Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
January 30, 2003
(Date of Report)
ALASKA AIR GROUP, INC.
(Exact name of registrant as specified in its charter)
Commission file number 1-8957
| Delaware (State or other jurisdiction of incorporation or organization) |
91-1292054 (I.R.S. Employer Identification No.) |
19300 Pacific Highway South, Seattle, Washington 98188
(Address of principal executive offices)
(206) 431-7040
(Registrant’s telephone number)
1
| ITEM 5. Other Events and Regulation FD Disclosure | ||||||||
| ITEM 7. Financial Statements and Exhibits. | ||||||||
| Signature | ||||||||
| EXHIBIT 99.1 | ||||||||
| EXHIBIT 99.2 | ||||||||
Table of Contents
ITEM 5.
Other Events and Regulation FD Disclosure
Alaska Air Group, Inc. (the Company) today issued a press release reporting
financial results for the quarter and calendar year ended December 31, 2002.
The press release is attached as Exhibit 99.1.
The Company also will be providing supplemental data in connection with the restated 2002 and 2001 quarterly information. On January 10, 2003, the Company filed a Form 10-K/A with the SEC restating each of the three years ended December 31, 2001. The attached schedules provide the restated financial results by quarter for 2001, and the first three quarters of 2002. The Company will amend its previously filed Form 10-Q’s restating the first three quarters of 2002 in the next several weeks. The supplemental data is attached as Exhibit 99.2.
FORWARD-LOOKING INFORMATION
This report may contain forward-looking statements that are based on the best
information currently available to management. These forward-looking
statements are intended to be subject to the safe harbor protection provided by
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are indicated by phrases such
as “will,” “should,” “the Company believes,” “we expect” or any other language
indicating a prediction of future events. There can be no assurance that
actual developments will be those anticipated by the Company. Actual results
could differ materially from those projected as a result of a number of
factors, some of which the Company cannot predict or control. For a discussion
of these factors, please see Item 1 of the Company’s Annual Report on Form 10-K
for the year ended December 31, 2001. The Company expressly disclaims any duty
to update these projections, and makes no representation as to their continued
accuracy in the event it does not provide such updates.
ITEM 7.
Financial Statements and Exhibits.
(c) Exhibits
| Exhibit 99.1 | Press Release dated January 30, 2003 titled “Alaska Air Group Reports Fourth Quarter Results” | |
| Exhibit 99.2 | Supplemental Unaudited Quarterly Financial Results for each of the quarters in the years ended December 31, 2001 and 2002 |
2
Table of Contents
Signature
Pursuant to the requirements of the Securities Exchange 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: January 30, 2003
/s/ Terri K. Maupin
Terri K. Maupin
Staff Vice President/Finance and Controller
/s/ Bradley D. Tilden
Bradley D. Tilden
Executive Vice President/Finance and Chief Financial Officer
3
EXHIBIT 99.1 Contact: Brad Tilden -or- Lou Cancelmi 206/433-3362 206/433-3170 FOR IMMEDIATE RELEASE January 30, 2003 ALASKA AIR GROUP REPORTS FOURTH QUARTER RESULTS SEATTLE -- Alaska Air Group, Inc. (NYSE:ALK) today reported a fourth quarter net loss of $43.1 million, or $1.62 per share, compared with a net loss of $37.4 million, or $1.41 per share, during the corresponding quarter in 2001. The company's fourth quarter results for 2001 include pre-tax compensation of $52.3 million that was received pursuant to the Air Transportation Safety and System Stabilization Act and a $10.2 million special charge related to the retirement of Horizon's F-28 fleet. Excluding these items, the company lost $63.9 million or $2.41 per share in the fourth quarter of 2001. For the full year, Alaska Air Group lost $118.6 million or $4.47 per share in 2002. Included in the company's 2002 full year results is a $51.4 million charge related to the write off of goodwill in connection with the adoption of Statement of Financial Accounting Standards No. 142. Excluding this charge, the company lost $67.2 million or $2.53 per share versus a loss of $43.4 million or $1.64 per share in 2001. Due to the September 11 terrorist acts, year over year comparisons of both financial and operational information are significantly impacted. "As expected, it was a difficult quarter, ending yet another difficult year for both the industry and Alaska Air Group," said John F. Kelly, chairman and chief executive officer. "And yet as difficult as it was, we continued to outperform most of the industry by maintaining our focus on delivering an award-winning product, by implementing further cost management initiatives, and by strengthening our network through the re-deployment of a portion of our fleet to strategic new markets. We expect that further changes in our industry will occur, but feel that we're well positioned to deal with the challenges and opportunities that lie ahead." Operationally, Alaska Airlines' passenger traffic in the fourth quarter increased 15.6 percent on a capacity increase of 15.5 percent. Load factor increased 0.1 points to 66.5 percent. The airline's operating revenue per available seat mile (ASM) decreased 3.4 percent, while its operating cost per ASM excluding fuel decreased 8.9 percent. Alaska's pretax loss was $58.6 million compared to a pretax loss of $18.8 million a year earlier. Alaska's 2001 pretax income includes $52.9 million of U.S. government compensation. Horizon Air's passenger traffic in the fourth quarter increased 28.7 percent on a 33.3 percent capacity increase. Load factor decreased by 2.2 points to 61.1 percent. The airline's operating revenue per