Alaska Air Group Reports Record Adjusted First Quarter 2013 Results

Financial Highlights:

•Reported record first quarter net income, excluding special items, of $44 million, or $0.62 per diluted share, compared to adjusted net income of $28 million, or $0.39 per diluted share in the prior year quarter. This quarter’s results compare to a First Call analyst consensus estimate of $0.56 per share.

•Recorded net income for the first quarter under Generally Accepted Accounting Principles (GAAP) of $37 million, or $0.51 per diluted share, compared to net income of $41 million, or $0.56 per diluted share in 2012.

•Achieved trailing twelve-month return on invested capital of 13.4 percent compared to 11.6 percent in the twelve months ended March 31, 2012.

•Lowered adjusted debt-to-total-capitalization ratio by 1 point, to 53 percent, since Dec. 31, 2012.

•Repurchased 373,185 shares of common stock for $19 million. Since 2007, Air Group has used $340 million to repurchase 19 million shares.

•Held $1.3 billion in unrestricted cash and marketable securities as of March 31, 2013.

Operational Highlights:

•Awarded 2012 On-Time Performance Service Award among major North American airlines by FlightStats.com.

•Held the No. 1 spot in U.S. Department of Transportation on-time performance among the 10 largest U.S. airlines for the twelve months ended February 2013.

•Improved employee productivity by 4.3 percent
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New routes:

•Began new service between San Diego and Boston and between Seattle and Salt Lake City.

•Will begin new service between San Diego and Lihue and seasonal service between Portland and Fairbanks in June.

SEATTLE — Alaska Air Group, Inc., (NYSE: ALK) today reported first quarter 2013 GAAP net income of $37 million, or $0.51 per diluted share, compared to $41 million, or $0.56 per diluted share in 2012. Excluding the impact of mark-to-market fuel hedge adjustments of $12 million ($7 million after tax, or $0.11 per diluted share), the company reported record first quarter 2013 net income of $44 million, or $0.62 per diluted share, compared to net income excluding mark-to-market fuel hedge adjustments of $28 million, or $0.39 per diluted share, in 2012.

“Our record performance in what is seasonally our weakest quarter is due to steady demand that kept pace with our growth, and to the many changes we’ve made to improve our business over the last several years,” Alaska Air Group CEO Brad Tilden said. “Looking ahead, we’re facing increased competition in certain markets, and we will closely monitor the environment and continue to adjust our plans to appropriately address these challenges. Our first quarter results, and our ability to be flexible and adapt to an ever-changing industry landscape, would not be possible without the dedication and determination of our employees at Alaska and Horizon.”