Alaska Air Group Reports Second Quarter 2013 Results July 25, 2013 Alaska Airlines 15 min read Share Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window) 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... SEATTLE, July 25, 2013 /PRNewswire/ — 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. New routes: New routes launched and announced in the second quarter are as follows: New Non-Stop Routes launched in Q2 New Non-Stop Routes (Launch Date) Portland to Fairbanks Anchorage to Fairbanks (3/3/14) – Horizon San Diego to Lihue Anchorage to Kodiak (3/3/14) – Horizon Seattle to Salt Lake City Anchorage to Las Vegas (12/19) Anchorage to Phoenix (12/18) Portland to Boise (11/1) – SkyWest Portland to Reno (11/8) Portland to Tucson (11/1) San Diego to Boise (11/1) San Diego to Mammoth Lakes (12/19) Seattle to Colorado Springs (11/1) Seattle to Omaha (11/7) Seattle to Steamboat Springs (12/18) 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." The following table reconciles the company’s reported GAAP net income and earnings per diluted share (EPS) during the second quarters of 2013 and 2012 to adjusted amounts: Three Months Ended June 30, 2013 2012 (in millions, except per-share amounts) Dollars Diluted EPS Dollars Diluted EPS Reported GAAP net income $ 104 $ 1.47 $ 68 $ 0.93 Mark-to-market fuel hedge adjustments, net of tax 1 — 43 0.60 Non-GAAP adjusted income and per-share amounts $ 105 $ 1.47 $ 111 $ 1.53 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 via the Internet at 8:30 a.m. Pacific time on July 25, 2013. It can be accessed through the company’s website at 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 news release to "Air Group," "company," "we," "us" and "our" refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified. Alaska Airlines, Inc. and Horizon Air Industries, Inc. are referred to as "Alaska" and "Horizon," respectively, and together as our "airlines." 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 Dec. 31, 2012. Some of these risks include general economic conditions, increases in operating costs including fuel, competition, labor costs and relations, our significant 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, a subsidiary of Alaska Air Group (NYSE: ALK), together with its partner regional airlines, serves 95 cities through an expansive network in Alaska, the Lower 48, Hawaii, Canada and Mexico. Alaska Airlines has ranked "Highest in Customer Satisfaction Among Traditional Network Carriers" in the J.D. Power and Associates North America Airline Satisfaction Study SM for six consecutive years from 2008 to 2013. For reservations, visit www.alaskaair.com. For more news and information, visit the Alaska Airlines Newsroom at www.alaskaair.com/newsroom. 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) 2013 2012 Change 2013 2012 Change Operating Revenues: Passenger Mainline $ 896 $ 863 4 % 1,692 1,586 7 % Regional 192 188 2 % 374 361 4 % Total passenger revenue 1,088 1,051 4 % 2,066 1,947 6 % Freight and mail 30 31 (3) % 56 55 2 % Other – net 138 132 5 % 268 251 7 % Total Operating Revenues 1,256 1,214 3 % 2,390 2,253 6 % Operating Expenses: Wages and benefits 258 259 — % 522 515 1 % Variable incentive pay 21 22 (5) % 42 38 11 % Aircraft fuel, including hedging gains and losses 372 433 (14) % 753 751 — % Aircraft maintenance 67 54 24 % 133 105 27 % Aircraft rent 30 29 3 % 59 57 4 % Landing fees and other rentals 75 60 25 % 136 123 11 % Contracted services 54 50 8 % 107 98 9 % Selling expenses 51 44 16 % 89 85 5 % Depreciation and amortization 68 66 3 % 136 129 5 % Food and beverage service 21 20 5 % 41 37 11 % Other 65 61 7 % 133 126 6 % Total Operating Expenses 1,082 1,098 (1) % 2,151 2,064 4 % Operating Income 174 116 50 % 239 188 27 % Nonoperating Income (Expense): Interest income 4 5 9 10 Interest expense (14) (17) (29) (34) Interest capitalized 5 3 9 8 Other – net — 2 1 3 (5) (7) (10) (13) Income Before Income Tax 169 109 229 176 Income tax expense 65 41 88 67 Net Income $ 104 $ 68 141 109 Basic Earnings Per Share: $ 1.49 $ 0.95 $ 2.00 $ 1.53 