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Alaska Air Group delivers strong fourth quarter 2022 and full-year results

Delivered industry-leading full-year adjusted pretax margin of 7.6%; 
Record annual revenue of $9.6 billion, up 10% versus 2019; 
Employees hard work recognized with performance-based bonuses totaling 10.5% of annual pay

SEATTLE, Jan. 26, 2023 /PRNewswire/ -- Alaska Air Group Inc. (NYSE: ALK) today reported financial results for the fourth quarter and full year ended Dec. 31, 2022, and provided an outlook for the first quarter ending March 31, 2023.

"2022 was a year of significant recovery and accomplishment for Alaska Airlines," said Alaska Airlines CEO Ben Minicucci. "Despite many challenges during the year, we ran one of the best operations, signed five new labor deals, and executed the majority of our single fleet transition. The results we posted today signal how well our teams are navigating this recovery. I want to thank our employees for their commitment to our success, and for the work they do every day to take great care of our guests. I am confident that we are well positioned to grow, compete and out-perform in 2023."

Financial Results:
  • Reported net income for the fourth quarter and full year 2022 under Generally Accepted Accounting Principles (GAAP) of $22 million, or $0.17 per diluted share, and $58 million, or $0.45 per diluted share. These results compare to net income for the fourth quarter and full year 2021 of $18 million, or $0.14 per diluted share, and $478 million, or $3.77 per diluted share.
  • Reported net income for the fourth quarter and full year 2022, excluding special items and mark-to-market fuel hedge accounting adjustments, of $118 million, or $0.92 per diluted share, and $556 million, or $4.35 per diluted share. These results compare to net income for the fourth quarter and net loss for the full year 2021, excluding special items and mark-to-market fuel hedge accounting adjustments, of $31 million, or $0.24 per diluted share, and $256 million, or $2.03 per share.
  • Recorded $257 million of incentive pay in 2022 earned by employees for meeting or exceeding profitability, safety and emissions targets. The payout is the richest in the 20-year history of the plan, representing nearly six weeks of pay for most employees.
  • Recorded $2.5 billion in operating revenue for the fourth quarter, resulting in $9.6 billion in operating revenue for the full year 2022, the highest annual total in company history.
  • Received nearly $1.5 billion in annual cash remuneration under the renewed co-brand credit card arrangement with Bank of America, the highest level in the program's history.

 

Balance Sheet and Liquidity:
  • Announced plans to resume share repurchases in early 2023 to offset annual dilution. Repurchases are expected to range from $75 million to $100 million in 2023.
  • Ended the quarter with a debt-to-capitalization ratio of 49%, within our target range of 40% to 50%.
  • Repaid $52 million in debt in the fourth quarter, bringing total debt payments to $385 million for the full year 2022.
  • Held $2.4 billion in unrestricted cash and marketable securities as of Dec. 31, 2022.

 

Fleet Updates:
  • Retired ten Airbus A320 aircraft and nine Q400 aircraft during the fourth quarter. All remaining A320 aircraft have since been retired and all remaining Q400 aircraft will be retired by the end of January 2023.
  • Amended a previously existing aircraft purchase agreement with Boeing to convert 52 737 MAX aircraft options to firm purchases for delivery between 2024 and 2027. Alaska also added an incremental 105 delivery positions to purchase 737 MAX aircraft between 2026 and 2030.
  • Received four 737-9 aircraft during the quarter, bringing the total 737-9 fleet to 37.
  • Received three E175 aircraft during the quarter, bringing Horizon's total E175 fleet to 33.

 

Other Operational Updates:
  • Partnered with Lyft to offer Mileage Plan members one mile for every $1 spent on all Lyft rides in the U.S. and Canada.
  • Added a new Mileage Plan partner, Mokulele Airlines, to offer guests more convenient connections within the Hawaiian Islands, starting in early 2023.
  • Launched the first U.S. electronic bag tag program, enabling guests to tag their luggage through the airline's mobile app before they reach the airport.
  • Opened the renovated C Concourse Lounge in Seattle, the first of several investments that will improve the lounge experience with more seating and food and beverage choices for guests in Seattle, Portland, San Francisco and Los Angeles.

