SEATTLE, July 22, 2021 /PRNewswire/ --
Financial Results:
- Reported net income for the second quarter of 2021 under
Generally Accepted Accounting Principles (GAAP) of $397 million, or $3.15 per share, compared to a net loss of
$214 million, or $1.74 per share in the second quarter of
2020.
- Reported a net loss for the second quarter of 2021, excluding
CARES Act Payroll Support Program (PSP) wage offsets, special items
and mark-to-market fuel hedge accounting adjustments, of
$38 million, or $0.30 per share, compared to an adjusted net loss
of $439 million or $3.57 per share, in the second quarter of
2020.
- Reported a debt-to-capitalization ratio, including short-term
borrowings related to COVID-19, of 56%.
- Held $4.0 billion in unrestricted
cash and marketable securities as of June
30, 2021.
- Generated $840 million in
operating cash flow in the second quarter, inclusive of
$489 million of PSP funding,
bolstered by improved advance bookings on a surge in demand for air
travel. Excluding PSP funding, quarterly operating cash flows
improved over $580 million from the
first quarter of 2021.
Operational Updates:
- Announced plans to grow our mainline and regional fleets,
exercising options for 13 Boeing 737-9 MAX with deliveries in 2023
and 2024, and nine E175 to be operated by Horizon Air with
deliveries in 2022 and 2023. In addition, expanded our long-term
capacity agreement with SkyWest Airlines by eight aircraft to be
delivered in 2022.
- Announced new service to Central
America with new routes to Belize from Seattle and Los
Angeles, with service slated to begin in November 2021.
- Issued recall notices to all pilots on incentive lines for
return to work by October 2021.
- Continued our history of providing meaningful incentive
programs to our employees with $67
million in cash bonuses earned to date.
- Announced seven new domestic routes aimed at providing our West
Coast guests more options to sun-filled destinations, including
three new routes serving Boise,
Idaho.
Liquidity Updates:
- Received $664 million through a
combination of grants and loans from the U.S. Treasury under an
extension of the PSP.
- Repaid approximately $570 million
in debt, including the full $135
million loan from the U.S. Treasury made available under the
CARES Act and the $363 million
outstanding balance on two credit facilities.
Sustainability Updates:
- Announced five-part pathway to achieve a net zero carbon
footprint by 2040, putting the airline on track to meet the annual
carbon intensity target that is part of its performance-based pay
program for all employees.
- First airline to implement network optimization software,
Flyways, using artificial intelligence and machine learning to
optimize air traffic and enable more fuel-efficient flight paths
for aggregate savings of fuel, carbon emissions and time.
- Partnered with Boeing to launch a 737-9 ecoDemonstrator to test
advanced technologies that can enhance the safety and
sustainability of air travel. The aircraft will conduct five
months of flight tests across the U.S.
- Revealed "Our Commitment" aircraft in partnership with
long-time partner UNCF, a symbol of the airline's commitments to
increase diverse representation in our leadership, advance
education as a critical component of equity, and to make Alaska
Airlines a place where everyone feels they belong.
Alaska Air Group Inc. today reported second quarter 2021 GAAP
net income of $397 million, or
$3.15 per share, compared to a net
loss of $214 million, or $1.74 per share in the second quarter of 2020.
Excluding the impact of payroll support program wage offsets,
special items and mark-to-market fuel hedge adjustments, the
company reported an adjusted net loss of $38
million, or $0.30 per diluted
share, compared to an adjusted net loss of $439 million, or $3.57 per diluted share in 2020.
"As we put the worst of last year's downturn behind us,
Alaska is back on the path to
profitability," said CEO Ben
Minicucci. "We are executing our plan, rebuilding our
network, leveraging our capacity to meet growing demand, and
delivering exceptional service and value to our guests. I'm
incredibly proud and grateful for how hard our employees are
working and how they show up for each other and our guests every
day with focus on safety, operational excellence and care."
The following table reconciles the company's reported GAAP net
income (loss) per share (EPS) for the three and six months ended
June 30, 2021 and 2020 to adjusted amounts.
