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Alaska Air Group reports fourth quarter 2020 and full-year results

SEATTLE, Jan. 26, 2021 /PRNewswire/ --

Financial Results:

  • Reported net loss for the fourth quarter and full year 2020 under Generally Accepted Accounting Principles (GAAP) of $430 million, or $3.47 per diluted share, and $1.3 billion, or $10.59 per diluted share. These results compare to fourth quarter 2019 net income of $181 million, or $1.46 per diluted share, and full year 2019 net income of $769 million, or $6.19 per diluted share.
  • Reported adjusted net loss for the fourth quarter and full year 2020, excluding payroll support program wage offsets, special items, and mark-to-market fuel hedging adjustments, of $316 million, or $2.55 per diluted share, and $1.3 billion, or $10.17 per diluted share. These results compare to fourth quarter 2019 adjusted net income of $181 million, or $1.46 per diluted share, and full year 2019 adjusted net income of $798 million, or $6.42 per diluted share.
  • Reported adjusted net debt of $1.7 billion, flat from December 2019 despite a 59% decline in operating revenues for the year.
  • Reported a debt-to-capitalization ratio, including certain short-term borrowings, of 61%.
  • Held $3.3 billion in unrestricted cash and marketable securities as of Dec. 31, 2020.

Liquidity and Fleet Updates:

  • Accessed approximately $5 billion in new liquidity in 2020, including $1.2 billion raised in the capital markets and approximately $600 million in bank financing.
  • Reached an agreement with the U.S. Treasury in January 2021 to receive an extension of payroll support totaling $533 million, $266 million of which was received on Jan. 15, 2021.
  • Extended the period available to draw funds under the CARES Act loan program from March 26, 2021 to May 28, 2021.
  • Announced plans to expand the mainline fleet and restructure the existing aircraft purchase agreement with Boeing. In total, Air Group will take delivery of 68 737-9 MAX aircraft between 2021 and 2024, inclusive of 32 previous purchase commitments and 13 aircraft to be leased from Air Lease Corporation.
  • Took delivery of Alaska's first 737-9 MAX aircraft on January 24, 2021, which is expected to enter revenue service on March 1, 2021.
  • Permanently removed an additional 20 Airbus A320 aircraft from the fleet in the fourth quarter, resulting in 40 Airbus aircraft removed in 2020. A total of 31 Airbus aircraft remain in the operating fleet as of the end of the year.
  • Held $3.4 billion in cash and marketable securities as of Jan. 22, 2021, and total liquidity of $5.2 billion.

Operational and Guest Safety Updates

  • Announced seven new routes in the fourth quarter, including three "fun and sun" destinations connecting Anchorage to Las Vegas, Denver and San Francisco, and expanded service from Southern California to Austin and New York.
  • Eliminated change fees and extended the flexible travel policy for tickets purchased through March 31, 2021.
  • Implemented Next-Level Care initiative, which includes more than 100 measures designed to create a safe experience for guests and employees. These efforts were highlighted in the Alaska Safety Dance video.
  • Named the safest U.S. airline by AirlineRatings.com in their annual Top 20 Safest Airline report.
  • Launched the West Coast International Alliance with American Airlines on Jan. 1, 2021, which will unlock new benefits for Alaska Mileage Plan members in the spring.
  • Partnered with healthcare providers to offer rapid and standardized COVID-19 testing for those guests traveling to destinations that require a negative result.
  • Received diamond level certification from the Airline Passenger Experience Association for the health and safety standards Alaska and Horizon Air implemented to keep guests safe throughout their journey.
  • Launched pre-clearance program for guests traveling to the Hawaiian Islands from the West Coast with an approved negative COVID-19 test.
  • Announced a partnership with Microsoft to use sustainable aviation fuel to offset the environmental impact of certain business air travel.
  • Announced oneworld benefits for elite Mileage Plan members, providing tier status in the global alliance to Alaska's elite members, as the company works toward joining oneworld on March 31, 2021.