ASM decreased 8.8 percent, while its operating cost per ASM excluding special charge decreased 24.6 percent. Excluding fuel and special charge, cost per ASM decreased 26.8 percent. Horizon's pretax loss was $5.8 million, compared to a pretax loss of $35.0 million a year earlier. Horizon's 2001 pretax income includes $0.6 million of U.S. government compensation. Alaska Air Group continues to have a strong cash position at December 31, 2002 with approximately $636 million in cash and marketable securities. The company's debt-to-capital ratio, assuming aircraft operating leases are capitalized at seven times annualized rent, was 77 percent. During the quarter, the company also recorded a non-cash charge to equity of $87.2 million (net of income taxes of $52.5 million) relating to the defined benefit pension plans that the company sponsors for eligible employees. This change is the result of an unfunded accrued benefit obligation resulting from lower than expected return on plan assets. A conference call regarding year-end and fourth quarter results will be simulcast via the Internet at 9:00 a.m. Pacific Standard Time. It may be accessed through the company's website at www.alaskaair.com. This report may contain forward-looking statements that are based on the best information currently available to management. These forward-looking statements are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are indicated by phrases such as "will," "should," "the company believes," "we expect" or any other language indicating a prediction of future events. There can be no assurance that actual developments will be those anticipated by the company. Actual results could differ materially from those projected as a result of a number of factors, some of which the company cannot predict or control. For a discussion of these factors, please see Item 1 of the company's Annual Report on Form 10-K/A for the year ended December 31, 2001. Alaska Air Group is the parent company of Alaska Airlines, Inc. and Horizon Air Industries, Inc. # # # ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In Millions Except Per Share Amounts)
QUARTER ENDED YEAR ENDED December 31 December 31 ----------------------- --------------------- Restated Restated 2001 2002 2001 2002 -------- ------ -------- --------- OPERATING REVENUES: Passenger $ 425.0 $485.7 $1,972.4 $2,037.7 Freight and mail 19.0 17.7 86.3 77.1 Other - net 22.1 24.3 94.1 109.3 -------- ------ -------- -------- TOTAL OPERATING REVENUES 466.1 527.7 2,152.8 2,224.1 -------- ------ -------- -------- OPERATING EXPENSES: Wages and benefits 207.3 219.3 795.5 858.1 Contracted services 21.7 23.7 86.7 93.0 Aircraft fuel 59.3 79.4 324.3 302.0 Aircraft maintenance 37.7 48.9 181.3 170.2 Aircraft rent 47.4 48.8 186.0 190.4 Food and beverage service 13.7 16.3 58.3 66.2 Commissions 12.3 3.9 60.2 35.0 Other selling expenses 28.5 28.7 124.9 124.9 Depreciation and amortization 37.2 31.8 134.1 132.5 Loss (gain) on sale of assets 3.1 0.9 4.7 0.1 Landing fees and other rentals 36.6 36.4 128.2 140.3 Other 46.1 49.4 184.7 200.3 Special charges 10.2 - 10.2 - -------- ------ -------- -------- TOTAL OPERATING EXPENSES 561.1 587.5 2,279.1 2,313.0 -------- ------ -------- -------- OPERATING LOSS (95.0) (59.8) (126.3) (88.9) -------- ------ -------- -------- NONOPERATING INCOME (EXPENSES): Interest income 4.0 5.1 22.2 21.2 Interest expense (12.9) (11.5) (47.4) (46.3) Interest capitalized 1.3 1.2 10.6 2.7 U.S. government compensation 52.3 - 81.4 0.5 Other - net (4.0) 0.1 (4.0) 9.0 -------- ------ -------- -------- 40.7 (5.1) 62.8 12.9 -------- ------ -------- -------- Loss before income tax and accounting change (54.3) (64.9) (63.5) (101.8) Income tax benefit (16.9) (21.8) (20.1) (34.6) -------- ------ -------- -------- Loss before accounting change (37.4) (43.1) (43.4) (67.2) Cumulative effect of accounting change net of income tax - - - (51.4) -------- ------ -------- -------- NET LOSS $ (37.4) $(43.1) $(43.4) $ (118.6) ======== ====== ======== ======== BASIC AND DILUTED LOSS PER SHARE $ (1.41) $(1.62) $(1.64) $ (4.47) ======== ====== ======== ======== Shares used for computation: Basic and Diluted 26.528 26.556 26.499 26.546 ALASKA AIR GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED) (In Millions) SUPPLEMENTAL TABLE - ------------ ----- During 2002 and 2001, the Company's diluted loss per share (EPS) and net loss were impacted by the following (dollars in millions):
RESTATED DECEMBER 31 DECEMBER 31 2001 2002 ----------- ----------- Cash and marketable securities $661 $636 ====== ====== Total current assets 919 967 Property and equipment-net 1,822 1,779 Other assets 210 125 ------ ------ Total assets $2,951 $2,871 ====== ====== Current liabilities $752 $775 Long-term debt and capital lease obligations 852 857 Other liabilities and credits 496 583 Shareholders' equity 851 656 ------ ------ Total liabilities and equity $2,951 $2,871 ====== ======
THREE MONTHS ENDED DECEMBER 31 2001 (RESTATED) 2002 --------------------- ---------------- DOLLARS EPS DOLLARS EPS ------- ------ ------- ------ Net loss and diluted EPS excluding non-recurring items $(63.9) $(2.41) $(43.1) $(1.62) U.S. government compensation 32.9 1.24 - - Special charge - impairment of Horizon F-28 fleet (6.4) (0.24) - - ------- ------ ------- ------ Reported amounts $(37.4) $(1.41) $(43.1) $(1.62) ======= ====== ====== ======
YEAR ENDED DECEMBER 31 2001 (RESTATED) 2002 -------------------- ------------------ DOLLARS EPS DOLLARS EPS ------- ------- ------- ------- Net loss and diluted EPS excluding non-recurring items $(88.3) $(3.34) $ (67.7) $(2.55) U.S. government compensation 51.3 1.94 0.5 0.02 Special charge - impairment of Horizon F-38 fleet (6.4) (0.24) - - Change in accounting principle related to goodwill - $ - (51.4) (1.94) ------ ------ -------- ------ Reported amounts $(43.4) $(1.64) $(118.6) $(4.47) ======= ======= ======== ======= ALASKA AIRLINES FINANCIAL AND STATISTICAL DATA