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
(in millions,
except per-share amounts)
|
Dollars
|
|
Diluted
EPS
|
|
Dollars
|
|
Diluted
EPS
|
GAAP net income
(loss) per share
|
$
|
397
|
|
|
$
|
3.15
|
|
|
$
|
(214)
|
|
|
$
|
(1.74)
|
|
Payroll support
program wage offset
|
(503)
|
|
|
(3.99)
|
|
|
(362)
|
|
|
(2.94)
|
|
Mark-to-market fuel
hedge adjustments
|
(46)
|
|
|
(0.37)
|
|
|
(6)
|
|
|
(0.05)
|
|
Special items -
impairment charges and other
|
(4)
|
|
|
(0.03)
|
|
|
69
|
|
|
0.56
|
|
Special items -
restructuring charges
|
(23)
|
|
|
(0.18)
|
|
|
—
|
|
|
—
|
|
Special items -
merger-related costs
|
—
|
|
|
—
|
|
|
1
|
|
|
0.01
|
|
Income tax effect of
reconciling items above
|
141
|
|
|
1.12
|
|
|
73
|
|
|
0.59
|
|
Non-GAAP adjusted net
loss per share
|
$
|
(38)
|
|
|
$
|
(0.30)
|
|
|
$
|
(439)
|
|
|
$
|
(3.57)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
(in millions,
except per-share amounts)
|
Dollars
|
|
Diluted
EPS
|
|
Dollars
|
|
Diluted
EPS
|
GAAP net income
(loss) per share
|
$
|
266
|
|
|
$
|
2.12
|
|
|
$
|
(446)
|
|
|
$
|
(3.62)
|
|
Payroll support
program wage offset
|
(914)
|
|
|
(7.27)
|
|
|
(362)
|
|
|
(2.94)
|
|
Mark-to-market fuel
hedge adjustments
|
(68)
|
|
|
(0.54)
|
|
|
3
|
|
|
0.02
|
|
Special items -
impairment charges and other
|
14
|
|
|
0.11
|
|
|
229
|
|
|
1.86
|
|
Special items -
restructuring charges
|
(12)
|
|
|
(0.10)
|
|
|
—
|
|
|
—
|
|
Special items -
merger-related costs
|
—
|
|
|
—
|
|
|
4
|
|
|
0.03
|
|
Income tax effect of
reconciling items above
|
240
|
|
|
1.91
|
|
|
31
|
|
|
0.25
|
|
Non-GAAP adjusted net
loss per share
|
$
|
(474)
|
|
|
$
|
(3.77)
|
|
|
$
|
(541)
|
|
|
$
|
(4.40)
|
|
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
streamed online at 8:30 a.m. PDT on
July 22, 2021. 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, 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
December 31, 2020. Some of these
risks include the risks associated with contagious illnesses and
contagion, such as COVID-19, general economic conditions, increases
in operating costs including fuel, competition, labor costs and
relations, our indebtedness, inability to meet cost reduction
goals, seasonal fluctuations in our financial results, an aircraft
accident, and changes in laws and regulations. All of the
forward-looking statements are qualified in their entirety by
reference to the risk factors discussed therein. 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 after the date of this
report to conform them to actual results. Over time, our actual
results, performance or achievements will likely differ from the
anticipated results, performance, or achievements that are
expressed or implied by our forward-looking statements, and such
differences might be significant and materially adverse.
Alaska Airlines and its regional partners serve more than 120
destinations across the United
States and to Mexico,
Canada and Costa Rica. The airline emphasizes Next-Level
Care for its guests, along with providing low fares, award-winning
customer service and sustainability efforts. Alaska is a member of oneworld. With the
global alliance and the airline's additional partners, guests can
travel to more than 1,000 destinations on more than 20 airlines
while earning and redeeming miles on flights to locations around
the world. Learn more about Alaska
at newsroom.alaskaair.com and blog.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
June 30,
|
|
Six Months Ended
June 30,
|
(in millions,
except per-share amounts)
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Operating
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
|
1,352
|
|
|
$
|
309
|
|
|
338
|
%
|
|
$
|
2,011
|
|
|
$
|
1,790
|
|
|
12
|
%
|
Mileage Plan other
revenue
|
118
|
|
|
73
|
|
|
62
|
%
|
|
212
|
|
|
182
|
|
|
16
|
%
|
Cargo and
other
|
57
|
|
|
39
|
|
|
46
|
%
|
|
101
|
|
|
85
|
|
|
19
|
%
|
Total Operating
Revenues
|
1,527
|
|
|
421
|
|
|
263
|
%
|
|
2,324
|
|
|
2,057
|
|
|
13
|
%
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Wages and
benefits
|
510
|
|
|
472
|
|
|
8
|
%
|
|
1,003
|
|
|
1,084
|
|
|
(7)
|
%
|
Payroll support
program wage offset
|
(503)
|
|
|
(362)
|
|
|
39
|
%
|
|
(914)
|
|
|
(362)
|
|
|
152
|
%
|
Variable incentive
pay
|
34
|
|
|
16
|
|
|
113
|
%
|
|
67
|
|
|
23
|
|
|
191
|
%
|
Aircraft fuel,
including hedging gains and losses
|
274
|
|
|
59
|
|
|
364
|
%
|
|
477
|
|
|
443
|
|
|
8
|
%
|
Aircraft
maintenance
|
102
|
|
|
45
|
|
|
127
|
%
|
|
183
|
|
|
160
|
|
|
14
|
%
|
Aircraft
rent
|
62
|
|
|
74
|
|
|
(16)
|
%
|
|
124
|
|
|
155
|
|
|
(20)
|
%
|
Landing fees and
other rentals
|
144
|
|
|
83
|
|
|
73
|
%
|
|
273
|
|
|
214
|
|
|
28
|
%
|
Contracted
services
|
54
|
|
|
30
|
|
|
80
|
%
|
|
105
|
|
|
102
|
|
|
3
|
%
|
Selling
expenses
|
41
|
|
|
4
|
|
|
925
|
%
|
|
74
|
|
|
59
|
|
|
25
|
%
|
Depreciation and
amortization
|
98
|
|
|
107
|
|
|
(8)
|
%
|
|
195
|
|
|
215
|
|
|
(9)
|
%
|
Food and beverage
service
|
35
|
|
|
7
|
|
|
400
|
%
|
|
58
|
|
|
56
|
|
|
4
|
%
|
Third-party regional
carrier expense
|
37
|
|
|
26
|
|
|
42
|
%
|
|
67
|
|
|
63
|
|
|
6
|
%
|
Other
|
117
|
|
|
78
|
|
|
50
|
%
|
|
222
|
|
|
221
|
|
|
—
|
%
|
Special items -
impairment charges and other
|
(4)
|
|
|
69
|
|
|
(106)
|
%
|
|
14
|
|
|
229
|
|
|
(94)
|
%
|
Special items -
restructuring charges
|
(23)
|
|
|
—
|
|
.