Alaska Air Group Inc. (NYSE: ALK) today reported a fourth quarter 2020 GAAP net loss of $430 million, or $3.47 per diluted share, compared to net income of $181 million, or $1.46 per diluted share in 2019. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported a fourth quarter adjusted net loss of $316 million, or $2.55 per diluted share, compared to adjusted net income of $181 million, or $1.46 per diluted share in the fourth quarter of 2019.

The company reported a full-year 2020 GAAP net loss of $1.3 billion, compared to net income of $769 million in the prior year. 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 $1.3 billion, or $10.17 per diluted share for 2020, compared to adjusted net income of $798 million, or $6.42 per diluted share in 2019.

"We are not out of the woods, but we are seeing signs of brighter days ahead," said Air Group CEO Brad Tilden. "The people of Alaska and Horizon have really shown their grit over the past year, and the rest of the leadership team and I could not be more proud of them. We're positioned to come out of this crisis with our balance sheet unimpaired and our competitive advantages intact, and both of these set us up for a strong future and a long runway for growth."

The following tables reconcile the company's adjusted net income and earnings per diluted share (EPS) during the full year and fourth quarters of 2020 and 2019 to amounts as reported in accordance with GAAP:

Three Months Ended December 31,

2020

2019

(in millions, except per share amounts)

Dollars

Diluted EPS

Dollars

Diluted EPS

Reported GAAP net income (loss) and diluted EPS

$

(430)

$

(3.47)

$

181

$

1.46

Payroll support program wage offset

(22)

(0.18)

—

—

Mark-to-market fuel hedge adjustments

(8)

(0.07)

(5)

(0.04)

Special items - impairment charges and other

255

2.06

—

—

Special items - restructuring charges

(102)

(0.82)

—

—

Special items - merger-related costs

1

0.01

5

0.04

Special items - net non-operating

26

0.21

—

—

Income tax effect on special items and fuel hedge adjustments

(36)

(0.29)

—

—

Non-GAAP adjusted net income (loss) and diluted EPS

$

(316)

$

(2.55)

$

181

$

1.46

 

Twelve Months Ended December 31,

2020

2019

(in millions, except per share amounts)

Dollars

Diluted EPS

Dollars

Diluted EPS

Reported GAAP net income (loss) and diluted EPS

$

(1,307)

$

(10.59)

$

769

$

6.19

Payroll support program wage offset

(782)

(6.33)

—

—

Mark-to-market fuel hedge adjustments

(8)

(0.06)

(6)

(0.05)

Special items - impairment charges and other

605

4.90

—

—

Special items - restructuring charges

220

1.78

—

—

Special items - merger-related costs

6

0.05

44

0.35

Special items - net non-operating

26

0.21

—

—

Income tax effect on special items and fuel hedge adjustments

(16)

(0.13)

(9)

(0.07)

Non-GAAP adjusted net income (loss) and diluted EPS

$

(1,256)

$

(10.17)

$

798

$

6.42

Statistical data, as well as a reconciliation of other 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 fourth quarter and full year results will be streamed online at 8:30 a.m. Pacific time on January 26, 2021. It can be accessed through 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 December 31, 2019, the Company's Quarterly Report on Form 10-Q for the year ended September 30, 2020, as well as in other documents filed by the Company with the SEC after the date thereof. 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, changes in laws and regulations, and risks inherent in the achievement of anticipated synergies and the timing thereof in connection with the acquisition of Virgin America. 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 115 destinations across the United States and North America. The airline provides essential air service for our guests along with moving crucial cargo shipments, while emphasizing Next-Level Care. Alaska is known for low fares, award-winning customer service and sustainability efforts. Guests can earn and redeem miles on flights to more than 800 destinations worldwide with Alaska and its Global Partners. On March 31, 2021, Alaska will officially become a member of the oneworld global alliance. 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 December 31,

Twelve Months Ended December 31,

(in millions, except per share amounts)

2020

2019

Change

2020

2019

Change

Operating Revenues:










Passenger revenue

$

657

$

2,057

(68)

%

$

3,019

$

8,095

(63)