 

Environmental, Social and Governance Updates:
  • Donated a retired Q400 to the Portland Community College Foundation, providing students of the Aviation Maintenance Technology and Aviation Science programs the opportunity to gain hands-on experience working on a commercial aircraft.
  • Completed the transition to paper cups for inflight beverages, which will replace more than 55 million plastic cups each year with a more sustainable alternative.
  • Donated 55 million miles to 20 different charities through Alaska's Care Miles program in 2022.
  • Created a new Diversity, Equity and Inclusion Disability Office dedicated to ensuring Alaska becomes a leader in disability inclusion.

The following table reconciles the company's reported GAAP net income per share (EPS) for the three and twelve months ended Dec. 31, 2022 and 2021 to adjusted amounts.

Three Months Ended December 31,

2022

2021

(in millions, except per-share amounts)

Dollars

Diluted EPS

Dollars

Diluted EPS

GAAP net income per share

$                 22

$             0.17

$                 18

$             0.14

Mark-to-market fuel hedge adjustments

12

0.09

21

0.16

Special items - fleet transition and other(a)

120

0.93

(6)

(0.05)

Special items - labor and related(b)

(6)

(0.04)

2

0.02

Income tax effect of reconciling items above

(30)

(0.23)

(4)

(0.03)

Non-GAAP adjusted net income (loss) per share

$              118

$             0.92

$                 31

$             0.24

 

Twelve Months Ended December 31,

2022

2021

(in millions, except per-share amounts)

Dollars

Diluted EPS

Dollars

Diluted EPS

GAAP net income per share

$                 58

$             0.45

$              478

$             3.77

Payroll Support Program grant wage offset

—

—

(914)

(7.21)

Mark-to-market fuel hedge adjustments

76

0.60

(47)

(0.37)

Special items - fleet transition and other(a)

496

3.88

(1)

(0.01)

Special items - labor and related(b)

84

0.66

(10)

(0.08)

Income tax effect of reconciling items above

(158)

(1.24)

238

1.87

Non-GAAP adjusted net income (loss) per share

$              556

$             4.35

$            (256)

$           (2.03)


(a)

Special items - fleet transition and other in the three and twelve months ended December 31, 2022 is primarily impairment charges and accelerated costs associated with the retirement of the A320 and Q400 fleets.

(b)

Special items - labor and related in the three and twelve months ended December 31, 2022 is primarily a one-time payment to Alaska pilots following ratification of a new collective bargaining agreement.

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables. A glossary of financial terms can be found on the last page of this release.

A conference call regarding the fourth quarter and full year results will be streamed online at 8:30 a.m. PST on Jan. 26, 2023. It can be accessed at www.alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call.

References in this update to "Air Group," "Company," "we," "us," and "our" refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified.

This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by our forward-looking statements, assumptions or beliefs. For a comprehensive discussion of potential risk factors, see Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2021. Some of these risks include competition, labor costs, relations and availability, general economic conditions including those associated with pandemic recovery, increases in operating costs including fuel, inability to meet cost reduction, ESG and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, and changes in laws and regulations that impact our business. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed in our most recent Form 10-K and in our subsequent SEC filings. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements made today to conform them to actual results. Over time, our actual results, performance or achievements may differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, assumptions or beliefs and such differences might be significant and materially adverse.

Alaska Airlines and our regional partners serve more than 120 destinations across the United States, Belize, Canada, Costa Rica and Mexico. We emphasize low fares and award-winning customer service. Alaska is a member of the oneworld global alliance. With the alliance and our additional airline partners, our guests can travel to more than 900 destinations on more than 20 airlines while earning and redeeming miles on flights to locations around the world. Learn more about Alaska at news.alaskaair.com. Alaska Airlines and Horizon Air are subsidiaries of Alaska Air Group. (NYSE: ALK).

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Alaska Air Group, Inc.