QUARTER ENDED DECEMBER 31 YEAR ENDED DECEMBER 31 --------------------------------------- --------------------------------------- Restated % Restated % FINANCIAL DATA (IN MILLIONS): 2001 2002 Change 2001 2002 Change -------- ------ ------ -------- -------- ------- Operating Revenues: Passenger $349.6 $392.2 12.2% $1,607.6 $1,667.8 3.7% Freight and mail 17.7 16.6 -6.2% 78.2 72.1 -7.8% Other - net 18.2 21.0 15.4% 77.2 93.2 20.7% ---- ------ ---- ---- TOTAL OPERATING REVENUES 385.5 429.8 11.5% 1,763.0 1,833.1 4.0% ----- ------ ------- ------- OPERATING EXPENSES: Wages and benefits 166.4 179.9 8.1% 642.9 705.5 9.7% Contracted services 19.0 20.4 7.4% 76.0 80.7 6.2% Aircraft fuel 49.9 67.2 34.7% 269.8 257.3 -4.6% Aircraft maintenance 29.7 41.9 41.1% 129.7 145.2 12.0% Aircraft rent 33.6 32.4 -3.6% 137.6 128.2 -6.8% Food and beverage service 13.2 15.6 18.2% 55.5 63.5 14.4% Commissions 13.6 7.6 -44.1% 64.1 48.2 -24.8% Other selling expenses 23.8 23.1 -2.9% 102.7 101.9 -0.8% Depreciation and amortization 30.0 28.4 -5.3% 106.1 114.2 7.6% Loss on sale of assets 3.2 1.0 -68.8% 5.0 1.7 -66.0% Landing fees and other rentals 28.7 28.3 -1.4% 99.5 110.5 11.1% Other 35.4 38.0 7.3% 145.7 150.7 3.4% ----- ------ ----- ----- TOTAL OPERATING EXPENSES 446.5 483.8 8.4% 1,834.6 1,907.6 4.0% ----- ------ ------- ------- OPERATING LOSS (61.0) (54.0) -11.5% (71.6) (74.5) 4.1% ------ ------ ------ ------ Interest income 4.4 5.7 26.0 23.2 Interest expense (12.9) (11.5) (47.4) (46.3) Interest capitalized 0.9 1.0 7.5 2.1 U.S. government compensation 52.9 - 71.6 0.3 Other - net (3.1) 0.2 (2.5) 7.9 ----- ------ ----- --- 42.2 (4.6) 55.2 (12.8) ---- ------ ---- ------ LOSS BEFORE INCOME TAX $(18.8) $(58.6) NM $(16.4) $(87.3) NM ======= ====== ======= ======= OPERATING STATISTICS: Revenue passengers (000) 3,025 3,367 11.3% 13,668 14,154 3.6% RPMs (000,000) 2,736 3,164 15.6% 12,249 13,186 7.6% ASMs (000,000) 4,121 4,758 15.5% 17,919 19,360 3.0% Passenger load factor 66.4% 66.5% 0.1 pts 68.4% 68.1% (0.3)pts Breakeven load factor 82.2% 78.4% (3.7)pts 73.5% 73.1% (0.4)pts Yield per passenger mile 12.78(cents) 12.40(cents) -3.0% 13.12(cents) 12.65(cents) -3.6% Operating revenue per ASM 9.35(cents) 9.03(cents) -3.4% 9.84(cents) 9.47(cents) -3.8% Operating expenses per ASM 10.84(cents) 10.17(cents) -6.2% 10.24(cents) 9.85(cents) -3.8% Expense per ASM excluding fuel 9.62(cents) 8.76(cents) -8.9% 8.73(cents) 8.52(cents) -2.4% Fuel cost per gallon 71.9(cents) 84.7(cents) 17.8% 88.3(cents) 79.6(cents) -9.9% Fuel gallons (000,000) 69.6 79.3 13.9% 305.7 323.3 5.8% Average number of employees 9,834 10,065 2.3% 10,115 10,142 0.3% Aircraft utilization (blk hrs/day) 9.2 10.3 12.0% 10.4 10.6 1.9% Operating fleet at period-end 101 102 1.0% 101 102 1.0% NM - Not Meaningful HORIZON AIR FINANCIAL AND STATISTICAL DATA *2001 amounts exclude the impact of a special charge in December 2001. NM=Not Meaningful
QUARTER ENDED DECEMBER 31 YEAR ENDED DECEMBER 31 -------------------------------------- ------------------------------------- Restated % Restated % 2001 2002 Change 2001 2002 Change -------- ------ ------- --------- ----- ------ FINANCIAL DATA (IN MILLIONS): Operating Revenues: Passenger $ 79.0 $ 97.9 23.9% $ 380.0 $389.5 2.5% Freight and mail 1.3 1.1 -15.4% 8.1 5.0 -38.3% Other - net 4.7 4.4 -6.4% 20.3 20.7 2.0% ---- ---- ------ ------ ----- TOTAL OPERATING REVENUES 85.0 103.4 21.6% 408.4 415.2 1.7% ---- ---- ------ ------ ----- Operating Expenses: Wages and benefits 40.9 39.4 -3.7% 152.6 152.6 0.0% Contracted services 3.5 4.3 22.9% 13.8 16.6 20.3% Aircraft fuel 9.3 12.2 31.2% 54.5 44.7 -18.0% Aircraft maintenance 8.0 7.0 -12.5% 51.6 25.1 -51.4% Aircraft rent 13.8 16.3 18.1% 48.4 62.2 28.5% Food and beverage service 0.6 0.7 16.7% 2.9 2.7 -6.9% Commissions 2.2 0.7 -68.2% 11.3 6.4 -43.4% Other selling expenses 4.7 5.6 19.1% 22.2 23.0 3.6% Depreciation and amortization 6.9 3.2 -53.6% 26.7 17.0 -36.3% loss on sale of assets (0.1) (0.1) NM (0.4) (1.6) NM Landing fees and other rentals 8.1 8.4 3.7% 30.2 31.2 3.3% Other 10.4 11.1 6.7% 37.7 48.7 29.2% Special charges 10.2 -100.0% 10.2 -100.0% ----- ----- ------ ------ TOTAL OPERATING EXPENSES 118.5 108.8 -8.2% 461.7 428.6 -7.2% ----- ----- ------ ------ OPERATING LOSS (33.5) (5.4) NM (53.3) (13.4) NM ----- ----- ------ ------ Interest Income 0.7 Interest expense (0.3) (0.5) (3.0) (2.1) Interest capitalized 0.3 0.2 3.0 0.6 U.S. government compensation (0.6) 9.8 0.2 Other-net (0.9) (0.1) (1.6) 1.2 ----- ----- ----- ------ (1.5) (0.4) 8.2 0.6 ----- ----- ----- ------ LOSS BEFORE INCOME TAX $(35.0) $ (5.8) -83.4% $(45.1) $(12.8) NM ===== ===== ===== ====== OPERATING STATISTICS: Revenue passengers (000) 1,034 1,194 15.5% 4,668 4,815 3.1% RPMs (000,000) 300 386 28.7% 1,350 1,514 12.1% ASMs (000,000) 474 632 33.3% 2,148 2,427 13.0% Passenger load factor 63.3% 61.1% (2.2)pts 62.8% 62.4% (0.4)pts Breakeven load factor 83.4% 65.0% (18.7)pts 70.8% 65.0% (5.8)pts Yield per passenger mile 26.33(cents) 25.35(cents) -3.7% 28.15(cents) 25.73(cents) -8.6% Operating revenue per ASM* 17.93(cents) 16.36(cents) -8.8% 19.02(cents) 17.11(cents) -10.0% Operating expenses per ASM* 22.85(cents) 17.22(cents) -24.6% 21.02(cents) 17.66(cents) -16.0% Expense per ASM excluding fuel 20.89(cents) 15.29(cents) -26.8% 18.48(cents) 15.82(cents) -14.4% Fuel cost per gallon 77.4(cents) 87.7(cents) 13.3% 93.4(cents) 82.0(cents) -12.2% Fuel gallons (000,000) 12.0 13.9 15.8% 58.3 54.5 -6.5% Average number of employees 3,534 3,518 -0.5% 3,764 3,476 -7.7% Aircraft utilization (blk hrs/day) 6.7 7.5 11.9% 7.6 7.5 -1.3% Operating fleet at period-end 60 63 5.0% 60 63 5.0%
EXHIBIT 99.2 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Alaska Air Group, Inc.