%

Mileage Plan other revenue

108

119

(9)

%

374

465

(20)

%

Cargo and other

43

52

(17)

%

173

221

(22)

%

Total Operating Revenues

808

2,228

(64)

%

3,566

8,781

(59)

%












Operating Expenses:










Wages and benefits

474

638

(26)

%

2,053

2,370

(13)

%

Variable incentive pay

65

38

71

%

130

163

(20)

%

Payroll support program wage offset

(22)

—

NM

(782)

—

NM

Aircraft fuel, including hedging gains and losses

155

470

(67)

%

723

1,878

(62)

%

Aircraft maintenance

77

96

(20)

%

321

437

(27)

%

Aircraft rent

70

84

(17)

%

299

331

(10)

%

Landing fees and other rentals

94

143

(34)

%

417

531

(21)

%

Contracted services

43

75

(43)

%

181

289

(37)

%

Selling expenses

18

77

(77)

%

101

313

(68)

%

Depreciation and amortization

100

106

(6)

%

420

423

(1)

%

Food and beverage service

20

55

(64)

%

90

214

(58)

%

Third-party regional carrier expense

36

41

(12)

%

128

166

(23)

%

Other

97

148

(34)

%

407

559

(27)

%

Special items - impairment charges and other

255

—

NM

605

—

NM

Special items - restructuring charges

(102)

—

NM

220

—

NM

Special items - merger-related costs

1

5

(80)

%

6

44

(86)

%

Total Operating Expenses

1,381

1,976

(30)

%

5,319

7,718

(31)

%

Operating Income (Loss)

(573)

252

NM

(1,753)

1,063

NM

Non-operating Income (Expense):










Interest income

8

11

(27)

%

31

42

(26)

%

Interest expense

(34)

(18)

89

%

(98)

(78)

26

%

Interest capitalized

3

4

(25)

%

11

15

(27)

%

Other - net

1

(6)

NM

17

(26)

NM

Special charges - net non-operating

(26)

—

NM

(26)

—

NM

Total Non-operating Expense

(48)

(9)

NM

(65)

(47)

38

%

Income (Loss) Before Income Tax

(621)

243



(1,818)

1,016


Income tax (benefit) expense

(191)

62



(511)

247


Net Income (Loss)

$

(430)

$

181



$

(1,307)

$

769














Basic Earnings (Loss) Per Share:

$

(3.47)

$

1.47



$

(10.59)

$

6.24


Diluted Earnings (Loss) Per Share:

$

(3.47)

$

1.46



$

(10.59)

$

6.19














Shares Used for Computation:










Basic

124.013

123.129



123.450

123.279


Diluted

124.013

124.245



123.450

124.289














Cash dividend declared per share

$

—

$

0.35



$

0.375

$

1.40


 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)


Alaska Air Group, Inc.






(in millions)

December 31, 2020

December 31, 2019

Cash and marketable securities

$

3,346

$

1,521

Other current assets

660

516

Current assets

4,006

2,037

Property and equipment-net

6,211

6,902

Operating lease asset

1,400

1,711

Goodwill

1,943

1,943

Intangible assets-net

107

122

Other assets

379

278

Total assets

$

14,046

$

12,993




Air traffic liability

1,073

900

Current portion of long-term debt

1,138

235

Current portion of operating lease liabilities

290

269

Other current liabilities

1,770

1,797

Current liabilities

$

4,271

$

3,201

Long-term debt

2,357

1,264

Long-term operating lease liabilities

1,268

1,439

Other liabilities and credits

3,145

2,758

Shareholders' equity

3,005

4,331

Total liabilities and shareholders' equity

$

14,046

$

12,993




Debt-to-capitalization ratio, including operating leases

61%

41%

Number of common shares outstanding

124.218

123.000

SUMMARY CASH FLOW (unaudited)
Alaska Air Group, Inc.

The Company believes that cash burn is an important metric to investors in evaluating the Company's ability to maintain liquidity and manage cash on hand. We define cash burn as all cash flows, excluding the impact of any CARES Act funding or proceeds from new borrowings, one-time vendor advances, plus net activities from marketable securities.