|
NM
|
|
|
(12)
|
|
|
—
|
|
|
NM
|
|
Special items -
merger-related costs
|
—
|
|
|
1
|
|
|
(100)
|
%
|
|
—
|
|
|
4
|
|
|
(100)
|
%
|
Total Operating
Expenses
|
978
|
|
|
709
|
|
|
38
|
%
|
|
1,936
|
|
|
2,666
|
|
|
(27)
|
%
|
Operating Income
(Expense)
|
549
|
|
|
(288)
|
|
|
(291)
|
%
|
|
388
|
|
|
(609)
|
|
|
(164)
|
%
|
Nonoperating
Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
6
|
|
|
7
|
|
|
(14)
|
%
|
|
13
|
|
|
16
|
|
|
(19)
|
%
|
Interest
expense
|
(39)
|
|
|
(17)
|
|
|
129
|
%
|
|
(71)
|
|
|
(30)
|
|
|
137
|
%
|
Interest
capitalized
|
3
|
|
|
1
|
|
|
200
|
%
|
|
6
|
|
|
4
|
|
|
50
|
%
|
Other -
net
|
9
|
|
|
6
|
|
|
50
|
%
|
|
19
|
|
|
11
|
|
|
73
|
%
|
Total Nonoperating
Income (Expense)
|
(21)
|
|
|
(3)
|
|
|
NM
|
|
|
(33)
|
|
|
1
|
|
|
NM
|
|
Income (Loss)
Before Income Tax
|
528
|
|
|
(291)
|
|
|
|
|
355
|
|
|
(608)
|
|
|
|
Income tax expense
(benefit)
|
131
|
|
|
(77)
|
|
|
|
|
89
|
|
|
(162)
|
|
|
|
Net Income
(Loss)
|
$
|
397
|
|
|
$
|
(214)
|
|
|
|
|
$
|
266
|
|
|
$
|
(446)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Income
(Loss) Per Share:
|
$
|
3.18
|
|
|
$
|
(1.74)
|
|
|
|
|
$
|
2.13
|
|
|
$
|
(3.62)
|
|
|
|
Diluted Income
(Loss) Per Share:
|
$
|
3.15
|
|
|
$
|
(1.74)
|
|
|
|
|
$
|
2.12
|
|
|
$
|
(3.62)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Used for
Computation:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
124.977
|
|
|
123.296
|
|
|
|
|
124.640
|
|
|
123.058
|
|
|
|
Diluted
|
126.037
|
|
|
123.296
|
|
|
|
|
125.676
|
|
|
123.058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend
declared per share:
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
0.375
|
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
(in
millions)
|
June 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
|
1,025
|
|
|
$
|
1,370
|
|
Marketable
securities
|
2,926
|
|
|
1,976
|
|
Total
cash and marketable securities
|
3,951
|
|
|
3,346
|
|
Other current
assets
|
820
|
|
|
660
|
|
Current
assets
|
4,771
|
|
|
4,006
|
|
Property and
equipment - net
|
6,128
|
|
|
6,211
|
|
Operating lease
assets
|
1,375
|
|
|
1,400
|
|
Goodwill
|
1,943
|
|
|
1,943
|
|
Intangible assets -
net
|
103
|
|
|
107
|
|
Other
assets
|
336
|
|
|
379
|
|
Total
assets
|
14,656
|
|
|
14,046
|
|
|
|
|
|
Air traffic
liability
|
1,533
|
|
|
1,073
|
|
Current portion of
long-term debt
|
869
|
|
|
1,138
|
|
Current portion of
operating lease liabilities
|
263
|
|
|
290
|
|
Other current
liabilities
|
2,181
|
|
|
1,792
|
|
Current
liabilities
|
4,846
|
|
|
4,293
|
|
Long-term
debt
|
2,319
|
|
|
2,357
|
|
Long-term operating
lease liabilities
|
1,222
|
|
|
1,268
|
|
Other liabilities and
credits
|
2,945
|
|
|
3,140
|
|
Shareholders'
equity
|
3,324
|
|
|
2,988
|
|
Total liabilities
and shareholders' equity
|
$
|
14,656
|
|
|
$
|
14,046
|
|
|
|
|
|
Debt-to-capitalization ratio, including operating
leases
|
56
|
%
|
|
61
|
%
|
|
|
|
|
Number of common
shares outstanding
|
125.229
|
|
|
124.218
|
|
SUMMARY CASH FLOW
(unaudited)
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
(in
millions)
|
Six Months
Ended
June 30, 2021
|
|
Three Months
Ended
March 31, 2021(a)
|
|
Three Months
Ended
June 30,
2021(b)
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net income
(loss)
|
$
|
266
|
|
|
$
|
(131)
|
|
|
$
|
397
|
|
Non-cash reconciling
items
|
221
|
|
|
138
|
|
|
83
|
|
Changes in working
capital
|
520
|
|
|
160
|
|
|
360
|
|
Net cash provided
by (used in) operating activities
|
1,007
|
|
|
167
|
|
|
840
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Property and
equipment additions
|
(102)
|
|
|
(27)
|
|
|
(75)
|
|
Other investing
activities
|
(968)
|
|
|
(516)
|
|
|
(452)
|
|
Net cash provided
by (used in) investing activities
|
(1,070)
|
|
|
(543)
|
|
|
(527)
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
(281)
|
|
|
82
|
|
|
(363)
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
$
|
(344)
|
|
|
$
|
(294)
|
|
|
$
|
(50)
|
|
Cash, cash
equivalents, and restricted cash at beginning of period
|
1,386
|
|
|
1,386
|
|
|
1,092
|
|
Cash, cash
equivalents, and restricted cash at end of the
period
|
$
|
1,042
|
|
|
$
|
1,092
|
|
|
$
|
1,042
|
|
(a)
|
As reported in Form
10-Q for the first quarter of 2021.