Three Months Ended March 31 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - --------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 479.8 $ 477.5 $ 456.1 $ 455.9 Freight and mail 20.6 20.6 17.1 17.1 Other - net 15.6 18.3 23.7 27.1 - --------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 516.0 516.4 496.9 500.1 - --------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 192.0 191.5 204.6 202.9 Contracted services 20.9 21.8 22.8 24.7 Aircraft fuel 89.7 89.7 64.7 64.7 Aircraft maintenance 50.1 52.7 43.1 43.2 Aircraft rent 46.2 46.2 46.5 46.5 Food and beverage service 14.0 14.0 14.3 14.3 Commissions 15.4 15.4 12.4 12.4 Other selling expenses 31.8 31.8 30.2 30.2 Depreciation and amortization 29.9 30.4 31.7 32.3 (Gain) loss on sale of assets 0.8 0.8 (0.6) (0.6) Landing fees and other rentals 28.3 27.9 30.1 29.8 Other 46.4 48.2 48.5 49.3 - --------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 565.5 570.4 548.3 549.7 - --------------------------------------------------------------------------------------------------------- OPERATING LOSS (49.5) (54.0) (51.4) (49.6) - --------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 8.1 7.2 4.4 4.4 Interest expense (12.1) (12.1) (11.9) (11.9) Interest capitalized 3.6 4.2 0.2 0.2 Other - net (1.4) (0.9) 5.3 4.5 - --------------------------------------------------------------------------------------------------------- (1.8) (1.6) (2.0) (2.8) - --------------------------------------------------------------------------------------------------------- Loss before income tax and accounting change (51.3) (55.6) (53.4) (52.4) Income tax benefit (18.2) (19.9) (19.0) (18.7) - --------------------------------------------------------------------------------------------------------- Loss before accounting change (33.1) (35.7) (34.4) (33.7) Cumulative effect of accounting change -- -- -- (51.4) - --------------------------------------------------------------------------------------------------------- Net Loss $ (33.1) $ (35.7) $ (34.4) $ (85.1) ========================================================================================================= BASIC LOSS PER SHARE: Loss before accounting change $ (1.25) $ (1.35) $ (1.30) $ (1.27) Cumulative effect of accounting change -- -- -- (1.94) - --------------------------------------------------------------------------------------------------------- Net Loss $ (1.25) $ (1.35) $ (1.30) $ (3.21) ========================================================================================================= DILUTED LOSS PER SHARE: Loss before accounting change $ (1.25) $ (1.35) $ (1.30) $ (1.27) Cumulative effect of accounting change -- -- -- (1.94) - --------------------------------------------------------------------------------------------------------- Net Loss $ (1.25) $ (1.35) $ (1.30) $ (3.21) ========================================================================================================== Shares used for computation: Basic 26.471 26.471 26.532 26.532 Diluted 26.471 26.471 26.532 26.532 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Alaska Air Group, Inc.
Three Months Ended June 30 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - ---------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 534.3 $ 533.6 $ 525.4 $ 525.4 Freight and mail 24.1 24.0 21.3 21.2 Other - net 20.9 25.2 27.4 29.1 - ---------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 579.3 582.8 574.1 575.7 - ---------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 194.1 194.0 212.4 211.8 Contracted services 20.9 21.9 22.3 22.4 Aircraft fuel 89.8 89.8 75.1 75.2 Aircraft maintenance 45.2 47.3 42.4 42.3 Aircraft rent 46.3 46.3 46.8 46.8 Food and beverage service 15.4 15.4 17.0 17.0 Commissions 16.4 16.3 11.5 11.5 Other selling expenses 32.8 32.8 33.5 33.5 Depreciation and amortization 31.6 32.2 34.2 34.0 Loss on sale of assets 0.4 0.4 0.0 0.1 Landing fees and other rentals 30.7 30.4 36.1 36.0 Other 44.4 47.0 49.6 50.1 - ---------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 568.0 573.8 580.9 580.7 - ---------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) 11.3 9.0 (6.8) (5.0) - ---------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 5.7 4.8 5.8 5.7 Interest expense (10.6) (10.6) (11.6) (11.6) Interest capitalized 2.3 2.9 0.5 0.6 U.S. government compensation -- -- 5.6 0.1 Other - net (0.5) 0.4 -- 6.4 - ---------------------------------------------------------------------------------------------------------- (3.1) (2.5) 0.3 1.2 - ---------------------------------------------------------------------------------------------------------- Income (loss) before income tax 8.2 6.5 (6.5) (3.8) Income tax expense (benefit) 3.5 3.0 (2.0) (0.9) - ---------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) $ 4.7 $ 3.5 $ (4.5) $ (2.9) ========================================================================================================== BASIC EARNINGS (LOSS) PER SHARE $ 0.18 $ 0.13 $ (0.17) $ (0.11) ========================================================================================================== DILUTED EARNINGS (LOSS) PER SHARE $ 0.18 $ 0.13 $ (0.17) $ (0.11) ========================================================================================================== Shares used for computation: Basic 26.481 26.481 26.548 26.548 Diluted 26.526 26.526 26.548 26.548 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Alaska Air Group, Inc.
Three Months Ended September 30 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - --------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 536.8 $ 536.2 $ 569.8 $ 570.7 Freight and mail 22.6 22.6 21.0 21.1 Other - net 24.0 28.6 29.3 28.8 - --------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 583.4 587.4 620.1 620.6 - --------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 205.0 202.7 224.8 224.1 Contracted services 19.2 21.4 22.0 22.2 Aircraft fuel 85.6 85.6 82.8 82.7 Aircraft maintenance 42.7 43.6 35.8 35.8 Aircraft rent 46.0 46.0 48.3 48.3 Food and beverage service 15.2 15.2 18.6 18.6 Commissions 16.0 16.1 7.2 7.2 Other selling expenses 31.8 31.8 32.5 32.5 Depreciation and amortization 33.7 34.4 34.8 34.4 (Gain) loss on sale of assets 0.3 0.3 (0.2) (0.3) Landing fees and other rentals 33.8 33.2 38.9 38.1 Other 41.3 43.5 51.0 51.5 - --------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 570.6 573.8 596.5 595.1 - --------------------------------------------------------------------------------------------------------- OPERATING INCOME 12.8 13.6 23.6 25.5 - --------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 7.1 6.2 5.8 6.0 Interest expense (11.8) (11.8) (10.5) (11.3) Interest capitalized 1.6 2.2 -- 0.7 U.S. government compensation 29.1 29.1 0.5 0.4 Other - net (0.5) 0.5 (3.0) (2.0) - --------------------------------------------------------------------------------------------------------- 25.5 26.2 (7.2) (6.2) - --------------------------------------------------------------------------------------------------------- Income before income tax 38.3 39.8 16.4 19.3 Income tax expense 13.0 13.6 5.8 6.8 - --------------------------------------------------------------------------------------------------------- NET INCOME $ 25.3 $ 26.2 $ 10.6 $ 12.5 ========================================================================================================= BASIC EARNINGS PER SHARE $ 0.95 $ 0.99 $ 0.40 $ 0.47 ========================================================================================================= DILUTED EARNINGS PER SHARE $ 0.95 $ 0.99 $ 0.40 $ 0.47 ========================================================================================================= Shares used for computation: Basic 26.514 26.514 26.549 26.549 Diluted 26.559 26.559 26.562 26.562 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Alaska Air Group, Inc.