Three Months Ended December
31,

Twelve Months Ended December
31,

(in millions, except per-share amounts)

2022

2021

Change

2022

2021

Change

Operating Revenue










Passenger revenue

$        2,264

$        1,715

32 %

$        8,808

$        5,499

60 %

Mileage Plan other revenue

157

129

22 %

590

461

28 %

Cargo and other revenue

58

55

5 %

248

216

15 %

Total Operating Revenue

2,479

1,899

31 %

9,646

6,176

56 %












Operating Expenses










Wages and benefits

709

637

11 %

2,640

2,218

19 %

Variable incentive pay

117

42

179 %

257

151

70 %

Payroll Support Program grant wage offset

—

—

— %

—

(914)

NM

Aircraft fuel, including hedging gains and

losses

668

426

57 %

2,668

1,279

109 %

Aircraft maintenance

93

92

1 %

424

364

16 %

Aircraft rent

69

66

5 %

291

254

15 %

Landing fees and other rentals

146

141

4 %

581

555

5 %

Contracted services

86

68

26 %

329

235

40 %

Selling expenses

77

50

54 %

295

173

71 %

Depreciation and amortization

105

100

5 %

415

394

5 %

Food and beverage service

54

42

29 %

197

139

42 %

Third-party regional carrier expense

37

41

(10) %

182

147

24 %

Other

181

159

14 %

717

507

41 %

Special items - fleet transition and other

120

(6)

NM

496

(1)

NM

Special items - labor and related

(6)

2

NM

84

(10)

NM

Total Operating Expenses

2,456

1,860

32 %

9,576

5,491

74 %

Operating Income

23

39

(41) %

70

685

(90) %

Non-operating Income (Expense)










Interest income

18

6

200 %

53

25

112 %

Interest expense

(24)

(27)

(11) %

(108)

(128)

(16) %

Interest capitalized

6

2

200 %

14

11

27 %

Other - net

12

9

33 %

50

36

39 %

Total Non-operating Income (Expense)

12

(10)

NM

9

(56)

116 %

Income Before Income Tax

35

29


79

629

Income tax expense

13

11


21

151

Net Income

$             22

$             18


$             58

$           478













Basic Earnings Per Share

$          0.17

$          0.14


$          0.46

$          3.82

Diluted Earnings Per Share

$          0.17

$          0.14


$          0.45

$          3.77













Shares used for computation:










Basic

127.303

125.708


126.657

125.063

Diluted

128.470

127.284


127.899

126.775

 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


Alaska Air Group, Inc.


As of December 31 (in millions)

2022

2021

ASSETS


Current Assets


Cash and cash equivalents

$                              338

$                              470

Marketable securities

2,079

2,646

Total cash and marketable securities

2,417

3,116

Receivables - net

296

546

Inventories and supplies - net

104

62

Prepaid expenses and other current assets

223

196

Total Current Assets

3,040

3,920




Property and Equipment


Aircraft and other flight equipment

9,053

8,127

Other property and equipment

1,661

1,489

Deposits for future flight equipment

670

384

11,384

10,000

Less accumulated depreciation and amortization

4,127

3,862

Total Property and Equipment - Net

7,257

6,138




Other Assets


Operating lease assets

1,566

1,453

Goodwill and intangible assets

2,038

2,044

Other noncurrent assets

380

396

Total Other Assets

3,984

3,893




Total Assets

$                         14,281

$                         13,951

 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


Alaska Air Group, Inc.


As of December 31 (in millions except share amounts)

2022

2021

LIABILITIES AND SHAREHOLDERS' EQUITY


Current Liabilities


Accounts payable

$                            221

$                            200

Accrued wages, vacation and payroll taxes

619

457

Air traffic liability

1,180

1,163

Other accrued liabilities

846

625

Deferred revenue

1,123

912

Current portion of operating lease liabilities

247

268

Current portion of long-term debt

276

366

Total Current Liabilities

4,512

3,991




Long-Term Debt, Net of Current Portion

1,883

2,173




Noncurrent Liabilities


Long-term operating lease liabilities, net of current portion

1,469

1,279

Deferred income taxes

574

578

Deferred revenue

1,374

1,446

Obligation for pension and post-retirement medical benefits

348

305

Other liabilities

305

378

Total Noncurrent Liabilities

4,070

3,986




Commitments and Contingencies






Shareholders' Equity


Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none

issued or outstanding

—

—

Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued:

2022 - 136,883,042 shares; 2021 - 135,255,808 shares, Outstanding: 2022 -

127,533,098 shares; 2021 - 125,905,864 shares

1

1

Capital in excess of par value

577

494

Treasury stock (common), at cost: 2022 - 9,349,944 shares; 2021 - 9,349,944

shares

(674)

(674)

Accumulated other comprehensive loss

(388)

(262)

Retained earnings

4,300

4,242

3,816

3,801

Total Liabilities and Shareholders' Equity

$                      14,281

$                      13,951

 

SUMMARY CASH FLOW (unaudited)




Alaska Air Group, Inc.