|
(b)
|
Cash flows for the
three months ended June 30, 2021, can be calculated by subtracting
cash flows for the three months ended March 31, 2021, as reported
in Form 10-Q for the first quarter 2021, from the six months ended
June 30, 2021.
|
OPERATING
STATISTICS SUMMARY (unaudited)
|
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Consolidated
Operating Statistics:(a)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
8,712
|
|
1,485
|
|
486.7%
|
|
13,379
|
|
10,417
|
|
28.4%
|
RPMs (000,000)
"traffic"
|
10,334
|
|
1,654
|
|
524.8%
|
|
15,727
|
|
12,310
|
|
27.8%
|
ASMs (000,000)
"capacity"
|
13,413
|
|
4,307
|
|
211.4%
|
|
23,810
|
|
19,612
|
|
21.4%
|
Load
factor
|
77.0%
|
|
38.4%
|
|
38.6 pts
|
|
66.1%
|
|
62.8%
|
|
3.3 pts
|
Yield
|
13.09¢
|
|
18.68¢
|
|
(29.9)%
|
|
12.79¢
|
|
14.54¢
|
|
(12.0)%
|
RASM
|
11.38¢
|
|
9.77¢
|
|
16.5%
|
|
9.76¢
|
|
10.49¢
|
|
(7.0)%
|
CASMex(b)
|
9.20¢
|
|
21.87¢
|
|
(57.9)%
|
|
9.95¢
|
|
12.00¢
|
|
(17.1)%
|
Economic fuel cost
per gallon(b)
|
$1.90
|
|
$1.20
|
|
58.3%
|
|
$1.85
|
|
$1.77
|
|
4.5%
|
Fuel gallons
(000,000)
|
168
|
|
54
|
|
211.1%
|
|
294
|
|
248
|
|
18.5%
|
ASM's per
gallon
|
79.8
|
|
79.8
|
|
—%
|
|
81.0
|
|
79.1
|
|
2.4%
|
Average number of
full-time equivalent employees (FTE)
|
19,001
|
|
15,836
|
|
20.0%
|
|
18,071
|
|
19,115
|
|
(5.5)%
|
Mainline Operating
Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
6,151
|
|
905
|
|
579.7%
|
|
9,302
|
|
7,580
|
|
22.7%
|
RPMs (000,000)
"traffic"
|
8,966
|
|
1,276
|
|
602.7%
|
|
13,555
|
|
10,858
|
|
24.8%
|
ASMs (000,000)
"capacity"
|
11,611
|
|
3,363
|
|
245.3%
|
|
20,464
|
|
17,060
|
|
20.0%
|
Load
factor
|
77.2%
|
|
37.9%
|
|
39.3 pts
|
|
66.2%
|
|
63.6%
|
|
2.6 pts
|
Yield
|
11.96¢
|
|
17.63¢
|
|
(32.2)%
|
|
11.64¢
|
|
13.44¢
|
|
(13.4)%
|
RASM
|
10.59¢
|
|
9.52¢
|
|
11.2%
|
|
9.09¢
|
|
9.94¢
|
|
(8.6)%
|
CASMex(b)
|
8.48¢
|
|
22.19¢
|
|
(61.8)%
|
|
9.17¢
|
|
11.17¢
|
|
(17.9)%
|
Economic fuel cost
per gallon(b)
|
$1.88
|
|
$1.20
|
|
56.7%
|
|
$1.84
|
|
$1.78
|
|
3.4%
|
Fuel gallons
(000,000)
|
135
|
|
38
|
|
255.3%
|
|
233
|
|
201
|
|
15.9%
|
ASM's per
gallon
|
86.0
|
|
88.5
|
|
(2.8)%
|
|
87.8
|
|
84.9
|
|
3.4%
|
Average number of
FTE's
|
14,021
|
|
12,340
|
|
13.6%
|
|
13,247
|
|
14,579
|
|
(9.1)%
|
Aircraft
utilization
|
9.9
|
|
5.6
|
|
76.8%
|
|
9.2
|
|
8.8
|
|
4.5%
|
Average aircraft
stage length
|
1,320
|
|
1,144
|
|
15.4%
|
|
1,313
|
|
1,270
|
|
3.4%
|
Operating
fleet(d)
|
202
|
|
225
|
|
(23) a/c
|
|
202
|
|
225
|
|
(23) a/c
|
Regional Operating
Statistics:(c)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
2,562
|
|
580
|
|
341.7%
|
|
4,077
|
|
2,837
|
|
43.7%
|
RPMs (000,000)
"traffic"
|
1,367
|
|
378
|
|
261.6%
|
|
2,172
|
|
1,452
|
|
49.6%
|
ASMs (000,000)
"capacity"
|
1,802
|
|
945
|
|
90.7%
|
|
3,346
|
|
2,552
|
|
31.1%
|
Load
factor
|
75.9%
|
|
40.0%
|
|
35.9 pts
|
|
64.9%
|
|
56.9%
|
|
8.0 pts
|
Yield
|
20.48¢
|
|
22.12¢
|
|
(7.4)%
|
|
19.95¢
|
|
22.80¢
|
|
(12.5)%
|
RASM
|
16.41¢
|
|
10.63¢
|
|
54.4%
|
|
13.84¢
|
|
14.07¢
|
|
(1.6)%
|
Operating
fleet
|
94
|
|
94
|
|
— a/c
|
|
94
|
|
94
|
|
— 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 the
importance of this measure to investors in the accompanying
pages.
|
(c)
|
Data presented
includes information for flights operated by Horizon and
third-party carriers.
|
(d)
|
Excludes all aircraft
removed from operating service.
|
Given the unusual nature of 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 2021 to 2019.
