News releases

Alaska Air Group reports second quarter 2017 results
Financial Highlights:
- Reported net income for the second quarter under Generally Accepted Accounting Principles ("GAAP") of
$296 million or$2.38 per diluted share, compared to net income of$260 million , or$2.10 per diluted share in 2016. As the acquisition ofVirgin America Inc. ("Virgin America") closed onDec. 14, 2016 , second quarter 2017 information reflects the results of Virgin America, including the impacts associated with purchase accounting. Second quarter 2016 results do not include Virgin America. - Reported second quarter net income, excluding merger-related costs and mark-to-market fuel hedging adjustments, of
$312 million , compared to$263 million in the second quarter of 2016. Adjusted diluted earnings per share were$2.51 , compared to$2.12 in the second quarter of 2016. This quarter's results were in line with First Call analyst consensus estimate of$2.52 per share. - Paid
$0.30 per-share quarterly cash dividend in the second quarter, a 9% increase over the dividend paid in the second quarter of 2016. - Generated approximately
$1.1 billion of operating cash flow and used approximately$512 million for capital expenditures, resulting in$572 million of free cash flow in the second quarter of 2017. - Held
$1.9 billion in unrestricted cash and marketable securities as ofJune 30, 2017 .
Operational Highlights:
- Launched nine new routes during the quarter and announced 10 new routes, including obtaining final approval from the
Department of Transportation for three routes toMexico City . - Took delivery of two of five Airbus A321neos scheduled for delivery in 2017, becoming the first airline to operate this aircraft.
- Began jet service at Horizon with the first flights of the new Embraer 175 jets after taking delivery of the first six of 33 aircraft scheduled for delivery over the next two years.
- Entered into an agreement with the
International Brotherhood of Teamsters to amend the eight-year contract with Horizon's pilots, providing Horizon the ability to attract and retain the best pilots in the regional industry. - Added
Finnair as a global Mileage Plan partner.
Recognition and Awards
- Ranked "Highest in Customer Satisfaction Among Traditional Carriers" in 2017 by
J.D. Power for the 10th year in a row. - Virgin America:
Rated Best Domestic Airline in Travel +Leisure "World 's Best Awards" for 10 years in a row. - Rated "Best Airline Staff in
North America " and "Best Regional Airline inNorth America " bySkytrax World Airline Awards. - Awarded
TripAdvisor's 2017 Travelers' Choice Award for second-best midsize and low-cost airlines inNorth America and one of the top 10 best airlines in the world. - Ranked among
Forbes' 2017 "America's Best Employers" for the third year in a row. - Certified as a great workplace by
Great Place to Work, the global authority on high-trust, high-performance workplace cultures. - Received 16th Diamond Award of Excellence from the
Federal Aviation Administration , recognizing bothAlaska and Horizon's aircraft technicians for their commitment to training. - Received the 2017 Visionary Award for Leadership and Governance of a
Public Company , presented by theWomen Corporate Directors Global Institute , recognizing diversity among our directors. - Ranked among the Fortune 500 for the fourth year in a row.