(in millions)

Year Ended
December 31, 2022

Nine Months Ended
September 30, 2022(a)

Three Months Ended

December 31, 2022(b)

Cash Flows from Operating Activities:




Net income

$                             58

$                                 36

$                                  22

Non-cash reconciling items

953

719

234

Changes in working capital

407

654

(247)

Net cash provided by operating activities

1,418

1,409

9






Cash Flows from Investing Activities:




Property and equipment additions

(1,671)

(947)

(724)

Other investing activities

453

59

394

Net cash used in investing activities

(1,218)

(888)

(330)






Net cash used in financing activities

(325)

(296)

(29)






Net increase (decrease) in cash and cash equivalents

(125)

225

(350)

Cash, cash equivalents, and restricted cash at
beginning of year

494

494

719

Cash, cash equivalents, and restricted cash at end
of year

$                           369

$                               719

$                               369


(a)

As reported in Form 10-Q for the third quarter of 2022.

(b)

Cash flows for the three months ended December 31, 2022 can be calculated by subtracting cash flows for the nine months ended September 30, 2022, as reported in Form 10-Q for the third quarter 2022, from the year ended December 31, 2022.

 

OPERATING STATISTICS SUMMARY (unaudited)







Alaska Air Group, Inc.











Three Months Ended December 31,

Twelve Months Ended December 31,

2022

2021

Change

2022

2021

Change

Consolidated Operating Statistics:(a)










Revenue passengers (000)

10,331

9,196

12.3 %

41,468

32,407

28.0 %

RPMs (000,000) "traffic"

12,855

11,279

14.0 %

51,330

38,598

33.0 %

ASMs (000,000) "capacity"

15,030

14,207

5.8 %

60,773

52,445

15.9 %

Load factor

85.5 %

79.4 %

6.1 pts

84.5 %

73.6 %

10.9 pts

Yield

17.61¢

15.20¢

15.9 %

17.16¢

14.25¢

20.4 %

RASM

16.49¢

13.36¢

23.4 %

15.87¢

11.78¢

34.8 %

CASMex(b)

11.14¢

10.12¢

10.1 %

10.41¢

9.80¢

6.3 %

Economic fuel cost per gallon(b) 

$3.55

$2.26

57.1 %

$3.42

$2.02

69.3 %

Fuel gallons (000,000)

185

179

3.4 %

758

656

15.5 %

ASMs per gallon

81.2

79.4

2.3 %

80.2

79.9

0.3 %

Departures (000)

95

94

1.1 %

404

377

7.2 %

Average full-time equivalent employees
(FTEs)

23,195

21,043

10.2 %

22,564

19,375

16.5 %

Mainline Operating Statistics:










Revenue passengers (000)

8,237

6,900

19.4 %

31,795

23,268

36.6 %

RPMs (000,000) "traffic"

11,994

10,078

19.0 %

46,812

33,755

38.7 %

ASMs (000,000) "capacity"

14,004

12,737

9.9 %

55,224

45,741

20.7 %

Load factor

85.6 %

79.1 %

6.5 pts

84.8 %

73.8 %

11.0 pts

Yield

16.39¢

13.97¢

17.3 %

15.92¢

13.07¢

21.8 %

RASM

15.49¢

12.39¢

25.0 %

14.91¢

10.99¢

35.7 %

CASMex(b)

10.05¢

9.14¢

10.0 %

9.45¢

8.96¢

5.5 %

Economic fuel cost per gallon(b)

$3.52

$2.25

56.4 %

$3.40

$2.01

69.2 %

Fuel gallons (000,000)

163

150

8.7 %

646

530

21.9 %

ASMs per gallon

85.9

84.8

1.3 %

85.5

86.2

(0.8) %

Departures (000)

62

56

10.7 %

244

207

17.9 %

Average full-time equivalent employees
(FTEs)