Our daily cash burn for the quarter and year ended December 31, 2020, is reconciled from our statement of cash flows as follows:

(in millions)

Year Ended
December 31,  2020

Nine Months Ended
September 30, 2020(a)

Three Months Ended
December 31, 2020(b)

Net cash provided by (used in) operating activities

$

(234)

$

116

$

(350)

Less: Payroll support program grant

(753)

(753)

—

Adjusted net cash used in operating activities

(987)

(637)

(350)

Net cash provided by (used in) investing activities

(593)

(767)

174

Net cash provided by (used in) financing activities

1,981

2,286

(305)

Adjusted net increase (decrease) in cash, cash
equivalents and restricted cash

401

882

(481)






Adjusted to remove:




Payroll support program note and equity

298

298

—

CARES Act loan program and equity

135

135

—

Net secured debt issuances (payments)(c)

1,711

1,724

(13)

Net credit facility draws (payments)(d)

363

363

—

Net marketable security activity(e) 

(676)

(593)

(83)

Early out and severance payments(f)

(31)

—

(31)

Advance vendor rebate(g)

38

50

(12)

Total adjustments

1,838

1,977

(139)






Adjusted cash burn

$

(1,437)

$

(1,095)

$

(342)

Days in the period

366

274

92

Average daily cash burn

$

(4)

$

(4)

$

(4)

(a)    As reported in Form 10-Q for the third quarter 2020.

(b)    Cash burn for the three months ended December 31, 2020, can be calculated by subtracting cash flows for the nine months ended 
         September 30, 2020, as previously reported in Form 10-Q for the third quarter 2020, from the year-ended December 31, 2020.

(c)     Secured debt issuances are presented net of related issuance costs and collateral-based prepayments.

(d)     Credit facility draws are presented net of collateral-based prepayments.

(e)     Net marketable security activity represents net purchases and sales activity of marketable securities, plus any unrealized gains or losses 
          on outstanding securities.

(f)      In the fourth quarter of 2020, the Company paid severance payments to certain employees through voluntary and involuntary leaves.

(g)     In the third quarter of 2020, the Company received an advance payment of a vendor rebate. This rebate will be recognized into earnings  
          and adjusted into cash burn over the next 12 month period.

 

OPERATING STATISTICS SUMMARY (unaudited)







Alaska Air Group, Inc.























Three Months Ended December 31,

Twelve Months Ended December 31,

2020

2019

Change

2020

2019

Change

Consolidated Operating Statistics:(a)










Revenue passengers (000)

3,916

11,715

(66.6)%

17,927

46,733

(61.6)%

RPMs (000,000) "traffic"

4,366

13,928

(68.7)%

20,493

56,040

(63.4)%

ASMs (000,000) "capacity"

9,631

16,648

(42.1)%

37,114

66,654

(44.3)%

Load factor

45.3%

83.7%

(38.4) pts

55.2%

84.1%

(28.9) pts

Yield

15.06¢

14.77¢

2.0%

14.73¢

14.45¢

1.9%

RASM

8.39¢

13.38¢

(37.3)%

9.61¢

13.17¢

(27.0)%

CASMex(b)

11.35¢

9.01¢

26.0%

12.25¢

8.70¢

40.8%

Economic fuel cost per gallon(b) 

$1.39

$2.21

(37.1)%

$1.58

$2.19

(27.9)%

Fuel gallons (000,000)

117

216

(45.9)%

461

862

(46.5)%

ASM's per gallon

82.3

77.2

6.7%

80.5

77.3

4.1%

Average full-time equivalent employees (FTEs)

16,050

22,506

(28.7)%

17,596

22,126

(20.5)%

Employee productivity (PAX/FTEs/months)

81.3

173.5

(53.1)%

84.9

176.0

(51.8)%

Mainline Operating Statistics:










Revenue passengers (000)

2,545

8,805

(71.1)%

12,280

35,530

(65.4)%

RPMs (000,000) "traffic"

3,622

12,496

(71.0)%

17,438

50,413

(65.4)%

ASMs (000,000) "capacity"

8,047

14,895

(46.0)%

31,387

59,711

(47.4)%

Load factor

45.0%

83.9%

(38.9) pts

55.6%

84.4%

(28.8) pts

Yield

13.54¢

13.69¢

(1.1)%

13.48¢

13.39¢

0.7%

RASM

7.73¢

12.53¢

(38.3)%

9.01¢

12.36¢

(27.1)%

CASMex(b)

10.60¢

8.27¢

28.2%

11.57¢

8.00¢

44.6%

Economic fuel cost per gallon(b)

$1.37

$2.19

(37.4)%

$1.59

$2.17

(26.7)%

Fuel gallons (000,000)

88

182

(51.4)%

358

731

(51.0)%

ASM's per gallon

90.9

81.8

11.1%

87.7

81.7

7.3%

Average number of FTEs

11,665

16,771

(30.4)%

13,214

16,642

(20.6)%

Aircraft utilization

8.3

10.8

(23.1)%

8.3

10.9

(23.9)%

Average aircraft stage length

1,298

1,303

(0.4)%

1,272

1,299

(2.1)%

Operating fleet(d)

197

237

(40) a/c

197

237

(40) a/c

Regional Operating Statistics:(c)










Revenue passengers (000)

1,371

2,910

(52.9)%

5,647

11,203

(49.6)%

RPMs (000,000) "traffic"

744

1,432

(48.0)%

3,055

5,627

(45.7)%

ASMs (000,000) "capacity"

1,584

1,753

(9.6)%

5,727

6,943

(17.5)%

Load factor

47.0%

81.7%

(34.7) pts

53.3%

81.0%

(27.7) pts

Yield

22.47¢

24.22¢

(7.2)%

21.90¢

23.90¢

(8.4)%

Operating Fleet

94

95

(1) a/c

94

95

(1) 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 potential importance of this measure to investors in the accompanying pages.

(c)     Data presented includes information related to flights operated by Horizon and third-party carriers.

(d)     Excludes 40 Airbus aircraft permanently parked during 2020.

 

 

OPERATING SEGMENTS (unaudited)





Alaska Air Group, Inc.



























Three Months Ended December 31, 2020

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating revenues












Passenger revenue

$

490

$

167

$

—

$

—

$

657

$

—

$

657

CPA revenue

—

—

105

(105)

—

—

—

Mileage Plan other revenue

90

18

—

—

108

—

108

Cargo and other

42

—

—

1

43

—

43

Total Operating Revenues

622

185

105

(104)

808

—

808

Operating Expenses












Non-fuel operating expenses

853

266

85

(110)

1,094

132

1,226

Fuel expense

121

42

—

—

163

(8)

155

Total Operating Expenses

974

308

85

(110)

1,257

124

1,381

Total Non-operating Income (Expense)

(18)

—

(6)

2

(22)

(26)

(48)

Income (Loss) Before Income Tax

$

(370)

$

(123)

$

14

$

8

$

(471)

$

(150)

$

(621)















Three Months Ended December 31, 2019

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating revenues












Passenger revenue

$

1,711

$

346

$

—

$

—

$

2,057

$

—

$

2,057

CPA revenues

—

—

110

(110)

—

—

—

Mileage Plan other revenue

107

12

—

—

119

—

119

Cargo and other

49

1

—

2

52

—

52

Total Operating Revenues

1,867

359

110

(108)

2,228

—

2,228

Operating Expenses












Non-fuel operating expenses

1,233

280

99

(111)

1,501

5

1,506

Fuel expense

398

77

—

—

475

(5)

470

Total Operating Expenses

1,631

357

99

(111)

1,976

—

1,976

Total Non-operating Income (Expense)

(4)

—

(6)

1

(9)

—

(9)

Income (Loss) Before Income Tax

$

232

$

2

$

5

$

4

$

243

$

—

$

243

 

OPERATING SEGMENTS (unaudited)





Alaska Air Group, Inc.



























