Alaska Air Group Reports Second Quarter 2013 Results

Financial Highlights:

Reported second quarter net income, excluding special items, of $105 million, or $1.47 per diluted share, compared to adjusted net income of $111 million, or $1.53 per diluted share in the prior year quarter. This quarter’s results compare to a First Call analyst consensus estimate of $1.51 per share.
Recorded net income for the second quarter under Generally Accepted Accounting Principles (GAAP) of $104 million or $1.47 per diluted share, compared to net income of $68 million, or $0.93 per diluted share in 2012.
Achieved trailing twelve-month return on invested capital of 13.0 percent compared to 12.3 percent in the twelve months ended June 30, 2012.
Declared a $.20 quarterly cash dividend to be paid on August 22.
Announced changes to bag and change fee policies effective October 30, estimated to increase revenues by approximately $50 million annually.
Extended affinity card agreement with Bank of America through 2017, estimated to generate $55 million in additional cash flows on an annual basis.
Lowered adjusted debt-to-total-capitalization ratio by 2.0 percentage points, to 52.0 percent, since Dec. 31, 2012.
Repurchased 544,597 shares of common stock for $32 million in the second quarter. For the year the company has repurchased 917,782 shares for $51 million.
Held $1.4 billion in unrestricted cash and marketable securities as of June 30, 2013.
Operational Highlights:

Ranked “Highest in Customer Satisfaction Among Traditional Network Carriers” in 2013 by J.D. Power and Associates for the sixth year in a row.
Received the FAA’s “Diamond Certificate of Excellence” award for the 12th consecutive year.
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 May 2013.
Improved employee productivity by 5.5 percent.
Signed five-year collective bargaining agreements with Alaska pilots and Horizon flight attendants.

Alaska Air Group, Inc., (NYSE: ALK) today reported second quarter 2013 GAAP net income of $104 million, or $1.47 per diluted share, compared to $68 million, or $0.93 per diluted share in the second quarter of 2012. Excluding the impact of mark-to-market fuel hedge adjustments of $1 million, the company reported adjusted net income of $105 million, or $1.47 per diluted share, compared to adjusted net income of $111 million, or $1.53 per diluted share, in 2012.

“These results represent our 17th consecutive quarter of profitability and the second-best June quarter in our history. I want to thank our employees at Alaska and Horizon who are continuing to work hard to keep us safe and reliable, provide a great experience for our customers, and produce results that make Alaska a great place to invest,” CEO Brad Tilden said. “Although our quarterly results were down slightly, our financial performance continues to be very strong. This is why we were very pleased to recently announce the initiation of a quarterly dividend which, combined with our share repurchases, will be a key component of our capital deployment program.”