Three Months Ended December 31 2001 2001 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported - ----------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 422.1 $ 425.0 $ 485.7 Freight and mail 19.0 19.0 17.7 Other - net 21.1 22.1 24.3 - ----------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 462.2 466.1 527.7 - ----------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 208.2 207.3 219.3 Contracted services 21.0 21.7 23.7 Aircraft fuel 59.2 59.3 79.4 Aircraft maintenance 36.0 37.7 48.9 Aircraft rent 47.4 47.4 48.8 Food and beverage service 13.7 13.7 16.3 Commissions 12.4 12.3 3.9 Other selling expenses 28.5 28.5 28.7 Depreciation and amortization 36.5 37.2 31.8 Loss on sale of assets 3.2 3.1 0.9 Landing fees and other rentals 36.9 36.6 36.4 Other 45.4 46.1 49.4 Special charges 10.2 10.2 -- - ----------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 558.6 561.1 587.5 - ----------------------------------------------------------------------------------------- OPERATING LOSS (96.4) (95.0) (59.8) - ----------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 4.9 4.0 5.1 Interest expense (12.8) (12.9) (11.5) Interest capitalized 0.6 1.3 1.2 U.S. government compensation 52.3 52.3 -- Other - net (1.3) (4.0) 0.1 - ----------------------------------------------------------------------------------------- 43.7 40.7 (5.1) - ----------------------------------------------------------------------------------------- Loss before income tax (52.7) (54.3) (64.9) Income tax benefit (16.3) (16.9) (21.8) - ----------------------------------------------------------------------------------------- NET LOSS $ (36.4) $ (37.4) $ (43.1) ========================================================================================= BASIC LOSS PER SHARE $ (1.37) $ (1.41) $ (1.62) ========================================================================================= DILUTED LOSS PER SHARE $ (1.37) $ (1.41) $ (1.62) ========================================================================================= Shares used for computation: Basic 26.528 26.528 26.556 Diluted 26.528 26.528 26.556 CONSOLIDATED STATEMENTS OF OPERATIONS Alaska Airlines, Inc.
Three Months Ended March 31 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - -------------------------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 385.1 $ 382.8 $ 374.2 $ 374.0 Freight and mail 18.3 18.3 15.9 15.9 Other - net 14.7 17.5 18.8 22.3 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 418.1 418.6 408.9 412.2 - -------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 155.3 154.7 167.3 165.7 Contracted services 17.9 18.8 19.9 21.8 Aircraft fuel 74.0 74.0 55.2 55.2 Aircraft maintenance 31.1 34.5 36.5 35.6 Aircraft rent 35.3 35.3 31.8 31.8 Food and beverage service 13.2 13.2 13.9 13.9 Commissions 15.9 15.9 14.3 14.2 Other selling expenses 26.0 26.0 24.9 24.9 Depreciation and amortization 23.1 23.6 27.6 28.2 Loss on sale of assets 0.9 0.9 0.1 -- Landing fees and other rentals 21.5 21.5 23.7 23.6 Other 36.4 38.0 35.5 36.3 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 450.6 456.4 450.7 451.2 - -------------------------------------------------------------------------------------------------------------------------- OPERATING LOSS (32.5) (37.8) (41.8) (39.0) - -------------------------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 9.5 8.6 5.0 5.0 Interest expense (12.1) (12.1) (11.9) (11.9) Interest capitalized 2.6 3.2 0.1 0.1 Other - net (1.2) (0.5) 4.7 4.1 - -------------------------------------------------------------------------------------------------------------------------- (1.2) (0.8) (2.1) (2.7) - -------------------------------------------------------------------------------------------------------------------------- Loss before income tax and cumulative effect of accounting change (33.7) (38.6) (43.9) (41.7) Income tax benefit (12.1) (13.9) (15.7) (14.9) - -------------------------------------------------------------------------------------------------------------------------- Loss before accounting change (21.6) (24.7) (28.2) (26.8) Cumulative effect of change in accounting -- -- -- (12.5) - -------------------------------------------------------------------------------------------------------------------------- NET LOSS (21.6) (24.7) (28.2) (39.3) ========================================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 3,198 3,198 3,193 3,193 RPMs (000,000) 2,895 2,895 2,977 2,977 ASMs (000,000) 4,428 4,428 4,467 4,467 Passenger load factor 65.4% 65.4% 66.7% 66.7% Yield per passenger mile 13.30 (cents) 13.22 (cents) 12.57 (cents) 12.56 (cents) Operating revenue per ASM 9.44 (cents) 9.45 (cents) 9.16 (cents) 9.23 (cents) Operating expenses per ASM 10.18 (cents) 10.31 (cents) 10.09 (cents) 10.10 (cents) Expense per ASM excluding fuel 8.51 (cents) 8.64 (cents) 8.86 (cents) 8.87 (cents) Fuel cost per gallon 97.1 (cents) 97.1 (cents) 73.6 (cents) 73.6 (cents) Fuel gallons (000,000) 76.2 76.2 75.0 75.0 Average number of employees 10,203 10,203 9,815 9,815 Aircraft utilization (blk hrs/day) 11.0 11.0 10.1 10.1 Operating fleet at period-end 96 96 102 102 CONSOLIDATED STATEMENTS OF OPERATIONS Alaska Airlines, Inc.