Twelve Months Ended December 31, 2020

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating revenues












Passenger revenue

$

2,350

$

669

$

—

$

—

$

3,019

$

—

$

3,019

CPA revenue

—

—

386

(386)

—

—

—

Mileage Plan other revenue

309

65

—

—

374

—

374

Cargo and other

170

—

—

3

173

—

173

Total Operating Revenues

2,829

734

386

(383)

3,566

—

3,566

Operating Expenses












Non-fuel operating expenses

3,630

993

323

(399)

4,547

49

4,596

Fuel expense

569

162

—

—

731

(8)

723

Total Operating Expenses

4,199

1,155

323

(399)

5,278

41

5,319

Total Non-operating Income (Expense)

(19)

—

(22)

2

(39)

(26)

(65)

Income (Loss) Before Income Tax

$

(1,389)

$

(421)

$

41

$

18

$

(1,751)

$

(67)

$

(1,818)















Twelve Months Ended December 31, 2019

(in millions)

Mainline

Regional

Horizon

Consolidating
& Other(a)

Air Group
Adjusted(b)

Special
Items(c)

Consolidated

Operating revenues












Passenger revenue

$

6,750

$

1,345

$

—

$

—

$

8,095

$

—

$

8,095

CPA revenue

—

—

450

(450)

—

—

—

Mileage Plan other revenue

419

46

—

—

465

—

465

Cargo and other

212

3

1

5

221

—

221

Total Operating Revenues

7,381

1,394

451

(445)

8,781

—

8,781

Operating Expenses












Non-fuel operating expenses

4,778

1,097

385

(464)

5,796

44

5,840

Fuel expense

1,589

295

—

—

1,884

(6)

1,878

Total Operating Expenses

6,367

1,392

385

(464)

7,680

38

7,718

Total Non-operating Income (Expense)

(21)

—

(28)

2

(47)

—

(47)

Income (Loss) Before Income Tax

$

993

$

2

$

38

$

21

$

1,054

$

(38)

$

1,016

(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 (unaudited)









Three Months Ended December 31,

Twelve Months Ended December 31,

(in cents)

2020

2019

2020

2019

Consolidated:






Total operating expenses per ASM (CASM)

14.33

¢

11.86

¢

14.33

¢

11.58

¢

Less the following components:






Payroll support program wage offset

(0.23)

—

(2.11)

—

Aircraft fuel, including hedging gains and losses

1.61

2.82

1.95

2.82

Special items - impairment charges and other

2.65

—

1.63

—

Special items - restructuring charges

(1.06)

—

0.59

—

Special items - merger-related costs

0.01

0.03

0.02

0.06

CASM, excluding fuel and special items

11.35

¢

9.01

¢

12.25

¢

8.70

¢








Mainline:






Total operating expenses per ASM (CASM)

13.84

¢

10.95

¢

13.59

¢

10.73

¢

Less the following components:






Payroll support program wage offset

(0.07)

—

(2.17)

—

Aircraft fuel, including hedging gains and losses

1.40

2.64

1.79

2.65

Special items - impairment charges and other

3.17

—

1.73

—

Special items - restructuring charges

(1.27)

—

0.65

—

Special items - merger-related costs

0.01

0.04

0.02

0.08

CASM, excluding fuel and special items

10.60

¢

8.27

¢

11.57

¢

8.00

¢








 

Fuel Reconciliations (unaudited)















Three Months Ended December 31,

2020

2019

(in millions, except for per gallon amounts)

Dollars

Cost/Gal

Dollars

Cost/Gal

Raw or "into-plane" fuel cost

$

159

$

1.36

$

471

$

2.19

Losses (gains) on settled hedges

4

0.03

4

0.02

Consolidated economic fuel expense

$

163

$

1.39

$

475

$

2.21

Mark-to-market fuel hedge adjustments

(8)

(0.07)

(5)

(0.03)

GAAP fuel expense

$

155

$

1.32

$

470

$

2.18

Fuel gallons

117



216











Twelve Months Ended December 31,

2020

2019