17,792

15,855

12.2 %

17,224

14,366

19.9 %

Aircraft utilization

9.9

10.0

(1.0) %

9.9

9.7

2.1 %

Average aircraft stage length

1,341

1,356

(1.1) %

1,347

1,324

1.7 %

Operating fleet(d)

225

217

8 a/c

225

217

8 a/c

Regional Operating Statistics:(c)










Revenue passengers (000)

2,094

2,296

(8.8) %

9,673

9,139

5.8 %

RPMs (000,000) "traffic"

861

1,201

(28.3) %

4,518

4,842

(6.7) %

ASMs (000,000) "capacity"

1,027

1,469

(30.1) %

5,549

6,704

(17.2) %

Load factor

83.9 %

81.7 %

2.2 pts

81.4 %

72.2 %

9.2 pts

Yield

34.66¢

25.57¢

35.5 %

29.97¢

22.49¢

33.3 %

RASM

30.08¢

21.82¢

37.9 %

25.34¢

17.12¢

48.0 %

Departures (000)

33

38

(13.2) %

160

170

(5.9) %

Operating fleet(d)

86

94

(8) a/c

86

94

(8) a/c


(a)

Except for FTEs, data includes information related to third-party regional capacity purchase flying arrangements.

(b)

See a reconciliation of this non-GAAP measure and Note A for a discussion of potential importance of this measure to investors in the accompanying pages.

(c)

Data presented includes information related to flights operated by Horizon and third-party carriers.

(d)

Excludes all aircraft removed from operating service.

Given the unusual nature of 2021 and 2020, we believe that some analysis of specific financial and operational results compared to 2019 provides meaningful insight. The table below includes comparative results from 2022 to 2019.

FINANCIAL INFORMATION AND OPERATING STATISTICS - 2022 Compared with 2019 (unaudited)

Alaska Air Group, Inc.























Three Months Ended December 31,

Year Ended December 31,

2022

2019

Change

2022

2019

Change

Passenger revenue

$        2,264

$        2,057

10 %

$        8,808

$        8,095

9 %

Mileage Plan other revenue

157

119

32 %

590

465

27 %

Cargo and other revenue

58

52

12 %

248

221

12 %

Total Operating Revenue

$        2,479

$        2,228

11 %

$        9,646

$        8,781

10 %












Operating expense, excluding fuel and
special items

$        1,674

$        1,500

12 %

$        6,328

$        5,796

9 %

Aircraft fuel, including hedging gains and
losses

668

476

40 %

2,668

1,884

42 %

Special items

114

—

NM

580

38

NM

Total Operating Expenses

$        2,456

$        1,976

24 %

$        9,576

$        7,718

24 %












Total Non-operating Income (Expense)

$              12

$              (9)

NM

$                9

$            (47)

119 %

Income Before Income Tax

$              35

$            243

(86) %

$              79

$        1,016

(92) %












Consolidated Operating Statistics:










Revenue passengers (000)

10,331

11,715

(12) %

41,468

46,733

(11) %

RPMs (000,000) "traffic"

12,855

13,928

(8) %

51,330

56,040

(8) %

ASMs (000,000) "capacity"

15,030

16,648

(10) %

60,773

66,654

(9) %

Load Factor

85.5 %

83.7 %

1.8 pts

84.5 %

84.1 %

0.4 pts

Yield

17.61¢

14.77¢

19 %

17.16¢

14.45¢

19 %

RASM

16.49¢

13.38¢

23 %

15.87¢

13.17¢

21 %

CASMex

11.14¢

9.01¢

24 %

10.41¢

8.70¢

20 %

FTEs

23,195

22,506

3 %

22,564

22,126

2 %

 

OPERATING SEGMENTS (unaudited)





Alaska Air Group, Inc.