Three Months Ended June 30 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - ------------------------------------------------------------------------------------------------------------------ OPERATING REVENUES Passenger $ 434.7 $ 434.1 $ 433.6 $ 433.6 Freight and mail 21.4 21.4 20.0 20.0 Other - net 15.2 19.2 23.3 25.1 - ------------------------------------------------------------------------------------------------------------------ TOTAL OPERATING REVENUES 471.3 474.7 476.9 478.7 - ------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Wages and benefits 157.5 157.5 175.2 174.5 Contracted services 18.2 19.2 19.2 19.4 Aircraft fuel 74.1 74.1 64.2 64.2 Aircraft maintenance 32.1 32.6 36.1 36.1 Aircraft rent 35.0 35.0 31.8 31.8 Food and beverage service 14.7 14.7 16.2 16.2 Commissions 18.2 18.2 14.2 14.2 Other selling expenses 26.6 26.6 27.8 27.8 Depreciation and amortization 24.6 25.2 28.8 28.5 Loss on sale of assets 0.3 0.3 0.1 0.2 Landing fees and other rentals 23.3 23.4 28.4 28.5 Other 35.6 37.7 37.1 37.5 - ------------------------------------------------------------------------------------------------------------------ TOTAL OPERATING EXPENSES 460.2 464.5 479.1 478.9 - ------------------------------------------------------------------------------------------------------------------ OPERATING INCOME (LOSS) 11.1 10.2 (2.2) (0.2) - ------------------------------------------------------------------------------------------------------------------ NONOPERATING INCOME (EXPENSE) Interest income 6.8 6.0 6.1 6.1 Interest expense (10.6) (10.6) (11.6) (11.6) Interest capitalized 1.2 1.9 0.4 0.4 U.S. government compensation 0.0 -- 0.0 0.1 Other - net (0.2) 0.6 4.6 5.1 - ------------------------------------------------------------------------------------------------------------------ (2.8) (2.1) (0.5) 0.1 - ------------------------------------------------------------------------------------------------------------------ Income (loss) before income tax 8.3 8.1 (2.7) (0.1) Income tax expense (benefit) 3.5 3.5 (0.2) 0.7 - ------------------------------------------------------------------------------------------------------------------ NET INCOME (LOSS) 4.8 4.6 (2.5) (0.8) ================================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 3,698 3,698 3,616 3,616 RPMs (000,000) 3,290 3,290 3,372 3,372 ASMs (000,000) 4,683 4,683 4,929 4,929 Passenger load factor 70.3% 70.3% 68.4% 68.4% Yield per passenger mile 13.21 (cents) 13.19 (cents) 12.86 (cents) 12.86 (cents) Operating revenue per ASM 10.06 (cents) 10.14 (cents) 9.68 (cents) 9.71 (cents) Operating expenses per ASM 9.82 (cents) 9.92 (cents) 9.72 (cents) 9.71 (cents) Expense per ASM excluding fuel 8.24 (cents) 8.34 (cents) 8.42 (cents) 8.41 (cents) Fuel cost per gallon 92.3 (cents) 92.3 (cents) 78.0 (cents) 78.0 (cents) Fuel gallons (000,000) 80.3 80.3 82.3 82.3 Average number of employees 10,201 10,201 10,222 10,222 Aircraft utilization (blk hrs/day) 11.1 11.1 10.8 10.8 Operating fleet at period-end 100 100 102 102 CONSOLIDATED STATEMENTS OF OPERATIONS Alaska Airlines, Inc.
Three Months Ended September 30 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - ------------------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 441.8 $ 441.1 $ 467.1 $ 468.0 Freight and mail 20.8 20.8 19.7 19.6 Other - net 17.4 22.3 25.2 24.8 - ------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 480.0 484.2 512.0 512.4 - ------------------------------------------------------------------------------------------------------------------- Operating Expenses Wages and benefits 166.6 164.3 186.0 185.4 Contracted services 16.8 19.0 19.0 19.1 Aircraft fuel 71.7 71.8 70.7 70.7 Aircraft maintenance 32.2 32.9 31.6 31.6 Aircraft rent 33.7 33.7 32.1 32.2 Food and beverage service 14.5 14.4 17.8 17.8 Commissions 16.3 16.4 12.1 12.1 Other selling expenses 26.3 26.3 26.1 26.1 Depreciation and amortization 26.7 27.3 29.5 29.2 Loss on sale of assets 0.6 0.6 0.5 0.5 Landing fees and other rentals 25.9 25.9 30.2 30.1 Other 32.8 34.6 39.5 38.9 - ------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 464.1 467.2 495.1 493.7 - ------------------------------------------------------------------------------------------------------------------- OPERATING INCOME 15.9 17.0 16.9 18.7 - ------------------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 7.9 7.0 6.3 6.4 Interest expense (11.9) (11.8) (11.3) (11.2) Interest capitalized 1.0 1.5 0.5 0.5 U.S. government compensation 18.7 18.7 0.3 0.2 Other - net (0.3) 0.6 (2.3) (1.5) - ------------------------------------------------------------------------------------------------------------------- 15.4 16.0 (6.5) (5.6) - ------------------------------------------------------------------------------------------------------------------- Income before income tax 31.3 33.0 10.4 13.1 Income tax expense 10.1 10.7 3.2 4.2 - ------------------------------------------------------------------------------------------------------------------- NET INCOME 21.2 22.3 7.2 8.9 =================================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 3,747 3,747 3,978 3,978 RPMs (000,000) 3,328 3,328 3,673 3,673 ASMs (000,000) 4,687 4,687 5,207 5,207 Passenger load factor 71.0% 71.0% 70.5% 70.5% Yield per passenger mile 13.27 (cents) 13.25 (cents) 12.72 (cents) 12.74 (cents) Operating revenue per ASM 10.24 (cents) 10.33 (cents) 9.83 (cents) 9.84 (cents) Operating expenses per ASM 9.90 (cents) 9.97 (cents) 9.51 (cents) 9.48 (cents) Expense per ASM excluding fuel 8.37 (cents) 8.44 (cents) 8.15 (cents) 8.13 (cents) Fuel cost per gallon 90.1 (cents) 90.1 (cents) 81.6 (cents) 81.6 (cents) Fuel gallons (000,000) 79.6 79.6 86.6 86.6 Average number of employees 10,222 10,222 10,465 10,465 Aircraft utilization (blk hrs/day) 10.3 10.3 11.2 11.2 Operating fleet at period-end 102 102 102 102 CONSOLIDATED STATEMENTS OF OPERATIONS Alaska Airlines, Inc.
Three Months Ended December 31 2001 2001 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported - ----------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 346.7 $ 349.6 $ 392.2 Freight and mail 17.7 17.7 16.6 Other - net 17.1 18.2 21.0 - ----------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 381.5 385.5 429.8 - ----------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 167.3 166.4 179.9 Contracted services 18.3 19.0 20.4 Aircraft fuel 50.0 49.9 67.2 Aircraft maintenance 29.7 29.7 41.9 Aircraft rent 33.6 33.6 32.4 Food and beverage service 13.1 13.2 15.6 Commissions 13.7 13.6 7.6 Other selling expenses 23.8 23.8 23.1 Depreciation and amortization 29.2 30.0 28.4 Loss on sale of assets 3.2 3.2 1.0 Landing fees and other rentals 28.8 28.7 28.3 Other 35.1 35.4 38.0 - ----------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 445.8 446.5 483.8 - ----------------------------------------------------------------------------------------------------- OPERATING LOSS (64.3) (61.0) (54.0) - ----------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 5.4 4.4 5.7 Interest expense (12.8) (12.9) (11.5) Interest capitalized 0.3 0.9 1.0 U.S. government compensation 52.9 52.9 -- Other - net (1.2) (3.1) 0.2 - ----------------------------------------------------------------------------------------------------- 44.6 42.2 (4.6) - ----------------------------------------------------------------------------------------------------- Loss before income tax (19.7) (18.8) (58.6) Income tax benefit (5.2) (4.9) (20.4) - ----------------------------------------------------------------------------------------------------- NET LOSS (14.5) (13.9) (38.2) ===================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 3,025 3,025 3,367 RPMs (000,000) 2,736 2,736 3,164 ASMs (000,000) 4,121 4,121 4,758 Passenger load factor 66.4% 66.4% 66.5% Yield per passenger mile 12.67 (cents) 12.78 (cents) 12.40 (cents) Operating revenue per ASM 9.26 (cents) 9.35 (cents) 9.03 (cents) Operating expenses per ASM 10.82 (cents) 10.84 (cents) 10.17 (cents) Expense per ASM excluding fuel 9.60 (cents) 9.62 (cents) 8.76 (cents) Fuel cost per gallon 71.9 (cents) 71.9 (cents) 84.7 (cents) Fuel gallons (000,000) 69.6 69.6 79.3 Average number of employees 9,834 9,834 10,065 Aircraft utilization (blk hrs/day) 9.2 9.2 10.3 Operating fleet at period-end 101 101 102 CONSOLIDATED STATEMENTS OF OPERATIONS Horizon Air, Inc.
Three Months Ended March 31 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - -------------------------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 98.2 $ 98.2 $ 86.3 $ 86.3 Freight and mail 2.3 2.3 1.2 1.2 Other - net 1.5 1.5 5.7 5.7 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 102.0 102.0 93.2 93.2 - -------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 36.7 36.7 37.3 37.3 Contracted services 3.7 3.7 3.9 3.9 Aircraft fuel 15.7 15.7 9.5 9.5 Aircraft maintenance 19.0 18.2 6.6 7.6 Aircraft rent 11.0 11.0 14.8 14.8 Food and beverage service 0.8 0.8 0.4 0.4 Commissions 2.9 2.9 2.3 2.3 Other selling expenses 5.8 5.8 5.3 5.3 Depreciation and amortization 6.4 6.4 3.9 3.9 Loss on sale of assets (0.1) (0.1) (0.6) (0.6) Landing fees and other rentals 6.9 6.9 6.4 6.4 Other 9.9 9.9 12.7 12.7 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 118.7 117.9 102.5 103.5 - -------------------------------------------------------------------------------------------------------------------------- OPERATING LOSS (16.7) (15.9) (9.3) (10.3) - -------------------------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest expense (1.1) (1.1) (0.5) (0.5) Interest capitalized 1.1 1.1 0.2 0.2 Other - net (0.4) (0.4) 0.6 0.4 - -------------------------------------------------------------------------------------------------------------------------- (0.4) (0.4) 0.3 0.1 - -------------------------------------------------------------------------------------------------------------------------- LOSS BEFORE INCOME TAX (17.1) (16.3) (9.0) (10.2) ========================================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 1,177 1,177 1,095 1,095 RPM's (000,000) 336 336 329 329 ASM's (000,000) 543 543 531 531 Passenger load factor 61.8% 61.8% 62.0% 62.0% Yield per passenger mile 29.24 (cents) 29.24 (cents) 26.20 (cents) 26.20 (cents) Operating revenue per ASM 18.78 (cents) 18.78 (cents) 17.56 (cents) 17.56 (cents) Operating expense per ASM 21.85 (cents) 21.71 (cents) 19.31 (cents) 19.50 (cents) Expense per ASM excluding fuel 18.96 (cents) 18.83 (cents) 17.52 (cents) 17.71 (cents) Fuel cost per gallon 100.1 (cents) 100.1 (cents) 77.2 (cents) 77.2 (cents) Fuel gallons (000) 15.6 15.6 12.3 12.3 Average number of employees 3,923 3,923 3,452 3,452 Aircraft utilization (blk hrs/day) 8.1 8.1 7.1 7.1 Operating fleet at period-end 63 63 62 62 CONSOLIDATED STATEMENTS OF OPERATIONS Horizon Air, Inc.
Three Months Ended June 30 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - -------------------------------------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 104.4 $ 104.4 $ 96.4 $ 96.4 Freight and mail 2.6 2.6 1.2 1.2 Other - net 6.9 6.9 5.5 5.5 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 113.9 113.9 103.1 103.1 - -------------------------------------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 36.6 36.6 37.2 37.2 Contracted services 3.4 3.4 4.2 4.2 Aircraft fuel 15.7 15.7 11.0 11.0 Aircraft maintenance 13.1 14.7 6.2 6.2 Aircraft rent 11.3 11.3 14.9 14.9 Food and beverage service 0.7 0.7 0.8 0.8 Commissions 3.1 3.1 2.1 2.1 Other selling expenses 6.3 6.2 5.7 5.7 Depreciation and amortization 6.7 6.7 5.1 5.1 Loss on sale of assets 0.1 0.1 (0.1) (0.1) Landing fees and other rentals 7.3 7.3 7.8 7.8 Other 8.7 8.7 12.3 12.3 - -------------------------------------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 113.0 114.5 107.2 107.2 - -------------------------------------------------------------------------------------------------------------------------- OPERATING INCOME (LOSS) 0.9 (0.6) (4.1) (4.1) - -------------------------------------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income 0.4 Interest expense (1.0) (1.0) (0.5) (0.5) Interest capitalized 1.0 1.0 0.1 0.1 U.S. government compensation Other - net (0.1) (0.2) 1.5 1.3 - -------------------------------------------------------------------------------------------------------------------------- (0.1) (0.2) 1.1 1.3 - -------------------------------------------------------------------------------------------------------------------------- INCOME (LOSS) BEFORE INCOME TAX 0.8 (0.8) (3.0) (2.8) ========================================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 1,250 1,250 1,192 1,192 RPM's (000,000) 358 358 374 374 ASM's (000,000) 575 575 607 607 Passenger load factor 62.2% 62.2% 61.7% 61.7% Yield per passenger mile 29.19 (cents) 29.19 (cents) 25.79 (cents) 25.79 (cents) Operating revenue per ASM 19.79 (cents) 19.79 (cents) 16.97 (cents) 16.97 (cents) Operating expense per ASM 19.64 (cents) 19.90 (cents) 17.65 (cents) 17.65 (cents) Expense per ASM excluding fuel 16.91 (cents) 17.16 (cents) 15.84 (cents) 15.84 (cents) Fuel cost per gallon 98.4 (cents) 98.4 (cents) 80.8 (cents) 80.8 (cents) Fuel gallons (000) 16.0 16.0 13.6 13.6 Average number of employees 3,786 3,786 3,417 3,417 Aircraft utilization (blk hrs/day) 8.1 8.1 7.5 7.5 Operating fleet at period-end 63 63 62 62 CONSOLIDATED STATEMENTS OF OPERATIONS Horizon Air, Inc.