"We had a very solid quarter, driven by a growing customer base and strong revenue performance," said CEO
The following table reconciles the company's reported GAAP net income and earnings per diluted share ("diluted EPS") for the three and six months ended
Three Months Ended June 30, |
|||||||||||||||
2017 |
2016 |
||||||||||||||
(in millions, except per-share amounts) |
Dollars |
Diluted EPS |
Dollars |
Diluted EPS |
|||||||||||
Reported GAAP net income |
$ |
296 |
$ |
2.38 |
$ |
260 |
$ |
2.10 |
|||||||
Mark-to-market fuel hedge adjustments |
2 |
0.02 |
(10) |
(0.08) |
|||||||||||
Special items—merger-related costs |
24 |
0.19 |
14 |
0.11 |
|||||||||||
Income tax effect on special items and fuel hedge adjustments |
(10) |
(0.08) |
(1) |
(0.01) |
|||||||||||
Non-GAAP adjusted net income and per-share amounts |
$ |
312 |
$ |
2.51 |
$ |
263 |
$ |
2.12 |
|||||||
Six Months Ended June 30, |
|||||||||||||||
2017 |
2016 |
||||||||||||||
Dollars |
Diluted EPS |
Dollars |
Diluted EPS |
||||||||||||
Reported GAAP net income and diluted EPS |
$ |
395 |
$ |
3.17 |
$ |
444 |
$ |
3.56 |
|||||||
Mark-to-market fuel hedge adjustments |
12 |
0.10 |
(12) |
(0.10) |
|||||||||||
Special items—merger-related costs |
64 |
0.51 |
14 |
0.12 |
|||||||||||
Income tax effect on special items and fuel hedge adjustments |
(28) |
(0.22) |
(1) |
(0.01) |
|||||||||||
Non-GAAP adjusted net income and diluted EPS |
$ |
443 |
$ |
3.56 |
$ |
445 |
$ |
3.57 |
*
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 second quarter results will be simulcast online at
References in this news release to "
This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, 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 any forward-looking statements. 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) |
|||||||||||||||||||||
Alaska Air Group, Inc. |
|||||||||||||||||||||
As the acquisition closed on December 14, 2016, amounts presented below include Virgin America results for the three and six months ended June 30, 2017 but not for the prior periods. |
|||||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||||
(in millions, except per-share amounts) |
2017 |
2016 |
Change(a) |
2017 |
2016 |
Change(a) |
|||||||||||||||
Operating Revenues: |
|||||||||||||||||||||
Passenger |
|||||||||||||||||||||
Mainline |
$ |
1,556 |
$ |
1,036 |
50 |
% |
$ |
2,828 |
$ |
1,963 |
44 |
% |
|||||||||
Regional |
251 |
227 |
11 |
% |
463 |
433 |
7 |
% |
|||||||||||||
Total passenger revenue |
1,807 |
1,263 |
43 |
% |
3,291 |
2,396 |
37 |
% |
|||||||||||||
Freight and mail |
32 |
27 |
19 |
% |
56 |
51 |
10 |
% |
|||||||||||||
Other—net |
263 |
204 |
29 |
% |
504 |
394 |
28 |
% |
|||||||||||||
Total Operating Revenues |
2,102 |
1,494 |
41 |
% |
3,851 |
2,841 |
36 |
% |
|||||||||||||
Operating Expenses: |
|||||||||||||||||||||
Wages and benefits |
469 |
332 |
41 |
% |
917 |
668 |
37 |
% |
|||||||||||||
Variable incentive pay |
27 |
32 |
(16) |
% |
58 |
64 |
(9) |
% |
|||||||||||||
Aircraft fuel, including hedging gains and losses |
344 |
201 |
71 |
% |
683 |
368 |
86 |
% |
|||||||||||||
Aircraft maintenance |
96 |
65 |
48 |
% |
183 |
133 |
38 |
% |
|||||||||||||
Aircraft rent |
69 |
26 |
165 |
% |
134 |
55 |
144 |
% |
|||||||||||||
Landing fees and other rentals |
99 |
63 |
57 |
% |
214 |
143 |
50 |
% |
|||||||||||||
Contracted services |
77 |
60 |
28 |
% |
158 |
120 |
32 |
% |
|||||||||||||
Selling expenses |
97 |
55 |
76 |
% |
178 |
104 |
71 |
% |
|||||||||||||
Depreciation and amortization |
90 |
92 |
(2) |
% |
180 |
180 |
— |
% |
|||||||||||||
Food and beverage service |
50 |
31 |
61 |
% |
95 |
62 |
53 |
% |
|||||||||||||
Third-party regional carrier expense |
27 |
24 |
13 |
% |
54 |
47 |
15 |
% |
|||||||||||||
Special items—merger-related costs |
24 |
14 |
71 |
% |
64 |
14 |
357 |
% |
|||||||||||||
Other |
140 |
81 |
73 |
% |
274 |
175 |
57 |
% |
|||||||||||||
Total Operating Expenses |
1,609 |
1,076 |
50 |
% |
3,192 |
2,133 |
50 |
% |
|||||||||||||
Operating Income |
493 |
418 |
18 |
% |
659 |
708 |
(7) |
% |
|||||||||||||
Nonoperating Income (Expense): |
|||||||||||||||||||||
Interest income |
9 |
7 |
16 |
13 |
|||||||||||||||||
Interest expense |
(26) |
(9) |
(51) |
(22) |
|||||||||||||||||
Interest capitalized |
4 |
7 |
8 |
15 |
|||||||||||||||||
Other—net |
(1) |
(3) |
(1) |
(2) |
|||||||||||||||||
Total Nonoperating Income (Expense) |
(14) |
2 |
(28) |
4 |
|||||||||||||||||
Income Before Income Tax |
479 |
420 |
631 |
712 |
|||||||||||||||||
Income tax expense |
183 |
160 |
236 |
268 |
|||||||||||||||||
Net Income |
$ |
296 |
$ |
260 |
$ |
395 |
$ |
444 |
|||||||||||||
Basic Earnings Per Share: |
$ |
2.40 |
$ |
2.11 |
$ |
3.19 |
$ |
3.58 |
|||||||||||||
Diluted Earnings Per Share: |
$ |
2.38 |
$ |
2.10 |
$ |
3.17 |
$ |
3.56 |
|||||||||||||
Shares Used for Computation: |
|||||||||||||||||||||
Basic |
123.573 |
123.250 |
123.534 |
123.900 |
|||||||||||||||||
Diluted |
124.332 |
123.988 |
124.374 |
124.715 |
|||||||||||||||||
Cash dividend declared per share: |
$ |
0.300 |
$ |
0.275 |
$ |
0.600 |
$ |
0.550 |
(a) |
See Combined Comparative information in the accompanying pages for year-over-year comparisons including Virgin America. |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) |
|||||||
Alaska Air Group, Inc. |
|||||||
(in millions) |
June 30, 2017 |
December 31, 2016 |
|||||
Cash and marketable securities |
$ |
1,922 |
$ |
1,580 |
|||
Total current assets |
2,425 |
2,050 |
|||||
Property and equipment—net |
6,002 |
5,666 |
|||||
Goodwill |
1,940 |
1,934 |
|||||
Intangible assets |
137 |
143 |
|||||
Other assets |
216 |
169 |
|||||
Total assets |
10,720 |
9,962 |
|||||
Air traffic liability |
1,255 |
849 |
|||||
Current portion of long-term debt |
337 |
319 |
|||||
Other current liabilities |
1,382 |
1,367 |
|||||
Current liabilities |
2,974 |
2,535 |
|||||
Long-term debt |
2,469 |
2,645 |
|||||
Other liabilities and credits |
2,013 |
1,851 |
|||||
Shareholders' equity |
3,264 |
2,931 |
|||||
Total liabilities and shareholders' equity |
$ |
10,720 |
$ |
9,962 |
|||
Debt-to-capitalization ratio, adjusted for operating leases(a) |
55 |
% |
59 |
% |
|||
Number of common shares outstanding |
123.521 |
123.328 |
(a) |
Calculated using the present value of remaining aircraft lease payments. |
OPERATING STATISTICS SUMMARY (unaudited) |
|||||||||||
Alaska Air Group, Inc. |
|||||||||||
As the acquisition closed on December 14, 2016, Consolidated and Mainline amounts presented below include Virgin America results for the three and six months ended June 30, 2017 but not for the prior periods. |
|||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||
2017 |
2016 |
Change(e) |
2017 |
2016 |
Change(e) |
||||||
Consolidated Operating Statistics:(a) |
|||||||||||
Revenue passengers (000) |
11,400 |
8,647 |
31.8% |
21,417 |
16,482 |
29.9% |
|||||
RPMs (000,000) "traffic" |
13,554 |
9,397 |
44.2% |
25,262 |
17,968 |
40.6% |
|||||
ASMs (000,000) "capacity" |
15,612 |
11,062 |
41.1% |
30,006 |
21,515 |
39.5% |
|||||
Load factor |
86.8% |
84.9% |
1.9 pts |
84.2% |
83.5% |
0.7 pts |
|||||
Yield |
13.33¢ |
13.44¢ |
(0.8)% |
13.03¢ |
13.34¢ |
(2.3)% |
|||||
PRASM |
11.57¢ |
11.42¢ |
1.3% |
10.97¢ |
11.14¢ |
(1.5)% |
|||||
RASM |
13.46¢ |
13.51¢ |
(0.4)% |
12.83¢ |
13.21¢ |
(2.9)% |
|||||
CASMex(b) |
7.94¢ |
7.78¢ |
2.1% |
8.15¢ |
8.14¢ |
0.1% |
|||||
Economic fuel cost per gallon(c) |
$1.71 |
$1.53 |
11.8% |
$1.75 |
$1.41 |
24.1% |
|||||
Fuel gallons (000,000) |
201 |
138 |
45.7% |
385 |
270 |
42.6% |
|||||
ASM's per gallon |
77.7 |
80.2 |
(3.1)% |
77.9 |
79.7 |
(2.3)% |
|||||
Average number of full-time equivalent employees (FTE) |
19,745 |
14,470 |
36.5% |
19,214 |
14,414 |
33.3% |
|||||
Mainline Operating Statistics: |
|||||||||||
Revenue passengers (000) |
8,950 |
6,282 |
42.5% |
16,733 |
11,925 |
40.3% |
|||||
RPMs (000,000) "traffic" |
12,525 |
8,456 |
48.1% |
23,352 |
16,172 |
44.4% |
|||||
ASMs (000,000) "capacity" |
14,341 |
9,875 |
45.2% |
27,602 |
19,229 |
43.5% |
|||||
Load factor |
87.3% |
85.6% |
1.7 pts |
84.6% |
84.1% |
0.5 pts |
|||||
Yield |
12.42¢ |
12.25¢ |
1.4% |
12.11¢ |
12.14¢ |
(0.2)% |
|||||
PRASM |
10.85¢ |
10.49¢ |
3.4% |
10.25¢ |
10.21¢ |
0.4% |
|||||
RASM |
12.76¢ |
12.61¢ |
1.2% |
12.13¢ |
12.31¢ |
(1.5)% |
|||||
CASMex(b) |
7.15¢ |
6.88¢ |
3.9% |
7.33¢ |
7.18¢ |
2.1% |
|||||
Economic fuel cost per gallon(c) |
$1.70 |
$1.52 |
11.8% |
$1.74 |
$1.40 |
24.3% |
|||||
Fuel gallons (000,000) |
179 |
118 |
51.7% |
343 |
231 |
48.5% |
|||||
ASM's per gallon |
80.3 |
83.7 |
(4.1)% |
80.5 |
83.2 |
(3.2)% |
|||||
Average number of FTE's |
15,447 |
11,261 |
37.2% |
15,227 |
11,192 |
36.1% |
|||||
Aircraft utilization |
11.4 |
10.8 |
5.6% |
11.1 |
10.7 |
3.7% |
|||||
Average aircraft stage length |
1,294 |
1,177 |
9.9% |
1,295 |
1,195 |
8.4% |
|||||
Operating fleet |
221 |
152 |
69 a/c |
221 |
152 |
69 a/c |
|||||
Regional Operating Statistics:(d) |
|||||||||||
Revenue passengers (000) |
2,450 |
2,365 |
3.6% |
4,685 |
4,558 |
2.8% |
|||||
RPMs (000,000) "traffic" |
1,030 |
941 |
9.5% |
1,910 |
1,796 |
6.3% |
|||||
ASMs (000,000) "capacity" |
1,270 |
1,187 |
7.0% |
2,404 |
2,287 |
5.1% |
|||||
Load factor |
81.1% |
79.3% |
1.8 pts |
79.4% |
78.5% |
0.9 pts |
|||||
Yield |
24.30¢ |
24.17¢ |
0.5% |
24.22¢ |
24.13¢ |
0.4% |
|||||
PRASM |
19.70¢ |
19.16¢ |
2.8% |
19.24¢ |
18.95¢ |
1.5% |
|||||
Operating fleet |
78 |
69 |
9 a/c |
78 |
69 |
9 a/c |
(a) |
Except for full-time equivalent employees, 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) |
See a reconciliation of economic fuel cost in the accompanying pages. |
(d) |
Data presented includes information related to flights operated by Horizon Air and third-party carriers. |
(e) |
See Combined Comparative information in the accompanying pages for year-over-year comparisons including Virgin America. |
SUPPLEMENTARY COMBINED COMPARATIVE FINANCIAL AND OPERATING INFORMATION (unaudited)
We believe that analysis of specific financial and operational results on a combined basis provides more meaningful year-over-year comparisons. The table below provides "Combined Comparative" results for the three and six months ended June 30, 2016, determined as the sum of the historical consolidated results of
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||
As Reported |
Combined(a) |
Change |
As Reported |
Combined(a) |
Change |
||||||||||||||
Combined Comparative Operating Results |
|||||||||||||||||||
Passenger revenue |
$ |
1,807 |
$ |
1,647 |
10% |
$ |
3,291 |
$ |
3,109 |
6% |
|||||||||
Other revenue |
295 |
272 |
8% |
560 |
520 |
8% |
|||||||||||||
Total Operating Revenues |
2,102 |
1,919 |
10% |
3,851 |
3,629 |
6% |
|||||||||||||
Non-fuel operating expense |
1,265 |
1,152 |
10% |
2,509 |
2,302 |
9% |
|||||||||||||
Fuel expense |
344 |
278 |
24% |
683 |
516 |
32% |
|||||||||||||
Total Operating Expenses |
1,609 |
1,430 |
13% |
3,192 |
2,818 |
13% |
|||||||||||||
Operating Income |
493 |
489 |
1% |
659 |
811 |
(19)% |
|||||||||||||
Nonoperating income (expense) |
(14) |
(3) |
367% |
(28) |
(5) |
460% |
|||||||||||||
Income Before Tax |
479 |
486 |
(1)% |
631 |
806 |
(22)% |
|||||||||||||
Special items—merger-related costs |
24 |
18 |
33% |
64 |
20 |
220% |
|||||||||||||
Mark-to-market fuel hedge adjustments |
2 |
(11) |
(118)% |
12 |
(14) |
(186)% |
|||||||||||||
Adjusted Income Before Tax |
$ |
505 |
$ |
493 |
2% |
$ |
707 |
$ |
812 |
(13)% |
|||||||||
Combined Comparative Operating Statistics |
|||||||||||||||||||
Revenue passengers (000) |
11,400 |
10,734 |
6.2% |
21,417 |
20,336 |
5.3% |
|||||||||||||
RPMs (000,000) |
13,554 |
12,562 |
7.9% |
25,262 |
23,748 |
6.4% |
|||||||||||||
ASMs (000,000) |
15,612 |
14,751 |
5.8% |
30,006 |
28,470 |
5.4% |
|||||||||||||
Load Factor |
86.8 |
% |
85.2 |
% |
1.6 pts |
84.2 |
% |
83.4 |
% |
0.8 pts |
|||||||||
PRASM |
11.57 |
¢ |
11.16 |
¢ |
3.7% |
10.97 |
¢ |
10.92 |
¢ |
0.5% |
|||||||||
RASM |
13.46 |
¢ |
13.01 |
¢ |
3.5% |
12.83 |
¢ |
12.75 |
¢ |
0.6% |
|||||||||
CASMex |
7.94 |
¢ |
7.69 |
¢ |
3.3% |
8.15 |
¢ |
8.01 |
¢ |
1.7% |
(a) |
Refer to our Investor Update issued on April 12, 2017 on Form 8-K for further details of the calculation of the three and six months ended June 30, 2016 combined data. |
2016 Combined Comparative Operating Results and Statistics—Other Quarters
Refer to our Investor Update issued on
OPERATING SEGMENTS (unaudited) |
|||||||||||||||||||||||||||
Alaska Air Group, Inc. |
|||||||||||||||||||||||||||
As the acquisition closed on December 14, 2016, Consolidated and Mainline amounts presented below include Virgin America results for the three and six months ended June 30, 2017 but not for the prior periods. |
|||||||||||||||||||||||||||
Three Months Ended June 30, 2017 |
|||||||||||||||||||||||||||
(in millions) |
Mainline |
Regional |
Horizon |
Consolidating |
Air Group |
Special |
Consolidated |
||||||||||||||||||||
Operating revenues |
|||||||||||||||||||||||||||
Passenger |
|||||||||||||||||||||||||||
Mainline |
$ |
1,556 |
$ |
— |
$ |
— |
$ |
— |
$ |
1,556 |
$ |
— |
$ |
1,556 |
|||||||||||||
Regional |
— |
251 |
— |
— |
251 |
— |
251 |
||||||||||||||||||||
Total passenger revenues |
1,556 |
251 |
— |
— |
1,807 |
— |
1,807 |
||||||||||||||||||||
CPA revenues |
— |
— |
108 |
(108) |
— |
— |
— |
||||||||||||||||||||
Freight and mail |
31 |
1 |
— |
— |
32 |
— |
32 |
||||||||||||||||||||
Other—net |
244 |
19 |
1 |
(1) |
263 |
— |
263 |
||||||||||||||||||||
Total operating revenues |
1,831 |
271 |
109 |
(109) |
2,102 |
— |
2,102 |
||||||||||||||||||||
Operating expenses |
|||||||||||||||||||||||||||
Operating expenses, excluding fuel |
1,026 |
206 |
116 |
(107) |
1,241 |
24 |
1,265 |
||||||||||||||||||||
Economic fuel |
304 |
39 |
— |
(1) |
342 |
2 |
344 |
||||||||||||||||||||
Total operating expenses |
1,330 |
245 |
116 |
(108) |
1,583 |
26 |
1,609 |
||||||||||||||||||||
Nonoperating income (expense) |
|||||||||||||||||||||||||||
Interest income |
9 |
— |
— |
— |
9 |
— |
9 |
||||||||||||||||||||
Interest expense |
(23) |
— |
(3) |
— |
(26) |
— |
(26) |
||||||||||||||||||||
Other |
3 |
— |
1 |
(1) |
3 |
— |
3 |
||||||||||||||||||||
Total Nonoperating income (expense) |
(11) |
— |
(2) |
(1) |
(14) |
— |
(14) |
||||||||||||||||||||
Income (loss) before income tax |
$ |
490 |
$ |
26 |
$ |
(9) |
$ |
(2) |
$ |
505 |
$ |
(26) |
$ |
479 |
|||||||||||||
Three Months Ended June 30, 2016 |
|||||||||||||||||||||||||||
(in millions) |
Mainline |
Regional |
Horizon |
Consolidating |
Air Group |
Special |
Consolidated |
||||||||||||||||||||
Operating revenues |
|||||||||||||||||||||||||||
Passenger |
|||||||||||||||||||||||||||
Mainline |
$ |
1,036 |
$ |
— |
$ |
— |
$ |
— |
$ |
1,036 |
$ |
— |
$ |
1,036 |
|||||||||||||
Regional |
— |
227 |
— |
— |
227 |
— |
227 |
||||||||||||||||||||
Total passenger revenues |
1,036 |
227 |
— |
— |
1,263 |
— |
1,263 |
||||||||||||||||||||
CPA revenues |
— |
— |
110 |
(110) |
— |
— |
— |
||||||||||||||||||||
Freight and mail |
26 |
1 |
— |
— |
27 |
— |
27 |
||||||||||||||||||||
Other—net |
184 |
19 |
1 |
— |
204 |
— |
204 |
||||||||||||||||||||
Total operating revenues |
1,246 |
247 |
111 |
(110) |
1,494 |
— |
1,494 |
||||||||||||||||||||
Operating expenses |
|||||||||||||||||||||||||||
Operating expenses, excluding fuel |
679 |
192 |
101 |
(111) |
861 |
14 |
875 |
||||||||||||||||||||
Economic fuel |
180 |
31 |
— |
— |
211 |
(10) |
201 |
||||||||||||||||||||
Total operating expenses |
859 |
223 |
101 |
(111) |
1,072 |
4 |
1,076 |
||||||||||||||||||||
Nonoperating income (expense) |
|||||||||||||||||||||||||||
Interest income |
6 |
— |
1 |
— |
7 |
— |
7 |
||||||||||||||||||||
Interest expense |
(4) |
— |
(4) |
(1) |
(9) |
— |
(9) |
||||||||||||||||||||
Other |
3 |
— |
— |
1 |
4 |
— |
4 |
||||||||||||||||||||
Total Nonoperating income (expense) |
5 |
— |
(3) |
— |
2 |
— |
2 |
||||||||||||||||||||
Income (loss) before income tax |
$ |
392 |
$ |
24 |
$ |
7 |
$ |
1 |
$ |
424 |
$ |
(4) |
$ |
420 |
(a) |
The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocation and does not include certain charges. See Note A in the accompanying pages for further information. |
(b) |
Includes merger-related costs and mark-to-market fuel hedge accounting adjustments. |
Six Months Ended June 30, 2017 |
||||||||||||||||||||
(in millions) |
Mainline |
Regional |
Horizon |
Consolidating |
Air Group |
Special |
Consolidated |
|||||||||||||
Operating revenues |
||||||||||||||||||||
Passenger |
||||||||||||||||||||
Mainline |
2,828 |
— |
— |
— |
2,828 |
— |
2,828 |
|||||||||||||
Regional |
— |
463 |
— |
— |
463 |
— |
463 |
|||||||||||||
Total passenger revenues |
2,828 |
463 |
— |
— |
3,291 |
— |
3,291 |
|||||||||||||
Revenue from CPA with Alaska |
— |
— |
205 |
(205) |
— |
— |
— |
|||||||||||||
Freight and mail |
54 |
2 |
— |
— |
56 |
— |
56 |
|||||||||||||
Other—net |
466 |
36 |
2 |
— |
504 |
— |
504 |
|||||||||||||
Total operating revenues |
3,348 |
501 |
207 |
(205) |
3,851 |
— |
3,851 |
|||||||||||||
Operating expenses |
||||||||||||||||||||
Operating expenses, excluding fuel |
2,024 |
406 |
219 |
(204) |
2,445 |
64 |
2,509 |
|||||||||||||
Economic fuel |
596 |
75 |
— |
— |
671 |
12 |
683 |
|||||||||||||
Total operating expenses |
2,620 |
481 |
219 |
(204) |
3,116 |
76 |
3,192 |
|||||||||||||
Nonoperating income (expense) |
||||||||||||||||||||
Interest income |
16 |
— |
— |
— |
16 |
— |
16 |
|||||||||||||
Interest expense |
(45) |
— |
(5) |
(1) |
(51) |
— |
(51) |
|||||||||||||
Other |
6 |
— |
1 |
— |
7 |
— |
7 |
|||||||||||||
Total Nonoperating income (expense) |
(23) |
— |
(4) |
(1) |
(28) |
— |
(28) |
|||||||||||||
Income (loss) before income tax |
705 |
20 |
(16) |
(2) |
707 |
(76) |
631 |
|||||||||||||
Six Months Ended June 30, 2016 |
||||||||||||||||||||
(in millions) |
Mainline |
Regional |
Horizon |
Consolidating |
Air Group |
Special |
Consolidated |
|||||||||||||
Operating revenues |
||||||||||||||||||||
Passenger |
||||||||||||||||||||
Mainline |
1,963 |
— |
— |
— |
1,963 |
— |
1,963 |
|||||||||||||
Regional |
— |
433 |
— |
— |
433 |
— |
433 |
|||||||||||||
Total passenger revenues |
1,963 |
433 |
— |
— |
2,396 |
— |
2,396 |
|||||||||||||
Revenue from CPA with Alaska |
— |
— |
213 |
(213) |
— |
— |
— |
|||||||||||||
Freight and mail |
49 |
2 |
— |
— |
51 |
— |
51 |
|||||||||||||
Other—net |
356 |
36 |
2 |
— |
394 |
— |
394 |
|||||||||||||
Total operating revenues |
2,368 |
471 |
215 |
(213) |
2,841 |
— |
2,841 |
|||||||||||||
Operating expenses |
||||||||||||||||||||
Operating expenses, excluding fuel |
1,380 |
378 |
206 |
(213) |
1,751 |
14 |
1,765 |
|||||||||||||
Economic fuel |
324 |
56 |
— |
— |
380 |
(12) |
368 |
|||||||||||||
Total operating expenses |
1,704 |
434 |
206 |
(213) |
2,131 |
2 |
2,133 |
|||||||||||||
Nonoperating income (expense) |
||||||||||||||||||||
Interest income |
12 |
— |
1 |
— |
13 |
— |
13 |
|||||||||||||
Interest expense |
(16) |
— |
(5) |
(1) |
(22) |
— |
(22) |
|||||||||||||
Other |
10 |
— |
— |
3 |
13 |
— |
13 |
|||||||||||||
Total Nonoperating income (expense) |
6 |
— |
(4) |
2 |
4 |
— |
4 |
|||||||||||||
Income (loss) before income tax |
670 |
37 |
5 |
2 |
714 |
(2) |
712 |
(a) |
The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocation and does not include certain charges. See Note A in the accompanying pages for further information. |
(b) |
Includes merger-related costs and mark-to-market fuel hedge accounting adjustments. |
GAAP TO NON-GAAP RECONCILIATIONS (unaudited) |
|||||||||||
Alaska Air Group, Inc. |
|||||||||||