements or accompanying notes as of June 30, 2023.