Three Months Ended September 30 2001 2001 2002 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported As Restated - ------------------------------------------------------------------------------------------------------------------------ OPERATING REVENUES Passenger $ 98.4 $ 98.4 $ 108.9 $ 108.9 Freight and mail 1.9 1.9 1.4 1.4 Other - net 7.2 7.2 5.2 5.2 - ------------------------------------------------------------------------------------------------------------------------ TOTAL OPERATING REVENUES 107.5 107.5 115.5 115.5 - ------------------------------------------------------------------------------------------------------------------------ OPERATING EXPENSES Wages and benefits 38.4 38.4 38.7 38.7 Contracted services 3.3 3.2 4.2 4.2 Aircraft fuel 13.8 13.8 12.0 12.0 Aircraft maintenance 10.5 10.7 4.3 4.3 Aircraft rent 12.3 12.3 16.2 16.2 Food and beverage service 0.8 0.8 0.8 0.8 Commissions 3.0 3.1 1.3 1.3 Other selling expenses 5.5 5.5 6.4 6.4 Depreciation and amortization 6.7 6.7 4.9 4.8 Loss on sale of assets (0.3) (0.3) (0.7) (0.8) Landing fees and other rentals 7.9 7.9 8.6 8.6 Other 8.7 8.7 12.4 12.6 - ------------------------------------------------------------------------------------------------------------------------ TOTAL OPERATING EXPENSES 110.6 110.8 109.1 109.1 - ------------------------------------------------------------------------------------------------------------------------ OPERATING INCOME (LOSS) (3.1) (3.3) 6.4 6.4 - ------------------------------------------------------------------------------------------------------------------------ NONOPERATING INCOME (EXPENSE) Interest income 0.3 Interest expense (0.7) (0.6) (0.6) (0.6) Interest capitalized 0.6 0.6 0.1 0.1 U.S. government compensation 10.4 10.4 0.2 0.2 Other - net (0.1) (0.3) (0.4) - ------------------------------------------------------------------------------------------------------------------------ 10.3 10.3 (0.6) (0.4) - ------------------------------------------------------------------------------------------------------------------------ INCOME BEFORE INCOME TAX 7.2 7.0 5.8 6.0 ======================================================================================================================== OPERATING STATISTICS: Revenue passengers (000) 1,207 1,207 1,334 1,334 RPM's (000,000) 357 357 424 424 ASM's (000,000) 555 555 657 657 Passenger load factor 64.3% 64.3% 64.6% 64.6% Yield per passenger mile 27.59 (cents) 27.59 (cents) 25.66 (cents) 25.66 (cents) Operating revenue per ASM 19.36 (cents) 19.36 (cents) 17.58 (cents) 17.58 (cents) Operating expense per ASM 19.92 (cents) 19.97 (cents) 16.60 (cents) 16.60 (cents) Expense per ASM excluding fuel 17.44 (cents) 17.47 (cents) 14.77 (cents) 14.77 (cents) Fuel cost per gallon 94.0 (cents) 94.0 (cents) 81.9 (cents) 81.9 (cents) Fuel gallons (000) 14.7 14.7 14.7 14.7 Average number of employees 3,811 3,811 3,518 3,518 Aircraft utilization (blk hrs/day) 7.6 7.6 7.7 7.7 Operating fleet at period-end 65 65 63 63 CONSOLIDATED STATEMENTS OF OPERATIONS Horizon Air, Inc.
Three Months Ended December 31 2001 2001 2002 (In Millions Except Per Share Amounts) As Reported As Restated As Reported - ---------------------------------------------------------------------------------------------- OPERATING REVENUES Passenger $ 79.0 $ 79.0 $ 97.9 Freight and mail 1.3 1.3 1.1 Other - net 4.7 4.7 4.4 - ---------------------------------------------------------------------------------------------- TOTAL OPERATING REVENUES 85.0 85.0 103.4 - ---------------------------------------------------------------------------------------------- OPERATING EXPENSES Wages and benefits 40.9 40.9 39.4 Contracted services 3.4 3.5 4.3 Aircraft fuel 9.3 9.3 12.2 Aircraft maintenance 6.4 8.0 7.0 Aircraft rent 13.8 13.8 16.3 Food and beverage service 0.6 0.6 0.7 Commissions 2.3 2.2 0.7 Other selling expenses 4.6 4.7 5.6 Depreciation and amortization 6.9 6.9 3.2 Loss on sale of assets (0.1) (0.1) (0.1) Landing fees and other rentals 8.1 8.1 8.4 Other 10.4 10.4 11.1 Special charges 10.2 10.2 -- - ---------------------------------------------------------------------------------------------- TOTAL OPERATING EXPENSES 116.8 118.5 108.8 - ---------------------------------------------------------------------------------------------- OPERATING LOSS (31.8) (33.5) (5.4) - ---------------------------------------------------------------------------------------------- NONOPERATING INCOME (EXPENSE) Interest income Interest expense (0.3) (0.3) (0.5) Interest capitalized 0.3 0.3 0.2 U.S. government compensation (0.6) (0.6) -- Other - net (0.1) (0.9) (0.1) - ---------------------------------------------------------------------------------------------- (0.7) (1.5) (0.4) - ---------------------------------------------------------------------------------------------- LOSS BEFORE INCOME TAX (32.5) (35.0) (5.8) ============================================================================================== OPERATING STATISTICS: Revenue passengers (000) 1,034 1,034 1,194 RPM's (000,000) 300 300 386 ASM's (000,000) 474 474 632 Passenger load factor 63.3% 63.3% 61.1% Yield per passenger mile 26.33 (cents) 26.33 (cents) 25.35 (cents) Operating revenue per ASM 17.95 (cents) 17.93 (cents) 16.36 (cents) Operating expense per ASM 22.51 (cents) 22.85 (cents) 17.22 (cents) Expense per ASM excluding fuel 20.55 (cents) 20.89 (cents) 15.29 (cents) Fuel cost per gallon 77.4 (cents) 77.4 (cents) 87.7 (cents) Fuel gallons (000) 12.0 12.0 13.9 Average number of employees 3,534 3,534 3,518 Aircraft utilization (blk hrs/day) 6.7 6.7 7.5 Operating fleet at period-end 60 60 63