Diluted Earnings Per Share: $ 1.47 $ 0.93 $ 1.98 $ 1.50 Shares Used for Computation: Basic 70.252 70.996 70.342 71.069 Diluted 71.159 72.200 71.297 72.325 CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) Alaska Air Group, Inc. (in millions) June 30, 2013 December 31, 2012 Cash and marketable securities $ 1,429 $ 1,252 Total current assets 1,986 1,737 Property and equipment-net 3,725 3,609 Other assets 141 159 Total assets 5,852 5,505 Air traffic liability 724 534 Current portion of long-term debt 110 161 Other current liabilities 922 806 Current liabilities 1,756 1,501 Long-term debt 814 871 Other liabilities and credits 1,739 1,712 Shareholders’ equity 1,543 1,421 Total liabilities and shareholders’ equity $ 5,852 $ 5,505 Debt to Capitalization, adjusted for operating leases 52%:48% 54%:46% Number of common shares outstanding 70.009 70.377 OPERATING STATISTICS SUMMARY (unaudited) Alaska Air Group, Inc. Three Months Ended June 30, Six Months Ended June 30, 2013 2012 Change 2013 2012 Change Consolidated Operating Statistics:(a) Revenue passengers (000) 6,980 6,565 6.3 % 13,326 12,560 6.1 % RPMs (000,000) "traffic" 7,385 6,869 7.5 % 14,181 13,101 8.2 % ASMs (000,000) "capacity" 8,547 7,939 7.6 % 16,530 15,283 8.2 % Load factor 86.4 % 86.5 % (0.1 pts) 85.8 % 85.7 % 0.1 pts Yield 14.73 ¢ 15.29 ¢ (3.7) % 14.56 ¢ 14.86 ¢ (2.0) % PRASM 12.73 ¢ 13.23 ¢ (3.8) % 12.49 ¢ 12.74 ¢ (2.0) % RASM 14.70 ¢ 15.28 ¢ (3.8) % 14.46 ¢ 14.74 ¢ (1.9) % CASM excluding fuel(b) 8.31 ¢ 8.38 ¢ (0.8) % 8.46 ¢ 8.60 ¢ (1.6) % Economic fuel cost per gallon(c) $ 3.28 $ 3.40 (3.5) % $ 3.38 $ 3.41 (0.9) % Fuel gallons (000,000) 113 106 6.6 % 219 206 6.3 % Average number of full-time equivalent employees 12,059 11,965 0.8 % 12,036 11,899 1.2 % Mainline Operating Statistics: Revenue passengers (000) 5,074 4,752 6.8 % 9,608 9,027 6.4 % RPMs (000,000) "traffic" 6,729 6,231 8.0 % 12,901 11,868 8.7 % ASMs (000,000) "capacity" 7,743 7,130 8.6 % 14,946 13,705 9.1 % Load factor 86.9 % 87.4 % (0.5 pts) 86.3 % 86.6 % (0.3 pts) Yield 13.31 ¢ 13.85 ¢ (3.9) % 13.11 ¢ 13.36 ¢ (1.9) % PRASM 11.57 ¢ 12.10 ¢ (4.4) % 11.32 ¢ 11.57 ¢ (2.2) % RASM 13.50 ¢ 14.13 ¢ (4.5) % 13.24 ¢ 13.55 ¢ (2.3) % CASM excluding fuel(b) 7.35 ¢ 7.46 ¢ (1.6) % 7.47 ¢ 7.67 ¢ (2.6) % Economic fuel cost per gallon(c) $ 3.28 $ 3.40 (3.6) % $ 3.37 $ 3.40 (0.9) % Fuel gallons (000,000) 100 93 7.2 % 193 180 7.3 % Average number of full-time equivalent employees 9,457 9,165 3.2 % 9,404 9,088 3.5 % Aircraft utilization 10.9 10.9 (0.2) % 10.7 10.6 0.9 % Average aircraft stage length 1,156 1,149 0.6 % 1,188 1,151 3.2 % Operating fleet 128 120 8 a/c 128 120 8 a/c Regional Operating Statistics:(d) Revenue passengers (000) 1,907 1,813 5.2 % 3,718 3,533 5.2 % RPMs (000,000) "traffic" 656 638 2.8 % 1,280 1,233 3.8 % ASMs (000,000) "capacity" 804 809 (0.7) % 1,584 1,578 0.4 % Load factor 81.6 % 78.9 % 2.7 pts 80.8 % 78.1 % 2.7 pts Yield 29.29 ¢ 29.40 ¢ (0.3) % 29.19 ¢ 29.23 ¢ (0.2) % PRASM 23.91 ¢ 23.19 ¢ 3.2 % 23.60 ¢ 22.84 ¢ 3.3 % Operating fleet (Horizon only) 48 50 (2) a/c 48 50 (2) 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 operating expenses excluding fuel and certain special items and Note A for a discussion of why these measures may be important 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. OPERATING SEGMENTS (unaudited) Alaska Air Group, Inc. Three Months Ended June 30, 2013 Alaska (in millions) Mainline Regional Horizon Consolidating Air Group Adjusted(a) Special Items Consolidated Operating revenues Passenger Mainline $ 896 $ — $ — $ — $ 896 $ — $ 896 Regional 192 — — 192 — 192 Total passenger revenues 896 192 — — 1,088 — 1,088 CPA revenues — — 91 (91) — — Freight and mail 29 1 — — 30 — 30 Other-net 120 16 2 — 138 — 138 Total operating revenues 1,045 209 93 (91) 1,256 — 1,256 Operating expenses Operating expenses, excluding fuel 569 149 84 (92) 710 — 710 Economic fuel 327 44 — — 371 1 372 Total operating expenses 896 193 84 (92) 1,081 1 1,082 Nonoperating income (expense) Interest income 4 — — — 4 — 4 Interest expense (9) — (4) (1) (14) — (14) Other 6 (1) 1 (1) 5 — 5 1 (1) (3) (2) (5) — (5) Income (loss) before income tax $ 150 $ 15 $ 6 $ (1) $ 170 $ (1) $ 169 Three Months Ended June 30, 2012 Alaska (in millions) Mainline Regional Horizon Consolidating Air Group Adjusted(a) Special Items Consolidated Operating revenues Passenger Mainline $ 863 $ — $ — $ — $ 863 $ — $ 863 Regional — 188 — — 188 — 188 Total passenger revenues 863 188 — — 1,051 — 1,051 CPA revenues — — 89 (89) — — — Freight and mail 30 1 — — 31 — 31 Other-net 115 15 2 — 132 — 132 Total operating revenues 1,008 204 91 (89) 1,214 — 1,214 Operating expenses Operating expenses, excluding fuel 532 139 83 (89) 665 — 665 Economic fuel 317 46 — — 363 70 433 Total operating expenses 849 185 83 (89) 1,028 70 1,098 Nonoperating income (expense) Interest income 4 — — 1 5 — 5 Interest expense (12) — (4) (1) (17) — (17) Other 5 — — — 5 — 5 (3) — (4) — (7) — (7) Income (loss) before income tax $ 156 $ 19 $ 4 $ — $ 179 $ (70) $ 109 (a) The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain charges. See Note A for further information in the accompanying pages. OPERATING SEGMENTS (unaudited) Alaska Air Group, Inc. Six Months Ended June 30, 2013 Alaska (in millions) Mainline Regional Horizon Consolidating Air Group Adjusted(a) Special Items Consolidated Operating revenues Passenger Mainline $ 1,692 $ — $ — $ — $ 1,692 $ — $ 1,692 Regional — 374 — — 374 — 374 Total passenger revenues 1,692 374 — — 2,066 — 2,066 CPA revenues — — 186 (186) — — — Freight and mail 54 2 — — 56 — 56 Other-net 234 31 3 — 268 — 268 Total operating revenues 1,980 407 189 (186) 2,390 — 2,390 Operating expenses Operating expenses, excluding fuel 1,116 296 173 (187) 1,398 — 1,398 Economic fuel 650 90 — — 740 13 753 Total operating expenses 1,766 386 173 (187) 2,138 13 2,151 Nonoperating income (expense) Interest income 9 — — — 9 — 9 Interest expense (21) — (7) (1) (29) — (29) Other 11 (1) 1 (1) 10 — 10 (1) (1) (6) (2) (10) — (10) Income (loss) before income tax $ 213 $ 20 $ 10 $ (1) $ 242 $ (13) $ 229 Six Months Ended June 30, 2012 Alaska (in millions) Mainline Regional Horizon Consolidating Air Group Adjusted(a) Special Items Consolidated Operating revenues Passenger Mainline $ 1,586 $ — $ — $ — $ 1,586 $ — $ 1,586 Regional — 361 — — 361 — 361 Total passenger revenues 1,586 361 — — 1,947 — 1,947 CPA revenues — — 176 (176) — — — Freight and mail 53 2 — — 55 — 55 Other-net 218 29 4 — 251 — 251 Total operating revenues 1,857 392 180 (176) 2,253 — 2,253 Operating expenses Operating expenses, excluding fuel 1,051 276 161 (175) 1,313 — 1,313 Economic fuel 611 90 — — 701 50 751 Total operating expenses 1,662 366 161 (175) 2,014 50 2,064 Nonoperating income (expense) Interest income 9 — — 1 10 — 10 Interest expense (25) — (8) — (34) — (34) Other 10 — 1 — 11 — 11 (6) — (7) 1 (13) — (13) Income (loss) before income tax $ 189 $ 26 $ 12 $ — $ 226 $ (50) $ 176 (a) The adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and does not include certain charges. See Note A for further information in the accompanying pages. FUEL RECONCILIATIONS (unaudited) Alaska Air Group, Inc. Three Months Ended June 30, 2013 2012 (in millions, except for per-gallon amounts) Dollars Cost/Gallon Dollars Cost/Gallon Raw or "into-plane" fuel cost $ 347 $ 3.07 $ 351 $ 3.29 (Gains) losses on settled hedges 24 0.21 12 0.11 Consolidated economic fuel expense 371 3.28 363 3.40 Mark-to-market fuel hedge adjustment 1 0.01 70 0.66 GAAP fuel expense $ 372 $ 3.29 $ 433 $ 4.06 Fuel gallons 113 106 Six Months Ended June 30, 2013 2012 (in millions, except for per gallon amounts) Dollars Cost/Gallon Dollars Cost/Gallon Raw or "into-plane" fuel cost $ 704 $ 3.22 $ 688 $ 3.34 (Gains) losses on settled hedges 36 0.16 13 0.07 Consolidated economic fuel expense $ 740 $ 3.38 $ 701 $ 3.41 Mark-to-market fuel hedge adjustment 13 0.06 50 0.24 GAAP fuel expense $ 753 $ 3.44 $ 751 $ 3.65 Fuel gallons 219 206 Breakout of Fuel Expense: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2013 2012 2013 2012 Mainline economic fuel expense $ 327 $ 317 $ 650 $ 611 Regional economic fuel expense 44 46 90 90 Consolidated