FINANCIAL
INFORMATION AND OPERATING STATISTICS - 2019 RESULTS
(unaudited)
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2019
|
|
Change
|
|
2021
|
|
2019
|
|
Change
|
Passenger
revenue
|
$
|
1,352
|
|
|
$
|
2,111
|
|
|
(36)
|
%
|
|
$
|
2,011
|
|
|
$
|
3,827
|
|
|
(47)
|
%
|
Mileage plan other
revenue
|
118
|
|
|
118
|
|
|
—
|
%
|
|
212
|
|
|
228
|
|
|
(7)
|
%
|
Cargo and
other
|
57
|
|
|
59
|
|
|
(3)
|
%
|
|
101
|
|
|
109
|
|
|
(7)
|
%
|
Total operating
revenues
|
$
|
1,527
|
|
|
$
|
2,288
|
|
|
(33)
|
%
|
|
$
|
2,324
|
|
|
$
|
4,164
|
|
|
(44)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense,
excluding fuel and special items
|
$
|
1,234
|
|
|
$
|
1,414
|
|
|
(13)
|
%
|
|
$
|
2,371
|
|
|
$
|
2,819
|
|
|
(16)
|
%
|
Economic
fuel
|
274
|
|
|
502
|
|
|
(45)
|
%
|
|
477
|
|
|
922
|
|
|
(48)
|
%
|
Special
items
|
(530)
|
|
|
8
|
|
|
NM
|
|
|
(912)
|
|
|
34
|
|
|
NM
|
|
Total operating
expenses
|
$
|
978
|
|
|
$
|
1,924
|
|
|
(49)
|
%
|
|
$
|
1,936
|
|
|
$
|
3,775
|
|
|
(49)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Operating Statistics(a):
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
8,712
|
|
|
12,026
|
|
|
(28)
|
%
|
|
13,379
|
|
|
22,442
|
|
|
(40)
|
%
|
RPMs (000,000)
"traffic"
|
10,334
|
|
|
14,638
|
|
|
(29)
|
%
|
|
15,727
|
|
|
27,087
|
|
|
(42)
|
%
|
ASMs (000,000)
"capacity"
|
13,413
|
|
|
16,980
|
|
|
(21)
|
%
|
|
23,810
|
|
|
32,487
|
|
|
(27)
|
%
|
Load
Factor
|
77.0%
|
|
|
86.2%
|
|
|
(9.2)
|
pts
|
|
66.1%
|
|
|
83.4%
|
|
|
(17.3)
|
pts
|
Yield
|
13.09¢
|
|
|
14.43¢
|
|
|
(9)
|
%
|
|
12.79¢
|
|
|
14.13¢
|
|
|
(9)
|
%
|
RASM
|
11.38¢
|
|
|
13.48¢
|
|
|
(16)
|
%
|
|
9.76¢
|
|
|
12.82¢
|
|
|
(24)
|
%
|
CASMex
|
9.20¢
|
|
|
8.33¢
|
|
|
10
|
%
|
|
9.95¢
|
|
|
8.68¢
|
|
|
15
|
%
|
FTEs
|
19,001
|
|
|
21,921
|
|
|
(13)
|
%
|
|
18,071
|
|
|
21,876
|
|
|
(17)
|
%
|
(a)
|
2019 comparative
operating statistics have been recalculated using the information
presented above, and as filed in our second quarter 2019 Form
10-Q
|
OPERATING SEGMENTS
(unaudited)
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2021
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$
|
1,072
|
|
|
$
|
280
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,352
|
|
|
$
|
—
|
|
|
$
|
1,352
|
|
CPA
revenues
|
—
|
|
|
—
|
|
|
111
|
|
|
(111)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mileage Plan other
revenue
|
102
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
Cargo and
other
|
55
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
57
|
|
|
—
|
|
|
57
|
|
Total Operating
Revenues
|
1,229
|
|
|
296
|
|
|
111
|
|
|
(109)
|
|
|
1,527
|
|
|
—
|
|
|
1,527
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
984
|
|
|
286
|
|
|
91
|
|
|
(127)
|
|
|
1,234
|
|
|
(530)
|
|
|
704
|
|
Economic
fuel
|
253
|
|
|
66
|
|
|
—
|
|
|
1
|
|
|
320
|
|
|
(46)
|
|
|
274
|
|
Total Operating
Expenses
|
1,237
|
|
|
352
|
|
|
91
|
|
|
(126)
|
|
|
1,554
|
|
|
(576)
|
|
|
978
|
|
Nonoperating
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Interest
expense
|
(34)
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
|
(39)
|
|
|
—
|
|
|
(39)
|
|
Interest
capitalized
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Other -
net
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
Total Nonoperating
Expense
|
(16)
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
|
(21)
|
|
|
—
|
|
|
(21)
|
|
Income (Loss)
Before Income Tax
|
$
|
(24)
|
|
|
$
|
(56)
|
|
|
$
|
15
|
|
|
$
|
17
|
|
|
$
|
(48)
|
|
|
$
|
576
|
|
|
$
|
528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2020
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$
|
225
|
|
|
$
|
84
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
309
|
|
|
$
|
—
|
|
|
$
|
309
|
|
CPA
revenues
|
—
|
|
|
—
|
|
|
81
|
|
|
(81)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mileage Plan other
revenue
|
56
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
73
|
|
Cargo and
other
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
Total Operating
Revenues
|
320
|
|
|
101
|
|
|
81
|
|
|
(81)
|
|
|
421
|
|
|
—
|
|
|
421
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
746
|
|
|
210
|
|
|
68
|
|
|
(82)
|
|
|
942
|
|
|
(292)
|
|
|
650
|
|
Economic
fuel
|
45
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|
(6)
|
|
|
59
|
|
Total Operating
Expenses
|
791
|
|
|
230
|
|
|
68
|
|
|
(82)
|
|
|
1,007
|
|
|
(298)
|
|
|
709
|
|
Nonoperating
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
11
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Interest
expense
|
(18)
|
|
|
—
|
|
|
(5)
|
|
|
6
|
|
|
(17)
|
|
|
—
|
|
|
(17)
|
|
Interest
capitalized
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Other -
net
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Total Nonoperating
Income (Expense)
|
—
|
|
|
—
|
|
|
(5)
|
|
|
2
|
|
|
(3)
|
|
|
—
|
|
|
(3)
|
|
Income (Loss)
Before Income Tax
|
$
|
(471)
|
|
|
$
|
(129)
|
|
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