Three Months Ended December 31, 2022

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating Revenue












Passenger revenue

$        1,966

$        298

$          —

$                  —

$       2,264

$           —

$        2,264

CPA revenue

—

—

71

(71)

—

—

—

Mileage Plan other revenue

146

11

—

—

157

—

157

Cargo and other revenue

58

—

—

—

58

—

58

Total Operating Revenue

2,170

309

71

(71)

2,479

—

2,479

Operating Expenses












Operating expenses, excluding fuel

1,408

243

92

(69)

1,674

114

1,788

Fuel expense

572

84

—

—

656

12

668

Total Operating Expenses

1,980

327

92

(69)

2,330

126

2,456

Non-operating Income (Expense)

18

—

(7)

1

12

—

12

Income (Loss) Before Income Tax

$           208

$        (18)

$        (28)

$                  (1)

$          161

$       (126)

$             35

Pretax Margin







6.5 %


1.4 %















Three Months Ended December 31, 2021

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating Revenue












Passenger revenue

$        1,408

$        307

$          —

$                  —

$       1,715

$           —

$        1,715

CPA revenue

—

—

84

(84)

—

—

—

Mileage Plan other revenue

115

14

—

—

129

—

129

Cargo and other revenue

55

—

—

—

55

—

55

Total Operating Revenue

1,578

321

84

(84)

1,899

—

1,899

Operating Expenses












Operating expenses, excluding fuel

1,164

258

101

(85)

1,438

(4)

1,434

Fuel expense

339

66

—

—

405

21

426

Total Operating Expenses

1,503

324

101

(85)

1,843

17

1,860

Non-operating Income (Expense)

(7)

—

(5)

2

(10)

—

(10)

Income (Loss) Before Income Tax

$             68

$          (3)

$        (22)

$                    3

$            46

$         (17)

$             29

Pretax Margin







2.4 %


1.5 %

 

OPERATING SEGMENTS (unaudited)





Alaska Air Group, Inc.













Twelve Months Ended December 31, 2022

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating Revenue












Passenger revenue

$        7,454

$     1,354

$          —

$                  —

$       8,808

$           —

$        8,808

CPA revenue

—

—

359

(359)

—

—

—

Mileage Plan other revenue

538

52

—

—

590

—

590

Cargo and other revenue

244

—

—

4

248

—

248

Total Operating Revenue

8,236

1,406

359

(355)

9,646

—

9,646

Operating Expenses












Operating expenses, excluding fuel

5,216

1,085

383

(356)

6,328

580

6,908

Fuel expense

2,195

397

—

—

2,592

76

2,668

Total Operating Expenses

7,411

1,482

383

(356)

8,920

656

9,576

Non-operating Income (Expense)

30

—

(22)

1

9

—

9

Income (Loss) Before Income Tax

$           855

$        (76)

$        (46)

$                    2

$          735

$       (656)

$             79

Pretax Margin







7.6 %


0.8 %















Twelve Months Ended December 31, 2021

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating Revenue












Passenger revenue

$        4,411

$     1,088

$          —

$                  —

$       5,499

$           —

$        5,499

CPA revenue

—

—

406

(406)

—

—

—

Mileage Plan other revenue

402

59

—

—

461

—

461

Cargo and other revenue

212

—

—

4

216

—

216

Total Operating Revenue

5,025

1,147

406

(402)

6,176

—

6,176

Operating Expenses












Operating expenses, excluding fuel

4,101

1,096

373

(433)

5,137

(925)

4,212

Fuel expense

1,065

261

—

—

1,326

(47)

1,279

Total Operating Expenses

5,166

1,357

373

(433)

6,463

(972)

5,491

Non-operating Income (Expense)

(38)

—

(21)

3

(56)

—

(56)

Income (Loss) Before Income Tax

$         (179)

$      (210)

$          12

$                  34

$        (343)

$         972

$           629

Pretax Margin







(5.6) %


10.2 %


(a)

Includes consolidating entries, Air Group parent company, McGee Air Services, and other immaterial business units.

(b)

The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocation and excludes certain charges. See Note A in the accompanying pages for further information.

(c)

Includes Payroll Support Program grant wage offsets, special items and mark-to-market fuel hedge accounting adjustments.

 

GAAP TO NON-GAAP RECONCILIATIONS (unaudited)

Alaska Air Group, Inc.    

CASM Excluding Fuel and Special Items Reconciliation

Three Months Ended December 31,

Twelve Months Ended December 31,

(in cents)

2022

2021

2022

2021

Consolidated:






CASM

                  16.34 ¢

                  13.09 ¢

                  15.76 ¢

                  10.47 ¢

Less the following components: