UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994.
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from . . . . . . to . . . . . .
Commission file number 1-8957
ALASKA AIR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1292054
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19300 Pacific Highway South, Seattle, Washington 98188
(Address of principal executive offices)
Registrant's telephone number, including area code: (206)
431-7040
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days. Yes X No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan
confirmed by a court. Yes_ No_
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
The registrant has 13,371,165 common shares, par value
$1.00, outstanding at September 30, 1994.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Attached are the following Alaska Air Group, Inc. (the
Company or Air Group) unaudited financial statements: (i)
consolidated balance sheet as of September 30, 1994 and
December 31, 1993; (ii) consolidated statements of income
for the quarters and nine months ended September 30, 1994
and 1993; (iii) consolidated statement of shareholders'
equity for the nine months ended September 30, 1994; and,
(iv) consolidated statements of cash flows for the quarters
and nine months ended September 30, 1994 and 1993. Also
attached are the accompanying notes to Air Group's
consolidated financial statements that have changed
significantly during the nine months ended September 30,
1994. These statements include all adjustments which are,
in the opinion of management, necessary for a fair statement
of the results for the interim periods. The adjustments
made were of a normal, recurring nature.
Air Group is a holding company incorporated in Delaware in
1985. Its principal subsidiaries are Alaska Airlines, Inc.
(Alaska) and Horizon Air Industries, Inc. (Horizon).
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Third Quarter 1994 Compared with Third Quarter 1993
The consolidated net income for the third quarter of 1994
was $24.3 million, or $1.81 per share (primary) and $1.22
per share (fully diluted). This compares with 1993's third
quarter net income of $8.0 million, or $.60 per share
(primary) and $.47 (fully diluted). The operating profit
for the third quarter of 1994 was $52.3 million, compared to
$20.7 million for the third quarter of 1993.
Operating Revenues
Operating revenues increased 20% from $323.4 million to
$386.8 million. Passenger revenues increased 21% on a 32%
increase in passenger traffic. Traffic gains were due to a
23% increase in system capacity, lower fares that stimulated
traffic throughout most of the system, and improvements in
market share. Load factor increased from 62.8% in 1993 to
67.2% in 1994. Passenger yields decreased 8%, reflecting
fare reductions. Average revenue per passenger mile (yield)
decreased 1.2 cents, from 15.2 cents in the third quarter of
1993 to 14.0 cents in the third quarter of 1994. Currently,
a 1 cent change in yield affects annual revenues by
approximately $80 million.
Freight and mail revenues increased $2.1 million (9%) due to
a military charter contract in the state of Alaska, and
increased freight volumes and rates, offset by lower mail
volumes. The lower mail volumes resulted from Alaska's
decision to not bid on certain U.S. mail contracts and
instead haul higher yielding freight. Other-net revenues
were up $1.1 million (10%) due to increased revenues from
Alaska's frequent flyer program and inflight liquor sales.
Operating Expenses
Operating expenses increased 11% to $334.5 million on a
capacity increase of 23%. Operating expenses per available
seat mile (ASM) declined 10%, from 9.99 cents in the third
quarter of 1993 to 9.00 cents for the current quarter. The
lower unit costs were due to an intensive cost reduction
effort and better utilization of aircraft, facilities,
equipment and people as well as a 2% increase in average
seats per aircraft. Alaska's daily aircraft utilization
increased 21% from 9.1 hours to 11.0 hours. In addition,
lower fuel prices reduced operating expenses by $3.2 million
in the third quarter 1994. The table below shows the major
consolidated operating expenses on a unit cost basis for the
quarters ended September 30, 1994 and 1993. In addition,
total unit costs for Alaska and Horizon are shown for the
same periods.
Operating Expenses Per ASM (In Cents)
%
1994 1993 Change Change
Air Group Consolidated
Wages and benefits 2.94 3.15 (.21) (7)
Aircraft fuel 1.14 1.33 (.19) (14)
Aircraft maintenance .48 .60 (.12) (20)
Aircraft rent 1.14 1.31 (.17) (13)
Commissions .73 .75 (.02) (3)
Depreciation & .39 .48 (.09) (19)
amortization
Other 2.18 2.37 (.19) (8)
Air Group Total 9.00 9.99 (.99) (10)
Alaska Airlines Total 7.92 8.91 (.99) (11)
Horizon Air Total 20.17 21.01 (.84) (4)
Wages and benefits per ASM decreased 7% primarily due to
improved productivity at Alaska. The number of Alaska
employees increased 5% while its capacity increased 23% and
traffic increased 32%. During March 1994, Alaska and the
Association of Flight Attendants concluded a new five-year
contract, which was effective May 1, 1994. With a few
exceptions tailored to Alaska's operations, the contract is
identical to the one used at Southwest Airlines and provides
flight attendants the opportunity to earn increased wages
through increased flying. It also provides a lower starting
rate of pay, more flexible work rules, reduced pension
expenses, and has a duration of five years with a March 14,
1999 expiration date.
Fuel expense per ASM decreased 14% primarily due to a 7%
decrease in the cost of fuel and more fuel-efficient
aircraft. The average cost per gallon was down 4.6 cents
from 65.4 cents in the third quarter of 1993 to 60.8 cents
in the current quarter. Currently, a 1 cent change in fuel
prices affects annual fuel costs by approximately $2.4
million.
Maintenance expense per ASM decreased 20% due to the
replacement of older aircraft with new aircraft during the
past year as well as significant improvements in maintenance
programs, techniques and efficiencies. Aircraft rent per
ASM decreased 13% primarily due to a substantial increase in
Alaska's average fleet utilization, offset by higher rents
for new aircraft acquired during the past year.
Depreciation and amortization expense per ASM decreased 19%
due to the retirement of essentially all of Alaska's Boeing
727-200 aircraft during 1993, and increased utilization of
the remaining fleet. Other expense per ASM decreased 8% due
to lower unit costs for food, advertising and personnel
expenses.
Other Income (Expense)
Nonoperating expense was $9.4 million in the third quarter
of 1994 compared to $6.7 million 1993. The increase was
primarily due to higher interest rates on variable debt and
higher average debt balances.
Nine Months 1994 Compared with Nine Months 1993
The consolidated net income for the nine months ended
September 30, 1994 was $27.6 million, or $2.07 per share
(primary) and $1.57 per share (fully diluted). This
compares with 1993's nine-month net loss of $10.6 million,
or $.98 per share. Operating revenues for the 1994 period
were $997.7 million, 17% higher than the $851.1 million
posted a year ago. A 26% increase in capacity coupled with
a 16% decrease in yields resulted in passenger traffic
climbing 39% for the period. The reasons noted for the
third quarter passenger revenue variation also apply for the
nine-month period.
Operating expenses increased 9% to $923.8 million, compared
to $845.2 million in the first nine months of last year.
Operating expenses per available seat mile (ASM) declined
13%, from 10.95 cents to 9.53 cents. The table below shows
the major consolidated operating expenses on a unit cost
basis for the nine months ended September 30, 1994 and 1993.
In addition, total unit costs for Alaska and Horizon are
shown for the same periods.
Operating Expenses Per ASM (In Cents)
%
1994 1993 Change Change
Air Group Consolidated
Wages and benefits 3.12 3.56 (.44) (12)
Aircraft fuel 1.13 1.38 (.25) (18)
Aircraft maintenance .54 .68 (.14) (21)
Aircraft rent 1.27 1.48 (.21) (14)
Commissions .73 .80 (.07) (09)
Depreciation & .43 .56 (.13) (23)
amortization
Other 2.31 2.49 (.18) (7)
Air Group Total 9.53 10.95 (1.42) (13)
Alaska Airlines Total 8.43 9.80 (1.37) (14)
Horizon Air Total 21.05 21.94 (.89) (4)
The reasons noted for the third quarter expense variations
also apply for the nine-month period.
Liquidity and Capital Resources
The table below shows the major indicators of financial
condition and liquidity at September 30, 1994 and December
31, 1993 and the changes during the nine months ended
September 30, 1994.
September December Change
30, 1994 31, 1993
(In millions, except ratios and per share)
Cash and marketable $152.2 $101.1 $51.1
securities
Working capital (deficit) (52.3) (61.3) 9.0
Total assets 1,282.2 1,135.0 147.2
Long-term debt 587.7 525.4 62.3
Shareholders' equity 195.7 166.8 28.9
Book value per common $14.63 $12.51 $2.12
share
Debt/equity ratio 75%:25% 76%:24% N/A
The Company's cash and marketable securities portfolio
increased by $51.1 million during the first nine months of
1994. Operating activities provided $146 million of cash in
the first nine months of 1994. Additional cash was provided
by $104 million in new long-term debt. Cash was used for
the purchase of four new MD-83 aircraft, one used B737-200C
aircraft, and other capital expenditures ($143 million),
debt payments ($42 million), and repayment of short-term
borrowings ($20 million).
Financing Arrangements
In the first nine months of 1994, four MD-83 aircraft were
financed with $104 million in ten-year loans at variable
interest rates based on LIBOR.
At September 30, 1994, Alaska had $70 million in lines of
credit, none of which were being used.
Commitments
During the first nine months of 1994, Alaska took delivery
of four new B737-400 aircraft under eight-year operating
leases. In April 1994, Alaska further restructured its
aircraft orders with McDonnell Douglas and replaced an order
for ten MD-90s plus options with an order for four MD-83s.
Two MD-83s will be delivered in 1996 and two in 1997. The
net effect will reduce future capital commitments by
approximately $360 million.
During November 1994, Alaska announced a restructuring of its
aircraft leases. Effective May 1, 1995, the agreement provides
for reduced lease rates coupled with extensions of lease terms
on twenty Boeing 737-400 aircraft. As part of the agreement,
Alaska will purchase three of the twenty aircraft over the next
three years and received options to purchase up to four more of
the twenty between 1997 and 1999. As a result of the extended
lease commitments, Alaska expects to save $6-7 million annually
over the ten-year term of the leases.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
In December 1992, the U.S. Department of Justice filed suit
against most major domestic airlines, including the Company,
alleging that they violated the antitrust laws by conspiring
to fix prices for domestic airline tickets in violation of
Section 1 of the Sherman Act. During March 1994, six of the
airlines, including the Company, entered into consent
decrees with the U.S. Department of Justice. The agreement
requires no refunds or monetary cost to the Company and was
approved by the court in the third quarter of 1994.
ITEM 6. Exhibits and Reports on Form 8-K
(a)Exhibit 11 - Statement regarding computation of per-share
earnings.
Exhibit 27 - Financial data schedule.
(b)No reports on Form 8-K were filed during the third
quarter 1994.
Signatures
Pursuant to the requirements of the Securities Act of 1934,
the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ALASKA AIR GROUP, INC.
Registrant
Date: November 9, 1994
/s/ Raymond J. Vecci
Raymond J. Vecci
Chairman, President and Chief Executive Officer
/s/ Kathleen H. Iskra
Kathleen H. Iskra
Controller (Principal Accounting Officer)
CONSOLIDATED BALANCE SHEET
Alaska Air Group, Inc.
ASSETS
September 30, December 31,
(In Thousands) 1994 1993
Current Assets
Cash and cash equivalents $30,811 $27,179
Marketable securities 121,402 73,970
Receivables - net 79,881 75,274
Inventories and supplies 41,928 41,269
Prepaid expenses and other assets 53,053 56,498
Total Current Assets 327,075 274,190
Property and Equipment
Flight equipment 743,568 614,717
Other property and equipment 207,631 217,967
Deposits for future flight equipment 54,643 79,765
1,005,842 912,449
Less accum. depreciation and amort. 256,506 247,145
749,336 665,304
Capital leases
Flight and other equipment 44,381 44,381
Less accumulated amortization 20,660 19,079
23,721 25,302
Total Property and Equipment - Net 773,057 690,606
Intangible Assets - Subsidiaries 66,181 67,711
Other Assets 115,864 102,447
Total Assets $1,282,177 $1,134,954
See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEET
Alaska Air Group, Inc.
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, December 31,
(In Thousands) 1994 1993
Current Liabilities
Accounts payable $52,991 $45,582
Accrued aircraft rent 36,602 39,119
Other accrued liabilities 77,110 46,679
Accrued wages and related 44,691 40,192
Short-term borrowings - 20,000
Air traffic liability 125,579 108,360
Current portion of long-term debt and
capital lease obligations 42,437 35,575
Total Current Liabilities 379,410 335,507
Long-Term Debt and Capital Lease
Obligations 587,706 525,418
Other Liabilities and Credits
Deferred income taxes 35,926 20,998
Deferred income 23,715 25,827
Other liabilities 59,758 60,371
119,399 107,196
Shareholders' Equity
Common stock, $1 par value
Authorized: 30,000,000 shares
Issued: 1994 - 16,524,754 shares
1993 - 16,495,210 shares 16,525 16,495
Capital in excess of par value 152,306 152,017
Treasury stock, at cost:
1994-3,153,589 sh; 1993-3,153,589 sh (71,807) (71,807)
Deferred compensation (4,934) (5,813)
Retained earnings 103,572 75,941
195,662 166,833
Total Liabilities and Shareholders' Equity $1,282,177 $1,134,954
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF INCOME
Alaska Air Group, Inc.
Quarter Ended September 30 (In Thousands) 1994 1993
Operating Revenues
Passenger $349,707 $289,468
Freight and mail 24,833 22,773
Other - net 12,261 11,145
Total Operating Revenues 386,801 323,386
Operating Expenses
Wages and benefits 109,397 95,583
Aircraft fuel 42,598 40,189
Aircraft maintenance 17,727 18,154
Aircraft rent 42,623 39,837
Commissions 27,148 22,844
Depreciation and amortization 14,475 14,522
Other 80,552 71,570
Total Operating Expenses 334,520 302,699
Operating Income 52,281 20,687
Other Income (Expense)
Interest income 2,426 1,731
Interest expense (11,985) (9,280)
Interest capitalized 83 112
Gain (loss) on sale of assets (320) 98
Other - net 427 656
(9,369) (6,683)
Income before income tax 42,912 14,004
Income tax expense 18,649 5,976
Net Income $24,263 $8,028
Earnings Per Common Share:
Primary -
Net income $24,263 $8,028
Average shares outstanding (000) 13,386 13,348
Earnings per common share $1.81 $0.60
Fully Diluted -
Net income $26,581 $10,558
Average shares outstanding (000) 21,801 22,254
Earnings per common share $1.22 $0.47
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF INCOME
Alaska Air Group, Inc.
Nine Months Ended September 30 (In Thousands) 1994 1993
Operating Revenues
Passenger $892,173 $760,526
Freight and mail 67,428 59,456
Other - net 38,057 31,129
Total Operating Revenues 997,658 851,111
Operating Expenses
Wages and benefits 302,526 275,581
Aircraft fuel 109,940 106,230
Aircraft maintenance 52,397 52,530
Aircraft rent 123,135 114,525
Commissions 70,799 61,736
Depreciation and amortization 41,678 43,379
Other 223,339 191,207
Total Operating Expenses 923,814 845,188
Operating Income 73,844 5,923
Other Income (Expense)
Interest income 5,561 5,470
Interest expense (33,672) (28,396)
Interest capitalized 281 333
Gain (loss) on sale of assets (822) 97
Other - net 4,310 1,929
(24,342) (20,567)
Income (loss) before income tax 49,502 (14,644)
Income tax expense (credit) 21,871 (4,050)
Net Income (Loss) $27,631 $(10,594)
Earnings (Loss) Per Common Share:
Primary -
Net income (loss) $27,631 $(10,594)
Preferred stock dividends - (2,525)
Income (loss) applicable to common shares $27,631 $(13,119)
Average shares outstanding (000) 13,371 13,339
Earnings (loss) per common share $2.07 $(0.98)
Fully Diluted -
Net income $34,668
Average shares outstanding (000) 22,040 Anti-
Earnings per common share $1.57 Dilutive
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Alaska Air Group, Inc.
Common Stock
Capital in Treasury Deferred
$1 Par Excess of Stock Compen- Retained
(In Thousands) Value Par Value at Cost sation Earnings
Balances at December 31, 1993 $16,495 $152,017 ($71,807) ($5,813) $75,941
Net income for the nine months
ended September 30, 1994 27,631
Stock issued under stock plans 30 289
Employee Stock Ownership Plans
shares allocated 879
Balances at September 30, 1994 $16,525 $152,306 ($71,807) ($4,934) $103,572
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Alaska Air Group, Inc.
Quarter Ended September 30 (In Thousands) 1994 1993
Cash and cash equivalents at beginning of quarter $48,718 $14,416
Cash flows from operating activities:
Net income 24,263 8,028
Adjustments to reconcile net income to cash:
Depreciation and amortization 14,475 14,522
Amortization of airframe and engine overhauls 5,089 8,301
Loss (gain) on disposal of assets and debt retirement 320 (476)
Deferred income taxes
Decrease (increase) in accounts receivable 3,395 (1,005)
Decrease (increase) in other current assets (1,901) 1,312
Decrease in air traffic liability (27,666) (19,500)
Increase in other current liabilities 16,625 1,625
Interest on zero coupon notes 2,521 2,522
Leased aircraft return payments and other-net (3,270) (6,143)
Net cash provided by operating activities 46,030 15,167
Cash flows from investing activities:
Proceeds from disposition of assets 1,190 2,706
Purchases of marketable securities (127,600) (141,750)
Sales and maturities of marketable securities 84,248 136,914
Restricted deposits (255) (1,386)
Flight equipment deposits returned
Additions to flight equipment deposits (135) (192)
Additions to property and equipment
Payments received on loans to ESOPs 1,313 1,527
Net cash used in investing activities
Cash flows from financing activities:
Long-term debt and capital lease payments (10,477) (10,567)
Proceeds from issuance of common stock 45 -
Gain on debt retirement - 378
Net cash used in financing activities (10,432) (10,189)
Net decrease in cash and cash equivalents (17,907) (2,696)
Cash and cash equivalents at end of quarter $30,811 $11,720
Supplemental disclosure of cash paid during the quarter for:
Interest (net of amount capitalized) $7,917 $7,359
Income taxes 1,300 -
Noncash investing and financing activities None None
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Alaska Air Group, Inc.
Nine Months Ended September 30 (In Thousands) 1994 1993
Cash and cash equivalents at beginning of period $27,179 $6,880
Cash flows from operating activities:
Net income (loss) 27,631 (10,594)
Adjustments to reconcile net income (loss) to cash:
Depreciation and amortization 41,678 43,379
Amortization of airframe and engine overhauls 15,357 23,026
Gain on disposition of assets and debt retirement (723) (1,061)
Deferred income taxes
Decrease (increase) in accounts receivable (4,607) 6,160
Decrease in other current assets 2,786 1,239
Increase in air traffic liability 17,219 21,812
Increase in other current liabilities 39,822 3,780
Interest on zero coupon notes 7,610 7,359
Leased aircraft return payments and other-net (15,589) (10,117)
Net cash provided by operating activities 146,112 78,522
Cash flows from investing activities:
Proceeds from disposition of assets 4,691 3,468
Purchases of marketable securities (399,100) (400,475)
Sales and maturities of marketable securities 351,668 389,729
Restricted deposits (5,509) (3,681)
Flight equipment deposits returned
Additions to flight equipment deposits (961) (571)
Additions to property and equipment (141,566) (25,421)
Payments received on loans to ESOPs 1,313 1,527
Net cash used in investing activities (185,886) (33,833)
Cash flows from financing activities:
Repayment of short-term borrowings (20,000) -
Proceeds from sale and leaseback transactions - 17,500
Proceeds from issuance of long-term debt 104,000 -
Long-term debt and capital lease payments (42,458) (22,693)
Proceeds from issuance of common stock 319 184
Repurchase of preferred stock - (33,375)
Cash dividends - (2,429)
Gain on debt retirement 1,545 964
Net cash provided by (used in) financing activities 43,406 (39,849)
Net increase in cash and cash equivalents 3,632 4,840
Cash and cash equivalents at end of period $30,811 $11,720
Supplemental disclosure of cash paid during the period for:
Interest (net of amount capitalized) $28,813 $21,218
Income taxes (refunds) (5,415) (18,554)
Noncash investing and financing activities:
1994 - None
1993 - The preferred stock was repurchased in exchange for a $27 million
note payable and a $33.4 million cash payment.
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THAT HAVE CHANGED
SIGNIFICANTLY DURING THE NINE MONTHS ENDED SEPTEMBER 30, 1994
Alaska Air Group, Inc.
Note 1. Long-Term Debt (See Note 3 to Consolidated Financial
Statements at December 31, 1993)
In the first nine months of 1994, four MD-83 aircraft were
financed with $104 million in ten-year loans at variable interest
rates based on LIBOR.
At September 30, 1994, Alaska had $70 million in lines of credit,
none of which were being used.
At September 30, 1994, under the most restrictive loan
provisions, Alaska had $32.3 million of net worth in excess of
the minimum.
Note 2. Commitments (See Note 5 to Consolidated Financial
Statements at December 31, 1993)
During the first nine months of 1994, Alaska took delivery of
four new B737-400 aircraft under eight-year operating leases. In
April 1994, Alaska further restructured its aircraft orders with
McDonnell Douglas and replaced an order for ten MD-90s plus
options with an order for four MD-83s. Two MD-83s will be
delivered in 1996 and two in 1997. The net effect will reduce
future capital commitments by approximately $360 million.
During November 1994, Alaska restructured its twenty Boeing 737-400
aircraft leases. Alaska will purchase three of the twenty aircraft
during the next three years. This will increase the present value
of capital lease payments by approximately $55 million at December
31, 1994. Lease rates will be reduced and leases extended. Based
on this restructuring and the effect of other aircraft leased during
1994, future minimum payments under aircraft operating leases as of
September 30, 1994 are as follows: 1995 - $167 million, 1996 - $151
million, 1997 - $134 million, 1998 - $126 million, thereafter -
$749 million.
Note 3. Fuel Hedge Agreement (See Note 11 to Consolidated
Financial Statements at December 31, 1993)
The Company enters into hedge agreements to reduce its exposure
to fluctuations in the price of jet fuel. The agreements
establish a ceiling and floor fuel price. The Company records
income or loss if the average cost of fuel, as determined by an
index, exceeds the ceiling fuel price or falls below the floor
price, respectively.
The fuel hedges had no material effect on the first nine months
of 1994 operating results. At September 30, 1994, the Company
had fuel hedge agreements in place with a ceiling price of 65
cents covering approximately 50% of the expected fuel usage
through July 1995, and a floor price of 44 cents covering
approximately 57% of the expected fuel usage through July 1995.
Alaska Air Group, Inc. EXHIBIT 11
Computation of Earnings Per Common Share
(In thousands, except per share)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
1994 1993 1994 1993
------ ------ ------ ------
Primary -
Net income $24,263 $8,028 $27,631 ($10,594)
Deduct dividends on preferred shares - - - (2,453)
Deduct preferred stock accretion - - - (72)
------ ------ ------ ------
Income applicable to common shares $24,263 $8,028 $27,631 ($13,119)
====== ====== ====== ======
Average number of shares outstanding 13,370 13,342 13,359 13,339
Assumed exercise of stock options 16 6 12 -
------ ------ ------ ------
Average shares as adjusted 13,386 13,348 13,371 13,339
====== ====== ====== ======
Earnings per common share $1.81 $0.60 $2.07 ($0.98)
====== ====== ====== ======
Fully Diluted -
Net income $24,263 $8,028 $27,631 ($10,594)
After tax interest on convertible securities 2,318 2,530 7,037 7,514
------ ------ ------ ------
Income applicable to common shares $26,581 $10,558 $34,668 ($3,080)
====== ====== ====== ======
Average number of shares outstanding 13,370 13,342 13,359 13,339
Common stock equivalents 19 5 15 12
Common stock reserved for conversion 8,412 8,907 8,666 9,001
------ ------ ------ ------
Average shares as adjusted 21,801 22,254 22,040 22,352
====== ====== ====== ======
Earnings per Common Share $1.22 $0.47 $1.57 ($0.14)
====== ====== ====== ======
*
* Anti-dilutive
5
1000
9-MOS
DEC-31-1994
SEP-30-1994
30,811
121,402
79,881
0
41,928
327,075
1,005,842
256,506
1,282,177
379,410
587,706
16,525
0
0
179,137
1,282,177
997,658
997,658
923,814
923,814
0
0
33,672
49,502
21,871
27,631
0
0
0
27,631
2.07
1.57