(589)
|
|
|
$
|
298
|
|
|
$
|
(291)
|
|
|
|
Six Months Ended
June 30, 2021
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$
|
1,578
|
|
|
$
|
433
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,011
|
|
|
$
|
—
|
|
|
$
|
2,011
|
|
CPA
revenues
|
—
|
|
|
—
|
|
|
215
|
|
|
(215)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mileage Plan other
revenue
|
182
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
212
|
|
|
—
|
|
|
212
|
|
Cargo and
other
|
99
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
101
|
|
|
—
|
|
|
101
|
|
Total Operating
Revenues
|
1,859
|
|
|
463
|
|
|
215
|
|
|
(213)
|
|
|
2,324
|
|
|
—
|
|
|
2,324
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
1,877
|
|
|
551
|
|
|
179
|
|
|
(236)
|
|
|
2,371
|
|
|
(912)
|
|
|
1,459
|
|
Economic
fuel
|
427
|
|
|
118
|
|
|
—
|
|
|
—
|
|
|
545
|
|
|
(68)
|
|
|
477
|
|
Total Operating
Expenses
|
2,304
|
|
|
669
|
|
|
179
|
|
|
(236)
|
|
|
2,916
|
|
|
(980)
|
|
|
1,936
|
|
Nonoperating
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
Interest
expense
|
(61)
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(71)
|
|
|
—
|
|
|
(71)
|
|
Interest
capitalized
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Other -
net
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
Total Nonoperating
Expense
|
(23)
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
(33)
|
|
|
—
|
|
|
(33)
|
|
Income (Loss)
Before Income Tax
|
$
|
(468)
|
|
|
$
|
(206)
|
|
|
$
|
26
|
|
|
$
|
23
|
|
|
$
|
(625)
|
|
|
$
|
980
|
|
|
$
|
355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2020
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$
|
1,459
|
|
|
$
|
331
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,790
|
|
|
$
|
—
|
|
|
$
|
1,790
|
|
CPA
revenues
|
—
|
|
|
—
|
|
|
186
|
|
|
(186)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mileage Plan other
revenue
|
154
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
182
|
|
|
—
|
|
|
182
|
|
Cargo and
other
|
83
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
85
|
|
|
—
|
|
|
85
|
|
Total Operating
Revenues
|
1,696
|
|
|
359
|
|
|
186
|
|
|
(184)
|
|
|
2,057
|
|
|
—
|
|
|
2,057
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
1,905
|
|
|
479
|
|
|
160
|
|
|
(192)
|
|
|
2,352
|
|
|
(129)
|
|
|
2,223
|
|
Economic
fuel
|
358
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
440
|
|
|
3
|
|
|
443
|
|
Total Operating
Expenses
|
2,263
|
|
|
561
|
|
|
160
|
|
|
(192)
|
|
|
2,792
|
|
|
(126)
|
|
|
2,666
|
|
Nonoperating
Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
25
|
|
|
—
|
|
|
—
|
|
|
(9)
|
|
|
16
|
|
|
—
|
|
|
16
|
|
Interest
expense
|
(30)
|
|
|
—
|
|
|
(10)
|
|
|
10
|
|
|
(30)
|
|
|
—
|
|
|
(30)
|
|
Interest
capitalized
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
Other -
net
|
12
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
11
|
|
|
—
|
|
|
11
|
|
Total Nonoperating
Income (Expense)
|
11
|
|
|
—
|
|
|
(10)
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Income (Loss)
Before Income Tax
|
$
|
(556)
|
|
|
$
|
(202)
|
|
|
$
|
16
|
|
|
$
|
8
|
|
|
$
|
(734)
|
|
|
$
|
126
|
|
|
$
|
(608)
|
|
(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 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Consolidated:
|
|
|
|
|
|
|
|
CASM
|
7.29
|
¢
|
|
16.46
|
¢
|
|
8.13
|
¢
|
|
13.59
|
¢
|
Less the
following components:
|
|
|
|
|
|
|
|
Payroll support
program wage offset (benefit)
|
(3.75)
|
|
|
(8.40)
|
|
|
(3.84)
|
|
|
(1.85)
|
|
Aircraft fuel,
including hedging gains and losses
|
2.04
|
|
|
1.37
|
|
|
2.00
|
|
|
2.26
|
|
Special items -
impairment charges and other(a)
|
(0.03)
|
|
|
1.60
|
|
|
0.07
|
|
|
1.17
|
|
Special items -
restructuring charges(b)
|
(0.17)
|
|
|
—
|
|
|
(0.05)
|
|
|
—
|
|
Special items -
merger-related costs
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.01
|
|
CASM excluding
fuel and special items
|
9.20
|
¢
|
|
21.87
|
¢
|
|
9.95
|
¢
|
|
12.00
|
¢
|
|
|
|
|
|
|
|
|
Mainline:
|
|
|
|
|
|
|
|
CASM
|
6.24
|
¢
|
|
15.79
|
¢
|
|
6.72
|
¢
|
|
12.39
|
¢
|
Less the
following components:
|
|
|
|
|
|
|
|
Payroll support
program wage offset (benefit)
|
(3.79)
|
|
|
(9.69)
|
|
|
(4.21)
|
|
|
(1.91)
|
|
Aircraft fuel,
including hedging gains and losses
|
1.78
|
|
|
1.16
|
|
|
1.75
|
|
|
2.12
|
|
Special items -
impairment charges and other(a)
|
(0.03)
|
|
|
2.11
|
|
|
0.07
|
|
|
0.99
|
|
Special items -
restructuring charges(b)
|
(0.20)
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
Special items -
merger-related costs
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.02
|
|
CASM excluding
fuel and special items
|
8.48
|
¢
|
|
22.19
|
¢
|
|
9.17
|
¢
|
|
11.17
|
¢
|
(a)
|
Special items -
impairment charges and other in the three and six months ended June
30, 2021 are primarily comprised of updated estimates of cost
associated with leased aircraft that have been retired and removed
from the operating fleet but not yet returned to the
lessor.
