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Alaska Air Group flying high, paid a dividend

Staff writer |
Alaska Air Group reported third quarter 2013 GAAP net income of $289 million, or $4.08 per diluted share, compared to $163 million, or $2.27 per diluted share in the third quarter of 2012.

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Excluding the impact of mark-to-market fuel hedge adjustments of $20 million ($12 million after tax, or $0.17 per diluted share), and a one-time special revenue item of $192 million ($120 million after tax, or $1.70 per diluted share) that primarily resulted from the application of new accounting rules associated with the modified affinity card agreement, the company reported record adjusted net income of $157 million, or $2.21 per diluted share, compared to adjusted net income of $150 million, or $2.09 per diluted share, in 2012.

Alaska Air Group achieved trailing 12-month return on invested capital of 13 percent compared to 12.7 percent in the 12 months ended September 30, 2012.

The company lowered adjusted debt-to-total-capitalization ratio by 7 percentage points, to 47 percent, from December 31, 2012., paid a $0.20 per-share quarterly cash dividend on August 22 totaling $14 million and this is the first time since 1992 that Alaska Air Group has paid a dividend, and repurchased 537,008 shares of common stock for $32 million in the third quarter. For the year, the company has repurchased 1,454,790 shares for $83 million.

The company modified the affinity card agreement with Bank of America and extended it through 2017, estimated to generate $55 million in additional cash flows on an annual basis, and held $1.4 billion in unrestricted cash and marketable securities as of September 30, 2013.


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