economic fuel expense $ 371 $ 363 $ 740 $ 701 Mainline Economic Cost per Gallon Reconciliation: Three Months Ended June 30, Six Months Ended June 30, (in millions, except for per-gallon amounts) 2013 2012 2013 2012 Mainline economic fuel expense $ 327 $ 317 $ 650 $ 611 Mainline fuel gallons 100 93 193 180 Mainline economic cost per gallon $ 3.28 $ 3.40 $ 3.37 $ 3.40 Note A: Pursuant to Regulation G, we are providing disclosure of the reconciliation 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 from our cost and unit cost metrics, we believe that we have better visibility into the results of our non-fuel cost-reduction initiatives. 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 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 Taxes and CASM excluding fuel (and other items as specified in our plan documents) are important metrics for the employee incentive plan that covers all 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 compare our airlines 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 certain items, such as fleet transition costs, is important because it provides information on significant items that are not necessarily indicative of future performance. 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. Note B: Air Group has two operating airlines – Alaska Airlines and Horizon Air. Each is a regulated airline with separate management teams primarily in operational roles. To manage the two operating airlines, management views the business in three operating segments. Alaska operates a fleet of passenger jets (Alaska Mainline) and contracts with Horizon, SkyWest Airlines, Inc. (SkyWest), and Peninsula Airways, Inc. (PenAir) for regional capacity under which Alaska receives all passenger revenue from those flights (Alaska Regional). Horizon operates a fleet of turboprop aircraft and sells all of its capacity to Alaska pursuant to a capacity purchase arrangement (Horizon). The Company believes the amounts paid by Alaska to Horizon approximate current market rates received by other regional carriers for similar flying and are available to pay for various Horizon operating expenses such as crew expenses, maintenance, and aircraft ownership costs. All inter-company revenues and expenses between Alaska and Horizon are eliminated in consolidation. Glossary of Terms Mainline – represents flying Boeing 737 jets and all associated revenues and costs Regional – represents capacity purchased by Alaska from Horizon, SkyWest, and PenAir. In this segment, Alaska Regional records actual on-board passenger revenue, less costs such as fuel, distribution costs, and payments made to Horizon, SkyWest and PenAir under the respective capacity purchased arrangement (CPAs). Additionally, Alaska 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 ASMs – available seat miles, or "capacity"; represents total seats available across the fleet multiplied by the number of miles flown Load Factor – RPMs as a percentage of ASMs; represents the number of available seats that were filled with paying passengers Yield – passenger revenue per RPM; represents the average revenue for flying one passenger one mile PRASM – passenger revenue per ASM; commonly called "passenger unit revenue" 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 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 Economic Fuel – best estimate of the cash cost of fuel, net of the impact of our fuel-hedging program Aircraft Utilization – block hours per day; this represents the average number of hours our aircraft are flying Aircraft Stage Length – represents the average miles flown per aircraft departure Diluted Earnings per Share – represents earnings per share 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 Productivity – number of revenue passengers per full-time equivalent employee Debt to Capitalization ratio – represents adjusted debt (long-term debt plus seven times annualized aircraft rent) divided by total equity plus adjusted debt SOURCE Alaska Air Group Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window) Related