|
(b)
|
Special items -
restructuring charges in the three and six months ended June 30,
2021 represent adjustments to total cost for pilot incentive leaves
as a result of updated recall timing from what was previously
anticipated due to schedule changes, training limitations and other
factors.
|
Fuel
Reconciliation
|
|
Three Months Ended
June 30,
|
|
2021
|
|
2020
|
(in millions,
except for per-gallon amounts)
|
Dollars
|
|
Cost/Gallon
|
|
Dollars
|
|
Cost/Gallon
|
Raw or "into-plane"
fuel cost
|
$
|
330
|
|
|
$
|
1.96
|
|
|
$
|
60
|
|
|
$
|
1.11
|
|
Losses (gains) on
settled hedges
|
(10)
|
|
|
(0.06)
|
|
|
5
|
|
|
0.09
|
|
Consolidated
economic fuel expense
|
320
|
|
|
1.90
|
|
|
65
|
|
|
1.20
|
|
Mark-to-market fuel
hedge adjustment
|
(46)
|
|
|
(0.27)
|
|
|
(6)
|
|
|
(0.11)
|
|
GAAP fuel
expense
|
$
|
274
|
|
|
$
|
1.63
|
|
|
$
|
59
|
|
|
$
|
1.09
|
|
Fuel
gallons
|
168
|
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2021
|
|
2020
|
(in millions,
except for per gallon amounts)
|
Dollars
|
|
Cost/Gallon
|
|
Dollars
|
|
Cost/Gallon
|
Raw or "into-plane"
fuel cost
|
$
|
552
|
|
|
$
|
1.87
|
|
|
$
|
430
|
|
|
$
|
1.73
|
|
Losses (gains) on
settled hedges
|
(7)
|
|
|
(0.02)
|
|
|
10
|
|
|
0.04
|
|
Consolidated
economic fuel expense
|
$
|
545
|
|
|
$
|
1.85
|
|
|
$
|
440
|
|
|
$
|
1.77
|
|
Mark-to-market fuel
hedge adjustment
|
(68)
|
|
|
(0.23)
|
|
|
3
|
|
|
0.01
|
|
GAAP fuel
expense
|
$
|
477
|
|
|
$
|
1.62
|
|
|
$
|
443
|
|
|
$
|
1.78
|
|
Fuel
gallons
|
294
|
|
|
|
|
248
|
|
|
|
|
Debt-to-capitalization, adjusted for operating
leases
|
(in
millions)
|
June 30,
2021
|
|
December 31,
2020
|
Long-term debt, net
of current portion
|
$
|
2,319
|
|
|
$
|
2,357
|
|
Capitalized operating
leases
|
1,485
|
|
|
1,558
|
|
COVID-19 related
borrowings(a)
|
425
|
|
|
734
|
|
Adjusted debt, net of
current portion of long-term debt
|
4,229
|
|
|
4,649
|
|
Shareholders'
equity
|
3,324
|
|
|
2,988
|
|
Total Invested
Capital
|
$
|
7,553
|
|
|
$
|
7,637
|
|
|
|
|
|
Debt-to-capitalization ratio, including operating
leases
|
56
|
%
|
|
61
|
%
|
(a)
|
To best reflect our
leverage we included the remaining short-term borrowings stemming
from the COVID-19 pandemic which are classified as current
liabilities in the consolidated balance sheets.
|
Adjusted net debt
to earnings before interest, taxes, depreciation, amortization and
special items
|
(in
millions)
|
June 30,
2021
|
|
December 31,
2020
|
Current portion of
long-term debt
|
$
|
869
|
|
|
$
|
1,138
|
|
Current portion of
operating lease liabilities
|
263
|
|
|
290
|
|
Long-term debt, net
of current portion
|
2,319
|
|
|
2,357
|
|
Long-term operating
lease liabilities, net of current portion
|
1,222
|
|
|
1,268
|
|
Total adjusted
debt
|
4,673
|
|
|
5,053
|
|
Less: Cash and
marketable securities
|
(3,951)
|
|
|
(3,346)
|
|
Adjusted net
debt
|
$
|
722
|
|
|
$
|
1,707
|
|
|
|
|
|
(in
millions)
|
Twelve Months
Ended
June 30, 2021
|
|
Twelve Months
Ended
December 31, 2020
|
GAAP Operating
Loss(a)
|
$
|
(778)
|
|
|
$
|
(1,775)
|
|
Adjusted
for:
|
|
|
|
Payroll Support
Program grant wage offset and special items
|
(712)
|
|
|
71
|
|
Mark-to-market fuel
hedge adjustments
|
(79)
|
|
|
(8)
|
|
Depreciation and
amortization
|
400
|
|
|
420
|
|
Aircraft
rent
|
268
|
|
|
299
|
|
EBITDAR
|
$
|
(901)
|
|
|
$
|
(993)
|
|
|
|
|
|
Adjusted net debt to
EBITDAR
|
(0.8x)
|
|
|
(1.7x)
|
|
(a)
|
Operating loss can be
reconciled using the trailing twelve month operating income as
filed quarterly with the SEC.
|
Note A: Pursuant to Regulation G, we are providing
reconciliations of reported non-GAAP financial measures to their
most directly comparable financial measures reported on a GAAP
basis. We believe that consideration of these non-GAAP financial
measures may be important to investors for the following
reasons:
- By eliminating fuel expense and certain special items
(including the payroll support program wage offset, impairment and
restructuring charges and merger-related costs) from our unit
metrics, we believe that we have better visibility into the results
of operations as we focus on cost-reduction initiatives emerging
from the COVID-19 pandemic. Our industry is highly competitive
and is characterized by high fixed costs, so even a small reduction
in non-fuel operating costs can result in a significant improvement
in operating results. In addition, we believe that all
domestic carriers are similarly impacted by changes in jet fuel
costs over the long run, so it is important for management (and
thus investors) to understand the impact of (and trends in)
company-specific cost drivers such as labor rates and productivity,
airport costs, maintenance costs, etc., which are more controllable
by management.
- Cost per ASM (CASM) excluding fuel and certain special items,
such as the payroll support program wage offset, impairment and
restructuring charges and merger-related costs, is one of the most
important measures used by management and by the Air Group Board of
Directors in assessing quarterly and annual cost performance.
- Adjusted income before income tax (and other items as specified
in our plan documents) is an important metric for the employee
incentive plan, which covers the majority of Air Group
employees.
- CASM excluding fuel and certain special items is a measure
commonly used by industry analysts, and we believe it is the basis
by which they have historically compared our airline to others in
the industry. The measure is also the subject of frequent
questions from investors.
- Disclosure of the individual impact of certain noted items
provides investors the ability to measure and monitor performance
both with and without these special items. We believe that
disclosing the impact of these items as noted above. Industry
analysts and investors consistently measure our performance without
these items for better comparability between periods and among
other airlines.
- Although we disclose our passenger unit revenues, we do not
(nor are we able to) evaluate unit revenues excluding the impact
that changes in fuel costs have had on ticket prices. Fuel
expense represents a large percentage of our total operating
expenses. Fluctuations in fuel prices often drive changes in
unit revenues in the mid-to-long term. Although we believe it
is useful to evaluate non-fuel unit costs for the reasons noted
above, we would caution readers of these financial statements not
to place undue reliance on unit costs excluding fuel as a measure
or predictor of future profitability because of the significant
impact of fuel costs on our business.
GLOSSARY OF TERMS
Adjusted net debt - long-term debt, including current
portion, plus capitalized operating leases, less cash and
marketable securities
Adjusted net debt to EBITDAR - represents net
adjusted debt divided by EBITDAR (trailing twelve months earnings
before interest, taxes, depreciation, amortization, special items
and rent)
Aircraft Utilization - block hours per day; this
represents the average number of hours per day our aircraft are in
transit
Aircraft Stage Length - represents the average miles
flown per aircraft departure
ASMs - available seat miles, or "capacity";
represents total seats available across the fleet multiplied by the
number of miles flown
CASM - operating costs per ASM, or "unit cost";
represents all operating expenses including fuel and special
items
CASMex - operating costs excluding fuel and special
items per ASM; this metric is used to help track progress toward
reduction of non-fuel operating costs since fuel is largely out of
our control
Debt-to-capitalization ratio - represents adjusted
debt (long-term debt plus capitalized operating lease liabilities)
divided by total equity plus adjusted debt
Diluted Earnings per Share - represents earnings per
share (EPS) using fully diluted shares outstanding
Diluted Shares - represents the total number of shares
that would be outstanding if all possible sources of conversion,
such as stock options, were exercised
Economic Fuel - best estimate of the cash cost of
fuel, net of the impact of our fuel-hedging program
Load Factor - RPMs as a percentage of ASMs;
represents the number of available seats that were filled with
paying passengers
Mainline - represents flying Boeing 737, Airbus 320
and Airbus 321neo family jets and all associated revenues and
costs
Productivity - number of revenue passengers per full-time
equivalent employee
RASM - operating revenue per ASMs, or "unit
revenue"; operating revenue includes all passenger revenue, freight
& mail, Mileage Plan and other ancillary revenue; represents
the average total revenue for flying one seat one mile
Regional - represents capacity purchased by Alaska from Horizon and SkyWest. In this
segment, Regional records actual on-board passenger revenue, less
costs such as fuel, distribution costs, and payments made to
Horizon and SkyWest under the respective capacity purchased
arrangement (CPAs). Additionally, Regional includes an allocation
of corporate overhead such as IT, finance, other administrative
costs incurred by Alaska and on
behalf of Horizon.
RPMs - revenue passenger miles, or "traffic";
represents the number of seats that were filled with paying
passengers; one passenger traveling one mile is one RPM
Yield - passenger revenue per RPM; represents the
average revenue for flying one passenger one mile
View original
content:https://www.prnewswire.com/news-releases/alaska-air-group-reports-second-quarter-2021-results-301339134.html
SOURCE Alaska Air Group